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MINUTESOF
THE MIAMI VALLEY RISK MANAGEMENT ASSOCIATION
June 10, 2002
Time and Location
Miami Valley Risk Management Office, 4625 Presidential Way, Kettering, Ohio. The meeting began at 9:06 am.
The following individuals were present when the meeting was called to order: Sherry Callahan, Beavercreek; Jim Pfeffer, Blue Ash; Mike Burns, Indian Hill; Nancy Gregory, Kettering; Kim Lapensee, Madeira; Bruce Snell and Eric Hansen, Mason; Dody Bruck, Miamisburg; Wayne Davis, Montgomery; Robert Slagle, Piqua; Tom Judy, Sidney; Sue Knight, Troy; Julie Trick, Vandalia; Dina Minneci, Wyoming; John Milazzo, Bob Brunyate and Lauren Kitchen, Marsh; and Kathy St. Pierre, Craig Blair, Starr Markworth, and Michael Hammond, MVRMA.
Derrick Parham, Springdale arrived at 9:10 am.
Consent Agenda Approval
Motion by Mr. Pfeffer, seconded by Mr. Burns, to approve the Consent Agenda. Motion carried.
Finance Committee Report
Mr. Judy provided a summary of the Finance committee meeting held May 9, 2002.
Because the non-appraised list has grown substantially over the years and is not proportional to the appraised list, the Finance Committee recommended including non-appraised property in the appraisal figure used to calculate the PCF. This inclusion would fairly apportion the cost of property coverage for the non-appraised list to each member city. Staff is currently working with Marsh to categorize non-appraised property so that all necessary information is reported. Motion by Mr. Pfeffer, seconded by Mr. Parham, to include non-appraised property in the appraisal figure used for calculating the PCF effective with the 2003 Preliminary Budget. Motion carried.
While reviewing records filed with the Secretary of State, Mr. Surdyk discovered Mike Robinette, formerly finance director for the City of Kettering, was still listed as MVRMA’s statutory agent. Motion by Mr. Pfeffer, seconded by Mr. Burns, to authorize the Executive Director as statutory agent for MVRMA. Motion carried.
Prior to the Finance Committee meeting, Marsh projected the renewal of the excess flood policy for Troy to be in the $14,000-$15,000 range. Subsequently, Royal informed Marsh it now has a minimum premium of $25,000, but contents, which were not previously included, can be added to the renewal policy. Although Marsh will continue to check other markets, quotes already received from other companies have included higher premiums and lower limits than are available through Royal. Initially, the Finance Committee recommended MVRMA pay the first $15,000 for the excess flood coverage with Troy picking up the balance. After much discussion, there was a motion by Mr. Judy, seconded by Mr. Pfeffer, to pay up to $25,000 for the excess flood policy effective 7/1/02 and develop an internal MVRMA policy to address uncovered issues in the future. Motion carried. Ms. Gregory stated she and Mr. Hammond would name an ad hoc committee to develop the internal policy.
With regard to the broker interviews, Mr. Judy explained the choice between Driver and Marsh was very difficult. Both brokers rated high in all aspects of the evaluation. The deciding factor became Marsh’s proven market clout as demonstrated at the last renewal. Additionally, Marsh addressed timeliness issues (receiving newsletter articles when requested and responding to MVRMA phone messages promptly) by providing financial disincentives. Marsh further confirmed its commitment to the MVRMA account by providing alternative proposals for various brokering options. Motion by Mr. Pfeffer, seconded by Mr. Parham, to approve the selection of Marsh Inc. as MVRMA’s broker and to authorize the Executive Director to execute the agreement. Motion carried.
Awards Committee Report
Ms. Knight reviewed the results of this year’s Awards Program, which were included in the June 10th agenda packet. Motion by Ms. Minneci, seconded by Ms. Lapensee to approve the following awards:
Overall Winner: Montgomery ($0/employee)
Runner-up: Wilmington ($19/employee
Departmental Winners: Police – Montgomery
Fire & EMS – Miamisburg
Water & Wastewater – Miamisburg
Parks & Recreation – West Carrollton
Streets & Refuse – Indian Hill
Safety Performance Award Winners (Zero Losses 1998, 1999 & 2000):
Police – None
Fire & EMS – Wilmington (8 years)
Water & Wastewater – Vandalia (8 years).
