TO: LINDA REICH, CITY MANAGER
FROM: TERRY DOYLE, DIRECTOR OF HUMAN RESOURCES/RISK MANAGEMENT
SUBJECT
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Fund 630 Risk Management Budget Appropriation for Workers’ Compensation Claim Expenditures for FY 2025-26.
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RECOMMENDATION
Approve an appropriation in the amount of $277,742.99 from the Risk Management Fund (630) for workers’ compensation claim expenditures for FY2025-26, and authorize the City Manager to execute all necessary documents on behalf of the City.
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FISCAL IMPACT
Requires an appropriation in the amount of $277,742.99 from the available Risk Management 630 Fund Balance to cover expenditures for FY 2025-26 that exceeded the budget.
CITY OF CHINO MISSION / VISION / VALUES / STRATEGIC ISSUES
The recommendation detailed above further the City’s values and strategic issues that serve as key pillars on which identified priorities, goals, and action plans are built, by fostering:
• Financial Stability
• Responsible Long-Range Planning
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Revenue: |
Expenditure: 6305010-43500 |
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Transfer In: |
Transfer Out: |
BACKGROUND
The City maintains Fund 630 - Risk Management to account for risk management activities and related expenditures, including workers’ compensation claims. Workers’ compensation costs are incurred throughout the year based on employee claims and the associated medical, indemnity, and administrative expenses.
During the year-end audit review, the actual workers’ compensation expenditures exceeded the FY 2025-26 budgeted amount of $5,875,017, by $277,742.99 in Fund 630 and therefore, staff is requesting an appropriation of $277,742.99 from available Fund 630 fund balance to cover these expenditures.
ISSUES/ANALYSIS
The current Fund 630 budget does not provide sufficient appropriation authority to accommodate the workers’ compensation expenditures that have been incurred and/or anticipated in Fiscal Year 2025-26. Without an additional appropriation, the available bottom line program budget will be insufficient to record and process these expenditures.
Fund 630 has sufficient available fund balance to support the requested appropriation. Using fund balance for this purpose is consistent with the intended use of the Risk Management Fund and avoids the need to use General Fund resources for these expenditures.
Although the expenses have been incurred and paid, the requested appropriation of $277,742.99 is necessary to provide the required budget authority in Fund 630 to maintain compliance with the City’s Budget policy.
Attachments: None