Risk Management in the Face of Legal Challenges

Alvaro Valdez, Assistant Management Services Director, City of Burbank

Alvaro Valdez is the Assistant Management Services Director for Risk Management and Safety in the City of Burbank. Since joining the City in 2007, Alvaro has contributed to five different City departments throughout his career in local government. A proud graduate of the Leadership Burbank Class of 2023, he has played a pivotal role in educational initiatives aimed at reducing plastic waste in Burbank’s elementary schools in collaboration with the Burbank Unified School District. Prior to his current role, Alvaro held the position of Acting Workers’ Compensation Administrator in Management Services.

In an interview with Govt CIO Outlook, Alvaro shares his insights on the challenges and emerging trends in civic engagement and ways to adapt to the upcoming change.

Could you share your professional background and describe what a typical day looks like for you?

As the Risk Manager for the City of Burbank, my role encompasses overseeing various critical functions. These include managing general liability claims against the City, such as personal injury and property damage, as well as administering our insurance program to ensure that all City infrastructure is adequately covered, including negotiating insurance terms with potential vendors and contractors. This involves collaborating closely with departments, vendors, contractors, and brokers to secure the necessary insurance for City projects.

I’m also in charge of our workers’ compensation program. Given that we’re self-administered and self-insured, it’s my duty to ensure that our employees receive prompt and appropriate care, along with timely updates, to expedite the resolution of their cases.

Safety is another critical aspect of my work. I lead our Safety section, focusing on employee training, hazard identification, and the implementation of resources to prevent workplace injuries and incidents. This role requires a hands-on approach and intimate collaboration with my team. I have direct experience in each division, which allows me to understand the intricacies of the work and find innovative solutions to serve our community and organization better and eliminate any obstacles.

My typical day encompasses a blend of engagements with vendors/contractors, where we delve into contractual insurance terms, conducting self-audits on workers' compensation and general liability claims, spearheading the implementation of fresh organizational processes, and engaging in collaborative efforts with colleagues across the organization. I also prioritize time with my team, meeting with each of the 10 members weekly to address any challenges they face, ensuring they feel supported and empowered, and fostering their professional growth.

I’m always exploring ways to modernize our City’s operations to make them more effective for our employees, all while being mindful of our budget. As we’re funded by public taxes, I prioritize fiscal responsibility, ensuring fairness and equity in claim settlements and resolutions and seeking the most cost-effective solutions when negotiating with vendors. This approach helps me balance the complexities of my role while aiming to serve both the City and its residents effectively.

Can you discuss any recent challenges you encounter in your role and how they impact your work?

Being situated in California, one of the significant shifts we’re navigating in Burbank concerns the legal landscape, especially around general liability, workers’ compensation, and insurance. We’ve observed a trend of large judgments being awarded in favor of plaintiffs. This is reshaping how we manage broad liability claims and impacting insurance practices across the state. As settlements become costlier, our approach to handling claims has had to evolve.

We could previously lean on established case law or certain immunities to defend the City effectively. However, the current trend sees some of these defenses being less successful in court, prompting us to reassess our strategies. Now, we’re encountering demands that are frequent and complex, requiring us to work closely with our City Attorney's Office. Together, we explore whether to fortify our defense or seek a fair settlement for all involved parties.

“Risk Management is a unique field, often misunderstood by those outside it. Yet, it offers ample room for creativity, particularly in navigating complex systems like workers’ compensation in California.”

This shift is not limited to liability insurance; it also extends to workers’ compensation. California’s system tends to favor employees, which means we have to be especially diligent. We engage in thorough discussions with injured workers and departments to understand the root cause of an injury and determine a fair compensation approach. This requires a careful balance, ensuring we’re supporting our employees while also safeguarding the City’s interests, while ensuring an equitable solution.

These challenges have made our work more intricate than before, pushing us to be more adaptive and strategic in our decisions.

Are there any emerging trends that might impact the landscape over the next 18 to 24 months?

While predicting the future comes with its uncertainties, one trend that’s becoming evident is the increasing pushback from municipalities against the surge in high demands and judgments. We’re observing a growing trend of municipalities, including ours, successfully appealing judgments. This suggests a potential shift where the defense side might gain a stronger footing, possibly having a second chance at presenting their case more effectively.

On the workers’ compensation front, there’s a collaborative momentum building among risk managers across various municipalities. We're engaging more with our counterparts to exchange insights and strategies, aiming to resolve matters proactively and mitigate injuries or incidents before they occur.

Looking ahead, I believe the role of Safety divisions within municipalities, including Burbank, will become increasingly prominent. We’re focusing on transforming the safety culture within our organizations, identifying and eliminating potential hazards to ensure the well-being of both the public and our employees. This shift toward a more proactive safety paradigm is something I see as a key focus in the near future, aiming to address risks and foster a safer environment for everyone.

What advice would you offer to your peers and colleagues in the industry?

My top piece of advice centers around embracing innovation and creativity. I encourage those in our field to think outside the box, especially when it comes to devising long-term solutions. Be bold and open to trying new approaches. For instance, since joining the City’s Workers’ Compensation section in 2022, I’ve been keen to challenge the status quo. The mindset of ‘we've always done it this way’ doesn't sit well with me. Instead, I advocate for continuous improvement, questioning how we can enhance even the processes that aren’t currently problematic to prevent them from becoming outdated.

A practical step I’ve taken involves establishing connections with local medical facilities to ensure swift and quality care for injured workers, facilitating smoother communication and quicker claim resolutions. Developing relationships with medical providers has also been crucial, allowing us to expedite the care of injured workers and the receipt of medical reports to take prompt action on claims.

Networking with peers and exploring joint solutions with other municipalities have been equally important. Risk Management is a unique field, often misunderstood by those outside it. Yet, it offers ample room for creativity, particularly in navigating complex systems like workers’ compensation in California. For example, we’re exploring on-site physical therapy for injured workers, eliminating transportation hurdles, reducing organizational costs, and enhancing the overall experience for the injured worker. Such initiatives, while seemingly small, can significantly impact claim efficiency, employee convenience and cost-effectiveness. We continue to foster our professional relationships with treaters and injured workers to ensure we maintain an open line of communication.

For those in general liability, building strong relationships with claimants or their attorneys is vital. Remember, as City employees, we’re here to serve our community and organization. Working closely with claimants helps break down barriers and fosters more positive outcomes. The general liability claim process does not have to be adversarial, amicable results derive from effective collaboration and understanding. Afterall, we are all partners and need one another to achieve a common goal. 

Risk Management

Legal