Update on Proposed Insurance Retained Capital Release

Mr. Eugene Dwyer, Head of Roads and Transport gave an update to members.  Mr. Dwyer outlined that Irish Public Bodies (IPB) provide Employers Liability & Public Liability insurance cover to Roscommon County Council.  Up to now premiums were paid annually to IPB and as claims were settled during the year, an additional payment would be paid at the end of the year called a retro excess payment and would vary depending on the level of claims settled with the risk falling to the Local Authority on all outstanding claims.    In order to give budget certainty it was agreed with IPB to buyout this retro balance for all outstanding claims and move to a new community rating system of a flat premium payment.  While the new payment will be initially higher under the current premium where Local Authorities reduce their risk over time that will be rewarded with a reduced premium as well. 

Secondly IPB has accumulated surplus capital reserves over the years and a decision has been taken to release this retained funding back to the Local Authorities.  The CPG in June agreed the following:

·         Set aside an amount as a cushion for payments of the additional premium over the next three years.

·         Employ an Assistant Engineer or Technician reporting to the Head of Roads and Transportation to carry out risk management.

·         Carry out works in the form outlined on a priority basis on a county wide basis.

IPB has now confirmed the proposed release of the retained capital reserves as follows:

·         Total payment due to Roscommon County Council is €3,205,000

·         First tranche in the sum of €1.518m is to be processed immediately

·         Remaining balance of €1.687m is to be distributed in four equal instalments of €422k over four years from 2019 to 2022.

As agreed with IPB the sum of €997k is due to IPB for the buyout of the retro and the movement to a flat payment from 1^st January 2017.  This will be deducted from the first tranche resulting in a net payment to the Council of €521k approx.

As previously stated there will be increased premiums as a result of the abolition of the retro balances and we need to set aside money for a number of years until we are able to manage our risk and our liability starts to fall.  This will amount to approx €100k per year.  At the present time our ranking is no better than mid table with regard to current risk according to IPB.  Notwithstanding the need to mitigate our risk we have to have regard to future planned improvement works but however there are a number of areas where we can immediately carry out works. Initially surveys will be carried out by the engineer who has been appointed to identify areas of priority for remedial works and works will start this year.   

Members made the following comments:

·         What areas will the remedial works include?

·         Will remedial works include villages as well as towns?

·         Why type of remedial works will be carried out?

Mr.  Dwyer responded as follows:

·         Priority will be areas where there are the highest claims which are Roscommon, Boyle, Ballaghaderreen.  All footpaths will be surveyed and rated.

·         Remedial works will include slips and trips in town centres initially and black spots will be identified and dealt with first. 

·         Only source of funding for new footpaths is from the Council’s own funds i.e. Development charges.