§ 2-8. Risk retention fund.

(a)

The city hereby establishes a risk retention fund to cover the expense of repairing any physical damage to city-owned or leased vehicles which resulted from occurrences which are determined to be the city's liability.

(b)

This vehicle physical damage (collision comprehension coverage) retention fund is to receive at least thirty-five thousand dollars ($35,000.00) annually plus rate of inflation increase/decrease from general fund and shall be deposited in a special operating fund the first day of each fiscal year. These monies are the approximate amounts that would be paid to an insurance company for annual premium of collision coverage.

(c)

The agent or department managing this fund must maintain detailed records as to the loss experience as follows:

(1)

By dollar loss;

(2)

By accident frequency;

(3)

By line coverage;

(4)

By accident cause.

(d)

Since this means of "self-insurance" only projects the city's expected losses based on past five (5) years' experience, there is no provision for catastrophic losses at the time when this plan is initiated, provisions of this section must anticipate the following:

(1)

Additional funding must be provided should actual losses exceed fund balance;

(2)

Losses will equal fund balance;

(3)

Losses will be less; therefore the surplus balance plus any interest accrued are to remain in this fund to provide a reservoir for future losses and to private adequate coverage for expanded vehicle fleet and inflationary cost of repairs.

(e)

This section is to provide for self-insurance on physical damage only. The liability coverage, personal injury protection (or no fault equivalent coverage) and uninsured motorist insurance are to be procured from outside insurance carriers. Each expenditure paid from this fund for physical damage repairs must be approved by the risk manager and risk management committee who will establish procedures to determine losses involved and the method of having repairs made and by whom.

(Ord. No. 501, 6-12-86)