Finance Committee - Regular Meeting

And could barely walk. She did two treatments of the localized cryotherapy and she came back telling me that she was able to play her game on Saturday and just seeing that all the time makes me feel really good knowing that I'm providing service that helps out my community.

Hi. I'm chief Marine, and you're watching Riverside TV.

Alright. Good afternoon. We will get we'll call our meeting to order for the finance committee on December 10, 3PM. Our first item on the agenda is public comment. So if we could play the recording now, please.

Public comment is now open for this item, available in both English and Spanish. Call (951) 826-8686 and follow the prompts to access the meeting in either language. To request to speak, press 9. You can also join via Zoom. The meeting ID for both languages can be found on the agenda.

Alright. We will look to online to see if we have any comments. In the meantime, we have one in chamber comment, Errol Koschowicz. You have three minutes, sir. Thank you.

Hey, guys. How's it going again?

Alright.

Yeah. The other day, I I got a little dizzy with you guys, and I didn't wanna say anything that would have been pretty bad, pretty bad. I was thinking about saying something pretty bad. But anyway, the city of Riverside is in violation of the Public Records Request Act under the California Public Records Request Act. I've been asking for information for close to a year.

You have been giving me information that is false. It is complete lies. I want actual information and I don't know where you guys come up with the stuff that you're sending me. I I've asked nicely to Carmen. You know, you gotta start giving me actual information that is not lying or straight up lying. I wanted to say something back to this is what I'm getting back. Can I put this on the overhead projector? I wanna I wanna actually talk about it, it actually. Actually. I requested public records, and it was $34,000,000 And I asked for well, I'll say it like this.

I asked for records, actually a copy of the check to Blue Shield Blue Cross, which is insurance. Why are we paying $34,000,000 to Blue Cross Blue Shield? She came back and said responsible records are available on Riverside records portal. Now the portal is fake. The portal is lies. Your website is lies. We need to start being truthful, guys. We should've been truthful a long time ago. I mean, I got records back almost twenty years, you guys. It's it's pretty disgusting.

I've been asking for twenty years, and, hopefully, you guys, we can start learning how to be truthful and say we're sorry. We've been money laundering. We've been committing fraud. We've been been doing everything, guys. It's to the point where you gotta start being truthful. And I I just can't believe I could sit down with any one of you and show you what Carmen has sent me. It's full of shit. K? I don't wanna say I don't wanna cuss, but I'm I'm telling you. Not giving me the records, putting me back to the website and the portal, which is all fake.

The budget is fake. I I mean, you could just look at it. I mean, you spend $30,000,000,000 on vendors and you get a billion dollar budget, it's fake. It's all coming directly from the automatic clearinghouse. Like I've said this before, and we need some accountability, guys. And until we get accountability, you bought property, you bought everything, You're buying boats. What else do you want me to say, guys? I I don't wanna say anything bad to you guys. At the end of night, I I was gonna say but you guys, thank you very much.

Thank you, mister Kostowicz. We do not have any comments online, so we will close public comment and move on to our discussion item discussion calendar for today. Item number two, this is the city's risk management division and insurance program administration annual Update. And I think Jacqueline Godinez. Yes. Did I get that right? Gonna give us a presentation. Thank you.

Good afternoon, committee members. My name is Jackie Godinez and am the risk manager for the city of Riverside. Today I have the pleasure of presenting today's presentation to give you an update on the city's risk management operations and general insurance program. So this presentation today is in accordance with Chapter 3.18 of the Riverside Municipal Code and bringing an annual update to you in regards to risk management and insurance. The risk management division as we see it today is composed of three staff members, two full time employees, a risk manager, risk management analyst and one California fellow.

Although all city employees take an important part in mitigating the city's risks, the risk management division is responsible for the administration of risk management which includes insurance procurement. So we purchase all of the city's insurance policies, certificate of insurance reviews. We review approximately over 3,000 individual certificates each year. So anybody who provides a permit, has an agreement with the city, or is a vendor that you see on the sidewalk, they have to provide insurance. The risk management division, we also develop the rates for our self insurance funds.

