December 20, 2001

Time and Location

MVRMA Office, 4625 Presidential Way, Kettering, Ohio.  The meeting began at 9:05 am.

The following individuals were present when the meeting was called to order: Jim Pfeffer, Blue Ash; Nancy Gregory, Kettering; Tom Moeller and Kim Lapensee, Madeira; Bruce Snell, Mason; Kate Earley, Montgomery; Tom Judy, Sidney; Derrick Parham, Springdale; David Collinsworth, Tipp City; Sue Knight, Troy; Julie Trick, Vandalia; David Watson, West Carrollton; Dina Minneci, Wyoming; John Milazzo, Pete Gallagher, Nora Dudek and Barbara Roberts, Marsh; and Kathy St. Pierre, Craig Blair, Starr Markworth, and Michael Hammond, MVRMA.

Mike Burns and Dave Couch, Indian Hill and Jack Haney, Beavercreek arrived at 9:40 am. 

Consent Agenda Approval

Because there were additions to be made to the December 20, 2001 agenda, Mr. Pfeffer’s motion, seconded by Ms. Knight, was to approve only B and C of the Consent Agenda.  Motion carried. 

Items to be Added to the December 20, 2001 Agenda

Motion by Mr. Pfeffer, seconded by Ms. Knight to approve the following amendments to the December 20, 2001 agenda:

            4. B.     Approve a Pass-thru Expense for Mid-year Property Additions

            6. D.    Approve Membership of Piqua into MVRMA if Authorized by Piqua’s Governing Body

Motion carried.

Finance Committee Report

Mr. Hammond stated it would not be necessary to review the 2002 Goals and Objectives, which were adopted as part of the Preliminary Budget at the September 24, 2001 Board Meeting, because they remained unchanged.  He further noted the 2002 Final Budget was approximately $19,000 less than the Preliminary Budget.  Comparing the amount to be billed in 2002 with the amount billed in 2001, Mr. Hammond cited an increase of approximately 8.6% ($209,623), with the largest dollar increase reflected in the amount to be paid for Excess Insurance (100-xxx). 

Ms. St. Pierre reviewed the significant changes made to the Expenditure Budget since the approval of the Preliminary Budget.  They included the following:

        Excess Insurance (100-xxx) actually decreased from the Preliminary Budget by almost $18,000.

        Professional Services (200-xxx) increased by $5,300 because of a $3,000 increase in the Loss Control Services line (200-202), which        was counter-balanced by a $3,000 decrease in Miscellaneous/Contingency (400-411), and an increase in the Brokering Services line (200-210).

        Employment Services (300-xxx) increased slightly to cover the increase in health insurance for staff (300-302) and expenses associated with staff’s Workers’ Compensation (300-309). 

Ms. St. Pierre also noted an increase in the 2002 Operating Fund Rebate from $30,000 in the Preliminary Budget to $35,001 in the Final Budget. 

Motion by Mr. Pfeffer, seconded by Mr. Moeller to approve the 2002 Final Budget and Objectives/Work Plan.  Motion carried. 

Mr. Hammond explained the necessity for a pass-thru insurance expense for property (buildings or stated value vehicles) acquired by a member city after the annual premiums are quoted.  With the hardening insurance market, MVRMA is now billed throughout the year for any new property exposures acquired subsequent to renewal.  At the Finance Committee Meeting December 19^th, staff recommended and the Finance Committee concurred any additional expense incurred by the pool for property acquired after the renewal should be billed to the appropriate city as a pass thru expense, just like builders’ risk coverage.  Motion by Mr. Parham, seconded by Ms. Trick, to approve a pass-thru expense for mid-year property additions.  Motion carried.

Risk Management Committee Report

Ms. Markworth provided a training update.  She noted 505 people had been trained at MVRMA seminars since she started as Loss Control Manager in July.  For the year, approximately 1000 people had taken part in MVRMA training classes.  One especially well received seminar for Parks and Recreation employees had representation from 9 of our 16 member cities. 

