CSRMA California Sanitation Risk Management Authority

Transcription

1 CSRMA California Sanitation Risk Management Authority c/o ALLIANT INSURANCE SERVICES, INC. 100 Pine Street, 11th Floor, San Francisco, CA Tel: Insurance License No.: 0C36861 Fax: OFFICERS: Russ Baggerly, President PAST PRESIDENTS: Robert Reid Paul Bushee, Vice President Kevin Hardy BOARD OF DIRECTORS MEETING AGENDA Date/Time:Friday, April 26, 2013 Location: Newport Beach Marriott Hotel and Spa 7:30 AM Buffet Breakfast 900 Newport Center Drive 8:00 AM Meeting Newport Beach, CA Hotel Phone: Room: Cardiff (Main Level) A. CALL TO ORDER I: Information V: Verbal B. PUBLIC COMMENTS A: Action H: Handout C. BOARD MEMBER COMMENTS S: Separate D. CONSENT CALENDAR 1. Meeting Minutes: January 18, 2013 A p. 3 E. GENERAL ADMINISTRATION Officers Election A p Budget to Date Report as of March 31, 2013 I p Estimated Actual 12/13 Budget & Proposed 13/14 Budget A/S p JPA Auditor Position - Proposed Amendment to the JPA Agreement and Bylaws A p Investment Update and Cash Flow Analysis I/S p Investing Additional Funds in Longer Maturities A p Policy & Procedure for Analyzing and Selecting Discount Rates used in Establishing Claims Liabilities A p. 60 F. OFFICER/STAFF/COMMITTEE REPORTS 1. Pooled Liability Program a. Quarterly Claims Report as of March 31, 2013 I p Workers' Compensation Program a. Quarterly Claims Report as of March 31, 2013 I p. 63 b. Program Year 24 ( ) Renewal Update I p Primary Insurance Program None 4. Property Program a. Program Renewal Update I p. 65 G. INFORMATION ITEMS 1. Item - An Update on SB from York Public Entity I p Article - The Norovirus in Invading the Workplace I p Article - Lingering effect of sleep aids could impair driving I p Article - Motivated Employees are Loyal Employees I p CSRMA 2013 Meeting Calendar I p CSRMA Organizational Chart I p CSRMA Service Team I p. 81 H. GUEST SPEAKER 1. Parametrics Presented by Alex Kaplan, Swiss Re V I. ADJOURNMENT The next meeting is scheduled for August 23, 2013 at the CASA Conference Per Government Code section , 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) 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

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3 D.1 CALIFORNIA SANITATION RISK MANAGEMENT AUTHORITY BOARD OF DIRECTORS MEETING JANUARY 18, 2013 INDIAN WELLS, CALIFORNIA MEMBERS PRESENT Craig Murray, Carpenteria Sanitary District Roland Williams, Castro Valley Sanitary District Bill Bosworth, Cupertino Sanitary District Bert Michalczyk, Dublin San Ramon Services District Michael Connor, East Bay Dischargers Authority Kevin Hardy, Encina Wastewater Authority Talyon Sortor, Fairfield/Suisun Sewer District George Emerson, Goleta Sanitary District Mark Nation, Goleta West 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 Ron Shepherd, South Bayside System Authority Al Miller, Stege Sanitary District Thomas Selfridge, Truckee Sanitary District David O Hara, Union Sanitary District Zoeanne Tafolla, Vallejo Sanitation and Flood Control District Ron Buchwald, Valley Sanitary District Phil Scott, West Bay Sanitary District George Schmidt, West County Wastewater District GUESTS AND CONSULTANTS Seth Cole, Alliant Insurance Services, Inc. Myron Leavell, Alliant Insurance Services, Inc. P. J. Skarlanic, Alliant Insurance Services, Inc. David Patzer, Risk Management Solutions Kay Patzer, Risk Management Solutions Byrne Conley, Gibbons & Conley Janice Yardley, Carl Warren and Company David Becker, James Marta & Co. Ralph Johnson, Castro Valley Sanitary District Mark Williams, Las Gallinas Valley Sanitary District Paul Bushee, Leucadia Wastewater District Brenda Krout, Ojai Valley Sanitary District Andy Jannings, Vallejo Sanitation and Flood Control District Ron Matheson, Vallejo Sanitation and Flood Control District G:\Share\CLIENT\jpa\CSRMA\Agenda\_Board of Directors\Meeting Minutes\Minutes of the BOD January FINAL.doc 3

4 A. CALL TO ORDER The meeting was called to order by President Russ Baggerly at 8:00 a.m. B. PUBLIC & BOARD MEMBER COMMENTS There were no public or board member comments. C. CONSENT CALENDAR C.1. Meeting Minutes: August 10, 2012 The minutes of the meeting on August 10, 2012 were reviewed. A motion was made to accept the minutes as presented. MOTION: Judy Hanson SECOND: Roland Williams MOTION CARRIED D. GENERAL ADMINISTRATION D.1. Executive Board Elections Russ Baggerly reviewed with the Board of Directors the current make-up of the Executive Board and the eligibility of members whose terms are expiring, and those who are eligible to continue another term. The Nominating Committee, consisting of Kevin Hardy and Robert Reid, recommended the following slate of candidates: That Craig Murray, Carpinteria Sanitary District be elected to the Executive Board 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 Wastewater Reclamation Authority be elected to fill the Alternate position vacated by Craig Murray. Russ asked the Board of Directors if there were any nominations from the floor. There were none. A motion was made to elect the slate of candidates presented by the Nominating Committee. MOTION: George Emerson SECOND: Kevin Hardy MOTION CARRIED G:\Share\CLIENT\jpa\CSRMA\Agenda\_Board of Directors\Meeting Minutes\Minutes of the BOD January FINAL.doc 4

5 D.2. Acceptance of Financial Audit Russ Baggerly reported that the financial audit for fiscal year 2011/12 is complete and that David Becker of James Marta & Co. is present to review the results of the audit with the Board. David provided an overview of the audit process, and then reviewed the results of the audit with the Board, indicating that the financial statements are presented fairly and in accordance with the accounting principles generally accepted in the United States. David pointed out the CSRMA has returned over $25 million to its members through dividends and retrospective rating payments over the last 10 years and during that time net assets have increased $4.1 million. David reported that CSRMA s financial position is excellent with $12.3 million in net assets. David discussed the discount factors used in the actuarial projections, which was initially reported in last year s audit process. At that time, it was recommended that CSRMA revisit the discount rates used, given the current economic times. As a result, the Executive Board is working with the Program Administrators to create a board policy to address the issue. Russ asked for questions from the floor. There was a question as to why the actuarial projections vary so much from year to year. Seth Cole responded that CSRMA s claims volume is relatively low and a handful of large claims in any given year can have an adverse affect on the actuarial projections. From year to year the frequency and severity of claims can vary greatly for both pooled programs. Russ then asked for a motion to accept the financial audit. A motion was made to accept the Financial Audit for Fiscal Year 2011/12 as presented. MOTION: Roland Williams SECOND: Zoeanne Tafolla MOTION CARRIED D.3. Annual Operating Report Russ Baggerly reported that the 2012 Annual Report has been completed. Copies were handed out to members present, and also will be sent to all member agencies for their records. D.4. Investment Performance Review Seth Cole directed the Board of Directors attention to the Investment Report of November 5, 2012 included in the agenda packet. The CSRMA investment portfolio, managed by PFM Asset Management, LLC, continues to outperform the Merrill-Lynch 1-5 Year U.S. Treasury Index, the selected benchmark. There were no questions from the floor. D.5. Budget to Date Report as of December 31, 2012 Seth Cole reviewed the Budget to Date Report with the Board, directing their attention to the Variance Report. Expenses are tracking to the approved budget. There are no concerns regarding CSRMA s finances at this time. G:\Share\CLIENT\jpa\CSRMA\Agenda\_Board of Directors\Meeting Minutes\Minutes of the BOD January FINAL.doc 5

6 A question was asked as to why the User/Fraud fund Assessment line item was over budget. Seth responded that the assessment is paid to the State and varies from year to year, in most cases upwards, making it difficult to get an accurate figure for budgeting purposes. E. OFFICERS/STAFF/COMMITTEE REPORTS E.1. Pooled Liability Program E.1.a. Post Renewal Report Seth Cole reported that the Pooled Liability Program renewed on December 31, Seth directed the Board of Directors attention to the table on page 19 of the agenda and reported that the 2012/13 total expected costs decreased by about 6.47% over last year. This is largely due to a projected 10.81% decrease in the overall funding requirements due to better than expected claims development. E.1.b. Declaration of Dividend at 12/31/12 Russ Baggerly reported that the dividend calculation at 12/31/12 has been completed and is presented to the Board of Directors for approval. Russ explained that the dividend calculation resulted in a total of $711,912 to be returned to the membership. A motion was made to approve a dividend calculation of $711,912 be returned to the membership. MOTION: Ron Shepherd SECOND: Kevin Hardy MOTION CARRIED E.1.c. Quarterly Claims Report as of December 31, 2012 Seth Cole reviewed the quarterly claims report with the Board, and reported that the loss ratio for the most current Program Year was 9%, which contributed to the overall reduction in program renewal costs as reported above. E.2. Workers Compensation Program E.2.a Quarterly Claims Report as of December 31, 2012 Seth Cole reviewed the quarterly claims report with the Board. Seth added that although there is an increase in severity for Program Year 22, with two very large losses that year; the overall trend is favorable. The Workers Compensation Program continues to perform well with a loss ratio of 69% over 23 years. E.2.b PY 22 11/12 Workers Compensation Excellence Awards David Patzer reviewed the item and presented the Workers Compensation Excellence Award winners for the 2011/12 fiscal year to the Board. David reported that winners will receive a plaque, lobby banner and announcement in a CSRMA Bulletin. G:\Share\CLIENT\jpa\CSRMA\Agenda\_Board of Directors\Meeting Minutes\Minutes of the BOD January FINAL.doc 6

7 The winners by category were: Small Agency: Castro Valley Sanitary District San Elijo Joint Powers Authority Sanitary District #5 of Marin County Sausalito-Marin City Sanitary District Stege Sanitary District Medium Agency: Central Marin Sanitation Agency Goleta Sanitary District Napa Sanitary District Novato Sanitary District Large Agency: Tahoe-Truckee Sanitation Agency Fairfield-Suisun Sewer District E.3. Primary Insurance Program E.3.a Post Renewal Report Seth Cole reported that the Primary Insurance Program renewed effective December 31, 2012 with American Alternative Insurance Corporation (AAIC). Seth indicated that the total renewal cost decreased 1.9% over last year. However, costs for individual members varied based on changes in exposure and loss history. Seth further reported that the Program Administrators marketed coverage this year to ensure that Primary Insurance Program remains competitively priced and obtained alternative proposals from Alteris WaterPlus. The Alteris pricing was 9.49% higher than that of AAIC. E.4. Property Program E.4.a Property Program Renewal Preliminary Thoughts and Planning Seth Cole reviewed this item with the Board of Directors. Seth informed the Board that in budgeting for the property renewal, members should budget for a potential rate increase of 5-15%. This is in addition to any increase in insured values. There are dramatic changes expected in the property market as a result of Superstorm Sandy. Insured losses are estimated at $25 billion, putting upward pressure on property rates. F. BOARD RESOLUTIONS F.1. F.2. Resolution Recognizing the Contributions of Marcia Beals Resolution Recognizing the Contributions of Talyon Sortor G:\Share\CLIENT\jpa\CSRMA\Agenda\_Board of Directors\Meeting Minutes\Minutes of the BOD January FINAL.doc 7

8 F.3. F.4. F.5. Resolution Recognizing the Contributions of Zoeanne Tafolla Resolution Recognizing the Contributions of Al Miller Resolution Recognizing the Contributions of E.J. Shalaby Russ Baggerly reviewed the resolutions recognizing the contributions of CSRMA s departing Executive Board and Committee members, Marcia Beals, Talyon Sortor, Zoeanne Tafolla, Al Miller and E.J. Shalaby. Russ commended them for all of their efforts while serving CSRMA as Executive Board and Committee members. A motion was made to honor the contributions of Marcia Beals, Talyon Sortor, Zoeanne Tafolla, Al Miller and E.J. Shalaby with formal resolutions. MOTION: Jason Warner SECOND: Roland Williams MOTION CARRIED G. INFORMATION ITEMS G.1. PEPIP Pollution (ACE) Loss Reporting Bulletin The Board of Directors reviewed the bulletin. G.2. Superbug Identified in US Wastewater Treatment Plants The Board of Directors reviewed this article. G.3. What if a superstorm strikes Sacramento Flooding danger puts the capital at risk for disaster worse than Sandy The Board of Directors reviewed this article. G.4. As Solar Power Gained Traction, So Does Installation Theft The Board of Directors reviewed this article. G.5. Study Warns of $66 billion annual increase in medical costs by 2030 The Board of Directors reviewed this article. G.6. CSRMA 2013 Meeting Calendar The Board of Directors reviewed the 2013 Meeting Calendar. G.7. CSRMA Organizational Chart The Board of Directors reviewed the Organizational Chart. G.8. CSRMA Service Team The Board of Directors reviewed the Service Team chart. G:\Share\CLIENT\jpa\CSRMA\Agenda\_Board of Directors\Meeting Minutes\Minutes of the BOD January FINAL.doc 8

9 H. GUEST SPEAKER CSRMA Liability and Workers Compensation Loss Analysis Reports were presented by David Patzer, CSRMA Risk Control Advisor I. ADJOURNMENT The meeting was adjourned at 9:06 a.m. The next meeting is scheduled for April 26, 2013, at the CASA Conference. G:\Share\CLIENT\jpa\CSRMA\Agenda\_Board of Directors\Meeting Minutes\Minutes of the BOD January FINAL.doc 9

10 Agenda Item No. E1 Board of Directors Meeting Meeting Date: April 26, Officer Elections ISSUE: At the January 18, 2013 Board of Directors meeting the Board was asked to elect a slate of candidates to the Executive Board. In that agenda packet, the President and Vice President were incorrectly shown on the table as having terms that were not expiring. The President and Vice President terms of office had in fact expired, and should have been included on the slate of candidates for re-election in January. This action item is to correct this oversight. Position Current Member Expiring Term Eligible for Reelection President Russ Baggerly Yes Yes Vice President Paul Bushee Yes Yes RECOMMENDATION: The Board of Directors is asked to re-elect the President and Vice President as outlined above retroactive to January 18, FISCAL IMPACT: None. BACKGROUND: The CSRMA Officers terms of office are governed by Article III of the Bylaws and Section 11 and 12 of the Joint Exercise of Powers Agreement. ATTACHMENTS: 1) Section 11 & 12 of the Joint Exercise of Powers Agreement 2) Article III & IV of the Bylaws G:\Share\CLIENT\jpa\CSRMA\Agenda\_Board of Directors\2013\ \E.1 - Exec Board Elections 13 - P & VP.doc 10

11 i. Election of certain Authority officers and the members of its Executive Board, except that vacancies occurring in those offices during their term shall be filled pursuant to Section 11(f) and 12(d) ii. Approval of the annual budget of the Authority. iii. Approval of amendments to this Agreement and the Bylaws. iv. Approval of new Insurance programs of the Authority. v. The exercise of powers of the Authority, including promulgation of policies, procedures and rules, with respect to all matters reserved to the Board of Directors by this Agreement, the Bylaws or otherwise. SECTION 10: Meetings of the Board of Directors (a) The Bylaws of the Authority shall make provision for calling and holding meetings of the Board of Directors which shall include, in any event, at least one regular meeting annually. (b) Meetings of the Board of Directors shall be conducted in accordance with this Section, the Bylaws and applicable provisions of law governing the meetings of legislative bodies and governing boards of local public entities of the State of California including the provisions of the Ralph M. Brown Act (California Government Code Section et seq.). (c) The presence in person (or by telephone in the case of a noticed telephonic meeting) of a majority of the then duly appointed members (including one alternate in the case of absence of the member) of the Board of Directors shall constitute a quorum for the conduct of business of the Board except as otherwise provided by this Agreement, the Bylaws or other applicable provisions of law. SECTION 11: Officers of the Authority (a) The officers of the Authority shall be a President, Vice- President, Secretary and Treasurer whose duties shall be as set forth in this Agreement, the Bylaws or as prescribed by applicable provisions of law. (b) The President and Vice President shall be elected by the Board of Directors and shall serve two-year terms. Neither officer shall serve for more than two complete consecutive terms in his or her respective office. The terms of each office will ordinarily commence immediately following the first Board of Directors meeting of each odd-numbered calendar year except that if an election has not been conducted by that date, the terms shall commence as soon as the election has been held. (c) Unless the Board of Directors determines otherwise, the Secretary shall be an individual who is the senior representative of the Program Director. The Secretary shall serve at the pleasure of the Executive Board. If the senior representative of the Program Director is 5 11 G:\Share\CLIENT\jpa\CSRMA\Admin\Governing Documents\JPA Agreement\CSRMA - JEPA - Restated FINAL.doc

