Riverside County’s liability costs from lawsuits continue to climb, but officials told the Board of Supervisors Tuesday that policies to contain and control payouts will reduce the county’s expenses in the future.
The Office of the Auditor-Controller submitted a Legal Settlement Cost Report to the board based on data obtained from the Department of Human Resources and the Risk Management Steering Committee, which identified a total of $167.22 million in liability expenses between fiscal years 2015-16 and 2019-20.
According to Auditor-Controller Paul Angulo and his staff, the projected costs for the period were $118.52 million, meaning county taxpayers footed a bill that was roughly 41% bigger than what had been anticipated.
“Our number is astronomical for a county our size,” Supervisor Kevin Jeffries said. “If these numbers are accurate, then the reforms we’ve tried to implement are not making a bit of difference. It’s a pretty damning report.”
Department of Human Resources Director Brenda Diederichs said the auditor-controller’s findings did not reflect a complete picture, and in some cases, there may have been an “apples to oranges” comparison because of the way data was analyzed. However, she acknowledged that “they’re higher numbers that we would wish to have.”
The report focused, in part, on the period spanning calendar years 2013 to 2017, as a follow-up to a prior study that analyzed that same time frame, comparing how Riverside County stacks up against counties of similar size, specifically Los Angeles, Orange, San Bernardino, Santa Clara and San Diego counties.
Figures showed Riverside County held the unenviable No. 2 spot in total legal settlement costs for the five-year period, with $136.59 million being paid out to cover liabilities. Only Los Angeles County’s expenditures were higher — $321 million, according to the Office of the Auditor-Controller.
On a per capita level, Riverside County was No. 1, with liability expenses amounting to $56.37 per resident, while Los Angeles County’s outgo worked out to about $31.59 per resident. However, its population is also four times larger, translating to wider distribution.
The report pointed out that public safety liabilities remain the largest burden on the risk management fund, the pooled account into which all agencies pay as a kind of self-insurance. Between fiscal years 2014-15 and 2019-20, the Sheriff’s Department’s general liability costs were estimated to be nearly $75 million.
Despite the large aggregate sum, the report indicated that, in 2016-17 and 2017-18, the agency experienced a roughly $2.5 million reduction in liability expenses. Then in 2018-19, they jumped again — by 160%.
The only county agency that came close to the Sheriff’s Department was the Department of Public Social Services, where general liability costs were estimated to be about $38 million from 2014-15 to 2019-20, according to the report, which says the county contends with an estimated 2,400 claims annually.
Jeffries questioned whether the findings underscored the need to “look at do we have the right people in the right places.”
It was at his urging that the board, in May 2019, instituted reforms to reduce the county’s liability exposure. The Risk Management Steering Committee, with which current county CEO Jeff Van Wagenen was heavily involved, spearheaded some changes, including tracking claims and lawsuits more closely and dispatching “loss control” personnel to evaluate how and whether departments are implementing corrective measures to mitigate risks.
“It looks like the mitigation strategies are working going forward,” Department of Human Resources Assistant Director Mike Bowers said. “We are starting to get some traction. In three to four years, we should see the fruits of our labor.”
Angulo and his staff listed multiple recommendations as part of the report. They included improvements in employee training, transparent communication between all parties tasked with reducing liability exposures, and avoidance of “quickly settling legal claims” because it signals that the county is too willing to surrender rather than fight in court.