2013 agendas.xls 1 1/10/2013 c/o ALLIANT INSURANCE SERVICES 100 Pine Street, 11th Floor, San Francisco, CA 94111 Tel: 415.403.1400 Fax: 415.874-4813 OFFICERS: Russ Baggerly, President Robert Reid 805.646.5548 2006-2010 Paul Bushee, Vice President Kevin Hardy 760.753.0155 2003-2006 Date/Time: Friday, January 18, 2013 LOCATION: Renaissance Esmeralda 8:00 AM 44-400 Indian Wells Lane American Breakfast: 7:30 - 8:00 AM Indian Wells, CA 92210-8708 Hotel Phone: (760) 773-4444 Room: Valencia I - IV A. CALL TO ORDER A = Action I = Information B. PUBLIC & BOARD MEMBER COMMENTS V = Verbal S = Separate C. CONSENT CALENDAR H = Handout 1. Meeting Minutes August 10, 2012 A p. 3 D. GENERAL ADMINISTRATION 1. Executive Board Elections A p. 8 2. Acceptance of Financial Audit - June 30, 2012 A/S p. 9 3. Annual Operating Report H 4. Investment Performance Review I/S p. 10 5. Budget to Date Report as of December 31, 2012 I p. 11 E. OFFICER/STAFF/COMMITTEE REPORTS 1. Pooled Liability Program a. Post Renewal Report I p. 19 b. Declaration of Dividend at December 31, 2012 A p. 22 c. Quarterly Claims Report as of December 31, 2012 I p. 24 2. Workers' Compensation Program a. Quarterly Claims Report as of December 31, 2012 I p. 25 b. PY 22 11/12 Workers' Compensation Excellence Awards I/H p. 26 3. Primary Insurance Program a. Post Renewal Report I p. 27 4. Property Program a. Property Program Renewal Preliminary Thoughts and Planning V F. RESOLUTIONS 1. Resolution Recognizing the Contributions of Marcia Beals A p. 28 2. Resolution Recognizing the Contributions of Talyon Sortor A p. 30 3. Resolution Recognizing the Contributions of Zoeanne Tafolla A p. 32 4. Resolution Recognizing the Contributions of Al Miller A p. 34 5. Resolution Recognizing the Contributions of E.J. Shalaby A p. 36 G. INFORMATION ITEMS 1. PEPIP Pollution (ACE) Loss Reporting Bulletin I p. 38 2. Article - Superbug Identified in US Wastewater Treatment Plants I p. 42 3. I p. 44 4. Article - As Solar Power Gained Traction, So does Installation Theft I p. 50 5. Article - Study warns of $66 billion annual increase in medical costs by 2030 I p. 53 6. CSRMA 2013 Meeting Calendar I p. 54 7. CSRMA Organizational Chart I p. 55 8. CSRMA Service Team I p. 56 H. GUEST SPEAKER 1. Liability and Workers' Compensation Loss Analysis - David Patzer, CSRMA Risk Control Advisor V I. ADJOURNMENT Article - What if a superstorm strikes Sacramento - Flooding danger puts the capital at risk of a disaster worse than Sandy BOARD OF DIRECTORS AGENDA CSRMA California Sanitation Risk Management Authority Insurance License No.: 0C36861 PAST PRESIDENTS: The next meeting is scheduled for April 26, 2013 Per Government Code section 54954.2, persons requesting disability-related modifications or accommodations, including auxiliary aids or services in order to participate in the meeting, are requested to contact Alliant at (415) 403-1400 twenty-four hours in advance of the meeting. Entrance to the meeting location requires routine provision of identification to building security. However, CSRMA does not require any member of the public to register his or her name, or to provide other information, as a condition to attendance at any public meeting and will not inquire of building security concerning information so provided. See Government Code section 54953.3.
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2013 agendas.xls 1 1/10/2013
c/o ALLIANT INSURANCE SERVICES 100 Pine Street, 11th Floor, San Francisco, CA 94111 Tel: 415.403.1400 Fax: 415.874-4813
OFFICERS:Russ Baggerly, President Robert Reid805.646.5548 2006-2010Paul Bushee, Vice President Kevin Hardy760.753.0155 2003-2006
Date/Time: Friday, January 18, 2013 LOCATION: Renaissance Esmeralda8:00 AM 44-400 Indian Wells LaneAmerican Breakfast: 7:30 - 8:00 AM Indian Wells, CA 92210-8708
Hotel Phone: (760) 773-4444Room: Valencia I - IV
A. CALL TO ORDER A = ActionI = Information
B. PUBLIC & BOARD MEMBER COMMENTS V = VerbalS = Separate
C. CONSENT CALENDAR H = Handout1. Meeting Minutes August 10, 2012 A p. 3
D. GENERAL ADMINISTRATION1. Executive Board Elections A p. 82. Acceptance of Financial Audit - June 30, 2012 A/S p. 93. Annual Operating Report H4. Investment Performance Review I/S p. 105. Budget to Date Report as of December 31, 2012 I p. 11
E. OFFICER/STAFF/COMMITTEE REPORTS1. Pooled Liability Program
a. Post Renewal Report I p. 19b. Declaration of Dividend at December 31, 2012 A p. 22c. Quarterly Claims Report as of December 31, 2012 I p. 24
2. Workers' Compensation Programa. Quarterly Claims Report as of December 31, 2012 I p. 25b. PY 22 11/12 Workers' Compensation Excellence Awards I/H p. 26
3. Primary Insurance Programa. Post Renewal Report I p. 27
4. Property Programa. Property Program Renewal Preliminary Thoughts and Planning V
F. RESOLUTIONS1. Resolution Recognizing the Contributions of Marcia Beals A p. 282. Resolution Recognizing the Contributions of Talyon Sortor A p. 303. Resolution Recognizing the Contributions of Zoeanne Tafolla A p. 324. Resolution Recognizing the Contributions of Al Miller A p. 345. Resolution Recognizing the Contributions of E.J. Shalaby A p. 36
G. INFORMATION ITEMS1. PEPIP Pollution (ACE) Loss Reporting Bulletin I p. 382. Article - Superbug Identified in US Wastewater Treatment Plants I p. 423. I
p. 444. Article - As Solar Power Gained Traction, So does Installation Theft I p. 505. Article - Study warns of $66 billion annual increase in medical costs by 2030 I p. 536. CSRMA 2013 Meeting Calendar I p. 547. CSRMA Organizational Chart I p. 558. CSRMA Service Team I p. 56
H. GUEST SPEAKER1. Liability and Workers' Compensation Loss Analysis - David Patzer, CSRMA Risk Control Advisor V
I. ADJOURNMENT
Article - What if a superstorm strikes Sacramento - Flooding danger puts the capital at risk of a disaster worse than Sandy
BOARD OF DIRECTORS AGENDA
CSRMA California Sanitation Risk Management Authority
Insurance License No.: 0C36861
PAST PRESIDENTS:
The next meeting is scheduled for April 26, 2013
Per Government Code section 54954.2, persons requesting disability-related modifications or accommodations, including auxiliary aids or services in order toparticipate in the meeting, are requested to contact Alliant at (415) 403-1400 twenty-four hours in advance of the meeting. Entrance to the meeting location requiresroutine provision of identification to building security. However, CSRMA does not require any member of the public to register his or her name, or to provide otherinformation, as a condition to attendance at any public meeting and will not inquire of building security concerning information so provided. See Government Codesection 54953.3.