12 unable to serve for any reason, including his or her removal from office by the Executive Board, the Executive Board shall appoint a replacement who may be another senior member of the Program Director, a senior staff member of the Authority, a member of the Executive Board, a member of the Board of Directors or an officer, director or employee of a Member Agency. (d) Unless the Board of Directors determines otherwise, the Treasurer shall be appointed by the Executive Board and shall serve at the Executive Board's pleasure. The Treasurer shall be an officer, director or employee of a Member Agency. (e) The Authority may have such other officers as provided in the Bylaws. (f) If a vacancy occurs mid-term in the office of the President, the Vice President shall automatically succeed to the office of President to serve out the balance of the term of his/her predecessor. If a vacancy occurs mid-term in the office of Vice President, a successor shall be appointed by the Executive Board to serve out the balance of the term. SECTION 12: Executive Board (a) The day-to-day business of the Authority will be conducted, directed and supervised by an Executive Board consisting of eight members of the Board of Directors, seven of whom shall be regular members and one of whom shall be an alternate member. The alternate shall attend and participate in all meetings of the Executive Board but shall not be entitled to vote except in the absence of a regular member. (b) The Executive Board shall have the powers, duties and obligations granted to it by this Agreement, the Bylaws and as delegated by the Board of Directors. (c) The President and Vice President of the Authority shall serve as members of the Executive Board. The other five members and the alternate shall be elected by the Board of Directors and shall serve terms of office as provided in the Bylaws. (d) If a vacancy occurs mid-term in the office of a regular member of the Executive Board, the Alternate member, if there is one, shall automatically succeed to the vacant office for the balance of the term of his/her predecessor. If there is no Alternate member, or if the vacancy occurs mid-term in the office of the Alternate member, the Executive Board shall fill the vacant office by appointment and the appointee shall serve out the balance of his/her predecessor's term. SECTION 13: Committees The Authority shall have standing and other committees as may be provided for in the Bylaws or which are created by the Board of Directors, the Executive Board or the President. Committees of the Authority shall have powers, duties and responsibilities as provided in the Bylaws or as delegated and directed by the appointing person G:\Share\CLIENT\jpa\CSRMA\Admin\Governing Documents\JPA Agreement\CSRMA - JEPA - Restated FINAL.doc

13 (g) Action by the Board. All resolutions of the Board shall be in writing, signed by the President and attested to by the Secretary. All other actions of the Board shall be by motion recorded in written minutes. (h) Rule of Order. All rules of order not otherwise provided for shall be determined, to the extent practicable, in accordance with "Robert's Rules of Order;" provided, however, that no action of the Board shall be invalidated or its legality otherwise affected by the failure or omission to observe or follow "Robert's Rules of Order." ARTICLE III - EXECUTIVE BOARD SECTION 3.1. Membership. (a) The membership of the Executive Board shall be as set forth in Section 12 of the Agreement. (b) The members of the Executive Board shall be appointed as individuals and not merely as representatives of a specific Member Agency. SECTION 3.2. Term. The President and Vice President of the Board shall serve as Executive Board members during their tenure as such officers. The terms of all members of the Executive Board other than President and Vice President shall be two (2) years, with the terms of two (2) regular members and the alternate expiring in even-numbered years and the terms of the other three (3) regular members expiring in odd-numbered years. A member may be reappointed to serve on the Executive Board, but except for the President and Vice President, a member may not be appointed for more than two complete consecutive terms. SECTION 3.3. Powers, Duties and Responsibilities. (a) The Executive Board shall conduct, direct and supervise the day-to-day business of the Authority and in doing so shall exercise the powers expressly granted to it by the Agreement, these Bylaws and as otherwise delegated by the Board of Directors. (b) The following duties and responsibilities shall be assumed and carried out by the Executive Board, which shall have all powers necessary for those purposes: i. Provide general supervision and direction to the Program Director. ii. Authorize payment of claims against the Authority; provided, however, that with respect to claims arising under programs operated by the Authority, claim settlement authority shall be in accordance with the policies and procedures governing the particular program. iii. Enter into contracts, within budget limits. G:\Share\CLIENT\jpa\CSRMA\Admin\Governing Documents\Bylaws\CSRMA Bylaws - Restated FINAL.doc 13

14 iv. Make payments pursuant to previously authorized contracts, within budget limits; this authority includes the power to authorize and reimburse expenses incurred for budgeted activities, within budget limits. v. Review and recommend a budget to the Board no later than fifteen (15) days prior to the regular spring meeting of the Board. vi. Act as Program Director in the absence of the Program Director. vii. Establish policies and procedures to implement the Agreement, the Bylaws and the operation of specific programs. viii. Appoint a nominating committee for each election of officers and members of the Executive Board. (c) Subject only such limitations as are expressly stated in the Agreement, these Bylaws or a resolution of the Board of Directors, the Executive Board shall have and be entitled to exercise all powers which may be reasonably implied from powers expressly granted and which are reasonably necessary to conduct, direct and supervise the business of the Authority. SECTION 3.4. Meetings. (a) Regular Meetings. Regular meetings of the Executive Board shall be held at least twice a year and at other times as the Executive Board deems appropriate. The time and place of regular meetings shall be set by the Executive Board, and the Board of Directors shall be notified of the meeting schedule. The agenda for each regular meeting of the Executive Board shall be posted at the principal office of the Authority and mailed to each Executive Board member and alternate at least seven (7) days in advance of the meeting. (b) Special Meetings. Special meetings of the Executive Board may be called by the Chairman or a majority of Executive Board members, in accordance with the provisions of California Government Code Section The agenda for each special meeting of the Committee shall be posted at the principal office of the Authority and mailed to each Executive Board member so as to be received by each member at least two (2) days in advance of the meeting. (c) Public Meetings. All meetings of the Executive Board shall be open to the public, except as provided by law. (d) Quorum. Four (4) members of the Executive Board shall constitute a quorum for the transaction of business. Except as otherwise provided, no action may be taken by the Executive Board except by affirmative vote of not less than a majority of those Executive Board members present. A smaller number may adjourn a meeting. G:\Share\CLIENT\jpa\CSRMA\Admin\Governing Documents\Bylaws\CSRMA Bylaws - Restated FINAL.doc 14

15 (e) Action by the Executive Board. All resolutions of the Board shall be in writing, signed by the President and attested to by the Secretary. All other actions of the Board shall be by motion recorded in written minutes. (f) Removal From Executive Board. A member may be removed from the Executive Board in the following ways: i. Death of a Board member. ii. Voluntary resignation. iii. Absence from three (3) consecutive meetings without a valid reason, in which case the Chair may recommend to the Executive Board that member be terminated from Executive Board membership. If the Executive Board recommends to the Board of Directors that an Executive Board member be terminated, the Board of Directors shall vote on the matter at its next regularly scheduled meeting. Removal of an Executive Board member shall require an affirmative vote of not less than two-thirds (2/3) of those Board members present. ARTICLE IV - OFFICERS SECTION 4.1. Principal Officers. The principal officers of the Authority are the President, Vice-President, Secretary and Treasurer, as provide in Section 11 of the Agreement. The President and VicePresident shall also serve as Chair and Vice-Chair of the Executive Board. SECTION 4.2. Other Officers. The Executive Board may create such other offices and appoint such other officers as it deems necessary and advisable. Officers so appointed shall serve at the pleasure of the Executive Board and shall exercise such powers, perform such duties and assume such responsibilities as set forth in a resolution duly adopted by the Executive Board for that purpose. ARTICLE V - COMMITTEES SECTION 5.1. Establishment of Committees. Pursuant to Section 13 of the Agreement, the Authority shall have the standing committees specified in this Article and such other committees as may be appointed from time-to-time by the Board of Directors, Executive Board or the President. G:\Share\CLIENT\jpa\CSRMA\Admin\Governing Documents\Bylaws\CSRMA Bylaws - Restated FINAL.doc 15

16 Agenda Item No. E2 Board of Directors Meeting Meeting Date: April 26, 2013 Budget to Date Report as of March 31, 2013 ISSUE: Attached is the budget to date report as of March 31, 2013 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. Balance Sheet G:\Share\CLIENT\jpa\CSRMA\Agenda\_Board of Directors\2013\ \E.2 - Budget To Date doc 16

17 California Sanitation Risk Management Authority Income Statement July 1, 2012 to March 31, PIP Jul '12 - Mar 13 Budget $ Over Budget % of Budget Ordinary Income/Expense Income 4000 Non-Member Revenue , (2,744.25) 24.57% 4100 JPA Charge 22, , (7,639.19) 74.55% 4110 Program Directors' Fee 101, , (28,083.76) 78.31% 4220 Pooled Deposit Retro Adjustment Insurance Premium (Net) 280, , (84,773.16) 76.77% 4602 'Deductible Recoveries Interest Income , (549.67) 45.14% 4660 Investment Income Investment Income - Realized Investment Income - Unrealized Total 4660 Investment Income Total Income 405, , (123,761.01) 76.61% Expense 5201 Claims Expense Risk Control Online , (1,367.50) 41.31% 6330 Program Directors' Fee Exp. 102, , (27,414.45) 78.83% 6432 Net Insurance Premium 261, , (103,694.25) 71.58% 6464 User/Fraud Fund Assessment Actuarial Claims Audit Claims Admin. Annual Fee Coverage Counsel Safety Other (49.00) 87.75% 6523 Outside Safety Consultant 6, , (1,576.31) 79.58% 6650 Program Legal Program Committee Program Contingency Program Consulting % 6667 CSRMA Provided Seminars 6, , (1,169.09) 85.39% 7804 Accounting Consulting (120.00) 52.0% 7808 Financial Audit 1, , % 7822 Board Counsel , (678.21) 54.79% 8944 Printing/Promotion , (480.17) 51.98% 8945 Computer Software/Programming , (628.69) 37.13% 8946 Memberships/Other % 8948 Banking Service Charges (99.45) 83.43% 8954 Executive/Officers Committee 1, , (697.99) 72.08% 8956 Board of Directors (240.49) 65.64% 8960 JPA Insurance 2, , (652.24) 78.26% 8990 General Contingency , (745.00) 25.5% 9120 Dividends 0.00 Total Expense 387, , (139,492.84) 73.52% Net Ordinary Income 18, , , % Other Income/Expense Other Expense 8995 Gen. Acct. Cash Reconciliation 0.00 Total Other Expense 0.00 Net Other Income 0.00 Net Income 18, , , % *** Balances are preliminary and omit interest and investment activity for the quarter ending March

18 California Sanitation Risk Management Auth Income Statement July 1, 2012 to March 31, Property Jul '12 - Mar 13 Budget $ Over Budget % of Budget Ordinary Income/Expense Income 4000 Non-Member Revenue 4100 JPA Charge 4110 Program Directors' Fee 4220 Pooled Deposit 4391 Retro Adjustment 4400 Insurance Premium (Net) 4602 'Deductible Recoveries 4620 Interest Income 4660 Investment Income Investment Income - Realized Investment Income - Unrealized Total 4660 Investment Income , (2,744.25) 24.57% 22, , (7,505.00) 75.0% 112, , (37,462.47) 75.0% , ,204, (221,739.47) 81.59% ,219.88% Total Income 1,119, ,388, (268,864.11) 80.63% Expense 5201 Claims Expense 5300 Risk Control Online 6330 Program Directors' Fee Exp Net Insurance Premium 6464 User/Fraud Fund Assessment 6506 Actuarial 6510 Claims Audit 6512 Claims Admin. Annual Fee 6516 Coverage Counsel 6522 Safety Other 6523 Outside Safety Consultant 6650 Program Legal 6652 Program Committee 6658 Program Contingency 6660 Program Consulting 6667 CSRMA Provided Seminars 7804 Accounting Consulting 7808 Financial Audit 7822 Board Counsel 8944 Printing/Promotion 8945 Computer Software/Programming 8946 Memberships/Other 8948 Banking Service Charges 8954 Executive/Officers Committee 8956 Board of Directors 8960 JPA Insurance 8990 General Contingency 9120 Dividends Total Expense , (1,367.50) 41.31% 112, , (37,462.50) 75.0% 982, ,204, (221,739.50) 81.59% (49.00) 87.75% 6, , (1,576.31) 79.58% % 6, , (1,169.09) 85.39% (120.00) 52.0% 1, , % , (678.21) 54.79% , (480.17) 51.98% , (628.69) 37.13% % (99.45) 83.43% 1, , (697.99) 72.08% (240.49) 65.64% 2, , (652.24) 78.26% , (745.00) 25.5% ,119, ,386, (267,586.14) 80.7% Net Ordinary Income , (1,277.97) 5.82% Other Income/Expense Other Expense 8995 Gen. Acct. Cash Reconciliation Total Other Expense Net Other Income 0.00 Net Income , (1,277.97) 5.82% *** Balances are preliminary and omit interest and investment act 18

19 California Sanitation Risk Management Auth Income Statement July 1, 2012 to March 31, Liability Jul '12 - Mar 13 Budget $ Over Budget % of Budget Ordinary Income/Expense Income 4000 Non-Member Revenue 4100 JPA Charge 4110 Program Directors' Fee 4220 Pooled Deposit 4391 Retro Adjustment 4400 Insurance Premium (Net) 4602 'Deductible Recoveries 4620 Interest Income 4660 Investment Income Investment Income - Realized Investment Income - Unrealized Total 4660 Investment Income 7, , (21,950.00) 24.57% 202, , (67,862.50) 74.87% 435, , (145,247.86) 75.0% 1,795, ,663, (867,655.75) 67.42% (601,315.00) (250,000.00) (351,315.00) % 966, ,245, (279,699.66) 77.55% 220, , , % 68, , (52,466.43) 56.66% 1, , , Total Income 3,098, ,710, (1,611,565.17) 65.79% Expense 5201 Claims Expense 5300 Risk Control Online 6330 Program Directors' Fee Exp Net Insurance Premium 6464 User/Fraud Fund Assessment 6506 Actuarial 6510 Claims Audit 6512 Claims Admin. Annual Fee 6516 Coverage Counsel 6522 Safety Other 6523 Outside Safety Consultant 6650 Program Legal 6652 Program Committee 6658 Program Contingency 6660 Program Consulting 6667 CSRMA Provided Seminars 7804 Accounting Consulting 7808 Financial Audit 7822 Board Counsel 8944 Printing/Promotion 8945 Computer Software/Programming 8946 Memberships/Other 8948 Banking Service Charges 8954 Executive/Officers Committee 8956 Board of Directors 8960 JPA Insurance 8990 General Contingency 9120 Dividends Total Expense 1,033, ,432, (398,390.25) 72.18% 4, , (13,871.25) 25.58% 435, , (145,155.53) 75.02% 988, ,245, (257,410.32) 79.34% , , % 4, , , (5,100.00) 66.67% , (5,000.00) 0.0% 2, , (1,498.87) 59.49% 50, , (24,105.15) 67.83% 16, , (8,879.50) 64.48% 1, , (1,385.90) 44.56% , (2,000.00) 0.0% 4, , (8,038.00) 35.7% 30, , (5,261.08) 85.39% (215.00) 73.13% 7, , % 3, , (3,802.00) 49.31% 2, , (2,462.86) 50.74% 5, , (4,354.33) 56.46% % 2, , (432.55) 83.89% 8, , (2,891.10) 73.72% 2, , (452.21) 82.06% 10, , (2,743.13) 79.39% 1, , (3,852.50) 22.95% 711, , (38,088.00) 94.92% 3,366, ,297, (930,574.53) 78.35% Net Ordinary Income (268,117.64) 412, (680,990.64) (64.94%) Other Income/Expense Other Expense 8995 Gen. Acct. Cash Reconciliation Total Other Expense Net Other Income 0.00 Net Income (268,117.64) 412, (680,990.64) (64.94%) *** Balances are preliminary and omit interest and investment act 19

