California Sanitation Risk Management Authority: - 2014 Annual … · 2015-01-22 · In September 2013, the State Water Board began requiring wastewater system operators to develop

“The California Sanitation Risk Management Authority provides broad coverage and risk control services to its members.”

2014 Annual ReportC A L I F O R N I A S A N I T A T I O N R I S K M A N A G E M E N T A U T H O R I T Y

Dear Members and Friends of CSRMA:

CSRMA is a seasoned risk pool providing broad programs of coverage and an array of risk control services to its membership. This has been our mission since our founding, and with the continued assistance of our members, business partners and concerned members of the public, we continue down the path of protecting public resources through reducing the risk of loss.

This past year has been a busy one for our pool. In this report, we highlight our recent accomplishments and describe the notable activities that we have planned for the coming year. In this space, I would like to share a few of our achievements that warrant special note.

In keeping with CSRMA’s stated vision, “To sustain cutting edge services and values that fulfills our member’s long term needs”, CSRMA invested in the development of mobile technology to better aid our members when responding to sewer backups. CSRMA’s “SMART SSO/Backup Response Application” was launched earlier this year. Its sophisticated technology and tailored interface is designed to specifically address the needs of our membership. We feel that this product will greatly enhance our members’ ability to respond, remediate and reduce the reoccurrence of the number one cause of loss to CSRMA.

Several sanitation districts throughout the state of California, including some CSRMA members, have faced Clean Water Act Citizens Suits. Given the concern over water safety, there is reason to believe that such actions will continue. In an effort to address this growing concern, CSRMA made a contribution to the UC Berkeley Wheeler Institute to fund their research into Clean Water Act Citizens Suits with the hope that greater research and analysis will help address the concerns of the public.

From an operational and financial perspective, CSRMA continues to be Accredited with Excellence by the California Association of Joint Powers Authorities (CAJPA), and continues to maintain the Certificate of Achievement for Excellence in Financial Reporting from the Government Finance Officers Association. These distinctions speak to the commitment of our Board Members and staff to maintain the highest quality operations that we can in carrying out our responsibilities to our members and the public we serve.

On a more personal note, after 15 years of service to CSRMA on various Committees and the Executive Board, I am sad (and happy!) to announce that I am retiring as Board President. It has been an honor and a privilege to serve the membership over these many years, and it is comforting to know that the good work that has been performed by all who I have been fortunate to work with will continue into the future.

Sincerely,

Russ BaggerlyCSRMA President of the Board

PRESIDENT’S MESSAGE

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FINANCIAL SUMMARY

The CSRMA Joint Powers Authority keeps its financial records in accordance with Government Accounting

Standards Board (GASB) recommendations and produces a comprehensive annual financial report each year.

Investments are governed by a Board approved policy and procedure. Cash beyond short-term needs is invested

with California’s Local Agency Investment Fund and the California Asset Management Program.

70%

8% 1% 21% Cash and CashEquivalents

Investments

Prepaid Expenses

Accounts Receivable

Cash and Cash Equivalents 5,654,564$Investments 19,331,769$Prepaid Expenses 2,086,324$Accounts Receivable 306,416$

TOTAL: 27,379,073$

ASSETS

Claims Reserves

Claims Incurred butnot Reported

Unallocated LossAdjustment Expenses

Deferred Revenue

Accounts Payable

Retained Earnings

41%

1%

25%

21% 4% 8%

Claims Reserves 6,847,036$Claims Incurred but not Reported 5,751,820$Unallocated Loss Adjustment Expenses 1,169,951$Deferred Revenue 2,452,346$

Retained Earnings 10,965,694$Accounts Payable 192,226$

TOTAL: 27,379,073$

LIABILITIES & RETAINED EARNINGS

41%

% 21%

SUMMARY BALANCE SHEET - AS OF JUNE 30, 2014

INCOME STATEMENT - 2013/2014 FINANCIAL POSITIONFiscal Years 2008 - 2014

Tota

l (in

Mill

ions

)

Fiscal Year Ended June 30, 2014

Total Expenses Total Revenues Net Income (Loss)

-$2 -$1 $0 $1 $2 $3 $4 $5 $6 $7 $8 $9

$10 $11 $12

2008 2009 2010 2011 2012 2013 2014

Revenue

Member Contributions $Retrospective Contributions $Member Fees $Interest Income $Other $TOTAL REVENUE $

Expenses

Program Expenses $Dividends $General & Administrative $TOTAL EXPENSES $

Net (Loss) Income $

9,598,715-420,099

1,269,383316,57148,400

10,812,970

9,382,9392,370,674

133,99511,887,608

-1,074,638

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CSRMA Members can choose to participate in the JPA’s “pooling” programs: The Pooled Liability Program and the Workers’ Compensation Program.

