Sec. 2-190 Purpose.

It is the purpose of this article that a fund be established (pursuant to A.R.S. § 11-981) for the payment of defense, claims adjusting fees, losses, anticipated losses, for the purpose of insurance and that such funds shall not be used for any other purpose.

The amount of money to be appropriated to the fund will be based on:

(a) Losses incurred in the past;

(b) Projected exposure of risk assumed;

(c) Insurance premium costs.

(Ord. No. 630, 10-6-86)

Sec. 2-191 Definitions.

In this article, unless the context otherwise requires:

(1) City means the City of Kingman, Arizona, including public officials, boards, commissions, employees and supervised volunteers, while performing duties for the city within the scope of employment.

(2) Liability loss means defense and damages for losses to persons or property for which the city is liable.

(3) Property means buildings and other improvements to real estate, inventories, vehicles and equipment but not shrubbery, landscaping, traffic signals, street improvements and water and sewer lines.

(4) Property loss means damage to tangible city-owned property by an accidental event but not property of public officials, boards, commissions, employees or volunteers.

(Ord. No. 630, 10-6-86)

Sec. 2-192 Self insurance trust fund.

The self insurance trust fund shall provide defense and payment of claims for property and liability losses and payment of insurance premiums subject to the following exceptions:

(1) Claims or punitive damages arising out of the willful violation of a penal statute or ordinance.

(2) Claims arising out of acts of bad faith and/or fraud committed by or at the direction of an individual with affirmative dishonesty or actual intent to deceive or defraud.

(3) Claims for damages arising from condemnation, inverse condemnation, dedication, eminent domain, zoning or contract disputes except when the dispute involves insurance coverage.

(4) Claims which are covered by a valid insurance policy or which shall be deemed uninsurable under law.

(5) Any claim based upon an individual gaining in fact any personal profit or advantage to which they were not legally entitled.

(6) Any claim when a service was allegedly rendered for compensation from a source other than the City of Kingman and when the city is not liable.

(7) Inventory shrinkage and damages to city property that has customarily been repaired by city employees.

(8) The separate departments within the city shall absorb the first five hundred dollars ($500.00) of any property loss as defined in section 2-191, paragraphs (3) and (4).

(9) Lost wages not covered under the workers’ compensation laws of the State of Arizona or any other state.

(Ord. No. 630, 10-6-86)

Sec. 2-193 Trustees advisory to city council.

The common council shall appoint five (5) joint trustees, of whom no more than one (1) may be a city employee. The trustees shall be responsible for recommendations to the common council regarding the administration of the trust fund. The trustees shall meet at least once a year and submit a report to the common council as to the status of the trust fund. Such report shall include recommendations the trustees deem necessary. The trustees shall be bonded in a minimum amount of ten thousand dollars ($10,000.00). Costs for bonding shall be paid by the City of Kingman.

(Ord. No. 630, 10-6-86)

Sec. 2-194 Risk management consultant; powers.

The city manager shall designate a risk management consultant who shall be licensed pursuant to Title 20, Chapter 2, Arizona Revised Statutes. The risk management consultant shall report to the city manager as directed by the city manager.

(Ord. No. 630, 10-6-86)

Sec. 2-195 Responsibility for claims management and legal service.

Claims management and lawsuit fiscal responsibility rests with the claims manager who shall be the city manager or his designee. The responsibility for response to questions of law and trial legal services rests with the attorney selected to handle the matter.

(Ord. No. 630, 10-6-86)

Sec. 2-196 City attorney salary expense.

The direct cost of salary expense for the city attorney in matters of litigation shall be an eligible charge to the self-insurance trust fund.

(Ord. No. 630, 10-6-86)

Sec. 2-197 Settlement of claims.

The city manager shall have the authority to settle claims against the city up to the amount of two thousand five hundred dollars ($2,500.00); any claim in excess of this amount shall require approval of the common council.

(Ord. No. 630, 10-6-86)

Sec. 2-198 Representation by city attorney.

The claims manager shall consult with the city attorney when claims are likely to involve litigation. The city attorney may provide defense for damage suits against the city if he determines his department has the necessary expertise in that particular area of defense.

(Ord. No. 630, 10-6-86)

Sec. 2-199 Referral to outside attorneys.

Claims referred to outside law firms for defense shall be the responsibility of the city manager, the claims manager and the city attorney. Referral to particular outside firms shall be based upon their expertise and experience in the particular type of litigation and past performance.

(Ord. No. 630, 10-6-86)

Sec. 2-200 Excess insurance.

The city shall purchase excess insurance above the risk retention limit determined by the common council.

(Ord. No. 630, 10-6-86)

Sec. 2-201 Trust fund not subject to budget law.

Expenditures during the fiscal year from the trust fund and monies in the trust fund at the close of the fiscal year shall not be subject to the provisions of Title 42, Chapter 2, Article 4, Arizona Revised Statutes. An audit shall be performed annually by an external auditor and said report shall be kept on file for a minimum of five (5) years.

(Ord. No. 630, 10-6-86)

Sec. 2-202 Claims for money or damages.

(a) Any claims for money or damages, from whatever cause arising (including claims for the taking of or damage to private property and claims based on contract) shall be in accordance with A.R.S. § 12-821.

(b) Any claim required to be presented pursuant to subsection (a) shall be presented in the form prescribed by the city attorney with the city clerk, no later than one (1) year after the occurrence, event or transaction from which the damages allegedly arose.

(c) The filing and rejection of any claim required by this section is a prerequisite to suit thereon.

(d) If any portion of this section is in violation of state law, state law shall prevail.

(Ord. No. 629, § 1, 10-6-86)

Secs. 2-2032-210. Reserved.


Editor’s note: Res. No. 1094, adopted Oct. 6, 1986, establishing guidelines and practices for the risk management program, is not included herein but is kept on file in the office of the clerk to common council.