20 California Sanitation Risk Management Auth Income Statement July 1, 2012 to March 31, WC Jul '12 - Mar 13 Budget $ Over Budget % of Budget Ordinary Income/Expense Income 4000 Non-Member Revenue 4100 JPA Charge 4110 Program Directors' Fee 4220 Pooled Deposit 4391 Retro Adjustment 4400 Insurance Premium (Net) 4602 'Deductible Recoveries 4620 Interest Income 4660 Investment Income Investment Income - Realized Investment Income - Unrealized Total 4660 Investment Income 8, , (27,437.50) 24.57% 249, , (83,040.50) 75.0% 276, , (92,024.00) 75.0% 2,322, ,073, (750,282.61) 75.59% (583,626.00) (250,000.00) (333,626.00) % 318, , (98,753.61) 76.34% , , (43,893.60) 67.68% 1, , , Total Income 2,689, ,112, (1,423,161.95) 65.4% Expense 5201 Claims Expense 5300 Risk Control Online 6330 Program Directors' Fee Exp Net Insurance Premium 6464 User/Fraud Fund Assessment 6506 Actuarial 6510 Claims Audit 6512 Claims Admin. Annual Fee 6516 Coverage Counsel 6522 Safety Other 6523 Outside Safety Consultant 6650 Program Legal 6652 Program Committee 6658 Program Contingency 6660 Program Consulting 6667 CSRMA Provided Seminars 7804 Accounting Consulting 7808 Financial Audit 7822 Board Counsel 8944 Printing/Promotion 8945 Computer Software/Programming 8946 Memberships/Other 8948 Banking Service Charges 8954 Executive/Officers Committee 8956 Board of Directors 8960 JPA Insurance 8990 General Contingency 9120 Dividends Total Expense 1,814, ,248, (434,852.17) 80.66% 4, , (19,118.75) 17.95% 276, , (92,024.00) 75.0% 318, , (99,310.62) 76.21% 55, , , % , (32,754.00) 0.0% 8, , , % , , (929.08) 83.11% 80, , (47,352.00) 63.07% , (2,450.49) 1.98% , (2,500.00) 0.0% , (2,000.00) 0.0% 1, , (575.00) 77.0% 23, , (4,091.93) 85.39% , (608.00) 42.8% 5, , % 2, , (3,123.76) 47.94% 2, , (3,982.68) 33.62% 1, , (3,275.57) 34.49% % 1, , (441.09) 79.89% 6, , (2,193.04) 74.2% 1, , (351.71) 82.06% 8, , (2,133.89) 79.39% 11, , (3,457.50) 76.95% 1,487, , , % 4,148, ,289, (141,381.42) 96.7% Net Ordinary Income (1,458,644.53) (176,864.00) (1,281,780.53) % Other Income/Expense Other Expense 8995 Gen. Acct. Cash Reconciliation Total Other Expense Net Other Income 0.00 Net Income (1,458,644.53) (176,864.00) (1,281,780.53) % *** Balances are preliminary and omit interest and investment act 20

21 California Sanitation Risk Management Authority Profit && Loss Budget vs. Actual July 2012 through March 2013 TOTAL Jul '12 - Mar 13 Budget $ Over Budget % of Budget Ordinary Income/Expense Income 4000 Non-Member Revenue 17, , (54,876.00) 24.57% Risk Control Online usage less than expected & partial refund of prior year 4100 JPA Charge 496, , (166,047.19) 74.93% Three quarters recognized 4110 Program Directors' Fee 925, ,228, (302,818.09) 75.35% Three quarters recognized 4220 Pooled Deposit 4,118, ,736, (1,617,938.36) 71.8% Three quarters recognized 4391 Retro Adjustment (1,184,941.00) (500,000.00) (684,941.00) % Retro unknown at time of budget 4400 Insurance Premium (Net) 2,547, ,232, (684,965.90) 78.81% Three quarters recognized 4602 'Deductible Recoveries 220, , , % Deductible recoveries unknown at time of the budget 4620 Interest Income 161, , (96,360.96) 62.64% 3rd quarter data not yet recorded 4660 Investment Income Investment Income - Realized 2, , % 3rd quarter data not yet recorded Investment Income - Unrealized 7, , % 3rd quarter data not yet recorded Total 4660 Investment Income 10, , % Total Income 7,313, ,740, (3,427,352.24) 68.09% Expense 5201 Claims Expense 2,847, ,681, (833,242.42) 77.36% 5300 Risk Control Online 10, , (35,725.00) 23.34% Risk Control Online usage less than expected & partial refund of prior year 6330 Program Directors' Fee Exp. 926, ,228, (302,056.48) 75.41% Three quarters recognized 6432 Net Insurance Premium 2,550, ,232, (682,154.69) 78.9% Three quarters recognized 6464 User/Fraud Fund Assessment 55, , , % Assessment higher than prior year 6506 Actuarial 27, , (32,754.00) 45.19% WC actuarial invoiced in 4th quarter 6510 Claims Audit 12, , % Liability Program claims audit not budgeted inadvertantly 6512 Claims Admin. Annual Fee 40, , (5,100.00) 88.77% Liability Program paid monthly; WC Program will be paid in 3Q 6516 Coverage Counsel , (5,000.00) 0.0% 6522 Safety Other 7, , (2,525.95) 74.74% 6523 Outside Safety Consultant 143, , (74,609.77) 65.87% 6650 Program Legal 16, , (11,329.99) 58.8% 6652 Program Committee 1, , (3,885.90) 22.28% 6658 Program Contingency , (4,000.00) 0.0% Line item no longer used; will be removed from future budgets Program Consulting 7, , (8,513.00) 46.79% 6667 CSRMA Provided Seminars 68, , (11,691.19) 85.39% 7804 Accounting Consulting 1, , (1,063.00) 55.02% 7808 Financial Audit 17, , % Contract amount slightly more than budgeted 7822 Board Counsel 8, , (8,282.18) 49.81% 8944 Printing/Promotion 5, , (7,405.88) 43.03% 8945 Computer Software/Programming 8, , (8,887.28) 47.72% 21

22 TOTAL Jul '12 - Mar 13 Budget $ Over Budget % of Budget 8946 Memberships/Other 2, , % 8948 Banking Service Charges 5, , (1,072.54) 82.35% 3rd quarter activity not yet recorded 8954 Executive/Officers Committee 18, , (6,480.12) 73.55% 8956 Board of Directors 4, , (1,284.90) 78.15% 8960 JPA Insurance 23, , (6,181.50) 79.16% 8990 General Contingency 13, , (8,800.00) 60.0% 9120 Dividends 2,199, ,650, , % Dividends higher than expected Total Expense 9,021, ,500, (1,479,034.93) 85.92% Net Ordinary Income (1,708,641.31) 239, (1,948,317.31) (712.9%) Other Income/Expense Other Expense 8995 Gen. Acct. Cash Reconciliation % Total Other Expense % Net Other Income % Net Income (1,708,641.31) 239, (1,948,317.31) (712.9%) 22

23 California Sanitation Risk Management Authority Balance Sheet As of March 31, 2013 Mar 31, 13 ASSETS Current Assets Checking/Savings 1002 LAIF 8,394, General Checking - UB 180, WC Trust - UB 150, Liability Trust - UB 100, PFM/CA Asset Mgmt Program 17,981, PFM-CAMP Cash Reserve 954, Total Checking/Savings 27,761, Accounts Receivable 1100 Accounts Receivable 450, Total Accounts Receivable 450, Other Current Assets 1200 Interest Receivable 97, Prepaid Insurance Premium 1,691, Prepaid Program Directors' Fee 662, Total Other Current Assets 2,451, Total Current Assets 30,663, TOTAL ASSETS 30,663, LIABILITIES & EQUITY Liabilities Current Liabilities Accounts Payable 2000 Accounts Payable 3, Total Accounts Payable 3, Other Current Liabilities 2200 Deferred JPA Charge 315, Deferred Program Directors' Fee 661, Deferred Pooled Deposits 2,495, Deferred Insurance Premium 1,665, Total Other Current Liabilities 5,138, Total Current Liabilities 5,141, Long Term Liabilities 2300 Claims Reserves 6,920, Claims IBNR 6,698, Claims ULAE 1,273, Total Long Term Liabilities 14,891, Total Liabilities 20,033, Equity 3900 Retained Earnings 12,338, Net Income (1,708,641.31) Total Equity 10,629, TOTAL LIABILITIES & EQUITY 30,663, *** Balances are preliminary and omit interest and investment activity for the quarter ending March

24 Agenda Item No. E3 Board of Directors Meeting Meeting Date: April 26, 2013 Estimated Actual 12/13 Budget & Proposed 13/14 Budget ISSUE: Review and discuss the budget for Fiscal Year 2013/2014. RECOMMENDATION: The Executive Board recommends that the Board of Directors adopt the proposed budget for the fiscal year as presented with any verbal changes that may be noted at the meeting, and with the authority given to the Treasurer to make minor changes to the numbers presented if better estimates are reached prior to the commencement of the fiscal year. FISCAL IMPACT: As depicted in the proposed budget document. BACKGROUND: The proposed budget is the result of a number of assumptions and the analysis of many disparate factors. Each Program of the JPA is analyzed individually with general expenses of the JPA allocated to each program on a percentage basis. The majority of expenses however, are program specific. The two group purchase programs (Property, PIP) are designed to break even each year as there is no risk sharing involved and monies generally do not need to be accrued beyond a single fiscal year. The revenue and expenses of the two pooling programs (liability & workers comp.) however are driven heavily by actuarial projections and the underwriting results of prior Program Years as reflected through the retrospective rating and dividend calculations. For these reasons there is not necessarily a balance between revenue and expenses in any one year. The Program Administrators have identified some items that the Board may want to focus on, or review. These are described as follows: 1. Allocation percentages are used in the budget to calculate: JPA expenses, Interest Income, Program Directors Fees, and Safety Expenses for each Program, as follows: A. JPA Expenses are allocated back to each program based on the total expenses for the JPA, unless an expense item is program specific. The percentages used are 10% PIP, 10% Property, 45% Liability, and 35% Workers Compensation. The percentages are based on an estimate of how much time each Program takes as a percentage of overall JPA administration time. B. Interest Income is calculated according to each program s cash balance in LAIF and the short term investments in CAMP as reflected in the audited financials, and are adjusted each year. 24

25 C. Program Directors Fee is program specific and is based on the annual hours worked on each program in accordance to the contract agreement between Alliant Insurance Services and CSRMA. This amount has been increased by 5% solely for the sake of argument at this juncture. The Program Administrators are directed to negotiate their contract renewal with the Officers Committee for subsequent action by the Executive Board. Last year the Board approved a 10% reallocation of the Program Directors Fees between the PIP and Property Programs in the FY Budget. The Program Administrators reported to the Board last year that they believed the allocation of Program Directors Fees between the PIP and Property Program was out of alignment by as much as 20% - 25%, given the number of members participating in each Program and the associated Net Insurance Premium. The growth in the Property Program has outpaced the growth in the PIP Program. Therefore, the Program Administrators recommended that a portion of the Program Directors Fee for the PIP be allocated to the Property Program and recommended that the reallocation be phased in over 2-3 years. The Program Administrators are recommending another 10% reallocation of the Program Directors Fees between the PIP and Property Program to bring them in balance. This is reflected in the proposed FY Budget. D. Safety Expenses allocation percentages are 10% PIP, 10% Property, 35% Liability, and 45% Workers Compensation unless an expense item is program specific. These percentages are based on the Risk Control Advisor s time and resources applied to each program. E. Other Revenue and Risk Control Online Expense are new line items to account for revenue realized for selling access to Risk Control Online to nonmembers and the associated expense. The allocation percentages are 5% PIP, 5% Property, 40% Liability, and 50% Workers Compensation. ATTACHMENTS: Estimated Actual 12/13 Budget & Proposed 13/14 Budget (Separate) 25

26 Agenda Item No. E.4. Board of Directors Meeting Meeting Date: April 26, 2013 JPA Auditor Position Proposed Amendment to JPA Agreement and Bylaws ISSUE: The California Association of Joint Powers Authority s (CAJPA) Accreditation standards recommend that a JPA designate an Auditor, per the requirements of the California Government Code, specifically section 6505 et seq. CSRMA is currently accredited by CAJPA and will be renewing its accreditation in The Auditor is appointed by the entity (i.e. CSRMA) and can be one of its officers or employees. CSRMA s officers include the President, Vice President, Treasurer and Secretary. CSRMA has no employees. The Executive Board discussed the creation of an auditor position and the consensus was that the Treasurer should be appointed to serve as the JPA Auditor. Accordingly, the Executive Board directed the Program Administrators to work with legal counsel to prepare draft amendments to the Joint Exercise of Powers Agreement and Bylaws to create a Treasurer-Auditor position. The proposed amendments to the Joint Exercise of Powers Agreement and Bylaws have been made in redline strikeout and are attached to this item for the Board s review. In accordance with Section 26 of the JPA Agreement and Article IX of the Bylaws, notice of the proposed amendment was sent to the membership dated March 22, RECOMMENDATION: The Executive Board recommend to the Board of Directors adoption of the amended Joint Exercise of Powers Agreement and Bylaws. FISCAL IMPACT: None BACKGROUND: Traditionally, the Treasurer oversees the entity s funds and investments, and disburses funds; i.e., the Treasurer administers the funds. Whereas, the Auditor reviews and authorizes disbursements; i.e., the Auditor verifies and approves disbursements. Per the Government Code, the entity may appoint one of its officers or employees to either or both positions. Such offices may be held by separate officers or employees or combined and held by one officer or employee. Such person or persons shall comply with the duties and responsibilities of the office or offices as set forth in subdivisions (a) to (d) inclusive of the Section ATTACHMENTS: 1. California Government Code Section Amended JPA Agreement - RLSO 3. Amended Bylaws - RLSO G:\Share\CLIENT\jpa\CSRMA\Agenda\_Board of Directors\2013\ \E.4 - JPA Auditor Position_2013.doc 26

27 California Government Code: (a) The agreement shall provide for strict accountability of all funds and report of all receipts and disbursements. (b) In addition, and provided a separate agency or entity is created, the public officer performing the functions of auditor or controller as determined pursuant to Section , shall either make or contract with a certified public accountant or public accountant to make an annual audit of the accounts and records of every agency or entity, except that the officer need not make or contract for the audit in any case where an annual audit of the accounts and records of the agency or entity by a certified public accountant or public accountant is otherwise made by any agency of the state or the United States only as to those accounts and records which are directly subject to such a federal or state audit. In each case the minimum requirements of the audit shall be those prescribed by the Controller for special districts under Section and shall conform to generally accepted auditing standards. (c) When an audit of an account and records is made by a certified public accountant or public accountant, a report thereof shall be filed as public records with each of the contracting parties to the agreement and also with the county auditor of the county where the home office of the joint powers authority is located and shall be sent to any public agency or person in California that submits a written request to the joint powers authority. The report shall be filed within 12 months of the end of the fiscal year or years under examination. (d) When a nonprofit corporation is designated by the agreement to administer or execute the agreement and no public officer is required to perform the functions of auditor or controller as determined pursuant to Section , an audit of the accounts and records of the agreement shall be made at least once each year by a certified public accountant or public accountant, and a report thereof shall be filed as a public record with each of the contracting parties to the agreement and with the county auditor of the county where the home office of the joint powers authority is located, and shall be sent to any public agency or person in California that submits a written request to the joint powers authority. These reports shall be filed within 12 months after the end of the fiscal year or years under examination. (e) Any costs of the audit, including contracts with, or employment of certified public accountants or public accountants, in making an audit pursuant to this section shall be borne by the agency or entity and shall be a charge against any unencumbered funds of the agency or entity available for the purpose. (f) All agencies or entities may, by unanimous request of the governing body thereof, replace the annual special audit with an audit covering a two-year period. (g) Notwithstanding the foregoing provisions of this section to the contrary, agencies or entities shall be exempt from the requirement of an annual audit if the financial statements are audited by the Controller to satisfy federal audit requirements The contracting parties to an agreement made pursuant to this chapter shall designate the public office or officers or person or persons who have charge of, handle, or have access to any property of the agency or entity and shall require such public officer or officers or person or persons to file an official bond in an amount to be fixed by the contracting parties. 27 Page 1 of 2

