Chapter 128 - RISK MANAGEMENT PROGRAM

Sec. 126.903. - Remedies prior to an award of contract. Chapter 129 - COMPENSATION OF CITY OFFICIALS AND EMPLOYEES Chapter 128 - RISK MANAGEMENT PROGRAM[1]

Footnotes: --- (1) ---

Editor's note— Ord. 2018-380-E, § 1, amended the Code by repealing former Ch. 128, §§ 128.101—128.124, and adding a new Ch. 128. Former Ch. 128 pertained to similar subject matter, and derived from Ord. 78-436-306, § 1; Ord. 78-1267-598, § 1; Ord. 79-902-499, § 1; Ord. 80-1320-665, § 1; Ord. 81-609-303, § 1.8; Ord. 83-591-400, § 1; Ord. 83-687-344, § 1; Ord. 83-1026-567, § 1; Ord. 86-1117-581, § 1; Ord. 88-297-117, § 1; Ord. 90-870-346, § 1; Ord. 91-619-243, § 1; Ord. 91-876-321, § 1; Ord. 92-1655-1103, § 1; Ord. 95-129-101, § 1; Ord. 96-457-275, § 1; Ord. 1999-863-E, § 3; Ord. 2004-835-E, § 1; Ord. 2005-700-E, § 1; Ord. 2006-902-E, § 1; Ord. 2008-513-E, § 1; Ord. 2009-374-E, § 2; Ord. 2011-732-E; Ord. 2013-209-E, § 40; Ord. 2015-5-E, § 1; and Ord. 2016-140-E, § 16.

State Law reference— Provision of insurance in anticipation of judgments or settlements against officers, employees, or agents of any county, municipality, or political subdivision, F.S. § 111.072; security for compensation; insurance carriers and self-insurers workers' compensation, F.S. § 440.38; waiver of sovereign immunity in tort actions, F.S. § 768.28.

State rule reference—Self-insurers in workers' compensation law, F.A.C. Ch. 38F-101 et seq.

PART 1. - GENERAL PROVISIONS

Sec. 128.101. - Short title.

This Chapter shall be known and may be cited as the Risk Management Code.

(Ord. 2018-380-E, § 2)

Sec. 128.102. - Risk management program created; coverages provided.

There is hereby authorized and created a Risk Management Program for the City. The Risk Management Program consists of self-insurance, administration and miscellaneous insurance to appropriately absorb or transfer risk from City operations. The purpose of the Risk Management Program is to generally manage the risk associated with City operations, provide uniform and centralized self-insurance for Automobile Liability, General Liability, and Workers' Compensation, as such terms are defined in Section 128.103 and provide insurance coverage for such other risks as may from time to time be added by the Director as provided in Section 128.401.

(Ord. 2018-380-E, § 2)

Sec. 128.103. - Definitions.

In this Chapter, unless the context otherwise requires, the following words or phrases have the following meanings:

(a)

Accident is an unforeseen and unplanned event or circumstance.

(b)

Actuary is the firm or individual utilized by the Self-Insurance Program to quantify risk and project future Claim Costs of the Self-Insurance Program and its Participants.

(c)

Actuarial Report is the report(s) prepared by the Division's Actuary that provides projections of future liabilities for the Self-Insurance Program.

(d)

Administrative Expense means all expenses of the Self-Insurance Program which are not directly attributable to the investigation, defense preparation, settlement and disposition of particular Claims or Occurrences.

(e)

Annual Funding Amount is the amount that a Participant is required to pay into the Self-Insurance Program for the purpose of funding the Participant's estimated Claim Costs, share of Administrative Expense and Participant's contribution to the Self-Insurance Operating Reserve for the ensuing fiscal year.

(f)

Automobile Liability includes that which is deemed payable under the terms and conditions of the most recent edition of the Specimen Policy for Automobile Liability as kept on file with the Division, and as modified periodically in accordance with Section 128.104.

(g)

Case Reserves means an estimate of the value of the amounts that will be paid in the future in connection with a Claim or a group of Claims that has not yet been paid.

(h)

City means the consolidated City of Jacksonville, Florida and all of its departments, divisions, boards, commissions, offices and organizational units including all Constitutional Officers of the City of Jacksonville, with the exception of the Duval County School Board and the School Board Members. The term City also includes all Independent Agencies.

(i)

City-Produced Event shall be any event where the City acts as the sole event producer or host.

(j)

City Safety Officer is the position within the Division primarily responsible for overseeing and supervising the safety efforts of the City and coordinating with all City departments, divisions, agencies, offices and organizational units on their established safety efforts, as is further described in Section 128.702.

(k)

Claim Costs means the sum of Claim Expense and Claim Payments.

(l)

Claim is a demand by an individual or entity, made against a Participant, to recover money as a result of a loss that is covered by either the Self-Insurance Program or by a policy maintained in the Miscellaneous Insurance Program.

(m)

Claim Expense means all expenses of the Self-Insurance Program, other than Claim Payments, which are directly attributable to particular Claims or Occurrences.

(n)

Claim Payments means the expenses of the Self-Insurance Program which are directly attributable to the settlement or judgment of a particular Claim or Occurrence.

(o)

Department means the Finance and Administration Department, or as named at the time.

(p)

Director means the Director of the Finance and Administration Department.

