June 19, 2006

Time and Location

MVRMA Office, 4625 Presidential Way, Kettering, Ohio.  The meeting began at 9:12 am.

The following individuals were present when the meeting was called to order: Myra Jackson, Beavercreek; Dave Helling, Bellbrook; Jim Pfeffer, Blue Ash; Mark Schlagheck, Centerville; Janine Cooper, Englewood; Mike Burns, Indian Hill; Kim Lapensee, Madeira; Bruce Snell, Mason; Dody Bruck, Miamisburg; Wayne Davis, Montgomery; Gary Lucas, Piqua; Tom Judy, Sidney; Sue Knight, Troy; Julie Trick, Vandalia; Tom Reilly, West Carrollton; Bob Surdyk, Surdyk, Dowd and Turner; Rick Steddom, Driver Alliant Insurance Services; and Kathy St. Pierre, Craig Blair, Starr Markworth and Michael Hammond, MVRMA.

Derrick Parham, Springdale and Nancy Gregory, Kettering arrived a few minutes after the meeting started.

Consent Agenda Approval

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

Risk Management Committee Report

Ms. Markworth provided a training update in the agenda packet.  The total number of participants so far this year was 607.  Ms. Markworth called attention to several training sessions.  She noted this year’s Supervisory Training will celebrate at a graduation luncheon for its 32 participants at the end of June.  This training is expected to be held again next year from March through May, and trustees were encouraged to consider current or potential supervisors for participation.  Ms. Markworth also mentioned the Workplace Harassment training which has been very well attended.  This training was conducted by Cindi Ann Thomas who has received rave reviews.  She will try to involve Ms. Thomas in additional training in the fall.  Ms. Markworth noted her very busy schedule also included five sessions of driver training.  Mr. Hammond thanked Mr. Surdyk for arranging the sign ordinance session held on May 3, presented by Mr. Eric Damian Kelly, an expert on sign liability.

Ms. Markworth presented the 2006 SPEC awards as follows:

Ascension Award (largest increase in compliance from the previous year) – Centerville (increased 35.39%)

Pinnacle Award (highest percentage of compliance – 100%) Englewood, Indian Hill and Miamisburg

Sidney and Troy were exempt from awards this year because they both had 100% compliance last year.  Trophies were presented to this year’s winners.  Ms. Markworth believes this year’s evaluations were more complete because, in most cities, she was able to meet with the various department heads.  These meetings were beneficial for MVRMA because they provided an understanding of what we do and how we can help the members, and they also provided an opportunity for cooperation and sharing within each city.  SPEC compliance comparisons for 2001-2006 were distributed at the meeting.

Ms. Lapensee explained the current SPEC evaluation schedule conflicts with Ms. Markworth’s training schedule which is heavily waited in the same time period.  At the most recent Risk Management Committee meeting, Ms. Markworth suggested changing the “SPEC year” to July through August.  The timing would be as follows:

1.      Initial letters would go out to each member in May

2.      Evaluations would take place during the summer

3.      Awards would be presented at the September Board Meeting

Motion by Mr. Burns, seconded by Ms. Lapensee, to change the 2007 SPEC schedule as presented.  Motion carried.

Ms. Lapensee informed the Board that several new risk management issues were discussed at the most recent RM Committee meeting.  They included background checks for volunteers who work with youth.  An attachment was included in the agenda packet.  Another handout that included the nine steps for background screening was distributed at the meeting.  Also included in the agenda packet was an article concerning off duty police officers which highlighted the fact that many officers are considered “always on duty” and are therefore armed.  The article encourages training for off-duty events to protect officers from friendly fire tragedies.  Mr. Helling discussed another agenda attachment concerning Homeland Security and the Government Emergency Telecommunications Service.  This service provides telecommunications for federal, state and local governments during times of disaster or emergencies that cause congestion or network outages.  Another agenda attachment provided a summary of legislation addressing prevention of assistance to terrorist organizations.  The ORC now requires political subdivisions to require certain entities, that contract with them or apply for certain licenses, and applicants for employment to complete one of several forms entitled Declaration of Material Assistance/Non-Assistance (DMA).  The DMA is a questionnaire which certifies the entity has not provided material assistance to a terrorist organization listed on the U.S. Department of State Terrorist Exclusion List.  The final issue discussed concerned a policy review requested by the city of Wilmington regarding emergency vehicle driving operations for its fire department.  The city’s former policy was more restrictive than the Ohio Revised Code.  Because of the policy’s wording, the fire department could have been judged by a stricter standard than the state required.  Mr. Hammond provided copies of the new policy at the Board Meeting.

