FY2024 Proposed Budget

RISK MANAGEMENT FUND The City is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; workplace accidents, errors and omissions; and natural disasters. During fiscal year 1988, the City established the Loss Reserve Fund, an internal service fund, to account for and finance its uninsured risks of loss. Funds pay annual premiums to the Loss Reserve Fund based on actuarial estimates of the amounts needed to pay prior and current-year claims and to establish a reserve for catastrophic losses. Accumulated monies in the Loss Reserve Fund are available to cover the self-insured retention amounts and any uninsured losses. The Housing Authority Fund is insured under a separate policy with the Assisted Housing Risk Management Association. All other funds participate in the Loss Reserve Fund. Nearly 95% of the Risk Management Fund’s revenue is from internal service charges to the other funds for annual premiums. For the fiscal year ending June 30, 2023 the City has purchased property, liability, and workers’ compensation insurance under the program that provides for a $100,000 self-insured retention per occurrence on property losses (2% or $250,000 for wind or hail damage), and a $500,000 self-insured retention per occurrence on liability. Liability insurance provides coverage for claims in excess of the aforementioned self-insured retention up to a maximum of $20.0 million annual aggregate of losses paid. Starting in fiscal year 2022, the City switched from being self insured for worker’s compensation coverage to being fully insured by Iowa Municipal Workers Comp Association (IMWCA) except for Fire Fighters. Settled claims have not exceeded this commercial coverage in any of the past five fiscal years. The City will seek bids to renew or replace its insurance coverage this spring for fiscal year 2023. The fiscal year 2023 revised fund balance is $3,501,660 which is $155,452 or 4.44% lower than the fiscal year 2022 ending fund balance. The fund balance is expected to slightly decrease over the next two years; however, the change in fund balance is entirely dependent on the amount of claims paid. Due to the change in workers compensation coverage, it is difficult to predict what the actual impact from that change will be.

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