(q)

Dividend means an amount payable to a Participant at the end of the fiscal year based upon the amount of Participant Retained Earnings for that Participant.

(r)

Division means the Risk Management Division of the Finance and Administration Department.

(s)

Division Administrative Expense means "Division Administrative Expense" as such is defined in Section 128.402(a).

(t)

Division Retained Earnings means "Division Retained Earnings" as such is defined in Section 128.402(b).

(u)

General Liability includes that which is deemed payable under the terms and conditions of the most recent edition of the Specimen Policy for General Liability as kept on file with the Division, and as modified periodically in accordance with Section 128.104.

(v)

General Recoveries means those amounts which are recovered from third parties as a result of Occurrences of property damage or other losses suffered by the City.

(w)

Incurred But Not Reported (IBNR) means an estimate of the future liability arising from claims that will result from Occurrences that have already taken place but for which the claim(s) has not yet been reported to the Self-Insurance Program.

(x)

Incurred Loss means the entire loss including the estimated future settlement value of each Claim or cause of action arising from any Occurrence and for which coverage is provided for a Participant under the Self-Insurance Program, together with all reasonably foreseeable costs of investigation and adjustment.

(y)

Independent Agencies means a public body corporate and politic or body corporate operating in Duval County created by the City Council or the Florida legislature, with the exception of the Jacksonville Transit Authority.

(z)

Liability Component means that portion of a Participant's Claim Costs within the Self-Insurance Program which are attributable to the Participant's Claims covered under General Liability and under Automobile Liability.

(aa)

Loss means a monetary liability resulting from an Occurrence against a Participant under the coverages provided by this Chapter.

(bb)

Miscellaneous Insurance Program means the related administration and purchase of various insurance policies for risks transferred to insurance companies.

(cc)

Occurrence is an Accident, including continuous or repeated exposure to substantially the same general harmful conditions.

(dd)

Outstanding Claim Liability means the projected amount of liability for Claim Costs for all open claims and Incurred But Not Reported claims of a Participant for the anticipated life of those claims.

(ee)

Paid Loss means Claim Costs actually paid during a specific financial reporting period.

(ff)

Participant means the City, considered as a single unit, together with any Participating Independent Agencies.

(gg)

Participant Actual Expense Amount means the total amount of Claim Cost and Administrative Expense actually incurred by the Self-Insurance Program on behalf of a Participant during an annual period.

(hh)

Participant Actual Revenue Amount means the total amount of revenue received by the Self-Insurance Program attributable to a Participant during an annual period.

(ii)

Participating Independent Agency are the following listed Independent Agencies: Jacksonville Aviation Authority, Jacksonville Port Authority, JEA, Jacksonville Housing Authority, as such list may expanded or limited pursuant to Section 128.105 and Section 128.106, respectively.

(jj)

Participant Recovery or Recoveries means those amounts which are recovered from third parties in relation to a Claim that is covered in the Self-Insurance Program.

(kk)

Participant Retained Earnings means "Participant Retained Earnings" as such is defined in Section 128.308.

(ll)

Retained Earnings Adjustment Amount is the amount that a Participant's Retained Earnings either increases or decreases in a given year.

(mm)

Retained Earnings Threshold is the amount of the Retained Earnings account that, if exceeded, will qualify the Participant to receive a Dividend.

(nn)

Retained Earnings Threshold Percentage is the percentage used to determine the Retained Earnings Threshold and as described in Section 128.311.

(oo)

Risk Management Program means, collectively, the Self-Insurance Program, Miscellaneous Insurance Program and other related activities and responsibilities delegated to the City's Risk Management Division by the Director.

(pp)

Risk Manager means the person appointed by the Mayor and confirmed by the City Council as the Chief of Risk Management for the Division.

(qq)

Self-Insurance Operating Reserve means the "Self-Insurance Operating Reserve" as such is defined in Section 128.312.

(rr)

Self-Insurance Operating Reserve Maximum means the maximum balance to be maintained in the Self-Insurance Operating Reserve as such is described in Section 128.312.

(ss)

Self-Insurance Program means the self-insured risk management program established by Part 3 of this Chapter.

(tt)

Specimen Policy means the insurance form that shall be used to determine whether the Self-Insurance Program will be responsible for administering, adjusting and paying any Claim or Occurrence which is submitted to the Self-Insurance Program by a Participant.

(uu)

Workers' Compensation includes that which is deemed payable under the terms and conditions of the most recent edition of the Specimen Policy for Workers' Compensation as kept on file with the Division, and as modified periodically in accordance with Section 128.104.

(vv)

Workers' Compensation Component means that portion of a Participant's Claim Costs within the Self-Insurance Program which are attributable to the Participant's Claims covered under Workers' Compensation.

(Ord. 2018-380-E, § 2)

Sec. 128.104. - Scope of coverage.

(a)

In General. The Risk Management Program shall cover all officials, officers, employees and volunteers of the Participants while acting within the scope of their duties. It is intended that the Risk Management Program shall only cover such officials, officers, employees and volunteers of the Participants who acted in good faith and in the best interests of the Participant(s). The Participants do not intend to waive sovereign immunity by establishing the Risk Management Program. The Participants reserve the right to assert sovereign immunity to the extent allowed by law and to assert restrictions, conditions, and limitations on the settlement of Claims and payments of judgments, as set forth in applicable State or federal law.