Ms. Markworth explained that driver training is required for police under the SPEC program.  To assist with this training, Ms. Markworth recommended, and the risk management committee approved, five grants of $475 each for the 2007 OPOTA train the trainer program.  These grants will be given to the first five members who request them.

Mr. Hammond discussed the amendment to the current Litigation Management Policy, which requires authorization of the Board in order to settle any claim in excess of $25,000.  The policy states it is in accordance with Article XIV of the MVRMA Bylaws, but after further review, this statement was determined to be inaccurate.  A proposed amendment, written with the help of Mr. Surdyk, was included in the agenda packet.  To provide more flexibility for staff and counsel in settling claims, it requires approval of a report (Claims Watch List) at each regularly scheduled Board Meeting.  The report will list each pending claim with a reserve greater than $25,000.  Approval of the report shall constitute advance notice and possible settlement in excess of $25,000 and shall permit the Executive Director or his designee to settle any claim on the report up to its stated reserve.  If the requested settlement exceeds the approved reserve, it will be necessary to notify the Board of Trustees by fax as was done in the past.  A majority approval of the settlement will be required.  Mr. Surdyk explained the need for a change in the current policy arose because of a suit filed against the city of Montgomery.  The necessity of a quick response to a settlement offer in excess of $25,000 appeared eminent, and there was not time to seek approval from the membership.  The proposed amendment to the Litigation Management Policy should prevent this situation in most future settlement negotiations.  The reserves set at each Board Meeting will provide notice to counsel of the maximum settlement without further approval from the membership.  To further comply with the Bylaws, the policy amendment includes a requirement that, if possible, the member must be notified of any settlement in excess of $10,000 at least ten days in advance of the date of settlement.  This notification has never been a problem in the past because members are regularly updated about claim and settlement discussions.  Having  reviewed and compared the Bylaws and the Litigation Management Policy, Mr.
Surdyk believes the proposed amendment now mirrors the Bylaws.  Mr. Surdyk advised it is important for cities to voice concerns or objections to settlements early on.  He also mentioned any city wishing to have its law director involved in its defense need only contact him or Mr. Becker to make arrangements.  Motion by Mr. Pfeffer, seconded by Mr. Judy, to approve the amended Litigation Management Policy.  Motion carried.   

Prior to its actual review, Mr. Blair noted the Claims Watch List will be undergoing some changes in the next few months while it is being refined to meet the needs of the amended Litigation Management Policy.  It was suggested that all new claims and any reserves that were changed since the last meeting be highlighted.  It was also mentioned that the Claims Watch List will be considered public information and could be requested by a plantiff’s attorney.  Mr. Surdyk and Mr. Blair explained the actual reserves reflected in the list are established by reviewing past similar cases and jury verdict results, offsets provided by sovereign immunity, and the extent of the plaintiff’s injuries.  These reserves are reviewed at biannual meetings with defense counsel.  Motion by Mr. Davis, seconded by Ms. Lapensee, to approve the Claims Watch List as presented.  Motion carried.               

Finance Committee Report

Mr. Hammond reviewed MVRMA’s 2005 Annual Report which was published in the June issue of Risky Business.  He highlighted the fact that MVRMA’s total net assets (members’ surplus) increased from $2,445,916 in 2004 to $4,475,845 in 2005.  He noted the annual average number of claims for the most recent seven year period (355) was up slightly from the last report.  He also noted the average per claim ($2,764) was unchanged from the last report.  The breakdown by type of claim was as follows: Auto Liability = 20.4%, Auto Physical Damage = 12.2%, General Liability = 43.5% and Property = 23.9%.  Mr. Hammond stated that although Loss Control Activity totals were down slightly when compared to 2004, they were still very strong. 

