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Risk Management Report 2013

The purpose of this report is to provide information, both programmatic and statistical, to help us understand and incorporate risk management measures into the everyday tasks we perform. Some general and unique challenges that have faced Clackamas County will be addressed as well. Knowing there is no crystal ball for forecasting the future needs of the County, we must rely on the experiences and statistics of previous years to project potential areas of future need.

General Overview

Clackamas County has 381,775 residents living within an area of 1,879 square miles. The county is primarily rural but does include 17 cities and local governments. Clackamas County employs approximately 2,379 full-time, part-time, seasonal and temporary employees, along with many volunteers. County government consists of departments organized to provide the following services: transportation and development, sewer, public safety/law enforcement, tourism, public and governmental affairs, libraries, community health and social services, taxation and assessment, as well as internal administrative services.

It is the intention of Clackamas County to preserve and protect the assets of the County from accidental loss at the most economical cost. Also, just as importantly, the County’s goal is to provide a safe, secure and healthy working environment for its employees. The County has elected to retain exposure to loss primarily through self-insurance and transfer exposure through purchased insurance only when the premium cost has been determined to be cost-efficient compared to the exposure.

The management and control of the County’s risk management program is a function of the Risk and Benefits Division, within the Department of Employee Services. A Risk Management Committee provides oversight of this function with the day to day management provided by the Risk Manager. Our philosophy is that risk management must be so much a part of County culture that it becomes a value rather than merely a priority that shifts as other priorities change. The primary areas managed through this program are: liability, workers’ compensation, vehicles and unemployment claims administration, loss control services, insurance, and contracts.

Services to the Organization

Risk Management staff provides the following services to the organization:

Executive Summary

Our Cost of Risk had a slight uptick during FY12/13, due to an increase in each of the major expenditure areas (liability claims costs, workers’ compensation claims costs, insurance premiums and personal services.) The composite amount is the second highest amount during the last five years.

Vehicle costs continue on a steady incline since FY07/08. This is despite a drop in the number of incidents/claims since last fiscal year. The paid cost of “at-fault” vehicle accidents increased again in FY12/13 to $1,409 per 100,000 miles driven as compared to $1,304 in FY11/12. We will discuss the area of vehicle loss increase in more detail later in this report.

Unemployment costs have decreased for the third year in a row, down another 25%.

Daily attention to risk identification, prevention and mitigation is very important to the financial stability of ongoing stresses on County resources. Risks arise from decisions and practices throughout the entire organization, not just those departments with the most likelihood of sustaining loss. Identifying risk and preventing and managing it wherever it is found will contribute to a sound and productive service-oriented organization.

Statistical Summary

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Claims data reflects that from FY 11/12 to FY 12/13 number and costs changed by the following:

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The OSHA Incidence Rate graph shows how we have done in preventing injuries. This relates to the number of injuries per 100 full-time workers. The current OSHA review period increased 1% to 5.08. The trend over the past three years is moving upward. With the increasing cost of medical care it is essential that employees focus on prevention through a heightened awareness of the risks associated with each task performed. Prevention is the best way to avoid these costs. The workers’ compensation section describes the financial impact of this OSHA experience.

Risk graphs

To compare our program with like entities, we calculate the cost of risk as a percentage of budget and payroll. Costs include: actual claims expenditures (liability, workers’ compensation, and vehicle), insurance premiums, staff salaries and benefits, materials and supplies, consultants and contractors.

From the graph you will see that our cost of risk increased from FY11/12. The budget percentage increased by 12.91% and payroll by 5.56%. As mentioned in the summary, the increase resulted from increased in each of the areas listed above.

Liability Claims

Claims brought against the County comprise a significant portion of the annual expenditures from the self insurance fund. We contract with a third-party administrator to effectively manage general liability, employment and vehicle claims. County Counsel contributes early on in any claims that may involve litigation. The following graphs show the pertinent data related to these exposures.

