Per Government Code section 54954.2, persons requesting disability-related modifications or accommodations, including auxiliary aids or services in order to participate in the meeting, are requested to contact CJPRMA at (925) 837-0667 24 hours in advance of the meeting.

pg. 1

CALIFORNIA JOINT POWERS RISK MANAGEMENT AUTHORITY

EXECUTIVE COMMITTEE MEETING

November 5, 2014 - 10:00 A.M.

CJPRMA Office 3201 Doolan Road, Suite 285

Livermore, CA 94551 (925) 837-0667

AGENDA

I. CALL TO ORDER: 10:00 A.M.

II. ROLL CALL

III. PRESENTATIONS

None

IV. APPROVAL OF MINUTES

1. Minutes of the Executive Committee meeting held September 19, 2014 (Pages 3-8)

V. COMMUNICATIONS

1. Executive Committee Members 2. General Manager/Secretary 3. Next Scheduled Meetings: Board of Directors (12/18/2014) CJPRMA Office

Executive Committee (1/15/2015) Location TBD

VI. CONSENT CALENDAR

None

VII. THIS TIME IS RESERVED FOR MEMBERS OF THE PUBLIC TO ADDRESS THE EXECUTIVE COMMITTEE ON MATTERS OF EXECUTIVE COMMITTEE BUSINESS

VIII. ACTION CALENDAR

1. Business Calendars for 2014 and 2015 (Pages 9-15)

Per Government Code section 54954.2, persons requesting disability-related modifications or accommodations, including auxiliary aids or services in order to participate in the meeting, are requested to contact CJPRMA at (925) 837-0667 24 hours in advance of the meeting.

pg. 2

2. Status Update on General Manager’s Goals and Objectives 2013-2015 (Pages 16-24) 3. Risk Management Issues (Pages 25-34)

IX. CLOSED SESSION

1. Government Code Section 54957 Public Employee Performance Evaluation

Title: General Manager

X. ACTION ON CLOSED SESSION ITEMS

XI. ADJOURNMENT

Back to Agenda

CALIFORNIA JOINT POWERS RISK MANAGEMENT AUTHORITY

EXECUTIVE COMMITTEE MEETING

September 19, 2014 - 10:00 A.M.

Lake Tahoe Resort Hotel Mamie/Meteor Room

4130 Lake Tahoe Boulevard South Lake Tahoe, CA 96150

(530) 544-5400

MINUTES

I. CALL TO ORDER: 10:00 A.M.

President Giles called the meeting to order at 10:00 a.m.

II. ROLL CALL

PRESENT

1) Ron Blanquie, Petaluma 2) Chris Carmona, Redding 3) Anthony Giles, Sunnyvale

4) Kim Greer, Richmond 5) Janet Hamilton, Livermore 6) Paula Islas, NCCSIF

ABSENT

Fremont

OTHERS PRESENT

7) David Clovis, CJPRMA 9) Robert Lowe, AON 8) A. Byrne Conley, Gibbons & Conley 10) Craig Schweikhard, CJPRMA

III. PRESENTATIONS

None

IV. APPROVAL OF MINUTES

A motion by Director Carmona, seconded by Director Greer, to approve the minutes of the Executive Committee meeting held on July 16, 2014. Directors Blanquie, Carmona, Giles, Greer, Hamilton, and Islas voted for the approval of the minutes. Motion passes.

Executive Committee Meeting Minutes September 19, 2014 Page 2

V. COMMUNICATIONS 1. Executive Committee Members 2. General Manager/Secretary 3. Next Scheduled Meetings: Board of Directors (10/23/2014) CJPRMA Office

Executive Committee (11/05/2014) CJPRMA Office

VI. CONSENT CALENDAR

None

VII. THIS TIME IS RESERVED FOR MEMBERS OF THE PUBLIC TO ADDRESS THE EXECUTIVE COMMITTEE ON MATTERS OF EXECUTIVE COMMITTEE BUSINESS

VIII. ACTION CALENDAR

1. Business Calendar for 2014 The business calendar was provided to the Executive Committee as a standing agenda item. The calendar provides the committee with key business items and the required dates for completion. No action was required on this item.

2. Status Update on General Manager’s Goals and Objectives 2013-2015 The general manager provided the committee with the General Manager Goals and Objectives for FY 2013-2015. He gave a status update on all items listed. The Committee reviewed all items and their corresponding progress updates. Director Giles advised the committee that the general manager’s annual review will occur at the November Meeting and be held at the CJPRMA Office. President Giles requested that the Executive Committee be prepared for the discussion and provide him with any specific comments prior to that meeting. The Committee should be prepared to discuss each of the performance goals and to reach a consensus at that meeting. President Giles requested staff to provide the Committee with performance evaluation forms. Director Giles reminded the Executive Committee that the Board of Directors has referred the ongoing review of the General Manager Goals and Objectives to the Executive Committee.

