HomeMy WebLinkAboutCOM 0804.015 2002-2004
Ntr Of
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Harry Kim - Dixie Kaetsu
Mayor Managing Director
'Pet6r ~endricks
Deputy Managing Director
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25 Aupuni Street, Room 215 • Hilo, Hawaii 96720-4252 • (808) 961-8211 Fax (808) 961-6553
KONA: 75-5706 Kuakini Highway, Suite 103 • Kailm-Kona, Hawai'i 96740
(808) 329-5226 • Fax (808) 326-5663
October 29, 2004
The Honorable James Y. Arakaki, Chairman, and
Members of the County Council
County of Hawaii
25 Aupuni Street
Hilo, Hawaii 96720
Subject: Bill 350 -Partial Appropriation of Excess Fund Balance
Discussion of Risk Management Program
Dear Chairman Arakaki and Members of the Council:
At the October 19, 2004, Finance Committee meeting, Bill 350 to appropriate a portion of the
General Fund's excess fund balance was approved. In part, this bill would transfer $2.5
million to the Self Insurance Fund to cover approved and anticipated claims and judgments
and to provide a reserve for future needs. At this meeting, Councilmember Tyler expressed
his concern at the lack of a risk management program for the County.
This administration shares Councilmember Tyler's concern, and I would like to take this
opportunity to update the County Council about what has been done to address risk
management, and what will be presented for your consideration in the near future.
Please see the attached October 22, 2004, memorandum from Corporation Counsel Lincoln
Ashida. He gives a history of what his office has been trying to do since 2000. After
attempting to have the various attorneys work individually with their client departments on
risk management, he realized that this approach was not resulting in aggressive and
comprehensive risk management. This initial effort attempted to implement risk management
with existing County personnel. After this initial effort, Mr. Ashida recommended that a
comprehensive risk management program be adopted, and necessary staff created, to
effectively examine County operations and make recommendations to protect County
resources, including the safety of our citizens and employees.
A committee was formed, including representation from Police, Fire, Parks, Public Works,
Civil Service, Safety, Finance, and Corporation Counsel. This committee has been meeting
monthly, and has completed its review and finalized its recommendations. On October 27,
this committee met with the Mayor and made its recommendations that a risk manager
position and support staff be created for the County of Hawaii. An October 26, 2004, Q
Comm. Na. o ~ It. Ref. To- Presented OVASCi
Reif. Ca.7-
Hawaii County is an equal opportunity provider and employer.
October 29, 2004
The Honorable James Y. Arakaki, Chairman, and
Members of the Hawaii County Council
Page 2
memorandum from Lincoln Ashida (attached) gives more detail about the specific
recommendations. Also attached is a memo from Director of Personnel Michael Ben,
expressing his support for the committee's proposal.
The Mayor is currently reviewing these recommendations.
Please review the attached information, and let me know if you have any questions. We
welcome your comments, so we can work together to develop an effective risk management
program for the County of Hawaii.
Sincerely,
alai
Dixie Kaetsu
Managing Director
cc: Memorandum from Lincoln Ashida, October 22, 2004 (w/attachments)
Memorandum from Lincoln Ashida, October 26, 2004 (w/attachments)
InterOffice Memo from Michael R. Ben, October 29, 2004
"`Y°FLincoln S.T. Ashida
Harry Kim Corporation Counsel
Mayor
Gerald Takase
Assistant Corporation
Counsel
COUNTY OF HAWAII
OFFICE OF THE CORPORATION COUNSEL,
101 Aupuni Street, Suite 325 . Hilo, Hawaii 96720-4262 . (808) 961-8251 . Fax (808) 961-8622
October 22, 2004
MEMORANDUM
TO: DIXIE KAETSU
Managing Director
FROM: LINCOLN S. T. ASHIDA\P-Ke
Corporation Counsel
RE: Risk Management Executive Summary
Our Entry No.: WRK 04-7053
The following provides an executive summary of Corporation Counsel risk
management activity since the beginning of Mayor Harry Kim's term.
Upon our office administration assuming command of the Corporation
Counsel's Office in December of 2000, we examined the then present risk
management activities within the County. Although Finance Department rules
provided for a Risk Management Program, to our knowledge there was no
coordinated activity County-wide, nor a system of data collection or formal
accountability.
We immediately tasked our attorneys with working with their client
departments to develop a comprehensive risk management program. However,
given the multitude of acutely pressing legal requests and demands, risk
management often either was placed on the "backburner," or was reactive
instead of proactive. In sum, our attorneys were following up with their client
departments on what may be characterized as "maintenance," instead of
aggressive and comprehensive risk management.
The following lessons were learned from this experience:
The County needs a comprehensive risk management program, instead of
each individual department "doing their own thing."
Our County needs to invest the time, money and effort in creating a County-
wide risk manager and the necessary resources (including staff). This risk
manager would be dedicated exclusively to examining the operations of the
County and making necessary recommendations to protect County
resources, which include the safety of our citizens.
Hawaii County is an Equal Opportunity Employer and Provider
In March of 2003, 1 tasked one of our staff members to begin research into
the creation of risk manager position for our County. This research included, but
was not limited to, examination of similar positions in other jurisdictions in our
State, an examination and evaluation of current risk management principles
nationwide, and assembling data on past and present claims facing our County.