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The overall number of liability claims decreased by19%, due primarily to a decrease in the general liability category (e.g. trip/fall, road design, etc.). However, general liability (e.g. slip/fall, property damage) was one of the two highest categories with the highest cost. The other category was automobile claims. These increases drove an overall increase in the liability cost category of 22%. Note: this is cost paid during FY12/13 for all claims, regardless of the year in which they occurred, so the increase is partially related to older claims.

Of note is that vehicle claims (this does not include incidents that are handled in-house or where money is paid to a damaged third party) increased in both number and cost by 12.5% and 59%, respectively. The Vehicle Claims section of this report contains more detail.

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This year, for the first time, the report contains data that reflects each department’s relativity to other departments based on payroll (per $100,000).

Based on this method you will note that the Department of Transportation and Development (DTD) and the Sheriff’s Office (CCSO) do not have the highest number of claims per capita for FY12/13. The Sheriff’s Office does, however, have the highest cost.

Workers' Compensation Claims

Workers’ compensation claims costs increased by 19% from FY11/12 to FY12/13 while the number decreased by 6% during the same period. (See the Summary graphs in the Statistical summary section).

Risk graphs

The number of claims per employee decreased by 6%. This continues a three-year downward trend for which we are very pleased. With this continued decrease we are optimistic that future costs will begin to decrease. As has been mentioned in earlier reports, the best way to reduce costs is to prevent injuries.

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Strains and sprains decreased by 31% this past year. Because of the extended length of time these claims continue, this reduction should mean lower future costs. However, the number of fractures increased by 60%. Another area of high frequency was lacerations. The majority of the lacerations were either needle sticks or dog bites. Generally speaking, fractures and lacerations are less sever and of shorter duration than strains/sprains. However, costs associated with fractures increased by 529% and lacerations by 156%. From a loss prevention standpoint, these types of injuries are very preventable. The fractures resulted mostly from trips and falls which can be prevented with a hight level of attentiveness to one’s surroundings. Needle sticks can be prevented through stricter adherence to correct protocols around giving injections and dog bites through proper dog handling.

The cost graphs capture the amount spent during the fiscal year for all claims. It is apparent that strains and sprains continue to generate significant cost (over $500,000). Even though the number of strains/sprains declined, the cost was still significant. This type of injury is usually the most potentially volatile so implementing ways of preventing them is vital.

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The Department graphs compare the relativity between departments based on $100,000 of payroll. This method gives us a better idea of how departments compare based on their size. There is still a risk factor to consider and the relativity does not take this into account. However, the comparisons reveal where some additional analysis of injures is warranted. While the numbers in both areas decreased, there is still work to be done (e.g. DTD claims number and CCSO and Health, Housing and Human Services (H3S) costs). The two injury-type categories with the highest frequency in DTD were contusions (8) and strain/sprains (7) out of a total of 23. The top two cost categories in CCSO were fractures and strain/sprains. The high cost of the H3S claims resulted from claims in the Health and Weatherization divisions. The highest categories were fractures and strain/sprains.

Vehicle Claims

County personnel drove in excess of 6.5 million miles during FY12/13. The total number of vehicle accidents (including fault and no-fault) decreased from 135 to 95 (-30%). From an analysis of the data, the largest decrease occurred in the “backing-up” and “hitting fixed objects” (posts) categories. However, the cost for these accidents increased by 14% due to a few high-dollar crashes. Since FY09/10 vehicle accident costs have increased by 56%.

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We feel it is important to distinguish between “no-fault” and “fault” accidents. This will help us focus on those accidents that result from error on the part of a County driver and look for loss prevention methods to address it.

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The preceding graphs capture the areas where our loss control efforts need to be focused. These are all causes that resulted from driver errors. From an analysis of the data, driver distractions and poor judgment were the primary causes.

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Data reflects each department’s relativity to other departments based on payroll. The two departments that drive the most (CCSO and DTD) incurred the most vehicle incidents. Proper follow-up training after a preventable accident and regular refresher training are important for all departments.