28 If a separate agency or entity is created by the agreement, the agreement shall designate the treasurer of one of the contracting parties, or in lieu thereof, the county treasurer of a county in which one of the contracting parties is situated, or a certified public accountant to be the depositary and have custody of all the money of the agency or entity, from whatever source. The treasurer or certified public accountant so designated shall do all of the following: (a) Receive and receipt for all money of the agency or entity and place it in the treasury of the treasurer so designated to the credit of the agency or entity. (b) Be responsible, upon his or her official bond, for the safekeeping and disbursement of all agency or entity money so held by him or her. (c) Pay, when due, out of money of the agency or entity held by him or her, all sums payable on outstanding bonds and coupons of the agency or entity. (d) Pay any other sums due from the agency or entity from agency or entity money, or any portion thereof, only upon warrants of the public officer performing the functions of auditor or controller who has been designated by the agreement. (e) Verify and report in writing on the first day of July, October, January, and April of each year to the agency or entity and to the contracting parties to the agreement the amount of money he or she holds for the agency or entity, the amount of receipts since his or her last report, and the amount paid out since his or her last report. The officer performing the functions of auditor or controller shall be of the same public agency as the treasurer designated as depositary pursuant to this section. However, where a certified public accountant has been designated as treasurer of the entity, the auditor of one of the contracting parties or of a county in which one of the contracting parties is located shall be designated as auditor of the entity. The auditor shall draw warrants to pay demands against the agency or entity when the demands have been approved by any person authorized to so approve in the agreement creating the agency or entity. The governing body of the same public entity as the treasurer and auditor specified pursuant to this section shall determine charges to be made against the agency or entity for the services of the treasurer and auditor. However, where a certified public accountant has been designated as treasurer, the governing body of the same public entity as the auditor specified pursuant to this section shall determine charges to be made against the agency or entity for the services of the auditor In lieu of the designation of a treasurer and auditor as set forth in Section , the agency or entity may appoint one of its officers or employees to either or both of such positions. Such offices may be held by separate officers or employees or combined and held by one officer or employee. Such person or persons shall comply with the duties and responsibilities of the office or offices as set forth in subdivisions (a) to (d), inclusive, of Section In the event the agency or entity designates its officers or employees to fill the functions of treasurer or auditor, or both, pursuant to this section, such officers or employees shall cause an independent audit to be made by a certified public accountant, or public accountant, in compliance with Section Page 2 of 2

29 CSRMA V. JOINT EXERCISE OF POWERS AGREEMENT AMENDED AS OF JANUARY 14, 2011April 26, 2013 G:\Share\CLIENT\jpa\CSRMA\Agenda\_Board of Directors\2013\ \E.4.b - CSRMA - JEPA - Restated FINAL_Treasurer-Auditor RLSO.doc1 29

30 JOINT EXERCISE OF POWERS AGREEMENT FOR THE CALIFORNIA SANITATION RISK MANAGEMENT AUTHORITY THIS RESTATED AGREEMENT is made and entered by and between the local government entities who are presently parties to that certain "Joint Exercise of Powers Agreement For The California Sanitation Risk Management Authority," or who subsequently become signatories to this instrument (the "Agreement"). Recitals A. On April 2, 1986, the California Sanitation Risk Management Authority was formed by a group of California local public entities who executed a certain "Joint Exercise of Powers Agreement For the California Sanitation Risk Management Authority" (the "JEPA"). The JEPA has been amended on three occasions since then. Other local public entities have subsequently become signatories to the JEPA and members of California Sanitation Risk Management Authority ("CSRMA"), and at the present time there are sixty members of CSRMA who are parties to the JEPA. B. In the interval since CSRMA was founded, CSRMA has developed and is presently operating risk management and loss prevention programs related to public liability, environmental impairment, auto liability, public officials errors and omissions, property losses and workers' compensation risks in which CSRMA's local government entity members may and do participate. C. With the increase in membership in CSRMA and the development and operation of multiple programs, the conduct of CSRMA's business has become significantly more complex, resulting in the need for a restructuring of certain elements of the CSRMA organization. D. In order to implement the required restructuring, make other needed amendments to the provisions of the JEPA and incorporate all changes in a single instrument, the parties desire to restate the JEPA in the form of this Agreement. E. In order to make the agreement easier to read and understand, all previous endorsements and adjustments have been incorporated into a single instrument. Terms and Conditions In consideration of the foregoing Recitals and the mutual promises of the parties as set forth in the following Terms and Conditions, it is mutually agreed by all of the parties to this Agreement as follows: SECTION 1: Definitions The following definitions shall apply to the provisions of this Agreement: 1 G:\Share\CLIENT\jpa\CSRMA\Agenda\_Board of Directors\2013\ \E.4.b - CSRMA - JEPA - Restated FINAL_Treasurer-Auditor RLSO.doc 30

31 (a) "Agreement" shall mean this restated Joint Exercise of Powers Agreement. (b) "Authority" shall mean the California Sanitation Risk Management Authority (sometimes also referred to in this Agreement as the "CSRMA") created by and existing under this Agreement. (c) "Board of Directors" shall mean the principal governing body of the Authority. (d) "Bylaws" shall mean the adopted Bylaws of the Authority as amended and/or restated in their latest approved form. (e) "Executive Board" shall mean the Executive Board of the Authority's Board of Directors. (f) "Insurance" shall mean any program of the Authority providing coverage against losses to Member Agencies who are participants in the program whether the coverage is based upon purchased insurance, self-insurance, pooled funding or any other similar mechanism, instrument or facility. (g) "Member Agency" shall mean an entity of local government, which is a party to this Agreement. (h) "Program Director" shall mean the individual or firm retained by the Board of Directors to administer the Authority. SECTION 2: Legal Authority For Agreement (a) This Agreement is entered into pursuant to the provisions of Article 1, Chapter 5, Division 7, Title 1 of the California Government Code (beginning with Section 6500) which authorizes two or more local public entities, such as the Member Agencies who are parties to this Agreement, to exercise any power which is common to each of them. (b) This Agreement is also based upon applicable provisions of law which empower local public entities, such as the Member Agencies who are parties to this Agreement, to engage in risk management and loss prevention activities. Those provisions of law include Chapter 3, Part 6, Division 3.6, Title 1 of the California Government Code (beginning with Section 989) having to do with insurance and self-insurance coverage for local public entities. SECTION 3: Purposes The purposes of this Agreement are to: (a) Provide for the continuation and effective governance of the Authority. (b) Continue effective operation of cooperative programs of risk management and loss prevention so as to reduce or eliminate losses and loss exposures, decrease the expenses 2 G:\Share\CLIENT\jpa\CSRMA\Agenda\_Board of Directors\2013\ \E.4.b - CSRMA - JEPA - Restated FINAL_Treasurer-Auditor RLSO.doc 31

32 of claims and claims administration and improve procedures to manage risks commonly experienced by the parties to this Agreement. (c) Continue effective operation of existing Insurance programs in the areas of public liability, environmental impairment, auto liability, public officials errors and omissions, workers compensation and property losses. (d) Implement new Insurance and other programs related to the foregoing purposes which the Authority deems necessary, advisable and beneficial to the parties to this Agreement. (e) Pool the self-insurance claims of two or more local public entities as referred to in California Government Code SECTION 4: Parties to the Agreement (a) Only local public entities of California government which are empowered by law and actually engaged in activities pertaining to the disposal of wastewaters and water borne sanitary wastes may be considered for membership in the Authority. (b) The parties to this Agreement are all local public entities which are, as of the effective date of this Agreement, Member Agencies of the Authority or which are subsequently admitted as Member Agencies in accordance with Section 21 of this Agreement. SECTION 5: Term of Agreement Subject to the power to terminate any Member Agency's membership in the Authority, as provided for in this Agreement, this Agreement shall continue indefinitely, and it shall not be terminated so long as two or more Member Agencies agree that the Agreement, and the Authority, be continued. SECTION 6: Existence of Authority As Separate Public Entity With Sole Responsibility For Its Obligations Pursuant to California Government Code Sections 6500 et seq., a public entity of the State of California known as the California Sanitation Risk Management Authority has been created and does now exist. The Authority exists separately and apart from the Member Agencies. Pursuant to California Government Code Section the debts, liabilities and obligations of the Authority shall be solely its own and they shall not constitute debts, liabilities or obligations of its officers, directors, employees, agents, Board of Directors, Executive Board, Program Director or of any Member Agency. SECTION 7: Powers of Authority (a) The Authority shall have all of the powers common to the parties to this Agreement and all additional powers afforded under California law to public entities such as Authority, formed for the purpose of jointly exercising powers common to their members. The Authority is also authorized by this Agreement to do all acts necessary for the exercise of its powers. The Authority's powers include, but are not limited to, the following: 3 32 G:\Share\CLIENT\jpa\CSRMA\Agenda\_Board of Directors\2013\ \E.4.b - CSRMA - JEPA - Restated FINAL_Treasurer-Auditor RLSO.doc

33 i. To make and enter into contracts. ii. To incur debts, liabilities, and obligations. iii. To acquire, hold, or dispose of property, contributions and donations of property, funds, services, and other forms of assistance from persons, firms, corporations, and government entities. iv. To sue and be sued in its own name, and to settle any claim against it. v. To receive and use contributions and advances from member Districts as provided in California Government Code Section 6505, including contributions or advances of personnel, equipment or property. vi. To invest any money in its treasury that is not required for its immediate necessities, pursuant to Government Code Section vii. To carry out all provisions of this Agreement. (b) Pursuant to California Government Code Section 6509 the Authority's powers shall be exercised in the manner and according to Procedures provided in the laws applicable to a California county sanitation district, as set forth in the County Sanitation District Act (California Health and Safety Code Sections 4700 et seq.). SECTION 8: Board of Directors The Authority shall be governed by a Board of Directors which shall be composed of representatives of those Member Agencies who have exercised their right to participate on the Board of Directors. Each Member Agency shall be entitled at any given time to appoint one member and one or more alternate member(s) of the Board of Directors, each of whom shall be an officer, director or employee of the appointing Member Agency. Appointments shall be made as specified in the Bylaws. At any meeting of the Board of Directors, each duly appointed member, or in the member's absence, one of the alternate members as determined by the Member Agency, shall have one vote on behalf of his or her Member Agency. SECTION 9: Powers of the Board of Directors (a) The Member Agencies, acting through the Board of Directors, shall retain overall responsibility for governance of the Authority, including the right to exercise all powers of the Authority not delegated to other persons or bodies of the Authority. (b) The Board of Directors shall have the following express powers, duties and responsibilities: 4 G:\Share\CLIENT\jpa\CSRMA\Agenda\_Board of Directors\2013\ \E.4.b - CSRMA - JEPA - Restated FINAL_Treasurer-Auditor RLSO.doc 33

34 i. Election of certain Authority officers and the members of its Executive Board, except that vacancies occurring in those offices during their term shall be filled pursuant to Section 11(f) and 12(d) ii. Approval of the annual budget of the Authority. iii. Approval of amendments to this Agreement and the Bylaws. iv. Approval of new Insurance programs of the Authority. v. The exercise of powers of the Authority, including promulgation of policies, procedures and rules, with respect to all matters reserved to the Board of Directors by this Agreement, the Bylaws or otherwise. SECTION 10: Meetings of the Board of Directors (a) The Bylaws of the Authority shall make provision for calling and holding meetings of the Board of Directors which shall include, in any event, at least one regular meeting annually. (b) Meetings of the Board of Directors shall be conducted in accordance with this Section, the Bylaws and applicable provisions of law governing the meetings of legislative bodies and governing boards of local public entities of the State of California including the provisions of the Ralph M. Brown Act (California Government Code Section et seq.). (c) The presence in person (or by telephone in the case of a noticed telephonic meeting) of a majority of the then duly appointed members (including one alternate in the case of absence of the member) of the Board of Directors shall constitute a quorum for the conduct of business of the Board except as otherwise provided by this Agreement, the Bylaws or other applicable provisions of law. SECTION 11: Officers of the Authority (a) The officers of the Authority shall be a President, Vice- President, Secretary and TreasurerTreasurer-Auditor whose duties shall be as set forth in this Agreement, the Bylaws or as prescribed by applicable provisions of law. (b) The President and Vice President shall be elected by the Board of Directors and shall serve two-year terms. Neither officer shall serve for more than two complete consecutive terms in his or her respective office. The terms of each office will ordinarily commence immediately following the first Board of Directors meeting of each odd-numbered calendar year except that if an election has not been conducted by that date, the terms shall commence as soon as the election has been held. (c) Unless the Board of Directors determines otherwise, the Secretary shall be an individual who is the senior representative of the Program Director. The Secretary shall serve at the pleasure of the Executive Board. If the senior representative of the Program Director is 5 G:\Share\CLIENT\jpa\CSRMA\Agenda\_Board of Directors\2013\ \E.4.b - CSRMA - JEPA - Restated FINAL_Treasurer-Auditor RLSO.doc 34

35 unable to serve for any reason, including his or her removal from office by the Executive Board, the Executive Board shall appoint a replacement who may be another senior member of the Program Director, a senior staff member of the Authority, a member of the Executive Board, a member of the Board of Directors or an officer, director or employee of a Member Agency. (d) Unless the Board of Directors determines otherwise, the TreasurerTreasurer-Auditor shall be appointed by the Executive Board and shall serve at the Executive Board's pleasure. The TreasurerTreasurer-Auditor shall be an officer, director or employee of a Member Agency. (e) The Authority may have such other officers as provided in the Bylaws. (f) If a vacancy occurs mid-term in the office of the President, the Vice President shall automatically succeed to the office of President to serve out the balance of the term of his/her predecessor. If a vacancy occurs mid-term in the office of Vice President, a successor shall be appointed by the Executive Board to serve out the balance of the term. SECTION 12: Executive Board (a) The day-to-day business of the Authority will be conducted, directed and supervised by an Executive Board consisting of eight members of the Board of Directors, seven of whom shall be regular members and one of whom shall be an alternate member. The alternate shall attend and participate in all meetings of the Executive Board but shall not be entitled to vote except in the absence of a regular member. (b) The Executive Board shall have the powers, duties and obligations granted to it by this Agreement, the Bylaws and as delegated by the Board of Directors. (c) The President and Vice President of the Authority shall serve as members of the Executive Board. The other five members and the alternate shall be elected by the Board of Directors and shall serve terms of office as provided in the Bylaws. (d) If a vacancy occurs mid-term in the office of a regular member of the Executive Board, the Alternate member, if there is one, shall automatically succeed to the vacant office for the balance of the term of his/her predecessor. If there is no Alternate member, or if the vacancy occurs mid-term in the office of the Alternate member, the Executive Board shall fill the vacant office by appointment and the appointee shall serve out the balance of his/her predecessor's term. SECTION 13: Committees The Authority shall have standing and other committees as may be provided for in the Bylaws or which are created by the Board of Directors, the Executive Board or the President. Committees of the Authority shall have powers, duties and responsibilities as provided in the Bylaws or as delegated and directed by the appointing person. 6 G:\Share\CLIENT\jpa\CSRMA\Agenda\_Board of Directors\2013\ \E.4.b - CSRMA - JEPA - Restated FINAL_Treasurer-Auditor RLSO.doc 35

36 SECTION 14: Program Director and Other Staff (a) The Board of Directors shall appoint a Program Director who shall be responsible for the general administration of the business and activities of the Authority as directed by the Executive Board. (b) The Board of Directors shall appoint an attorney at law who shall serve as general Legal Counsel to the Authority. (c) Subject to the direction of the Board of Directors, the Executive Board shall provide for the appointment of such other staff of the Authority as may be necessary for the administration of the Authority. (d) As determined by the Executive Board, staff functions may be performed by employees of the Authority, by officers, directors and employees of Member Agencies and by agents, advisors and consultants retained under contract by Authority. (e) The Program Director and other staff of the Authority shall have such powers, duties and obligations as are established by this Agreement, the Bylaws, the policies, procedures and rules promulgated by the Authority and any contractual arrangements which may exist between the Authority and the respective person. (f) Subject to any applicable contractual arrangements which may take precedence, the Program Director and Legal Counsel shall serve at the will and pleasure of the Board of Directors and all other staff shall serve at the will and pleasure of the Executive Board. SECTION 15: Insurance Coverage The Authority shall maintain insurance coverage on its activities as determined by the Executive Board to be necessary and adequate. SECTION 16: Accounts and Records (a) Annual Budget. The Authority shall adopt an annual budget, which shall include a separate budget for each separate Insurance program under development or adopted and implemented by the Authority. The Executive Board shall cause to be prepared, shall review and approve and shall recommend a proposed annual budget to the Board of Directors for its consideration. The recommended budget shall be submitted to the members of the Board of Directors not later than fifteen (15) days prior to the Board of Directors' regular spring meeting. (b) Funds and Accounts. As directed by the Executive Board, the TreasurerTreasurer- Auditor of the Authority shall establish and maintain such funds and accounts as may be required by law and good accounting practices. Separate accounts shall be established and maintained for each insurance program under development or adopted and implemented by the Authority. Books and records of the Authority in the hands of the 7 G:\Share\CLIENT\jpa\CSRMA\Agenda\_Board of Directors\2013\ \E.4.b - CSRMA - JEPA - Restated FINAL_Treasurer-Auditor RLSO.doc 36

