Agenda 05/26/2009 Item #16E 7
EXECUTIVE SUMMARY
Agenda Item No, 16E7
May 26, 2009
Page 1 of 2
Recommendation to approve a Budget Amendment to the Workers' Compensation
Fund (518), for the funding of three large claims in the amount of $622,797.
OBJECTIVE: To gain approval from the Board of Commissioners (Board) for a Budget Amendment
in the amount of $622,797 to the Workers' Compensation Fund (518), for the purpose of funding
three large claims settlements,
CONSIDERATIONS: The Risk Management Department administers a partially self-funded
Workers' Compensation insurance program, The County purchases specific excess insurance to
cover claims that exceed a self-insured retention. Benefits are administrative in nature and are
determined pursuant to Florida Statutes Chapter 440 and applicable case law. Claims are
administered through Johns Eastern Company, the County's adjusting firm.
In FY 2009, three large claims in excess of $50,000 have been settled or "washed out" as permitted
by the Florida Workers' Compensation Statutes Chapter 440.20(11), These washouts were
recommended by the County's Workers' Compensation legal counsel, Randy Thomas of the firm of
Kelly, Thomas, Stiffler; the County's adjusting company, Johns Eastern; and have been approved by
the County's excess carrier. When a claim is washed out, all future medical and indemnity benefits
are settled and the file is closed, All future medical and wage needs must be paid by the claimant
from the settlement proceeds, Typically, washouts are valued by calculating the net present value of
future benefits with the final settlement being approximately 50% of that figure. A voluntary
resignation is received as part of the settlement. All washouts must be approved by the Judge of
Com pensation.
When Workers' Compensation rates are established for a fiscal year, reserves are set aside in
anticipation of current and future claims liabilities such as these. The three large claims in question
total $622,797, Reinsurance recoveries in the amount of $585,842 have been approved by the
County's carrier, The remainder of funds will be transferred from reserves.
Therefore, to assure sufficient appropriations for FY 2009, it is recommended that a Budget
Amendment be approved in the amount of $622,797, Risk Management will submit a claim report to
the Board in a separate agenda item documenting the closure of these claims, as part of Resolution
2004-15,
FISCAL IMPACT: Funds are available in the Workers' Compensation Fund (518) Reserves and from
reinsurance proceeds for this purpose. The total of these settlements is $622,797 and the County
anticipates the receipt of approximately $585,842 in reinsurance proceeds from its excess carrier.
GROWTH MANAGEMENT IMPACT: There is no growth management impact associated with this
Executive Summary,
LEGAL CONSIDERATIONS: This item is not quasi-judicial, and as such ex parte disclosure is not
required, This item requires majority vote only, This item is legally sufficient for Board action, -
CMG
RECOMMENDATION: That the Board approves a Budget Amendment to the Workers'
Compensation Fund (518) for the funding of claims as outlined in this Executive Summary,
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PREPARED BY: Jeffrey A. Walker, CPCU, ARM, Director, Department of Risk Management
Item Number:
Item Summary:
Meeting Date:
Page 1 of 1
Agenda Item No. 16E7
May 26, 2009
Page 2 of 2
COLLIER COUNTY
BOARD OF COUNTY COMMISSIONERS
16E7
Recommendation to approve a Budget Amendment to the Workers Compensation Fund
(518), for the funding of three large claims in the amount of $622,797.
5/26/2009 90000 AM
Approved By
Jeffrey A, Walker, CPCU,
ARM
Administrative Services
Risk Management Director
Date
Risk Management
5/12/200910:32 AM
Date
Approved By
Colleen Greene
County Attorney
Assistant County Attorner
County Attorney Office
5/12/2009 1 :39 PM
Approved By
Len Golden Price
Administrative Services
Administrative Services Administrator
Date
Administrative Services Admin.
5/14/20093:56 PM
Date
Approved By
Jeff Klatzkow
County Attorney
County Attorney
County Attorney Office
5/14/20094:45 PM
Approved By
OMB Coordinator
County Manager's Office
OMS Coordinator
Date
Office of Management & Budget
5/15/20099:44 AM
Approved By
Laura Davisson
County Manager's Office
Management & Budget Analyst
Office of Management & Budget
Date
5/15/200910:03 AM
Approved By
Leo E. Ochs, Jr.
Board of County
Commissioners
Deputy County Manager
Date
County Manager's Office
5/15/20097:47 PM
file://C:\AgendaTest\Export\ 130-May%2026, %202009\ 16, %20CONSENT%20AGENDA \1.., 5/20/2009