March 15, 2004

Time and Location

MVRMA Office, 4625 Presidential Way, Kettering, Ohio.  The meeting began at 9:10 am.

The following individuals were present when the meeting was called to order: Sherry Callahan, Beavercreek; Dave Helling, Bellbrook; Jim Pfeffer, Blue Ash; Janine Cooper, Englewood; Nancy Gregory, Kettering; Bruce Snell, Mason; Dody Bruck, Miamisburg; Derek Allen, Piqua; Tom Judy, Sidney; Derrick Parham, Springdale; Dick Drennen, Tipp City; Sue Knight, Troy; Julie Trick, Vandalia; Tom Reilly, West Carrollton; Dina Minneci and Bob Harrison, Wyoming; John Milazzo, Marsh; Martin Heflin and Rick Steddom, Driver Alliant Insurance Services; and Kathy St. Pierre, Craig Blair, Starr Markworth and Michael Hammond, MVRMA.

 Kim Lapensee, Madeira arrived at 9:15 am.

Consent Agenda Approval

Motion by Ms. Gregory, seconded by Ms. Knight, to approve the Consent Agenda.  Motion carried.

Presentation of OCMA Intergovernmental Cooperation Award

Mr. Bob Harrison, Wyoming City Manager and OCMA Member Services Chair, presented the 2004 OCMA Intergovernmental Cooperation Award to Mr. Judy, Board President, on behalf of the Association.  Mr. Hammond informed the Board that OCMA subsequently submitted MVRMA’s application to the ICMA awards program which will be announced at the October ICMA conference in San Diego, California.

Finance Committee Report

At the December 15, 2003 Board Meeting, the Board authorized the Finance Committee and Executive Director to approve the excess reinsurance renewal once the proposal was received.  On January 15, 2004, final terms for this placement were negotiated by Driver Alliant Insurance Services with an AIG company, the Insurance Company of the State of Pennsylvania, which has an AM Best rating of A++.  MVRMA was given the following two options:

$10 million excess $2 million with an annual premium of $377,488

$5 million excess $2 million with an annual premium of $277,488

The Finance Committee agreed the second option provided more than adequate coverage and was more in line with MVRMA’s $275,095 budget for this layer.  In all, the 2004 liability coverage through GEM and AIG was only $2,393 or .48% more than in 2003. 

Motion by Mr. Parham, seconded by Mr. Pfeffer, to approve the 2004 liability placement with AIG.  Motion carried.

In 2003, MVRMA had one Liability Coverage document which was reinsured by Endurance for excess coverage.  AIG, however, would not agree to reinsure each GEM member’s document.  It would only agree to reinsure a standard memorandum of coverage.  As of the Board Meeting, this document had not been finalized due to specific changes that were being negotiated for inclusion in the final version.  We will review the memorandum of coverage at the June Board Meeting.  Because of the resulting discrepancies between the two documents, there will most likely be coverages in one that are not included in the other.  The MVRMA Liability Coverage document will be known as 2004LY16-A with coverage limits of $2 million.  AIG’s document will be known as 2004LY16-B with coverage limits of $5 million excess $2 million.

The 2004 MVRMA Liability Coverage document will be similar to the 2003 document except for coverage limits and the following:

1.      Under “Defense Costs,” a disclaimer was added to nullify the Association’s responsibility to defend claims not covered by the coverage document.

2.      Under “Exclusions:”

a.       G was amended to include “the ‘taking’ of property” and “any violations of civil rights resulting from the ‘taking’ of property.”

b.      V, W and X, which are included in the AIG memorandum of coverage, were added.

3.      Endorsement No. 1-04 was amended to include the Cities of Englewood and Bellbrook as of January 11 and January 15, respectively.

4.      Endorsement No. 6-04 was added to include coverage for police impound lots operated by Blue Ash, Mason and Wilmington.

Motion by Mr. Pfeffer, seconded by Ms. Minneci, to approve the 2004 Liability Coverage document 2004LY16-A.  Motion carried.

Mr. Hammond noted the lease on the MVRMA office is due to expire July 1, 2004, unless MVRMA exercises its option to renew for an additional five years.  Rent for the additional five years would increase from $3,033.33/month to $3,336.66/month.  Motion by Mr. Parham, seconded by Ms. Knight to approve renewal of the lease for the MVRMA office.  Motion carried.

Mr. Hammond acknowledged MVRMA’s receipt of the GFOA Certificate of Achievement for Excellence in Financial Reporting for the year ended December 31, 2002, its eleventh consecutive year for this award.

Mr. Hammond acknowledged receipt of the first installment of the 2001 Aggregate Funded Layer (AFL) refund, which amounted to $24,856.  The remaining 63% or $55,927 will be refunded in 2005 as long as claims have not eroded the AFL.  Mr. Steddom informed the Board, currently, no claims were approaching this layer.

Risk Management Committee Report

Ms. Markworth referred to the training calendar included in the agenda packet explaining it would be updated and redistributed periodically throughout the year.  She also noted there will be one scholarship per member awarded for the Supervisor Training to be offered for the period May through October.  Those cities who had not taken advantage of this offer were instructed to contact her. 