A short summary of current risk management principles is attached.
A committee was formed, comprised of representatives from the following
departments: Police, Fire, Parks, Public Works, Civil Service, Safety, Finance,
and Corporation Counsel. We have met monthly since early 2004, culminating
with our final meeting on October 21, 2004. A multitude of issues were
painstakingly discussed, including but not limited to where this risk manager
would be housed within the County, whether the position should be appointed or
civil service, who would be responsible for hiring this position, what types of
individuals would we attract in the recruitment, how this risk manager should
interact with County departments, where the money would come from in order to
fund improvements recommended by the risk manager, and what would be the
performance measures utilized in order to assess the success of the risk
manager and the risk management program.
We are prepared to make the following recommendations to Mayor Kim
and the Hawaii County Council:
• Creation of a County Risk Manager and the necessary support staff. These
positions will be annexed to the Finance Department and come under the
direct supervision of the Finance Director, who will be responsible for hiring
these civil service positions.
• Resurrecting the County's formal existing Risk Management Program, as
found in the Finance Department's Procedures Manual (attached). It is our
intention to continue our periodic meetings, and include Police, Fire, Public
Works, Parks, and any other department that wishes to participate in this
important committee.
The reality is we need to spend the time, energy and money up front in
order to reduce larger costs down the road. Risk management for our County
needs to be proactive, and not reactive. It may be difficult to quantify tangible
measures of success for a risk management program. Merely looking at money
paid in claims, although relevant, may not accurately reflect nor capture the
savings to the County from a catastrophic claim averted by responsible risk
management activity.
Please let me know if further documentation or information is desired.
Encls.
S: Depts/Corp Counsel/LSA Misc. Corresp./Risk Management Executive Summary 10-22-04/LSAmr
2
RISK MANAGEMENT
What is risk management?
Risk management is "using common sense to prevent accidents, injuries, and oversights." It is a discipline
for dealing with the possibility that some future event will cause harm. It provides strategies, techniques,
and an approach to recognizing and confronting any threat faced by an organization in fulfilling its mission.
By identifying risks and implementing an action plan to address them, public entities can protect their
financial stability and their ability to provide services. Because risk is inherent in most productive activities,
even the most conscientious efforts cannot eliminate all risk, but the impact of risk on their operations can be
reduced.
Risk management may be as uncomplicated as answering three basic questions:
• What can go wrong?
• What will we do (both to prevent the harm from occurring and in the aftermath of an "incident)?
• If something happens, how will we pay for it?
1
What is the risk management department responsible for?
The department may manage litigation, coordinate safety programs, and undertake the complex analyses
required to set monetary reserves for future claims. The functions of continuous risk management would be
to:
41, 1
Identify: Search for and locate risks before they become problems.
Analyze: Transform risk data into decision-making information. Evaluate impact, probability, and
timeframe, classify and prioritize risks.
Plan: Translate risk information into decisions and mitigation actions (both present and future), and
implement those actions.
Track: Monitor risk indicators and mitigation actions.
Control: Correct for deviations from the risk mitigation plans.
Communicate: Provide information and feedback, internal and external to the project, on the risk activities,
current risks, and emerging risks.
Developing a Risk Management Proeram
The first step in creating a risk management program is to identify and establish the purpose for creating a
risk management program. It may include items such as to reduce the cost of insurance and/or financial
losses, minimize interruption of vital County services, provide a safe environment for the public and
employees and reduce the number and cost of accidents.
The next step would be to designate an individual or team responsible for developing and implementing the
organization's risk management program. The team would be principally responsible for the risk
management plan, while successfully integrating risk management within all levels of the organization.
2
County personnel from managemc,..c on down to regular employees should .ssist in identifying risks and
managers and/or supervisors should develop suitable loss control and intervention strategies.
Insurance and Risk Management
When losses do occur, organizations must pay for them somehow. Insurance is one of many methods
available for financing losses. However, insurance does nothing to prevent a loss from occurring. The least
costly accident in terms of time, money, and morale is the one that never happens. Practicing risk
management is living with the commitment to prevent harm.
Any misstep or event that brings negative attention to the organization can have a lasting impact on an
organization's ability to fulfill its mission. The success of most nonprofits depends on the support of the
public (volunteers, members) and risk management is an effective way to help maintain the public trust.
The Bole of the Risk Management Department
The risk management department would oversee the execution of a five-step risk management process:
1. Acknowledge and identrfv risks. The operation of any organization involves some degree of risk or
uncertainty of future events. The first step would be to identify these risks. These may include a
very wide variety of incidents, such as someone slipping on a wet floor, vehicular accidents, injury
while playing at a park, accident while performing job related duties, etc. No matter how improbable
a risk may seem, if the organization can envision an incident happening, this should be listed during
the first stage of developing a risk management program.
2. Evaluate and prioritize risk. Assessment of the probability of each risk becoming reality and
estimating its possible effect and cost to the County would be the next step. Past accidents and near
misses should be evaluated Checking with similar organizations that have developed a probability
and cost estimate should be looked at. Also take into consideration the possible public reaction to an
adverse event. Priority areas of concern will include those risks that are most likely to occur and are
very expensive when they do happen. Lower priority risks are those that seldom occur and are not
likely to cost as much when they do happen.
