FYI

- Michael Hammond

At the Winter Conference of the Ohio City Management Association (OCMA), MVRMA received the 2004 OCMA Intergovernmental Cooperation Award. This prestigious award recognizes successful joint ventures and cooperative efforts of Ohio local governments. Robert Harrison, City Manager of Wyoming and OCMA Member Services Chair, made the presentation to the MVRMA Board at its quarterly meeting March 15, 2004. Tom Judy, MVRMA Board President, accepted the award stating, "This is an example of what we can do when we pool not only our financial but our intellectual resources."

MVRMA was borne out of the hard insurance market of the 1980s and has continued to flourish after 15 years of operation. At a time when local governments were receiving cancellation notices from their insurers and unable to place property and casualty coverage in the commercial market, six Miami Valley communities stepped forward. On December 1, 1988, they formed a governmental insurance pool to be known as Miami Valley Risk Management Association. The original six charter members were the cities of Beavercreek, Kettering, Miamisburg, Vandalia, West Carrollton and Wilmington.

Their plan for MVRMA was to act collectively in addressing the members’ risk management and risk financing needs. MVRMA was organized under section 2744.081 of the Ohio Revised Code. The Association provides a combination of self-insurance and commercial reinsurance for its members’ property/casualty exposures. In addition, it acts as a clearinghouse for risk related information and provides extensive safety/loss control consulting and training.

The mission of MVRMA is to deliver high quality risk management services to its member municipalities in a manner which provides long term financial stability, minimization of risks, and protection of mutual interests. Our goal is to reduce the frequency and severity of losses, thus making our members better risks. By accomplishing this goal, we are generally able to provide comprehensive insurance coverages at a reduced cost.

In recognizing the success of MVRMA, it is important to understand what makes us different from other similar insurance programs. The following are key features of MVRMA membership:

1. MVRMA serves only qualified municipalities in the Dayton-Cincinnati area. Since its inception, the Association has selectively expanded to 19 members. Applicants for membership are assessed on their commitment to the concepts of risk pooling, risk assumption and risk sharing. They must have a commitment to improving loss control through safety related practices and employee training. Finally, there must be a history of financial stability and professional city management.

2. Each member of the Association appoints a representative to serve on the Board of Trustees. The Board meets quarterly to approve the business of the Association and adopt its policies. Trustees serve on a variety of committees that report directly to the Board. Each Association member has one vote.

3. MVRMA is member owned and member controlled. Members retain an ownership interest in their annual contributions and share in the pooled losses within the self-insured retention. To date, 45% of the monies set aside to pay member losses have been refunded, saving members nearly $3 million.

4. One-third of the formula used to determine a member’s annual contribution is based upon its average annual losses for the last four years. Thus, the formula rewards those members with good loss experience. However, just as an important, the Board has developed a policy that caps or forgives a member's large losses in order to soften the fluctuations that might otherwise occur in a member's annual contribution.

5. Understanding the workings of local government and the associated risk management needs of municipalities are high on the list of criteria for selecting an Executive Director. MVRMA's only two Executive Directors have both had extensive experience in local government.

During the past 15 years, MVRMA members have learned a successful pool involves a great deal more than just risk sharing and risk financing. It also requires cooperation and trust among the members, since losses that fall within the self insured retention are paid from pooled funds. Another key element is the development of long term relationships, as evidenced by the fact no member has ever left MVRMA.

As Board Members have stated from time to time, governmental risk pooling takes more time and effort than purchasing commercial insurance, but it is well worth the effort. The OCMA Intergovernmental Cooperation Award is recognition of the successful cooperative efforts of all MVRMA members.

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Counselors' Comments

 - Surdyk, Dowd & Turner

A recent $1 million settlement in Putnam County highlights an exception to the blanket immunity from lawsuits afforded to political subdivisions. A falling tree limb is the root of the problem.

During a rain storm in July 1998, a large tree limb fell onto this plaintiff's truck, crushing the roof. The driver was knocked unconscious, crashed into the tree at issue and was severely injured. Plaintiff sued the Village of Leipsic, where the accident occurred, for negligence.

