Travis County Commissioners Court
August 2, 2005
Item 6
Let's go to number 6. , consider and take appropriate action on the fy 2005 and fy 2005 through June performance report for Travis County risk management program.
>> you have before you a report, and this is an annual report that we are obligated to provide to the court on your risk management fund. And i'd like for you -- go ahead and start. If you would turn to page 5 of your backup, we can go ahead and start there.
>> okay.
>> and the risk management fund is the fund that the county has that takes care of property, insurance, it takes care of workman's compensation. It takes care of your -- like your aviation insurance. And it is the fund that you have in case there is a crucial event. And it takes care of all your litigation and liability costs. If you turn to page 5 that will give you a broad perspective on the fund. Overall the fund is about 18,635 -- 18,635,000 and that's your total assets. Then you see liabilities. And these are your claims. Usually what happens with claims is that we bill them at a time that they are filed for an estimated amount. You also have then the liabilities in terms of your insurance and all that you pay for the insurance. What we've done this year in the report is tried to bring to you a visual performance presentation, a report on how the fund has done over the last several years. We're most proud of our workman's compensation program. We have really reduced that program. We are not only better by about 59% than most of the -- our peer group that are benchmarked, we are also quite close to best practices in workman's comp. And we'll talk more about that. I’m going to turn it over to dan to go over all the graphics that you have that will explain to you where we're at with the program.
>>
>> [one moment, please, for change in captioners]
>>
>> …you can turn to page 6 in your backup. The total cost by fiscal year is consistently over the last four years now, recognizing the 2005 is still where we are still working in that fiscal year and those figures are to change somewhat. I think you are still going to see an overall reduction in claims for 2005. If I look at page 7. That's going to illustrate the -- the distribution of those dollars. As an example in 2002, if you look at that graph, the majority of dollars went to the workers' compensation program. In 2002 you approved an ergonomics program and funded it, that resulted in a little bit of change in 2003 for the workers' comp. But it started to show results in 2004. So far in 2005, dollars going to workers' comp and reduced gradually over those years as a result of some good safety, loss prevention and the ergonomics program.
>> did that also include conditions of work and stuff like that.
>> is there another reason for these -- for these decreases in the compensation, workers' compensation claims, is that also included as far as conditions of work? Safety and a whole bunch of those things --
>> safety issues and loss prevention has really taken hold. I think when we see within the workers' compensation, what we see mainly is a reduction in office type of --
>> right.
>> carpal tunnel, repetitive motion, next and back from sitting and -- in a work station area. The safety, I have to say that dennis miller of t.n.r. Has done an excellent job in safety in that area, because we have had a reduction in claims as well. I think these are the -- are all of the different programs that have come together to -- to show a savings in the workers' comp. At workers' comp -- as it has declined over the last few years, you have seen a reduction also in general liability claims. The fact that in 2004 and 2005 there have been an increase in auto liability. The share of dollars going to that, not the total dollars. We really haven't seen an increase as much, just a redistribution. One of the other reasons this is so successful is the woman sitting to my right, donna sterman, medical management company, I’m going to ask her to talk to you a little bit general liability and what has happened in that area of exposure.
>> your slide number 8 takes you to the general liability. This slide demonstrates the frequency, which is the number of claims. We have broken them down into four different categories. Your employment, errors and omissions, bodily injury which is also -- also encompasses death and custody and all other -- the all other does seem to be a higher number. It's -- it includes damage that we do to third parties property damage, pothole claims, those kind of claims, mowers, and lost inmate property in juveniles.
>> now, these claims found to be valid by us or just claims foiled against us?
>> it's all claims. This is all claims -- these are all numbers of claims reported, whether they are denied or paid.
>> okay.
>> the next -- on page number 9 for you tells how many dollars that we have actually spent out on the claims. And as you can see it's also gone down as dan said 205 is not a complete year and 204 is probably not really complete, either. 2 and 3 would be considered a -- more than likely settled.
>> our lag time in general liability claims is usually about 24 to 30 months from the time a claim is filed to the time it's actually settled or paid out.