These programs are an alternative to traditional commercial insurance, in that they are member owned and

operated. Interest earning funds are placed on deposit with the Authority where they are used to pay members’

claims and related expenses. Funds not spent or reserved are refunded to members through retrospective

rating adjustments and dividend payments.

POOLED LIABILITY PROGRAMThe Pooled Liability Program provides its members with

third party liability coverage specifically designed to meet

the exposures faced by the wastewater industry. Members

are provided with coverage for General Liability, Automobile

Liability, Employment Practices Liability and Public Entity

Errors and Omissions Liability.

2014 Accomplishments• Over $1.1 million was returned to the members in

dividend payments;

• Over $800,000 was returned to the members in retrospective rating adjustments;

• Liability claims trended favorably resulting in a

reduction in the funding level for the Program.

POOLED WORKERS’ COMPENSATION PROGRAMThe Workers’ Compensation Program provides State

mandated benefits to employees of member agencies.

The Program enables its members to retain control of the

cost and delivery of services to participating members.

2014 Accomplishments• Nearly $150,000 was returned to the members in

retrospective rating adjustments;

• The Program’s claims frequency and severity continue to fall below the California industry average.

• A claims audit was performed this year. The claims adjusting firm, York Risk Services Group, continues to provide effective claims administration for the Authority.

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SHARED RISK PROGRAMS

Pooled Liability Program Loss History

Incu

rred

Loss

esTh

ousa

nds

Fiscal Year Ended June 30, 2014

The graph shows a 10-year loss history for the pooled liability program. Each policy year's losses are broken down among paid claims, claim reserves established by the claims administrator, claims incurred but not reported (IBNR) as determined by the actuary and unallocated loss adjustment expenses (ULAE), also determined by the actuary. Although there are not a significant number of open claims, the actuary's projections include a fair amount of IBNR outstanding for the last 3 years.

IBNR ULAEReservePaid

$0 $200 $400 $600 $800

$1,000 $1,200 $1,400 $1,600 $1,800 $2,000 $2,200 $2,400

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Pooled Workers’ Compensation Program Loss History

Incu

rred

Loss

esTh

ousa

nds

Fiscal Year Ended June 30, 2014

IBNR ULAEReservePaid

The graph shows a 10-year loss history for the workers' compensation program. Each policy year's losses are broken down among paid claims, claim reserves established by the claims administrator, claims incurred but not reported (IBNR) as determined by the actuary and unallocated loss adjustment expenses (ULAE), also determined by the actuary. This program has a number of open claims over the last 5 years, and the majority of IBNR projected by the actuary is in those years.

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

GROUP PURCHASE PROGRAMS

CSRMA Group Purchase Programs provide members the benefit of buying power while assuring that special needs will be addressed.

PRIMARY INSURANCE PROGRAM (PIP)The PIP provides the clout of a group purchase program, offering competitive pricing to its members. The Program continues to afford coverage for General Liability, Automobile Liability, Employment Practices Liability, Public Entity Errors & Omissions and Auto Physical Damage to members that do not wish to pool their risk with other members.

PROPERTY INSURANCE PROGRAMThe Property Program provides the benefit of a group purchase program offering its members “All-Risk” Property and Boiler & Machinery insurance. This includes Terrorism, Pollution Legal Liability specific to a member’s SOV, and Cyber Liability.

Members have the ability to manage their property schedules over the internet through the Program Administrator’s OASYS-NET System.

ANCILLARY COVERAGESCSRMA members have access to an array of group purchase programs made available by the Program Administrators, including but not limited to:

Public Entity Vehicle & Mobile Equipment Physical Damage Program

This Program provides “All-Risk” property (physical damage) coverage for private passenger vehicles, light trucks and high value specialized vehicles with limited “over-the-road” exposures.