(b)

Self-Insurance Program.

(1)

Specimen Policies. The Division shall assemble, maintain and distribute to all Participants, copies of Specimen Policies for Automobile Liability, General Liability and Workers' Compensation. The specimen policies shall be assembled and maintained in accordance with this Section 128.104.

(2)

Modification of Specimen Policies. Periodically, but not more than once per fiscal year, the Division may modify the Specimen Policies by adding, removing or amending the forms and endorsements attached. When such modifications are made, all Participants shall be provided with copies of the revised Specimen Policies and all attached forms at least 60 days prior to the effective date of any change.

(3)

Automobile Liability. The Specimen Policy for Automobile Liability shall be based upon the liability coverage section of the most recent version of the Business Auto Coverage Form, Form CA 00 01, as issued by the Insurance Services Office, Inc. and with Symbol 1 ("any auto") selected. The Specimen Policy for Automobile Liability will also include designated endorsements as selected by the Division. Where possible, such endorsements modifying the Specimen Policy for Automobile Liability shall be selected from the forms and endorsements issued by the Insurance Services Offices, Inc. and approved for use by insurance companies in the State of Florida.

(4)

General Liability. The Specimen Policy for General Liability shall be based upon the most recent version of the Commercial General Liability Coverage Form, Form CG 00 01, as issued by the Insurance Services Office, Inc. The Specimen Policy for General Liability will also include designated endorsements as selected by the Division. Where possible, such endorsements modifying the Specimen Policy for General Liability shall be selected from the forms and endorsements issued by the Insurance Services Offices, Inc. and approved for use by insurance companies in the State of Florida.

(5)

Workers' Compensation. The Specimen Policy for Workers' Compensation shall cover all liabilities of the Participants arising under F.S. Ch. 440, and shall be based upon the most recent version of the Workers Compensation And Employers Liability Insurance Policy Form, Form WC 00 00 00 C, as issued by the National Council on Compensation Insurance. The Specimen Policy for Workers' Compensation will also include designated endorsements as selected by the Division. Where possible, such endorsements modifying the Specimen Policy for Workers' Compensation shall be selected from the forms and endorsements issued by the National Council on Compensation Insurance and approved for use by insurance companies in the State of Florida.

(c)

Miscellaneous Insurance Program. The scope of coverage in the Miscellaneous Insurance Program will be governed by terms and conditions of the insurance policies purchased by the Division.

(Ord. 2018-380-E, § 2)

Sec. 128.105. - Participation by independent agencies authorized.

(a)

Participation by the Participating Independent Agencies in the Self-Insurance Program is authorized. A City agency desiring to become a Participating Independent Agency in the Self-Insurance Program must be an Independent Agency. Such independent agency shall provide to the Director a resolution of its governing body making such election. Upon acceptance by the Director, the election shall become binding upon the electing independent agency and irrevocable except with the consent of the City Council. However, the Director is expressly authorized to reject such resolution if any of the following is a part of the resolution:

(1)

The electing independent agency, in its resolution, requires coverage for a risk not covered by the Self-Insurance Program; or

(2)

The resolution imposes or attempts to impose limits or conditions on the administration of the Self-Insurance Program when such conditions are different from or contrary to the provisions of this Chapter or to the rules and methodologies prescribed by the Director; or

(3)

The resolution reserves the right of the electing independent agency to withdraw from the Self-Insurance Program without the prior consent of the City Council.

(b)

The City Council shall grant final approval to the admittance of any independent agency into the Self-Insurance Program. The City Council shall have full discretion to withhold or deny approval of any prospective independent agency.

(c)

A Participating Independent Agency shall be subject to and observe all the provisions of this Chapter, as from time to time amended by the City Council, and all rules prescribed by the Director pursuant to Chapter 128.

(Ord. 2018-380-E, § 2)

Sec. 128.106. - Withdrawal of Participating Independent Agencies from the Self-Insurance Program.

As described in Section 128.105(a), a Participating Independent Agency once admitted to participate in the Self-Insurance Program, may not withdraw from the Self-Insurance Program without the consent of the City Council. Further, the City Council's approval of such withdrawal shall designate whether the withdrawing Participating Independent Agency agrees to:

(a)

Assume Administration of their Existing Claims by agreeing to assume control of, responsibility for, and payment of all existing claims the City was administering in the Self-Insurance Program as of the effective date of the Participating Independent Agency's withdrawal. All funds being held by the City for the payment and administration of the outstanding Claims shall be returned to the withdrawing Participant. However, the withdrawing Participant shall:

(1)

Remain obligated for any Assessments payable by the Participant under Section 128.309 that accumulated prior to the date of the Participant's withdrawal;

(2)

Remain entitled to any Dividends which are payable to the Participant under Section 128.311 that accumulated prior to the date of the Participant's withdrawal; and

(3)

Forfeit all and shall not be entitled to any refund of contributions made to the Self-Insurance Operating Reserve; or

(b)

Pay the City for Continued Administration of their Existing Claims by establishing a funding agreement with the Director to provide for a means of funding Claim Costs and Administrative Expenses associated with administering the existing Claims of the withdrawing Participant as of the effective date of the withdrawal, until all Claims of the withdrawing Participant, that had been presented to the Self-Insurance Program prior to the date of the Participant's withdrawal, are closed and paid in full. Such funding mechanism shall be calculated subject to the following criteria:

