HomeMy WebLinkAbout10/21/1996 '.
BAKERSFIELD
Patricia J. DeMond, Chair
Irma Carson
Kevin McDermott
Staff: Dolores Teubner
AGENDA
BUDGET AND FINANCE COMMITTEE
Monday, October 21, 1996
12:15 p..m.
City Manager's Conference Room
Second Floor - City Hall, Suite 201
1501 Truxtun Avenue
Bakersfield, CA
1. ROLL CALL
2. APPROVAL OF SEPTEMBER 16, 1996 MINUTES
3. PRESENTATIONS
4. PUBLIC STATEMENTS
5. DEFERRED BUSINESS
NONE
6. NEW BUSINESS
A. REQUESTS FOR ECONOMIC DEVELOPMENT ASSISTANCE FROM SOUTHWEST
CONTRACTORS, INC. AND HAMMONS MEAT SALES, INC. - Wager
B. STRESS DISABILITY CLAIMS - Stinson
7. ADJOURNMENT
DBT:)p
B A K-E R S F I,E L D
Patricia J. DeMond, Chair
staff.' Do/ores Teub~' ~er Kevin McDermott
AGENDA SUMMARY REPORT
BUDGET AND FINANCE COMMITTEE
Monday, September 16, 1996
12:15 p.m.
City Manager's Conference Room
1. ROLL CALL
-.. Call to Order at 12:25 p.m.
Present: Councilmembers: Patricia J. DeMond, Chair; Irma Carson; and
Kevin McDermott
2, APPROVAL OF THE AUGUST 12, 1996 MINUTES
Approved as submitted.
3. PRESENTATIONS
None
4. PUBLIC STATEMENTS
None
5. DEFERRED BUSINESS
A. LOCAL PREFERENCE BID POLICY
Staff reiterated the current City policy on local bid preference. The City Attorney
explained that our Charter does not allow for an expanded local preference policy.
The concern is that it would ultimately reduce competition and increase the cost of
certain services provided by local vendors. The City already awards the majority of
AGENDA SUMMARY REPORT_~
BUDGET AND FINANCE COMMITTEE
Monday, September 16, 1996
Page -2-
non-construction and non-RFP bids to local vendors and gives local preference
points in the RFP process. The Committee asked staff to continue to look for ways
to expand our local preference policy without negatively affecting the City's bid
process, and return to the Committee in three months with a progress report.
6. NEW BUSINESS
A. CiTY INVESTMENT POLICY
Staff reviewed the proposed investment policy with the Committee. State guidelines
are included in the City's policy. Councilmember McDermott suggested that a cap
of no more than 30% of the City's portfolio be invested in the LAIF at any one time
be added to the policy. Exceptions would be considered on a case by case basis.
Staff will identify different investment types by definition in the policy for clarity, and
differentiation between the various investment caps required by State and local law.
The policy was approved by the Committee and will be recommended to the full
Council.
B. LEASE AGREEMENT/PURCHASE OPTION FOR BAKERSFIELD ART
FOUNDATION
The proposed lease agreement with the Bakersfield Art Foundation is for five years
with an option to buy the property for $5,000 any time during the lease period. The
long-term lease will allow the museum to commit to the Central Park location and
will remove the need for the Council to approve the lease annually. The Committee
asked that certain portions of the agreement be clarified, such as "art-related
activities," and to include a more detailed description of the size and boundaries of
the property subject to the lease/purchase. The Committee recommended
forwarding the agreement as amended to the City Council for approval.
7. ADJOURNMENT
The meeting was adjourned at 1:25 p.m.
cc: Honorable Mayor and City Council
DBT:jp
BAKERSFIELD
Economic and Community Development Department
MEMORANDUM
October 16, 1996
TO: Alan Tandy, City Manager
FROM: /lake Wager, Economic Development Direc
SUBJECT: Response to concerns on tIammons Meatsanw'oouthwest Contractors
I have reviewed your comments on my memos regarding these two proposals and have
addressed your concerns below.
Security
Concern: Odd form of security, unless there is something I'm unaware of.