Crime/Bond Programs

The Commercial Crime Program affords its members with public employee dishonesty coverage. Additional coverages available include forgery or alteration, theft, disappearance and destruction of money and securities and computer fraud. The Public Official Bond Program provides its members with coverage for dishonest acts of public officials.

Special Events Liability Program

The Special Events Liability Program grants its members with protection against third party liability for bodily injury, personal/advertising injury and property damage resulting from a covered special event. Special events include receptions, tours and parties.

Vendors/Contractors General Liability Program

The Vendors/Contractors General Liability Program furnishes general liability coverage for a wide range of vendors and contractors.

Pollution and Remediation Legal Liability Program

The Pollution and Remediation Legal Liability Program provides coverage for environmental exposures unique to the wastewater industry.

Storage Tank Program

The Storage Tank Program furnishes its members with third party pollution legal liability and clean-up for above and below ground storage tank exposures.

Identity Fraud Reimbursement

Reimburses employees and board members of member agencies, and their spouses, with coverage for identity theft related expenses. Includes attorney’s fees, lost wages, notary and certified mail charges, and fees to re-apply for loans that were denied as a result of the identity theft. This coverage is provided to all CSRMA members.

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RISK CONTROL SERVICES

CSRMA continued its tradition of providing leading

edge risk control services for its members this year by

introducing many new products and services tailored

to the unique loss exposures facing CSRMA.

NEW Sanitary Sewer Overflow and Backup Response Mobile Application – CSRMA partnered with DKF

Solutions Group, LLC to develop the first and the only

mobile app designed to document sewer overflows

and backups in accordance with State Water Board

and CSRMA claims handling requirements. The app

runs on iPads and Android tablets, as well as laptops

and desktop computers. The app helps ensure

uniform, consistent and reliable documentation,

including photos/video and takes the guesswork out

of determining defensible SSO volume estimates –

something the regulators have been ratcheting up

enforcement on. For more information, or to download,

please go to http://www.dkfsolutions.com/smart/.

NEW Sewer Summit 2014 - CSRMA joined forces

with the Association of Bay Area Governments Pooled

Liability Assurance Network (ABAG PLAN) to cosponsor

the 2014 Sewer Summit in Fremont on November 13. This event is designed to bring together wastewater

professionals and regulators to hear the latest on

sewer overflow prevention, regulatory compliance and

employee safety. Over 180 people representing over

60 cities and wastewater districts attended the event.

Attendees had the opportunity to choose four different

topics out of the twelve offered in order to customize

the information most useful to them and their agency.

NEW CSRMA Water Quality Monitoring Plan –

In September 2013, the State Water Board began

requiring wastewater system operators to develop a

Water Quality Monitoring Plan. This plan is required

to be implemented for any sewage spills to surface

waters of 50,000 gallons or more. Understanding the

complexity of surface water sample collection means

– selecting sample locations, sample collections,

preservation and chain of custody procedures amongst

many other things CSRMA developed a model Water

Quality Monitoring Plan addressing not only the

regulatory requirements, but also legal defensibility of

the data collected. Reviewed by subject matter experts

and the State Water Board, CSRMA leads the way in

developing timely and effective turnkey risk control

resources and solutions.

Expansion of CSRMA Risk Control Online -

This platform, custom built and designed for CSRMA

members and their needs, offers an employee training

management system, online at CalOSHA, wastewater

specific training and other professional level risk

control resources. New features added this year

include:

• Updated and expanded CalOSHA Compliance

Interactive Tools, covering 20 of the most common

regulations impacting members

• Interactive Electrical Switchgear Inspection and

Maintenance Guide

• Training module covering the safe collection of

surface water samples in the event of a sewer spill

Wellness Program Reimbursement Incentive – Employee health promotion or wellness programs

effectively address many of the underlying causes

of occupational and non-occupational injuries. This

program is intended to assist members of the Workers’

Compensation Program with the development

and implementation of an onsite employee health

promotion program by offering up to $1,200/fiscal year

in reimbursement dollars for wellness efforts.