37 TreasurerTreasurer-Auditor shall be open to inspection at all reasonable times by authorized representatives of Member Agencies. A quarterly unaudited financial statement will be produced and distributed to all Member Agencies. The Authority shall adhere to the standard of strict accountability for funds set forth in Government Code Section (c) TreasurerTreasurer-Auditor's Report. The TreasurerTreasurer-Auditor, within one hundred and twenty (120) days after the close of each fiscal year, shall give a complete written report of all financial activities for such fiscal year to the Board and to each member District. (d) Annual Audit. Pursuant to Government Code Section 6505, the Authority shall contract with an independent certified public accountant to make an annual fiscal year audit of all accounts and financial statements of the Authority, conforming in all respects with the requirements of that section. A report of the audit shall be filed as a public record with the County Auditor of each Member Agency within six months of the end of the fiscal year under examination. Costs of the audit shall be considered a general expense of the Authority. SECTION 17: Responsibilities for Funds and Property (a) The TreasurerTreasurer-Auditor shall have custody of and disburse the Authority's funds. He or she may delegate disbursing authority to such persons as may be authorized by the Executive Board to perform that function, subject to the requirements of (b) below. (b) Pursuant to Government Code Section , the TreasurerTreasurer-Auditor shall: i. Receive and acknowledge receipt for all funds of the Authority and place them in the treasury of the TreasurerTreasurer-Auditor to the credit of the Authority. ii. Be responsible upon his or her official bond for the safekeeping and disbursement of all Authority funds so held by him or her. iii. Pay any sums due from the Authority, as approved for payment by the Executive Board or by any body or person to whom the Board has delegated approval authority, making such payments from Authority funds upon warrants drawn by the TreasurerTreasurer-Auditor. All warrants of the Authority shall be signed by two persons as designated by the Board; provided, however, that the Board may, by resolution, authorize imprest accounts for expenditures of funds in limited amounts for which only one authorized signatory shall be required on the instrument. iv. Verify and report in writing to the Authority and to Member Agencies, as of the first day of each quarter of the fiscal year, the amount of money then held for the Authority, the amount of receipts since the last report, and the amount paid out since the last report. 8 G:\Share\CLIENT\jpa\CSRMA\Agenda\_Board of Directors\2013\ \E.4.b - CSRMA - JEPA - Restated FINAL_Treasurer-Auditor RLSO.doc 37

38 (c) Pursuant to Government Code Section , the Program Director, the TreasurerTreasurer-Auditor and such other persons as the Board of Directors may designate shall have charge of, handle and have access to the property of the Authority. (d) The Authority shall secure and pay for a fidelity bond or bonds, in an amount or amounts and in form specified by the Board of Directors, covering the TreasurerTreasurer-Auditor and all other officers and staff of the Authority who are authorized to hold or disburse funds of the Authority, and all other officers and staff who are authorized to have charge of, handle, and have access to property of the Authority. SECTION 18: Responsibilities of the Authority The Authority shall perform the following functions in discharging its responsibilities under this Agreement: (a) Assist each Member Agency's designated risk manager with the risk management function; (b) Provide loss prevention and safety services to the Member Agencies; (c) Provide claims adjusting and claims management services as required; (d) Provide statistical reports to the Member Agencies; (e) Recommend standard contract clauses relating to indemnity, hold harmless, insurance and other similar matters affecting Member Agencies; and (f) Provide other services consistent with purposes of the Authority as may be deemed necessary, advisable and beneficial to the Member Agencies. SECTION 19: Responsibilities of the Member Agencies (a) Each Member Agency shall appoint one employee or other representative to be responsible for the Member Agency's risk management functions and to serve as liaison between Member Agency and the Authority as respects risk management. (b) Each Member Agency shall maintain an active safety program through a designated safety officer and/or safety committee. (c) Each Member Agency shall timely pay all premiums, fees, charges and assessments imposed or levied by the Authority. (d) Each Member Agency shall provide the Authority with requested information and assistance in order to fulfill the programs under this Agreement. 9 G:\Share\CLIENT\jpa\CSRMA\Agenda\_Board of Directors\2013\ \E.4.b - CSRMA - JEPA - Restated FINAL_Treasurer-Auditor RLSO.doc 38

39 (e) Each Member Agency shall in all ways cooperate with and assist the Authority in all matters relating to this Agreement and comply with the Bylaws and the policies, procedures and rules promulgated by the Authority. (f) Each Member Agency shall cooperate fully with the Authority in determining the causes of losses and in the settlement of losses. SECTION 20: Development, Implementation and Funding of Insurance Programs (a) Program Coverage. The Authority may develop and implement programs of Insurance, which the Authority deems necessary, advisable and beneficial to Member Agencies. Subject to any Insurance program's applicable underwriting rules and other qualifying conditions, each Member Agency shall be eligible to apply for membership and participation in any program conducted by the Authority. (b) Program and Authority Funding. The Member Agencies developing or participating in an insurance program shall fund all costs of that program, including administrative costs, as hereinafter provided. Costs of staffing and supporting the Authority, hereinafter called Authority general expenses, shall be equitably allocated among the various programs and shall be funded by the Member Agencies developing or participating in such programs in accordance with such allocations, as hereinafter provided. i. Development Charge. Development costs of an insurance program shall be funded by a development charge as fixed by the Executive Board. The development charge shall be paid by each Member Agency which wishes to join in development of the program, after receipt of information as estimated on the cost and scope of the program, and thereby reserve the option to participate in the program following its adoption by the Board of Directors. Development costs are those costs incurred by the Authority in developing a program for review and adoption by the Board of Directors, including but not limited to: research, feasibility studies, information and liaison work among Districts, preparation and review of documents, and actuarial and risk management consulting services. The development charge may also include an equitable share of Authority general expense incurred in the development function. Upon the conclusion of program development: any deficiency in development funds shall be billed to all Member Agencies which have paid the development charge, on a pro-rata or other equitable basis, as determined by the Executive Board; and any surplus in such funds shall be transferred into the loss reserve fund for the program, or, if the program is not implemented, into the Authority's general fund. ii. Annual Premium. Except as provided in iii. below, all post-development costs of an insurance program shall be funded by annual premiums charged to the Member Agencies participating in the program each policy year, and by interest earnings on the fund so accumulated. Premiums shall be determined by the Executive Board upon the basis of a cost allocation plan and rating formula developed by the Authority with the assistance of an actuary, risk management consultant or other qualified person. The premium for each participating Member Agency shall include that Member Agency's share of expected program losses, program reinsurance costs, and program 10 G:\Share\CLIENT\jpa\CSRMA\Agenda\_Board of Directors\2013\ \E.4.b - CSRMA - JEPA - Restated FINAL_Treasurer-Auditor RLSO.doc 39

40 administrative costs for the year plus that Member Agency's share of Authority general expense allocated to the program. Annual premiums shall be billed by the Authority at the beginning of each policy year and shall be payable within thirty (30) days of the billing date. At the end of each policy year, program costs shall be audited by the Authority. Any deficiency or surplus in the premium paid by a participating Member Agency, as shown by such audit, shall be adjusted by a corresponding increase or decrease in the premium charge to that Member Agency for the next succeeding year, or held by the Authority to pay future expenses of the program unless the Member Agency withdraws or is canceled from the program. iii. Assessment. If the Authority experiences an unusually large number of losses under a program during a policy year, such that pooled funds for the program may be exhausted or depleted excessively before the next annual premiums are due, the Board of Directors may, upon consultation with an actuary, impose assessments on all participating Member Agencies, which, in total amount, will assure adequate funds to the Authority for the payment of all incurred losses. SECTION 21: New Members A local public entity that is not a Member Agency may become a party to this Agreement only upon approval of the Executive Board and by paying an appropriate entry fee or charge as established by the Executive Board. The Executive Board may condition its approval upon the proposed new member's ability to satisfy the underwriting criteria and other qualifying conditions which may then be in effect for any Insurance program in which the proposed new member District wishes to participate. SECTION 22: Withdrawal (a) A Member Agency may withdraw as a party to this Agreement upon thirty (30) days' advance written notice to the Authority if it has never become a participant in any Insurance program, or if it has withdrawn from all insurance programs in which it was a participant, pursuant to (b) below. (b) After becoming a participant in an Insurance program, a Member Agency may withdraw from that program only at the end of a policy year for the program, and, unless the Insurance program's policies, procedures and rules otherwise provide, only if the Member Agency has given the Authority at least six (6) months' advance written notice of such action. SECTION 23: Termination (a) Notwithstanding the provisions of Section 22, the Board of Directors may: i. Terminate any District from this Agreement and membership in the Authority, on a vote of two-thirds of the Board members present and voting. Such action shall have the effect of terminating the District's participation in all insurance programs of the Authority as of the date that membership is terminated. 11 G:\Share\CLIENT\jpa\CSRMA\Agenda\_Board of Directors\2013\ \E.4.b - CSRMA - JEPA - Restated FINAL_Treasurer-Auditor RLSO.doc 40

41 ii. Terminate any District's participation in an insurance program of the Authority, without terminating the District's membership in the Authority or participation in other programs, on a vote of two-thirds of the Board members present and voting. (b) The Board shall give sixty (60) days' advance written notice of the effective date of any termination under the provisions of (a) above. Upon the effective date, the Member Agency shall be treated the same as if it had voluntarily withdrawn from this Agreement or from the program, as the case may be. A termination procedure will be set forth in the Bylaws of the Authority. (c) A Member Agency which does not enter one or more of the Insurance programs of the Authority within 36 months after the Member Agency becomes a party to this Agreement shall be considered to have withdrawn as a party to this Agreement at the expiration of the 36-month period, and its membership in the Authority shall be automatically canceled as of that time without action of the Board of Directors. (d) A Member Agency which withdraws from all Insurance programs of the Authority in which it was a participant and does not enter any program for a period of six (6) months thereafter shall be considered to have withdrawn as a party to this Agreement at the end of that period, and its membership in the Authority shall be automatically canceled as of that time, without action of the Board of Directors. SECTION 24: Effect of Withdrawal or Termination The withdrawal or termination of any Member Agency from this Agreement shall not terminate the responsibility of the Member Agency to continue to contribute its share of assessments or other financial obligations incurred by reason of its prior participation, nor shall a Member Agency s withdrawal or termination require the Authority to repay or return to the Member Agency all or any part of any contributions, payments or advances made by the Member Agency expect as provided in Section 24.1 below. SECTION 24.1: Disposition of Property and Funds (a) Upon the dissolution of the Authority or other final termination of the Agreement, any properties of the Authority shall be liquidated and the funds received, together with other funds on hand, shall be used first to discharge all obligations of the Authority. These obligations shall include all claims for which the Authority may have financial responsibility including claims which have been incurred but not reported, and shall be determined by independent accountants and actuaries selected by the Executive Board. Any surplus funds remaining after payment of or providing for the Authority s obligations shall be applied in accordance with Subsection (b) below. (b) Surplus money on hand in a self-insurance pool operated by the Authority shall be returned to present and former Member Agencies who participated in the pool in proportion to contributions made and claims or losses paid as specified in California Government Code Section Any other surplus money remaining on hand shall be 12 G:\Share\CLIENT\jpa\CSRMA\Agenda\_Board of Directors\2013\ \E.4.b - CSRMA - JEPA - Restated FINAL_Treasurer-Auditor RLSO.doc 41

42 returned in proportion to contributions made as specified in California Government Code Section SECTION 25: Provision for Bylaws The Authority shall develop, adopt, amend and promulgate Bylaws and other executive directives to govern the operations of the Authority. Each Member Agency will be provided with copies of all such materials. SECTION 26: Amendment of Agreement This Agreement may be amended at any time by a two-thirds vote of the entire Board of Directors, provided, however, that: (a) Any meeting at which an amendment is to be acted upon shall require thirty (30) days' prior notice of the proposal, with the specifics of the proposed amendment to be set forth in the notice; and (b) No amendment which increases the liability or financial obligation of a Member Agency shall be approved without: i. That Member Agency's consent; or ii. That Member Agency being given the specific option to withdraw from the Authority. SECTION 27: Agreement Complete The foregoing constitutes the full and complete agreement of the parties. There are no oral understandings or agreements not set forth in this instrument. SECTION 28: Effective Date of Restated Agreement The effective date of this Agreement as restated shall be the date that the Board of Directors of the Authority duly and regularly adopts a resolution approving the form of this Agreement in the manner provided by Section 26 of the JEPA. SECTION 29: Superseding Effect This Agreement supersedes JEPA (referred to in Recital A above), and shall govern the rights and obligations of the parties as to all matters covered by this Agreement after its effective date. SECTION 30: Contract with Each Signatory Each party to this Agreement, whether by having been a signatory to JEPA (referred to in Recital A above) or by having become a signatory to this Agreement, shall be deemed and is, a contracting party with each and all of the other parties to this Agreement without regard to the time that a party became a party to the Agreement. The deletion of one or more parties from this Agreement shall not affect the validity, term or continuing effectiveness of this Agreement. 13 G:\Share\CLIENT\jpa\CSRMA\Agenda\_Board of Directors\2013\ \E.4.b - CSRMA - JEPA - Restated FINAL_Treasurer-Auditor RLSO.doc 42

43 * * * * * * * * * Certificate of Secretary The undersigned Secretary of California Sanitation Risk Management Authority certifies that the foregoing Joint Exercise of Powers Agreement (Restated as of January 14, 2011) was adopted by Resolution No. 3-11TBD(BD) of the Board of Directors of California Sanitation Risk Management Authority at a meeting of the Board duly and regularly called and conducted on January 14, 2011April 26, Secretary 14 G:\Share\CLIENT\jpa\CSRMA\Agenda\_Board of Directors\2013\ \E.4.b - CSRMA - JEPA - Restated FINAL_Treasurer-Auditor RLSO.doc 43

44 BYLAWS of the CALIFORNIA SANITATION RISK MANAGEMENT AUTHORITY PREAMBLE These Bylaws are adopted effective April 26, 2013January 14, 2011 pursuant to the "Joint Exercise of Powers Agreement of the California Sanitation Risk Management Authority" (the "Agreement"). These Bylaws supersede the Bylaws of the California Sanitation Risk Management Authority ("CSRMA") which were initially adopted by a resolution of CSRMA's Board of Directors on November 16, 1986, and were subsequently restated as of August 17, 1988 and August 9, 1991, and amended effective May 15, 1992, October 18, 1994, November 5, 1997, May 4, 2001, August 9, 2002, January 23, 2004, August 19, 2005, May 4, 2007, and January 15, 2010 and January 14, ARTICLE I - THE AUTHORITY SECTION 1.1. Name of Authority. The name of the Authority created by the Agreement shall be the California Sanitation Risk Management Authority (the "Authority"). SECTION 2.1. Office of Authority. The principle office of the Authority shall be at the address listed in Attachment A to these Bylaws, or at such other location as the Board of Directors may designate by resolution. SECTION 3.1. Fiscal Year. The fiscal year for the Authority shall commence July 1 of each calendar year and end June 30 of the following calendar year. ARTICLE II - BOARD OF DIRECTORS SECTION 2.1. Membership. The Authority shall be governed by a Board of Directors. Each of the parties to the Agreement as set forth in Sections 4 and 21 of the Agreement (the "Member Agencies") shall be entitled to participate and be represented by a representative on the Board of Directors. If a Member Agency elects to exercise its right to representation on the Board of Directors, it shall promptly notify the Authority in writing of the names of the Board member and alternates who have been selected to represent the Member Agency, and subsequently of any successors to them. The Member Agency shall also comply with any other procedures which may be established by resolution of the Board of Directors to identify Member Agencies who have chosen to participate and be represented on the Board of Directors and to authenticate Member Agencies' representatives. All designated Board members and alternates shall comply with the provisions of California law which require certain public officials to file Statements of Economic Interests. Any Member Agency which is not then exercising its right to participate on the Board of Directors may change its status at any time by written G:\Share\CLIENT\jpa\CSRMA\Agenda\_Board of Directors\2013\ \E.4.c - CSRMA Bylaws - Restated FINAL_Treasurer-Auditor RLSO.doc 44