3. Decide how to manage your risks, using risk management strategies.
Development of a written plan, which outlines how the organization will manage its major risks, is
the next step. The plan should describe the suggested strategy or combination of strategies that the
organization will employ. The four basic strategies for controlling risk are:
• Avoidance. Do not offer or cease to provide a service or conduct an activity because it is
considered too risky. '
• Modification. Change the activity so that the chance of harm occurring and impact of potential
damage are within acceptable limits.
• Retention. Accept all or a portion of the risk, and prepare for the consequences.
• Sharing Risks. Consider sharing the risk with another organization. This may include
purchasing insurance or sharing responsibility for a risk with another service provider through a
contractual arrangement.
• Implement The Plan. Once the appropriate governing body or management personnel has
reviewed the plan, the agency should formally adopt and implement it. This would involve
3
distributing and exph,.ung the plan to everyone affected by it. dmploym and volunteers may
need training to enable them to meet their specific risk management responsibilities.
• Review And Revise Plan As Needed. The County must adapt to changes such as funding
constraints, new services to address public needs, and the establishment of new laws. The Risk
Management Department needs to evaluate its strategies at least once a year and evaluate the risk f
management plan to ensure its continued relevancy, comprehensiveness and effectiveness.
Having a risk management committee that meets periodically can help ensure that the issue of
risk management receives ongoing attention. In evaluating the effectiveness of the program,
answers to various questions should be reviewed, such as: Have the risk management techniques
had the desired impact? Were injuries or accidents reduced? Did the program have a positive
effect upon insurance requirements? Are greater or fewer resources available for controlling
risks? Are revisions necessary to achieve the desired impact?
The basic steps of risk management would be:
Identification: Identifying services and assets that could cause a loss to your local government.
Evaluation: Placing values on potential losses by determining how frequently a loss is likely to occur and
how severe it could be.
Treatment: Examining ways to handle risks by securing insurance coverage, preventing accidents,
minimizing losses after an accident, and exploring ways to manage uncovered losses financially.
Selection and Implementation: Choosing and putting into practice the methods selected to deal with risks.
Program Monitoring: Overseeing the results to ensure the program is effective.
Benefits of Risk Management
More effective use of public fends-instead of paying medical claims, liability suits, and property damage,
put dollars toward public programs and services.
Decreased costs and increased productivity-preventing worksite accidents and injuries reduces medical
expenses, as well as costs related to lost work days, replacement workers, etc.
Reduced losses from natural disasters, lawsuits, and other unexpected occurrences.
Identification of exposures you may prefer to cover through means other than insurance-or avoid
completely.
Increased potential for economic development and rural revitalization resulting from improved efficiency
and effectiveness.
4
Establishing a Written Risk Management Policy Statement
A written policy statement is an effective tool for communicating the purpose of the risk 1
management role to others throughout the organization. It also identifies specific actions
that employees can take to contribute to and help promote the organization's overall
efforts.
A risk program is more likely to succeed if it is based on a policy statement endorsed by
the governing body or chief executive officer or mayor. A strong policy statement
would: (1) define risk as a priority for all employees, (2) empower a risk team to identify
risks and develop a plan to address them, and (3) require the participation of all
operational departments. Although the policy statement should be distributed throughout
the organization, it is particularly important to communicate risk policy to department
heads or others who will be asked to contribute resources (primarily manpower or
employee time).
Advantages of a Written Statement
• Establishes the general goals and objectives of the risk management function within
the organization
• Defines the duties and the authority/responsibility relationships of the risk
management department
• Coordinates the treatment of loss exposures on a reasonably standardized basis
among the various departments
• Establishes and/or improves existing communication changes and management
information systems within the organization
• Provides for program continuity and facilitates a smoother transition during changes
in administration and/or personnel
The policy statement is a continuing guide and would be especially helpful to new
employees. Furthermore, for the risk management professionals and staff, a written
statement:
• Provides the framework for assessing responsibility for controlling and/or fihancing
loss expenses
• Emphasizes the importance of the risk management function
• States the position of the risk management department within the overall
organizational chart
1
Contents of a Written Statement
The risk management policy statement: I
Begins with a general description of risk management and its importance to the
organization
Discusses the position of the risk management department within the overall
organizational structure
Defines reporting relationships
Outlines the scope of the authority and responsibility of the risk management
professionals in dealing with others within the organization
May describe the internal structure of the risk management department
Clearly states senior management's objections for making appropriate use of risk control
and risk financing techniques
Specifies particular decision rules for various risk management techniques, depending on
the level of detail the organization typically uses in policy statements regarding other
functions
2
COUNTY OF HAWAII
DEPARTMENT + FINANCE
PROCEDURES MANUAL - RISK MANAGEMENT
SUBJECT:
RISK MANAGEMENT PROGRAM
I. Risk Manaaem n is a planned approach to protecting the County from
loss.
II. The objectives of the County of Hawaii's risk management Program arP
1. To protect County assets.
2. To minimize the interruption of vital County services.
3. To provide a safe environment for the public and employees.
4. To reduce the cost of accidents and other financial losses.
III. Risk Management Policy
The County of Hawaii shall endeavor to reduce the risks of accidental
losses or other financial losses which in the aggregate during any
fiscal year would significantly affect personnel, property, the
budget, or the ability of the County to continue to fulfill its
responsibilities.
