Risk Management

January 6, 2004 City Council Meeting

This document was sent to all members of the City Council, Chief Word, Mayor Brown, Interim City Manager Deborah Edgerly, Risk Manager Stephanie Garrabrant-Sierra, and City Attorney John A. Russo as well as to the City Clerk for inclusion in the Supplemental Agenda for Tuesday January 6, 2004.

 

Note that the Risk Manger's Report referred to below is available on the City of Oakland web site with the January 6 2004 agenda.  The agenda is downloaded as a .pdf file.

 

PUEBLO wishes to take the following position regarding the Staff Report on Risk Management which has been prepared for this discussion.

l. PUEBLO has received no evidence to suggest that the RMIP (Option A), adopted unanimously by Council in 1998, is not the best option of those presented by Staff. Since the program was never implemented, there is no way to evaluate how effective it might have been, or might be, compared to the other models. We remain committed to its core principles of accountability, and by the notion of incentives and disincentives intended to promote loss prevention. There is no reason why ‘non-financial’ incentives, such as those outlined in Option D, cannot be implemented simultaneously to optimize success.

2. PUEBLO has no objection to the model of Option B: the introduction of ‘deductibles.’

3. PUEBLO has no objection to the model of Option C, as described.

4. PUEBLO agrees with the proposals contained in Option D, but not as a ‘stand alone’ risk management program; we believe Option D must be an added component to one or more of the other alternatives listed.

5. PUEBLO agrees with Option E: the Phoenix model. We believe that analysis of payouts resulting in ‘charging’ departments for their share of liability by allocating their share of self-insurance budget (based on their five year payout history) at the beginning of the fiscal year, and then billing them for each payout, is preferable to Oakland’s current practice of pay outs coming from the non-departmental self-insurance funds.(This was, as Staff noted, a central component of Option A: RMIP, as well.). The City Attorney should provide Council with a ‘running tab’ on payouts from each Department’s allocated fund in closed sessions on a regular basis.

Additionally: PUEBLO supports the introduction of pro-active incentives and practices, some of which are practiced in Portland, Oregon. They are:

  • "Providing ‘seed money’ to OPD to implement a loss prevention program to be developed in conjunction with the City Attorney’s Office and the Risk Manager. The objective would be to institute a training program which targets a 15% loss reduction. If successful, this program could be extended to other departments.
  • ∑ Requiring officers who are the subject of law suits to meet with a member of the City Attorney’s Office to review the circumstances that gave rise to the City’s legal exposure.
  • ∑Implementing rewards to employees at every division level whose job performance contributed to loss prevention within their Continued reporting obligations to the Finance Committee, as described in RMIP."

Recommendations:

PUEBLO recommends that the City Council adopt one or more of the ‘financial’ options presented by Staff (Options A, B, C, or E.) as well as the adoption of Option D.

In addition, PUEBLO recommends the adoption of ‘non-financial’ incentives Citywide, as a means to motivate the cultural change that is needed to prevent loss. The City of Portland lists on its “Loss Prevention Program” website page, in its vision statement:

  • Losses are considered intolerable
  • A loss prevention attitutude permeates the organization
  • Safety becomes an integral value that underlies every activity from the trenches to City Council chambers

Among their goals are the following:

  • 15% reduction in frequency of claims filed
  • Develop a culture City wide that values safety
  • Create a system to monitor and measure progress to 15% reduction:

Establishing culture PUEBLO recommends that the City Council embrace these goals, and create a risk management program designed to achieve these outcomes.