Presented below is Clackamas County Risk Management's Annual Report. It contains graphs and statistics spanning the five-year period of July 1, 2010 through June 30, 2015.
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 rely on the experiences and statistics of previous years to project potential areas of future need.
Clackamas County has 397,385 residents living within an area of 1,879 square miles. Clackamas County employs approximately 2,370 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 can shift 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:
- Internal consulting services for departmental staff on preventing and controlling risks, including risk assessments;
- Workers' compensation, liability, vehicle, property and unemployment claims administration;
- Marketing, purchasing, and administration of property, excess liability and workers' compensation, and other miscellaneous insurance policies and bonds;
- Review of County contracts for insurance requirements and indemnification language;
- Employee and supervisory training on risk-related topics, including tory liability, workers' compensation, loss control and employee safety;
- Coordination of transitional duty assignments and physical rehabilitation programs for injured workers;
- Loss control consultative services for employee safety and environmental issues;
- Ergonomic consultations.
We continue to focus on creating a loss-free environment. One important way of doing this is to analyze what has occurred and what can be learned from it.
Our Cost of Risk had a slight uptick during the FY 14/15, due primarily to an increase in workers' compensation claims costs. The composite amount is the highest amount during the last five years.
You will notice that the number of claims decreased in Liability and increased in Workers' Compensation. However, even with a 35% decrease in liability claims, the cost remained high. The reason for this is that the cost of older claims continues to increase.
Vehicle costs for all vehicle claims have continued on a steady incline since FY 10/11. Of these costs, the paid cost of "at-fault" vehicle accidents increased by 7% in FY 14/15. We will discuss the area of vehicle cost increase in more detail later in this report.
Unemployment costs increased 2% in FY 14/15.
Daily attention to risk identification, prevention and mitigation is very important to necessary financial stability because 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 and move the County's strategic plan forward.
Claims data reflects that from FY 13/14 to FY 14/15 number and costs changed by the following:
- Liability down 35% and down 2% respectively.
- Workers' Compensation up 13% and up 68% respectively.
- Vehicle claims up 1% and up 20% respectively.
The OSHA Incidence Rate graph shows how we are doing in preventing injuries. This is a calculation that determines the number of injuries per 100 full-time workers. The current OSHA review period increased 10% to 4.81. There is a direct correlation between the OSHA rate and workers' compensation expenditures that will be explained in the WC section.
Cost of Risk
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 slightly from FY 13/14. The budget percentage increased by .36% and payroll by 1%. As noted in the Executive Summary, the increase is primarily the result of a large increase in workers' compensation claims expenditures that will be explained in more detail in the Workers' Compensation Claims section.
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.
The overall number of liability claims decreased by 35%, due to a decrease in all Liability categories: General Liability, Medical Malpractice, Employment Related, Excessive Force, and Auto.
The general liability claims category decreased by 27%. Some examples of general liability claims are: trip/falls, road design, and property losses.
General liability claims costs increased by 6%, despite a 27% reduction in number of claims. Note: this is money paid during FY 14/15 for all claims, regardless of the year in which they occurred. 3 claims accounted for 93% of the expenditure.
You will also note that there are costs associated with civil rights claims in fiscal years 13/14 and 14/15 even though there were no claims during those years. This is because some claims, especially claims where litigation is involved, can take years before the final disposition occurs. Costs continue to accrue during this period.
Please note that in the Departmental graphs the data is based on the department's relativity to other departments based on payroll ($100,000).
By looking at departments based on payroll we get a good picture of how departments compare to each other, taking size out of the equation. One possible conclusion we may draw from the cost graph is that, despite not having the highest number of claims, because of the type of risk involved, the Sheriff's Office and Department of Transportation generally have claims that result in higher costs.
As mentioned earlier, the OSHA rate increased in FY 14/15. This correlates with an increase in the number of workers' compensation claims of 13%.
Costs increased by 68% (this is the amount spent on all claims - regardless of the year in which they occurred).
The majority of this increase occurred in the fracture and contusion categories. Even though the number of new claims decreased in these categories, because of prior year claims that continue to generate medical treatment, the cost that occurred in FY 14/15 increased.
Strains and sprains continue to be the highest cause of claims in both number and cost. There were 60% more strain/sprain claims as compared to the prior year. This often has an effect on the costs increasing in the future because these kinds of claims generate the most medical treatment and disability over a long period of time.