The County of Hawaii will apply to risks of accidental loss the risk
management process, which includes'a systematic and continuous
identification of loss exposures, the analysis of these exposures in
terms of frequency and severity probabilities, the application of
sound risk control procedures, and the financing of risk consistent
with financial resources.
In recognition of its financial resources and the spread of its
physical assets, the County will accept retention of uninsured losses
of less than approximately one-tenth of one (0.11) percent of the
annual budget and accept retention of catastrophic loss in excess of
approximately ten (10%) percent of the annual budget; losses between
those limits shall be controlled by the purchase of insurance,
consistent with availability of coverage and reasonableness of
premium cost in relation to perceived risk, probability of loss and
generally accepted industry practices.
EFFECTIVE DATE: REVISION NO.: PAGE 1 Of 8 SECTION-CODE-APPENDIX
COUNTY OF HAWAII
DEPARTMENT : FINANCE
PROCEDURES MAN U A L- RISK MANAGEMENT
SUBJECT:
RISK MANAGEMENT PROGRAM
IV. Elements of Risk Management
1. Identification of exposures - a continuous discovery process to
identify County resources and the loss exposures that could
affect them materially.
2. Analysis of risk - a continuous process to measure financial
impact of loss exposures by analyzing past loss frequency and
severity, and by estimating future loss frequency and severity.
3. Control of risk - the planned and coordinated program to
eliminate or reduce losses and risks by the methods of avoidance,
transfer or retention.
4. Funding of risk - the provision of sufficient funds to pay for-
losses by the most effective use of County resources, including
the purchase of insurance.
5. Administration of risk management program - the development of
personnel and an administrative management program to effectively
use County resources.
V. Responsibilities
1. Agency heads, other officers and supervisors shall be primarily
responsible for carrying out the County's risk management program
by:
a. Identifying and analyzing the probable financial impact of
exposures within their areas of responsibility and interest.
b. Taking appropriate action to avoid or minimize loss which
might result from identified exposures.
C. Reporting all loss exposures as well as actual losses,
accidents or incidents occurring in their area of
responsibility and interest.
d. Assisting in carrying out the County's risk management
program.
EFFECTIVE DATE: REVISION NO.: PAGE OF SECTION-CODE-APPENDIX
2 8
COUNTY OF HAWAII
DEPARTMENT. FINANCE
PROCEDURES MANUAL BISK~tANAGEMENT
SUBJECT:
RISK MANAGEMENT PROGRAM
2. A risk management committee for the County of Hawaii is hereby
established.
a. The committee shall consist of the managing director, the
finance director, the corporation counsel, the safety
coordinator, and the risk manager, who shall be designated by
the committee and shall be a civil servant to maintain
continuity of the program.
b. The risk management committee shall establish, coordinate and
maintain a county-wide risk management program. It shall
formulate a program for the elimination or reduction of loss,
including the purchase of insurance.
c. The risk management committee shall arrange periodic risk
management reviews and audits of claims and other
administrative programs.
3. The Director of Finance shall establish, coordinate and maintain
a county-wide risk management program and, with the risk manager
and assistance from other officials, shall:
a. Analyze the cost of insurance services.
b. Monitor cost to determine cash flow advantages.
C. Build reserves to support retained risks.
d. Obtain loss probability and actuarial studies to determine
funding requirements.
e. Develop a risk management budget to be approved by the risk
management committee, including accumulation of funds in a
trust fund for payment of claims.
f. Maintain log of insurance policies, costs, coverage dates,
agents, and other appropriate data.
EFFECTIVE DATE: REVISION NO.: PAGE OF SECTION-CODE-APPENDIX
3 8
COUNTY OF HAWAII
DEPARTMENT : FINANCE
PROCEDURES MANUAL- RISK MANAGEMENT
SUBJECT:
RISK MANAGEMENT PROGRAM
4. The Corporation Counsel shall:
a. Investigate liability claims filed against the County and
investigate accidents that might result in a lawsuit or
filing of claims.
b. Take appropriate action to settle claims within limits
authorized by the County Council.
C. Recommend settlement of other claims or lawsuits for County
Council action.
d. Defend County against all suits.
e. Review contract terms and conditions for adequacy in
protecting County against losses.
f. Provide legal advice to agencies in avoiding or transferring
risk, including equal employment.
g. Estimate probable loss payments for establishment of reserves.
h. Maintain liability claim files.
S. The Safety Coordinator shall:
a. Develop, implement and maintain a county-wide safety program.
b. Administer the County workers' compensation program.
C. Maintain county-wide workers' compensation claim files.
d. Estimate probable workers' compensation payments for
establishment of reserves.
e. Establish, implement and maintain an employee assistance
program to counsel and assist employees as necessary.
6. The Equal Employment Opportunity/Affirmative Action Officer shall:
a. Advise departments in employment interview and selection
process to avoid equal employment violations.
b. Review cases filed for corrective revisions to practices and
procedures.
EFFECTIVE DATE: REVISION NO.: PAGE OF SECTION-CODE-APPENDIX
4 8
COUNTY OF HAWAII ;
DEPARTMENT = FINANCE
PROCEDURES MANUAL. RISK MANAGEMENT
SUBJECT:
RISK MANAGEMENT.PROGRAM
7. The Personnel Director shall:
a. Establish, implement and maintain physical standards for
employment.
b. Develop policies and procedures in cooperation with the
Safety Coordinator and the Equal Employment
Opportunity/Affirmative Action Officer to address risks
associated with diseases, substance abuse and other
health-related issues.