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The number of claims per miles driven is the best way to compare Clackamas County with other jurisdictions. For example, Clackamas County’s FY 11-12 rate was 1.98. Multnomah County’s FY11-12 rate of 2.48 (number of incidents per 100,000 miles driven) reflects how our two jurisdictions compare.

Unemployment Claims

Unemployment costs have decreased for the third year in a row, down another 25%.

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We have made some progress in the areas of appropriate documentation about employment actions and involving the Department of Employee Services early when employment questions and decisions arise. Fewer claims are being filed because of fewer layoffs and the length of time that people draw benefits has shortened.

Insurance Premiums

Premiums increased slightly (8%). This was primarily due to the fact that the property insurer that has insured the County for a number of years decided to withdraw from the public entity market in the Northwest to a large extent because of recent earthquake modeling. This insurer had been the most competitive in terms of pricing.

Clackamas County purchases insurance in the following areas: property, boiler and machinery, excess liability, excess workers’ compensation, volunteer and van liability, and marine and aviation liability.

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Conclusion

Together we make a difference

Achieving our mission - The goal of any risk management effort should be to help the organization achieve its mission. At the beginning of this report we stated that with resources shrinking, risk management is affected as well. In light of this, we should question how we are doing relative to those efforts. Hopefully, the data presented in this report can help answer that question.

It has been suggested that managing our risk effectively can be seen as a way to increase resources. Here are a couple of ways this can happen.

In terms of workers’ compensation, employees who are at work because they have not been injured on the job avoids the need to back-fill, avoids overtime, promotes higher quality work because the person whose job it is, is doing the work, promotes positive morale and eliminates claim costs.

On the liability side, attention to how an action may bring liability upon the County improves County-citizen relations by avoiding contentious claims. This attention often improves the efficiency of the service as well since time is not spent investigating and managing the result of a bad decision.

During FY12/13 the number of claims in each area decreased while the cost in all three areas increased. As mentioned earlier, claim prevention is the best way to reduce costs. Some examples of loss prevention measures are: ergonomic assessments and stretching to reduce strains; thorough review of incidents to determine case to prevent recurrence (CCSO Accident Review Board); a pothole hotline; regular training on practices such as the Sheriff’s pursuit policy and proper use of personal protective equipment.

Efforts will be increased to improve the consistency and effectiveness of our driver training. With the majority of the accidents occurring in the Sheriff’s Office, Risk Management will lend its support to finding ways of meeting the training needs. Also, on a County-wide basis emphasis will be placed on increased use of the Alert Driving training tool.

In addition, we believe that some of the cause of vehicle accidents is related to improper driving habits, such as following distance. Many of us have been driving for many years and have either forgotten driving rules or never had the opportunity to learn them early on. We believe the Transportation Safety Action Plan being promoted by the Transportation Department will help in this area.
Coney
To further promote and encourage safety the Safety Team introduced Coney”, an icon meant to easily direct people to safety-related messages and resources.

As noted in the Workers’ Compensation section there is work to be done related to greater attentiveness to ones surroundings and stricter adherence to correct protocols, especially around giving injections and dog bites.

Participation in the Safety Incentive Program increased during FY12/13 to an average of almost 700 submissions per month. The program focuses on reporting safe and unsafe behaviors and conditions with the goal being to identify corrective measures.

Our goal remains to assist County departments in working to preserve and protect the assets of Clackamas County and its citizens.

Dwayne Kroening, CRM
Risk Manager
(503) 655-8576

Janis Oyama
Human Resources Assistant
(503) 742-5476

Shari Riedman
Integrated Disability Analyst
(503) 655-8577

Teresa Pouppirt
Integrated Disability Analyst
(503) 742-5477

Christie Long
Human Resources Assistant
(503) 742-5469

Trisha Bafus
Risk & Loss Control Analyst
(503) 742-5482

Jeremy Tovey
Risk & Loss Control Analyst
(503) 742-5475

Larry Lancaster
Risk & Loss Control Analyst
(503) 742-4618

Jason Morrill
Human Resources Assistant
(503) 655-8354

Mark Stotik
Employee Services Deputy Director
(503) 655-8292

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