No action was required on this item.

Executive Committee Meeting Minutes September 19, 2014 Page 3

3. Update of General Manager Compensation Plan

The general manager provided the committee the results of the survey completed by Creative Management Solutions, Inc. for the Public Entity Risk Management Authority (PERMA). This survey was commissioned by PERMA for the purposes of evaluating their compensation plan. The results of the survey were completed September 15, 2013. The general manager advised the committee that Creative Management Solutions completed a similar survey for CJPRMA in 2009. The high and low compensation points currently in place for the general manager were adopted by the Board of Directors at their May 6, 2009, meeting. The Executive Committee reviewed the materials and provided several questions to the general manager for discussion. Director Blanquie questioned the purpose of the survey and questioned the relevance of the agencies included in the survey. The general manager advised the committee that the same participants included in the current survey were also the basis for the adopted plan in 2009. Director Islas requested additional clarification on the total compensation package currently in place for the general manager and all staff members. Based upon the questions provided, the Executive Committee accepted a recommendation by the general manager to table the current discussion and revisit the survey at the scheduled January Executive Committee Meeting. No action was taken on this item.

4. Proposed Modifications to the Property Memorandum of Coverage The general manager provided an overview to the committee of the effects on the members of the property program that will occur as a result of the City of Stockton Earle Hotel Fire. The discussion revolved around the actual value of the structure at the time of the loss. The general manager explained that Munich Re has evaluated the loss and determined that the current language in the policy requires a loss payment based upon the Actual Cash Value (ACV) of the structure. The policy definition of ACV for this purpose is the replacement cost vs. depreciation. On this specific loss that value will exceed $8 million. The current MOC does not currently contain any restrictions for property that are either vacant or abandoned. The Executive Committee discussed the importance of this change and offered a concern in making mid year adjustments that benefit the reinsurer. The general manager further explained that the intent of the modification was not to limit coverage provided by members but to protect the entire membership from a loss that impacts the viability of the program in the future. Director Blanquie recommended that the general manager provide the Board of Directors with a history of the total premiums collected by Munich Re and the total losses to date to

Executive Committee Meeting Minutes September 19, 2014 Page 4

assist the members of the property program in determining the feasibility of the mid year modification. A motion by Director Giles, a second by Director Blanquie, to approve the proposed modifications to the Property Memorandum of Coverage effective January 1, 2015 and to recommend that the members of the property program approve the modifications at the October 23, 2014, Board of Directors Meeting. Directors Blanquie, Carmona, Giles, Greer, Hamilton, and Islas voted for the approval of the modifications to the Property Memorandum of Coverage and a recommendation to the members of the Property Program adopt the changes. Motion passes.

5. CJPRMA Model Contract Language

The general manager provided copies of four model contract language documents for review and approval of the Executive Committee. The Executive Committee first reviewed the Petaluma draft language at the July Executive Committee Meeting. To date, staff has not received any feedback from Executive Committee Members of any recommended additions or deletions. The general manager reviewed the recommended language provided by Director Blanquie. Staff made modifications to the draft document and a final version of the four models language documents were reviewed by the committee. The Executive Committee agreed with the current language revisions and supported the general manager’s recommendation to provide these documents to the Board of Directors October 23, 2014, meeting for approval. No formal action taken on this item.

6. Annual Meeting 2015

The general manager provided the Executive Committee with a cost comparison of the annual meetings held in 2010, 2011, 2012, 2013 and 2014. The 2010 annual meeting was held in Santa Rosa, 2011 meeting at the CJPRMA office in Livermore, 2012 meeting in Folsom, 2013 meeting in Bodega Bay, and 2014 meeting in Lodi. The Executive Committee agreed that the facility used for the 2014 annual meeting was a wonderful facility but the meeting room was too large for good conversation. President Giles also expressed concern over the quality of the meeting room utilized for the 2013 annual meeting. The general manager advised the committee that obtaining a good meeting room equipped with appropriate technology is very difficult and not always possible. He further related that the best meeting room currently available for the meeting would be the CJPRMA Board Room, which is set for that purpose.

Executive Committee Meeting Minutes September 19, 2014 Page 5

After a significant amount of discussion by all members of the committee, they recommended that the general manager schedule the meeting for the CJPRMA Office in May. President Giles advised that he would brief the Board of Directors on this issue at the October Meeting and would gather comments from all Board Members regarding hosting the annual meeting in Livermore. No formal action was taken on this item.

