Chapter 3.40
WORKER’S COMPENSATION SELF-INSURANCE FUND
Sections:
3.40.030 Deposits to the fund.
3.40.040 Disbursements from the fund.
3.40.050 Minimum funding level.
3.40.010 Purpose.
The council declares that this chapter is adopted to achieve the following, among other, purposes and directs that the provisions of this chapter be interpreted in order to accomplish those purposes:
A. To provide for the potential liabilities arising as the result of injuries incurred and occupational illnesses contracted by employees in the course of employment by the city;
B. To provide for the payment of expenses incurred by the city in the administration of a self-insurance coverage of worker’s compensation liability;
C. To provide for the payment of any insurance premiums incurred in providing protection against claims out of, or for accidents in excess of, basic coverages assumed by the fund; and
D. To reimburse the General Fund for the excess costs of retirement benefits occasioned by early retirements resulting from occupational injuries or occupational illnesses. (Prior code § 8-8.01)
3.40.020 Creation.
The city treasurer shall create a fund, to be known as the worker’s compensation self-insurance fund, to fulfill the purposes set forth in Section 3.40.010, which fund shall be kept separate and apart from any other funds of the city, with additions and deletions made thereto solely in accordance with the provisions of this chapter. Any amounts held by the city treasurer on January 22, 1981, for the purpose of paying worker’s compensation claims to city employees shall be transferred into the worker’s compensation self-insurance fund. The term “fund,” whenever used alone in this chapter, shall refer to the worker’s compensation insurance fund. (Prior code § 8-8.02)
3.40.030 Deposits to the fund.
A. Annually, in the preparation of the fiscal year budget, the city manager shall determine the amount to be transferred to the fund during the course of the fiscal year and shall direct the monthly transfer to the fund of one-twelfth the amount so determined.
B. No deposit shall be required for any period where the city manager’s review shall indicate that the accumulated assets of the fund exceed the accrued actuarial liabilities at the time of the review. (Ord. 1726 § 27 (part), 2011; prior code § 8-8.03)
3.40.040 Disbursements from the fund.
A. Upon the approval of the city manager, the city treasurer shall be authorized to pay out of the fund any and all expenses arising in or out of the administration of a self-funded insurance program for worker’s compensation and to reimburse the General Fund for any excess retirement costs occasioned by the early retirement of employees disabled by industrial injuries or illnesses.
B. Upon the recommendation of the city manager and approval by a majority of the members of the council, the city treasurer shall be authorized to return to the General Fund any amount which shall accumulate in the fund because of favorable actuarial experience in the operation of the fund and/or investments of the fund assets; provided, however, any such return shall not reduce the assets of the fund to an amount less than specified in Section 3.40.050 as the minimum funding level.
C. Upon the recommendation of the city manager and approval by the finance committee of the council, the city treasurer shall be authorized to effect transfers of funds from the worker’s compensation reserve fund to the General Fund for periods of twelve months or less; provided, however, such short-term transfers shall not reduce the assets of the fund below the balance required of the fund to satisfy its obligations during the term of the transfer; and further provided any such transfer shall not extend beyond twelve months, unless it shall be approved by a majority of the members of the council. (Ord. 1726 § 27 (part), 2011; prior code § 8-8.04)
3.40.050 Minimum funding level.
The minimum funding level shall be that amount reasonably expected to be incurred on all claims open and outstanding as of the time of determination and shall be the total of the following calculations:
A. A reserve for all expected costs on all outstanding and unsettled claims determined in accordance with standard actuarial practices;
B. An amount equal to thirty-five percent of the result computed in subsection A of this subsection to provide for latent claims and contingencies; and
C. An amount equal to ten thousand dollars, multiplied by the number of outstanding claims representing injuries to members of the police department and fire department to provide for the additional exposure to loss on safety claims. (Prior code § 8-8.05)
3.40.060 Audits.
An annual independent audit pertaining to the fund established by this chapter and reserve adequacy shall be prepared and presented to the council. (Prior code § 8-8.06)