§ 128.312. Self-insurance operating reserve.

(a)

As a part of the Self-Insurance Program, the Division shall create and maintain a Self-Insurance Operating Reserve. The purpose of the Self-Insurance Operating Reserve shall be to ensure the continued financial stability of the Self-Insurance Program, to avoid undue financial distress upon Participants, to preserve the Self-Insurance Program's ability to address catastrophic claims on behalf of Participants, to mitigate unanticipated expenses and costs, and to protect the Self-Insurance Program's ability to continue to meet its ongoing financial obligations.

(b)

The Self-Insurance Operating Reserve shall be an operating and administrative part of the Self-Insurance Program from which the following costs and expenses may be paid:

(1)

To subsidize the payment of all or a portion of a Participant's outstanding assessment when the Participant's Retained Earnings balance is negative, as set forth in Section 128.308; or

(2)

To subsidize the payment of all or a portion of a Participant's Emergency Assessment or to apply toward a catastrophic claim to avoid the necessity of an Emergency Assessment, as set forth in Section 128.309;

(c)

The Self-Insurance Operating Reserve shall be funded by annual contributions from all Participants as a part of each Participant's Annual Funding Amount.

(d)

Beginning in the budgeting process for the fiscal year beginning October 1, 2018, the Self-Insurance Operating Reserve Maximum shall be calculated as the sum set forth in the prior fiscal year's annual September 30 Actuarial Report of:

(1)

No less than ten percent of the estimated amount of cumulative Outstanding Claim Liability for Workers' Compensation for each Participant; and

(2)

No less than 15 percent of the estimated amount of cumulative Outstanding Claim Liability for General Liability and Automobile Liability for each Participant. The Self-Insurance Operating Reserve Maximum for the Self Insurance Program shall be recalculated annually.

(e)

Funding of the Self-Insurance Operating Reserve by Participants shall not be required if the fund balance of the Self-Insurance Operating Reserve is equal to or greater than the Self-Insurance Operating Reserve Maximum. If funding the full funding percentages described in Section 128.312(d) will result in a Self-Insurance Operating Reserve balance exceeding the Self-Insurance Operating Reserve Maximum, then the funding percentages for all Participants for that annual period shall be reduced accordingly.

(f)

Each Participant's annual contribution to the Self-Insurance Operating Reserve shall be subject to the following:

(1)

The Participant shall not be required to fund, in a single fiscal year, more than 20 percent of that Participant's total allocated responsibility for the Self-Insurance Operating Reserve Maximum. The allocation of each Participant's responsibility for the Self-Insurance Operating Reserve Maximum shall be calculated based upon the percentage that the Participant's estimated amount of cumulative Outstanding Claim Liability, as set forth in the prior fiscal year's annual September 30 Actuarial Report, bears to the cumulative Outstanding Claim Liability of the entire Self Insurance Program, as set forth in the prior fiscal year's annual September 30 Actuarial Report.

(2)

Each Participant's responsibility for contributing to the Self-Insurance Operating Reserve shall be calculated annually.

(3)

Participants shall not be required to fund the Self-Insurance Operating Reserve in any amount greater than the Self-Insurance Operating Reserve Maximum amount.

(g)

At the end of each three-year funding period following September 30, 2018, at the discretion of the Director, the Division shall:

(1)

Adjust the percentages of Outstanding Claim Liability utilized in Section 128.312(d) for Workers' Compensation, General Liability and Automobile Liability no less than ten percent of the estimated amount of cumulative Outstanding Claim Liability for Workers' Compensation for each Participant and no less than 15 percent of the estimated amount of cumulative Outstanding Claim Liability for General Liability and Automobile Liability; and

(2)

Adjust the percentage of Participant annual contribution to be used in 128.312(f)(1).

(h)

Effective September 30, 2018, the Risk Manager shall be authorized to transfer existing funds currently held in operating reserve for the Self-Insurance Program into the Self-Insurance Operating Reserve when such fund is established.

(i)

If, at any time and for any reason, the fund balance of the Self-Insurance Operating Reserve exceeds the computed Self-Insurance Operating Reserve Maximum, the funds shall be maintained in the Self-Insurance Operating Reserve. However, all Participant contributions to the Self-Insurance Operating Reserve shall be suspended while the balance of the Self-Insurance Operating Reserve exceeds the Self-Insurance Operating Reserve Maximum.

(j)

Any amounts earned as interest on the funds held in the Self-Insurance Operating Reserve will be treated as all other Interest Income earned under this Chapter 128, and will not attach to or be added to the Self-Insurance Operating Reserve.

(k)

Any Participant which withdraws from the Self-Insurance Program under Section 128.106 shall not be entitled to any refund of any contributions made to the Self-Insurance Operating Reserve.

(Ord. 2018-380-E , § 2)