7. Proposed Language Change for Certificate of Coverage Form C

The general manager advised the Executive Committee that he received an inquiry from Marcus Beverly, Alliant Risk Insurance Services, regarding the current language contained within the CJPRMA Form C Certificate of Coverage; specifically regarding the current label of the coverage and the inclusion of E&O coverage on all certificates of coverage. The general manager conferred with Board Counsel Conley regarding the recommendations. Mr. Conley reviewed the current Certificate of Coverage Form C and provided the committee with his comments. The Executive Committee reviewed the language and discussed the impact of the changes. A motion by Director Blanquie, a second by Director Islas, to approve the modified Certificate of Coverage Form C as provided and recommend the Board of Directors approve the same document at the October 23, 2014, Board of Directors Meeting. Directors Blanquie, Carmona, Giles, Greer, Hamilton, and Islas voted for the approval of the modified Certificate of Coverage Form C with a recommendation to the Board of Directors to approve the documents. Motion passes.

8. Risk Management Issues The general manager advised the Executive Committee that he is working with the City of Livermore and the Livermore Pleasanton Fire Department on participation in the CJPRMA coverage program for FY 2015-2016. Director Giles advised the Executive Committee of the City of Pasadena v. Superior Court case involving city trees and an exposure of Inverse Condemnation. The committee agreed this case could impact all members adversely if the case remains published. The general manager will continue to monitor the case and will provide an update to the Board of Directors at the October 23, 2014, meeting. The general manager advised the Executive Committee of the status of the impacts of Senate Bill 854. This Senate Bill places new requirements on public agencies in the use of registered contractors for any public works projects. The general manager discussed the recent City of Vallejo fire apparatus vehicle accident. The committee discussed the need for a CJPRMA recommended policy on the investigation requirements for on-duty emergency vehicles.

Executive Committee Meeting Minutes September 19, 2014 Page 6

IX. CLOSED SESSION

1. Government Code Section 54956.9 (a) Conference with Legal Counsel - Pending Litigation Name of Case: WGS Partnership – TDIC v. City of Oroville (NCCSIF) Court: N/A Case No.: 153408

2. Government Code Section 54956.9 (a) Conference with Legal Counsel - Pending Litigation Name of Case: Westfield Galleria et. al. v. City of Roseville Court: Placer County Superior Court Case No.: SCV 0030677

3. Government Code Section 54956.9 (a) Conference with Legal Counsel - Pending Litigation Name of Case: Gliksman v. City of Davis (YCPARMIA) Court: Superior Court of Yolo County Case No.: PW-12-1372

4. Government Code Section 54956.9 (a) Conference with Legal Counsel - Pending Litigation Name of Case: Bertoli v. City of Sebastopol (REMIF) Court: Sonoma County Superior Court Case No.: SCV-247619

5. Government Code Section 54956.9 (a) Conference with Legal Counsel - Pending Litigation Name of Case: Hall v. City of Fairfield Court: 9th Circuit Federal Court of Appeals Case No.: 2:10 cv-00508-GEB-DAD

X. ACTION ON CLOSED SESSION ITEMS

A status update was provided on closed session item numbers one, two, three, four and five.

XI. ADJOURNMENT A motion was made by Director Carmona and seconded by Director Hamilton to adjourn the meeting at 12:40 p.m.

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Certificates of Coverage Renewals mailed to certificate holders (6/30/2014) Risk Management Plan Revisions Requests for reimbursement of liability training expenses due by August 31,2014

July

Distribution of Executive Committee Meeting Agenda – 07/10/2014 Executive Committee Meeting – 07/16/2014 General Liability Premiums Billed Auto Physical Damage Program Premiums Billed Property Program Premiums Billed Boiler & Machinery Premiums Billed Member Quarterly Payroll Reports -07/31/2014

August

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September

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October

Distribution of Board of Directors Meeting Agenda – 10/16/2014 Board of Directors Meeting – 10/23/14

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Revised 9/25/2014

November

Executive Committee Meeting – 11/5/2014 Deadline for Members to submit Agenda items for December Meeting –

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Deadline for change to SIR or withdrawal from any CJPRMA program - 12/31/2014

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provide the Board of Directors with feedback regarding the status of the current Strategic Plan and will document activities meeting those objectives.

This item is being provided as a discussion item only and the Executive Committee is not required to take any action.

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None.

Exhibits:

1. General Manager’s Goals and Objectives 2013-2015 with accomplishments

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GOALS OUTCOMES COMMITTEE ASSIGNMENT

TASKS COMPLETED

Develop core products and services with innovation.

15%

The general manager will continue to evaluate and monitor the core products and services provided to members. These products and services will be driven to insure financial strength and solvency to CJPRMA. CJPRMA will also attempt to broaden coverage and services that meet the needs for cost effective services for our members. The primary areas of focus for the achievement of this goal will include the following:

1. Risk Management Information Services 2. Coverage 3. Claims Management

General Manager

Moved organization to new liability

reinsurance partner with significant reduction in costs.

Developed new coverage options with a pollution program, cyber risk program and expanded limits for EPL coverage with new reinsurer.

Worked with actuary and broker to develop new SIR for prospective member ABAG Plan.