Answer: Our goal has been to obtain the most liquid and secure collateral to protect the
city's investment. A personal guaranty is the best way to meet thin criteria. Recognizing
that a personal guaranty is only as good as the assets backing it, we have accepted a personal
guaranty as security from Guy Chaddock & Co. and from John Q. Hammons. With
I-Iammons Meats, a personal guaranty was the only security available since Wells Fargo Bank
and Mid State Development Corporation will hold the first and second trust deed,
respectively, on the property.
When a personal guaranty is not a realistic alternative, we have accepted a first trust deed on
real property, whether it is the project property or some other real estate. This is what we
did with Clinica Sierra Vista when the city accepted a fa'st trust deed on the clinic's property
When neither a personal guaranty or first trust deed is poss~le, our third option is a trust
deed plus some other security proposed by the applicant and deemed acceptable by the city.
Our position regarding security, unless we hear otherwise, is to seek a personal guaranty
fa-st, then a first trust deed on real property (whether on the property in question or not),
then a trust deed plus other security to be determined.
Using a personal guaranty for security from Hammons Meats and Southwest Contractors is in
keeping with our practice.
October 16, 1996
Page 2
Personal investment
Concern: No direct investment of his own?
Answer: You are correct, there is no personal investment of the owner of Hammons Meats.
This deal came to us from Mid State Development Corporation, our local SBA Certified
Development Company. Mid State plans to use the SBA 504 loan program for this project.
]'his program will provide up to 90 percent financing for business expansion and acquisition
deals. According to Mid State, Itammous Meats has fight working capital and low liquidity,
making additional investment unlikely. On the plus side, the company has a historical
repayment ability, a reasonable level of debt, experienced owner management, 18 years in
business, and good credit. The deal has been reviewed and approved by both Wells Fargo
and Mid State.
Comparable terms between the two deal.~
Concern: Terms for SWC seem very generous ia comparison to Hammons for not much
difference in the number of jobs.
Answer: With both deals, the loan amounts are based upon what the borrowers requested
from the city. Because Hammons is a 504 deal, 90% of their Financing has already been
secured, meaning all but $35,000 was obtained from other sources. In regard to SWC, their
project cost was considerably higher than Hammous ($800,000 vs. $350,000), specifically
because Hammons was able to have the 504 program cover most of the project cost. Due to
the nature of the transaction, the SCW project soes not qualify as an SBA 504 loan.
In terms of job creation, Hammons projects to create their new jobs within Year 1, while
SWC will require up to five years to reach their jobs creation level. Hammons is an existing
southeast Bakersfield business that will expand onto an adjacent parcel. SWC will be
cimpleting its relocation from the county into the city. While the number of jobs at SWC
may be limited based upon the loan amount, our primary focus was assisting a business that
had been located in the county to make a commitment to create jobs and additional
investment in the city and,. particularly, southeast Bakersfield.
In terms of valuation of the overall projects, Hammons is a 10% investment, while SWC is
18.75%. Using a dollar per new job created comparison, Hammons proposal is $5,833 per
new job while SWC is $16,666 per new job created.
Enclosed are completed project evaluation forms for each project.
I~llt~l..L~, UII tlll~' t. UIIIIIlUlllty
OCT 1 119
CiTY OFBAKERSIJ~F--L,~_.~ E R S F I E L D
Economic and Community Development Department
MEMORANDUM
October 9, 1996
TO:
Alan
Tandy, City Manager (r \5~,%
FROM: Jake Wager, Economic Development Directol~,,~
SUBJECT: Proposed assistance for Southwest ContractoYt~Ine..
Southwest Contractors (SWC) is an existing Incentive Area business that is seeking to
purchase the 12+ acre facility they lease at 1500 South Union Avenue. The company's
functions are divided into pipeline operations, manufacturing, and communications. SWC is
constructing a 15,000 square foot fabrication shop building; this is in addition to the existing,
4,000 square foot fabrication facility already on the property. The purchase has not been
financed and is contingem on SWC receiving financial assistance from the City of Bakersfield
plus additional bank financing. The seller has agreed to allow SWC until December 1996 to
finance the purchase.
