Many times I hear Councilors say things like “think outside the box” but they never think “outside the box”. Yesterday we reviewed Councilor Gaffney’s idea on the Self-Insurance Trust Fund, which was truly “outside the box”. We need more of this in the City of Worcester!! Instead we spend time reinventing Main Street for the 3rd time in the past 30 years!!
Even if we do not agree with the idea, we support the effort and ask that we see more of this from our Council. Yesterday we were against his idea to return excess money in the Self-Insurance Trust Fund. We assumed that although the account had a fund balance of $21,000,000, the City of Worcester still had liabilities (claims) that would be coming in and would need to be paid out (12/15 or maybe a 12/24 contract).
After reviewing Comprehensive annual report, we change our minds. Here is the key paragraph on page 109.
The City has established a liability for health claims based on actual amounts paid two months subsequent to year-end (provided by a third-party administrator) and an estimate of future claims based on historical trends. The City has established a liability for judgments and claims based on a case-by-case review of all known claims, estimates of losses incurred but not reported, incremental costs incurred only because of claims, historical trends of previous years, and attorneys’ estimates of pending matters and lawsuits in which the City is involved.
What does this mean?
It means the the Internal Service Fund number of $22,120,553 in exhibit 8 on page 37 includes an estimate for claims that they expect to have coming in. In other words our concerns are taken into account and are reflected in this number. Based on this financial footnote, we wholeheartedly support Councilor Gaffney!!