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CALIFORNIA SANITATION RISK MANAGEMENT AUTHORITY BOARD OF DIRECTORS MEETING
AUGUST 10, 2012 SAN DIEGO, CALIFORNIA
MEMBERS PRESENT Craig Murray, Carpinteria Sanitary District Roland Williams, Castro Valley Sanitary District Bill Bosworth, Cupertino Sanitary District Kevin Hardy, Encina Wastewater Authority Talyon Sortor, Fairfield/Suisun Sewer District George Emerson, Goleta Sanitary District Russell Greenfield, Las Gallinas Valley Sanitary District Judy Hanson, Leucadia Wastewater District Beverly James, Novato Sanitary District Russ Baggerly, Ojai Valley Sanitary District Jason Warner, Oro Loma Sanitary District Doris Toy, San Rafael Sanitation District Ben Munoz, Selma-Kingsburg-Fowler County Sanitation District Ron Shepherd, South Bayside System Authority Al Miller, Stege Sanitary District Marcia Beals, Tahoe-Truckee Sanitation Agency Kenneth Spray, Vallejo Sanitation and Flood Control District Joseph Glowitz, Valley Sanitary District Phil Scott, West Bay Sanitary District George Schmidt, West County Wastewater District John Newby, West Valley Sanitation District GUESTS AND CONSULTANTS Ralph Johnson, Castro Valley Sanitary District Mark Williams, Las Gallinas Valley Sanitary District Craig K. Murray, Las Gallinas Valley Sanitary District Paul Bushee, Leucadia Wastewater District Brenda Krout, Ojai Valley Sanitary District John Simonetti, West Bay Sanitary District E.J. Shalaby, West County Wastewater District Ed Oyama, West Valley S.D. of Santa Clara County Dennis Mulqueeney, Alliant Insurance Services, Inc. Seth Cole, Alliant Insurance Services, Inc. Myron Leavell, Alliant Insurance Services, Inc. P.J. Skarlanic, Alliant Insurance Services, Inc. Janice Yardley, Carl Warren and Company Byrne Conley, Gibbons & Conley
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Carlos Oblites, PFM Asset Management LLC David Patzer, Risk Management Solutions Kay Patzer, Risk Management Solutions Esther Becker, Towers-Watson A. CALL TO ORDER The meeting was called to order by President Russ Baggerly at 8:10 a.m. B. PUBLIC COMMENTS None. C. BOARD MEMBER COMMENTS Al Miller, Stege Sanitary District, remarked that the training presented by Gordon Graham at the CSRMA Training Session was excellent. D. CONSENT CALENDAR D.1. Meeting Minutes – April 27, 2012 The minutes of the meeting on April 27, 2012 were reviewed. A motion was made to accept the minutes as presented. MOTION: George Emerson SECOND: Al Miller MOTION CARRIED E. GENERAL ADMINISTRATION E.1. Investment Update CSRMA Treasurer, Ken Spray, introduced Carlos Oblites, of PFM Asset Management LLC, CSRMA’s Financial Advisor, who presented the Investment update to the Board. He reviewed the 2nd Quarter Investment Report, prepared by PFM, which was included with the agenda packet. The report summarizes CSRMA’s current investments, discusses the portfolio’s performance and provides a market outlook. Ken explained that the long-term approach selected by CSRMA continues to work well in relation to the general state of the economy and that PFM continues to perform its function very well for CSRMA. There were no questions from the Board. E.2 Budget to Date Report as of June 30, 2012 Ken Spray reviewed the Budget to Date Report with the Board. He reported that revenues are ahead of expenses and there are no major concerns about CSRMA’s finances at this time.
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E.3 Certificate of Achievement for Excellence in Financial Reporting Ken Spray was happy to announce to the Board that CSRMA was awarded the Certificate of Achievement for Excellence in Financial Reporting for its Comprehensive Annual Financial Report (CAFR) for the Fiscal Year Ended June 30, 2011. Russ Baggerly congratulated Ken Spray and staff for their hard work. F. OFFICER/STAFF/COMMITTEE REPORTS F.1. POOLED LIABILITY PROGRAM F.1.a. Quarterly Claims Report as of June 30, 2012 Seth Cole reviewed the Quarterly Claims Report on page 19 of the agenda with the Board. He reported that the loss ratio for the current program year is below the Program’s rolling average over the last 25 years. F.2. WORKERS COMPENSATION PROGRAM F.2.a. Program Year 23 (2012/13) Post Renewal Report Seth Cole reviewed the Post Renewal Report with the Board, and directed their attention to the table depicted on page 20 of the agenda. The Program renewed with an overall increase of 7.8%. Seth explained that this increase is due in large part to an increase in payroll combined with a 4.5% increase in the pure premium rate. Another contributing factor to the increase in the ultimate net loss projection is a decrease in the interest rate assumption from the prior year of 3.5%. The Program Administrators consulted with the Authority’s financial advisor and actuary to arrive at a 2.5% discount rate for the renewal. The total expected costs for the 2012/13 renewal were $4,220,903. F.2.b. Dividend Calculation as of December 31, 2011 President Russ Baggerly reviewed the Dividend Calculation with the Board. The Calculation resulted in a $1,487,805 Dividend to be returned to the Workers’ Compensation Program members. A motion was made to declare a Dividend of $1,487,805 to the membership. MOTION: Ron Shepherd SECOND: Kevin Hardy MOTION CARRIED F.2.c. Quarterly Claims Report as of June 30, 2012
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Seth Cole reviewed the Quarterly Claims Report with the Board on page 25 of the agenda packet. Although there was a reduction in frequency in the 2011-12 program year, there was an increase in severity due to one large claim in that period, resulting in an uptick in the loss ratio. F.3. PROPERTY PROGRAM F.3.a. Program Year (2012/13) Post Renewal Report Dennis Mulqueeney reported that the Property Program renewed with an overall increase of 19.60% in total costs. CSRMA’s actual rate increased 11.87%. This combined with an 8.37% increase in the rating basis (“Total Insurable Values”) resulted in the overall increase. Dennis explained that in 2011, the property insurance market experienced its worst underwriting results since 2005. The large losses experienced by the global insurance market in 2011, such as the Tōhoku Japan Earthquake, coupled with the 1st Quarter 2012 tornado losses contributed to an overall hardening of the property market. Anticipating a rate increase, the Program Administrators conducted a full marketing process in an effort to explore CSRMA’s alternatives. The Public Entity Property Insurance Program (PEPIP), even with the increase, remained the best property insurance purchase for CSRMA. F.4. PRIMARY INSURANCE PROGRAM - None F.5. LOSS CONTROL F.5.a Presentation of the 2012 SHELL Award Winner David Patzer reviewed the CSRMA SHELL Award process with the Board of Directors explaining that it takes a fair amount of work to successfully complete the application process. This year three applications were submitted: Central Marin Sanitation Agency, Fairfield-Suisun Sewer District and West Bay Sanitary District. All were exceptional. In keeping with the Summer Olympics, Gold, Silver and Bronze medals were awarded. David announced the winners: Gold – West Bay Sanitary District, Silver – Central Marin Sanitation Agency, and Bronze – Fairfield-Suisun Sewer District. G. INFORMATION ITEMS G.1. W.H.O. designates radiation from cell phones as a possible carcinogen - Article The Board of Directors reviewed this article. G.2. Noting a “Job Well Done” Goes a Long Way to Keeping Your Best Employees - Article The Board of Directors reviewed this article.
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G.3. Impact of Obesity on HC and WC cost could be greater than thought - Article The Board of Directors reviewed this article. G.4. Missing Your Desk Because of Clutter? - Article The Board of Directors reviewed this article. G.5. Cybercriminals Sniff Out Vulnerable Firms - Article The Board of Directors reviewed this article. G.6. CSRMA 2012 Meeting Calendar The Board of Directors reviewed the 2012 Meeting Calendar. G.7. CSRMA Organizational Chart The Board of Directors reviewed the CSRMA Organizational Chart. G.8. CSRMA Service Team Chart The Board of Directors reviewed the CSRMA Service Team Chart. H. GUEST SPEAKER H.1. CSRMA Comparison to the California Workers Compensation Industry Ms. Esther Becker of Towers-Watson provided a comparison of CSRMA’s Workers’ Compensation Program results to the California Workers’ Compensation Industry and provided a market outlook. CSRMA continues outperform the industry average. I. ADJOURNMENT The meeting was adjourned at 9:21 a.m. The next meeting is scheduled for January 18, 2013 at the CASA Conference.
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Agenda Item No. D1 Board of Directors Meeting
Meeting Date: January 18, 2013
2013 Executive Board Elections ISSUE: The following table depicts the expiring Executive Board membership, and the eligibil-ity of members whose terms are expiring. A Nominating Committee of Kevin Hardy and Robert Reid was formed to administer the election process including recommending a slate of candidates for the open positions.
Position Current Member Expiring Term Eligible for Reelection President Russ Baggerly No N/A
Vice President Paul Bushee No N/A Member #1 Talyon Sortor Yes No Member #2 Zoeanne Tafolla Yes No Member #3 Marcia Beals Yes No Member #4 Tom Rosales No N/A Member #5 Bert Michalczyk No N/A Alternate Craig Murray Yes Yes
RECOMMENDATION: The Nominating Committee is recommending the following slate of candidates:
• That Craig Murray of Carpinteria Sanitary District be elected to fill the Member #1 position vacated by Talyon Sortor.
• That Greg Baatrup of Fairfield-Suisun Sewer District be elected to fill the Member #2
position vacated by Zoeanne Tafolla.
• That Jason Warner of Oro Loma Sanitary District be elected to fill the Member #3 position vacated by Marcia Beals.
