Finance Committee

Finance Committee Meeting Council Chambers November 7, 2013 8:00 a.m. Attendance: Committee Members Present: Chairman Joe LoVerde, John Johann, Robert Callero, Village Manager Steve Vinezeano, and Finance Director Scot Neukirch Committee Members Absent: None Non Committee Members Present: Village Attorney Joe Annunzio, Trustee O’donovan Matyas, Trustee Rosemary Palicki, Benefits Coordinator Kathy Barnat and Asst Finance Director Laurie Nannini. Call To Order: Meeting opened at 8:05 a.m. Roll Call: Finance Director Neukirch called the roll. Committee members present were Village Manager Vinezeano, Bob Callero, Chairman LoVerde and John Johann. Approval of Minutes: The minutes from the October 16, 2013 Finance Committee meeting were up for approval, motion made and all concurred. Accounts Payable Approval: The approval of the Accounts Payable registers for 10/11, 10/18 and 10/25 were up for approval, motion made and all concurred. Chairman LoVerde supplied a list of some payments he had questions on. Finance Director Neukirch will follow up with the Chairman on his questions. New Business Presentation of the Proposed 2014 Workers Compensation and Liability Insurance Program: Mike McHugh from Arthur J. Gallagher Risk Management Services Inc presented the Village’s options for renewal for its calendar 2014 workers compensation coverage, property and liability insurance coverage. Mr McHugh began the discussion by explaining the workers compensation portion of the Village’s plan. Mr McHugh explained that many carriers do not want to supply coverage to governmental entities in Illinois anymore because the exposure with the Police and Fire departments is too great. The workers compensation claims history was discussed and the breakdown of where the majority of the Village’s claims occur. Mr McHugh explained how the Village’s self-insurance plan has saved the Village a significant amount of money over the years compared to being with a first dollar, fully insured option. Other possible options such as pools were also discussed and that the Village’s plan allows for more control and is less expensive. There was discussion as to why a schedule in prior years’ reports showed first dollar premiums that were much higher than the current report showed. Mr McHugh explained that the prior years’ reports applied an experience modifier based on the Village’s poor loss history that would have increased the premium estimation. This year’s report did not add any adjustments for experience. There was discussion as to how the Village’s policy of paying 100% to non PEDA covered employees negatively impacts the Village’s claims experience. Emails from various carriers were shown that document their declining of coverage to the Village due to the poor loss experience in the last 10 years. The difficulties overall with workers compensation in Illinois were discussed with the Committee. The Committee also discussed the Village’s liability coverage and how the various components work when there is a claim. The Committee recommended that an option with the aggregate stop loss for workers compensation and one without be provided to the Village Board for approval. The Village has never reached its aggregate limit for workers compensation which for the 2014 renewal is set at $3.7 million. Removing this aggregate stop loss would reduce the Village’s premium by about $42,000 but would increase the Village’s exposure in the event of a rare catastrophic claim. Other Business: None Public Comment: None Executive Session: None Adjournment: Motion to adjourn was made and all concurred at 10:04 am. Prepared by Scot Neukirch on 11/7/2013