Fiscal Year Annual Report

Transcription

1 Fiscal Year 212 Annual Report PORTLAND PUBLIC SCHOOLS RISK MANAGEMENT

2 TABLE OF CONTENTS Letter from the Chief Financial Officer 1 Risk Management Staff 2 Overview 3 Services 4 Key Accomplishments 6 Self-Insured Liability Claims 7 Self-Insured Auto Claims 8 Student Injuries 9 Self-Insurance Savings 1 5-Year History 1 Property Losses 11 Workers Compensation 12 Benchmarking Risk Management Goals 17 Summary 18 The Portland Public Schools Risk Management Department is pleased to present our 212 annual report. The report represents current data analysis of loss statistics for the academic year. We hope this information will help Portland School Board members, district leaders and managers, employees and the community understand the depth of the Risk Management program and its value to the district. Our objective is to use the data in this report to shape future Risk Management services and programs in order to further mitigate risk at PPS. We appreciate our partnerships with Pinnacle Risk Management and Beecher Carlson Insurance Agency and the assistance they provided in helping prepare this report. Risk Management Department Portland Public Schools 51 North Dixon St. Portland, Oregon,

3 LETTER FROM THE CHIEF FINANCIAL OFFICER In the school year, the Risk Management Department made a number of districtwide improvements to safety for our district: 1. PPS received the nation s third-largest federal emergency management preparation grant focused on school districts and their community. We are finishing up the last year of the $658, grant over two years to fully train staff and equip each school to be able to improve responses to a range of emergencies including communications with families during emergencies, practice in lock-down procedures and training on catastrophic events. 2. We continued providing web-based safety training to a broad spectrum of our employees on topics ranging from preventing slips, trips and falls, to safe storage of science lab chemicals. 3. The Risk Department provided several efforts in safety services to our Facilities and Nutrition Services Departments. The newly passed bond measure will begin the first phase of upgrades to all of our schools. The Risk Management and Security Services departments will be included in the development of the educational specification documents to assist in the safety/security portion of the bond projects. The Risk Management Department has continuously led efforts focusing on safety preparedness for students, staff, and the general public as they engage in activities in the district. I appreciate the leadership and collaboration of our Risk Management team in these initiatives. In this report, you will learn how the frequency and severity of claims on the PPS selfinsured programs compare to past years and to similar Oregon school districts, as well as to other local governments. To learn more, visit Risk Management s website at pps.k12.or.us/departments/risk-management/. I hope this report provides useful information to you about our efforts to promote the safest possible learning environments at Portland Public Schools. Neil A. Sullivan Chief Financial Officer Portland Public Schools 1

4 RISK MANAGEMENT STAFF The Risk Management Department consists of five staff members (four full-time equivalents) with varied backgrounds in education, work experience and professional credentials that balance and complement one another. Risk Management employees work as a team and partner with all areas of the district as well as several companies and governmental entities. Our primary customer is each school s staff and students. Candy Snell, CDPM Workers Compensation Coordinator csnell@pps.net Philip March Senior Risk Specialist pmarch@pps.net Daedra Buntin Claims Specialist dbuntin@pps.net Last school year the Risk Management Department provided web-based safety training to 1,75 of our employees who completed nearly 3, classes on such topics as preventing slips, trips and falls, bullying, and emergency management. Our goal is to prevent on-the-job injuries experienced by our employees. Preventing injuries to our staff is our most successful approach to controlling our workers compensation costs. In addition, we provided in-person consultation and information to 42 schools regarding safety committee best practices. Moreover, our department has led an effort to produce improved safety committee documentation for the 213 school year. Furthermore, Risk Management led an effort to establish a plan to replace antiquated equipment in our Facilities and Nutrition Services Departments as a strategy to help reduce worker injuries. Lastly, Risk Management is leading an effort to have the district be better prepared to respond to emergencies, particularly involving our wheelchair reliant students. As our CFO noted in his greeting, these efforts are important steps in influencing and improving the safety culture throughout the school district. With the district leadership s support, we plan to continue our vigorous efforts to make Portland Public Schools work and learning environments as safe as possible. I m very proud of PPS efforts this past year to promote safety and preparedness in a district-wide collaborative manner. Thank you for reading, sharing and discussing this report on the state of risk management in PPS. If you have questions or want to discuss issues of particular interest, I encourage you to contact me or visit our website. Benson M. Meyers, MPA Director of Risk Management bmeyers@pps.net 2