Mr. Hammond reviewed the PEPIP property proposal which had changed slightly since the Finance Committee Meeting.  The new premium ($282,861) exceeded budget projections by only $2,069.  This premium for the period 7/1/06-7/1/07 is based on total insured values of $828,980,562, which includes the Piqua Power Plant.  The TIV increased 9.7% over expiring, and the rate increased slightly more than 10%.  The changes in limits included a reduction of the per occurrence limit from $1 billion to $500 million and some reduction in Terrorism Coverage.  Mr. Steddom explained the property market deteriorated rapidly beginning in March.  With reduced capacity, the limit per occurrence was reduced, but there is still the possibility it could increase to $750 million.  The SIR remains unchanged at $200,000.  Motion by Mr. Davis, seconded by Mr. Schlagheck, to approve the PEPIP Property renewal effective 7/1/06.  Motion carried. 

Mr. Hammond provided a review of the proposed Travel and Business Expense Policy which will replace the current Travel Policy adopted in 1991.  To determine what changes were necessary, Mr. Hammond reviewed policies from several MVRMA members.  The new policy provides more specific guidance with regard to reimbursable expenses.  Motion by Ms. Bruck, seconded by Mr. Schlagheck, to approve the proposed Travel and Business Expense Policy as presented.  Motion carried.    

Awards Committee Report

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

            Overall winner with $0 losses/employee – Madeira

            Overall runner-up with $33.90 losses /employee – Montgomery

            Department Winners with $0 losses/employee

                        Police – Springdale

                        Fire & EMS – Wilmington

                        Water & Wastewater – Sidney

                        Parks & Recreation – Beavercreek & Springdale

                        Streets & Refuse – Centerville

            Safety Performance Award ($0 losses/employee three or more years)

                        Police – Montgomery (3 years)

                        Fire & EMS – Tipp City (5 years), West Carrollton (4 years)

                        Water & Wastewater – Mason (3 years), Vandalia (12 years)

                        Parks & Recreation – Madeira (11 years), Montgomery (5 years),

Wilmington & Wyoming (3 years)

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

                        Madeira ($0)

                        Montgomery ($33.90)

                        Mason ($35.15)

                        Bellbrook ($63.80)

                        Piqua ($73.23)

                        Centerville ($80.23)

                        Wyoming ($86.54)

Motion by Ms. Trick, seconded by Ms. Bruck, to approve the award recommendations as presented.  Motion carried.

Mr. Judy informed the Board that three nominations were received for the Special Achievement Award, two from the city of Wyoming and one from the city of Miamisburg.  The committee recommended the following two programs for awards:

1.   The Wyoming Public Access Defibrillation (PAD) Program that became a city wide initiative to place AEDs in city       owned buildings, police cruisers, fire apparatus, staff vehicles, schools, houses of worship and recreation facilities.  At the time of the committee meeting, 33 of 36 were in place.  

2.   The Miamisburg Stay Alive! Don’t Talk & Drive Program that reminded employees to focus on driving, not talking on the cell phone or trying to do other things while operating city vehicles.

Motion by Mr. Pfeffer, seconded by Mr. Reilly, to approve the Special Achievement winners as presented.  Motion carried.  The winning programs will be included in the August issue of Risky Business.

Driver Alliant Insurance Services Report

Mr. Steddom reviewed the state of the insurance marketplace and its affect on MVRMA.  Last year the industry paid out $60 billion in damages for wind storms.  Because of these claims, the property market continues to deteriorate.  This year’s wind storm activity will play a large part in determining next year’s renewal.  With regard to the liability market, there has been the emergence of a new carrier (Everest) which provides additional capacity.  Driver has seen rates going down 2-10% for its 7/1/06 liability placements.  This decrease is a good indication for MVRMA’s renewal at the end of the year.  The layer placed with GEM is expected to be flat, and the upper layer with AmRe is expected to increase no more than a 2-3%.  However, property losses can spill over into the liability market, which means there could be a change between now and the end of the year.  The crime renewal is expected to be flat.    

Mr. Steddom provided an appraisal update.  Effective July 1, Driver’s contract with Maximus to conduct appraisals expires.  Appraisals will then be handled in-house by a newly formed department.  MVRMA has requested appraisals for 19 structures.  As yet, a pricing schedule has not been established.  Because the Driver Signature Services fee covered last year’s appraisals, staff did not include a line item for appraisals in this year’s budget.  Mr. Steddom will try to keep the cost for these appraisals reasonable.  He noted that only structures valued greater than $5 million are appraised for free (these appraisals are required by the underwriters every three years).