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 injuries is warranted. Additional detail is available upon request.
County personnel drove in excess of 7,300,000 miles during FY 14/15. This was a reduction from FY 13/14 of 4%.
However, we still saw a cost increase of 20%. The total number of vehicle accidents (both fault and no-fault) increased from 109 to 110.
Clackamas County's FY 14/15 rate per total number of claims was 1.49 as compared with 1.41 in FY 13/14. The cost per claim rate in FY 14/15 was $2,816.60 as compared with $2,226.62 in FY 13/14.
The top four causes by number of claims remained the same as last year. Backing remained number one. However, the highest cost that was paid out was in the "struck other vehicle" category.
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.
Clackamas County's FY 14/15 rate per number of at fault claims was 0.84 as compared with 0.64 in FY 13/14. The cost per at fault claim rate in FY 14/15 was $2,143.99 as compared with $1,663.95 in FY 13/14.
Not only are vehicle claims increasing in general but those caused due to the fault of our employee are also increasing.
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.
Data reflects each department's relativity to other departments based on miles driven. These totals include the costs related to the liability portion of a claim. The two departments that drive the most (CCSO and DTD) incurred the most vehicle incidents. However, while BCS had less claims than the Sheriff's Office or DTD, the cost was much higher. Proper follow-up training after a preventable accident and regular refresher training are important for all departments.
Unemployment costs increased 2% from FY 14/15. This increase represents an increase for the second year in a row. We are also seeing more benefits being paid to part-time workers due to claims being filed when the number of hours fall below full-time. Seasonal workers continue to represent the largest area where benefits are paid.
We continue to emphasize the need for appropriate documentation about employment actions and involving the Department of Employee Services early when employment questions and decisions arise.
Premiums decreased overall by 1%. A decrease in the Workers' Compensation excess premium compensated for an increase in property and excess liability lines of coverage. While rates are remaining fairly stable, the County's exposure base is increasing. In the property area we are adding and increasing property values. In the excess insurance markets our recent large claims payouts are increasing those premiums.
Clackamas County purchases insurance in the following areas: property, bridges, boiler and machinery, excess liability, excess workers' compensation, volunteer and van liability, and marine and aviation liability.
Of note this year is the fact that Clackamas County has joined with three other large self-insured public entities to create an excess liability insurance pool called Oregon Public Entity Excess Pool (OPEEP). It is our belief that this pool will provide a more stable insurance purchasing environment, resulting in lower premiums, higher limits and expanded coverage.
Achieving our mission - The goal of any risk management effort should be to help the organization achieve its mission. One important way of doing this is to increase resources. Managing risk can help accomplish this.
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.
In terms of liability, 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 FY 14/15 the costs as a percentage of both payroll and budget increased. An observation mentioned earlier is that claims, both liability and workers' compensation, can have long run-outs, so the greatest impact on reducing costs is to prevent loss, not just mitigate it once it occurs. Some examples of loss prevention measures in the workers' compensation area are: ergonomic assessments and stretching to reduce the impact of strains; in the liability area thorough review of incidents to determine ways to prevent recurrence (e.g. CCSO Accident Review Board); a pothole hotline; regular training on high risk practices such as the Sheriff Office's pursuit policy; and proper use of personal protective equipment.
Efforts are ongoing to improve the consistency of our driver training. Since much of the loss in the vehicle area is due to distracted driving and poor judgment while driving, efforts will be increased to communicate safe driving recommendations to County drivers. One example of this is observing safe following distances. Opportunities like the Wellness Fair will be used to promote these recommendations.
Risk Management has partnered with Clackamas County Safe Communities in a Drive to Zero campaign. All County employees will complete an online defensive driving course as one element in encouraging safe driving habits, both on and off the job.
To further promote and encourage safety the Safety Team uses "Coney", an icon meant to easily direct people to safety-related messages and resources.
Our goal remains to assist County departments in working to preserve and protect the assets of Clackamas County and its citizens.
Dwayne Kroening, CRM
Human Resources Assistant
Integrated Disability Analyst
Integrated Disability Analyst
Human Resources Assistant
Risk & Loss Control Analyst
Risk & Loss Control Analyst
Risk & Loss Control Analyst
Human Resources Assistant
Employee Services Deputy Director