5 OVERVIEW The Risk Management Department s mission is to foster a safe environment for students, staff and the community. Specifically, the department is responsible for the management and administration of the district s workers compensation, liability, property and auto insurance programs. This includes purchasing excess insurance policies, administering claims, developing policies and procedures, evaluating contractual risk, mitigating loss and supporting schools. Other key aspects of Risk Management include claims administration, loss prevention and risk financing. The department is responsible for financing the district s self-insurance program and controlling the cost of risk. The school district self-insures and self-administers its liability, property and auto claims. Workers compensation claims are self-insured and administered by a third-party administrator (TPA) through a contract. In fiscal year , the self-insured retention was $1 million for each line of coverage. The school district purchases excess coverage for claims that may reach more than $1 million. In all areas, the Risk Management Department strives to provide excellent customer service while achieving significant savings to the district. 3

6 SERVICES Risk Management staff services to Portland Public Schools GENERAL Provides leadership, assistance and support to schools and operations on risk assessment, loss control and insurancerelated matters and contracts management in order to foster a secure and productive learning and work environment. Purchases and administers general/auto liability, property, workers compensation and other excess insurance policies and bonds. Attends school health and safety inspections and safety committee meetings to assist with current risk issues and train staff on best practice operations. LIABILITY, AUTO & PROPERTY INSURANCE Manages and administers self-insured liability, auto and property claims including tort claims, burglary and fire claims, district facilities and vehicle liability, crime-related losses and professional/general liability exposures. Develops, implements and trains staff for online student accident reporting. Analyzes and recommends student insurance options. Assists in the assessment of ongoing risks of transporting students and develops policies and procedures. Reviews and approves field trip requests and provides guidance to schools. Negotiates recovery of funds for all aspects of the self-insured program, including third-party insurance companies, the Multnomah County District Attorney s Office and juvenile mediation. Reviews contracts for insurance requirements and indemnification agreements. Develops and evaluates statistical reports to assess progress and conditions of Portland Public Schools risk exposure. Provides internal consulting services for school and operations staff on loss control, liability exposures and policy development. 4

7 SERVICES WORKERS COMPENSATION INSURANCE Administers a self-insured workers compensation program and coordinates claims in collaboration with a third-party administrator. Leads, develops and implements, in partnership with the Human Resources Department, an early return-to-work program. Provides assistance and support to injured workers. Actively participates in the state s Employer-at-Injury (EAIP) and Preferred Worker Programs. Complies with federal OSHA (Occupational Safety and Health Administration) regulations, and maintain OSHA reporting logs. SAFETY AND LOSS PREVENTION Coordinates with the Facilities and Asset Management (FAM) and Security departments to implement loss control and prevention measures throughout the district. Contracts with a vendor to provide web-based safety training to teachers, para-educators, school administrators, campus monitors, custodians, maintenance staff and Nutrition Services workers. Consults with and trains school safety committees on how to meet best practices and comply with external regulations. Develops and implements Administrative Directives to improve existing safety protocols. Writes and publishes safety bulletins for staff. Manages health and safety funds and allocations to mitigate hazardous conditions. Assists FAM in conducting facility health and safety inspections. Supports the district s school crossing guard program. Conducts accident/safety investigations. Administers an ergonomic assistance program. EMERGENCY MANAGEMENT Provides leadership and coordination with other departments and senior management to enhance current practices. Participates on the district s Incident Command leadership team. 5