>> but the point is that we anticipate that both '04 and '05 just from what we are seeing now will be lower than the two previous years. That's what you want to see. You want those claims and that liability to -- to go down.
>> our next slide is internal property, again this demonstrates the frequency, we have broken it down into several categories trying to summarize it. The fire and storm, [indiscernible], building, contents, heavy equipment, that's damage to our heavy equipment. All other which -- so that you didn't have so many lines, we just incorporated the theft, burglary, lost property, all computer equipment and such and boiler and machinery claims are altogether.
>> the next slide demonstrates the cost of those claims. As you can see, there are three very large towers. Each one of those pretty much represent a large claim for that year. In 2002 our severe loss was the flooding of moya park, which is near and dear to my heart, it was finally closed in September of '04 after almost three years. Fiscal year 2003, in case we didn't have anything -- in '04 the severe loss for that year was the flooding of the tax office. Then in 2005 it's the storm that we had, the hailstorm that we had at -- at the satellite 2, I believe it was. And even though this mountain here is incurred, which -- this amount here is incurred, it's the incurred loss of what we suspect we will pay. Also a $50,000 deductible of what we will spend first.
>> in twowfer-2005, the amounts shown there, the county's liability is a $50,000, the difference would be picked up by our property insurance carrier.
>> okay.
>> the next slide, near number 12 is the automobile, frequency, it's kind of steady, gone down a little bit, but for the most part that's kind of [indiscernible] out. Again we broke them down into different categories, this is all auto internal and external, we have the park, our duty internal claims, which would encompass anything that's not parked and not off duty. Pretty much collisions. Which is Karen's favorite. [laughter] our third party property damage.
>> and Commissioner Gomez.
>> right.
>> missing this, darn [laughter]
>> they are not --
>> and more even though they are not clydeing even less. Colliding any less, the good news it's not going up.
>> the other one would be the third party [indiscernible], smallest.
>> the -- down for '05.
>> I’m sorry?
>> if preproject '05 through the end of this -- is this a fiscal year or calendar year?
>> fiscal year.
>> hey, that's we will be under '04 then, won't we? See, Karen, they have been listening to you all.
>> what's not on here, when did we change the policy related to points, wasn't that -- was that 2000 is this.
>> 2001?
>> okay. Because we really don't have the benchmark on here that really reflects the progress made related to automobile accidents. I mean, Commissioner Gomez and I really don't have to go on a rant and a tear too often now, which is there is progress being made.
>> right.
>> there is. Safety policies made a big difference. Even for those departments that do not work under that -- they've implemented safety policies and strengthened theirs, so it's working.
>> armorall on the brake pads.
>> [laughter]
>> okay.
>> next one is our -- is the severity, which puts the dollars to the amounts. Then again the high points there are the internal, collision claims, and mostly because those would include all total losses and we average four to eight of those a year. So in 2004 we actually had it kind of a double year where we ended up taking two years worth of claims together. That's why that one is a little bit higher.
>> I did also want to in a point to mention for the gl, property, auto, the slides to follow that encompassed the workers' comp, all of this information and these amounts were gleaned from the risk management system, which is -- showing you our dollars at work.
>> I want to take you quickly through the workers' compensation because this is an area that -- that has kind of stood out for us. Our excess workers' comp carrier, they did a benchmark study for us, the basis was other entities with the same job classification codes as Travis County. And in doing so, they identified the Travis County as operating a 59% lower than the benchmark standards.
>> that equates to about 3.7 million. So if you took municipalities, counties, our size with a number of workers, and compared us to that, we have had approximately $3.7 million less in claims from workmen's comp. It was pretty good.