8. County Physicians shall:
a. Review workers' compensation claims and advise Safety
Coordinator on payment.
b. Review physical standards for employment.
c. Conduct pre-employment physical examinations and advise
appointing authority on risks of hire.
VI.. Self-insurance Fund
1. Ordinance 86-35 (Section 2-156, Hawaii County Code) established a
self-insurance fund for the County, funded by an initial
appropriation of $500,000.
2. When the fund balance is less than $3,000,000, the self-
insurance fund may be used only to pay claims, settlements, and
judgments exclusive of workers' compensation claims against
the County where the amount of such claim, settlement, or
judgment is in excess of $1,000,000.
When the fund balance is $3,000,000 or more, the self-insurance
fund shall be used to pay all claims, settlements, and judgments
against the County, exclusive of workers' compensation claims.
EFFECTIVE DATE: REVISION NO.:. PAGE 5 OF 8 SECTION-CODE-APPENDIX
COUNTY OF HAWAII
[DEPARTMENT. FINANCE
PROCEDURES MANUAL. RISK MANAGEMENT
SUBJECT:
RISK MANAGEMENT PROGRAM
3. In accordance with Ordinance 86-35 (Section 2-157, Hawaii County
Code), an annual appropriation shall be made to the
self-insurance fund in the amount to be determined by the mayor
and the County Council. The Director of Finance may also, with
the approval of the Mayor and County Council, transfer prior to
year end, all or a portion of the appropriation not needed in the
miscellaneous insurance, claims and judgments account to the self
insurance fund.
4. The self-insurance fund may only be dissolved or used for
purposes other than those specified herein unless the dissolution
or non-specified use is approved by the unanimous vote of the
County Council.
S. The Director of Finance shall administer the self-insurance fund,
which shall include investment of the fund. Investment income of
the fund shall accrue to the self-insurance fund.
VII. Policy and Procedural Guidelines;
The Risk Manager, with the guidance and approval of the risk
management committee, shall develop policies and operating procedures
for the following:
1. Transfer of Risk:
a. Wherever possible and financially prudent, risk shall be
transferred to insurance companies consistent with the risk
management policy.
b. A consistent policy shall be developed to transfer risk
contractually, through the use of hold harmless and indemnity
clauses and requirements for contractors to name the County
as an additional insured on the contractor's insurance
policies and/or obtaining a waiver of subrogation on
contractors' workers' compensation insurance policies.
EFFECTIVE DATE: REVISION NO.: 1 PAGE OF SECTION-CODE-APPENOIX
6 8
COUNTY OF HAWAII
DEPARTMENT + FINANCE
PROCEDURES MANUAL. RISK MANAGEMENT
SUBJECT:
RISK MANAGEMENT PROGRAM
2. Avoidance of Risk
a. A continuing program of audit and analysis of potential risks
shall be developed and operated to monitor all County
departments and agencies.
b. Where possible, risk shall be eliminated or minimized.
c. Where not practical to eliminate or minimize, risk shall be
transferred to other public or private entities whenever
possible.
d. Efforts of the Safety Coordinator, the Civil Service
Director, and other educational and training efforts of the
County shall be coordinated by the risk manager to maximize
the avoidance of risk.
3. Retention of Risk
a. The risk manager shall annually determine the amount of
aggregate self-insured retention and deductibles from
insurance coverages to be retained as risk and likely to
become an expense.
b. The risk manager shall also calculate the acceptable amount
of losses from small claims which arise from a reasonably
predictable number of small losses.
c. The estimated total amount of retained risk shall then be
incorporated in the annual budget in the Miscellaneous
Insurance, Claims and Judgments account.
EFFECTIVE DATE: 1 1 REVISION NO.: PAGE OF SECTION-CODE-APPENDIX
7 8
COUNTY OF HAWAII
DEPARTMENT : FINANCE
PROCEDURES MANUAL. RISK MANAGEMENT
SUBJECT:
RISK MANAGEMENT PROGRAM
4. Purchase of Insurance
a. The risk manager shall continually monitor the insurance
industry to determine those risks more appropriately
transferred to insurance as opposed to those more appropriate
for self-insurance, as well as suitable levels of coverage,
deductibles and/or self-insured retention in relation to
premium costs.
b. The risk manager shall formulate procedures for the handling
of exceptions to policy regarding purchase of specialized
coverages required by contractual relationships, other
government agencies, lessors and other parties.
S. Risk Management Information System
a. The risk manager shall develop or otherwise acquire an
information system to include:
(i.) The reporting of losses, claims & incidents
(ii.) A database from which loss experience and other
statistical data may be effectively utilized.
(iii.) Financial information regarding current and future
costs of the risk management function.
b. The risk manager shall also coordinate record keeping &
retention with other departments and agencies as necessary.
C. The risk manager shall develop and implement such internal
office procedures as necessary to assure an efficient and
secure filing system for manual and electronic risk
management information.