8 KEY ACCOMPLISHMENTS The Risk Management staff is proud of the following significant accomplishments in : The department is greener and has improved efficiencies by implementing electronic reporting of on-the-job accidents and workers compensation claims. These changes reduce our use of paper and make information easily accessible and improve our work processes. Reduced the overall days lost due to on-the-job injury by 42% from the year before. Secured $195,833 through the state s Employer at Injury Program (EAIP) and Preferred Worker program. These funds support the district s return-to-work program. Appropriated $195, to enhance the health and safety features of many school buildings and equipment used by Operations departments. Led and paid for the implementation of a web-based safety training program throughout the district involving teachers, para-educators, campus monitors, maintenance staff, custodians, Nutrition Services workers and school administrators. Provided best-practice safety consultations to 42 school safety committees and to the Nutrition Services, Maintenance, Transportation and administrative departments. Partnered with Student Transportation Services and Student Athletics to monitor a Service Level Agreement to ensure Oregon Department of Education compliance and reduce the district s transportation liability. Completed an analysis of the district s self-insured retention amounts. Updated liability and workers compensation staff procedures manuals. Introduced options to FAM and the general counsel for Civic Use of Building permit holders to purchase a Tenant User Liability Policy. Prepared new materials for district employees on current workers compensation procedures. Completed an occupational equipment ergonomics assessment focused on custodians, maintenance and Nutrition Services workers. Completed six safety e-bulletins throughout the school year on timely topics. Brought all property valuations up to date. 6

9 SELF-INSURED LIABILITY CLAIMS NUMBER OF LIABILITY CLAIMS PPS is self-insured for liability loss exposures and purchases excess liability insurance up to a limit of $5 million. The district maintains a risk management fund to pay costs and expenses relating to self-insured claims. The liability program consists of both bodily and personal injury to students, visitors and members of the community. Claims can range from tort liability and employment wrongful acts. The number of annual liability claims has decreased steadily since 27. In addition to the annual reduction in claims, there are no liability claims currently in litigation, which significantly decreases the cost of being self-insured. Between the school years , liability claims filed remained consistent with an average of 25 claims filed per year. However, in 212 claim frequency went down by 44% from that average. From to , the cost of liability claims increased by over 18% but was still manageable for the district. Liability claim frequency and cost are managed in a very timely and accurate way. Key components of this work include regular inter-departmental meetings, claims investigations, research and development of district procedures to reduce risk, and direct consultation to schools and employees to mitigate future claims $3, $25, $2, $15, $1, $5, $- DOLLAR AMOUNT OF LIABILITY CLAIMS $297,621 $25,33 $76,47 $71,223 $85,

10 SELF-INSURED AUTO CLAIMS NUMBER OF AUTO CLAIMS PPS is self-insured for auto loss exposures per occurrence and purchases an excess policy of $5 million. The school district insured 298 vehicles in 212. The district s fleet contains school buses, maintenance, nutrition services and warehouse vehicles. The number of auto accidents in 212 increased by 27% when compared to 211. However, the average cost per claim in 212 decreased by 9% compared to the previous year. The 212 auto claim total cost was impacted by one large not-at-fault accident that was 22% of the total expenditure DOLLAR AMOUNT OF AUTO CLAIMS $9, $8, $7, $6, $5, $4, $3, $2, $1, $- $59,929 $58,182 $45,37 $65,96 $81,

11 STUDENT INJURIES STUDENT INJURIES BY ACTIVITY Student injuries in totaled 1,148, which is comparable to the previous year. School building staff records each student injury incident. Risk Management analyzes incidents and works with principals, teachers, school secretaries and safety committees to reduce student injuries. The statistics for student injuries by type of activity and body part are in line with previous years. Most injuries occur on the playground, during PE, or in the classroom. 37% 1% 2% 7% 17% 19% 15% 2% Athletics Cafeteria/Lunch Classroom Field Trip Other PE Playground Shop/Lab PERCENT OF STUDENT INJURIES BY BODY PART