• That Logan Olds of Victor Valley Reclamation Authority be elected to fill the
Alternate Member position vacated by Craig Murray. FISCAL IMPACT: None. BACKGROUND: The CSRMA Executive Board terms of office are governed by Article III of the Bylaws and Section 12 of the Joint Exercise of Powers Agreement. Last year the nominating committee was comprised of Russ Baggerly and Robert Reid. ATTACHMENTS: 1) Section 12 of the JPA Agreement 2) Article III of the Bylaws
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Agenda Item No. D2 Board of Directors Meeting
Meeting Date: January 18, 2013
Acceptance of Financial Audit – June 30, 2012
ISSUE: Every year, CSRMA undergoes a financial audit with the results presented to the Board of Directors at their January meeting. The auditor, David Becker of James Marta & Company, will be at the meeting to discuss the results of the Audit. RECOMMENDATION: The Executive Board recommends that the Board of Directors accept the Financial Audit for Fiscal Year 2011/12. FISCAL IMPACT: The total cost of the audit was $17,000. BACKGROUND: David Becker of James Marta & Company performed the financial audit for the year ended June 30, 2011. ATTACHMENTS: 2011/2012 Comprehensive Annual Financial Report (Separate)
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Agenda Item No. D4 Board of Directors Meeting
Meeting Date: January 18, 2013
Investment Performance Review
ISSUE: Ms. Paulina Woo of PFM presented a review of CSRMA’s current investments and provided a market outlook to the Finance Committee at their November 5, 2012 meeting. PFM’s presentation is included in the agenda packet for the Board’s review. CSRMA’s current investments are summarized on pages 7 and 8 of the presentation. The portfolio’s performance is highlighted on page 2. RECOMMENDATION: None at this time. FISCAL IMPACT: Unknown. BACKGROUND: None. ATTACHMENTS: Investment Review November 5, 2012 (Separate)
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Agenda Item No. D5 Board of Directors Meeting
Meeting Date: January 18, 2013
Budget to Date Report as of December 31, 2012
ISSUE: Attached is the budget to date report as of December 31, 2012 and corresponding balance sheet. A variance report highlighting notable variances in the actual year to date figures versus what was budgeted is included. There are no major concerns about CSRMA’s finances at this writing. RECOMMENDATION: None at this time. FISCAL IMPACT: As depicted in the attached document. BACKGROUND: None. ATTACHMENTS: 1. Profit & Loss Budget to Actual 2. Variance Report
3. Balance Sheet
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California Sanitation Risk Management Authority Profit && Loss Budget vs. Actual July through December 2012
4620 · Interest Income 83,606.14 257,910.00 (174,303.86) 32.42% 2nd quarter data not yet recorded4660 · Investment Income
4660.10 · Investment Income - Realized 2,891.13 0.00 2,891.13 100.0% 2nd quarter data not yet recorded4660.15 · Investment Income - Unrealized 50,409.33 0.00 50,409.33 100.0% 2nd quarter data not yet recorded
Total 4660 · Investment Income 53,300.46 0.00 53,300.46 100.0%
Total Income 4,466,861.68 10,740,465.00 (6,273,603.32) 41.59%
Total Expense 5,897,551.43 10,500,789.00 (4,603,237.57) 56.16%
Net Ordinary Income (1,430,689.75) 239,676.00 (1,670,365.75) (596.93%)
Net Income (1,430,689.75) 239,676.00 (1,670,365.75) (596.93%)
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California Sanitation Risk Management Authority Balance Sheet As of December 31, 2012
Dec 31, 12
ASSETS
Current Assets
Checking/Savings
1002 · LAIF 6,386,685.42
1005 · General Checking - UB 247,554.11
1006 · WC Trust - UB 152,026.18
1007 · Liability Trust - UB 100,000.00
1008 · PFM/CA Asset Mgmt Program 17,898,496.24
1009 · PFM-CAMP Cash Reserve 1,050,562.09
Total Checking/Savings 25,835,324.04
Accounts Receivable
1100 · Accounts Receivable 4,743,421.38
Total Accounts Receivable 4,743,421.38
Other Current Assets
1200 · Interest Receivable 57,815.11
1540 · Prepaid Insurance Premium 2,677,198.87
1550 · Prepaid Program Directors' Fee 828,797.00
1570 · Prepaid License Fee 1,325.01
Total Other Current Assets 3,565,135.99
Total Current Assets 34,143,881.41
TOTAL ASSETS 34,143,881.41
LIABILITIES & EQUITY
Liabilities
Current Liabilities
Accounts Payable
2000 · Accounts Payable 541,648.03
Total Accounts Payable 541,648.03
Other Current Liabilities
2200 · Deferred JPA Charge 480,970.78
2210 · Deferred Program Directors' Fee 786,492.70
2220 · Deferred Pooled Deposits 3,843,911.24
2240 · Deferred Insurance Premium 2,691,464.26
Total Other Current Liabilities 7,802,838.98
Total Current Liabilities 8,344,487.01
Long Term Liabilities
2300 · Claims Reserves 6,920,339.00
2500 · Claims IBNR 6,698,241.00
2600 · Claims ULAE 1,273,280.00
Total Long Term Liabilities 14,891,860.00
Total Liabilities 23,236,347.01
Equity
3900 · Retained Earnings 12,338,244.15
Net Income (1,430,689.75)
Total Equity 10,907,534.40
TOTAL LIABILITIES & EQUITY 34,143,881.41
*** Balances are preliminary and omit interest and investment activity for the quarter ending December 2012.
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Agenda Item No. E1a Board of Directors Meeting
Meeting Date: January 18, 2013
Pooled Liability Program Post Renewal Report
ISSUE: The Executive Board approved the renewal of the Pooled Liability Program effective December 31, 2012. RECOMMENDATION: None, information only. FISCAL IMPACT: The following chart depicts the Program's renewal costs compared to last year based on actuarial projections using a 70% confidence level at a $500,000 SIR, reinsurance / excess costs at the expiring limits, and budgeted expense items:
PY 26 PY 27 2011/12 2012/13
Expense Item $25.5 million
limit $25.5 million
limit Change Pool Deposits 2,574,249 2,295,908 -278,341 -10.81% Est. Reinsurance/Excess Costs (Net): Munich Re/Ironshore 1,297,238 1,269,588 -27,651 -2.13% Est. Fixed Expense (JPA Charge) 269,392 270,078 686 0.25% Pool Deposit Fees 580,995 580,995 0 0.00% Total Expected Costs 4,721,874 4,416,569 -305,306 -6.47% Retro Adjustment -968,947 -601,315 367,632 37.94% Net Renewal Invoices 3,752,927 3,815,254 62,326 1.66%
*includes Surplus Lines taxes and fees on the $10M xs $15M layer. BACKGROUND: A description of each line item in the above chart follows, as well as a discussion of other issues: 1. Pool Deposits: This is the actuary's suggested “Ultimate Net Loss” at a
70% confidence level, discounted at 2.5%. 2. Reinsurance / Excess Cost: This is an estimate of the reinsurance / excess cost net of
commission. 3. Fixed Expenses: Estimated expenses to operate the program which include
an allocation of overall JPA expenses.
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4. Pool Deposit Fees: Fees paid to the program administrator per its contract and CSRMA's budget. Alliant is also paid a commission on the reinsurance/excess insurance placement, which offsets the pool deposit fee.
5. Retro Adjustment: The Retro plan was adopted to spread losses amongst
members. The calculation grants either returns or assessments to members based on their individual experience and the experience of the group as a whole.
6. Net Renewal Invoice: Total amount to be invoiced to Members. Factors Considered
Pool Deposits
Pool Deposits for the 2012/13 PY renewal are based on the “ultimate net loss” projection from the Towers Watson Actuarial Study performed in 2012. Towers Watson projected a 10.81% decrease in the overall funding requirements primarily due to better than expected loss experience.
Reinsurance / Excess Insurance
The reinsurance / excess expense decreased 2.13% at renewal, due in part to a decrease in mem-ber payroll. The reinsurance carrier providing coverage in excess of the pooled layer is the Mu-nich Re-Insurance America (AM Best Rating A XV). The reinsurance limits are $15,000,000 excess of $500,000 (i.e. pooled layer). Ironshore Specialty Insurance Co. (Non-admitted, AM Best Rating A – XI) provides an additional $10,0000,000 in limits bringing the total limits excess of the pooled layer to $25,000,0000. The Program Administrators approached Starr Indemnity Liability Company and Wesco Insur-ance Company (AmTrust) to obtain alternative reinsurance quotes for this year’s renewal to en-sure the expiring program remained competitively priced. Starr indicated they were unable to compete with Munich Re’s pricing and declined to offer a quote. AmTrust offered a quote for $10,000,000 in limits excess of $500,000 (i.e. pooled layer) for $946,400 via the Alliant Munici-pal Liability Program. Munich Re provides $15,000,000 in reinsurance limits. The Program Administrators actively pursued options for $15,000,000 in limits excess of $10,000,000 to bring the total limits on the AmTrust option to $25,000,000 in order to do an apples to apples compari-son to the program offered by Munich Re and Ironshore. The markets approached were unable to provide a competitive option.