SWC has requested $150,000 toward the purchase of the property: no funds would be used
toward new construction. The facility is being purchased from ARB, Inc. for $800,000.
SWC relocated to this facility to provide additional space for its pipeline and fabrication
businesses. Sixteen jobs have been moved into the Incentive Area recently and the company
plans to cream an additional 9 positions during the term of the agreement.
The following terms and conditions have been provided to the company:
· assistance would be in the form of a forgivable loan in the mount of $150,000.
· the loan proceeds would be for the purchase of 1500 South Union Avenue.
· loan proceeds would not be used toward construction or any other activity that would trigger
the Davis-Bacon Act (prevailing wage rates).
· the term of the loan would be 5 years.
· adequate collateral would need to be provided to secure this loan. Our preference would be
· October 9, 1996
Page 2
in the form of a personal guaranty in the mount of $150,000. If this is not feasible for the
company, our next preference would be a first deed of trust on real property, not necessarily
the 1500 South Union Avenue property, in the amount of $150,000. If these two options are
not possible, we will request a combination of a second trust deed on the 1500 South Union
Avenue site plus additional security (to be determined).
o51% of all new jobs would be made available to low- and moderate-income individuals.
This requirement would be in place for five years. The specific reason for the five year term
is because it will take the company this long to create the 9 new jobs.
oSWC company would enter into an agreement with Employers' Training Resource to use
them as a first source for all hiring .during the course of the agreement.
· for each year SWC meets all the terms and conditions of the agreement, 1/5 of the loan
mount ($30,000) would be forgiven. One-fifth of the security would also be released for
each year the terms and conditions are met.
· if the terms and conditions are not met during Year 1, the total loan amount ($150,000)
would be due and payable.
· if the terms and conditions are not met during any of the following years, a portion of the
loan would need to be repaid. This amount would correspond to what percentage SWC failed
to meet the hiring criteria. For example, if during year 2, SWC found only 46% of its new
employees were low/mod, SWC would be required to repay 5% (51% required by HUD less
the 46% actually attained) of 1/5 of the loan ($30,000), or $1,500 (5% x $30,000). There
would be no credit given for exceeding the hiring goals of the agreement.
This project would create additional investment and employment activity in southeast
Bakersfield on a site that has been vacant for a while. This facility is adjacem to the former
Freymiller Tracking site. With your concurrence, we could bring this item to the City
Council by the end of 1996, subject to the necessary environmental reviews being completed.