12 INSURANCE VS. SELF-INSURANCE COMPARISON OF FULLY INSURED TO SELF-INSURED Self-insurance through the use of actuarially determined funding formulas and self-insured retentions provides both long-term and short-term savings for the district. Savings are realized by avoiding insurance company overhead and expenses. Additional savings are achieved by directly controlling the cost of claims and implementing safety programs. The self-insurance includes general liability, auto liability, workers compensation and property insurance. $6,, $5,, $4,, $3,, $2,, $1,, $ $5,174,258 Insurance $3,876,142 Self-Insurance IN 212, SELF-INSURANCE SAVED PORTLAND PUBLIC SCHOOLS $ 1,298, YEAR HISTORY During the latest five-year cycle, PPS has cultivated stability of rates and catastrophic limits through its selection of and partnership with our insurance broker and excess insurance companies. Risk Management continually analyzes carrier options in order to maximize coverage for the best value available. The district s effort to mitigate hazardous conditions, self-insure a portion of its risk, and improve safety features has directly affected its ability to purchase catastrophic insurance protection. Insurance rates have been relatively flat in recent years, although we are seeing signs of restricted property capacity and increasing rate trends by major property carriers as a result of worldwide catastrophic losses. 1

13 PROPERTY LOSSES The property programs insure 11 property sites valued at approximately $1.7 billion. Insurance covers property damaged by earthquake, fire, water damage, storms and burglary claims. The number of property claims in 212 was similar to last year, but the cost associated with those claims was significantly higher. Increased costs are attributed to the age of our facilities and prolonged heavy rain resulting in water penetration and damages. Theft claims due to burglary increased in 212 but was slightly below average in comparison to the last five school years. Unfortunately, the related claims cost was significantly higher than average. The spike in costs was due to two schools being repeatedly victimized that resulted in the loss of more than 3 computers and other IT equipment. In response Risk Management paid for the installation of advanced security systems in order to mitigate future losses. In a direct effort to respond as quickly as possible to technology losses, Risk Management works closely with the Information Technology and Security Services departments so that stolen property can be identified, recovered and/or replaced quickly. NUMBER OF PROPERTY CLAIMS (EXCLUDING BURGLARY) DOLLAR AMOUNT OF PROPERTY CLAIMS (EXCLUDING BURGLARY) $5,, $4,5, $4,, $3,5, $3,, $2,5, $2,, $1,5, $1,, $5, $- $4,511,74 $194,496 $163,432 $73,153 $128, NUMBER OF BURGLARY CLAIMS DOLLAR AMOUNT OF BURGLARY CLAIMS $14, $12, $1, $8, $6, $4, $2, $ $126,646 $84,848 $111,887 $37,882 $32,

14 WORKERS COMPENSATION Workers compensation insurance provides coverage for medical expenses and lost wages for employees who sustain on-the-job injuries or illnesses. Oregon employers must carry workers compensation insurance or be self-insured. PPS is self-insured up to $1 million per claim and carries an excess policy with a high limit per occurrence. A third-party administrator (TPA) manages the workers compensation claims in collaboration with the Risk Management Department and legal counsel. Risk Management, in collaboration with the Human Resources Department, coordinates a comprehensive workers compensation program including regular claims analysis and a districtwide return-to-work program. Last year Risk Management continued to provide, through a vendor, a web-based safety prevention training program in which 1,75 employees participated. In addition, the district continued to work with managed care organizations that provide occupational health care for employees injured on the job. The upper chart indicates that the frequency of workers compensation claims decreased by 15% compared to the prior year. The lower chart reveals that the severity of these claims, as measured by their direct costs, decreased by 23% as compared to the previous year. WORKERS COMPENSATION CLAIMS Medical Only Time Loss DOLLAR AMOUNT OF WORKERS COMPENSATION CLAIMS $3,, $2,5, $2,, $1,5, $1,, $5, $ $2,593,843 $2,252,996 $1,855,413 $1,678,65 $1,435,

