The Kenai Peninsula Borough Assembly passed Ordinance 2022-19-38, appropriating $475,250 from the Insurance and Litigation Fund for additional costs of insurance claims that may be incurred in FY2023.
In a memo to the Assembly, Sovala Kisena, KPB Risk Manager stated, the Kenai Peninsula Borough, including service areas and the Kenai Peninsula Borough School District, are self-insured for accidental losses including but not limited to property, liability, workers’ compensation and travel losses. In the first half of FY2023, the number of potentially large claims and their associated reserves for costs has been higher than projected. The original FY2023 budgeted amount was based on historical claims experience. However, in the first four months of FY2023, a higher number of such claims have been recorded with aggregate potential liability estimated to potentially be up to a total of $548,500.
This ordinance would appropriate $475,250 from the Insurance and Litigation Fund fund balance to provide the additional funds needed to ensure adequate funds are available for potential additional claims for this fiscal year.
In response to Ordinance 2022-19-38, Assembly Member Tyson Cox stated,
“we’re being asked to add an additional $475,250 to the $352,000 that we already allocated this year for litigation. So, that brings us to $829,250 for litigation that has happened this year. Typically, we only has around $350,000 that we need for any kind of litigation; this year it’s $829,250 for litigation. I just wanted to bring it forward that we are spending a lot on litigation this year and the public should know that.”
Borough Mayor Mike Navarre clarified the funds.
“I just want to also let the public know that these (increased funds) are based on potential claims and that it’s not guaranteed that it will be spent, if it is not spent it (funds) just lapses back into the insurance and litigation fund.”
The appropriation of litigation funds passed unanimously by the Assembly.