Ms. Markworth provided an update on the Englewood and Bellbrook needs assessments, which were conducted by Marsh Loss Control specialists.  She reported both cities were very forthcoming in providing the information requested and were open-minded about accepting recommendations.  There were no areas of great concern with either city.  Formal reports are expected before the end of the month.  Since the needs assessments closely follow the MVRMA SPEC program, the reports will provide guidelines for both cities in preparing for next year’s SPEC evaluation. 

In the past, Ms. Markworth has provided each city a loss control report during the annual SPEC.  Due to a lack of time for reviewing these reports, she recommended they be tied to the biennial loss ratio report prepared by Mr. Hammond.  The Risk Management Committee concurred with her suggestion to schedule a meeting with any city whose loss ratio is higher than the MVRMA average in order to discuss the loss control report.  Page 6:08:01 (Site Visits) of the MVRMA Handbook will be updated to reflect these biennial loss control visits.  Ms. Markworth reminded the Board that loss control reports could be prepared at any time for a member with specific concerns.

Mr. Blair briefly reviewed the Claims Watchlist noting the Shah claim has been dismissed, and the Mays claim has been settled.  The one claim that bears further scrutiny is the Porter claim, which currently lists a reserve of $100,000. This reserve will most likely be increased to at least $300,000 in the near future.  Mr. Blair was pleased to note the current number of lawsuits is the lowest it has been in some time. 

Mr. Hammond reviewed the amended Special Events Insurance Requirement Policy which was included in the agenda packet.  Since MVRMA no longer has the option of providing Special Events insurance, this policy must be amended.  The policy statement now requires a rental/use agreement where a third party is charged a fee or collects an admission fee.  This agreement must provide hold harmless/indemnification language in favor of the city, and the user must secure liability coverage naming the city additional insured.  The city may waive these requirements for good cause or if the city is a sponsor of the event.  Motion by Mr. Pfeffer, seconded by Ms. Minneci, to approve the amended Special Events Insurance Requirement Policy.  Motion carried.

Mr. Hammond discussed Ohio’s Concealed Carry Law and its impact on public employers.  This law, which will take effect in April, is very complex and will probably be tested in court.  Mr. Hammond mentioned the following issues of special interest:

1.      Signs must be posted in public buildings stating deadly weapons are not permitted on the premises.

2.      Public employers should establish policies for employees with concealed carry licenses.

3.      Police officers will now be confronting citizens who may be carrying concealed weapons.

4.      Releasing information deemed “confidential” under the act will be a felony.

Mr. Hammond recommended any police officers who conduct firearms training required by this law, conduct it distinct and separate from the city in order to avoid liability on behalf of the city. 

Marsh USA Inc. Report

Mr. Milazzo reviewed the current markets for Bonds, Crime and Property as follows:

            l The bond market remains relatively flat.

l Crime coverage usually requires a minimum premium but is generally increasing by no more than 10% for good risks.

l Property coverage is very competitive with renewals generally experiencing overall reductions in the first quarter.

Driver Alliant Insurance Services’ Report

Mr. Steddom reported GEM completed its first full year with $4.5 million in net written premium.  To date, no losses have penetrated the GEM layer.  GEM will show a profit for its first year, the allocation of which should be approved at its April Board Meeting.  It will then be added to each GEM member’s surplus account.  Mr. Steddom reminded the Board that MVRMA also received a premium reduction of 17% in the GEM layer for 2004.

Following a question from Mr. Parham, Mr. Hammond informed the Board NPX is still alive and well.  It is the sponsoring association for GEM.  NPX must exist for GEM to be an associate captive.  Most of the NPX members are also members of GEM.  The annual membership fee for NPX was lowered from $5,000 to $1,000 in 2004.

Executive Director's Report

Mr. Hammond informed the Board the City of Oakwood has asked for a proposal from MVRMA, effective May 6, 2004.  Since the city’s previous three-year rate guarantee with the Ohio Plan was essentially subsidized, it anticipates a sizable renewal.  The city has agreed to pay MVRMA the $300 application fee and has completed the liability exposure application and provided loss history as required by AIG.  Oakwood’s PCF of 3.275% would be very similar to Englewood’s.  Mr. Hammond noted he had met with Jay Weiskircher, Assistant City Manager, a couple times and believes the request from Oakwood is sincere.  Motion by Ms. Knight, seconded by Mr. Reilly, to approve MVRMA membership for Oakwood contingent upon its acceptance of our proposal.  Motion carried.

Mr. Blair reviewed the Townsend v. City of Kettering claim.  Ms. Townsend’s vehicle was rear ended by a City of Kettering van.  As a result of the accident, Ms. Townsend, who was already recovering from a right knee replacement, had a left hip fracture which required a partial hip replacement.  She has agreed to a settlement of $32,500 and the City of Kettering finds this settlement acceptable.  Motion by Mr. Parham, seconded by Ms. Knight, to authorize settlement in the amount of $32,500 for Townsend v. Kettering.  Motion carried.

Ms. St. Pierre distributed litigation summaries prepared by the Law Offices of Nicholas Subashi.

Having concluded its business for the day, the Board adjourned at 10:45 am.