15 WORKERS COMPENSATION CLAIMS BY BODY PART CLAIMS BY TYPE OF INJURY Back Knee Ankle Arm Average Claims Cost Ankle $4,956 Knee $6,796 Back $5, Head Neck Hand Wrist Strains Slip/Fall Struck/Injured 3 Assault/Altercation Average Claims Cost Strains $6,83 Struck $1,751 Slip/Fall $7,35 Cut/Puncture/Scrape $1, Cut, Puncture, Scrape CLAIMS BY OCCUPATION CLAIMS BY SCHOOL TYPE PK PK-5 BESC 6-8 Admininstration Transportation Other Average Claims Cost Custodian $4,77 Food Service $3,276 Teacher $5,442 Para Educator $2,265 Administrators $7,571 Average Claims Cost K-8 $3,514 High School $7,59 Transportation $3,875 BESC $5,476 Note: Teachers represent 55% of the district s work force (FTE). Custodians are 5% and para-educators are 7% of the work force (FTE). 13

16 WORKERS COMPENSATION Insurance Premium and Experience Modification Rating Factor In Oregon, companies workers compensation insurance premiums are linked to their loss experience based on an experience rating. Understanding the experience modification rate (mod rate) and monitoring it regularly are key in reducing workers compensation costs. The mod rate is also a measure of how loss prevention and control practices compare to others in similar industries. More simply, the mod rate compares PPS workers compensation claims experience to other employers of similar size in the same type of business. The mod rate is directly correlated to how much PPS pays in workers compensation premiums. Each year PPS reports payroll and class codes for work groups (teachers, support staff, custodial, Nutrition Services, maintenance, warehouse labor and student transportation). The National Council on Compensation Insurance calculates the payroll and losses for a three-year period and compares our payroll and loss experience to the industry average losses for like businesses of similar size. If PPS is at the industry average, the rate is 1.. If experience is better than the average, the rate is less than 1.. If the rate is greater than 1., employers pay premium in excess of the industry average Workers Compensation Savings Efforts Under Way to Reduce Workers Compensation Costs PPS EXPERIENCE MOD RATE HISTORY FY FY FY FY FY Return-to-Work In , Risk Management and Human Resources continued to refine a transitional return-to-work program begun in Transitional work is temporary work assigned to an employee who cannot perform regular duties because of medical restrictions and/or limitations. Last year 39 employees were placed in transitional light-duty tasks. Moreover, Risk Management streamlined the employee injury reporting system by implementing an online reporting process and assigning more accountability and responsibilities to affected employees and their supervisors. This change promotes more timely and accurate reporting of on-the-job injuries which in turn affects the accuracy of wage calculations. In addition, the Risk Management Department continued to apply for financial incentives that the Oregon Workers Compensation Division provides for employers to return injured employees to transitional work. In the department applied for and received $195,833 through the Employer-at-Injury and the Preferred Worker Programs. continued 14

17 WORKERS COMPENSATION Medical Bill Audits In , PPS averaged a 3% savings on medical bills from medical fee schedule audits coordinated by the district s third-party administrator. Quarterly Case Reviews Claims are reviewed to develop strategies for closure and cost reduction. When necessary these meetings may include the district s external partners in the delivery of our overall program. Review of Defense Legal Costs Staff conducts monthly reviews of legal defense strategies with the general counsel. Safety Committee Focus Risk Management consults with operations departments and schools in implementing and administering safety committees. Investment in Safety Equipment Risk Management advises the district to make investments in safety equipment for departments and schools where necessary and affordable. Early Return-to-Work Wage Subsidy The State of Oregon reimburses up to half of the salary for injured employees who are able to return to modified jobs. Risk Management staff aggressively seeks such wage subsidy reimbursement when appropriate. Managed Care Organizations Risk Management has contracts with Providence and Kaiser occupational health systems to provide specialized occupational health treatment through their managed care programs. 15