45 notice to the Authority of that decision, by designation of its representative Board member and alternate and by compliance with any other procedures established by the Board of Directors." SECTION 2.2. Powers. The powers of the Board shall be as set forth in Section 8 of the Agreement. SECTION 2.3. Meetings. (a) Regular Meetings. Regular meetings of the Board shall be held in winter, spring and summer of each year at a time and place to be set by the Board. Except as otherwise provided in Section 26 of the Agreement, the agenda for each regular meeting of the Board shall be posted at the principal office of the Authority and mailed to each Member Agency at least fifteen (15) days in advance of the meeting. (b) Special Meetings. Special meetings of the Board may be called in accordance with the provisions of California Government Code Section The agenda for each special meeting of the Board shall be posted at the principal office of the Authority and mailed to each Member Agency at least fifteen (15) days in advance of the meeting. (c) Public Meeting. All meetings of the Board shall be open to the public, except as provided by law. (d) Quorum. The presence of a majority of the members of the Board shall constitute a quorum for the transaction of business. Except as otherwise provided in the Agreement, the Bylaws or by law, no action may be taken by the Board except by affirmative vote of not less than a majority of those members of the Board present. A smaller number may adjourn a meeting. (e) Order of Business. At the regular meetings of the Board, the following shall be the order of business: i. Roll Call. ii. iii. iv. Approval of Minutes of the previous meeting. Agenda Items. Adjournment (f) Manner of Voting. With respect to matters of business affecting only a particular insurance program, voting on such matters shall be restricted to those Board members whose Member Agencies are participants in that particular program, and the votes of other Board members shall not be counted. G:\Share\CLIENT\jpa\CSRMA\Agenda\_Board of Directors\2013\ \E.4.c - CSRMA Bylaws - Restated FINAL_Treasurer-Auditor RLSO.doc 45

46 (g) Action by the Board. All resolutions of the Board shall be in writing, signed by the President and attested to by the Secretary. All other actions of the Board shall be by motion recorded in written minutes. (h) Rule of Order. All rules of order not otherwise provided for shall be determined, to the extent practicable, in accordance with "Robert's Rules of Order;" provided, however, that no action of the Board shall be invalidated or its legality otherwise affected by the failure or omission to observe or follow "Robert's Rules of Order." SECTION 3.1. Membership. ARTICLE III - EXECUTIVE BOARD (a) The membership of the Executive Board shall be as set forth in Section 12 of the Agreement. (b) The members of the Executive Board shall be appointed as individuals and not merely as representatives of a specific Member Agency. SECTION 3.2. Term. The President and Vice President of the Board shall serve as Executive Board members during their tenure as such officers. The terms of all members of the Executive Board other than President and Vice President shall be two (2) years, with the terms of two (2) regular members and the alternate expiring in even-numbered years and the terms of the other three (3) regular members expiring in odd-numbered years. A member may be reappointed to serve on the Executive Board, but except for the President and Vice President, a member may not be appointed for more than two complete consecutive terms. SECTION 3.3. Powers, Duties and Responsibilities. (a) The Executive Board shall conduct, direct and supervise the day-to-day business of the Authority and in doing so shall exercise the powers expressly granted to it by the Agreement, these Bylaws and as otherwise delegated by the Board of Directors. (b) The following duties and responsibilities shall be assumed and carried out by the Executive Board, which shall have all powers necessary for those purposes: i. Provide general supervision and direction to the Program Director. ii. Authorize payment of claims against the Authority; provided, however, that with respect to claims arising under programs operated by the Authority, claim settlement authority shall be in accordance with the policies and procedures governing the particular program. iii. Enter into contracts, within budget limits. G:\Share\CLIENT\jpa\CSRMA\Agenda\_Board of Directors\2013\ \E.4.c - CSRMA Bylaws - Restated FINAL_Treasurer-Auditor RLSO.doc 46

47 iv. Make payments pursuant to previously authorized contracts, within budget limits; this authority includes the power to authorize and reimburse expenses incurred for budgeted activities, within budget limits. v. Review and recommend a budget to the Board no later than fifteen (15) days prior to the regular spring meeting of the Board. vi. Act as Program Director in the absence of the Program Director. vii. Establish policies and procedures to implement the Agreement, the Bylaws and the operation of specific programs. viii. Appoint a nominating committee for each election of officers and members of the Executive Board. (c) Subject only such limitations as are expressly stated in the Agreement, these Bylaws or a resolution of the Board of Directors, the Executive Board shall have and be entitled to exercise all powers which may be reasonably implied from powers expressly granted and which are reasonably necessary to conduct, direct and supervise the business of the Authority. SECTION 3.4. Meetings. (a) Regular Meetings. Regular meetings of the Executive Board shall be held at least twice a year and at other times as the Executive Board deems appropriate. The time and place of regular meetings shall be set by the Executive Board, and the Board of Directors shall be notified of the meeting schedule. The agenda for each regular meeting of the Executive Board shall be posted at the principal office of the Authority and mailed to each Executive Board member and alternate at least seven (7) days in advance of the meeting. (b) Special Meetings. Special meetings of the Executive Board may be called by the Chairman or a majority of Executive Board members, in accordance with the provisions of California Government Code Section The agenda for each special meeting of the Committee shall be posted at the principal office of the Authority and mailed to each Executive Board member so as to be received by each member at least two (2) days in advance of the meeting. (c) Public Meetings. All meetings of the Executive Board shall be open to the public, except as provided by law. (d) Quorum. Four (4) members of the Executive Board shall constitute a quorum for the transaction of business. Except as otherwise provided, no action may be taken by the Executive Board except by affirmative vote of not less than a majority of those Executive Board members present. A smaller number may adjourn a meeting. G:\Share\CLIENT\jpa\CSRMA\Agenda\_Board of Directors\2013\ \E.4.c - CSRMA Bylaws - Restated FINAL_Treasurer-Auditor RLSO.doc 47

48 (e) Action by the Executive Board. All resolutions of the Board shall be in writing, signed by the President and attested to by the Secretary. All other actions of the Board shall be by motion recorded in written minutes. (f) Removal From Executive Board. A member may be removed from the Executive Board in the following ways: i. Death of a Board member. ii. Voluntary resignation. iii. Absence from three (3) consecutive meetings without a valid reason, in which case the Chair may recommend to the Executive Board that member be terminated from Executive Board membership. If the Executive Board recommends to the Board of Directors that an Executive Board member be terminated, the Board of Directors shall vote on the matter at its next regularly scheduled meeting. Removal of an Executive Board member shall require an affirmative vote of not less than two-thirds (2/3) of those Board members present. SECTION 4.1. Principal Officers. ARTICLE IV - OFFICERS The principal officers of the Authority are the President, Vice-President, Secretary and TreasurerTreasurer-Auditor, as provide in Section 11 of the Agreement. The President and Vice-President shall also serve as Chair and Vice-Chair of the Executive Board. SECTION 4.2. Other Officers. The Executive Board may create such other offices and appoint such other officers as it deems necessary and advisable. Officers so appointed shall serve at the pleasure of the Executive Board and shall exercise such powers, perform such duties and assume such responsibilities as set forth in a resolution duly adopted by the Executive Board for that purpose. G:\Share\CLIENT\jpa\CSRMA\Agenda\_Board of Directors\2013\ \E.4.c - CSRMA Bylaws - Restated FINAL_Treasurer-Auditor RLSO.doc 48

49 ARTICLE V - COMMITTEES SECTION 5.1. Establishment of Committees. Pursuant to Section 13 of the Agreement, the Authority shall have the standing committees specified in this Article and such other committees as may be appointed from time-to-time by the Board of Directors, Executive Board or the President. SECTION 5.2. Officers Committee. The President and Vice-President shall constitute a standing committee of the Authority known as the "Officers Committee." The Officers Committee shall execute and implement directives of the Executive Board. The Officers Committee shall have the following duties and responsibilities: (a) Direct staff. (b) Negotiate contracts for services on behalf of the Executive Board that are not specifically delegated to a committee. (c) Authorize work assignments under existing contracts that are within the amount budgeted. (d) Sign documents on behalf of the Executive Board and/or the Authority. (e) Recommend agenda topics for meetings of the Board of Directors and Executive Board. (f) Coordinate and review progress in attaining the Authority's annual goals and objectives. SECTION 5.3. Finance Committee. The "Finance Committee shall be a standing committee of the Authority. The committee shall consist of up to five members. The TreasurerTreasurer-Auditor shall serve as a voting member and as the Committee Chair. All members of the committee shall be: (1) affiliated with Member Agencies; (2) generally knowledgeable about the governmental accounting and finance issues; and (3) selected by the President. Committee members other than the TreasurerTreasurer-Auditor shall serve two, two-year terms with the terms of one or more member beginning in even-numbered calendar years and the other members' terms beginning in odd-numbered calendar years. The Finance Committee, with the support of the TreasurerTreasurer-Auditor and Authority accounting staff, shall coordinate and oversee all financial activities and fiscal affairs of the Authority. The Finance Committee shall have the following duties and responsibilities: G:\Share\CLIENT\jpa\CSRMA\Agenda\_Board of Directors\2013\ \E.4.c - CSRMA Bylaws - Restated FINAL_Treasurer-Auditor RLSO.doc 49

50 (a) Prepare a proposed annual budget by fund and program. (b) Review quarterly financial reports from the TreasurerTreasurer-Auditor. (c) Coordinate preparation of annual audit of the Authority's financial statements. (d) Prepare and recommend policies and procedures on financial matters to the Executive Board. (e) Follow and coordinate movement of funds from contingency reserves. (f) Negotiate contracts for financial services. (g) Work with the TreasurerTreasurer-Auditor on financial reporting and recordkeeping. (h) Conduct or coordinate financial training as needed for various programs. (i) Oversee adherence to the Authority's investment policy and recommend changes as needed. (j) Prepare reports and evaluations as necessary and requested by the Executive Board or the Board of Directors. (k) Assist with the preparation of financial information during program renewals to determine that all costs for the program are included in the annual premiums and fees. (l) Prepare and recommend mid-year budget adjustments. (m) Oversee and provide supervision of accounting staff. (n) Perform other duties as assigned by the Executive Board. (o) Delegate any of these duties and responsibilities as it deems appropriate SECTION 5.4. Pooled Liability Program Committee. (a) The "Pooled Liability Program Committee" shall be a standing committee of the Authority. The committee shall consist of up to six members, at least one of whom shall be a member of the Executive Board selected by the President and who shall serve as the Committee Chair. All members of the committee shall be: (1) affiliated with Member Agencies who are participants in the Authority's Pooled Liability Program; (2) knowledgeable about the operation of the program; and (3) selected by the President. Committee members other than the Committee Chair shall serve two, two-year terms with the terms of two or three members beginning in even-numbered calendar years and G:\Share\CLIENT\jpa\CSRMA\Agenda\_Board of Directors\2013\ \E.4.c - CSRMA Bylaws - Restated FINAL_Treasurer-Auditor RLSO.doc 50

51 the other two members' terms beginning in odd-numbered calendar years. The term of the Chair shall be indefinite and at the pleasure of the President. (b) The purpose of the Pooled Liability Program Committee shall be to advise the Executive Board and the Board of Directors of all operational aspects of the Pooled Liability Program and to execute and implement the directions of the Executive Board with regard to matters within the committee's powers, duties and responsibilities, which shall be as follows: (c) Underwriting i. Advise and report to the Executive Board on matters relating to prospective new members to the Program. members. ii. iii. Solicit information necessary to evaluate membership applications. Determine adequacy of information provided by prospective (d) Coverage Issues i. Review and advise on Memorandum of Coverage matters. ii. coverage issues. Make recommendations to the Executive Board concerning (e) Claims Administration i. Advise and report to the Executive Board and the Board as to the nature and extent of claims adjusting and legal defense services necessary to protect the funds of the Authority, and as to the settlement of those claims which involved liability of the Authority. ii. iii. Recommend policies and procedures for claim processing. Review all claims reported by Member Agencies. iv. Approve settlement of claims within a range of authority as determined by the Claims Management Policy & Procedure. v. Make recommendations on settlement of claims greater than the limit of authority established in the Claims Management Policy & Procedure. members. vi. Oversee the preparation of a quarterly claims report to all G:\Share\CLIENT\jpa\CSRMA\Agenda\_Board of Directors\2013\ \E.4.c - CSRMA Bylaws - Restated FINAL_Treasurer-Auditor RLSO.doc 51

52 of payments. vii. viii. Administer contract for claims services and recommend approval Make recommendation on the selection of a claims administrator. (f) Loss Control i. Develop programs, policies and resources that will enable Member Agencies to reduce liability and property damage losses. ii. Provide for inspections of facilities to assist members in reducing losses and improving safety and to determine compliance with CSRMA standards. iii. Administer contract for loss control services and recommend approval of payments. iv. Provide supervision and direction to the Authority's loss control consultation service provider. v. Prepare an annual loss control program and budget. vi. Program Committee. Coordinate safety programming with the Workers' Compensation provider. vii. Make recommendation on the selection of a Loss Control service (g) General i. Advise on structure and funding of the Pool layer. contractors. ii. iii. iv. Develop budget recommendation. Oversee projects of consultants. Report annually on the program and on the performance of (h) Delegation of Duties i. Delegate any of these duties and responsibilities as it deems appropriate. SECTION 5.5: Workers' Compensation Program Committee. G:\Share\CLIENT\jpa\CSRMA\Agenda\_Board of Directors\2013\ \E.4.c - CSRMA Bylaws - Restated FINAL_Treasurer-Auditor RLSO.doc 52

53 (a) The "Workers' Compensation Program Committee" shall be a standing committee of the Authority. The committee shall consist of up to six members, at least one of whom shall be a member of the Executive Board selected by the President and who shall serve as the committee chair. All members of the committee shall be: (1) affiliated with Member Agencies who are participants in the Authority's Workers' Compensation Program; (2) knowledgeable about the operation of the program; and (3) selected by the President. Committee members other than the Committee Chair shall serve two, two-year terms with the terms of two or three members beginning in evennumbered calendar years and the other members' terms beginning in odd-numbered calendar years. The term of the Chair shall be indefinite and at the pleasure of the President. (b) The purpose of the Workers' Compensation Program Committee shall be to advise the Executive Board and the Board of Directors of all operational aspects of the Workers' Compensation Program and to execute and implement the directions of the Executive Board with regard to matters within the committee's powers, duties and responsibilities, which shall be as follows: (c) Underwriting i. Solicit information necessary to evaluate membership applications. Determine adequacy of information provided by prospective members. ii. Advise and report to the Executive Board on matters relating to prospective new members to the program. (d) Coverage Issues i. Review coverage issues as they arise and make a determination relative to the coverage issue. (e) Claims Administration i. Advise and report to the Executive Board and the Board of Directors as to the status of the Program. ii. Solicit proposals, select, and recommend to the Executive Board qualified candidates to serve as the program's Workers' Compensation Claims Administrator. administrator. iii. iv. Administer the contract for claims services and review invoices. Provide supervision and direction to the Authority's claims G:\Share\CLIENT\jpa\CSRMA\Agenda\_Board of Directors\2013\ \E.4.c - CSRMA Bylaws - Restated FINAL_Treasurer-Auditor RLSO.doc 53

54 if appropriate. v. Review procedures for claim processing and recommend changes vi. vii. viii. Review claims frequency and severity reported by participants. Oversee the preparation of a quarterly claims report to all participants. Identify needs of participants and recommend training. ix. Review disputed claims and settle claims within authority granted by the Executive Board pursuant to the Workers Compensation Claims Management Policy & Procedure. (f) Safety i. Develop programs, policies and resources that will enable participants to reduce Workers' Compensation losses. ii. Provide for inspections of participants' facilities to assist in reducing losses and improving safety. payments. consultant. iii. iv. Administer contract for safety services and recommend approval of Provide supervision and direction to the Authority's safety program v. Prepare and coordinate an annual safety program. Committee. vi. Coordinate safety program with Pooled Liability Program (g) Budget i.recommend Program budget. (h) Delegation of Duties i. Delegate any of these duties and responsibilities as it deems appropriate. SECTION 5.6. Meetings of Standing Committees. Standing committees shall meet on the call of their respective committee chairs. Minutes of committee meetings shall be recorded and upon approval shall be distributed to the Executive Board and Board of Directors. Activities of committees shall be reported upon as directed by the Executive G:\Share\CLIENT\jpa\CSRMA\Agenda\_Board of Directors\2013\ \E.4.c - CSRMA Bylaws - Restated FINAL_Treasurer-Auditor RLSO.doc 54

