HomeMy WebLinkAboutCC 2026-03-10_11b Risk Management Annual ReportItem 11.b.
MEMORANDUM
TO: City Council
FROM: Ashley Garcia, Human Resources Officer
SUBJECT: Risk Management Annual Report
DATE: March 10, 2026
RECOMMENDATION:
Receive and file the Risk Management Annual Report.
IMPACT ON FINANCIAL AND PERSONNEL RESOURCES:
Costs of the general liability program, property program, crime insurance, and workers’
compensation program premiums are included in the biennial budget. The City’s share of
risk pool costs for coverage by the California Joint Powers Insurance Authority (CJPIA)
are calculated based on City payroll and loss experience. The City’s five-year insurance
expenditure history is shown below in Table 1.
Table 1: Five-Year Insurance Expenditure History
Coordination with CJPIA on Risk Management programs and training accounts for
approximately 15% of the Human Resources Officer’s time. The Legislative & Information
Services team also assists with third-party claim intake, estimated at 8 hours per month.
Designated representatives from each City department also serve on the Safety
Committee, which meets monthly.
BACKGROUND:
The City of Arroyo Grande Risk Management Program includes policies, programs,
insurance, and risk pool coverage to minimize the City’s risk exposures from employee
injury claims, third-party liability claims, or property loss.
Insurance Type FY 2021-22 FY 2022-23 FY 2023-24 FY 2024-25 FY 2025-26
General Liability 653,220 621,631 707,270 752,518 847,834
Property Insurance 65,572 71,591 87,455 100,323 82,777
Crime Insurance 1,471 2,415 5,717 2,752 4,603
Workers Comp 604,344 672,557 717,373 653,492 531,202
Total 1,324,607 1,368,194 1,517,815 1,509,085 1,466,416
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Item 11.b.
City Council
Risk Management Annual Report
March 10, 2026
Page 2
The CJPIA is the City’s provider of Risk Management services. Services provided include
coverage for Workers’ Compensation, General Liability, and Property Insurance claims.
In addition, CJPIA works closely with the City’s Human Resources Officer to review and
develop the City’s Risk Management programs and policies with the goal of mitigating
any risk exposure to the City and implementing cost-controlling techniques.
CJPIA acts as the City’s agent in claims processing and litigation and provides the City
with regulatory safety training to meet Occupational Safety and Health Administration
(OSHA) requirements, as well as best practice and development training. In addition to
this direct support and coordination with the City, CJPIA evaluates trends in claims
exposure across the pool and develops programs for its members.
ANALYSIS OF ISSUES:
The City’s Risk Management program focuses on identifying, evaluating, and addressing
loss exposures through various mitigation and preventive services. The program areas
include Workers’ Compensation, General Liability, Property Program, and Crime
Insurance.
Workers’ Compensation
This program is designed to ensure employee safety and to reduce employee injury
through proactive activities including:
Safety Policies and Programs
Staff training as required by OSHA to improve safe work practices
Regularly scheduled workplace safety and risk assessments and safety meetings
Prompt reporting of all workplace injuries that include documented investigations
and root cause analysis
Recurring Safety Committee Meetings to review injuries, safety training
requirements and progress, and site safety inspections; and
Working with the CJPIA and Athens Administrators for claims administration and
case management.
General Liability Program
This program includes identifying areas of risk exposure for the City and developing or
maintaining programs that will minimize or mitigate liability exposure. General liability
encompasses any claim against the City including but not limited to vehicle accidents;
slip, trips and falls; sewage backup; and errors and omissions.
Historically, the City has worked with Carl Warren & Company for general liability claims
administration and case management. Effective January 1, 2026, CJPIA transitioned
liability claim administration to Athens Administrators. To assist with continuity o f services
and minimize disruption, CJPIA was also able to secure the transition of Carl Warren
personnel to Athens Administrators.
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Item 11.b.
City Council
Risk Management Annual Report
March 10, 2026
Page 3
The City already works with Athens Administrators for Workers’ Compensation claim
administration, and this existing relationship is expected to support a seamless transition
and continued consistency in claims handling and risk management services.
Property Program
This program focuses on managing risk associated with the City’s real property, including
buildings, furniture and equipment, contractor’s equipment, vehicles, the property of
others while in care of the city, and buildings under construction.
Crime Insurance
This program covers financial losses due to dishonest acts, theft, or fraud involving
employees or third parties. It also includes faithful performance, depositor’s forgery,
money and securities crime, computer fraud, funds transfer fraud, money orders , and
counterfeit money coverages.
