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6.B. - Page 2 of 4 <br />ANALYSIS <br />Each fiscal year the City is responsible for paying an annual assessment to maintain its certificate of self- <br />insurance with the DIR. The assessment is calculated based upon an actuarially determined loss rate that <br />is applied to the City's projected payroll. The City's current loss rate is $8.83 per $100 of payroll according <br />to the actuarial analysis completed by Bickmore in February 2019. Based on the foregoing, the total annual <br />assessment for FY 2019-20 is $187,957.67. The amount owed by the City is a percentage of the DIR's total <br />indemnity statewide for self-insured employers. <br />The annual assessment collected by the DIR has a nexus to the City's status as a self-insured employer <br />because the funds collected are used for the following State funds: Labor Enforcement Compliance Fund, <br />Occupational Safety and Health Fund; State's Workers' Compensation Revolving Fund; Subsequent <br />Injuries Benefits Trust Fund; Uninsured Employers Benefits Trust Fund; and Workers' Compensation Fraud <br />Account Fund. <br />If the City does not pay its annual assessment, it risks losing consent from the State of California to operate <br />as a self-insured employer for the purposes of workers' compensation. <br />FISCAL IMPACT <br />The fee assessed by the DIR for FY 2019-20 is $187,957.67. Funding for this annual assessment is included <br />in the FY 2019-20 Adopted Budget in the Workers' Compensation Fund and no budget adjustment is <br />required. <br />ENVIRONMENTAL REVIEW <br />This activity is not a project under California Environmental Quality Act (CEQA) as defined in CEQA <br />Guidelines, section 15378, because it has no potential for resulting in either a direct or reasonably <br />foreseeable indirect physical change in the environment. <br />PUBLIC NOTICE <br />Public Notification was achieved by posting the agenda, with the agenda items being listed, at least 72 <br />hours prior to the meeting <br />ALTERNATIVES <br />While payment is required given the state mandate associated with the City's self-insured status for <br />workers' compensation, the City Council could direct staff to explore an alternative approach to self- <br />insurance for workers' compensation for future City Council consideration. <br />Page 2 of 3 <br />City of Redwood City 1017 Middlefield Road, Redwood City, CA. 94063 Tel: 650-780-7000 www.redwoodcity.ore <br />33 <br />