And those are the funds that we use to help pay out claims. In addition to that, we help public works, public utilities, and other departments respond to emergencies that happen on the city's right of way. Risk management is also responsible for the hazardous waste contract. So we pay all of the taxes, fees. We help departments dispatch emergency responses out on the street.

Some examples include if there's an accident and there's gasoline that's been spilled, we will dispatch our hazardous waste contractor to help with those emergencies. Risk management plays a crucial role in creating partnerships with our other departments such as human resources and the city attorney's office and safety to help mitigate overall risks for the city. So this slide here goes into detail of how the city purchases its insurance policies. You can divide the process into four major phases. The first phase is when we meet with our broker And we really talk about any changes that we see in the city that we perceive within the next twelve months that we may need to capture in the new insurance policies.

This may include the new water park or the sports complex as there's property that the city needs to be responsible for ensuring. We also review existing liabilities, anything that we see coming again within the next twelve months that may impact the new policies. The second phase is our exposure and underwriting phase. So we work very closely with our departments to ensure that we report all of our exposures correctly. We take note of all of the playgrounds we have, any new courts, pickleball courts, all of that is insured.

And we have to make sure our schedules are updated and the proper evaluations are given. The third phase, is really the coverage negotiation, that is primarily completed by our broker. So they are responsible for taking our applications, all of our data, going out to market to all the various insurance companies, including pools and other insuring mechanisms to get the best available quotes for us for the best coverage. Lastly, during the May, the last phase, which usually takes place May through June, is the presentation to the city. So our brokers come, they present all options.

We review policy exclusions, conditions, applicable retentions and deductibles, and select the best options for the city. On this slide here, you'll see the overall insurance costs for the city over the past five years. You'll see that the city has experienced some large increases but Riverside is not alone within that. We, from the assessments we have completed compared to other municipalities, have been on the lower end. But we have had some material underwriting conditions each year that have led to some of the increases.

Last year during the Palisades fire, we did not absorb any of those losses. The insurance companies that the city accesses are different from the insurance companies that homeowners access. So the city did not see any increases to the city's property insurance for this current policy cycle that we're in. We actually saw a reduction in the same process where we increased our insured values to about from $1,000,000,000 to $1,200,000,000 This is a copy of the certificate of insurance that we review for all applicable vendors and permit holders. It's a tool that helps us mitigate risk when we believe that a third party is responsible for certain aspects of a claim.

And again, we review over 3,000 a year. And we also conduct trainings throughout the year to help vendors understand insurance. We've been lucky enough to help vendors access programs. And in one particular case, helped a vendor identify fraud within their own broker where they were charging fees that they were not supposed to be charging for requesting these certificates. Recently with the help of our fellow, she has been able to complete GIS maps of our insured assets.

In doing so, we've been able to find assets that fall within certain flood zones. So we update those on our schedules. Currently, these maps are being implemented and used for other city services. And it's been good to see our insured assets. Again, just for us to reassure that we're properly insuring them, one.

And number two, if we do see city assets that are in vulnerable areas to take the proper risk or mitigation risk to help avoid any damage. We are also working on claims maps that will help us create some trends and, again, work with our city partners to help limit the city's liability. These are a couple examples of the responses that we help respond to. The first picture, we received a call from parks. There seemed that somebody dumped used oil on one of our park fence posts.

And that, of course, is a hazard to public visiting the park, and we definitely don't want any kids touching that, you know, drinking it or, you know, when they're out there in the field. The second two pictures happened last year during the heavy rain season. So we did help public works with that area. I'm not an engineer, so I don't know exactly what the technical terms are for what was done. But we were able to help them with the quick response and, again, ensure that there wasn't any flooding to surrounding areas.

And with that oh, one more thing. So recently, as part of the city manager's book of work, we did implement a risk management working group, which with the goal of this working group, again, is to work with our city partners in identifying major issues that increase the city's liabilities. With this group, we hope to enhance training and provide the resources that our staff need to reduce overall liabilities. And with that, the recommendation is that the finance committee receive the report and provide input and forward to the city council the annual update of the city's risk management division and insurance administration. I'm happy to answer any questions.