Miamisburg & West Carrollton (3 years)
Parks & Recreation – Madeira (7 years)
West Carrollton (3 years)
Streets & Refuse – None
Award of Excellence Winners ($100 or Less/employee):
Miamisburg (($72.82/employee)
Montgomery ($0/employee)
Sidney ($42.27/employee)
Tipp City ($98.62/employee)
Troy ($56.33/employee)
West Carrollton ($90.11/employee)
Wilmington ($19/employee)
Award of Excellence – Consecutive Years:
Miamisburg –1998-2001
Tipp City – 2000-2001
Innovation Award Winner
The City of Mason’s Confined Space Entry Trailer
Motion carried
Risk Management Committee Report
Ms. Markworth reported to date, MVRMA has conducted twelve seminars. Of the 413 attendees, 373 were from MVRMA cities (many of the seminars were held jointly with the Miami Valley Cable Council Training Academy). Five more seminars are scheduled through September 10. Ms. Markworth is working with MVCC to plan a rotating two year track which will cover all OSHA subjects. Mike Hayslip, an attorney and civil engineer who has been well received in previous MVRMA/MVCC training seminars, will be employed to conduct many of the sessions.
Ms. Markworth stated her SPEC visits should be completed later this week, and she hopes to have all reports mailed by early July.
As an added service, our EPLI coverage includes an on-line or CD-Rom training module through HR Comply to educate supervisors and employees about sexual harassment and discrimination. Ms. Markworth will schedule a meeting with HR representatives from all member cities to determine how this training can best be utilized.
Since MVRMA currently has eleven certified driving trainers for heavy vehicles, staff and the Risk Management Committee recommended Ms. Markworth forego being trained personally and instead, devote her time to facilitating this training. The Board, for the most part, concurred with this recommendation. However, Ms. Knight noted the trainers from her city voiced concerns about the credibility of the training without a MVRMA representative participating. Motion by Mr. Pfeffer, seconded by Mr. Judy, to amend the following objectives in order to more accurately define the responsibilities of the Loss Control Manager:
Objective Statement 6 under Goal Statement 2, “Provide Defensive Driver Training to the Loss Control Manager in order to obtain certification” should be deleted.
Objective Statement 12 under Goal Statement 2, “Plan and facilitate driver training sessions on a quarterly basis including the scheduling of instructors and arranging of site locations” should be added.
Motion carried with one opposing vote from Ms. Knight, Troy.
Mr. Blair updated the Board on the Janeil vs. Beavercreek claim. MVRMA’s attorneys have negotiated a tentative settlement of $350,000 pending Medicaid and probate court approval. The probate hearing is scheduled for June 19th, and Medicaid has no expenditures to date. Mr. Blair explained Medicaid, however, could assert a claim even after the settlement is finalized.
Mr. Blair also updated the Board on the PRDP project. The MVRMA claims system requires one additional update and will then be able to extract data from PRDP.
Marsh USA Inc. Report
Mr. Milazzo thanked the Board for its confidence in Marsh in renewing its contract. He and his team are looking forward to working with MVRMA in the future.
Mr. Brunyate addressed the issue of Piqua’s boilers/generators. After a request from Piqua for boiler inspections, Chubb began reviewing Piqua’s exposures. Subsequently, Chubb notified Marsh several of the boilers/generators at Piqua would have to be underwritten by its energy unit, and the deductible would be increased from $5,000 to $250,000. There was a possibility of an increased premium as well. The boilers/generators in question are part of Piqua’s electrical generation service, not the “normal” boilers found in the city’s office buildings. Chubb is most concerned about the two gas-fired peaking generators that are turned on once per month to test but are used only two to three months per year. Turning the generators on and off presents more of an exposure than if they were left on all the time. After discussing this matter with Mr. Hammond, Marsh forwarded a response to Chubb noting a change mid-policy cannot be made without MVRMA’s consent and that no consent had been given. Both Mr. Bruyate and Ms. Kitchen have met with Chubb several times on this issue and believe some compromise must be reached to maintain a satisfactory relationship with Chubb going forward. Mr. Milazzo suggested MVRMA agree to an increased deductible (up to a maximum of $200,000) with no premium change. The Board concurred with this recommendation and instructed Marsh to proceed with the negotiations.
