22-8025 Workers Compensation Fund Reserve Balance•
r
RESOLUTION NUMBER 22-8025
A RESOLUTION DEFINING THE PARAMETERS FOR ESTABLISHING A
WORKERS COMPENSATION FUND RESERVE BALANCE GOAL; ESTABLISHING A
WORKERS COMPENSATION FUND MANAGEMENT POLICY; AND AUTHORIZING
THE CITY MANAGER TO ADMINISTER THE WORKERS COMPENSATION FUND IN
ACCORDANCE WITH THE MANAGEMENT POLICY.
WHEREAS:
A. Since 1997 the City of Salina ("City") has self-funded its workers compensation program
available to the City's employees as outlined per the Kansas Department of Labor, Division of
Workers Compensation, as Kanas Statutes Annotated and Administrative Regulations which pertain
to workers compensation (44-501thru44-5a22; 74-711 thru 75-5708; 51-1-1 thru 51-24-10) and as
may be amended.
B. Based upon the recommendations of a nd a s tudy session discuss ion with staff and the
City's insurance consultant, the Governing Body desires to (1) estab li s h the means of annual ly
calculating minimum and maximum reserve balance goals and a management policy (the "Workers
Compensation Fund Management Policy") for the City of Salina's Workers Compensation Fund (the
"Fund ") and (2) to authorize the city manager to manage the Fund in acco rdanc e with the Workers
Compensation Fund Management Policy.
BE IT RESOLVED by the Governing Body of the City of Salina, Kansas:
Section 1. Calculation of Minimum and Maximum Reserve Balance Goals. The city manager
is authorized and directed to annually calculate the minimum and maximum reserve balance goals for
the Fund no later than 45 days following the conclusion of the prior plan year , as follows :
A. A "Minimum Fund Bal a nce Goal" calculated as th e total of the largest amount
the City may incur in an individual inciden t/acc ident ("Self-Insured Retention"), plus the
annual estimated pre mium required by the State of Kansas to se lf-in s ur e ("Excess Workers
Compensation Premium") and third party administrative expenses.
Ill
..
r ..
B. A "Maximum Fund Balance Goal" calculated as two times the largest Self-
lnsured Retention.
Section 2. Workers Compensation Fund Management Policy. It shall be the policy of the City
to manage the Fund balance such that if at any time the actual fund balance either falls below the
Minimum Fund Balance Goal or exceeds the Maximum Fund Balance Goal, the following sha ll occur:
A. If the fund balance falls below the Minimum Fund Balance Goal , the city manager
is authorized and directed to impose a one (1) to three (3) year rolling impact surcharge to the
established City of Salina budgetary funding approach, (i) lessening rate spikes in any one
year and (ii) allowing additional claim years to develop such that the rolling impact surcharge
can be recalculated and potentially adjusted as circumstances warrant. Beyond temporary
surcharges, significant and/or prolonged changes in cost factors (e.g. medical costs, excess
coverage insurance premium costs, and claims history) may necessitate eva luati on and
recommendation by the city manager to the governing body of structural changes in the City's
approach toward self-insurance and workers compensation.
B. If the fund balance exceeds the Maximum Fund Balance Goal:
1. The city manager will so inform the governing body and advise the
governing body of:
a. Any factors potentially affecting future utilization of the Fund ,
examples of which include (i) est imated Excess Workers Compensation
Premiums for future years, (ii) current claims severity and projected reserves
to cover future medical expenses resulting from those claims , and (iii)
substantial staffing and /or payroll changes involving additional employees or
changes in the types of duties performed with increased risk .
2. After taking into consideration the factors potentially affect in g future
"' "'
utilization of the Fund, the City may, at the direction of the governing body:
a. Declare a "moratorium " resulting in a reduction in City contributions
for a specified duration intended to reduce the fund balance to the Maximum
Fund Balance Goal;
b. Take any alternate approach authorized by the gove rnin g body ; or
c. Take no action.
Section 3. Delegation of Authority to City Manager. This Workers Compensation Fund
Management Policy shall be administered by the city manager in accordance with Section 2 above.
Section 4. Effective Date. This resolution shall be in full force and effect from and after it s
adoption.
Adopted by the Board of Commissioners and signed by the Mayor this 28t h day of February ,
2022.
~~
Trent W. Davis , M.D., Mayor
(SEAL)
0