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Fixed Expense (JPA Charges)
The Fixed Expense (JPA Charge) is expected to increase by 0.25%, due to a slight increase in budgeted expenses.
Pool Deposit Fees
At the contract renewal on July 1, 2012, the Program Administrators were allowed to earn up to $580,995,
based on a flat fee being offset by any insurance commission earned.
Other Factors to Consider
Alternative SIR Levels
The Executive Board elected to remain at the $500,000 SIR, as there was no cost savings associated with the assumption of a larger degree of risk, given the reinsurance carrier's pricing and actuarial projections. To move to a higher SIR ($750,000) the Program would need to charge $544,988 more in deposits. The reinsurer (Munich Re) would not drop their premiums by this amount to have a higher attachment point on the Program. The downside to this approach is the inability to return "excess" funds paid to the insurer, plus investment income to members at a later date and assuming no losses occur. Moving to a higher SIR would allow CSRMA to invest the increased deposits rather than transfer these funds to the reinsurance carrier, which in turn protects the lower SIR.
Stop Loss Aggregate
Each year, Stop Loss Aggregate coverage is considered. Munich Re provided an indication for an aggregate stop loss attaching at $3,735,000 (i.e. capping the pooled layer losses at $3,735,000 in PY 27). The limit offered was $1,000,000 excess of $3,735,000 for a premium of $166,000. The Executive Board elected not to purchase such coverage this year. This coverage is designed to protect pool assets against a series of catastrophic events in a single Program Year. ATTACHMENTS: None.
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Agenda Item No. E.1.b Board of Directors Meeting
Meeting Date: January 18, 2013
Pooled Liability Program Dividend Calculation as of 12/31/12
ISSUE: The Pooled Liability Program Policy & Procedure No. 5-L allows for dividends to be declared from completed program years if the following requirements are met:
• The program, on an aggregate basis, is funded to a 70% confidence level with retained funds in excess of the pooled layer per occurrence limit currently in force.
• Dividends cannot be declared sooner than five years after expiration of a program year. • No more than 25% of any years' retained earnings will be declared as dividends.
Program Years 1986/87, 1988/89, 1989/90, 1990/91, 1991/92, 1992/93, 1993/94, 1994/95, 1995/96, 1996/97, 1997/98, 1998/99, 1999/00, 2002/03, 2003/04, 2004/05, 2005/06, and 2006/07 are eligible for dividend declaration. RECOMMENDATION: The Executive Board recommends to the Board of Directors a decla-ration of a dividend in the amount of $711,912. FISCAL IMPACT: Declaration of the recommended dividend would reduce the program’s re-tained funds by $711,912. As of June 30, 2012, the retained funds in the program were $7,698,372. BACKGROUND: The Authority has two mechanisms with which to return retained earnings to members. The retrospective rating plan does not generally return all retained funds to members. Therefore, the authority adopted Policy & Procedure No. 5-L in order to distribute the balance of retained funds to members. Unlike the retro plan, all members are eligible to receive dividends even if a member has had a poor loss experience in the program year for which a dividend is being declared. The 1987/88, 2000/01, and 2001/02 years are not eligible for a dividend declara-tion due to negative retained earnings for these years. The dividend is calculated using the liability program matrix as of June 30, 2012 and the retro-spective rating plan calculation as of December 31, 2012. If a dividend were declared, dividend checks would be distributed to each of the members. The attached documents show the members allocations at a total distribution of $711,912. ATTACHMENTS: Summary of Dividends for All Program Years.
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California Sanitation Risk Management AuthorityPooled Liability Program Summary of Dividends for All Program YearsCalculated Effective December 31, 2012
Program Program Program Program Program Program Program Program Program Program Program TotalYear 1-11 Year 12 Year 13 Year 14 Year 15 Year 16 Year 17 Year 18 Year 19 Year 20 Year 21 Amount of
Member Agency 86/87-96/97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 DividendsAliso Water Management Agency -2,683 -575 -861 -1,307 0 0 NA NA NA NA NA -5,426Bolinas C.P.U.D. 0 NA NA NA NA NA NA NA NA NA NA 0Capistrano Beach S.D. -512 NA NA NA NA NA NA NA NA NA NA -512Carmel Area Wastewater Dist. -1,919 -291 -451 -775 0 0 -1,840 -1,662 -1,701 -1,805 -3,801 -10,444Carpinteria S. D. -1,282 -262 -449 -668 0 0 -1,267 -1,264 -1,180 -1,392 -2,931 -7,764Central Marin S.A. -2,600 -537 -826 -1,190 0 0 -2,352 -2,083 -2,099 -2,502 -5,266 -14,189Dana Point S.D. -1,010 -273 -393 NA NA NA NA NA NA NA NA -1,676Delta Diablo S.D. -2,410 -559 -647 -997 0 0 -2,723 -2,959 -2,662 -2,901 -6,108 -15,858Dublin San Ramon Services District -5,157 -1,025 -1,298 -2,149 0 0 -5,889 -5,653 -3,466 -4,115 -9,350 -28,752East Bay Dischargers Authority -700 -311 -485 -661 0 0 -1,555 -1,268 -1,137 -1,287 -2,708 -7,404East Palo Alto S.D. -1,157 NA NA NA NA NA NA NA NA NA NA -1,157Encina Wastewater Authority -4,998 -1,379 -1,666 -2,416 0 0 -5,730 -5,075 -5,121 -6,260 -13,177 -32,645Fairfield/Suisun Sewer Dist. -2,027 -592 -741 -952 0 0 -2,260 -2,079 -1,887 -2,242 -4,719 -12,780Fallbrook S.D. -1,543 NA NA NA NA NA NA NA NA NA NA -1,543Goleta S.D. -3,055 -891 -1,051 -1,481 0 0 -3,228 -2,956 -2,721 -3,326 -7,002 -18,709Ironhouse S.D. -1,512 -492 -622 -842 0 0 -2,600 -2,511 -2,406 -2,932 -6,173 -13,917Lake Arrowhead C.S.D. -1,864 -2,043 -2,515 -3,620 0 0 -7,894 -4,550 -3,426 -5,295 -11,065 -31,207Las Gallinas Valley S.D. -1,808 -582 -701 -1,091 0 0 -2,410 -2,239 -2,036 -2,264 -4,765 -13,131Leucadia C.S.D. -2,705 -453 -499 -734 0 0 -1,945 -3,001 -1,633 -2,035 -4,284 -13,005Montecito S.D. -1,259 -409 -475 -647 0 0 -1,366 -1,379 -1,245 -1,574 -3,313 -8,354Monterey Regional W.P.C.A. -4,487 -1,191 -1,320 -1,863 0 0 -5,719 -5,040 -4,309 -5,848 -12,310 -29,777North of River S.D. -2,031 -525 -647 -932 0 0 -2,560 -2,373 -2,154 -2,672 -5,625 -13,894Novato Sanitary District -2,312 -607 -689 -1,001 0 0 -2,150 -1,957 -1,853 -2,184 -4,597 -12,753Ojai Valley S.D. -2,233 -629 -704 -963 0 0 -2,086 -1,936 -1,519 -2,011 -4,233 -12,081Oro Loma S.D. -2,913 -796 -902 -1,422 0 0 -3,161 -2,542 -2,257 -2,789 -5,871 -16,782Sanitary District #1 -2,465 -918 -1,088 -1,446 0 0 -3,372 -2,625 -1,969 -3,117 -6,123 -17,000Sanitary District #5 -808 -254 -380 -518 0 0 -1,237 -1,770 -896 -1,005 -2,116 -6,868Santa Margarita WD 0 NA NA NA NA NA NA -16,982 -12,613 -13,987 -31,780 -43,582Sausalito Marin City S.D. -994 -278 -391 -531 0 0 -1,279 -1,044 -913 -1,026 -2,159 -6,456Selma-Kingsburg-Fowler C.S.D. -2,415 -735 -762 -1,117 0 0 -2,470 -2,373 -2,294 -2,862 -6,025 -15,028Sewer Authority of Mid-Coastside -1,761 -531 -762 -1,030 0 0 -1,817 -2,250 -1,768 -2,347 -4,940 -12,266Sewerage Agency of Southern Marin -2,326 -699 -894 -1,284 0 0 -2,120 -1,885 -1,386 -2,437 -5,130 -13,031South Bayside System Authority -3,842 -965 -1,517 -2,152 0 0 -5,113 -4,580 -3,993 -5,174 -10,892 -27,336South East Regional R.A. -2,898 -623 -757 -1,073 0 0 NA NA NA NA NA -5,351South Orange County Wastewater Authority 0 NA NA NA NA NA -5,269 -4,923 -4,324 -5,670 -11,937 -20,186South Tahoe PUD. -7,039 -2,656 -2,916 -4,193 0 0 -9,404 -9,198 -8,286 -10,529 -22,164 -54,221Stege S.D. -2,175 -646 -902 -1,226 0 0 -2,376 -2,197 -2,043 -2,504 -5,271 -14,069Tahoe-Truckee S.A. -1,809 -469 -511 -669 0 0 -1,557 -1,603 -1,587 -2,120 -4,463 -10,325Triunfo S.D. -1,258 -309 -453 -622 0 0 -1,510 -1,247 -1,079 -1,218 -2,565 -7,696Union S.D. -5,500 -1,125 -1,251 -1,616 0 0 -3,083 -2,637 -2,331 -2,854 -6,008 -20,397Vallejo Sanitation & Flood Control -2,319 -539 -589 -746 0 0 -1,774 -1,465 -1,316 -1,459 -3,072 -10,207Ventura Regional S.D. -7,345 -1,996 -2,148 -2,188 0 0 -5,004 -3,984 -3,560 -4,379 -9,217 -30,604Victor Valley W.R.A. -2,561 -796 -993 -1,412 0 0 -3,308 -3,237 -2,946 -4,076 -8,581 -19,329West Bay S.D. -2,676 -687 -917 -1,395 0 0 -2,487 -2,250 -2,068 -2,529 -5,285 -15,009West County W.D. -4,948 -1,282 -1,417 -1,384 0 0 -2,811 -2,540 -2,340 -2,890 -6,083 -19,612West Valley -896 -778 -927 -1,297 0 0 -3,985 -3,745 -3,362 -4,149 -8,733 -19,139Windsor W.D. -440 NA NA NA NA NA NA NA NA NA NA -440Total -110,652 -30,708 -37,517 -51,610 0 0 -118,711 -125,062 -105,886 -131,766 -279,842 -711,912
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POOLED LIABILITY PROGRAMQuarterly Claims ReportAs of December 31, 2012
Program Year PY 1-19 PY 20 PY 21 PY 22 PY 23 PY 24 PY 25 PY 26 Program Avg Program Avg 1987-2005 2006 2007 2008 2009 2010 2011 2012 Over 5 yrs Over 26 yrs