During the most recent SPEC audit, three MVRMA cities scored a perfect 100% compliance.  To reward those cities and encourage others to work toward that goal, the Risk Management Committee recommended exempting those cities from the SPEC audit the following year.  Motion by Mr. Pfeffer, seconded by Mr. Judy, to approve the amended SPEC program to include the exemption noted above.  Motion carried.

Ms. Markworth noted in her recent visits to MVRMA member cities, the majority of police chiefs expressed an interest in drivers training.  To facilitate this training, Ms. Markworth proposed a grant program, sponsored by MVRMA, that would reimburse a member city the cost of certifying an employee as a trainer.  Motion by Ms. Minneci, seconded by Mr. Pfeffer, to authorize staff to create an internal grant program for police defensive drivers training.  Motion carried.

The Public Entity Risk Institute (PERI) is helping fund the Public Risk Database Project (PRDP) by underwriting the cost of modifying computer programs to interface with PRDP.  MVRMA received approval for a PERI grant of $3,250.  To implement the necessary changes, MVRMA would pay an additional $5,245, which is included in the 2002 Budget.  Motion by Ms. Earley, seconded by Mr. Pfeffer to authorize the Executive Director to execute the PERI Implementation Grant Agreement.  Motion carried.

Mr. Hammond updated the Board on the tentative settlement of the Theobald vs. City of Montgomery lawsuit.  Because of Reliance’s insolvency, MVRMA would have been responsible for not only its $500,000 SIR, but also any portion of a settlement that reached the Reliance layer.  The recent authorization from the Board allowed MVRMA’s attorneys to negotiate a settlement of $265,000, which included complete indemnification for the City of Montgomery and MVRMA.  In addition, the settlement will be filed through Probate Court to prevent the minor children from filing any subsequent suits. 

Membership & Marketing Committee Report    

The New Member Fee was initially established to reimburse the pool for start-up costs.  In the beginning, it was also an added incentive to become a founding member rather than wait until later and pay the additional fee.  Most recently, the New Member Fee has served as a deterrent to those cities considering membership.  Adding 10% to the first year’s annual premium has often eliminated MVRMA’s competitive edge.  Motion by Mr. Judy, seconded by Mr. Burns, to approve amending MVRMA’s Bylaws to delete the New Member Fee.  A roll call vote was taken with all fourteen members present voting in the affirmative (Ms. Trick, Vandalia, left the meeting prior to the vote, and there was no representative from the City of Wilmington in attendance).  Motion carried.  Prior to submitting the amended Bylaws to MVRMA’s various city councils for approval, the Board agreed to review them in their entirety to determine if additional changes are necessary.  The Bylaws Review Committee will consist of members of the Finance Committee and all MVRMA officers. 

Mr. Hammond discussed his most recent marketing activities.  In October, the City of Oxford requested a quote from MVRMA, but since Oxford is not on the Approved List, we were unable to comply.  The M&M Committee did not want to consider adding Oxford at this time, since the Board had so recently updated the Approved List.  Oxford asked to be included in future considerations.  The City of Piqua, which is on the Approved List, also requested a proposal from MVRMA, and staff has been working with the city to obtain the necessary information.  Currently, Piqua has various renewal dates for its coverages.  The premium for the Boiler and Machinery Policy the city renewed December 8 was very high and would have to canceled within 30 days to avoid an excessive penalty.  Piqua, therefore, requested a firm quote by December 28 for an effective date of January 8, 2002.  Motion by Ms. Knight, seconded by Mr. Burns, to authorize admission of the City of Piqua into MVRMA pending an acceptable loss history, to be determined by MVRMA staff, and approval from Piqua’s City Council. A roll call vote was taken with all fourteen members present voting in the affirmative (Ms. Trick, Vandalia, left the meeting prior to the vote, and there was no representative from the City of Wilmington in attendance).  Motion carried.  The Board agreed the City of Piqua would not be charged the 10% New Member Fee pending approval of the amended MVRMA Bylaws.  It was noted Piqua would have a lower sublimit for earthquake than other members of MVRMA because of its proximity to a fault that runs through that part of the state.

