City councilors and staff discussed rising insurance costs and an increase in the workers' compensation line as departments reviewed budget pages that spread insurance across multiple funds.

Councilors flagged a large increase in the workers' compensation line for the streets department — staff noted a change of roughly 122 percent compared with the prior budget line. Staff explained part of the prior-year reduction had been funded with ARPA dollars and that the line “shot back up” to regular levels once that one-time funding ended. Staff also described a liability coverage structure that includes a deductible; councilors asked whether the city is effectively paying a large out-of-pocket share for claims given that deductibles were discussed in the meeting.

Several councilors questioned whether the city could allocate insurance premiums more directly by department so that high-claim areas such as police and fire bear greater shares. A staff member said the controller currently apportions the internal insurance charge largely on historical claim experience and that the controller will realign departmental charges to better reflect claim history and budget proportions. One councilor urged the controller to “combine it with the claims that are actually going to each department” when apportioning insurance charges.

Councilors also urged the administration to pursue risk-reduction measures — training, safety programs and procedural changes — that can drive down claims over time. A councilor who described private-sector experience in reducing workers' compensation costs urged the city to press insurance providers for concrete recommendations and to implement training and policy changes when carriers point to loss drivers.

Staff said internal service charges have created confusion in the budget book and that some items were shown without clear line references; councilors asked for clarification from the controller at the next meeting.