,~ Project Evaluation Southwest Contractors, Inc. page 1
Project description
I. Does the business currently operate within the city limits? I~1 Yes
2. Where is the project being proposed? C~Downtown nNE [] NW I~ISE
3. Is the project within the Incentive Area? [] Yes []No
4. Is Team Bakersfield assistance being requested? [] Yes ~No
5. Assistance requested includes (check all that apply)...
t~Cash assistance {ilLoan []Equipment purchase ~Off-site improvements
nDeferred payment schedule nOther
6. Size of project (square footage, acreage) 12+ acres, various buildings totalling 18,500 sf
7. Does the business already occupy the project site? [il Yes ~No
8. Will the business nlease or [] purchase the site?
9. Anticipated decision date: ASAP
10. Anticipated / desired commencement of operations: ASAP
Yr 1 Yr 2 Yr 3 Yr 4
11. Full time jobs to be retained in .................. 16
12. Full time equivalent jobs to be retained in ...........
13. Full time jobs to be created in ..................
14. Full time equivalent jobs to be created in ........... 2 3 2 2
15. Full time jobs to be transferred in ................
16. Full time equivalent jobs to be transferred in .........
17. Total jobs ............................... 18 3 2 2
18. Will jobs be targeted to certain groups def'med by income, residency,
or some other criteria? I~l Yes ONo
If yes, by what criteria? 51% Iow- and moderate income residents
19. Would the business use a first-source hire arrangement? [] Yes t~No
20. What % of jobs being created will provide benefits? 50 %
21. What % of jobs being retained will provide benefits? 75 %
22. What % of jobs being transferred in will provide benefits? NA %
23. What is the pay range of jobs being created? $ 7 / hr to $ 16 / hr Average: $11.50 / hr
24. What is pay range of jobs being retained? $ 8 / hr to $ 25.48 / hrAverage: $13.33 / hr
25. What is the pay range of jobs being transferred in? $ to $ Average: $
26. Proposed assistance will directly impact our area's existing businesses (choose one)
............................ ~negatively I~lpositively
27. Does the business have competitors in the local economy? [] Yes E~No
Fffects on the community
28. Will the business add diversity to our community's economic base? [] Yes c~No
29. Will the business play a pivotal role in strengthening existing clusters or forming
a new cluster in our area? [] Yes t~No
30. Will the business produce a product for export outside our area? [] Yes nNo
.~ Project Evaluation Southwest Contractors, Inc. page 2
Return on the community's investment
31. Annual revenue from property tax generated, if any $1,840
32. Annual revenue from sales tax generated, if any $ N/A
33. Annual revenue from business license generated, if any $ 1,050
34. , What are the performance measures for the company to achieve?
51% of new hires to be Iow~mod
35. Source(s) of proposed assistance requested:
CDBG $150,000
General Fund
Redevelopment tax increment
Other:
Other:
Total assistance proposed: $150,000
Total private f'mancing: 650,000
Total project valuation: $ 800,000
36. Is assistance proposed to be provided (check one)
[]at one-time / lump sum? r~over multiple years? (# of years )
37. Is the proposed assistance an investment in our community's future
(examples: customized job training, infrastructure, etc.) that provides
community-wide benefits even if the company moves or shuts down? [] Yes C~No
Encourages hiring of low~mod residents who will receive job training and experience.
Protecting the community's investment
38. Which of the following will be used to protect the city's investment should the business not meet the
performance measures listed above? (check all that apply)
OCollateral (deed of trust, UCC filing)
[]Recision (cancellation of the agreement)
[]Clawback (recovery of all or part of the subsidy costs)
t~Penalty (fines or charges for non-performance or relocation)
C;Recalibration (adjustments to subsidy to reflect changing business conditions)
[]Other personal guarani_for loan amount
nOther
Other considerations
39. Does the business receive any other type of government assistance? rn Yes []No
If yes, indicate source and amount
40. How important is this incentive in the business' decision to locate in Bakersfield?
The company has stated, "without this incentive it is highly likely the business will not consummate the purchase
and wouM locate outside the City of BakersfieM"
SWC has relocated and is now operational at the site. We believe this relocation occurred mid-1996.
dl',s wc,grd 10'16/96
· \
OCT 1 1199
?
CIYYOFBAKERSF~LDA K E R S F I E L D
Economic and Community Development Department
MEMORANDUM
.,~
October 10, 1996
TO: Alan Tandy, City Manager
FROM: Jake Wager, Economic Development Director
SUBJECT: Proposed assistance for Hammons Meat Sales, Inc.
Hammons Meat Sales, Inc. is an existing Incentive Area business that is seeking to expand its
operations and employ more people. The company has applied for an SBA 504 loan through
Mid State Development Corporation for the purchase of land and consU'ucfion of a new
building just north of the Bakersfield Municipal Airport on South Union Avenue.
The SBA 504 program will finance up to 90% of the project cost. Company owner Craig
Hammons has requested financial assistance from the city to cover the remaining 10%
($35,000) of the $350,000 project cost.
Now in its 18th year, Hammons Meats has outgrown their present facility on Old Yard Roadl
The company also leases a small cutting room in unincorporated east Bakersfield. After
looking at a variety of locations throughout Bakersfield, the company has decided their
preference is southeast Bakersfield near their present location and to consolidate their
operations into one Incentive Area location.
The company employs 23 people, plans to create another six positions, and transfer in two
workers from the company's other location in the county.
The terms of the proposed assistance would be: · a loan for $35,000 funded by CDBG.