Nominating Committee Report

Mr. Parham, on behalf of the Nominating Committee, recommended the current slate of officers continue in their positions for another year.  Motion by Mr. Moeller, seconded by Mr. Burns, to close the nominations and elect the following officers for 2002:

            President:                     Nancy Gregory, Kettering

            Vice President:            Jim Pfeffer, Blue Ash

            Secretary:                     Sue Knight, Troy

            Treasurer:                     Tom Judy, Sidney 

Motion carried.

Marsh USA Inc. Report

Mr. Milazzo noted this has been a very tough renewal for the Marsh team, but the results have been much more favorable than anticipated. 

Mr. Gallagher explained that MVRMA will continue with the same terms and conditions for the third year of its three-year agreement with Discover Re.  He warned that next year’s renewal will probably increase substantially. 

Ms. Dudek noted typical increases in late summer were approximately 20%, but after 9/11, the market skyrocketed.  Going into negotiations with Chubb, Marsh anticipated a 30-40% increase but fortunately, the final quotes were much better than that.  Property/Boiler & Machinery coverage increased by 23.8%, and Auto Physical Damage increased by 21.5% with the following changes in limits and coverages:

            The Blanket Limit of $477M was lowered to $100M per occurrence.

Earthquake and Flood coverage was lowered from $100M to $25M annual aggregate.

            MVRMA’s SIR increased from $150,000 to $250,000 per occurrence.

Ms. Dudek also referred to the notes provided on the last page of the property proposal, which stated:

1.      Vacant office buildings at Kettering Park will have sublimits of $500,000 per building until they meet certain criteria

2.   Notification that a OS&Y sprinkler valve has been secured with a chain

and lock in the open position is required for the new Vandalia Recreation Center.

Ms. Dudek also noted anytime a sprinkler system is turned off for longer than two hours, she or her replacement must be notified.  Once the system is re-activated, she must again be notified.

Individual surety bond coverage remains the same as 2001.  Any changes in personnel should be reported to Ms. St. Pierre, since St. Paul requires the bonds to be “named.” 

Mr. Milazzo reviewed the Crime and Employment Practices Liability coverage.  Regarding the Crime Policy, the Board agreed to Option II, which maintains the current limits of liability but increases the deductible for most situations from $10,000 to $15,000.  The EPLI renewal maintains the same limits and deductible with an increase in premium from $28,000 to $30,809.

Motion by Mr. Moeller, seconded by Ms. Knight, to approve the 2002 Marsh insurance renewal with the selection of Option II for Crime coverage.  Motion carried.         

Mr. Milazzo announced that Ms. Dudek was leaving the Marsh office in Cincinnati for a position in its Chicago office.  The Board offered its congratulations and best wishes for her impending transfer.

Executive Director’s Report

The NPX renewal will increase by 10% as quoted in the rate guarantee with Am Re.  There will be no increase in the dividend program or administrative fee.  Motion by Mr. Burns, seconded by Mr. Pfeffer, to approve the NPX renewal.  Motion carried.

Motion by Mr. Pfeffer, seconded by Ms. Minneci, to approve the following 2002 Board Meeting dates:

                         March 18, 2002

                        June 10, 2002

                        September 16, 2002

                        December 16, 2002

Motion carried.

Mr. Hammond reported that Ms. St. Pierre and Mr. Couch attended the AGRIP Fall Conference, and Ms. Earley will be attending the AGRIP Spring Conference.         

MVRMA received the GFOA Award of Excellence in Financial Reporting for its CAFR for the year ending December 31, 2000.

Mr. Hammond will be attending the NPX Annual Conference in Newport, California January 10-11.

President’s Report

Ms. Gregory reminded everyone that most recommendations are made at the Committee level and encouraged everyone’s participation.  She suggested that anyone who is not on a committee or wishes to change committees contact her or MVRMA staff.  We will try to accommodate all requests.

Having concluded its business for the day, the Board adjourned shortly after 11:00 am.  A holiday luncheon was held at Lincoln Park Grille at 11:30.

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