(1)

The funding mechanism shall utilize actuarially sound methodology;

(2)

In addition to the estimated liability for payment of outstanding Claim liabilities, the City shall be entitled to charge administrative fees to the withdrawing Participant, which can be assessed annually for all claims which remain open. These administrative fees will be based on the Administration Expenses calculation formula for then-existing Participating Independent Agencies;

(3)

The withdrawing Participant shall not be entitled to any refund of any contributions made to the Self-Insurance Operating Reserve; and

(4)

As Claims are closed, any excess fund balances attributable to the closed Claims shall be returned to the withdrawing Participant on an annual basis. Such funds due to the withdrawing Participant can either be paid directly to the Participant or applied as a credit to any amounts due to the City for continued administration of open claims.

(Ord. 2018-380-E, § 2)

PART 2. - RISK MANAGEMENT DIVISION ADMINISTRATION

Sec. 128.201. - Department to implement and consolidate.

The Department shall be responsible for implementation and administration of this Chapter and the Risk Management Program established hereby. The Director is authorized to promulgate rules for the proper management and maintenance of the Risk Management Program.

(Ord. 2018-380-E, § 2)

Sec. 128.202. - Duties of risk manager.

The duties of the Risk Manager are set forth in Chapter 24, Part 4, Ordinance Code.

(Ord. 2018-380-E, § 2)

Sec. 128.203. - Reports on risk management program.

(a)

The Mayor, through the Director, shall submit to the City Council annually by June 1 a formal report on his or her analysis of the Risk Management Program, which shall include:

(1)

Underwriting information as to the nature of the risks accepted for self-insurance and those risks that are transferred to the insurance market;

(2)

The funds appropriated or contributed to the Self-Insurance Fund and premiums paid for insurance through the market;

(3)

The costs of administration and operation of the Risk Management Program; and

(4)

Assessments made or loss provisions returned by the Director during the reporting period.

(b)

Annually by June 1, the Director shall submit to City Council the Risk Management maintained inventory of City owned properties.

(c)

The Director shall submit the final annual and semi-annual risk Actuarial Reports to City Council upon receipt.

(d)

The Division shall make available to the appropriate committee of the City Council and to the Participating Independent Agencies a complete claims history including description of loss, claims and reserves and the cost of all claims handled by the Risk Management Program.

(Ord. 2018-380-E, § 2)

PART 3. - SELF-INSURANCE PROGRAM

SUBPART A. - GENERAL PROVISIONS

Sec. 128.301. - Scope of Self-Insurance Program Coverage.

The Self-Insurance Program covers all Claim Costs and Administrative Expenses, which are covered by the Automobile Liability, General Liability and the Workers' Compensation coverage for all Participants.

(Ord. 2018-380-E, § 2)

Sec. 128.302. - Self-insurance fund.

There is hereby created a Self-Insurance Fund, a permanent fund which shall be a continuing appropriation notwithstanding fiscal years, to be used to fund the Claim Costs and Administrative Expenses of the Self-Insurance Program.

(Ord. 2018-380-E, § 2)

Sec. 128.303. - Investments.

Investment of the funds in the Self-Insurance Fund is authorized in accordance with general City investment policies and funds to be invested may be commingled with other City funds for this purpose.

(Ord. 2018-380-E, § 2)

Sec. 128.304. - Accounts and records.

Within the Self-Insurance Fund there shall be maintained such accounts and records as will provide a reasonable segregation and determination of the assets and liabilities of each Participant, together with historical loss data and other information necessary for the accurate and proper development of such operating statements as the Risk Manager deems necessary.

(Ord. 2018-380-E, § 2)

SUBPART B. - SELF-INSURANCE PROGRAM FUNDING

Sec. 128.305. - Annual funding and budgeting.

(a)

Annually, the Risk Manager shall determine the Annual Funding Amount for each Participant for the ensuing fiscal year, using sound accounting and actuarial principles, based upon the formula described below:

(1)

Projected Claim Costs plus Administrative Expenses;

(2)

Less projected interest income to be subtracted from (1) above;

(3)

Less projected miscellaneous income to be subtracted from (1) above;

(4)

Less projected Participant Recoveries, as defined in Section 128.502, to be subtracted from (1) above; and

(5)

Plus the Participant's requirement to fund the Self-Insurance Operating Reserve as described in Section 128.312.

(b)

The Division shall further subdivide all expenses and revenues related to the Self-Insurance Program into Workers' Compensation Component and Liability Component utilizing a methodology to be approved by the Risk Manager, which shall be based upon the historic analysis between workers' compensation and liability claims and expenses in the Self-Insurance Program.

(c)

Each Participant shall be responsible for budgeting and paying for its Annual Funding Amount for each fiscal year in 1/12th increments on a monthly basis.

(Ord. 2018-380-E, § 2)

Sec. 128.306. - Claim costs.

(a)

Claim Costs shall be estimated based upon the sum of the following factors:

(1)

Projected Paid Loss of the Participant for the upcoming fiscal year;

(2)

Projected change in Case Reserves of the Participant for the upcoming fiscal year;

(3)

Each Participant's share of the projected unallocated loss adjustment expense (ULAE) reserve for future administrative costs of the Self-Insurance Program; and

(4)

Projected Incurred But Not Reported (IBNR) Claims Expense for the Participant for the upcoming year.

