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ITEM 8
City Council Memorandum Human Resources Memo No.
N/A
Date:
November 10, 2022
To:
Mayor and Council
Thru:
Joshua H. Wright, City Manager
From:
Rae Lynn Nielsen, Human Resources Director
Subject:
Resolution No. 5616, Renewal Request to the Industrial Commission of Arizona for Continued Exemption from Requirement to Post Security for Self-Insured Workers' Compensation Program
Proposed Motion:
Move City Council pass and adopt Resolution No. 5616, renewing the request to the Industrial Commission of Arizona for continued exemption from requirement to post security for Self-Insurance Workers' Compensation Program.
Background:
The City of Chandler was approved by the Industrial Commission of Arizona (ICA) to self-insure workers' compensation benefits on January 1, 2003. A requirement of self-insured programs is to post a security bond with the ICA in order to ensure performance in the event that a self-insured program becomes insolvent.
On April 4, 2005, the ICA implemented rules governing management of the workers' compensation self-insurance program. Rule No. R20-5-1114 includes an "Exemption from Requirement to Post Security," reproduced below:
"A public entity application or public entity self-insurer is exempt from the requirement under this Article to post or provide security if the public entity:
Has a fully funded risk management fund sufficient to cover actuarial liabilities for workers' compensation as determined by the self-insurer in accordance with Government Accounting Standards Board Statement #10; and
Provided funding to the risk management fund each year sufficient to cover actuarial liabilities for workers' compensation as determined by the self-insurer in accordance with Government Accounting Standards Board Statement #10."
The Industrial Commission of Arizona requires a majority of the members of the City of Chandler governing body to certify that it meets the conditions required for a public entity to be self-insured and exempt to post or provide a security bond under A.A.C. Section R20-5-1114(A) and A.A.C. R20-5-114(B)(1-3).
Financial Implications:
Since the inception of the self-insured program in January 2003, the City has expended a total of $16,745 to purchase security bonds. The City's application for exemption to post security was later accepted and the City has not been required to purchase bonds or incur additional expenses.
Attachments
Resolution 5616
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