· term of the agreement would be five years.
· the loan would be secured by a personal guarantee for $35,000 from Mr. Hammons'
father.
· the company would be required to have 51% of all new hires be low- and moderate-
income individuals.
· the company would be required to enter into a fa'st source hiring agreement with
Employers' Training Resource.
· for each year the company meets the hiring goals, 20% of the loan ($7,000) would be
forgiven.
Alan Tandy
October 10, 1996
Page 2
· if in any year the company does not meet the hiring requirements, 20% of the loan
would be due and payable.
This project would create a large investment in southeast Bakersfield and would eliminate a
vacant piece of South Union Avenue property near the city's airport. Its highly visible
location would profile a major business retention and expansion investment that proceeded
with the city's assistance.
dl~'mmmons
~ Project Evaluation Hammons Meats, Inc. Page 1
· Project description
1. Does the business currently operate within the city limits? [] Yes []No
2. Where is the project being proposed? nDowntown []NE [] NW []SE []SW
3. Is the project within the Incentive Area? [] Yes []No
4. Is Team Bakersfield assistance being requested? [] Yes []No
5. Assistance requested includes (check all that apply)...
~Cash assistance I'ilLoan []Equipment purchase nOff-site improvements
ODeferred payment schedule []Other
6. Size of project (square footage, acreage) 5,865 square feet
7. Does the business already occupy the project site? [] Yes []No
8. Will the business t~lease or [] purchase the site?
9. Anticipated decision date: A S A P
10. Anticipated / desired commencement of operations: first quarter 1996
Yr I Yr 2 Yr 3 Yr 4 Yr 5
11. Full rime jobs to be retained in .................. 23
12. Full time equivalent jobs to be retained in ...........
13. Full time jobs to be created in .................. 6
14. Full time equivalent jobs to be created in ...........
15. Full time jobs to be transferred in ................ 2
16. Full time equivalent jobs to be transferred in .........
17. Total jobs ............................... 31
18. Will jobs be targeted to certain groups defined by income, residency,
or some other criteria? [] Yes []No
If yes, by what criteria? 51% of new hires will be Iow- and moderate-income.
19. Would the business use a first-source hire arrangement? [] Yes []No
20. What % of jobs being created will provide benefits? 100% after 1 year
21. What % of jobs being retained will provide benefits? I00 % after I year
22. What % of.j~bs being transferred in will provide benefits? 100 %
23. What is the pay range of jobs being created? $ 6 / hr to $ 9 / hr Average: $ 7 / hr
24. What is pay range of jobs being retained? $ 8 / hr to $10 / hr Average: $ 9 / hr
25. What is the pay range of jobs being transferred in? $ 8 / hr to $ 10 / hr Average: $ 9 / hr
26. Proposed assistance will directly impact our area's existing businesses (choose one)
[] negatively I~lpositively
27. Does the business have competitors in the local economy? [] Yes []No
Effects on the community
28. Will the business add diversity to our community's economic base? [] Yes oNo
29. Will the business play a pivotal role in strengthening existing clusters or forming
a new cluster in our area? [] Yes []No
30. Will the business produce a Product for export outside our area? [] Yes []No
~ Project Evaluation Hammons Meats, Inc. Page 2
Return on the community's investment
~ 1. Annual revenue from property tax generated, if any $ 805
32. Annual revenue from sales tax generated, if any $ 0 (wholesale business)
33. Annual revenue from business license generated, if any $ 2,534
34. What are the performance measures for the company to achieve?
51% of all new hires must be low~mod.
35. Source(s) of proposed assistance requested:
CDBG $ 35,000
General Fund
Redevelopment tax increment
Other:
Other:
Total assistance proposed: $ 35,000
Total private financing: 315,000
Total project valuation: $ 350,000
36. Is assistance proposed to be provided (check one)
lilat one-time / lump sum? t~over multiple years? (ge of years )
37. Is the proposed assistance an investment in our community's future
(examples: customized job training, infrastructure, etc.) that provides
cormnunity-wide benefits even if the company moves or shuts down? [] Yes t~No
Encourages hiring of low/rnod residents who will receive job training and experience.