All right, thank you. We will turn to public comment now. I don't know if we need to play the recording or if anyone would like to make public comment. No. I don't see any in in the chamber. I don't see any online. So I'll turn back to the dais here and ask my colleagues if they have any questions. Comments? No questions? No comments? I I just have one.

Sure.

So the working group was established in 2025, that's this year. Yes. How's it going? What will you all be focusing on?

Well, did have our initial kind of kickoff meeting. So with that, we decided the first course of action for us was really to map out all of the risk management operations in the city. The core function lives within the finance department, but other departments play a crucial role. We have the human resources department, which houses the workers' comp division. Our city attorney's office is responsible for litigating claims and the process of day to day tort claims. We also have our safety managers that are within the Human Resources Department. So it's really just a mapping out of the core players in order for us to kind of get on the same page and work together to again minimize the city's risk liabilities.

That's great. I'm guessing then we can identify certain things that might be problematic over time, track them, and see if we can get better every year.

Yes, correct.

That's great. I think this will be an important addition when we think about how to save money. What's that? Oh, one question from council member.

Sorry. I it just came to me. The as we are working and and you said that the fire insurance, like, homeowners' homeowners' insurance does not affect us as as as government purchasers for the insurance. How does I guess the question is is that as we have a lot of property that is adjacent to fire zones and things like that, is there any indication that it could get higher in the years to come, or is it just the current cycle not seeing it but it could be higher in cycles to come, fire insurance going up?

Sure. So just to add on to that, so with with homeowners, what we purchase is commercial insurance. Mhmm. What homeowners per purchase is personal insurance. So again, two completely different markets, two different bond markets, different underwriters, different funding sources. Insurance could always go up and down depending on the market. We've seen a hard market for the past few years due to all of the natural disasters throughout The United States. But every time that happens, underwriters meet. They try to find different insurance companies. A lot of the times, they'll be not admitted or overseas, which, again, just to extend the risk liability on their end.

But the answer is really yes, it could go up, it could go down but our broker is responsible for ensuring we have the best rates. Currently all of our assets that we have in our schedule are insured a 100%. If there's a fire, we would get the replacement cost for that. So I'm confident that we'll be able to to buffer that in the next few years.

And and a follow-up question is I I've seen this commercial insurance for apartment complexes and multifamily. This has been happening to property owners is that the insurance rate has actually been adjusted based if they have affordable housing as a mix of their multifamily projects. It sees a higher risk and then therefore the cost goes up. As we're seeing more and more affordable housing go up across the city, is that gonna affect insurance rates at all or we haven't seen any kind of effect from that?

No, not for the city. So that'll be different. If you get comments from the community and their individual owners of affordable housing units, There there's really two components to insurance. We have the property side and the casualty side. A lot of the those smaller units buy both together in what's called a business owner's package. But us on the steady side, no. We I don't perceive us creating additional affordable housing units as a factor in specifically increasing our pricing.

Okay, thank you.

Since it was brought up about wildfires, since we're implementing this new wildfire mitigation program, is that gonna be beneficial to the city or mainly just to the homeowners that would be getting the insurance?

Both. So when we when I meet with the underwriters in January and February, it's really an opportunity for us to sell the city as a as a good risk. So as being ISO class one with our fire department, you know, us creating the GIS maps of our insured assets so we know we know what assets are at risk definitely help us. We do have a great program with a great carrier and like I mentioned, all that work has allowed us to receive a lower premium in property this current term that we're in now.

That's great, that's great. Well, with that, we will need to forward this on to city council so I will need a motion. We have a motion and a second. So, let's please vote. Motion carries. Unanimous. Thank you. Didn't mean to cut it off. See, know, the committee meetings, it's moving fast. Alright, onto communications. Do we have any legislative updates? No legislative updates, any items for future consideration? Alright then we're gonna end this meeting, adjourn this meeting at a whopping 03:18. Thank you all.