Report to Mayor and City Council
Tuesday, January 09, 2024
Consent
SUBJECT:
Title
CONSIDER APPROVAL OF ADJUSTED WORKERS COMPENSATION PREMIUM FOR FY 2022/23 DUE TO FINAL PAYROLL AUDIT (CITY COUNCIL)
Body
I. SUMMARY
On June 7, 2022 City Council approved the renewal of City's excess workers compensation insurance for FY 22-23 at a premium of not-to-exceed $138,000. Subsequently, the City bound the insurance at a Deposit Premium of $125,239 based on annual payroll estimate of $30,025,000.
At the end of FY 22-23 the City's actual payroll amount was $36,346,950 - higher than the estimate, mainly due to COLA increases and retroactive salary payments. The additional payroll resulted in an adjusted premium of $146,944.
Therefore, staff is asking City Council to approve payment of $21,705 in additional premium, for a final FY 22-23 premium of $146,944.
II. RECOMMENDATION
Recommendation
APPROVE payment of $21,705 in additional premium, for a final Fiscal Year 2022-23 excess workers compensation premium of $146,944.
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III. ALTERNATIVES
TAKE any other action the City Council deems appropriate.
IV. BACKGROUND
The City's excess workers compensation insurance premium is calculated as a rate per $100 of payroll. The initial premium, i.e. "Deposit Premium", is calculated based on an estimate of the upcoming fiscal year payroll. At the end of each fiscal year, PRISM conducts a payroll audit to determine the final premium, which may result in additional premium due, or a refund. As an example, in FY 21-22 the City received a refund of $3,712 due to lower than estimated final payroll.
For FY 22-23 the Deposit Premium was $125,239 based on estimated payroll of $30,025,000. However, the final audited payroll was $36,346,950. The increase, which was mainly due to COLA and related retroactive payments, resulted in an adjusted final premium of $146,944. City Council approved amount was not-to-exceed $138,000.
Therefore, staff is now asking City Council to a...
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