Protecting the community's investment
38. Which of the following will be used to protect the city's investment should the business not meet the
performance measures listed above? (check all that apply)
OCollateral (deed of trust, UCC filing)
[]Recision (cancellation of the agreement)
[]Clawback (recovery of all or part of the subsidy costs)
npenalty (f'mes or charges for non-performance or relocation)
ORecalibration (adjustments to subsidy to reflect changing business conditions)
[]Other .personal guarani_
t~Other
Other considerations
39. Does the business receive any other type of government assistance? [] Yes UNo
If yes, indicate source and amount
,4 portion of the project is to be financed through a Small Business ,4dministration-issued debenture in the
amount of $145,000 ($I40, 000 toward 40% of the project cost plus an additional $5,000 in administrative
COSTS). - ....
40. How important is this incentive in the business' decision to locate in Bakersfield?
Business has already made an 18 year investment in BakersfieM. This assistance will allow the company to
expand its operations, purchase real estate, create jobs, and move 2 additional jobs from the county into the
~' hammons.grd 10II6'95
BAKERSFIELD
CITY MANAGER'S OFFICE
MEMORANDUM
October 17, 1996
TO: Alan Tandy, City Manager
FROM: John W. Stinso(~,~A~ssistant City Manager
SUBJECT: Stress Disability/Retirement
Per your request, this memo provides information pertaining to stress disability and
retirement for City of Bakersfield employees. Stress disability may result in a number of
outcomes depending on the nature of the illness, the employees type of employment
and the cause of illness. Generally, stress claims include psychological stress and/or
hypertension. They are treated under worker's compensation law and by the PERS
retirement system as medical illnesses which may or may not result in disability. The
city has received stress claims which result in temporary disability where the employee
recovers and returns to work, claims where an initial occurrence becomes aggravated
over time resulting in permanent disability, and claims which immediately result in
permanent disability. Sometimes there are other physical injuries or illness that are
related to these claims which can complicate the process. In addition there are special
rules and presumptive illnesses for safety employees which affect both the workers
compensation and disability retirement process. Some typical examples of how the
process works include the following:
1) Non-work related illness (Miscellaneous and Safety):
If the cause of illness is not work related and the employee becomes disabled
due to either psychological stress or hypertension to the extent that they can no
longer perform their job duties, the employee may be eligible for a disability
retirement under the PERS retirement system. The determination of the
disability is made based upon medical evidence. For Miscellaneous employees
PERS makes the determination to accept or reject the application.
For Safety employees the determination is made by the employer pursuant to a
procedure which has been established by the City Council. An employee or the
City M~nager may apply for industrial disability retirement. The Disability'
Retirement Review Committee (Risk Manager, City Attorney, and Chief of the
employee's department) as established by the City Council reviews the medical
S:UO~SK'~DISRET.MEM
evidence for all physicians involved and makes a recommendation to the City
Manager to approve or deny the application. There are specific appeal
procedures established as part of the process.
Employees must have worked for the City five years and be vested in the PERS
system in order to retire unless they are safety employees granted an industrial
disability retirement (see example number three).
2) Work related Illness - PERS Miscellaneous Retirement
This example pertains to work related stress claims and disability. The finding of
a claim being work related is determined by workers compensation laws. Again
these are determined by medical evidence. Depending on a variety of
conditions, there are specific processes and procedures outlined in the workers
compensation code as to which physicians and which reports are utilized to
make such determinations. Determination of the extent of disability and
compensability is made by the Workers Compensation Appeals Board. The Risk
Manager and the City's third party claims administrator are actively involved in
this process to ensure claims are legitimate, processed according to law and are
based on accurate and consistent medical evidence.
If the employee is determined by PERS to be unable to perform their essential
job duties they are eligible for a disability retirement similar to that described in
example one for miscellaneous employees.
