RALEIGH, NC (WNCN) — Let’s face it, accidents happen. But when it involves city of Raleigh property, don’t think its insurance that is paying for damages. Most of the time it’s you.
“Raleigh is essentially self-insured,” explained Dennis Paren, Risk Manager for the city of Raleigh.
Basically, that means each accident with less than a million dollars in damage is paid by taxpayers.
This includes everything from workers compensation to fender benders, sewer back up, or rocks flying from mowers.
Paren says the city’s risk exposure is based in part by the public services they provide; police, public utilities, fire, trash collection, etc.
“All of these services require a large amount of equipment, vehicles, personnel, and facilities” Paren said. “Accidents are bound to happen.”
THE MOST ACCIDENTS: POLICE AND TRASH
When it comes to the cities 2,300 vehicles, most accidents come from the police and solid waste department.
“We generally run about 65 to 70 trucks per day,” explained Tim Heath, safety coordinator for Raleigh’s Solid Waste Services. “Between getting up the garbage, recycling, and yard waste we touch about forty-thousand homes each day in the city.”
WNCN Investigates compiled 5 years’ worth of claims and found the solid waste department racked up more than a half of million dollars in accident pay outs.
“We’re continuously putting in programs to try and keep that number down but we are still seeing an increase,” said Heath.
Mary Anne Skender knows all too well.
“He backed up and he backed into me,” Skender said.
While she was leaving her home, a garbage truck backed into her SUV causing nearly $12,000 in damage.
“Everything on my front end, quarter panels, the roof, the radiator, the air conditioner,” said Skender.
“We do a lot of things within our department to mitigate those accidents to keep those insurance claims down and that involves a lot of employee training,” Heath said.
He says after accidents happen, they are reviewed by management and the driver’s peers.
“Awareness is key,” Heath said. “We keep driving those safety programs we keep talking about what is going on out there.”
Heath says moving towards a more automated fleet of trucks has added to the most common problem of hitting mailboxes and parked cars. He says the public can help cut down on those numbers by making sure they place their trash can in the right location.
“The driver himself is doing everything he can but we have a lot of cars on the side of the road in front of homes,” explained Heath, “Getting that garbage that’s right next to that car, that’s right next to that mailbox, it’s tough for the guys,” he added.
But they’re department is just one example. WNCN Investigates asked the Raleigh Police Department for an interview to discuss what they are doing to keep accidents to a minimum. The department referred us to risk management.
Risk management said while it provides yearly summaries of claims and accidents, it’s up to each department to implement plans to keep those claims down.
IT ADDS UP
WNCN Investigates also compiled claims for the police department which also racked up more than a half of million dollars in the past 5 years.
Add in all the other departments, plus workers comp, and the city spends close to $5 million in accident claims every year.
“Are you comfortable in what the city is spending in claims?” WNCN’s Jonathan Rodriguez asked Paren. “No, we’re not comfortable with that and so we have been making end roads in reducing those,” Paren said.
INSURING A CITY
So why self-insure? Paren says it’s what Raleigh has done for more than 20 years.
“The insurance industry has shied away from insuring cities of a certain size,” Paren said.
The last time the city considered the possibility of a ‘full coverage’ plan, the insurance company wouldn’t even quote them.
Paren says the ‘pay-as-you-go’ plan also improves the city’s cash flow.
For catastrophic accidents, causing more than $1 million in damage, the city is insured for up to $10 million.
The premiums for that coverage also cost the city about $1.5 million each year. Paren says that is less than a quarter of a percent of the total operating expenses.
“If you were to take a look at the experience the city had in 2009, 2010, and 2011 it was pretty horrendous,” he said.
The good news is Paren showed us Raleigh is on an upward trend. Currently, the city is required to maintain a $22 million risk management fund. Paren says last year, that fund was in surplus. In previous years it was in a deficit.
Paren says the total number of claims is also decreasing. He credits a lot of the improvement to the city’s new investment in safety.
Currently, the city is required to maintain a $22 million risk management fund. Paren says last year, that fund was in surplus. In previous years it was in a deficit.
“3 or 4 years ago you wouldn’t be able to count the 15 safety personnel that we have today, we may have even doubled that in the past few years,” Paren said.
Tim Heath is one of those safety employees.
“As the city continues to grow, we’ll continue to see accidents but hopefully we can keep those at a minimum,” said Heath. “But we need the resident’s help on this also,” he added.
For now it’s up to each department to make sure cleaning up accidents, doesn’t accidently clean out the budget.
“We have improved drastically on a financial side, now we just need to continue that into our current experience,” Paren said.
Spreadsheet of City of Raleigh accident claims for fiscal years 2011-2014