>> to avoid asking you to flip back and forth between the bound report from midwest casualty, we havel included in the -- we have included in some slides and from the study that we have interspersed between our slides, the first one is the way the benchmarking looks, it claims -- the way risk management looks at claims is by frequency and severity. High frequency, low severity, high severity, low frequency, that type of a review. So as we go through this, the frequency would have been -- we would have expected 59 more, 59% more claims than what we had. The -- the severity, we had 59% less severity and i'll get to that in just a minute. As alicia says, this equates to $3.7 million in savings. The next slide, the claim frequency, the blue line shows the reports, the work injuries that were reported. We asked departments and they are very cooperative in doing this to report any near miss or any type of injury. We do that so we can identify loss prevention programs and safety programs to address those near losses before they become actual losses. Of the -- of the 515 reported losses in 2001, actual medical and I am nity claims were 204. 256 were actual medical or indemnity claims. So you can see that the departments are reporting their near misses and were able to act on those. The payroll indicates to you that we have drop and leveled off at 1.11 for fiscal year '05, but remained fairly steady from '03 on to '05, that's a benchmark again against payroll showing the number of claims that we have filed. That's Travis County's experience. The benchmark shows that -- that the average is a -- $1.60 per -- per $100 of payroll. Travis County's is running at just $1.03 and the benchmark best practices, that's best practices is at a dollar. So we are narrowing down to -- to be close to the best practices. The next item is lost cost per $100 of payroll. While 2005 isn't completely developed, if you look at 2003 and 2004 you will see that they are in the 60 cents, 69, 61-cent category. And that's -- that's an excellent area to be in. The average cost per claim, for Travis County and I’m just going to run through these real quick because they could get, statistics can get boring. The Travis County average cost per claim is $4,871. The benchmark is $11,790. And the best practices is $8,844, so we are operating well below the benchmark or the best practices on severity of claims. What that tells us is when we have injuries that they are not severe in nature. This they are minor and that again goes back to your point, Commissioner Davis, that the safety programs are taking hold and -- and use of personal protective equipment, so forth is working, paying off.
>> what's the source for the best practices number. The best practices is the -- the study that u.s. Casualty has done to determine what would be the best -- the best practice, the outcome, if everyone practiced within the safety area, the loss prevention and risk control methods.
>> okay.
>> the average cost per claim we talked about that, I’m going to go through the -- to the next -- the number of claims per 100 employees, this is again an excellent record for Travis County because we have 4237 eligible employees for workers' compensation, for each 100 employees, we have 10.8 claims filed. And that is normally is -- is around -- maybe 1 point -- 12 to 14 claims filed per 100 employees. The next slide and the last one goes to something that we talk about with purchasing insurance. We purchase property insurance with a high deductible of $50,000 they ductible, aviation insurance with a $50,000 deductible. Over the last two to three years, our property insurance, even though the values increased, the property insurance rate has dropped and is slightly below this year's slightly below what it was in '04. We expect it to stay the same. That's derived from working with the underwriters that -- of these insurance companies, so that they would know exactly what the risk is. We provide them with a property book so that they can actually look through that book, see the condition of the buildings, how well they are maintained, the safety that the sprinklers, whatever really concerns the underwriter, we try to address them in that property book. So they get them, look full it, have a full understanding of what risk they are taking on. Earlier today you heard from star flight folks and our aviation insurance has stayed fairly level. That's because the quality of work that they do, the quality of the pilots, the safety record that they maintain and we would encourage the carrier's safety representative, the risk manager, to work with star flight and they do. They have a working relationship that serves to keep our premiums low because they have a full understanding of how the star flight program works. That concludes our report.
>> that concludes our report, again, the risk management fund is one of the largest funds that we manage, approximately $19 million. At the end of this fiscal year, it is projected the fund will have about $7.5 million in it. So that would -- if we ever have a catastrophic loss, that's exactly what that fund is for.
>> questions, comments?
>> congratulations.
>> thank you all very much.
>> very good.
The Closed Caption log for this Commissioners Court agenda item is provided by Travis County Internet Services. Since this file is derived from the Closed Captions created during live cablecasts, there are occasional spelling and grammatical errors. This Closed Caption log is not an official record the Commissioners Court Meeting and cannot be relied on for official purposes. For official records please contact the County Clerk at (512) 854-4722.
Last Modified:
Wednesday, August 2, 2005 10:01 AM