Chapter 4.16
CLAIMS AND LITIGATION FUND AND WORKERS’ COMPENSATION SELF‑INSURANCE FUND

Sections:

4.16.010    Established – Purpose.

4.16.020    Payment of claims.

4.16.030    Workers’ compensation self-insurance fund.

4.16.040    Contribution to funds.

4.16.060    Amount of claims and litigation fund.

4.16.070    Maintenance authority.

4.16.080    Protection of officers and employees from civil liability.

4.16.090    Risk management, loss control, and safety program.

4.16.010 Established – Purpose.

There is established a special municipal fund denominated claims, litigation and property loss fund into which shall be placed annually those moneys determined necessary for liability and property loss exposure. Such fund is declared to be perpetual and moneys remaining therein at the conclusion of each budget year shall carry over into the ensuing year. Such moneys as are available within such fund and, as council deems appropriate, shall be drawn upon for the purposes set forth below.

A. Claims, litigation expenses, administrative costs, settlements, and judgments incurred without regard to the specific source contributing thereto shall be paid from the fund; provided, however, that claims or judgments for breach of contract, added costs to the city on account of labor relation matters, should not be an expense of this fund.

B. Where a claim asserts a breach of contract or labor relations matter and another basis for liability, or seeks damages greater than the amount which was owed pursuant to the contract or which could have been attained if the labor relations matter had been resolved prior to the commencement of the claim or litigation, the additional costs resulting from the alternate basis for liability or the greater amount of damages sought, and the litigation and administrative expenses for the claims, may be paid from the fund.

C. The premium cost for property insurance to provide coverage for city property loss, with an appropriate deductible level, shall be paid from the fund. Each city department shall be responsible for routine property losses within that department which are under the deductible amount. If a department has a loss under the deductible amount from a type of event which is unusual and infrequent, the department may apply for fund payment for that loss from the risk manager, with appeal from any denial to the mayor.

D. The premium cost for any excess liability insurance purchased by the city shall be paid from the fund. [Ord. 2002-03-018; Ord. 1999-02-005 § 1; Ord. 9145 § 1, 1982; Ord. 9087 § 1, 1982; Ord. 8616 § 1, 1977].

4.16.020 Payment of claims.

The procedure for paying or denying claims which have been presented to the city council as provided in Bellingham City Charter Section 12.02 shall be as follows:

A. The risk manager/assistant city attorney shall have the authority to either approve or deny payment of claims of $5,000 or less.

B. For claims of greater than $5,000, the risk manager/assistant city attorney has the authority to deny the claim. If the risk manager/assistant city attorney determines that a claim greater than $5,000 but less than $15,000 should be paid, then he shall recommend payment of the claim to the mayor who shall be authorized to approve payment. If the risk manager/assistant city attorney determines that a claim greater than $15,000 should be paid, then he shall recommend payment to the city council.

C. If the risk manager/assistant city attorney denies a claim greater than $15,000, the claimant may appeal such denial to the city council by filing a written request for review with the finance director within 14 days of the date of mailing of the notice of denial.

D. Payments for claims shall be reported to and reviewed quarterly with the finance committee of the city council. The report shall include the amounts of all expenditures for claims, negotiated settlements, insurance settlements, judgments and litigation. [Ord. 2001-02-008; Ord. 10797 § 1, 1996; Ord. 10452 § 1, 1993; Ord. 9410, 1985; Ord. 8616 § 2, 1977].

4.16.030 Workers’ compensation self-insurance fund.

The city shall maintain a special municipal fund, designated workers’ compensation self-insurance fund, into which shall be placed any current or future funds generated by the continuation of the workers’ compensation self-insurance program as authorized by Chapter 51.14 RCW. Such fund is hereby declared to be perpetual, and moneys remaining therein at the conclusion of each budget year shall carry over into the ensuing year, provided, however, upon determination that the balance of this special fund exceeds the amount necessary to maintain a prudent funding level for current expenditures, reserves, and future premium stabilization, as part of the budgetary process, the city may make withdrawals from this fund for any city purpose.

The fund shall be drawn upon to pay workers’ compensation benefit payments required by state law and to pay other costs incurred by the city in the administration of the workers’ compensation program and related preventive, safety, and disability programs. [Ord. 1999-02-005 § 2; Ord. 8616 § 3, 1977].

4.16.040 Contribution to funds.

It is the further intention of the city council to continue to contribute to such claims, litigation, and property loss fund and workers’ compensation self-insurance fund such amounts as are needed on an annual basis. The contributions will be determined annually through the budget process. [Ord. 2002-03-018; Ord. 1999-02-005 § 3; Ord. 9888 § 1, 1989; Ord. 8616 § 4, 1977].

4.16.060 Amount of claims and litigation fund.

It is the intention of the city council to continue contributions to the claims, litigation and property loss fund until such time as no less than $5,000,000 is available to cover losses; and thereafter, such additional amounts shall only be paid in as are necessary to meet administration costs, unless the council deems it appropriate to budget additional funds therefor. [Ord. 2002-03-018; Ord. 1999-02-005 § 4; Ord. 9888 § 3, 1989; Ord. 8616 § 6, 1977].

4.16.070 Maintenance authority.

The finance director is directed to maintain the above-referenced funds as provided in this section and to invest the same so as to generate such additional moneys as is reasonably prudent. [Ord. 8616 § 7, 1977].

4.16.080 Protection of officers and employees from civil liability.

In recognition of the insulation from individual liability afforded city employees, officers, elected officials, and members of boards and commissions as a result of the city’s present insurance coverage, the city, in adopting its own self-insurance program, agrees to hereinafter hold each such employee, officer, elected official, and board or commission member harmless from any civil liability whatsoever, whether resulting from his or her acts or omissions incurred in conjunction with such person’s municipal relationship, which were not intentional or wanton and willful in their nature. The city council reserves the right to determine in its sole judgement whether or not such alleged act or omission occurred within the scope of such person’s municipal relationship. Such determination shall, however, be made within 14 days of any such claim or demand. [Ord. 8616 § 8, 1977].

4.16.090 Risk management, loss control, and safety program.

In recognition of the substantial risk incurred by the city in the furtherance of its governmental program, as well as the amounts of funds that need be paid in premiums or reserved for losses, the city council establishes a comprehensive program of risk management, loss control and employee safety to be effectuated no later than January 1, 1978. [Ord. 8616 § 9, 1977].