RES 03081 - Laserfiche WebLink

determined rate cycle. Over time, the rates should again normalize, and our total costs will be the same as projected in the long term. The City was faced with a similar situation in the mid 1980s, when PERS rates were 21.5% for public safety and 10.2% for miscellaneous employees. Unlike Pleasanton, many agencies took advantage of the long period of lower interest rates to balance their budgets, and they are now facing burdensome PERS rate increases. Because Pleasanton assumed the rate reductions were temporary and continued to budget for their costs, these large increases have been somewhat mitigated. Of course the portfolio losses have been large and happened very quickly, but the City's long-term financial planning will continue to normalize or level-off these PERS spikes over the long-term. e. Medical Premiums Providing quality, affordable health care for employees has become an almost unbeatable challenge in today's market. The basic problem is the rapidly rising cost of health care, particularly hospital and prescription costs, compounded by the lack of effectiveness of managed care to keep prices in check. For the fourth year in a row, the City's medical premiums will continue to climb faster than inflation in fiscal year 2003-04. The City's two health carriers have informed the City that they will increase their premiums by approximately 12%, beginning July 1, 2003. As a side note, while these pementages are high, they are actually lower than what staff is seeing industry wide in Northern California. f. Workers' Compensation Because the City is self-insured for workers' compensation activities, the City has an established Workers' Compensation Fund to account for and finance its liability arising out of workplace injuries. From this Fund, the City makes payments on all recorded and approved claims. For the period ending 6/30/02, the City's estimated future liability for all prior and current-year claims (excluding LPFD) was $1.6 million. As a comparison, this represents about a $265,000 increase from the period ending 6/30/01. During this same period, the LPFD's estimated future liability for all prior and current-year claims was $1 million - this represents an increase of approximately $386,000 from the previous fiscal year. All total, the City's combined liability for workers' compensation (excluding Livermore's share for LPFD) is approximately $2.1 million. While staff continues to aggressively manage workers' compensation claims to minimize and control costs to the City, the impacts and realities of workers' compensation laws are not within our span of control. For example, a new bill that was signed into law in 2002 increased temporary disability benefits from the maximum weekly rate of $490 to $602 in 2003, and the amount will incrementally go up again in 2004, 2005 and 2006. An increase in the permanent disability weekly maximum is also included in this new law. A very powerful xvi