EFFECTIVE DATE: REVISION NO.: PAGE 8 OF 8 SECTION-CODE-APPENDIX
N,
MfV Of
.`y !q Lincoln S.T. Ashida
Harry Kim - + Corporation Counsel
Mayor
Gerald Takase
;•.,1 , Assistant Corporation
Counsel
COUNTY OF HAWAII
OFFICE OF THE CORPORATION COUNSEL
101 Aupuni Street, Suite 325 • Hilo, Hawaii 96720-4262 . (808) 961-8251 • Fax (808) 961-8622
October 26, 2004
MEMORANDUM
TO: HONORABLE HARRY KIM
Mayor, County of Hawaii
FROM: RISK MANAGEMENT COMMITTEE
RE: Executive Summary: Proposal for Creation of Risk Manager
and Support Staff
It is recommended a risk manager position and support staff be created
for the County of Hawaii.
The following definition and philosophy may summarize a comprehensive
risk management program for our County:
• Risk management is "using common sense to prevent accidents, injuries, and
oversights." It is a discipline for dealing with the possibility that some future
event will cause harm.
• Risk management provides strategies, techniques, and an approach to
recognizing and confronting any threat faced by an organization in fulfilling its
mission.
After significant discussion, it was decided the Risk Manager and support
staff would be created as a division of the Finance Department. The positions
would be civil service, appointed by the Finance Director. The attached
organizational chart and summary sheet, together with the position descriptions
provide detailed information on the composition of this division.
The attached memorandum prepared for Managing Director Dixie Kaetsu
provides additional detail and information on our committee's activities and
decisions made over the course of our discussions.
We will be available at our meeting on October 27, 2004, to address any
questions you may have.
Encls.
c: Members of the Risk Management Committee (w/ encls.)
S: Departments/Corp Counsel/LSA Misc. Corresp./Memo to Mayor re Risk Management 10-26-04/LSAmr
Hawaii County is an Equal Opportunity Employer and Provider
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RISK MANAGEMENT DIVISION
The proposed positions for the division:
CLASS OF WORK PAY GRADE/ ANNUAL SALARY
B.U. MIN - MAX
Risk Management Officer EM-05 58,980 80,664
Loss Control Specialist SR-24; BU-13 42,180 60,048
Insurance and Claims Assistant SR-14; BU-03 26,652 41,040
Clerk III SR-10; BU-03 22,812 35,088
1. Risk Management Officer - administers the County-wide risk management
program; develops and implements policies, procedures, programs, and
activities for risk management and loss control that include exposure,
prevention, avoidance, and transfer of risk through purchase of Insurance
and other methods
2. Loss Control Specialist - develops, Implements, and monitors the County's
loss control activities to prevent, reduce, or eliminate the County's
exposure to liability and property losses (Note: There can be two
specialist performing similar work for East and West Hawaii; or the West
Hawaii specialist can be at the SR-24 level, and the East Hawaii specialist
be a lower level because the RM is located in East Hawaii.)
3. Insurance and Claims Assistant - provides specialized clerical and routine
administrative support to the overall functions of the risk management
program involving the review and evaluation of underwriting data,
Insurance proposals and contracts, preparation of comparative cost and
benefit analysis, identification and examination of potential sources of
liability and loss; and processing and auditing of claims
4. Clerk III - performs a variety of difficult clerical or routine administrative
work in preparing, checking, reviewing, evaluating, and refining forms,
records, and similar materials; prepares reports and maintains continuing
records
RISK MANAGEMENT OFFICER
EM-05
This position is responsible for the County's risk management program. Serves as an
advisor and technical resource to the County officials, managers, and employees on
risk management, including exposure, prevention, avoidance, and transfer of risk
through purchase of insurance and other methods. Develops and implements
County policies, procedures, and programs for risk management and loss control.
1. Plans, develops, and collaborates with departments to implement
County-wide risk management policies, procedures, programs, and controls.
2. Oversees and directs the identification of property and liability loss exposure
activities, including employee safety and workers' compensation; analyzes
and defines the extent of exposures; determines effective methods of
avoidance, reduction, prevention, assumption, or transfer of risks to provide
optimum coverage at minimum cost.
3. Monitors the insurance industry and develops risk financing strategies; obtains
actuarial evaluations of County self-insurance programs; develops criteria for
loss funding programs and setting of loss reserves.
4. Develops and directs strategies and risk analyses for self-insurance options.
5. Develops strategies and designs commercial insurance programs; processes,
negotiates, and oversees the administration of the County's insurance
contracts.
6. Collaborates with Risk Management Committee and directs the development
and administration of loss prevention programs, policies, and procedures;
advises departments in developing and implementing internal procedures for
compliance; conducts and/or coordinates risk management seminars and
training sessions.
7. Establishes and maintains records and statistics on the risk management and
loss control programs; analyzes data to identify areas of concern needing
appropriate corrective actions.
8. Reviews purchasing/procurement practices and procedures to ensure that risk
management concerns are addressed.
9. Provides information to elected and appointed officials and members of
boards and commissions as to potential liabilities arising out of their official
capacities.
10. Provides technical assistance to all departments in evaluating programs and
activities to minimize risk exposure.
RISK MANAGER
Position description
Page 2
11. Keeps abreast of and analyzes governmental regulations, laws, and rulings
concerned with insurance and risk management to determine their impact on
the County and its programs; implements appropriate action to stay in
compliance; prepares ordinance amendments and legislation proposals on
matters affecting the County's risk management programs.
12. Prepares and justifies annual program budget; sets appropriate reserves
based on a review of pending claims.
