June 18, 2007

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: Dave Helling, Bellbrook; Jim Pfeffer, Blue Ash; Mark Schlagheck, Centerville; Janine Cooper, Englewood; Nancy Gregory, Kettering; Tom Moeller, Madeira; Mary Mueller, Mason; Dody Bruck, Miamisburg; Wayne Davis, Montgomery; Gary Lucas, Piqua; Tom Judy, Sidney; Derrick Parham, Springdale; Sue Knight, Troy; Tom Reilly, West Carrollton; Laura Curliss, Wilmington; Rick Steddom and Mary Wells, Alliant Insurance Services; and Kathy St. Pierre, Craig Blair, Starr Markworth and Michael Hammond, MVRMA.

Consent Agenda Approval

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

Risk Management Committee Report

Ms. Markworth provided a training update.  As of the end of May, 650 participants had attended training.  Of that number, 34 completed the Supervisory Training that ran from March to June.  Ms. Markworth requested suggestions for training in the fall.

Mr. Hammond referred everyone to the list of risk management requests and new issues that staff had addressed since the last Board meeting.  He highlighted HB 9 which requires the adoption of a policy and the training of public officials with regard to public records requests.  The Attorney General will be providing a sample policy, and the State Auditor’s office will be auditing each city’s policy and procedures for compliance.  MVRMA hopes to provide a training session on these requirements in the near future.  The bill goes into effect in September.

Mr. Blair reviewed the Open Claims and Incurred Losses Report.  He noted the bold print indicates any changes since the last Board meeting.  Motion by Mr. Davis, seconded by Mr. Reilly, to approve the Open Claims and Incurred Losses Report dated May 31, 2007.  Motion carried.

Ms. Curliss announced the Risk Management Committee had directed staff to investigate the possibility of providing on-line claims reporting.  Mr. Hammond reported that staff is moving forward with this project.  They will review their progress as it occurs.

Ms. Markworth reviewed this year’s SPEC schedule.  Evaluations will begin in July and wrap up in August so that awards can be presented at the September Board Meeting.  The period for evaluation is January 2006 through June 2007.  Three cities are exempt from the process this year because they scored 100% compliance at the last evaluation.

Ms. Markworth provided an update on the FleetSMART on-line training program.  So far, 14 participants have registered employees.  By the end of the year, Ms. Markworth would like feedback about the program.  The City of Sidney has been a very active user – all its seasonal employees have been trained by this program, and full-time employees are now signing on.  The feedback has been very good.  Ms. Markworth offered to assist any member who has not registered or needs additional instruction. 

Ms. Markworth stated she has been working with the loss control people at Alliant to develop a best practices guide for background searches for public entity employees.  The guide included in the agenda packet is a work in progress.  Once the requirements are determined for each position, a list of vendors will be provided.  Ms. Markworth may survey members prior to the September Board Meeting to develop a list of providers.  She suggested everyone ask their provider what kind of data they are using – is it dated?  Is it current?  She noted www.samba.biz provides a service that notifies the client anytime a change occurs in the employee’s driving record.  This service provides a real time report and could take the place of the annual driver license checks through the Department of Motor Vehicles.

Finance Committee Report

Mr. Hammond reviewed the 2006 Annual Report, which was included in the May issue of Risky Business.  He highlighted the following:

            Claims Reserves were reduced from $4,558,196 the previous year to $4,060,226.

            Net assets increased from $4,475,845 to $7,203,587.

            The average claims costs for the period 2000-2006, as of 3/31/07, were apportioned 75% to indemnity and 25% to           defense.

Total claims costs were apportioned as follows: 19% Auto Liability, 14% Auto Physical Damage, 45% General Liability and 22% Property.

            A total of 1012 participants attended training in 2006.

Mr. Hammond expressed his pleasure with the PEPIP property renewal effective 7/1/07.  The total premium is $264,408, which is down 6.52% from the previous year.  This amount is $70,225 less than the amount budgeted.  Ms. Wells stated hurricanes affected the market place at the last renewal.  At that time coverage went down and rates went up.  Capacity was gone.  If we can get through another year with no bad storms or earthquakes, the rates will be even better.  There is currently a lot of capacity which drives competition.  This year Lexington London is assuming a $25 million primary layer instead of $10 million, which will save the program significant dollars.  Alliant wields a lot of clout with Lexington because 55% of its accounts are Alliant’s.  PEPIP has values of $223 billion in 37 states and an annual premium of $30 million.

