Title
Resolution Appropriating $9,099,893.00 from the Risk Management Fund Unrestricted Net Balance to the Risk Management Fund Operating Budget to Cover a Shortage Due to Unanticipated Claims in FY2015 as well as Additional Reservations for Existing Claims that will be Paid Out in Future Fiscal Years
Purpose
PURPOSE/BACKGROUND:
The Risk Management Fund (the Fund) was established separate from the General Fund to manage and account for various insured and uninsured risks of loss for the City Departments and Hampton City Schools, related to torts such as: theft of, damage to, and destruction of assets; errors and omissions; injuries to employees including Line of Duty Act, insurance payments and liabilities; and natural disasters. Income for the Fund comes from an assessed annual insurance premium charged to the City departments and Hampton City Schools. The Fund has a component which holds funds in reserve for known and unknown past and current fiscal year claims which are not anticipated to be paid out within the current fiscal year.
The annual Risk Management Operating Budget is a component of the Fund that has been appropriated via the annual budgeting process and results in a City Council approved Risk Management Fund Operating Budget.
During the fiscal year one or more large claims may be incurred that had not been budgeted. The recording of these claims on the books may create a situation where operating expenditures for the fiscal year will exceed the City Council approved operating budget. In that case, an appropriation of funds from the Fund’s reserve component to the Risk Management Operating Budget must be requested by the Risk Manager and approved by the City Council. An extraordinary number and size of unanticipated claims and liabilities incurred in FY15 necessitates such a request of City Council.
Discussion:
During FY 15 the operating expenditures exceeded the City Council approved operating budget. A transfer of funds from the ...
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