13. Plans, develops, and implements long-range program plans for risk
management.
14. Performs other related duties as assigned.
LOSS CONTROL SPECIALIST
SR-24; BU-13
Under the general direction of the Risk Management Officer, this position develops,
analyzes, implements, coordinates, and monitors the loss control activities for the
County's risk management program to prevent, reduce, or eliminate the County's
exposure to liability and property losses; assists the Risk Management Officer in
developing an overall understanding of the County's risk management program.
1. Develops, implements, interprets, revises, and monitors the County's loss control
policies, programs, and activities.
2. Identifies and analyzes potential sources of liability, property losses, or work
place hazards for the County.
• Conducts interviews with department heads and other staff,
• Conducts on-site inspections of buildings and facilities,
• Examines service contracts and agreements, internal policies and
procedures on quality assurance, and studies of overall operations and
objectives of operating departments and agencies, and
• Consults with public and private experts.
3. Estimates frequency, severity, and predictability of each loss exposure.
4. Utilizes loss control and loss finance methodologies that are cost-effective and
least disruptive to the overall departmental operations or objectives.
5. Provides technical consultative services to operating departments.
6. Develops alternative techniques or methodologies of loss avoidance; works
with departments to implement alternative techniques.
7. Reviews and monitors the results of implemented alternatives to determine its
effectiveness; modifies or makes improvements based upon new information
on loss exposures to ensure that the most effective techniques are chosen to
achieve the goals and objectives of the risk management program.
8. Determines that acceptable loss control performance standards have been
met.
9. Develops and manages the loss control reporting system; establishes
procedures to collect, maintain, and provide loss control information for
analyzing and monitoring loss control activities and formulating loss avoidance
techniques.
10. Monitors self-insurance retention and insured losses; gathers and maintains
underwriting information for insurance purposes.
11. Reviews and monitors safety recommendations from insurance companies.
12. Develops and/or obtains loss control training materials; provides loss control
training and assists in conducting risk management training.
13. Works with and trains operating departmental personnel to identify new loss
exposures and to report liability and property incidents.
14. Performs other related duties as assigned.
INSURANCE AND CLAIMS ASSISTANT
SR-14; B; U-03
Under the supervision of the Risk Management Officer, this position performs
specialized clerical and routine administrative duties relating to the underwriting and
analysis of insurance policies and contracts, review and monitoring of risk exposure
and loss control activities, establishment and maintenance of document/record
control systems and processing of insurance claims; formulates insurance bid
specifications.
1. Participates in the development of underwriting criteria for new and/or existing
insurance programs; collects and compiles underwriting data, prepares draft
analyses, and other data reports for Risk Management Officer's review.
2. Initiates correspondence to departments, agencies, and insurance brokers,
etc., to solicit required information, clarify or update data, and advise of
changes impacting insurance coverage.
3. Participates in the preparation of insurance specifications and bid packages;
clarifies information regarding the bid specification or proposal with insurance
underwriters and brokers; receives and reviews submitted proposals to ensure
strict compliance with bid specifications on advertised procurement; prepares
a comparative summary cost and benefit analysis for each proposal subject to
the Risk Management Officer's review.
4. Assists in the review of loss control reports to identify new or unusual exposures
or hazards.
5. Provides general information to the public on filing claims; refers claims reports,
letters, or telephone calls to the appropriate insurer; clarifies insurance premium
billings and personal claims; receives and verifies letters of claims or billings for
accuracy and compliance with contracted specifications, then processes
billings for payment.
6. Monitors loss payments and processes monthly billings.
7. Maintains the program's database by inputting various information, i.e.,
negligence claims and lawsuits, auto schedules, property records, policy history
records, premium records, etc.
8. Develops reports to summarize or list vital statistics or information from the
database.
9. Maintains insurance log and policy files, including premium and related loss
summaries.
10. Provides simple advice regarding insurance programs and procedures to
County departments and agencies.
11. Prepares standard reports for review and distribution; drafts and prepares
correspondence for superior's signature.
12. Performs other related duties as assigned.
1.036
DEPARTMENT OF CIVIL SERVICE
COUNTY OF HAWAII
CLERK III
Duties Summary:
Performs a variety of difficult clerical or routine administrative work in preparing,
checking, reviewing, evaluating, and refining forms, records, and similar materials;
prepares reports and maintains continuing records; may supervise others; and performs
other related duties as required.
Distinauishing Characteristics•
This class differs from that of Clerk II in that it types and performs a variety of
difficult clerical or routine administrative tasks which are primarily substantive in nature,
executes assignments with a minimum of supervision, and accomplishes work with
substantial use of discretion and selectiveness in deviating from established processes
and procedures; whereas, the Clerk II types and performs a variety of tasks involving
referral to a number of different sources, executes assignments in accordance with
general instructions, and accomplishes work with some use of discretion and
selectiveness in deviating from established processes and procedures.
Examples of Duties: (The following are examples of duties and not necessarily
descriptive of any one position in this class. The omission of specific duties statements
does not preclude the assignment of such duties if they are logical assignments for the
position and are consistent with the class concept.)
• Types letters, memoranda, reports, specifications, statements, forms, and other
materials into final form from rough or corrected copy; checks and proofreads
typewritten materials.
• Types tabular and other material from rough or corrected copy where format and
arrangement of data are not clearly indicated.