3) Work Related Illness- PERS Safety Retirement
This example is typically referred to as an "industrial disability" retirement. This
is only available for those who are sworn public safety employees (Police and
Fire). It is a retirement due to a work related illness or injury. Age and years of
service are not considered for qualifying purposes. In accordance with
Government Code Section 21025, a safety employee will be retired for industrial
disability only upon the City's determination that the employee is incapacitated
physically or mentally for the performance of the duties of the position.
Application for industrial disability retirement is done in the same manner and
process discussed in example number one for safety employees.
Due to the industrial nature of this type of retirement the relationship to the
workers compensation process is significant. If the disability has been
determined to be work related through the workers compensation process
mentioned in example two, it becomes difficult to deny the industrial disability
retirement if based upon medical evidence the employee can no longer perform
the essential job functions or if they have been granted a high percentage of
permanent disability.
S:UO HN~.I S K~DI S RET. MEM
Another significant issue related to industrial disability retirements for safety
employees is that retirement benefits are considered tax free under IRS
regulations. The tax free status of retirement benefits does not apply to
employees receiving PERS miscellaneous disability retirement benefits.
Change In the Law regarding Psyche Stress Claims
A significant change occurred in Workers Compensation law has had a significant
impact on psyche stress claims for employers. Effective for all dates of injury
subsequent to July 16, 1993, the laws governing psyche stress claims were changed
significantly. Prior to the change, an employee alleging work related psyche stress
needed to only show that 10% of that stress was work related to have an accepted
workers compensation claim. Effective July 16, 1993, employees need to prove by a
preponderance of the evidence that actual events of employment were dominant to all
causes of psyche stress (better known as the 51% rule). In addition, the new law
included other changes such as 1) a psyche stress claim could not be filed within the
initial 6 months of employment; and 2) a psyche stress claim could not be as a result of
a good faith personnel action.
This new law has had a significant effect on claims for stress disability. The City of
Bakersfield has not had a psyche stress retirement in any employee group with a dat~.
of injury subsequent to the enactment of the new law.
I have attached some recent data for the City regarding workers compensation stress
claims and disability retirements for your information.
S:UO~SK'~DISRET.MEM
WORKERS' COMPENSATION CLAIMS FILING
Fiscal Year 1992-93 (294 total claims filed) # filed # accepted
Stress/Hypertension claims 5 4
Stress/Psyche claims 8 2
Fiscal Year 1993-94 (291 total claims filed)
Stress/Hypertension claims 6 4
Stress/Psyche 3 2
Fiscal Year 1994-95 (261 total claims filed)
Stress/Hypertension claims 14 9
Stress/Psyche claims 4 3
Fiscal Year 1995-96 (223 total claims filed)
Stress/Hypertension claims 2 1
Stress/Psyche claims 3 0
NOTE
An employer has no control over the actual filings of a workers' compensation claim. Once a
claim is filed, however, the employer must deny within 90 days of the filing or the claim is
presumed to be accepted.
As shown above, of the 3 stress/psyche claims filed in fiscal year 1995-96, all were denied. Of the
2 stress/hypertension claims filed in fiscal year 1995-96, only 1 was accepted.
MANAGEMENT EMPLOYEES
In the analysis of the 4 fiscal years above, there were relatively few management employees who
filed workers' compensation claims for either stress/hypertension or stress/psyche. Of the 4 who
did file such claims, only one resulted in an industrial disability retirement, as follows:
# Mgmt.
Fiscal Year Employees Type of Stress Resolution
1992-93 1 Psyche Disability Retirement
1993-94 1 Psyche Industrial Disability Retirement *
1994-95 2 Hypertension Disability Retirement *
Hypertension Still working *
1995-96 0
* Safety Officer
PRESUMPTIVE INJURIES AND ILLNESSES FOR SAFETY OFFICERS
For sworn Police and Fire Personnel, certain injuries and illnesses are presumed to be work
related if the injury or illness develops or manifests itself in the course of employment. The
presumptions are as follows:
Sworn Police Personnel Sworn Fire Per~;onnel
Hernia Hernia
Heart trouble Heart trouble
Pneumonia Pneumonia
Tuberculosis Cancer