(Ord. 2018-380-E, § 2)

Sec. 128.307. - Administrative expense.

The portion of Administrative Expense allocated to each Participant for the ensuing fiscal year is determined by utilizing the number of the Participant's Full-Time Equivalent (FTE) employees for the current fiscal year as represented by the Participant's budget submission to the City Council for the upcoming fiscal year. However, with respect to the Jacksonville Housing Authority, the number of full time equivalent employees shall be based upon the budget submitted to and approved by the Jacksonville Housing Authority Board for the upcoming fiscal year.

(Ord. 2018-380-E, § 2)

Sec. 128.308. - Participant retained earnings.

(a)

For each Participant, for the fiscal year beginning October 1, 2018 and for all following fiscal years, a Participant Retained Earnings account shall be established.

(b)

Following the close of each fiscal year, the Risk Manager shall calculate the Participant's Retained Earnings Adjustment Amount. The Retained Earnings Adjustment Amount shall be the net difference of Participant's Actual Revenue Amount and the Participant's Actual Expense Amount.

(c)

If the Retained Earnings Adjustment Amount for a Participant is positive, that amount shall be added to the Participant's Retained Earnings account.

(d)

If the Retained Earnings Adjustment Amount for a Participant is negative, that amount shall be subtracted from the Participant's Retained Earnings account.

(e)

If following the adjustment, the Participant's Retained Earnings are negative, then that Participant shall be subject to Assessment, as outlined in Section 128.309.

(f)

If following the adjustment, the Participant's Retained Earnings are greater than the Retained Earnings Threshold, then that Participant shall be entitled to a Dividend, as outlined in Section 128.311.

(Ord. 2018-380-E, § 2)

Sec. 128.309. - Assessments.

(a)

For the fiscal year beginning October 1, 2018 and for all following fiscal years, if, following adjustment at the close of the fiscal year, a Participant's combined Retained Earnings account balance for both the Workers' Compensation Component and the Liability Component is negative, the Participant shall be assessed the balance of the deficit, which shall be paid as set forth in this Section.

(b)

Subject to the documented discretion of the Director, assessments shall be paid as follows:

(1)

The Participant shall be required to pay all or part of the assessment in that Participant's upcoming budget cycle, however, in no the event shall the assessment be paid in more than three budget cycles; or

(2)

Utilizing funds from the Self-Insurance Operating Reserve as described in Section 128.312.

(Ord. 2018-380-E, § 2)

Sec. 128.310. - Emergency assessments.

In the event of catastrophic losses which are of a magnitude that threaten the integrity and financial soundness of the Self-Insurance Program, and if it is determined by the Risk Manager that the resources of the Self-Insurance Operating Reserve are insufficient to allow for the deferral of the Self-Insurance Program's current debts and obligations to succeeding fiscal years, the Director shall have the right, with the concurrence of the Mayor, to authorize an emergency assessment to be assessed against each Participant. Such emergency assessment shall be approved by the City Council prior to such assessment. The Director, in his or her sole discretion, may apply payment from the Participant's Retained Earnings account to satisfy any or all of the emergency assessment.

(Ord. 2018-380-E, § 2)

Sec. 128.311. - Dividends.

(a)

Each Participant shall be required to choose a Retained Earnings Threshold Percentage for both the Workers' Compensation Component and the Liability Component for the purposes of determining the Participant's eligibility for Dividends. Each Participant shall select a Retained Earnings Threshold Percentage amount between a minimum of ten percent and a maximum of 100 percent.

(b)

Following the selection of the Participant's Retained Earnings Threshold Percentage, the amount of the Retained Earnings Threshold shall be calculated by multiplying the Retained Earnings Threshold Percentage by the average of the amount of funds that are actually paid into the Self-Insurance Program by the Participant for the previous three fiscal years, excluding the Participant's contribution to the Self-Insurance Operating Reserve for that Participant.

(c)

Participants must make an election of a Retained Earnings Threshold Amount Percentage by September 30, 2018.

(d)

The amount of the Retained Earnings Threshold shall be calculated for each Participant once every three years following the election made as of September 30, 2018. The Participant shall have the opportunity to change its Retained Earnings Threshold Percentage every three years when its Retained Earnings Threshold amount is recalculated. If a Participant does not choose a Retained Earnings Threshold Percentage for either the Workers' Compensation Component or the Liability Component, then the Participant's Retained Earnings Threshold Percentage default for the component or components for which no Retained Earnings Threshold Percentage is chosen shall be set at ten percent.

(e)

If, following the Participant's Retained Earnings adjustment at the close of a fiscal year, a Participant's Retained Earnings account balance exceeds that Participant's Retained Earnings Threshold, the Participant shall receive a Dividend in the amount that its combined Retained Earnings account balance for both the Workers' Compensation Component and the Liability Component exceeds the combined Participant's Retained Earnings Threshold for both the Workers' Compensation Component and the Liability Component.

(f)

If it is determined that a Dividend is payable to a Participant, the Risk Manager shall notify the Participant of the amount of the Dividend. Dividends shall be paid in accordance with one of the following methods at the Participant's election:

(1)

A lump sum payment payable to the Participant following the finalization of the City's consolidated annual financial report for the subject fiscal year; or

(2)

In the form of a credit to the Participant's next Annual Funding Amount.