• Prepares, checks, and reviews forms, records, reports, applications, and other
documents for accuracy, adequacy, and conformance to established
departmental and/or legal requirements.
• Evaluates documents and processes same according to individual circumstances
where the correct course of action is not clearly defined.
• Follows up to secure or clarify required information.
• Follows up on applications, forms, and other documents to ensure timely
processing.
CLERK III -2-
• Determines eligibility for and issues licenses and permits.
• Posts data to and maintains various types of operational and control records.
• Makes extensive searches through a variety of files and records, extracts, refines,
and organizes necessary information and prepares reports; summarizes and briefs
materials and prepares special reports involving interpretation and analysis of data
and judgment as to format and details of presentation.
• Takes and transcribes notes and taped recordings of meeting proceedings;
prepares minutes as required.
• Prepares reports and correspondence by transcribing taped recordings.
• Composes routine correspondence and letters of acknowledgment from general
instructions.
• Sets up and maintains files and revises system as necessary; codes and indexes
records.
• Provides information and resolves complaints by outside parties involving
interpretation and explanation of regulations, policies, and procedures, and
knowledge of the agency's purposes and functions.
• Processes accounts payable; orders office supplies, equipment, etc.
• Accepts cash payments for standard fees; writes out receipts; prepares deposit
receipts; may follow up on collection of returned checks.
• Reviews, prepares, and processes time sheets and related payroll documents.
• Answers telephone and takes or relays messages and calls.
• Makes appointments for the staff.
• Sorts, arranges, distributes, and files bills, invoices, applications, correspondence,
and other materials.
• Greets callers and directs them to proper persons or offices.
• Operates standard office machines such as copiers, calculators, typewriters, and
desktop computers and peripherals.
• May perform routine end user computer system assignments.
• May supervise and review the work of others.
CLERK III -3-
Minimum Qualification Requirements:
Training and Experience: A combination of education and experience
substantially equivalent to graduation from high school, and three years of clerical
experience which shall have included some typing. A current typing proficiency
certificate with a minimum typing speed of 40 net words per minute must be presented
at time of filing.
Qualification for Firearms: As applicable to the position, must be qualified to
carry and/or possess firearm or ammunition in accordance with state and federal laws,
e.g., no misdemeanor or felony domestic violence conviction.
License Reauirement: Possession of a valid State of Hawaii drivers license
(Class 3) or any other valid comparable motor vehicle operator's license as applicable
to the position.
Knowledge of: office practices and procedures; filing methods and systems;
grammar, spelling, and word usage; the purposes and uses of standard office
machines; principles and practices of supervision.
Ability to: type at the rate of 40 net words per minute; make arithmetic
computations; compare names and numbers accurately, set up and maintain records,
summarize and analyze materials; prepare reports; operate standard office machines
and equipment; understand, interpret, and explain laws, ordinances, regulations, and
policies pertinent to the department; give and follow oral and written instructions; deal
tactfully and effectively with the public and resolve complaints; supervise and work
harmoniously with others.
Physical Requirements:
Persons seeking appointment to positions in this class must meet the health and
physical condition standards deemed necessary and proper for performance of the
duties.
Physical Effort Grouping: Light
This is an amendment and retitling to the specification approved for
the class SENIOR CLERK-TYPIST on October 27, 1976.
APPROVED: June 29. 1998 An~ dfj
Date Director f Personnel
County of atawaii - Department of Civif Service
Interoffice Memo
TO: The Honorable Harry Kim, Mayor
,SRO-V: Michael R. Ben, Director of Personnel / - J
DATE: October 29, 2004
SUI?JEC? Risk Manager and Support Staff
I am in full support of the proposed Risk Management Division within the Department of
Finance; and its attendant request for appropriate staff. The ad hoc committee
considered a variety of scenarios on what this function entailed, where it should be
located, what its authority would be, and the staffing of the function. There were
advantages and disadvantages in all of the scenarios, and in the end, the committee
came up with its best recommendation after considering all of the committee members'
input. I concur that the Finance Department should incorporate this function because of
its concern with liability issues, and because Finance has the leverage that would be
needed by this Division to carry out its function.
The proposal attempts to take a proactive approach to Risk Management; i.e., identify
and alleviate, if not eliminate, potential liabilities for the counties. No other county in
Hawaii has a proactive approach to risk management. To the contrary, other counties'
staffs are reacting to incidents/events or are solely concentrating on workplace safety.
The ad hoc committee recognizes that risk management should be a county-wide
program, and that, in itself, creates problems that differ from the private sector. These
problems occur because the nature and scope of potential liabilities take on different
dimensions from one department to the next. In the private sector, I would guess it is
safe to say that businesses do not involve themselves with the wide variety of functions
that our county government is faced with.
To get a program up and running, it would be tremendously unfair to a risk manager to
have a shop of one individual, with no support staff whatsoever. We would never have a
complete proactive program if we do not adequately staff the function.
The proposed classes of work and position descriptions are good starting points to
begin. As the program is developed, changes may be made as needed. I do not see
this proposed program as overstaffed and overcompensated. Any future changes would
be to enhance the program, not to diminish it.
cc: Lincoln S.T. Ashida, Corporation Counsel
County of 9Cawai 'i is an EquaCOpportunity Provider andZmptoyer