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CITY OF PLEASANTON NOTES TO BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2022 Note 8: Risk Management The City is exposed to various risks of loss related to third party personal injuries and/or damage to property, employment practices liability, workers’ compensation claims, and damage to or destruction of City property and vehicles. The City has a self-retained limit for these various risks as shown below in the table. Over the City’s self-retained limits, the City has coverage through a number of risk sharing public entity pools. For example, general liability claims over $250,000 are covered through the Bay Cities Joint Powers Insurance Authority (BCJPIA) and the California Affiliated Risk Management Authority (CARMA). Similarly, employment practices liability claims between $75,000 and $1,000,000 are covered through the Employment Risk Management Authority (ERMA) and claims between $1,000,000 and $3,000,000 through Beazley Insurance, a Lloyd Company. In the opinion of City management, premiums paid to BCJPIA (which in turn pays premiums to others including CARMA and ERMA, depending on the risk involved) represent the best available estimate of the ultimate cost of its participation in these various risk sharing pools. The City’s self-insured retained limits and maximum coverage for its significant risk sharing public entity pools are as follows: Coverage Self-Insured Retained Limit Maximum Coverage Maximum Coverage Through General Liability 250,000$ 28,500,000$ BCJPIA/CARMA Employment Practices Liability 75,000 1,000,000 ERMA/Beazley Insurance, a Lloyd Company Workers' Compensation N/A Up to Statutory Limit BCJPIA/LAWCX All Risk Property 10,000 Up to Replacement Cost BCJPIA/APIP Auto Physical Damage Various Up to Replacement Cost BCJPIA/APIP Cyber Liability 100,000 25,000,000 APIP Commercial Crime Bond 10,000 1,000,000 FDCM/GAIC Within the past three fiscal years, all claims that have settled have been within the maximum coverage. The City accounts for and finances its uninsured risks of loss and liability insurance premiums in a Self Insurance Retention Fund and its Workers’ Compensation Program in an Employee Benefits Fund. Both funds are classified as Internal Service Funds. The Workers’ Compensation Program makes payments needed to pay prior and current year claims and to establish a reserve for future losses. The net position of the Workers’ Compensation Program at June 30, 2022, had a negative balance of $4,351,507 reflecting an increase in claims liability from the prior year. The claims liability of $8,854,000 is reported as claims payable as of June 30, 2022. Payments in future years from funds of the City participating in the Workers’ Compensation Program are anticipated to recover the full cost of the claims liability. In the Self Insurance Retention Internal Service Fund, at June 30, 2022, reserves of $2,393,852 are reported in net position and claims liabilities of $816,859 are reported as claims payable. 86