Cowlitz County finance staff warn of rising insurance assessments, plan budget amendments and public hearing

Finance staff updated the Cowlitz County Board of Commissioners on multiple risk-management funds, workers' compensation and liability claims and near-term budget actions during the county's regular meeting.

Finance Director Kathy Funk Baxter said staff had already paid a 12-month insurance premium and will make an additional stub-year payment in April so the county's billing aligns with a January–December calendar year. Finance Manager Susie Moon said, "At the beginning of every year, risk management will bill the various departments for insurance charges." Moon said the county has received just over $3,000,000 in internal service billings so far this year and about $4,300 in miscellaneous revenue (data pulled through March).

Moon told commissioners the county paid roughly $2,000,000 at the start of the year toward the pool premium and then will pay three months’ coverage this month for the stub year rather than being charged for 15 months. She said the county will not have further cash outflows for the risk pool until January 2026, when new assessments will be billed.

Moon said pool officials warned of possible assessment increases and that the county expects notices in October 2025 with payments due in January 2026. "We're waiting for that notice," she said. Commissioners were told the pool indicated increases could reach roughly 25 percent and that the county has experienced substantial increases in recent years.

Risk staff described transfers and restoration costs tied to the county annex. Moon said two transfers already budgeted were $300,000 to the liability claims fund and $550,000 to the general fund; the $300,000 transfer was, she said, intended to help cover costs related to restoration at the annex. Services spending has exceeded targets primarily because of the premium payment and the restoration work.

Scott Kaylene, the county's risk analyst, gave a quarterly-style presentation on claims and safety work. He said the county opened four new workers' compensation claims and closed six during the quarter, leaving 10 open claims. "We had at the very beginning of the year 12 open claims," Kaylene said. He broke the open claims down by severity: two off-work claims, four with modified duties and four medical-only claims; he added one claim is in an appeal process and the county is working with legal on that case.

Kaylene said average claim cost is about $7,000 currently and recommended introducing safety metrics to guide prevention. "This metric is called the total recordable incident rate, and this is what LNI and Wisha for Washington state use, to kind of show what companies, private and public owned, what their safety picture looks like," he said. Kaylene said Cowlitz County's calculated frequency for 2024 was 5.6 recordable cases per 100 full-time equivalent employees, compared with Washington local-government average 5.3 and a national average of 4.3.

On liability claims, staff reported there were 13 open tort or litigation claims as of the March snapshot. Moon and Kaylene said the county is monitoring potential higher-cost claims and that size of claims is increasing in the pool; staff noted the only reliable way to reduce long-term cost is to reduce the number of claims filed.

Budget amendments and next steps

Moon said staff will request a budget amendment to recognize about $6,000 in miscellaneous revenue related to a return on 2024 insurance premiums; she said the amendment and a required public hearing are scheduled for May 20. She also said staff will present a separate budget amendment to increase expenses and revenues related to annex restoration costs (Moon reported about $74,000 of restoration-related services spent to date).

Moon asked commissioners to anticipate higher assessment rates when preparing the department and general budgets for 2026, and to expect the county's internal department billings for risk will be prepared in January 2026 under the new calendar-year billing schedule.

Discussion and internal goals

Commissioners and staff discussed reducing average claim-open days to control costs; Kaylene said the county ended last year with an average 124 days open per claim and proposed a 5% reduction target for the year. Staff also said they plan to establish two centralized safety committees (administration building and the jail/HOJ) to better coordinate prevention and said many departments already have their own committees.

No formal motion or vote was recorded during the presentation. Staff asked commissioners to expect upcoming agenda items: the May 20 public hearing on the small budget amendment and later budget work as staff prepares the 2026 budget.

Ending

Staff encouraged commissioners to contact finance or risk management with follow-up questions. Kaylene said staff will continue collecting comparative data from other counties and the county's consultant, Gallagher, is assisting analysis for excess coverage and benchmarking.