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May 7, 2007
Achieving Greatness Through the Sum of its Parts
Time and Location
Centerville Police Department Training Room, 155 W. Spring Valley Road, Centerville, OH. At 9:00 am everyone gathered for a continental breakfast before beginning the retreat.
The following individuals were present when the retreat began at 9:25 am: Carol Becker, Beavercreek; Jim Pfeffer, Blue Ash; Mark Schlagheck, Centerville; Janine Cooper, Englewood; Nancy Gregory, Kettering; Annalee Duganier, Madeira; Mary Mueller, Mason; Dody Bruck, Miamisburg; Wayne Davis, Montgomery; Gary Lucas, Piqua; Tom Judy, Sidney; Dick Drennen and Dave Collinsworth, Tipp City; Sue Knight, Troy; Julie Trick, Vandalia; Tom Reilly, West Carrollton; Laura Curliss, Wilmington; Jenny Chavarria and Bob Harrison, Wyoming; Dave Leedy and Kathy St. Pierre, Starr Markworth, Craig Blair, and Michael Hammond, MVRMA.
Welcome
Sue Knight, MVRMA President, welcomed everyone with a brief recap of MVRMA’s history and an introduction of the keynote speaker.
Key Note Speaker
“Superman” Dave Leedy then infused the group with energy and enthusiasm for the day ahead.
Participation Encouraged
Mr. Hammond explained the purpose of the MVRMA Logo displayed on the easel at the front of the room. To add some fun and encourage participation, staff designed a contest for the retreat. As each Trustee contributed to the day’s discussions, his/her puzzle piece was added to the chart, and his/her name was entered in a drawing.
After lunch, five names were drawn, and gift certificates were presented.
Achieving Governance Effectiveness – (See attached sub-points for each category)
Mr. Hammond and Ms. Trick explained the role of the Trustee: Policy Formulation, Decision Making and Oversight, using slides provided from a presentation at the October 2006 AGRiP Conference. The group then broke into four smaller groups, with a staff member assigned to each, to rate the performance of the MVRMA Board in governance effectiveness.
The first group discussed Vision. Of the four points listed, MVRMA already complies with #2 and #4. This group recommended MVRMA develop a vision statement, and then include both the vision and mission statements in future agenda packets.
The second group discussed Structure. Of the six points listed, MVRMA already complies with #1, #3, #5 and #6. Regarding #2, Trustees expressed their satisfaction with the current committee process, whereby the various committees discuss strategies and monitor organizational success and present their findings and recommendations to the rest of the Board at Quarterly Board Meetings. The group agreed developing a succession plan for the CEO (#4) is a top priority that should be discussed by the Personnel and Compensation Committee at its next meeting.
The third group discussed Accountability. Of the nine points listed, MVRMA complies with all but #2 and #4. The following suggestions were made:
1. The group agreed a Board assessment should be developed. Staff was directed to obtain copies of other associations’ Board assessments.
2. Written norms of behavior and interaction with staff should be identified. It may be necessary to establish different expectations for new Trustees vs. those who have been on the Board for longer periods.
3. Provide each Board member a subscription to a professional journal for pools, or provide more access to pertinent articles (possibly via the MVRMA website).
4. Regarding #7, “The external auditor reports to the full Board,” it was recommended the Finance Committee act as the Board’s Audit Committee.
The fourth group discussed Advocacy. It was agreed that MVRMA complies with all five points through the actions of Board members or staff.
Using the scoring provided on the sheet, MVRMA’s total of 18 out of a possible 23 would be considered “good” or “an adolescent Board” and offers the challenge to “identify the next steps to excellence.”
Show Me the Money
Mr. Hammond reviewed an article from Public Risk , concerning establishing an effective cost allocation plan for a pool. The number one priority for the plan is making it fair for each member. A good plan should educate members about risk management costs, hold members accountable for high losses and support members’ loss prevention efforts. For cities, the exposures usually considered are operating expenses or payroll, employee count, vehicles and property values. Generally, loss experience for multiple years is considered with individual losses sometimes capped. Pools vary as to what percentage exposures and loss experience comprise their cost allocation formulas.
MVRMA’s plan allocates costs for every aspect of the pool, from insurance and reinsurance costs, to loss fund, professional fees and even office rent and utilities. Exposures account for 2/3 of the formula: % population, % FT police, % other FT employees, % title vehicles, % IRPRV, and % NOE. Loss experience accounts for the remaining 1/3 of the formula: 3 X % Annual average losses for the most recent four year period. Each member’s first large loss is capped at $35,000, and each additional loss is capped at $100,000. Everyone agreed rate stabilization is very important. A separate committee was assigned to review MVRMA’s current cost allocation and consider alternatives. Members of the committee are: Tom Judy, Mark Schlagheck, Wayne Davis, Dick Drennen and Tom Reilly. The following questions are to be considered:
Is current capping sufficient?
Should there be different caps for property and liability losses?
Should we average last year’s PCF with this year’s PCF to create a new PCF?
Hot Topic Discussion
Wayne Davis, assistant city manager for Montgomery, and Paul Wright, Fire Chief for Montgomery, were the discussion leaders for the “Hot Topics.” They used the interest based approach to discuss the following topics:
I. What (The Problem): Claims Handling - More efficiency for reporting claims and providing status reports
Why or why not (Interests):
1. Access to status
2. Providing information to claimant, council, city manager, etc.
3. Allows for decisions concerning provision of service
4. Takes advantage of technology – access & submission of claims, consistency of first report of loss form; consistency of communication
5. Resolution of claims – time, cost, workload
6. Identifying loss trends
7. Cost effective solution
8. Securing of information (public records)
How (Options):
1. Risk Master web-based or online reporting and access
2. Expand Risk Master capabilities
3. Back-up staff through cross-training
4. Advance notice of Claims Manager out of the office
5. Train Trustees on claims handling role
6. Staff research capabilities of Risk Master
7. Research other claims software
8. #6 & #7
9. Hosting options
10. IT employees from cities and MVRMA meet
11. Maintain “in-person” reporting of claims status
II. What (The Problem): Membership Expansion (CORMA)
Why or why not (Interests):
1. Not diluting member services for sake of expansion
2. Claims history consistent with MVRMA
3. Positive impact financially for members
4. Take advantage of law of large numbers
5. Opportunity to increase staff – cross training
6. To grow – reach out of current geographic area
7. Geographic spread of risk
8. Expectation of current members
9. Opportunity to network with Central Ohio
10. Integration into Board Culture
11. Equitable services & opportunities for all members
12. Implications of governance structure
How (Options):
1. Mike continue to converse with CORMA cities
2. Collect updated claims history
3. Invite CORMA members to MVRMA Board Meeting
4. Status Quo – no expansion
5. Investigate Board structure governance
6. Refresh – Review Godbold study
7. CORMA join as one member
8. Develop proposal
9. Staff expansion
III. What (The Problem): What additional services would the Board like?
Why or why not (Interests):
1. Educate members on value-added services
2. Make sure services provided are important
How (Options):
1. Analyze member services
2. Continue bi-annual survey
3. Continue open communication – Board Meeting/Staff input
4. Compare MVRMA services to other what other pools offer
GEM Overview & Update
Mr. Hammond provided an overview and update on Government Entities Mutual (GEM) with the power point presentation titled “GEM’s Carousel of Progress – Building Mutual Strength.” GEM is an association sponsored captive reinsurer formed by intergovernmental pools in order to meet their long-term financial needs. MVRMA became one of its founding members in 2003.