Number of Members N/A 39 39 39 40 40 40 40 40 N/A
Total Number of Claims 1,843 106 115 160 137 166 170 150 157 110
ISSUE: The 2011/12 CSRMA Workers’ Compensation Excellence Award program recognizes those members with the lowest frequency and severity rates, with an emphasis on severity, for the Program Year ending June 30, 2012. The winners will be recognized at the January 2013 Board of Directors meeting. RECOMMENDATION: None – informational item only. FISCAL IMPACT: The cost for the engraved Workers’ Compensation Excellence plaques, certificates and lobby banners is estimated to be less than $6,000. BACKGROUND: CSRMA wishes to recognize those members of the Workers’ Compensation Program who achieve the best loss record for the policy year (July 1 through June 30) in the following three measurement categories. 1. Incidence Rate (a measure of frequency per 100 full-time employees) 2. Average Medical Cost per Claim (a measure of the severity of the injuries that occur) 3. Average Indemnity per Claim (a measure of how aggressive a member is in returning injured
employees to work) The following awards will be presented to the top 10% of the membership reflecting the best performance in the three categories listed above in three different agency size categories: 1. Small: 1-30 employees 2. Medium: 31-60 employees 3. Large: More than 60 employees The winning agencies will receive: 1. Engraved plaque announcing the Member as an award winner for the policy year evaluated 2. Announcement of the award winners to the CSRMA Board of Director’s meeting 3. CSRMA Bulletin announcing the award winners 4. Banner suitable for lobby display announcing the Member as a CSRMA Workers’
Compensation Excellence Award winner for the policy year evaluated ATTACHMENTS: None
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Agenda Item No. E3a Board of Directors Meeting
Meeting Date: January 18, 2013
Primary Insurance Program
Post Renewal Report
ISSUE: The Executive Board approved renewal of the Primary Insurance Program effective December 31, 2012 with American Alternative Insurance Corporation (AAIC). This year, a coverage enhancement, Cyber Liability was added to the Program for members who purchase Management Liability coverage. To ensure that the Primary Insurance Program continues to be competitively priced, the Program Administrators marketed coverage and obtained alternative proposals from Alteris WaterPlus. The Alteris pricing was 9.49% higher than AAIC. RECOMMENDATION: None. FISCAL IMPACT: The table below provides a cost comparison to the 2011/12 Program Year.
% Change 2011/12 2012/13
Est. Insurance Premium (Net) 371,028 375,264 1.14% Program Directors Fee 143,866 129,479 -10.00% JPA Charge 30,042 30,020 -0.07% Total Cost 544,936 534,763 -1.87%
The percentage change in total cost for individual members varied based on changes in exposure and loss history. The Program Directors Fee and JPA Charge come from the Board approved budget. BACKGROUND: The PIP provides general liability, auto liability, errors and omissions liability, auto physical damage, and excess liability insurance coverages. ATTACHMENTS: None.
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Agenda Item No. F.1 Board of Directors Meeting
Meeting Date: January 18, 2013
Resolution Recognizing the Contributions of
Marcia Beals ISSUE: The Board of Directors wishes to recognize in a formal manner the contributions of CSRMA's departing Executive Committee Member Marcia Beals. RECOMMENDATION: The Executive Board recommends that the Board of Directors honor the contributions of Marcia Beals with a formal resolution. BACKGROUND: Marcia Beals has served on CSRMA's Board of Directors, Executive Board, and Pooled Liability Committee for many years. CSRMA has greatly benefited from her experience, expertise, guidance and support. ATTACHMENTS: Resolution No. 1-13 (BD)
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Agenda Item No. F.2 Board of Directors Meeting
Meeting Date: January 18, 2013
Resolution Recognizing the Contributions of
Talyon Sortor ISSUE: The Executive Board wishes to recognize in a formal manner the contributions of CSRMA's departing Executive Committee Member Talyon Sortor. RECOMMENDATION: The Executive Board recommends that the Board of Directors honor the contributions of Talyon Sortor with a formal resolution. BACKGROUND: Talyon Sortor has served on CSRMA's Board of Directors, Executive Board, and Pooled Liability Committee for many years. CSRMA has greatly benefited from his leadership, experience, expertise, guidance and support. ATTACHMENTS: Resolution No. 2-13 (BD)
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Agenda Item No. F.3 Board of Directors Meeting
Meeting Date: January 18, 2013
Resolution Recognizing the Contributions of
Zoeanne Tafolla ISSUE: The Executive Board wishes to recognize in a formal manner the contributions of CSRMA's departing Executive Committee Member Zoeanne Tafolla. RECOMMENDATION: The Executive Board recommends that the Board of Directors honor the contributions of Zoeanne Tafolla with a formal resolution. BACKGROUND: Zoeanne Tafolla has served on CSRMA's Board of Directors, Executive Board, Pooled Liability and Workers’ Compensation Committees for many years. CSRMA has greatly benefited from her leadership, experience, expertise, guidance and support. ATTACHMENTS: Resolution No. 3-13 (BD)
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Agenda Item No. F.4 Board of Directors Meeting
Meeting Date: January 18, 2013
Resolution Recognizing the Contributions of
Al Miller ISSUE: The Executive Board wishes to recognize in a formal manner the contributions of CSRMA's departing Pooled Liability Committee Member Al Miller. RECOMMENDATION: The Executive Board recommends that the Board of Directors honor the contributions of Al Miller with a formal resolution. BACKGROUND: Al Miller has served on CSRMA's Board of Directors, and Pooled Liability Committee for many years. CSRMA has greatly benefited from his experience, expertise, guidance and support. ATTACHMENTS: Resolution No. 4-13 (BD)
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Agenda Item No. F.5 Board of Directors Meeting
Meeting Date: January 18, 2013
Resolution Recognizing the Contributions of
E. J. Shalaby ISSUE: The Executive Board wishes to recognize in a formal manner the many contributions of E. J. Shalaby. RECOMMENDATION: The Executive Board recommends that the Board of Directors honor the contributions of E. J. Shalaby with a formal resolution. BACKGROUND: E. J. Shalaby has served on CSRMA's Board of Directors, Executive Board, Pooled Liability and Workers’ Compensation Committees for many years. CSRMA has greatly benefited from his leadership, experience, expertise, guidance and support. ATTACHMENTS: Resolution No. 5-13 (BD)
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PEPIP Pollution: Essential Loss Reporting Practices
We are pleased to provide you with the attached document titled PEPIP Pollution Essential Loss Reporting Practices. These four pages outline the steps that should be taken at the time of an environmental incident to assure that the Pollution coverage offered with ACE through PEPIP if fully available for claims payment. We ask that you review this document and provide copies to all appropriate colleagues in advance of a possible incident. Coverage under Pollution policies is dependent on specific compliance with claims and loss reporting; especially in the case of “Emergency Response” expenses that you may incur to address a Sudden and Accidental type loss. For these “Emergency Response” expenses there is a strict seven (7) day window, following discovery of a “Pollution Condition” by the “Insured”, after which reasonable expenses will not be reimbursed unless the carrier has given prior consent. It is Extremely Important that a Sudden and Accidental exposure be reported immediately, and clearly no later than seven (7) days. The following pages provide you with relevant information and material to comply with this important client obligation. We would like to point out to you some of the key sections of the 2012/13 ACE policy which address the “Emergency Response” and reporting provisions; they include the following:
III. DEFENSE AND SETTLEMENT C. The “insured” shall have the right and duty to retain a qualified environmental consultant to perform any investigation and/or remediation of any “pollution condition” covered pursuant to this Policy. The “insured” must receive the written consent of the Insurer prior to the selection and retention of such consultant, except in the event of an “emergency response”. Any costs incurred prior to such consent shall not be covered pursuant to this Policy, or credited against the “self-insured retention”, except in the event of an “emergency response”.