Risk Assessment/LossCAP Program
With the goal of minimizing the City’s risk exposure, CJPIA conducts thorough risk
management evaluations. The City was last evaluated in December 2024, and staff has
been working to implement recommended improvements since that time, including:
City policies and programs
Contractual language and insurance requirements
Public facilities such as sidewalks, streets, parks, and buildings, and
Training programs and procedures
Staff is committed to working with CJPIA to conduct regular risk management
assessments on the recommended best practice schedule of every three years.
Reporting and Claims History
Since payroll and loss experience drives the City’s costs of coverage with CJPIA, it is
helpful to regularly review status reports for both Workers’ Compensation and General
Liability claims provided by CJPIA. The overview reports summarize the claims history
over a five-year period, the category or cause of the claim, cost centers, and a comparison
to other agencies of a comparable size. The five-year claims history is used in calculating
the City’s premiums, which allows staff to anticipate costs for upcoming fiscal years. The
City’s claims are reviewed by the City’s Human Resources Officer, Risk Manager from
CJPIA, and the members of the Executive Team to learn from and identify areas of
concentration to minimize future exposure.
Annual Report
The City Council’s investment in infrastructure improvements, coupled with a commitment
to Risk Management, supports staff efforts to update policies and programs, which will
continue to reduce or mitigate the City’s liability in claims and litigation.
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Item 11.b.
City Council
Risk Management Annual Report
March 10, 2026
Page 4
1. Workers’ Compensation: City of Arroyo Grande is averaging about 21 workers’
compensation claims per year. Specifically,
Sprains/strains are the most common type of injury.
55% of all recent Workers’ Compensation costs are tied to just 6 claims.
Overall costs of claims are above pool average, boosted by police and fire
claims.
Police and fire claims are driving workers’ compensation costs yet remain
consisted with CJPIA pool members’ public safety department experience.
Recreation and public works departments have a lower claim rate compared
with the rest of the risk pool.
To prevent workplace injury, staff engages in frequent safety-related training.
In 2025, 268 participants were reached with in-person classroom training, 31
participated in an online class, and 3 attended multi-day academies.
After a hiatus during the pandemic, the City reinstated the Safety Committee in
early-2025, bringing together representatives from each department monthly.
In 2025, the Committee met nine times. Accomplishments of the Committee
include:
o Updating all City building evacuation maps,
o Replacing fire extinguishers and first aid kits at every facility,
o Conducting frequent workplace safety inspections,
o Creating an annual safety training plan,
o Checking in on the status of Risk Management Evaluation
implementation items, and
o Updating the Emergency Action Plan.
2. General Liability Program: The City had 35 total liability claims for program year
2024-2025, with 34% of the claims received related to streets, roads, and related
public infrastructure. City staff and CJPIA continue to manage and defend the City
to limit its exposure. Specifically,
Overall costs of claims are better than the pool average.
Slips, Trips, and Falls are the most common type of claim.
Vehicle-related claims are the next most common claim.
Public safety has performed very well, with very few liability claims compared
with the risk pool.
The City continues to leverage CJPIA services to support organizational risk management
compliance, including training, ergonomics, functional area-specific academies for staff
to learn best practices, and reviewing policies and procedures. The City’s focused
investment in infrastructure improvements, completion of sidewalk inspections, and ADA
self-evaluation all contribute to reducing our liability risk. Staff continue to implement Risk
Management Evaluation recommendations and have allocated budget resources for one-
time CIP safety improvements.
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Item 11.b.
City Council
Risk Management Annual Report
March 10, 2026
Page 5
ALTERNATIVES:
The following alternatives are provided for the Council’s consideration:
1. Staff’s recommendation; or
2. Provide other direction to staff.
ADVANTAGES:
Strengthens governance and oversight, promotes transparency, helps align risk exposure
with capital planning, identifies emerging risks, supports fiscal responsibility, and
encourages an organizational culture of safety.
DISADVANTAGES:
Sensitivity of public disclosure may create unnecessary concern rather than
demonstrating mitigation efforts and overall risk management strategies.
ENVIRONMENTAL REVIEW:
Receiving the Risk Management Annual Report is not a project subject to the California
Environmental Quality Act (“CEQA”) because it has no potential to result in either a direct,
or reasonably foreseeable indirect, physical change in the environment. (State CEQA
Guidelines, §§ 15060, subd. (c)(2)-(3), 15378.)
PUBLIC NOTIFICATION AND COMMENTS:
The Agenda was posted at City Hall and on the City’s website in accordance with
Government Code Section 54954.2.
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