To comprehend how a municipality may be liable for a falling tree limb, there are two important statutes to know and understand. Generally, a political subdivision is immune from a lawsuit for ordinary negligence claims. However, some exceptions do exist. One such exception refuses to extend immunity to a political subdivision for injury, death or loss to persons or property caused by the negligent failure to keep public roads in repair and negligent failure to remove obstructions from public roads. A different statute reinforces the exception above. This statute states the municipality's legislative authority has responsibility over the care, supervision and control of public highways, streets, avenues, alleys and sidewalks. Taken together, this means a political subdivision must monitor the public roads in its community in order to protect itself from liability should any person or property get injured while on the public roads.

Another factor played a role in the determination of liability. The Village of Leipsic was designated by Tree City USA. Tree City USA was created in 1976 by the National Arbor Day Foundation to encourage designated cities to develop and utilize standards to evaluate the community's urban forest resource. There are standards the municipality must follow to get and keep the designation; one requires someone, such as a local forestry department or a volunteer board, to be legally responsible for the care and maintenance of the community's trees. There must be an ordinance setting out clear guidelines for planting, maintenance and removal of trees in public places.

Why is this important? Eleven of nineteen MVRMA members have Tree City USA designations. More importantly, the designation of Tree City USA allows the plaintiff to show the municipality has a regular maintenance and removal policy in place in order to prove the municipality failed in its statutory duties.

Become aware of how your municipality complies with these statutory requirements. Remember, this recent development regarding potential governmental liability for falling tree limbs should encourage more awareness of the community's policy of maintaining its trees, not instill a fear of swelling litigation.

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The Claims File

- Craig Blair

There are certain topics that bear repeating, and understanding a city's legal liability for claims is one of them.

When a claim is made, MVRMA staff must determine if the member city is "legally liable" for the loss. In assessing the liability, the following questions must be considered:

1. Does the member owe a duty to the public or individual?

2. Did the member breach that duty?

3. Were the damages to the other party caused by the breach of that duty?

A positive response to the first two questions is not enough to collect on a claim. There must be verifiable damages related to the breach of duty.

A couple examples should make the "legally liable" issue clearer. (Please note: Although "legally liable," a city may be able to invoke certain immunities that limit payment on the claim.)

l City truck backs into a parked car. The duty owed by the city would be the same as it would be for anyone: to operate the vehicle in a safe manner. The "duty" in this case was obviously breached, and the city would be "legally liable" for the damages.

l A third party hits a pothole, and a tire is damaged. The city is held to a maintenance standard on roadways to keep them free of hazards. This is a case where there were verifiable damages, but as long as the city repaired the pothole in a timely fashion, once it was put on notice of the hazard, there was no breach of duty. The city would not be "legally liable."

l A resident has a storm water or sewer back up. Our members have a duty to maintain the storm drain and sewer lines. If the back up was caused by a blockage or overcharged system due to heavy rains, the city would not be "legally liable." The city's duty would be to clear the blockage when put on notice and to make sure all pump stations are functioning properly in order to alleviate as much water as possible during heavy rains.

l Storm water from a new development floods an adjoining property. The city owes a duty to control the storm water rate of flow from a new development in a way that does not damage people's property. If the city failed to properly control the water, it breached its duty and is "legally liable." The city would be required to resolve the problem at its own expense.

Hopefully, these examples will create a better understanding of legal liability and why MVRMA may choose to pay or deny certain claims.

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Loss Control Lowdown

-Starr Markworth

In the next hour, more than 2,400 drivers will be involved in motor vehicle collisions in the United States. Five deaths will occur from these collisions in addition to 230 disabling injuries and an estimated loss of $19 million. A projected 67% of these accidents are caused by human error and improper driving techniques.

Recognizing the importance of driver training for increasing a driver's skill and overall awareness of vehicle safety, MVRMA set out in 1999 to establish its own driver training program. It contracted with the National Association for Professional Driving to certify driving instructors in several MVRMA cities. Today, there are 11 certified instructors in eight MVRMA municipalities who train their city's employees as well as assist in pool sponsored heavy vehicle driver training. These certified trainers also bring expertise in the areas of Public Works or Fire, making the course extremely valuable.

MVRMA will be sponsoring four two-day heavy vehicle driver training sessions this spring. These courses are geared toward employees in the Public Works and Fire Departments, or others who drive heavy vehicles. The first day of training is classroom instruction, which will be held at the MVRMA office. The second day provides practical experience on a course specifically designed for this training. It will be held in the parking lot of the Miamisburg Mound Advanced Technology Center. Participants will be asked to bring a city vehicle to use on the track the second day.