5

RISK CONTROL SERVICES & FUTURE CSRMA

Risk Control and Safety Program Reimbursement Incentive – This reimbursement program is intended to provide an incentive for members of the Pooled Liabiltiy and Workers’ Compensastion Programs to go beyond basic compliance to a higher level of risk control by offering up to $2,000/fiscal year reimbursement for safety and risk control efforts for members participating in both programs. Members can also use the reimbursement funds to attend risk management and safety seminars and associated travel expenses.

Risk Control Seminars and Webinars – Offered on-site or online, just some of the following topics this year included:

• Mobile App for SSO Response & Volume Estimation• SSO’s and Water Quality Monitoring Plans • Overflow Emergency Response Plans• Defensible Sewer Overflow Volume Estimations• Fall Protection: CalOSHA’s Requirements for

Wastewater and Public Works• Employment Law Update for Public Agency

Managers• Millennials in the Workplace

2014 CSRMA Workers’ Compensation Excellence Award Winners - The 2013/14 CSRMA Workers’ Compensation Excellence Award Program recognizes those members of the Workers’ Compensation Program who achieve the best loss record for the policy year in three measurement categories.

The following 2013/14 Program Year Award Winners were:• Sewer Authority Mid-Coastside• Castro Valley Sanitary District • Goleta West Sanitary District• Oro Loma Sanitary District• Leucadia Sanitary District • Selma-Kingsburg-Fowler County Sanitation

District• Mt. View Sanitary District • Stege Sanitary District • San Elijo Joint Powers Authority• West County Wastewater District• Union Sanitary District• South Orange County Wastewater Authority

2014 CSRMA SHELL Award Winners - The CSRMA Executive Board is proud to announce the results of the CSRMA Safety, Health, Environmental, Liability and Losses (SHELL) Award! All applications submitted described Workers’ Compensation and General Liability loss control efforts that were both innovative and aggressive.

The winning agency’s employees split a $10,000 cash prize.

The 2014 SHELL Award winner is: Fairfield-Suisun Sewer District

Workers’ Compensation Consulting Services – CSRMA continued to benefit from the services of Heather Truro at HT Consulting. She is a Workers’ Compensation claims management specialist who has been retained by CSRMA to provide assistance to our members with Workers’ Compensation issues; in particular, by implementing the Workers’ Compensation Claims Management Program and the CSRMA Online Job Description Builder.

What the Future Holds:CSRMA looks forward to even more innovative and valuable products and services in 2015, including:• Network and SCADA Security and Penetration

Risks and Risk Control Strategies• Aggressive Animal Risk Reduction Techniques• Waterborne and Bloodborne Disease Transmission

Prevention Resources• Targeted Ergonomics and Biomechanics Training

for Non-Office Personnel• Sewer Summit 2015 in Northern California and

Southern California• More training resources on Risk Control Online

In short, the future goal of CSRMA Risk Control remains as it always has been – to provide in-depth, intelligent, loss control solutions, soundly conceived and practically executed.

For questions related to risk control services, contact David Patzer at: [email protected]

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Mr. Russ Baggerly, PresidentOjai Valley Sanitary District

Mr. Paul Bushee, Vice-PresidentLeucadia Wastewater District

Mr. George Emerson, SecretaryGoleta Sanitary District

Mr. Kenneth Spray, TreasurerVallejo Sanitation & Flood Control District

Craig MurrayCarpinteria Sanitary District

Mr. Jason WarnerOro Loma Sanitary District

Mr. Greg BaatrupFairfield-Suisun Sewer District

Mr. Logan OldsVictor Valley WRA

Mr. Bert MichalczykDublin San Ramon Services District

Mr. Dan ChildSilicon Valley Clean Water

Executive Board & Off icers

Program Administrators

Seth Cole(415) 403-1419

Phuntsok Gaphel(415) 403-1447

Myron Leavell(415) 403-1404

Tami Giovanni(925) 963-0951

Tevea Him(415) 403-1416

P.J. Skarlanic(415) 403-1455

Dennis Mulqueeney(415) 403-1421

David Patzer(707) 373-9709

Marilyn Schley(415) 403-1432

Thary Ou(415) 403-1433

Shadi Jalali(415) 403-1497

c/o Alliant Insurance Services, Inc.100 Pine Street, 11th FloorSan Francisco, CA 94111-5101Main: 415.403.1400Fax: 415.874.4813www.csrma.org