Alliant Comment: This section of the policy says the Insured has the RIGHT AND DUTY to retain a qualified consultant to do the work, then makes the insured get written agreement first unless it is an “emergency response” (see definition below) situation.
V. DEFINITIONS F. “Emergency response” means actions taken and reasonable “remediation costs” 7 days following the discovery of a “pollution condition” by an “insured” in order to abate or respond to an imminent and substantial threat to human health or the environment arising out of such “pollution condition”. T. “Pollution condition” means: 2. The discharge, dispersal, release, escape, migration, or seepage of any solid, liquid, gaseous or thermal irritant, contaminant, or pollutant, including smoke, soot, vapors, fumes, acids, alkalis, chemicals, hazardous substances, hazardous materials, or waste materials, on, in, into, or upon land and structures thereupon, the atmosphere, surface water, or groundwater. V. “Remediation costs” means reasonable expenses incurred to investigate, quantify, monitor, mitigate, abate, remove, dispose, treat, neutralize, or immobilize “pollution conditions” to the extent required by “environmental law”.
38
mleavell
Typewritten Text
G.1
VII. REPORTING AND COOPERATION A. The “insured” must see to it that the Insurer receives written notice of any “claim” or “pollution condition”, as soon as practicable, at the address identified in Item 7.a. of the Declarations to this Policy. Notice should include reasonably detailed information as to:
1. The identity of the “insured”, including contact information for an appropriate person to contact regarding the handling of the “claim” or “pollution condition”;
2. The identity of the “covered location” or “covered operations”;
3. The nature of the “claim” or “pollution condition”; and
4. Any steps undertaken by the “insured” to respond to the “claim” or “pollution condition”. In the event of a “pollution condition”, the “insured” must also take all reasonable measures to provide immediate verbal notice to the Insurer.
B. The “insured” must:
1. As soon as practicable, send the Insurer copies of any demands, notices, summonses or legal papers received in connection with any “claim”;
2. Authorize the Insurer to obtain records and other information;
3. Cooperate with the Insurer in the investigation, settlement or defense of the “claim”;
4. Assist the Insurer, upon the Insurer’s request, in the enforcement of any right against any person or organization which may be liable to the “insured” because of “bodily injury”, “property damage”, “remediation costs” or “legal defense expense” to which this Policy may apply; and
5. Provide the Insurer with such information and cooperation as it may reasonably require. C. No “insured” shall make or authorize an admission of liability or attempt to settle or otherwise dispose of any “claim” without the written consent of the Insurer. Nor shall any “insured” retain any consultants or incur any “remediation costs” without the prior express written consent of the Insurer, except in the event of an “emergency response”. (Emergency Response coverage is limited to the first 7 days) D. Upon the discovery of a “pollution condition”, the “insured” shall make every attempt to mitigate any loss and comply with applicable “environmental law”. The Insurer shall have the right, but not the duty, to mitigate such “pollution conditions” if, in the sole judgment of the Insurer, the “insured” fails to take reasonable steps to do so. In that event, any “remediation costs” incurred by the Insurer shall be deemed incurred by the “insured”, and shall be subject to the “self-insured retention” and Limits of Liability identified in the Declarations to this Policy.
The Bottom Line is; if you have a Sudden and Accidental spill, please and Call us Immediately - - let’s get the any Incident reported to property protect coverage for these unexpected events.
PLEASE NOTE: Additional PEPIP limits are included in the main form under the General Provisions Section I., Limits of Liability. Coverage for Accidental Contamination has an additional sublimit of $250,000 excess of your standard PEPIP deductible so coverage can also be trigger under the terms of that policy. Reporting follows the standard claims system currently in place.
1) Follow your company procedures for reporting and responding to an incident
2) Alert local emergency authorities, as appropriate
3) Report the incident to ACE Environmental Risk immediately at:
888-310-9553 All pollution incidents must be reported within:
SEVEN (7) days of Discovery Be prepared to give basic information about the location and nature of the incident, as well as steps which have been taken in response to the incident. You will be contacted by a trained representative of ACE to discuss further response steps as soon as possible.
4) Contact your Alliant representatives and use the reporting guidelines that follow:
DO follow your company’s detailed response plan DO contact your management as well as appropriate authorities DO ensure anyone who could come in contact with a spill or release is kept away DO NOT ignore a potential spill or leak DO NOT attempt to respond beyond your level of training or certification
ACE Today’s Date: Notice of: (check all that apply)
Pollution Incident Potential Claim Other Third-Party Claim Litigation Initiated
Insured’s Name & Contact Information
Company Name: Point of Contact:
Address: Phone #: Broker/Agent’s Name & Contact Information
Company Name: Alliant Insurance Services - Claims Point of Contact: David Sutton
Address: 100 Pine Street, 11th Floor, San Francisco, CA 94111 Phone #: 415-403-1400 Policy Information
Policy Number: PPL G24544837 002 Policy Period: 7/1/12 to 7/1/13
Limits of Liability: per agg Self-Insured Retention/Deductible
Loss Information Date of Incident/Claim: Location: Claimant Name/Address: Description of Loss: Please list all attached or enclosed documentation: (check if none provided) ________________ ___________________________________________________________________________________________________________________________________ Name of Person Completing This Form: Signature: ____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
ACE ENVIRONMENTAL RISK FIRST NOTICE OF LOSS FORM SEND TO: ACE Environmental Risk Claims Manager
BY MAIL: ACE USA Claims, P.O. Box 5103, Scranton, PA 18505-0510
You are in: Front Page News Headlines -> Superbug MRSA identified in US wastewater treatment plants
Healthcare
Superbug MRSA identified in US wastewater treatment plants
Publication Date: 11/21/2012
Source: Biotech Week
Superbug MRSA identified in US wastewater treatment plants
Publication Date 11/21/2012
Source: Biotech Week
Superbug MRSA identified in US wastewater treatment plants
Staphylococcus aureus
By a News Reporter-Staff News Editor at Biotech Week -- College Park, Md. - A team led by
researchers at the University of Maryland School of Public Health has found that the "superbug"
methicillin-resistant Staphylococcus aureus (MRSA) is prevalent at several U.S. wastewater treatment
plants (WWTPs). MRSA is well known for causing difficult-to-treat and potentially fatal bacterial
infections in hospital patients, but since the late 1990s it has also been infecting otherwise healthy
people in community settings.
"MRSA infections acquired outside of hospital settings - known as community-acquired MRSA or
CA-MRSA- are on the rise and can be just as severe as hospital-acquired MRSA. However, we still
do not fully understand the potential environmental sources of MRSA or how people in the community
come in contact with this microorganism," says Amy R. Sapkota, assistant professor in the Maryland
Institute for Applied Environmental Health and research study leader. "This was the first study to
investigate U.S. wastewater as a potential environmental reservoir of MRSA."