Heavy Vehicle Driver Training is scheduled for April 8-9, April 22-23, May 6-7 and May 20-21. As you may remember from a previous article, this class offers 12 contact hours for water, wastewater or water distribution operators. Please contact the MVRMA office for additional information or to register for training. The class size is limited to 15 participants, so register early!

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Brokers Beat

How Do You Insure Older or Historical Buildings?

Many public entities maintain older arenas, coliseums and stadiums that have long exceeded their intended useful life. Because of tradition, political pressure and/or economics, replacement of these aging facilities is not possible. Risk managers responsible for the insurance on these facilities are often concerned about adequate coverage. How should these facilities be insured? Insurance strategies are totally dependent on the goals and objectives of the public entity should the structure be partially or totally destroyed in a casualty loss. For some entities, the structures in question have a historical value they want to preserve. For others, they look to the functional purpose of the facility and want to replace the existing structure with a more up to date facility. Estimating values in a public entity environment is often tricky. Some public entities believe every dollar spent to improve or maintain a facility adds to the ultimate insurance value of the facility. They are often stunned to learn that rehabilitating a structure to increase its functionality doesn’t necessarily increase its value.

Accurate property valuations are another concern when talking about these historic structures. There is a limited pool of qualified building appraisers that can properly evaluate their reconstruction costs. While many architects and engineers can assist with the cost estimates for a new, ground up structure, they often cannot evaluate the cost to repair a partially damaged structure. Repair to historic buildings also involves a certain amount of conflict between those who will demand a faithful reconstruction to historical standards and those who want simply a cosmetic repair. Knowing the intent of the coverage before the loss is of paramount importance, as these conflicts in desires are often resolved in legal action.

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Coming Events

Diversity Training (Approved for Ohio EPA Contact Hours)

Session I 9:00 am - noon

Session II 1:00-4:00 pm

MVCC

8:00 am - 4:00 pm

NAPD Driver Training (Approved for Ohio EPA contact Hours)

MVRMA Offices/Mound

Hot Topics Luncheon - Media Relations

11:30 am - 1:00 pm

Location TBA

Pool and Chemical Safety

1:00 - 4:00 pm

MVCC

Chain Saw Safety

8:30 - 11:30 am or

12:30 - 3:30 pm

MVCC

Customer Service

9:00 am - noon or

1:00 - 4:00 pm

MVCC

May 4

Ethics/Open Records

Times TBA

MVCC

May 6 through October 7

Supervisor Training (Approved for Ohio EPA Contact Hours)

MVCC

May 19

Trenching and Excavation (Approved for Ohio EPA Contact Hours)

8:00 am - 4:00 pm

West Carrollton

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For the loss year ended December 31, 2002, the Overall Award for the lowest dollar losses per full-time employee was awarded to the City of Wyoming with losses of $7.71 per employee. The runner-up award was presented to the City of Vandalia with losses of $44.30 per employee.

Individual department winners (each with zero losses) were as follows:

Departments recognized with three or more consecutive zero loss years were the following:

Police	Tipp City and Wilmington (3 years)
Parks & Recreation	Madeira (8 years) Springdale (3 years)
Water & Wastewater	Vandalia (9 years) Miamisburg & West Carrollton (4 years)

The only cities that qualified for the Standard of Excellence (losses of $100 or less per employee) were the overall winner Wyoming and the 2002 runner-up Vandalia.

Congratulations to all our winners and all departments that ended the year with zero losses. Enjoy your celebrations and take pride in your loss record. 

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SPEC Awards

At the June Board Meeting, Ms. Markworth presented the 2003 SPEC Awards. SPEC (Safety Performance Evaluation Checklist) is an annual safety and loss control audit conducted for each member city. Members are rated by percentage of compliance with recommended policies and procedures. An Ascension Award is given to the city with the most improved compliance, and the Pinnacle Award is presented to the city with the highest percentage of compliance.

This year's Ascension Award went to the City of Vandalia which improved its compliance 10.33%. The Pinnacle Award was presented to two cities, both of which had 100% compliance, the Cities of Troy and Vandalia. This was Troy's third straight year with a perfect score! We're very proud of both cities and applaud their attention to safety and loss control. 

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Montgomery Receives Aa1 Bond Rating

4 MVRMA Cities Among Top 50