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Interest earnings are expected to decrease in FY 18. The expenses for this division are separated into four categories: General liability, Auto claims and insurance, Property and Worker’s compensation. Expenses in these four categories are allocated to each department based on a formula determined by an actuarial study done every few years. Worker’s compensation costs are the most expensive of these three categories, making up roughly 53% of the Risk Management budget. Projected expenses for General Liability have been increased $25,000 for FY 18, as the State of Maryland has increased the liability cap for general liability and auto claims



Two full-time positions are funded in this division. A step increase effective January 1, 2018 has been included. Funding has been included for one part-time Office Associate position to work two days per week for June, July and August and several days per month for the remainder of the year. Both health insurance and retirement contributions increase for this division.



Contracted Services include professional services and legal services. Legal fees have been budgeted at $95,000. An Actuarial study to assess ultimate losses and outstanding liability associated with the Town’s self-insured worker’s compensation, general liability and auto exposure was funded in FY 16 at a cost of $15,000. It has been recommended by the Town’s auditing firm that this study be conducted every few fiscal years, and will be included in the FY 19 budget. This study determines the necessary reserves for each type of insurance claims and also determines the allocation of each type of insurance to each City department. The actuarial study increased the amount of Risk fund balance restricted for claims and liability and for future claims by $736,366. Reserves necessary for worker’s compensation claims increased from $2.2 million to $3.2 million, but the amount necessary for auto liability claims was reduced. Insurance coverage and payment of insurance claims are the largest expenses in this department. Overall insurance costs are expected to increase $25,000 in FY 18. The Maryland cap on General Liability and Auto claims was increased to $400,000 on October 1, 2015, increasing overall liability to the Town. The amount allocated for worker’s compensation claims in FY 18 is $750,000, while the total allocation for worker’s compensation is $1,177,836. Property insurance is estimated to remain at $290,000 for FY 18, while General Liability claims have been increased $25,000, and Automobile claims are budgeted at the FY 17 level. $1,839,950 has been budgeted to cover the cost of insurance policies and insurance claims for FY 18. Intragovernmental expenses increase due to increases in General Overhead expense.