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Council hears rising insurance costs and heavy litigation burden in city attorney and risk reports
Summary
City leaders were told workers’ compensation premiums rose about 15% ($3.1M) and liability insurance 10% ($1.4M), while City Attorney Virginia Gennaro said the office handles roughly 184 active litigation matters and has relied increasingly on outside counsel after several large settlements.
Council members pressed staff on sharply rising insurance and litigation costs during the May 4 budget workshop.
Councilmember Gonzales summarized the changes: “we have a workers’ compensation increase of 15%, $3,100,000, [and] liability insurance has increased by 10%, $1,400,000,” a combined increase he called about $4.6 million year‑over‑year. Risk Manager Gina Covey told the council the risk unit allocates costs to departments (workers' comp by payroll and claim severity; liability by severity of claims and lawsuits) and described steps to reduce exposure, including driving simulators for employees, targeted audits, and monthly reviews with major departments.
City Attorney Virginia Gennaro described sustained litigation pressure on the city: the office is handling an unprecedented caseload, she said, with about 184 active litigation matters and several large settlements over the past year — “we've had 3 cases that we've had to settle for over $1,000,000. 2 of them were over $15,000,000,” Gennaro said — and emphasized the office’s reliance on outside counsel for specialized matters, listing current contracts and noting the office is actively recruiting to fill deputy positions.
Why it matters: Gennaro and Covey tied higher premiums and outside‑counsel costs to rising litigation and claim volumes; both effects increase the city’s operating costs and reduce flexibility in department budgets. Gennaro warned that large settlements produce secondary financial pressures (insurance premiums, long defense timelines) that complicate budgeting.
Next steps and context: Council members asked about policy levers (tort caps) and programmatic responses (receivership, short‑term rental ordinance enforcement); staff said some items will return as proposals in May and June. The finance director and city manager indicated increased insurance and litigation costs will be reflected in upcoming budget summaries.