55 Board. Meetings of committees shall be conducted in accordance with the Ralph M. Brown Act (California Government Code sections et seq.) including, as applicable, the provisions of sections and ARTICLE VI - PROGRAM DIRECTOR SECTION 6.1. Appointment. The Board shall appoint a Program Director in accordance with Section 14 of the Agreement. SECTION 6.2. Powers. In accordance with Section 14 of the Agreement, the Program Director shall administer the business and activities of the Authority. The Program Director shall have such powers, duties and responsibilities as set forth in the Agreement, these Bylaws and as may be provided by agreement between the Program Director and the Authority or as otherwise delegated to the Program Director by the Board of Directors or the Executive Board. ARTICLE VII - REIMBURSEMENT FOR TRAVEL EXPENSES Subject to the provisions of Article III, Section 3.3(b)ii. of these Bylaws, members of the Executive board, principal staff designated by the Executive Board and members of committees shall be reimbursed for all reasonable and necessary travel expenses when required or incurred by those persons in attending meetings of the Executive Board or a committee of the Authority. Reimbursable expenses shall include all charges for meals, lodging, air fare and costs of travel by automobile at the rate per mile allowed as a business expense by the Internal Revenue Service. The TreasurerTreasurer-Auditor, upon approval of the President, shall be authorized to pay all such expenses deemed reasonable and necessary so long as sufficient funds have been budgeted therefor. Payments for amounts in excess of that budgeted must be approved by the Executive Board. CSRMA shall reimburse a Board Member or Committee Member any reasonable and necessary travel expenses incurred for the member to attend a CSRMA meeting held in conjunction with another industry meeting (ie: CASA), and only if that member's sole purpose is to attend CSRMA's meeting. Reasonable and Necessary is defined as those expenses which the member would not have incurred in performing the normal business of its agency. Article VIII - TERMINATION OF A MEMBER AGENCY MEMBERSHIP A Member Agency may be terminated from membership in the Authority or from participation in a program of the Authority, in accordance with Section 24 of the Agreement. The procedures for terminating a Member Agency are as follows: G:\Share\CLIENT\jpa\CSRMA\Agenda\_Board of Directors\2013\ \E.4.c - CSRMA Bylaws - Restated FINAL_Treasurer-Auditor RLSO.doc 55

56 SECTION 8.1. Initiation. Proceedings for termination of a Member Agency as a participant in a program of the Authority or as a member of the Authority may be initiated by the Program Director, by any officer, director or standing committee of the Authority or by any Member Agency. The person initiating termination proceedings shall do so by a written report and recommendation to the Executive Board, setting forth in detail the grounds upon which the recommendation is made. SECTION 8.2. Notice and Hearing by Executive Board. Upon receipt of the report and recommendation, the Executive Board shall hold a hearing on the matter of the termination, at which hearing the affected Member Agency shall have the right to offer written and oral testimony. The Executive Board shall give the Member Agency at least thirty (30) days prior written notice of the hearing, and shall provide the Member Agency with a copy of the report and recommendations required to initiate the termination proceedings. SECTION 8.3. Recommendations of Executive Board. At the close of the hearing on the matter of termination, the Executive Board shall determine whether or not to recommend to the Board of Directors that the Member Agency be terminated. If the Executive Board decides not to recommend termination, no further action shall be taken. If the Executive Board decides to recommend termination, it shall forward such recommendation, in writing, to the Board of Directors along with the record of the proceedings before the Executive Board. SECTION 8.4. Hearing and Determination of the Board of Directors. The Board of Directors shall hold a hearing on the recommendation at its next meeting, which may be a regular or a special meeting; provided, however, that the affected Member Agency shall have received a copy of the recommendation and such notice of the meeting as is given to all Board members. At the hearing the affected Member Agency shall have the right to offer written and oral testimony. At the close of the hearing, the Board of Directors shall decide whether or not to terminate the Member Agency. If the Board votes to terminate the Member Agency, the reasons for such decision shall be given in writing to the Member Agency. Termination shall be effective sixty (60) days after the date of mailing of such written reasons to the Member Agency. ARTICLE IX - AMENDMENT These Bylaws may be amended from time to time by resolution of the Board of Directors duly adopted upon a two-thirds vote of the entire Board of Directors at a regular or special meeting of the Board; provided, however, that no such amendment shall be adopted unless at least thirty (30) days written notice thereof has previously been given to all members of the Board of Directors. Such notice shall identify the section or sections of the Bylaws proposed to be amended. G:\Share\CLIENT\jpa\CSRMA\Agenda\_Board of Directors\2013\ \E.4.c - CSRMA Bylaws - Restated FINAL_Treasurer-Auditor RLSO.doc 56

57 ARTICLE X - COVERAGE DOCUMENTS Each Member Agency participating in a program of the Authority shall be provided with either a memorandum of coverage or an insurance policy, as the case may be, which shall describe in detail the nature of the applicable coverage, including dollar amounts, together with any deductibles, exclusions, limitations or other provisions of the coverage. ARTICLE XI - RECORDS RETENTION All records and documents of the Authority shall be retained in accordance with a records retention policy and procedure adopted by the Board of Directors. ARTICLE XII - LIABILITY AND INDEMNIFICATION SECTION INDEMNIFICATION OF DIRECTORS, OFFICERS AND EMPLOYEES - The Authority shall defend and indemnify its directors, officers and employees to the same extent as any public agency of the State of California is obliged to defend and indemnify its public employees pursuant to California Government Code e 825 et seq. or other applicable provisions of law. SECTION INSURANCE - The Authority may insure itself to the extent deemed necessary by the Board of Directors against loss, liability and claims arising out of or connected to the conduct of the Authority's activities. SECTION INDEMNIFICATION BY MEMBER AGENCIES - To the extent any Member Agency's negligent or wrongful act or omission is the cause of an injury for which other Member Agencies may be, or are sought to be, held liable pursuant to California Government Code e 895 et seq., the Member Agency which is legally responsible for the injury shall, at its own expenses, defend, indemnify and hold harmless all of such other Member Agencies from any and all legal consequences of the negligent or wrongful conduct or omission. Nothing in this Section shall be deemed to preclude a Member Agency having the duty to defend, indemnify and hold harmless, from resorting to any insurance or other form of coverage for losses available to the Member Agency, including insurance or coverage for losses procured through the Authority. G:\Share\CLIENT\jpa\CSRMA\Agenda\_Board of Directors\2013\ \E.4.c - CSRMA Bylaws - Restated FINAL_Treasurer-Auditor RLSO.doc 57

58 Agenda Item No. E5 Board of Directors Meeting Meeting Date: April 26, 2013 Investment Update and Cash Flow Analysis ISSUE: Ms. Sarah Meacham of PFM presented a review of CSRMA s investments as of March 31, 2013, and provided a market outlook to the Finance Committee at their April 8, 2013 meeting. PFM s presentation is included in the agenda packet for the Board s review. CSRMA s investments as of 3/31/13 are summarized on page 8 of the presentation. The portfolio s performance is highlighted on page 6. Additionally, PFM performed a cash flow analysis for CSRMA to determine if it could invest in longer-term vehicles for greater yield. A copy of their analysis is included in the attached and will be discussed further under Agenda Item E.6. Investing Additional Funds in Longer Maturities. RECOMMENDATION: None at this time. FISCAL IMPACT: As depicted in the Investment Performance Review. BACKGROUND: CSRMA joined CAMP in 2004 and has invested $15,000,000 in shortterm notes in separately-managed portfolios. PFM Asset Management LLC is the Program Administrator. Remaining funds are invested in LAIF. ATTACHMENTS: First Quarter 2013 Review of Portfolio and Cash Flow Analysis (separate) G:\Share\CLIENT\jpa\CSRMA\Agenda\_Board of Directors\2013\ \E.5 - Investment Update and Cash Flow Analysis_BOD_Final.doc 58

59 Investing Additional Funds in Longer Maturities Agenda Item No. E6 Board of Directors Meeting Meeting Date: April 26, 2013 ISSUE: The Board of Directors has authorized the Treasurer to invest up to $15 million outside of California s Local Agency Investment Fund (LAIF) in accordance with the JPA s Investment Policy and Procedure. That investment has grown to approximately $19 million since Recently the Finance Committee has evaluated whether the $15 million threshold should be raised to take advantage of higher interest rates currently available in investment carrying longer maturities than that which is available in LAIF. A cash flow analysis was performed to determine if CSRMA could invest additional funds in longer-term vehicles without jeopardizing the JPA s ability to meet its cash flow needs. A copy of the analysis results is attached to this item for the Board s review. CSRMA s average monthly portfolio balance over the past 5-years is $27 million. The cash flow analysis projects that needed liquidity will fluctuate between about $4 million and $6 million over the next two years. This assumes a 15% cushion for additional liquidity. Currently, CSRMA s LAIF balance is $8.6 (of the $27 million), leaving in excess of $2 million in funds available for investment in longer term vehicles. The Executive Board will be discussing this issue at their April 25, 2013 meeting and will bring forth a recommendation at the Board meeting. RECOMMENDATION: The Executive Board recommends that the Board of Directors discuss this issue and take action as appropriate. FISCAL IMPACT: Given the current investment environment, an increase of 50 basis points on the additional funds if invested in longer maturities could be reasonably expected in the near term. BACKGROUND: See Agenda Item E.5. Investment Update and Cash Flow Analysis. ATTACHMENTS: None. G:\Share\CLIENT\jpa\CSRMA\Agenda\_Board of Directors\2013\ \E.6 - BOD Investing Additonal Funds in Longer Maturities_Final.doc 59

60 Agenda Item No. E.7 Board of Directors Meeting Meeting Date: April 26, 2013 Policy & Procedure for Analyzing and Selecting Discount Rates in Establishing Claims Liabilities ISSUE: As a result of discussion at the 2012 Long Range Planning Session, the Executive Board directed the Program Administrators to draft a Board policy for selecting the discount rate used in establishing the claims liabilities that will be recorded in the financial statements. The proposed Policy & Procedure is attached to this item for the Board s review and consideration. This Policy & Procedure incorporates the suggested edits made by the Finance Committee and subsequently the Executive Board. RECOMMENDATION: The Executive Board is recommending that the Board of Directors adopt the Policy & Procedure as presented. FISCAL IMPACT: Unknown. BACKGROUND: Historically the Program Administrators have used a conservative view of past earnings to project future earnings to determine the appropriate discount rate used in establishing claims liabilities recorded on the financial statements. Given the current economic environment and market forecast, past performance may not be an accurate indicator for predicting future performance. In light of this, CSRMA s financial auditor has recommended that the Board develop a policy for selecting the discount rate used in establishing the claims liabilities that will be recorded in the financial statements. Through consultation with the Authority s financial advisor and actuary, the development of a model discount factor would provide a basis that is in concert with current and projected achievable market realities. ATTACHMENTS: Proposed Policy & Procedure for Analyzing and Selecting Discount Rates in Establishing Claims Liabilities. G:\Share\CLIENT\jpa\CSRMA\Agenda\_Board of Directors\2013\ \E.7 - Policy and Procedure for Selecting Discount Rates - ITEM.doc 60

61 CSRMA California Sanitation Risk Management Authority JPA Manual CSRMA POLICY AND PROCEDURE MEMORANDUM #6-JPA EFFECT'IVE: April 26, 2013 SUBJECT: Analyzing and Selecting Discount Rates used in Establishing Claims Liabilities Policy Statement Given that CSRMA s financial condition relies substantially on estimates of the future value of current liabilities, it is incumbent upon the Authority to calculate these estimates as accurately as possible. These estimates involve discounting the liabilities to account for the time value of money, including both inflationary and investment income assumptions. CSRMA engages qualified financial professionals to assist in these calculations including, actuaries, investment advisors, financial auditors and insurance professionals, however estimates developed are ultimately the responsibility of CSRMA. A key factor in developing the estimates is the discount rate used in calculations. This policy is intended to assist the Authority in selecting the discount rate used in establishing claim liabilities that ultimately are recorded in the Authority s financial statements. Procedure At least every three (3) years at times relevant to the making of financial decisions for the Authority: Review and determine the current rate of return on the Authority s investment portfolio. Work with the Authority s investment advisor to determine a reasonable expected rate of return based on the current portfolio and expected future earnings. Work with Authority s actuary in setting a reasonable rate based on payout patterns for the respective programs. Discuss with the Authority s financial auditor the rationale for the discount rate being utilized. Discuss with the various CSRMA Committees the discount rate assumptions being utilized, its rationale and gain formal approval for the factors then in use from at least the Executive Board. Err on the side of conservatism. JPA Program Manual 61

62 F.1.a POOLED LIABILITY PROGRAM Quarterly Claims Report As of March 31, 2013 Program Year PY Number of Members PY PY PY PY PY PY PY PY Program Avg Over 5 yrs Program Avg Over 27 yrs N/A N/A 1, Initial Pool Deposits 27,798,928 2,266,790 2,436,557 2,643,576 2,872,384 3,099,945 3,057,827 3,233, ,608 2,603,036 2,712,856 Total Paid To Date 14,280,202 1,351,530 1,272, ,032 1,837, ,879 1,107, ,892 2, ,762 1,269, , , , , ,809 40, ,235 49,310 14,280,202 1,381,028 1,272, ,032 1,903,882 POOL PENETRATION 363,375 1,714, ,701 43, ,997 1,319, ,050, , , ,032 1,594, , , , ,227 1,043, , , , , ,496 18, ,097 47,142 12,050, , , ,032 1,661, ,375 1,278, ,701 18, ,324 1,090, Total Number of Claims Total Reserved Total Incurred No. of Occurrences Over Deductible Total Paid Over Deductible (per occurrence) Total Reserves Over Deductible (per occurrence) Total Incurred Over Deductible F.1.a Total Incurred Over Deductible / Pool Deposits (%) Pooled Liability Program Quarterly Loss Report Percent Program Year Total Incurred Over Deductible / Pool Deposits (%) Program Rolling Avg. over 27 Yrs. G:\Share\CLIENT\jpa\CSRMA\Pool Liability\lossrun\ Loss Reports - Pool Liability\lqtr 03_31_ Draft 62 Program Rolling Avg. over 5 Yrs

63 F.2.a WORKERS' COMPENSATION PROGRAM Quarterly Claims Report as of March 31, 2013 PY 1-15 Years Prior Program Year Number of Members PY /06 7/1/05-06 PY /07 7/1/06-07 F.2.a PY /08 7/1/07-08 PY /09 7/1/08-09 PY /10 7/1/09-10 PY /11 7/1/10-11 PY /12 7/1/11-12 PY /13 7/1/12-13 Program Average Over 5 yrs Program Average Over 23 yrs N/A N/A 2, Earned Premiums 30,206,721 3,995,000 2,814,000 2,118,530 2,458,322 2,650,774 2,814,041 2,841,462 2,321,853 2,617,290 2,373,668 Paid Indemnity, Medical, & Rehab 21,495,256 1,264,065 2,128,687 1,202,209 1,206, ,460 1,266,720 1,012,444 99, ,066 1,391,161 Paid Expenses 2,547,037 77, ,520 72, , , , ,615 21, , ,522 Reserved Indemnity, Medical, & Rehab 1,239, , , , , , ,701 1,448, , , , ,278 28, ,822 53,879 42,553 86,844 91, ,168 43, ,398 40,360 Total Incurred 25,466,731 1,747,558 2,983,140 1,685,290 1,816,560 1,597,284 2,041,511 2,834, ,017 1,718,057 1,839,682 Total Incurred Less ALAE 22,734,417 1,641,530 2,571,798 1,558,742 1,546,958 1,372,373 1,755,420 2,461, ,243 1,474,225 1,630, Total Number of Claims Reserved Expenses CSRMA (Loss Ratio) Total Incurred Less ALAE / Earned Premium (%) Workers' Compensation Loss Ratios Percentages Prior 7/1/ /1/ /1/ /1/08-09 CSRMA (Loss Ratio) Total Incurred Less ALAE / Earned Premium (%) G:\Share\CLIENT\jpa\CSRMA\Workers Comp\lossrun\ Loss Reports - WC\wcqtr Draft 7/1/ /1/10-11 Program Avg. Over 26 Years 63 7/1/ /1/12-13

