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CITY OF PLEASANTON NOTES TO BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2022 Note 8: Risk Management (Continued) The Workers' Compensation Program claims liabilities in the Employee Benefits Fund and the general and employment practices claims liabilities in the Self Insurance Retention Fund are based on the results of actuarial studies and include IBNR claims amounts. Claims liabilities are calculated considering the effects of inflation, recent claim settlement trends including frequency and amount of payouts and other economic and social factors. The aggregate change in the balance of claims liabilities for the internal service funds were as follows: 2022 2021 Unpaid claims, beginning of year 9,221,261$ 10,193,688$ Incurred claims and changes in estimates 2,955,477 1,471,099 Claim payments (2,505,879) (2,443,526) Unpaid claims, end of year 9,670,859$ 9,221,261$ Current portion 1,721,336$ 1,627,217$ June 30, Note 9: Investment in Joint Ventures and Membership in Insurance Pool The City participates in nine joint venture activities through formally organized and separate entities established under the Joint Exercise of Powers Act of the State of California. As separate legal entities, these entities exercise full powers and authorities within the scope of the related Joint Powers Agreements including the preparation of annual budgets, accountability for all funds, the power to make and execute contracts and the right to sue and be sued. a. Bay Cities Joint Powers Insurance Authority The City is a member of Bay Cities Joint Powers Insurance Authority (BCJPIA). BCJPIA was created in 1986 to develop effective risk management programs to reduce the amount and frequency of losses, to provide for pooled self-insurance among member agencies and to jointly purchase and provide administrative and other services including, but not limited to claims adjusting, data processing, risk management, loss prevention, accounting services, actuarial services, and legal services in connection with the program. BCJPIA consists of fifteen cities, four towns, one fire authority and one police authority all located within the metropolitan Bay Area. The City’s proportionate share of BCJPIA’s net position depends on a number of factors as there are inflows into the City’s account with BCJPIA based on premium deposits and interest earned and there are outflows for expenditures for matters such as administration, claims handling, incurred losses and a reserve for claims incurred but not yet reported (IBNR). Accordingly, it is difficult to ascertain what the City’s proportionate share is at any given time. 87