Council Study Session

MINUTES OF THE GILBERT TOWN COUNCIL, IN SPECIAL MEETING FOR A STUDY SESSION, TUESDAY, JUNE 14, 2022, AT 6:00 P.M., GILBERT PUBLIC SAFETY TRAINING FACILITY, ATLAS AUDITORIUM, 6860 SOUTH POWER ROAD, GILBERT, ARIZONA COUNCIL PRESENT: Mayor Brigette Peterson, Vice Mayor Aimee Yentes, Councilmembers Scott Anderson, Yung Koprowski, Scott September, and Kathy Tilque COUNCIL ABSENT: Councilmember Laurin Hendrix STAFF PRESENT: Town Manager Patrick Banger, Town Clerk Chaveli Herrera, and Town Attorney Chris Payne CALL TO ORDER OF SPECIAL MEETING Mayor Peterson called the meeting to order at 6:14 p.m. AGENDA ITEM 1. Discussion on creation of a Risk Management Self-Insured Trust Program and a Self-Insured Trust Fund through Ordinance and creation of a Declaration of Trust. Town Attorney Payne provided an overview of the Town’s Risk Program and discussed the role and duties of the Town Attorney as Risk Manager and of the assistant Risk Manager, Rita Murphy. He detailed the duties of risk management in general to include handling claims by and against the town, dealings of loss exposures, recommend loss control solutions and identify patterns of risk to assist in mitigation efforts. He discussed the difficulty in the market to procure insurance coverages and discussed premiums and deductibles increasing. He discussed the previous SIR amount of 50,000 and stated it was low for municipalities. He stated the town was responsible for the first 50,000 and then insurance would kick in for the rest. He outlined the difficulty in continuing at that rate and the overall need to increase to 250,000, with anticipated increases throughout future renewals and insurance companies continue to deal with losses and exposure. Due to the increase of the deducible on every claim, the recommendation is the creation of a Risk Management Trust with the idea that the funds that are used to pay claims and insurance premiums would be placed in a trust account and payments would be made from that account. He talked about the benefit the Boards ability to have extra oversight, receive reporting and review funds at least on an annual basis to make recommendations. The Trust would also engage in actuary in order project the amount the town would need in the future years in addition, the trust would also be subject to a separate audit. He clarified the authority to do so was set forth in statute provided information on the three-part process to consist of two ordinances and then a declaration of trust. Risk Management Program Ordinance: To include codification of the Town Attorney as Risk Manager; Establishes Risk Management Program in Town Code; Establishes duties of Risk Manager; Settlement authority remains per Code Section 2-61; Codifies requirement of Town Council approval prior to filing lawsuits; and Establishes Risk Management Loss Fund. Self-Insurance Retention Trust Fund Ordinance: To include the creation of new Article IV under Town Code Chapter 3; Trust overseen by self-insured trust board; Establishes Self-Insurance Retention Trust Fund and changes must by approved by the Town council including termination. Declaration of Trust: To include Trust administered by the Town Attorney’s office as part of the Risk Management Program; Trust overseen by Self-Insured Trust Board, changes must be approved by the Town Council, requires trust funds to be used only for authorized purposes; annual audits and actuarial studies for funding projections and reporting requirement to the board. He stated the intent would be to move forward and begin operating in the new fiscal year under this new format. Councilmember Tilque asked about the language being sent to Council prior to the agenda and Town Attorney Payne confirmed it had been sent out. Councilmember Tilque spoke in support of the system and liked the detailed financial statements and allows for additional set of eyes to ensure the money was being managed the way it should be without taking away authority of the Council to make decisions regarding lawsuits. He also spoke of the importance in understanding that this would not be new money and just pulling existing money into a new line item to which Town Attorney Payne confirmed. Councilmember Koprowksi asked if the cost to administer the Trust is equivalent to the insurance programs and the overall risk. Town Attorney Payne stated the only additional cost the Town would incur is the cost of the audit and of the actuary every year and stated that staff time was built in and any other costs have already been built in. Mayor Peterson stated this was a Board that was already standing and would just be a new obligation for them to which Town Attorney Payne confirmed and Council gave direction to move forward. ADJOURN Mayor Peterson adjourned the meeting at 6:28 p.m. ATTEST: ___________________________ ___________________________________ Brigette Peterson, Mayor Chaveli Herrera, MMC, Town Clerk CERTIFICATION I hereby certify that the foregoing minutes are a true and correct copy of the minutes of the Study Session of the Town Council of the Town of Gilbert held on the 14th day of June, 2022. I further certify that the meeting was duly called and held and that a quorum was present. Dated this __________ day of ______________, 2022. ___________________________________ Chaveli Herrera, MMC, Town Clerk