(Ord. 2018-380-E, § 2)

Sec. 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)

SUBPART C. - SETTLEMENT AND SPECIAL COUNSEL

Sec. 128.313. - Settlement of claims.

(a)

Claims arising from any of the risks covered by the Self-Insurance Program, shall be settled as follows, provided however, that in no instance can any claim, other than a claim for workers' compensation or property damage, against the Sheriff, Clerk of Court, Property Appraiser, Tax Collector or Supervisor of Elections (individually each a "Constitutional Officer"), or any of their respective employees or agencies, be settled unless it has been approved in writing by the appropriate Constitutional Officer or his or her designee or, in the case of suits against an individual employee of a Constitutional Officer who acted within the course and scope of his or her employment, approval of the employee:

(1)

Claims that can be settled in the field, by the City's authorized adjusters on behalf of the Self-Insurance Program, may be settled (including the provision and acceptance of releases on behalf of the Participant involved), without the necessity of obtaining prior approval of the settlement provided the settlement does not exceed $5,000 for bodily injury and $5,000 for property damage per occurrence.

(2)

All settlements of claims that do not exceed $50,000, and are not in litigation, the Risk Manager or Director, upon deeming it to be in the best interest of the Self-Insurance Program to settle the claim, shall have the authority to accept or give proper releases on behalf of the participants involved and to settle the claims (but he or she may not settle claims arising out of the same occurrence exceeding in the aggregate of the limitation of liability and specified in F.S. § 768.28(5), where applicable, as amended).

(3)

All settlements of claims that do not exceed $50,000, but are in litigation, the Director and the Risk Manager, upon deeming it to be in the best interest of the Self-Insurance Program to settle the claim, with the concurrence of the General Counsel or his or her designee, shall have the authority to accept or give proper releases on behalf of the participants involved and to settle the claims (but he or she may not settle claims arising out of the same occurrence exceeding in the aggregate of the limitation of liability and specified in F.S. § 768.28(5), where applicable, as amended).

(4)

All settlements of claims exceeding $50,000, but not exceeding $200,000, the Director, upon a favorable written recommendation of the Risk Manager and the General Counsel, or his or her designee, upon deeming it to be in the best interest of the Self-Insurance Program to settle the claim, shall have the authority to accept or give proper releases on behalf of the participants involved and to settle the claims (but he or she may not settle claims arising out of the same occurrence exceeding in the aggregate of the limitation of liability and specified in F.S. § 768.28(5), where applicable, as amended).

(5)

For all settlements of claims exceeding $200,000, the Mayor, upon the written recommendation of the Risk Manager, General Counsel or his or her designee, the Director, and the Council President, that they deem it to be in the best interest of the Self-Insurance Program to settle the claim, shall have the authority to accept or give proper releases on behalf of the participant involved and to settle the claims (as long as such settlement does not exceed those limitations of liability established in F.S. § 768.28(5), where applicable, as amended).

(b)

The authority granted by this Section shall be applicable only to claims arising out of the risks covered by the Self-Insurance Program. Otherwise, the provisions of Chapter 112 shall be applicable to the settlement of claims and suits by or against the City.

(c)

Notwithstanding anything in the Ordinance Code to the contrary, the General Counsel or the Director are authorized to employ outside general counsel and special counsel, from time to time, to perform legal services in connection with claims asserted against the Self-Insurance Program. The employment of outside general counsel and special counsel, and the compensation to be paid thereto, shall be subject to the prior written concurrence of the General Counsel or his or her designee, the Director or the Budget Officer, and either the chairperson of the Council Finance Committee or the Council President. Outside general counsel and special counsel employed under the provisions of this subsection shall be paid as Claim Expense from the Self-Insurance Program, as provided in Section 128.306.

(d)

Subject to the right of review of the Mayor or Director, all strategic decisions related to the settlement of claims covered by the Self-Insurance Program, not otherwise provided for herein, including but not limited to decisions related to the expenditure of costs and decisions to appeal, shall be made by the Risk Manager after consultation, as appropriate, with the Office of General Counsel and, regarding decisions to appeal claims, except for workers' compensation and property damage, against the Sheriff, Clerk of Court, Property Appraiser, Tax Collector or Supervisor of Elections, or any of their respective employees or agencies, with the concurrence of the appropriate Constitutional Officer or his or her designee or, in the case of suits against an individual employee, approval of the employee.

(e)

In the event of a disagreement between the Constitutional Officer or individual employee of the Constitutional Officer, as applicable, and the individuals authorized to settle claims or make recommendations to authorized persons as to the settlement or disposition of a claim, including decisions related to appeal of a claim against a Constitutional Officer, their respective employees or agencies, or an individual employee of the applicable Constitutional Officer pursuant to this Section, the Council President shall make the final determination as to settlement or appeal.

(Ord. 2018-380-E, § 2; Ord. 2024-45-E, § 2)

Sec. 128.314. - Subrogation rights.

In all instances where the Self-Insurance Program makes any payments on behalf of a Participant in relation to any claim, the Self-Insurance Program shall be subrogated to all rights of the Participant against any third parties which are potentially liable or responsible for the occurrence that gave rise to the claim. The Participant shall do nothing after the Occurrence has transpired to impede such rights of the Self-Insurance Program.