Executive Director’s Report
Mr. Hammond explained the Actuarial Report for the year ended December 31, 2001 had to be amended due to an increased reserve that was adjusted in early January rather than prior to year’s end. Staff distributed amended reports at the meeting. Motion by Mr. Parham, seconded by Ms. Knight, to approve the amended Actuarial Report. Motion carried.
Staff distributed the Financial Audit for the year ended December 31, 2001. Motion by Mr. Burns, seconded by Mr. Parham, to approve the Financial Audit. Motion carried.
While at the annual PRIMA/AGRIP Conference in San Antonio, May 14-17, Mr. Hammond attended several worthwhile sessions which included such topics as pool growth strategies, captives and terrorism implications.
Mr. Hammond informed the Board that Kemper, the company that fronts the current NPX reinsurance program, was recently downgraded to A- by A. M. Best. At this time he does not anticipate a problem as a result of this downgrade, but he noted NPX will not include Kemper in its upcoming renewal.
While in San Antonio, Mr. Hammond attended a meeting to discuss the captive NPX hopes to establish by 1/1/03. The captive insurance company will be known as GEM, Government Entities Mutual Inc. A captive is an alternative risk financing mechanism. It is a mutual insurance company owned by its insureds and regulated by its state of domicile. It will provide another layer of reinsurance between the NPX program and the reinsurance market. The NPX group is committed to this project and has provided $100,000 for start up costs. GEM’s goal is to capitalize with $10M. To become a capitalized member, a pool must contribute a minimum of $500,000. The captive is likely to be successful over a period of time, but many of the smaller pools are taking a wait and see attitude. Associate memberships, which allow smaller pools to develop capital over a period of time, may eventually be available. Mr. Hammond believes a portion of the NPX program will most likely be run through this captive in the future.
Every member but two, Beavercreek and Kettering, has verbally reported the approval of the amended Bylaws by their councils. Beavercreek and Kettering will be seeking approval at council meetings scheduled for later this week. Once MVRMA receives certified copies of resolutions and signed counterpart pages from 2/3 of the members, the amended bylaws will become effective. Corrected copies of the amended Bylaws were distributed at the meeting.
Executive Session
At approximately 11:00 am, there was a motion by Ms. Trick, seconded by Mr. Burns, to recess into Executive Session to discuss the performance and compensation of the Executive Director. Motion carried.
At 11:15 am there was a motion by Mr. Parham, seconded by Ms. Callahan, to adjourn from Executive Session and return to Regular Session. Motion carried.
Personnel & Compensation Committee Report
Motion by Mr. Judy, seconded by Mr. Parham, to approve a 5% increase for the Executive Director and direct the Personnel & Compensation Committee to review and improve the evaluation form prior to next year’s evaluation. Motion carried.
Ms. Trick explained “car allowance” is not currently addressed in the Personnel & Compensation Policy. Previously, it has been addressed as a line item in each year’s budget. Motion by Ms. Knight, seconded by Mr. Burns, to approve amending the Personnel & Compensation Policy as follows:
11. Car Allowance. A car allowance is authorized for the full-time Claims Manager and Loss Control Manager for the use of his/her personal vehicle in conducting MVRMA business within the MVRMA service area. With the approval of the P&C Committee, the Executive Director shall set the amount. In addition to the car allowance, the full-time Claims Manager and Loss Control Manager will receive mileage reimbursement at the per mile rate allowed by IRS for travel outside the MVRMA service area.
Because of the increased cost of operating a vehicle and the number of miles Mr. Blair travels in his capacity as Claims Manager, the P&C Committee approved an increase in his car allowance from $320 to $360 per month effective July 1, 2002.
The P&C Committee concurred with Mr. Hammond’s recommendation to do an external and internal comparison of staff pay ranges prior to preparation of the 2003 Preliminary Budget. Motion by Ms. Knight, seconded by Mr. Burns, for Mr. Hammond to complete the proposed salary review and present his findings later this summer. Motion carried.
Having concluded its business for the day, the Board adjourned at 11:30 am.