18 BENCHMARKING Beecher Carlson, PPS insurance broker, benchmarked the dollar amount of claims per student and the number of claims per student, as well as the dollar amount of claims per FTE and the number of claims per FTE. LIABILITY COST CLAIMS PER STUDENT POPULATION NUMBER OF LIABILITY CLAIMS PER 1, OF STUDENT POPULATION $16 $14 $12 $1 $8 $6 $4 $2 $ $15.55 $14.65 $11.53 $8.4 $6.17 $4.85 PPS SD A SD B SD C SD D SD E PPS SD A SD B SD C SD D SD E 5-year average of dollar amount of claims of most of Oregon s largest school districts 5-year average of dollar amount of claims of most of Oregon s largest school districts PPS claims frequency is similar to other large school districts in Oregon despite being larger than the other districts. The cost associated with these claims is significantly less than that of other districts. Some factors that contribute to this difference might be the district s multi-departmental team approach, timely investigations when necessary, claims handling procedures, and mitigation efforts. $4 $35 $3 $25 $2 $15 $1 $5 $ WORKERS COMPENSATION CLAIMS COST PER FTE $38 $288 $183 $319 $187 PPS SD 1 SD 2 SD 3 SD 4 5-year average of dollar amount of claims of Oregon s five largest school districts NUMBER OF WORKERS COMPENSATION CLAIMS PER 1, FTE PPS SD 1 SD 2 SD 3 SD 4 5-year average frequency of claims of Oregon s five largest school districts 35 PPS number of claims per 1, employees and the cost of those claims are high relative to other districts. 16

19 RISK MANAGEMENT GOALS Provide best-practice safety consultation to a minimum of 42 school safety committees, the Nutrition Services, Maintenance, and Transportation departments, the district s administrative safety team, and participate in a minimum of eight annual health and safety inspections. Implement accident investigation procedures for supervisors in the Facilities, Nutrition Services, and Transportation Departments. Develop and post on the Risk Management website a workers compensation FAQ sheet that can also be distributed to key stakeholders. Implement improvements to the staff accident and electronic 81reporting system. Develop and recommended a new district policy on IT equipment damage or loss claim procedures. Complete a written district-wide fleet management policy and procedures. Research choices available to the district regarding uninsured/underinsured/personal injury motorist coverage limits and provide a recommendation that will lessen the potential financial exposure to the district. Complete six safety e-bulletins throughout the school year on timely topics. Develop and implement a risk management essential information training tool for the district. Assess the district s preparedness and exposures regarding the evacuation of wheelchair-dependent students from schools and buses. Prepare a written report with recommendations for senior leadership s consideration. Assist in the development of improved school safety committee agenda and minutes tools to be used by all schools and departments. 17

20 SUMMARY Following are key Risk Management Department highlights for The district saved $1,298,116 by self-insuring and effectively administering and managing the district s overall claims and risks. The district secured $195,833 from the state s Employer at Injury Program and Preferred Worker workers compensation return-to-work programs. The department supported efforts to protect district employees from injury and/or exposure to harmful conditions by offering web-based safety training to our schoolbased administrators, teachers, most paraprofessionals, campus monitors, custodians, maintenance staff and nutrition services workers. The frequency of liability claims against the district decreased by 44 percent, and the severity of those claims, as measured by dollars spent, increased by 18 percent compared to the previous year. Auto claims frequency increased by 27 percent and their associated costs also increased by 2 percent. Thirty-seven percent of all reported student injuries occur in playground activities. PPS has a comparable number of claims per 1, students to other Oregon large school districts. However, the cost of PPS claims involving students is generally lower than most other districts in Oregon. Property claims frequency increased slightly and their costs were higher by 43 percent. Burglary claims frequency increased by 2 percent and the severity increased by 71 percent compared to the previous year. The frequency and severity of the district s workers compensation claims is higher than the other large school districts across the state. Employee s time loss due to injuries on-the-job decreased by 42% and the overall cost of workers compensation claims to the district was lowered by 23% compared to the previous year. Slip, Trip, and Falls are a significant proportion of the overall type of injury experienced throughout PPS and on average cost the district $7,35 per claim. The workers compensation Experience Modification ratingfactor reached its lowest point in five years. The department has adopted goals for the next year that continue its overall improvement strategies. In sum, Risk Management continues to develop a cost-efficient insurance program that provides appropriate financial protection in the event of a loss. It is always our goal to understand the types of activities that might increase the exposure to losses through the district s work and mitigate the risk wherever possible. 18