Because infected people can shed MRSA from their noses and skin and through their feces,wastewater treatment plants are a likely reservoir for the bacteria. Swedish researchers have previously
identified the presence of MRSA in WWTPs in Sweden, and this new UMD-led study confirms thepresence of MRSA in U.S. facilities. The study was published in the November issue of the journal
Environmental Health Perspectives.
The research team, including University of Maryland School of Public Health and University of
Nebraska Medical Center researchers, collected wastewater samples throughout the treatment
process at two Mid-Atlantic and two Midwestern WWTPs. These plants were chosen, in part,
because treated effluent discharged from these plants is reused as "reclaimed wastewater" in spray
irrigation activities. The researchers were interested in whether MRSA remained in the effluent.
They found that MRSA, as well as a related pathogen, methicillin-susceptible Staphylococcus aureus
(MSSA), were present at all four WWTPs, with MRSA in half of all samples and MSSA in 55
percent. MRSA was present in 83 percent of the influent- the raw sewage - at all plants, but thepercentage of MRSA- and MSSA-positive samples decreased as treatment progressed. Only one
WWTP had the bacteria in the treated water leaving the plant, and this was at a plant that does not
Another key difference is that most Sacramento residents actually live below the water level flowing by
in the rivers, especially when rivers swell in a storm. This means recovering from a levee break could
take a very long time, because it could take weeks or months just to pump out the water from a flood.
Billions of dollars in levee and dam improvements are under way in the area, supported by local, state
and federal tax dollars. But emergency officials are quick to acknowledge that a levee break can still
occur.
As a result, residents need to be ready, Martinez said, and know how vital services would be affected.
The Bee spoke with a number of experts to shed light on this fearful "what if" scenario.
Evacuation
If officials have enough information to know levees are threatened, their goal is to evacuate threatened
areas before a levee break occurs, Martinez said. This would be driven by data on water level and
flow volume provided by in-river monitors, and by storm predictions.
We've come close before. On Feb. 16, 1986, the American River swelled to less than 6 inches from
the levee top, threatening to spill over and erode the levee in the process.
Martinez said evacuations would apply only to areas where water is expected to flow. Other areas
would be urged not to evacuate, to preserve escape routes for those who really do have to leave.
But when the order goes out, he said, it's important for people to heed it. Anyone who stays behind is
likely to create trouble for themselves and rescue crews later.
"People need to take responsibility for their actions when they've been advised that it's time to leave,"
Martinez said. "When it gets bad, you're not going to be able to reach 911 or call regional transit and
say, 'Hey, can you send a bus by here.' "
Several neighborhoods -- the Pocket, Land Park, River Park and Natomas -- are considered "rescue
areas" in a levee break because floodwaters would reach 1 foot deep in two hours or less. As theflood continued, some of these areas would see water rise high enough to submerge a two-story house.
Residents who can't get out fast enough would have to be rescued.
Electricity
Anyone left behind in a flood will not have electricity. If a levee break is projected, the Sacramento
Municipal Utility District would turn off power in affected areas beforehand to protect vital equipment
that would be damaged if it remained energized during a flood.
"We tend to wait almost to the last second for such interruptions," said Vicken Kasarjian, director of
grid planning and operations at SMUD. "If you don't do that, we may end up damaging our own
infrastructure to the point that it cannot come back from such a situation."
In downtown, SMUD has some transformers installed in underground vaults, where they are vulnerable45
to flooding. In the event of a levee break, even aboveground transformers and substations would be
flooded. Most of this equipment could simply be cleaned off and turned back on after the water
subsides.
It is important not to damage transformers, Kasarjian said, because the United States no longer
manufactures these. They would have to be built to order in Asia, which can take up to 18 months.
"When you go to this kind of an extreme case, the best thing we can do is be prepared to serve the
load again as soon as possible," he said.
Drinking water, sewage
The city operates two drinking water treatment plants, one on the American River and one on the
Sacramento.
The plants are served by backup generators sufficient to meet citywide water demand in winter. The
generators sit above the 100-year floodplain, said Jessica Hess, spokeswoman for the city Utilities
Department. The city plans to move them above the 200-year floodplain, the target for urban flood
safety enshrined in state law.
It is likely both treatment plants would survive a flood unless a levee broke very close to either plant,
Hess said.
However, pressure changes underground caused by flooding could rupture water distribution pipes,
she said, cutting off supply to parts of the city and potentially contaminating the supply for others. In
addition, above-ground drinking water storage tanks could be damaged by flooding.
The city also operates dozens of electric pumps that move raw sewage through pipes underground to
the regional sewage treatment plant near Elk Grove. Because the city is flat, sewage won't flow by
gravity alone. It is likely some of these pumps would be damaged in a flood and cease to function
afterward, Hess said.
Floodgates, stormwater
Large parts of Sacramento can flood internally during heavy rain even if levees hold. The only thing
preventing that is a network of 105 electric stormwater pumps that move water out of the city and intothe rivers.
In 1996, some pumps quit and a few neighborhoods in south Sacramento experienced significant
flooding. Few pump stations had backup generators then.
Afterward, the city spent more than $5 million installing generators at 25 pump stations. The remaining
80 stations were equipped with "plug-and-play" hookups so a portable generator could simply be
plugged into a socket to run the pumps.
Sacramento also depends on a network of 15 floodgates to keep the city dry when rivers rise. Theseseal off roadway openings in levees that allow traffic to flow in dry times.
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The floodgates are closed only when rivers rise and begin to threaten low-lying areas. The gates are
crucial to protect the city, but when closed they also limit evacuation routes.
The gates are manually operated and somewhat medieval in appearance. They take several hours to
shut and require city workers to either close giant steel doors or place heavy boards into steel slots.
Both types are then sealed with sandbags and plastic sheeting. These materials are stored with some
gates, but in other cases must be transported from storage yards.
City transportation crews hold drills each fall to stay skilled at operating the gates as swiftly as possible.
Public transit
Sacramento's light-rail system is intended to play a "major role" in evacuating people if a flood is
expected, according to the city evacuation plan, prepared in 2008. A single four-car train can carry
about 600 people, said Mark Lonergan, operations chief at Sacramento Regional Transit.
The light-rail system itself is vulnerable to small amounts of flooding. Trains can function only up to a
water depth of 6 inches. The system also depends on "traction power substations" located about every
mile along the track. These are also vulnerable to water deeper than 6 inches.
"They would not survive a flood," Lonergan said. "I don't know what would be required to put them
back in service after a flood. I don't know if allowing them to dry out would work, or if we would have
to do some component replacements inside. I suspect it's the latter."
Buses would also be important for evacuations. Until recently, buses were entirely dependent on one
natural gas refueling station at RT's maintenance center at 29th and N streets in midtown -- a location
vulnerable to flooding.
By the end of this month, RT expects to complete a second refueling station at McClellan Field --
outside the flood zone.
Hospitals
Five major hospitals in the city of Sacramento fall within the 200-year floodplain. They have roughly2,000 beds -- about two-thirds of the available hospital beds in Sacramento County.
Of those, Sutter Medical Center in midtown is most vulnerable. In a number of levee-break scenarios
modeled by the city, the hospital would be surrounded by floodwaters 4 to 6 feet deep.
Hospitals cannot function without two things: electricity and fresh water. Both are vulnerable in a flood.
There are currently no state or federal requirements to floodproof these services at hospitals.
A proposed change in the state building code, which would take effect Jan. 1, 2014, requires new or
substantially remodeled hospitals to place backup generators above the predicted flood elevation.
Existing hospitals will not be required to comply.
The draft code also requires hospitals to store at least 5,000 gallons of water on site. Again, the rule
would apply only to hospitals built after Jan. 1, 2014. Existing hospitals would not be required to47
Sutter Medical Center, located alongside the Capital City Freeway in midtown, is in the midst of a
major remodeling and expansion. This was triggered largely by a state deadline requiring hospitals to
be strengthened against earthquakes.
Ironically, earthquake risk is relatively low in Sacramento, and that law says nothing specific about
flood risk.
For instance, Sutter's backup generators -- as at many hospitals -- are located underground. They
reside in a vault built to resist water intrusion. But it is not floodproof, said Carl Scheuerman, director
of facilities planning and development at Sutter Health. The generators are not being moved as part of
the remodeling.
"Like anything underground -- like the subways in New York City -- we could expect that, over time,
water would seep in there," Scheuerman said.
Sutter officials say their strategy is to evacuate the hospital before flooding occurred. Patients would be
moved to other area hospitals, which work together on regular disaster drills -- including one last week
-- to train for such patient transfers.