Mr. Steddom reviewed the reinsurance exclusion for liability of contractors for residential construction, which was discussed at a previous Board Meeting.  He noted the AmRe agreement with GEM excludes liability coverage arising out of or related to residential construction by contractors.  The exclusion does not apply to rehabbing (the type of construction that occurs in many of our member cities) so long as it does not include any structural changes.  As yet, this exclusion has not been incorporated into the agreement between GEM and MVRMA.

Mr. Steddom informed the Board that Driver ceased accepting contingent commissions in 2005.  However, since the brokerage industry, in general, continues to write such agreements, Driver is again accepting contingent commissions.  These agreements typically pay 10-14%.  At Driver, these commissions do not drop down to producers like Mr. Steddom but stay at the corporate level.  Since Driver has a broker services agreement with MVRMA for a flat fee, it will not accept contingent commissions for any premiums written for MVRMA.  Driver will provide an annual accounting of all placements for MVRMA.

Executive Director’s Report

Since the meeting was running later than anticipated, Mr. Hammond abbreviated his report.  Regarding CORMA, the pool of cities approved for marketing in the Columbus area, Mr. Hammond reported he has had three conversations with Ron Wittington, the Risk Manager for the city of Dublin.  The last conversation was on June 7, and as of that date, the pool was moving ahead with its October 1 renewal with Travelers and Willis Pooling.  Dublin does not think the current situation is working.  Claims administration is now being handled out of Louisville, KY, which has been a problem, and Willis Pooling is now increasing its administrative fees.  Until recently, the pool had not done a member accounting and had not segregated its contributions by loss year.  After going through that process, it was determined Pickerington has negative equity.  Dublin is ready to consider MVRMA, but the other members of CORMA are not so sure.  On August 9, CORMA is scheduled to meet again to discuss future options.

Mr. Hammond did not have notification of the 2005 GEM surplus but expected to get it later in the week when he attends the GEM Board Meeting. 

At a recent GEM meeting, Mr. Hammond attended a session concerning best practices for pools.  He noted MVRMA complies with 75-80% of the recommended practices, which is a very positive indicator for our pool.

Executive Session

At 11:15, there was a motion by Mr. Davis, seconded by Mr. Burns, 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 11:18, there was a motion by Mr. Judy, seconded by Mr. Davis, to adjourn from Executive Session and return to Regular Session.  Motion carried.

Personnel and Compensation Committee Report

Motion by Mr. Burns, seconded by Mr. Judy to approve a 3.5% increase for the Executive Director.  Motion carried.

Ms Trick presented an amended Personnel and Compensation Policy for the Board’s approval.  It included six paid holidays in addition to each full-time employee’s allotment of personal days.  In the past, holidays were deducted from each employee’s personal days.  A comparison of MVRMA employees’ annual leave (25-35 days depending on the length of employment) with other public sector employees (25-41days) justified the increase.  Motion by Mr. Reilly, seconded by Ms. Trick, to approve the amended Personal Days/Holidays section of the Personnel and Compensation Policy.  Motion carried.  In order to provide the same time off benefit for the Executive Director, there was a motion by Mr. Parham, seconded by Ms. Lapensee, to approve amending the Executive Director’s contract to allow for six paid holidays.  Motion carried.

Ms. Trick informed the Board the Personnel & Compensation Committee authorized the Executive Director to increase the car allowance for both the Claims Manager and the Loss Control Manager by $60/month effective July 1, 2006.  Neither employee had received an increase in several years.    

Mr. Hammond reviewed the health insurance renewal for MVRMA employees.  Due to Ohio insurance regulations, MVRMA will no longer be able to participate in the OBC.  The OBC was quoted a renewal rate with Anthem of 9.5% higher than expiring.  McGohan Brabender, the broker for the OBC, has been working with MVRMA to obtain quotes from Anthem and other carriers.  The only two proposals considered acceptable were from Anthem and United Healthcare.  Anthem’s quote provides similar coverage to expiring, with a 9.43% rate increase.  United Healthcare will also provide acceptable coverage but has quoted a rate 10.43% less than expiring.  Because MVRMA has fewer than 7 employees it will not receive a composite rate; each employee will be rated individually.  MVRMA will switch to United Healthcare effective 8/1/06 and will receive an additional discount of 2-3% by joining the local Chamber of Commerce.

Having concluded its business for the day, the meeting adjourned at 11:35 am.