Finance staff reports $2.6 million in insurer reimbursements; commissioners press for KPIs and steady reporting

South Pasadena Finance Commission members heard an update on the city’s insurance recoveries and risk-management processes on a meeting agenda item introduced by finance staff.

Finance staff reported the city is pursuing reimbursements on eight liability claims that exceeded the insurer’s $100,000 threshold. “We found that there was a total of 8 claims that met that threshold,” staff said, and that the city has received reimbursements “about $2,600,000 of reimbursements in the month of October alone.” The staff update said seven of the eight claims have been paid and deposited; about $249,235 remains outstanding and staff expects that remaining check within a week.

The update tied the increase in collected reimbursements to several changes in how claims are handled: the city has added a dedicated risk manager and a senior analyst supporting risk, is documenting the end-to-end claims process in desk manuals, and has increased engagement with its third-party administrator, Carl Warren. “We have regular quarterly meetings where we go over each of the claims and where we’re at with them,” staff said, describing access to Carl Warren’s file-management system and improved tracking.

Commissioners pressed staff on two recurring concerns: how claims and year-end accruals are reported, and whether the city has put durable processes in place so the reimbursements are tracked without relying on individual institutional knowledge. Commissioner comments emphasized that the prior lack of a structured process had suppressed reimbursement recovery and complicated actuarial calculations. One commissioner asked for a set of performance indicators and monthly updates to the commission; staff said the finance team already produces budget-tracking materials and will work with the commission to expand those reports to include a “3‑PIs” view on claims, reimbursements and insurance-fund status.

Staff also explained the accounting treatment and fund impact: because the insurance fund is treated as a proprietary (enterprise-style) fund, recoveries and reimbursements appear in that fund’s full-accrual results rather than the city’s modified-accrual governmental reporting. Staff estimated the insurance fund balance at roughly $2.75 million (as reported in the meeting) and said that after collection of the outstanding $249,235 the fund would show a roughly $165,000 positive position. Commissioners and staff agreed the next steps are: (1) finish desk manuals that document the claims workflow from first notice through reimbursement, (2) provide a monthly KPI package to the commission showing claims submitted, claims pending, reimbursements received and fund balance movements, and (3) keep quarterly reconciliation meetings with Carl Warren and the city attorney’s office.

Public comment earlier in the meeting included a visitor who urged clearer financial transparency and better accounting of the city’s reserve categories. The finance staff said the claims work and the longer-term financial-model project being launched with an outside adviser (separately discussed at the meeting) are intended to produce more clarity on reserves and long-term liabilities.

Commissioners said they will revisit this insurance/recovery item at the next meeting with a more granular KPI package and requested that the new risk manager be introduced to the commission when scheduling permits.

Ending

Staff expects the final outstanding reimbursement check shortly and pledged to bring the requested KPI and process documentation to the commission at the next meeting; commissioners asked that those materials make clear the difference between cash receipts and accruals so the commission can judge near-term liquidity as well as longer-term actuarial liability.