(Ord. 2018-380-E, § 2)

SUBPART D. - PARTICIPANT LOSS POOLING

Sec. 128.315. - Pooling of losses between participants.

(a)

The Self-Insurance Program is authorized to implement the pooling of Workers' Compensation losses among the Participants. As a result of the applicability of sovereign immunity and the tort liability caps of F.S. § 768.28, there shall be no pooling of General Liability and Automobile Liability losses in the Self-Insurance Program.

(b)

Beginning in fiscal year which starts on October 1, 2018, and going forward, unless and until an election is made to do otherwise, the election shall be that Participants in the Self-Insurance Program will not pool or share Workers' Compensation losses.

(c)

If an election is made by the Director to begin pooling of Workers' Compensation losses among Participants for any fiscal year after the year starting October 1, 2018, notice of the intent to begin pooling of Workers' Compensation losses and of the methodology to be utilized must be given to all Participants prior to the conclusion of the Division's budgeting process for the year prior to the year when pooling is to begin. In addition, in advance of any implementation of any Workers' Compensation loss pooling plan, there will be a meeting to discuss the proposed pooling mechanism to which representatives of all Participants will be invited.

(d)

Any pooling of Workers' Compensation losses among Participants following an election to reinstate pooling of Workers' Compensation losses shall only apply to Workers' Compensation losses arising out of occurrences which take place after the election to adopt the pooling mechanism has been made. There shall be no retroactive pooling of Workers' Compensation losses arising out of occurrences which take place in fiscal years prior to the election to reinstate a Workers' Compensation loss pooling mechanism.

(Ord. 2018-380-E, § 2)

PART 4. - ADMINISTRATION AND MISCELLANEOUS INSURANCE PROGRAMS

Sec. 128.401. - Authorization.

The Division is authorized to purchase insurance to protect the City against property and casualty risks for which the Director and the Risk Manager agree that a need has arisen for the purchase of such insurance coverages so as to transfer some or all of the risks to third parties. The Division is authorized to effectuate and contractually bind coverage on behalf of the City.

(Ord. 2018-380-E, § 2)

Sec. 128.402. - Administration.

(a)

"Division Administrative Expense" represents all of the expenses and costs of operating the Division other than expenses and costs directly related to operation of the Self-Insurance Program.

(b)

"Division Retained Earnings" represents funds accumulated and held by the Division for the purposes of paying incurred, anticipated and contingent Division Administrative Expense.

(c)

Division Retained Earnings are to be held by the Division for the purposes of maintaining the stability of the Division's programs and the long-term protection of the City's assets and interests.

(Ord. 2018-380-E, § 2)

Sec. 128.403. - Miscellaneous Insurance Program Fund.

There is hereby created a Miscellaneous Insurance Program Fund, a permanent fund, which shall be a continuing appropriation notwithstanding fiscal years, to be used to fund the deductibles and self-insured retentions of the insurance policies for the Miscellaneous Insurance Program. The Miscellaneous Insurance Program Fund shall be a part of Division Retained Earnings.

(Ord. 2018-380-E, § 2)

Sec. 128.404. - Investments.

Investment of the funds in the Miscellaneous Insurance Program Fund is authorized in accordance with general City investment policies, and funds to be invested may be commingled with other City funds for this purpose. All such investments and all earnings on such investments shall be included within Division Retained Earnings.

(Ord. 2018-380-E, § 2)

Sec. 128.405. - Premiums.

All premiums paid by the Division for the purchase of insurance policies outside of the Self-Insurance Program shall be chargeable to departments, divisions, agencies, offices and organizational units of the City covered under said insurance policies. Any surplus of funds chargeable to various departments, divisions, agencies, offices and organizational units of the City for insurance premiums shall be retained by the Division in Division Retained Earnings.

(Ord. 2018-380-E, § 2)

Sec. 128.406. - Deductibles and self-insured retentions.

The insurance policies purchased by the Division may be subject to deductibles and self-insured retentions. To the extent that it can be reasonably segregated and the Division pays any deductible or self-insured retention on behalf of any department, division, agency, office, board, commission or organizational unit of the City, the Division shall be authorized to charge the cost of payment to the unit of the City that suffered the loss.

(Ord. 2018-380-E, § 2)

Sec. 128.407. - Participating independent agencies.

(a)

The Division may elect to purchase insurance policies for the Miscellaneous Insurance Program that, upon request of a Participating Independent Agency and at the discretion of the Risk Manager, includes coverage for said Participating Independent Agency.

(b)

If included in the Miscellaneous Insurance Program, the Participating Independent Agency shall be responsible for the portion of the premium attributable to its inclusion in those insurance policies. Any surplus of funds chargeable to a Participating Independent Agency shall be retained by the Division in Division Retained Earnings.

(c)

The Division shall charge the cost of payment back to the Participating Independent Agency to the extent the Division pays any deductible or self-insured retention on behalf of any Participating Independent Agency.

(d)

If a Participating Independent Agency elects to withdraw from its participation in any insurance policy in the Miscellaneous Insurance Program, the Participating Independent Agency must give notice of such intent to withdraw, in writing, 90 days prior to the expiration of the insurance policy at issue.

(Ord. 2018-380-E, § 2)

Sec. 128.408. - Insurance claims, settlements and proceeds.