Mr. Hammond reviewed the GEM Member Surplus Account Report.  The Summary provided in the agenda packet reflects a total of $725,994.38 in MVRMA’s surplus account and $41,189.77 in the policy account.  The surplus account was established with MVRMA’s contributions of $500,000 in 2003 and $250,000 in 2005.  The policy account is the balance remaining from the annual premiums and includes allocations for IBNR. 

Mr. Hammond reviewed the Auditing Policy, which was developed as a result of discussions at Strategic Planning and to meet a GEM underwriting requirement.  It identifies the audit responsibilities of the Board, Audit Committee, IPA and Management and directs the Finance Committee to serve as the Auditing Committee.  The Auditing Committee will meet with the auditors annually for a post audit review.  Motion by Mr. Moeller, seconded by Ms. Mueller, to approve the Auditing Policy.  Motion carried.

Mr. Hammond stated this year’s audit went smoothly.  The CAFR for the year ending December 31, 2006 will be completed shortly and will be distributed before the September Board Meeting.

Awards Committee Report

Mr. Judy provided the following recommendations for this year’s awards program:

            Overall winner with $12.66 losses per employee – Indian Hill

            Overall runner-up with $22.44 losses per employee – Montgomery

            Department Winners with $0 losses per employee

                        Police – Mason

                        Fire & EMS – Piqua

                        Water & Wastewater – Troy

                        Parks & Recreation – Vandalia

                        Streets & Refuse – Vandalia

            Safety Performance Award (Zero losses 2004, 2005 & 2006 or longer)

                        Police – Montgomery (4 years)

                        Fire & EMS – West Carrollton (4 years)

                        Water & Wastewater – Wyoming (3 years), Vandalia (13 years)

                        Parks & Recreation – Indian Hill (3 years), Wilmington & Wyoming (4

years), Montgomery (6 years) and Madeira (12 years)

            Standard of Excellence (Losses of $100 or less/employee)

                        Indian Hill ($12.66 per employee)

                        Bellbrook ($22.44 per employee)

                        Beavercreek ($38.88 per employee)

                        Troy ($40.32 per employee)

                        Madeira ($61.14 per employee)

                        Springdale ($65.71 per employee)

                        Piqua ($85.51 per employee)

Motion by Mr. Moeller, seconded by Ms. Gregory to approve the awards as recommended.  Motion carried.

For the first time, plaques were distributed to the cities earning the Standard of Excellence award, in recognition of their accomplishment.  These cities will also be recognized in the awards article included in the next issue of Risky Business.

Mr. Judy noted four submissions were nominated for the Special Achievement Award.  One will be included in next year’s program because of its implementation date.  Mr. Judy thanked Wilmington’s Safety Committee and Mason’s Fire Department for their submissions and commended their efforts.  The Awards Committee agreed the submission that best met the criteria for this award was the personnel policy review process developed by the City of Montgomery.  The program was developed to help avert costly claims from employee practices liability issues.  Motion by Mr. Judy, seconded by Mr. Lucas, to approve the City of Montgomery as the Special Achievement Winner.  Motion carried.

Alliant Insurance Services Report

Mr. Hammond thanked Mr. Steddom and Ms. Wells for their attendance at this meeting.

Ms. Wells noted the insurance companies made a lot of money last year, but it is not necessarily reflected in their bottom lines.  Many of these assets were transferred to legacy loss reserves.  Right now the property and liability markets are soft and insurers are not willing to give up premium.  As reflected in the property proposal, the premium only decreased about $7,000 when the SIR was increased to $250,000.

Mr. Steddom said the liability market takes longer to soften than the property market.  Fortunately for MVRMA, the GEM portion of its liability coverage is not market driven.  However, the portion of the coverage retro ceded to Munich America Re is.  GEM is trying to streamline the renewal process, and Mr. Steddom hopes to have preliminary premium figures by November 1.  He anticipates lower premiums and form enhancements.

Regarding this year’s appraisal update, Mr. Steddom noted the appraiser who handled MVRMA’s account last year is no longer with Alliant.  Beth Kiley is the new vice president for Alliant Appraisal Services.  She may contract out some of the on-site work to American Appraisals. 

Executive Director’s Report

Mr. Hammond informed the Board four Trustees (Nancy Gregory, Sue Knight, Tom Judy and Derrick Parham) and one staff member (Kathy St. Pierre) attended the PRIMA Annual Conference in Boston June 10-13.  All of the attendees agreed it was a good conference and encouraged other Trustees to attend in the future.  They noted the conference included three full days of sessions with great keynote speakers beginning each day.

