09-29-89SpMtg SEPTEMBER 29, 1989
A Special Meeting of the City Commission of the City of Delray
Beach, Florida, was called to order by Mayor Doak S. Campbell in the
Commission Chambers at City Hall at 12 Noon, Friday, September 29, 1989.
Roll call showed:
Present - Commissioner Patricia Brainerd
Commissioner Jimmy Weatherspoon
Mayor Doak S. Campbell
Absent - Commissioner William Andrews
Commissioner Mary McCarty
Also present were - Interim City Manager Malcolm T. Bird and
City Attorney Herbert W.A. Thiele.
Mayor Campbell called the meeting to order and announced that
this meeting has been called for the purpose of (1) Discussion of
Workman's Compensation Insurance for the upcoming budget year.
1. The Interim City Manager stated that they received a bill from
the City's insurance carrier for Workman's Compensation in the amount of
$585,000. Unfortunately, the budgeted amount was only $445,000, leaving
them a significant shortfall. They considered alternatives as to how
they would fund the shortfall, if necessary, and also reviewed whether a
less costly policy could be found. He and Mr. Graham, Risk Management,
would like to recommend that this function be added to the existing
self-insurance program. They would be able to do this within the
budgeted amount, plus or minus 5%.
Upon question by Ms. Brainerd, the Interim City Manager advised
that Mr. Graham had budgeted a figure of $591,801 to pay this claim,
which was within 1%; however, the previous City Manager reduced that
amount to $445,000. He researched the work product which was delivered
to back up Mr. Graham's recommendation and found it to be without any
errors.
Ms. Brainerd stated by her crude figures, they are approaching
$900,000 worth of errors which were submitted by the previous City
Manager in the budget. Mayor Campbell stated they are bordering on
deficit financing which is unconstitutional. Ms. Brainerd stated she
would like to see a total run down of all of the similar type situations
facing them to see what the bottom dollar is.
The Interim City Manager advised he is suggesting that (1) they
inform the City's current carrier that they are discharged as of mid-
night on September 30th; (2) that they direct staff to initiate an
extension of the self-insurance program to include Workman's Compensa-
tion and (3) that the Commission have a finding of emergency action
requirement for the purpose of authorizing staff to enter into an
agreement with Gallagher and Company to provide the administrative
support, and also provide a cap which would make sure that no claim from
a single event, or employee, would generate a claim which would exceed
$125,000. They do not have time to go out and bid and they have to have
that umbrella in place if they are going to take the liability on their
own shoulders. Normally, he would recommend that they go to bid, and
they will bid between now and next year for all the services; however,
he does not have time to get a competitive bid together before Sunday
night.
Upon question by Mr. Weatherspoon, the Interim City Manager
advised if they have a catastrophic problem, it would not carry over and
impact on them forever. Once they get to the $125,000 cap it becomes
the insurance company's problem for whatever additional amount it may
cost. They do not expect this to exceed the budgeted figure; however,
if it did, it would not exceed it more than 2-3%.
The Interim City Manager advised the reason they will be
alright this year is because Workman's Compensation claims generally run
out over a period of years. Their first year impact is less than their
out year impact. As they continue to self-insure, they will have tail
years of people who are continuing to have a problem; even doing this,
their total claims costs and administrative costs should still be less
than what they were charged for this years premium.
The Interim City Manager stated that by next Tuesday he will
have some figures and exhibits for the Commission. However, he needs to
inform the City's current carrier by Saturday at midnight that they will
not be using him next year and he needs to inform Gallagher and Company
that the transition will occur then.
Ms. Brainerd moved to instruct the Mayor to inform the Florida
League of Cities FMSIF of non-renewal, declare that an emergency exists
and authorize staff to enter into an agreement with Gallagher and
Company to provide the administrative support and the cap policy for the
Workman's Compensation, seconded by Mr. Weatherspoon. Upon roll call
the Commission voted as follows: Ms. Brainerd - Yes; Mr. Weatherspoon -
Yes; Mayor Campbell - Yes. Said motion passed with a 3 to 0 vote.
Mayor Campbell declared the meeting adjourned at 12:16 P.M.
City Clerk
ATTEST:
MAYOR
The undersigned is the City Clerk of the City of Delray Beach
and that the information provided herein is the minutes of the meeting
of said City Commission of September 29, 1989, which minutes were
formally approved and adopted by the City Commission on ~ ~
NOTE TO READER:
If the minutes that you have received are not completed as indicated
above, then this means that these are not the official minutes of City
Commission. They will become the official minutes only after they have
been reviewed and approved which may involve some amendments, additions,
or deletions to the minutes as set forth above.
-2- 9/29/89