64 Agenda Item No. F2b Board of Directors Meeting Meeting Date: April 26, 2013 Workers Compensation Program Program Year 24 ( ) Renewal Update ISSUE: The Workers Compensation Program will be renewing July 1, The Program Administrators are currently working with the Workers Compensation Committee and CSRMA s actuary to develop the funding requirements for this year s renewal. RECOMMENDATION: None. FISCAL IMPACT: For budgeting purposes the Program Administrators are recommending that members budget for a 5-10% increase. Changes in member payroll also need to be accounted for. Last year the Executive Board approved a cost structure as summarized below. Expense Item 2012/13 Ultimate Net Loss Projection 3,095,804 Excess Insurance Expense (Net) 424,841 Estimated Program Expense 700,258 Total Expected Costs 4,220,903 BACKGROUND: The Governor recently signed into law new workers compensation reforms (SB 863). Despite projected savings by the WCIRB in 2013, it is widely believed that public agencies can expect higher reserves for new losses over the next few years as a result of the increase in permanent disability. Additionally, employers could bear increased administrative costs for the Independent Medical Review (IMR)/Independent Bill Review (IBR) process with a potential level of increased litigation when applicant s attorneys dispute Utilization Review (UR) decisions, leveraging the new IBR process. ATTACHMENTS: None. G:\Share\CLIENT\jpa\CSRMA\Agenda\_Board of Directors\2013\ \F.2.B - WC Renewal Update_BOD.doc 64

65 Property Program Program Renewal Update Agenda Item No. F.4.a Board of Directors Meeting Meeting Date: April 26, 2013 ISSUE: The Property Insurance Program renews July 1, In 2011 the property insurance market experienced its worst underwriting results since The large losses experienced by the global insurance market in 2011, followed by events in 2012 such as Hurricane Sandy, have contributed to a tighter review of the catastrophic exposure to property insurance underwriters. Fortunately, while there is plenty of capacity in the market, those risks that either have catastrophic exposures, or are viewed as being more favorably priced relative to the market should be planning for an increase. RECOMMENDATION: None. FISCAL IMPACT: For budgeting purposes the Program Administrators are recommending that members budget for a 10% rate increase. Last year the Executive Board approved a cost structure as summarized below. Expense Item 2012/13 Total Insurable Value 4,423,761,141 Est. Net "All Risk" & Boiler Premium (including Taxes & Fees) 1,327,594 JPA Charge 30,020 Program Director Fees 149,850 Est. Total Invoice 1,507,464 BACKGROUND: The Program Administrators are conducting a full marketing process in an effort to explore CSRMA s alternatives. Besides the current carriers involved in the current property insurance placement (The PEPIP Program), following is a list of the markets reviewing CSRMA s property insurance program for quotation. Axis FM Global Hartford Ironshore MunichRe Philadelphia SwissRe Travelers Zurich Market G:\Share\CLIENT\jpa\CSRMA\Agenda\_Board of Directors\2013\ \F.4.a - Property Program 2013 Renewal Update_BOD.doc 65

66 Following is a chart depicting the historical rates of the CSRMA Property Insurance Program. From it, it can be discerned that while rates have been on the rise over the past few years, rates are well below historical highs. CSRMA Historical Property Rate Rate Year ATTACHMENTS: 1) Property Insurance Market Update. G:\Share\CLIENT\jpa\CSRMA\Agenda\_Board of Directors\2013\ \F.4.a - Property Program 2013 Renewal Update_BOD.doc 66

67 U.S. Property & Casualty Industry Key Financial Metrics* September 30, 2012 Year End 2011 Combined ratio 100.1% 107.7% Premium growth 4.1% 3.6% Policy holder surplus $584B $552B CAT related losses $21.8B $44B Investment income $35.6B $56.2B After tax net income $31.2B $43.1B Best performing line Medical Malpractice Medical Malpractice Workers Compensation/ Property Workers Compensation/ Property Worst performing lines * Excludes mortgages and financial security segments; Source: AM Best 2008 Alliant Insurance Services, Inc. All rights reserved. 67

68 $26,981 $19,150 $3,043 $28,672 $35,204 $65,777 $44,155 $38,501 $30,029 $20,559 $20,598 $10,870 $3,046 $10,000 $19,316 $20,000 $5,840 $30,000 $14,178 $40,000 $21,865 $50,000 P-C Industry 2012:Q3 profits were up 222% from 2011:Q3, due primarily to lower catastrophe losses $30,773 $60, ROE*= 9.6% 2006 ROE = 12.7% 2007 ROE = 10.9% 2008 ROE = 0.1% 2009 ROE = 5.0% 2010 ROE = 6.6% 2011 ROAS1 = 3.5% 2012:Q3 ROAS1 = 6.3% $36,819 $70,000 $24,404 $80,000 $62,496 P/C Net Income After Taxes :Q3 ($ Millions ) $0 -$10,000 -$6, :Q3 1Return * ROE figures are GAAP; on avg. surplus. Excluding Mortgage & Financial Guaranty insurers yields a 6.6% ROAS through 2012:Q3, 4.6% ROAS for 2011, 7.6% for 2010 and 7.4% for Sources: A.M. Best, ISO, Insurance Information Institute 2008 Alliant Insurance Services, Inc. All rights reserved. 68 1

69 Top 12 Most Costly Hurricanes in U.S. History (Insured Losses, 2012 Dollars, $ Billions) 10 of the 12 most costly hurricanes in insurance history occurred over the past 9 years ( ) $60 $50 $40 $30 $20 $10 $4.4 Hurricane Irene became the 12 th most expensive hurricane in US history in 2011 $5.6 $5.6 $6.7 $7.8 $8.7 Hurricane Sandy could become the 3 rd costliest hurricane in US insurance history $9.2 $11.1 $13.4 $20.0 $25.6 $48.7 $0 Irene (2011) Jeanne (2004) Frances (2004) Rita (2005) Hugo (1989) Ivan (2004) Charley (2004) Wilma (2005) Ike (2008) Sandy* (2012) Andrew (1992) Katrina (2005) *Estimate as of 12/09/12 based on estimates of catastrophe modeling firms and reported losses as of 1/12/13. Estimates range up to $25B. Sources: PCS; Insurance Information Institute inflation adjustments to 2012 dollars using the CPI Alliant Insurance Services, Inc. All rights reserved. 69 2

70 How Will Climate Change Impact Insurers? Source; Ceres Climate Risk Disclosure Survey Alliant Insurance Services, Inc. All rights reserved. 70 4

71 G.1 March/2013 York Homepage An Update on SB 863 SB 863 was passed last year with portions of the legislation being phased in over a period of time. While it is still too early to understand how SB 863 will play out and the full impact this legislation will have on our clients, we wanted to provide a brief status update. On New Year s Day (1/1/13), the following implementing regulations were promulgated on an emergency basis by the Office of Administrative Law (OAL): Independent Medical Review (IMR) Independent Bill Review (IBR) Qualified Medical Evaluation (QME) and Permanent Disability Determination Supplemental Job Displacement Benefit (SJDB) Interpreter Certification Inpatient Hospital Fee Schedule Electronic Document and Lien Filing Fees Outpatient and Ambulatory Surgical Centers These implementing regulations of the DWC to SB 863 are current law until they can be revisited and made permanent through the normal regulatory process, which involves public comment and hearings. Public hearings have been scheduled as follows in Oakland: SJDB 03/26/13 IMR and QME 04/04/13 IBR 04/09/13 The emergency regulations on the reforms above can be accessed at the DWC rulemaking website at: The public hearings are open to the public and written comments can be submitted to: Division of Workers' Compensation P.O. Box San Francisco, CA Attn: DWC forums Relative to prior WC reforms, SB 863 and ensuing regulations have created a chaotic environment. SB 863 resulted in a significant overhaul to the California workers compensation system. Implementing regulations were drafted by the DWC regulators in a hurry, and these regulations -- which were enacted on an emergency basis (and are current law) -- contain many internal conflicts with other regulations. In some instances, they interpret corollary statutes in a manner that the Legislature did not 71

72 contemplate. The IMR and IBR programs should be of most concern to our clients. The fees for each IMR dispute that results from an adverse UR decision are paid by our clients, and those fees are substantial. The IMR dispute application form is the remedy of the injured worker, who can be assisted in filing the dispute by his/her attorney or physician. The statutory provisions of IMR mandate review by the Administrative Director to determine eligibility for the employee s dispute to proceed to Maximus, the State contracted Independent Medical Review Organization (IMRO). Yet the current application form is addressed directly to the IMRO with no involvement of the Administrative Director. This appears to create a substantial conflict of interest if the Administrative Director designee is the same review organization that can stand to profit from the substantial fees paid by our clients. This situation was created by the regulations and not contemplated by Legislative statutory intent and is typical of a myriad of other issues throughout approximately 700 pages of emergency regulations. York is carefully monitoring the situation and will help our clients remain abreast of the latest developments and changes. 72

73 4/5/13 Travelers RMplusonline G.2 The Norovirus Is Invading The Workplace. What Employers Need To Know. Over 21 million Americans suffer from norovirus infections, and nearly 800 victims die from it annually. Many people commonly refer to the norovirus as the "stomach flu" w ith its characteristic symptoms of nausea, vomiting, stomach cramps, and diarrhea, but the norovirus is not related to the flu. Noroviruses are very contagious, and they can circulate rapidly through a population. Sufferers commonly become infected w hen they touch contaminated surfaces and then touch their mouths. Infection can also occur by direct contact w ith an infected person or via contaminated food. The Centers for Disease Control (CDC) reports that noroviruses are the most common cause of gastroenteritis in the United States. Norovirus is commonly the cause of foodborne illness throughout the United States. Consuming contaminated green leafy vegetables, fresh fruits, and oysters is often the cause of infection. Dr. David B. Samadi, "Tips for preventing norovirus infection," (Feb. 13, 2013) Commentary and Checklist A norovirus infection is usually limited to a few days, and the majority of sufferers recover quickly, but it is not w ithout potentially serious side effects. Dehydration can be a dangerous result of the virus, particularly for babies, young children, and the elderly. Drinking plenty of fluids and staying aw ay from alcohol and caffeine is advised to avoid dehydration. Using common sense and follow ing some basic rules can help avoid infection. Thoroughly w ash your hands w ith soap and w arm w ater follow ed by rinsing them w ell and drying w ith a paper tow el or air dryer especially after using the bathroom. Because the norovirus is resistant to alcohol, hand sanitizers are of little use stick w ith soap and w ater. Surfaces should be w ashed w ith a bleach solution and contaminated laundry should be w ashed and dried separately. Stay home from w ork until the infection has passed. An infected person is contagious for up to three days after recovery. Many employees think that going to w ork is in the best interest of the organization, but doing so can place cow orkers at risk of infection, w hich can lead to w idespread loss of productivity. It is important that managers and supervisors understand that sick employees should not be encouraged to report to w ork. Here are some things to consider: Tell managers to encourage employees w ho are feeling ill to go home because a virus is often most contagious in its earliest stages. Urge employees to stay home until cleared by a physician. If an employee is w orried about falling behind, then permit employees to telecommute from home as long as it does not impede their recovery. Remind managers that sick leave is a benefit that helps keep employees and their cow orkers w ell. Encourage employees to w ash their hands often, especially after using the /2

74 4/5/13 Travelers RMplusonline bathroom, handling office equipment, and before eating. This informational piece w as published on April 1, April 1, Travelers, Inc., All Rights Reserved The McCalmon Group, Inc., All Rights Reserved. Designated trademarks and brands are the property of their respective owners. Use of this web site constitutes acceptance of The McCalmon Group's User Agreement and Privacy Policy. Legal Notices /2

75 Munich Reinsurance America, Inc. Client Connection 4/5/13 EMERGING EXPOSURES NEWS ITEM G.3 Spring 2013 Volume IX, #1 Miscellaneous Lingering effect of sleep aids could impair driving The Federal Drug Administration (FDA) has required drug makers to lower the recommended dosage of certain sleep-inducing drugs because evidence has surfaced that they could continue to cause drowsiness after waking. The recommended dosage of sleep aids that contain zolpidem should be cut in half for women, and the labeling should indicate to doctors that a lower dose than currently recommended is advisable for men, according to the FDA. Nearly 40 million prescriptions for sleep-inducing drugs were written in 2011, according to information provider IMS Health. The FDA had received information that raised the possibility of a link between the sleep-inducing drug and reported car accidents for years, but recent clinical data provided new evidence that indicated certain zolpidem-containing sleep aids lingers in the female body longer than in the bodies of men. More than 700 reports of car accidents citing the presences of zolpidem have been filed with the FDA in the past. In 2007, after the agency revised its drug warning regarding the possibility that a person might fall asleep or have impaired judgment, the agency noticed an uptick in reports The required changes in dosage affect both immediate and extended-versions of the drug. Sleep aids targeted to middle-of-the-night waking are not included in the FDA changes. Zolidem is used in Ambien, Ambien CR, Edluar and Zolpimist, among other sleep-inducing drugs. Source: Corbett-Dooren, Jennifer FDA requires doses for certain insomnia drugs. Wall Street Journal. January College Road East, Princeton, NJ (609) The Munich Reinsurance America, Inc. name and logo are marks owned by Munich Reinsurance America, Inc. Copyright 2013 Munich Reinsurance America, Inc. All rights reserved. This material was prepared based on industry sources for informational use only, and is not permitted to be further distributed without the express written permission of Munich Re America. No representation or warranty of any k ind, whether express or implied, is provided with respect to the accuracy, completeness, or applicability of this material to any recipient's circumstances. This material is not intended to be legal, underwriting, financial or any other type of professional advice. Munich Re America and its affiliates /2

76 4/5/13 Munich Reinsurance America, Inc. Client Connection disclaim any and all liability whatsoever resulting from use of or reliance upon this material /2

77 4/5/13 Travelers RMplusonline G.4 Motivated Employees Are Loyal Employees How Can You Motivate Your Workers? Personal motivation is a goal shared by many people, and it is a trait valued in the w orkplace, but people often find that achieving that goal can be challenging. As difficult as it can be to follow through and stay motivated, researchers w ho study motivation have some helpful advice on how it can be done. First, expect the unexpected. People w ho plan for the hitches along the w ay are in a better position to succeed. Imagining possible stumbling blocks and actions to take can help people, according to Peter Gollw itzer, a psychology professor at New York University, "stick w ith projects...." Gollw itzer studied tw o groups of w omen w ho w anted to lead a more active lifestyle. Both groups w ere instructed on how to achieve the goal, but the second group w as taught how to anticipate obstacles like, "It's raining, and I'd planned to go for a run. I'll pass on it today." Instead of dropping their plans, the group that learned to find alternatives, rather than miss out on the activity, adapted: "It's raining. I'll go to the gym instead." Second, Albert Bandura, psychology professor and researcher at Stanford University, reports that "people w ho have perceived self-efficacy (that is, the belief that they can accomplish w hat they set out to do) perform better than those w ho don't." Third, people w ho set ambitious, but realistic goals often enjoy the greatest success. Lisa Ordonez, a professor of management and organizations at the University of Arizona, recommends, "Instead of aiming unrealistically high (such as trying to save enough money for a dow n payment on a home in six months), set goals that are a stretch but not an overreach (come up w ith a doable savings plan for your budget)." Finally, Daniel Pink, author of Drive: The Surprising Truth About What Motivates Us, advises his readers to take small steps every day. He said this "w ill not only help hold your interest in w hat you're trying to achieve but w ill also ensure that you move slow ly, but surely, tow ard your goal." Lesley Alderman, "Secrets of motivated people," (Feb. 1, 2013). Commentary and Checklist CareerBuilder recently looked at w hat motivates employees. The study involved 2,600 hiring professionals and 4,000 employees. Of the 4,000 employees, 48 percent w ant to make a difference in their jobs, and 35 percent w ant to have challenging w ork. So, how can employers motivate employees and maintain their w orkforces? Verbally recognize an employee w ho does a good job in the presence of other employees. Write a commendation. A w ritten commendation means you took the time to preserve the employee's positive job performance in his or her record. Do performance evaluations often, and be sure to highlight the employee's good points as w ell as those that need improvement. Ask for input. When you ask for input, you engage employees and demonstrate /2