Minutes 10/09/2018 - Laserfiche WebLink

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October 9, 2018  City Council Ordinance 2017-27 states “all unspent appropriations under this ordinance or any ordinance appropriating funds for the FY 2018 Portsmouth Public Schools budgets shall lapse at the end of the fiscal year, as provided under 22.1-100 of the Code of Virginia. Funds encumbered but unpaid by the end of the fiscal year will be deemed unspent appropriations that will require re-appropriations by the City Council.”  Portsmouth City Code Sec.2.2 (a) states: “The school board risk management and insurance fund is hereby created for the purpose of providing a reserve source of funding for certain expenses of the public schools. The fund is to provide protection of the assets of the public schools against the financial consequences of losses that are unexpected. The fund may be used to pay the expenses associated with claims management and payment of claims arising out of the good faith actions of officers and employees of the Portsmouth public schools. The fund may also be used to pay insurance premiums and insurance pooling costs which may be obtained to provide protection from losses arising from claims covered by the fund.”  Portsmouth City Code Sec.2.2 (b) states: “Annually as part of the budget process, the city council shall appropriate for the purpose of education the total amount of all funds estimated to be available for the ensuing fiscal year in the school board risk management and insurance fund. Appropriations, to the extent they shall not have been expended or lawfully encumbered, shall lapse at the end of the period for which they were made.”  Portsmouth City Code Sec.2.2 (c) states “The city manager is hereby authorized to enter into an agreement with the superintendent of schools establishing rules and regulations governing the school board risk management and insurance fund and to authorize payments therefrom. The city attorney shall approve the payment of any claim and shall consult with the school board before payment is made of any claim in excess of $100,000.00.” Discussion:  The Portsmouth School Board adopted a Resolution requesting that the City re- appropriate the unexpended and unencumbered amount of $5,189,613 from the PPS FY 2018 Risk Management Fund Budget to the PPS FY 2019 Risk Management Fund for the following purposes:  $3,776,401 to remain in the Health Self Insurance Program to cover health claims and expenses and to maintain a reserve for large unexpected claims. PPS is self-funded for health care costs and budgets funds based on plan year (Calendar year) expenses not fiscal year expense.  $1,413,212 to remain in the Workers Compensation and General Liability Program as a reserve for large unexpected expenses, deductibles and other unexpected expenses.  The funds are therefore intended to serve as a reserve for health and liability expenses.  Given that the funds are a reserve, the draft Ordinance proposed for Council consideration provides as follows:  The unexpended funds from the PPS FY 2018 Risk Management Fund Budget in the amount of $5,189,613 are to be returned by PPS to the City.  Effective as of their return, the funds are appropriated within the City FY 2019 School Board Risk Management and Insurance Fund established by Section 2.2(a) of the City Code to serve as a reserve for the PPS Health Self Insurance and Workers Compensation and General Liability Programs.  In accordance with the intent of Section 2.2(c) of the Portsmouth City Code, the City Manager is authorized to enter into an agreement with PPS for the disbursement of the funds in the reserve to PPS on an as needed basis and without further action of City Council. Financial Impact:  The appropriation of these funds will establish a reserve for the PPS Health Self Insurance and Workers Compensation and General Liability Programs within the City FY 2019 School Board Risk Management and Insurance Fund. Recommended Action:  Adoption of the Ordinance.