"We do recognize that flooding is a hazard for us," said Loni Howard, the hospital's emergency
preparedness coordinator. "We would err on the side of safety and evacuate those patients out early."
Communication
Cellphones have become a primary means of communication for the public and emergency responders.
But cellphone systems are not floodproof, and building codes in most communities do not impose such
a requirement.
Like other systems dependent on electricity, cellphone service would likely go out during a flood, at
least initially.
"Massive flooding like Sandy brought is almost impossible to engineer for," said Robert Jystad, vicepresident of the California Wireless Association and an attorney who represents cellular companies.
"However, the industry has taken measures to minimize the impact flooding will have on the networks."
This includes battery backup systems to sustain cellular service for four to eight hours, Jystad said,
depending on call volume. Some also have generator backup. And when possible, transmission
equipment is installed on the upper floors of buildings, above a potential flood.
Preparedness
Because the city is enclosed by two rivers, limited evacuation routes would be available. At the website
stormready.org, Sacramento city and county have developed maps that show flood depths and
available evacuation routes in hypothetical levee-break scenarios. It would pay to know those routes.
Martinez said families should develop evacuation plans to account for different flood scenarios. This48
applies to families who may not live in the city of Sacramento but may have members who commute
downtown for work. On weekdays, commuters add about 110,000 people to the city population.
Though emergency officials have developed elaborate response plans, city residents would have to
fend for themselves to a large degree. Some may be forced to shelter in place for several days with
standing water around their home or workplace.
The website sacramentoready.org includes lots of information about how to prepare for a flood, what
to pack or set aside in advance, and how to make a family disaster plan.
Hurricane Sandy reinforced the importance of these preparation steps. One tool it showed to be
important is a means to recharge a cellphone in a power outage, be it from a solar panel, a backup
power source, a car charger, or all of the above.
Other important tools include an old-fashioned battery powered radio and a paper map of the
community, which could be helpful in an evacuation. Such simple tools have vanished from many
homes in the digital age.
Call The Bee's Matt Weiser, (916) 321-1264. Follow him on Twitter @matt_weiser.
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(c)2012 The Sacramento Bee (Sacramento, Calif.)
Visit The Sacramento Bee (Sacramento, Calif.) at www.sacbee.com
As solar power gains traction, so does installation theft
Alliant Insurance Services, Inc.
Tim Leech, First Vice President/Risk Control Consulting
Energy costs, government regulation, and our country’s emphasis on creating alternative sustainableenergy sources have created increased utilization of solar power.
Rural installations, wineries, and schools are among the nation’s largest growth industries for solarpower. Efforts to supplement traditional power grids with solar-generated power can result insignificant cost savings as illustrated by:
• Over 500 K-12 schools across 43 states have installed systems from 2007-2010. Solar power costsare estimated to have fallen by more than one-third. (Solar Energy Industries Association andGreentech Media Inc., Research).
• Scottsdale Unified School District installed Photo Voltaic (PV) panels on 19 of its 32 campuses, andthrough various contracts, cut energy costs $300,000 (5%) off a typical $6 million annual electrical bill.Cost savings resulted in a recall of six previously laid off teachers in 2009.
• Paradise Unified School District signed a 15-year contract to buy solar-generated power at 15%below utility power costs with no increase over the period of the contract.
Increased solar utilization, public demand, and industry growth is not without its challenges. InCalifornia, wineries have been hit particularly hard by organized and unorganized crime rings due totheir rural and lightly secured or unsecured installations. In fact, solar power-related theft is tracking atnearly the same rate (15%) as industry growth, which has been at a 19% average from 2002 through2009.
In a January 2010 news article, Michael Honig of Honig Winery in Napa Valley reported his companyhad been hit by thieves who stole more than 100 panels over three incidents. Each panel was valuedat approximately $1,000. While the thieves were eventually caught, the panels were never located.
Simply purchasing insurance to protect against solar panel theft is not enough today. Insurance isbecoming increasingly costly as premiums and associated deductibles continue to rise. Therefore, itis critical to understand the loss prevention risk as well as taking proper security measures to controlPV theft.
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Demographics of a “Thief” Theft rings are usually well organized and often drug-related. They may use social media ortechnology, such as Google Earth, to locate solar installations. Once acquired, panels may be usedon personal RVs, for other residential installations, or sold on the black market. Also, it is notuncommon to find solar panels and components for sale on Craigslist or similar websites. There areeven reports that marijuana growers use solar power to avoid spikes in utility use, which can be usedby law enforcement to help pinpoint crops.
Federal regulation requiring solar panel registration has been enacted through an amendment to theSolar Technology Roadmap Act. However, while a registration system may help to locate PV panelsor solar system components following a transaction or exchange, it is unlikely to have an immediateimpact on the theft problem.
Solar System Loss Prevention When organizations combine security industry technology with some thought, creativity, andtraditional measures, they can significantly reduce the risk of loss associated with solar powerinstallations.
For instance, when installing solar power systems, one or more of the following practices should beconsidered and reviewed with risk management and loss prevention specialists:
• Engineering and design:
o Using self-destructing bolts that can only be removed by using a special tool.
o Designing installations so they require the PV panels to be cut from the supporting structure. Thismay include welding units to a frame that is wrapped in concrete or uses stainless steel links with theconcrete settings.
o Installing tamper devices that that send a signal to an alarm company when system structures arecompromised. The devices should also emit a piercing alarm to discourage thieves from completingtheir goal.
• Reducing blind spots created by foliage, material storage, and other barriers increases visibility of asolar installation and discourages theft attempts. Whenever feasible, adequate lighting and perimeterfencing should be installed.
• Utilizing different types of installations. A roof or pole-mounted system is more difficult to accessthan a ground-mounted system and is a greater deterrent to theft.
• Employing a guard service to patrol the area or remain on site during unoccupied hours reduces thepossibility of theft.
• Installing perimeter alarms and detection systems, including high-resolution cameras and intrusionalarms. Alarm systems should be connected to a central service that guarantees fast response timesby local law enforcement. Alarms also can be built into the electrical installation to signal the securityservice when power systems are interrupted.
• Installing perimeter fencing for ground installations. Since a chain link fence can be easily cut orscaled, a solid fence with a lockable gate is more effective.
• Continually testing your security system. Testing enables you to identify possible gaps in yoursystem that otherwise may go unrecognized.
Finally, it is important to recognize that there is no single security solution that will be effective for allorganizations. The key to reducing the possibility of solar system theft and loss is being aware of thevarious risk factors and employing the right combination of security systems and preventative
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measures.
For additional information or assistance contact Risk Control Consulting [email protected] or by calling (888) 737-4752.
References:
“Solar Panel Thefts Heating Up,” Andrea Kissack, January 5, 2010 from KQED. “The Enlightened Classroom,” The Journal Report, Innovation Energy, June 18, 2012. “Solar Panel Theft is Rampant in California Wineries,” Lloyd Alter Technology, Solar Technology, July6, 2009. “Solar Panel Theft is on the Rise,” 2 News, July 13, 2012. “Tighter Security Vowed After Theft of Solar Panels,” Robert Knox, Globe Correspondent, September9, 2012. “The PV Industry Tackles Solar Theft,” James Lawson, Contributor, Solar Power Gen., April 4, 2012.
Study warns of $66 billion annual increase in medical costs by 2030
By 2030, the percentage of obese Americans could climb to 44 percent, according to Trust for America’sHealth, the Washington-based organization that issued the study, “F as in Fat: How Obesity ThreatensAmerica’s Future 2012.”
At current rates of growth, obesity will add more than six million new cases of type 2 diabetes, fivemillion cases of coronary heart disease and stroke and more than 400,000 cancer cases in the next 20years. These additional cases will increase the nation’s spending on direct costs for medical care forobesity-related conditions between $48 billion and $66 billion each year by 2030.
The loss of economic productivity associated with obesity-related conditions could balloon to between$390 billion and $580 billion annually.
While the study did not provide annual estimates for the growth in costs associated with workers’compensation claims, it pointed out that the cost of care for injured obese employees typically is muchgreater than that for “healthy weight” workers.
The study said that the obesity rate for 13 states including Kansas, Kentucky, Mississippi, Missouri,and Oklahoma could climb over 60 percent by 2030. Annual increases in medical costs for obesity-related conditions in nine states including Alaska, Colorado, New Hampshire, and New Jersey couldjump between 20 percent and 34.5 percent over the same period.
Source: Dunning, Matt. 2012. Obesity-related conditions could add $66B annually to medical costs by 2030:Study. Business Insurance, September 20.
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