Mr. Hammond expressed his thanks to the City of Centerville for hosting MVRMA’s recent Strategic Planning Retreat.  He noted minutes from this meeting as well as a summary of the evaluations were included in the agenda packet.  The group consensus was to shorten the retreat to ½ day and make lunch optional.  Everyone agreed the retreat was meaningful and valuable.  As a result of one of the discussions at that meeting, MVRMA’s Mission Statement will now be included on the first page of each agenda packet.

MVRMA and several of its members received a copy of a class action suit filed against various brokers and insurance companies for the period 1994-2005.  A settlement of $28 million is expected to be shared among all respondents who incurred damages.  Those defendants on the list with which MVRMA has done business include Acordia, Marsh and several insurance companies.  Mr. Hammond will respond to the lawsuit on behalf of MVRMA and its members.

Mr. Hammond provided an update on GEM activities.  The Annual Meeting and Governance Summit will be held in Madison, WI July 16-18, and Mr. Hammond and Mr. Schlagheck will attend.  In September, the Board meeting will be held in Columbus, with MVRMA serving as the host pool.  There is a new premier member of GEM, the Texas Water Pool, which will be obtaining liability coverage.  GEM is in the process of developing an on-line supervisory training program for its members.

Mr. Hammond provided a CORMA update.  On May 9, he met with the CORMA Board and spent 1.5 hours explaining how MVRMA operates.  The group was impressed with MVRMA’s structure and the many enhancements it provides its members.  Subsequent to the meeting with Mr. Hammond, the CORMA Board met with the Ohio Plan.  CORMA will now ask for proposals from both organizations with an effective date of 1/1/07 (as long as its current coverage can be extended to the end of the year).  CORMA has requested additional information about GEM, and Mr. Hammond has put the CORMA consultant in touch with GEM’s management.  Included in the agenda packet are the ratios Mr. Hammond developed in response to CORMA’s request.

An additional item Mr. Hammond brought before the group concerned the Ohio Public Entity Pool (PEP) and solicitation by Dave Harvey.  Mr. Harvey is a Senior Vice President at Acordia, the broker for PEP.  Recently, Mr. Harvey has contacted the city manager at several MVRMA cities trying to interest them in a proposal from PEP.  An important aspect to remember when considering the PEP pool is it’s a claims made program.  If a member leaves the PEP pool, it assumes liability for all existing claims and any that might appear later.  With MVRMA, each member is an owner of the pool and has a vested interest in its continued success.  As loss years are closed, remaining loss funds are refunded to the members.

Executive Session  

At 10:45 am, there was a motion by Mr. Moeller, seconded by Mr. Davis, to recess into Executive Session to discuss the results of the recently completed performance appraisal and compensation recommendation for the Executive Director.  Motion carried.

At 10:55 am, there was a motion by Mr. Davis, seconded by Mr. Moeller, to adjourn from Executive Session and return to Regular Session.  Motion carried.

Personnel & Compensation Committee Report

Motion by Ms. Gregory, seconded by Mr. Davis, to approve a 3.5% increase for the Executive Director effective July 1, 2007.  His new salary will be $99,356.  Motion carried.  Ms. Knight thanked Mr. Hammond for his hard work and dedication during the past year.  Mr. Hammond expressed his appreciation to the Board and staff and stated he looks forward to continuing as Executive Director.

As part of its underwriting requirements for GEM, MVRMA must have personnel policies covering Anti-discrimination, Anti-harassment and Workplace Violence.  Mr. Hammond stated these policies have been incorporated into MVRMA’s amended Personnel & Compensation Policy.  Motion by Ms. Gregory, seconded by Mr. Reilly, to approve the amended Personnel & Compensation Policy.  Motion carried.

Mr. Hammond reviewed the amended job descriptions for the Claims Manager, Loss Control Manager and Administrative Assistant.  They have all been updated with a common format and include current pay ranges.  Making the Administrative Assistant’s position exempt was the biggest change.  Motion by Ms. Curliss, seconded by Mr. Moeller, to approve the amended job descriptions.  Motion carried.

Developing a succession plan was a goal discussed at the Strategic Planning Retreat.  Mr. Hammond reviewed the draft Management Succession Policy included in the agenda packet.  It is a first step in developing a succession plan and details the responsibility of the Board and Executive Director in the absence of staff or key service providers.  More detailed information will be developed before the end of the year.  Motion by Mr. Parham, seconded by Mr. Davis, to approve the Management Succession Policy.  Motion carried.

Having concluded its business for the day, the meeting adjourned at 11:10 am.