(a)

The Division shall be authorized to make and settle Claims on behalf of all departments, divisions, agencies, boards, commissions, offices and organizational units of the City (and to the extent they are included, any Participating Independent Agency) that are covered under a policy from the Miscellaneous Insurance Program, subject to the Division's receipt of all approvals required in Sections 112.307 and 128.313.

(b)

The Division shall be authorized to receive payment of insurance proceeds from the insurance companies in settlement of Claims on behalf of all parties covered under a policy from the Miscellaneous Insurance Program. The Division shall be entitled to deduct any costs incurred in adjudicating such Claim, including deductible and self-insured retention payments, from such proceeds before forwarding such proceeds to the affected unit or units of the City (and to the extent they are included, any Participating Independent Agency) covered for the suffered loss.

(Ord. 2018-380-E, § 2; Ord. 2024-45-E, § 3)

Sec. 128.409. - Salvage and recovery rights.

The Division shall have the right to release, on behalf of departments, divisions, agencies, boards, commissions, offices and organizational units of the City, all rights of salvage and recovery to any insurance company that pays a covered Claim. To the extent the Division incurs costs in the adjudication of an insured Claim against City property, including costs incurred satisfying a deductible or self-insured retention, the Division shall be entitled to assume the rights of salvage and recovery of the departments, divisions, agencies, boards, commissions, offices and organizational units of the City so that the Division may recover such incurred costs.

(Ord. 2018-380-E, § 2)

PART 5. - RECOVERIES

Sec. 128.501. - Authorization.

The Division is authorized to pursue, collect and retain Participant Recoveries and General Recoveries from third parties in relation to the payment of any Claims.

(Ord. 2018-380-E, § 2)

Sec. 128.502. - Participant Recoveries.

Participant Recoveries shall be credited against the Participant's claim that generated the recovery of funds.

(Ord. 2018-380-E, § 2)

PART 6. - CITY INSURANCE AND INDEMNIFICATION STANDARDS

Sec. 128.601. - Insurance and Indemnity Reviews.

(a)

The Division shall be responsible for reviewing and approving all insurance and indemnity provisions, including any limitation on liability provisions in favor of a third-party, in:

(1)

All City contracts, including, but not limited to, construction contracts, vendor agreements, leases, easements, license and use agreements, permits, applications, grants and all other City agreements as determined by the Risk Manager;

(2)

All City bid and procurement documents; and

(3)

Any modifications of existing or new provisions in the Jacksonville, Florida - Code of Ordinances, which contain insurance related requirements.

(b)

Drafts of proposed contracts, procurement documents and new or modified City ordinances shall be provided to the Division for review and approval prior to the execution, release or submission for enactment of such documents.

(Ord. 2018-380-E, § 2)

Sec. 128.602. - Standard insurance and indemnification requirements.

The Division is authorized, subject to the concurrence of the Office of the General Counsel, to develop standard insurance and indemnification requirement terms and conditions to be used in all City contracts, agreements, leases, use agreements and procurement documents that are subject to Section 128.601(a). Any limitation on liability provision in favor of a third-party contained in a City contract, agreement, use agreement or procurement document, shall be subject to the Division's review and approval.

(Ord. 2018-380-E, § 2)

Sec. 128.603. - City-produced events.

The Division shall be responsible for the establishment, review and approval of the insurance and indemnification provisions to be required of all vendors and participants in City-Produced Events.

(Ord. 2018-380-E, § 2)

PART 7. - SAFETY AND LOSS PREVENTION

Sec. 128.701. - Authorization.

The Division is authorized to issue binding safety directives to all City departments, divisions, agencies, boards, commissions, offices and organizational units.

(Ord. 2018-380-E, § 2)

Sec. 128.702. - City safety officer.

(a)

The position of City Safety Officer shall be created within the Division. The City Safety Officer shall be primarily responsible for overseeing and supervising the safety efforts of the City. The City Safety Officer shall represent the City in the area of safety and shall be responsible for organizing the City's safety efforts into a comprehensive safety program.

(b)

The City Safety Officer shall have the following duties:

(1)

To establish a formal safety program for the City to reduce both workers' compensation and third party liability losses by identifying and eliminating hazards;

(2)

To assist and support the safety personnel of the City to increase their effectiveness;

(3)

To coordinate the necessary rules, inspections, and recordkeeping for certification by the State as Self-Insurer with Workplace Safety Program;

(4)

To coordinate the performance of regular and periodic public property and facility inspection(s) to identify hazardous conditions and direct corrective measures for their control;

(5)

To act, in the capacity as designee of the Director, as chairperson of the Mayor's Vehicle Safety Board; and

(6)

To carry out such other duties not inconsistent with the foregoing duties, as may be assigned by the Risk Manager.

(c)

The City Safety Officer shall be permitted to delegate any of the above powers to designated Safety Officers, who shall be employees of the Division.

(d)

Any City department, division, agency, office or organizational unit which is affected by a decision, determination, directive or interpretation by the City Safety Officer may request the Director or his/her designee to review the City Safety Officer's action. The Director, or his/her designee, shall hear the issue as expeditiously as possible for a final interpretation.

(Ord. 2018-380-E, § 2)

Sec. 126.903. - Remedies prior to an award of contract. Chapter 129 - COMPENSATION OF CITY OFFICIALS AND EMPLOYEES