Provided risk transfer training and developed state of the industry recommended clauses for contracts to offset impact of new ISO forms.

Created an updated flip book method of viewing annual report in digital format.

Delivered ongoing support of Risk Console to members using system. Also performed live demos for Roseville, Livermore, Fairfield, Lodi, Vallejo and Rocklin. Continued to update system to include mapping of exposures and losses.

Awarded CAJPA Accreditation with Excellence designation.

3 | P a g e Updated 10/28/2014

GOALS OUTCOMES COMMITTEE ASSIGNMENT

TASKS COMPLETED

Develop and deliver targeted training programs to members

based upon CJPRMA and member loss history.

10%

Collect the necessary data for the purpose of identifying the primary loss exposures for CJPRMA and our members. Utilize the data for the purpose of developing state of the art, effective training sessions for members. The primary areas of focus for completing this objective include the following:

1. Targeted training-Aligned to loss history and actual trends.

2. Member Education – Develop a training program for member management and operations.

3. Director Education and Training – Enhance skills of Directors through education and training.

General Manager

Will provide training in winter 2015 on

property and liability MOC and all insurance programs.

Working with City of Oakland as partner in police liability training program.

Delivered group risk transfer training to over 100 attendees. Delivered specific training to Livermore and Galt.

Provided ARM-P training for several Board Members and delivered testing at the same time.

Scheduling a new ARM series beginning in the fall.

Provided a Board Member Orientation.

Create an approach to marketing the value of

CJPRMA to its members and identify market opportunities

for control growth of the organization.

10%

Develop a member outreach program that provides members with key information identifying the value of CJPRMA to its members. In addition, evaluate the opportunities for development of a targeted marketing effort to organizations that meet and or exceed current member standards. The primary initiatives for the delivery of an effective outreach program will include:

1. Marketing communication brochure 2. Exclusions and alternative coverage 3. Market definition and outreach

Working with cities of Livermore and

Pleasanton to provide membership of Livermore Pleasanton Fire in CJPRMA.

Actively pursued ABAG Plan for membership for PY 14-15. ABAG deferred a determination for changing their program to later in the year. Developed a $2.5 million SIR to meet their needs.

Creating an educational video for our members on CJPRMA. The history and coverage options available will also be a tool for outreach for new prospects.

4 | P a g e Updated 10/28/2014

GOALS OUTCOMES COMMITTEE ASSIGNMENT

TASKS COMPLETED

Implement and monitor an information technology upgrade to all CJPRMA

systems.

10%

CJPRMA is implementing a new RMIS System. The system will be utilized as the primary workflow product for the organization and will provide membership with the opportunity to utilize multiple modules within the system for a significantly discounted pricing. In addition CJPRMA will evaluate all of its technology solutions and will expressly evaluate for following key areas:

1. Claims Management Technology 2. Member information upgrade 3. Exposure Data 4. Webinars

General Manager

Risk Console users include Redding,

Stockton and Fremont. New users include Livermore and Roseville.

Presented alternative risk tracking solution to simplify process. Redding and Galt evaluating the solution.

Implemented Risk Console to full functionality – continue to provide training on the use of the program. Also provided demos on Risk Console modules to expose members to options.

Awarded the Innovation Award for Creative Implementation of System.

Provide consultation to board members and individual

member agencies by resolving questions and issues

concerning agency risk management practices and

procedures.

10%

The general manager is available to assist board members and their agencies by reviewing contracts, performing audits, reviewing policies and by making practices for best practice risk management. General manager will work with ad-hoc committee to develop CJPRMA standards for risk transfer and will populate the new Risk Console System with standardized contract requirements.

Worked with members on contracts and

coverage issues as they arise. Fielding as many as 5 to 15 requests per week to review contracts and advise on coverage. Working with Galt on SWAT agreement with Elk Grove.

Actively working with Livermore on contract issues with LPFD.

5 | P a g e Updated 10/28/2014

GOALS OUTCOMES COMMITTEE ASSIGNMENT

TASKS COMPLETED

Provide updated information to members on CJPRMA programs, services and

provide ongoing updates on legislative changes including results of litigation affecting

our industry. 5%

CJPRMA staff will provide ongoing updates to members on programs and services and shall provide training on an annual basis that will include:

1. New board member orientation 2. Update on all memorandum of coverage

documents 3. Claims update 4. Case law updates

General Manager and Staff

Provided ongoing updates on current

issues to Board and Executive Committee including Pasadena case and S.B. 854.

Provided Board with updates by claims administrator on pertinent legislation in Sacramento.

Working with CAJPA and Legislative Committee on new issues.

Working with Redding on a letter of support on inverse condemnation published decision.

Actively supporting Vallejo on case law regarding bankruptcy.

Working on appeal with City of Fairfield on private property trespass issue.

Worked on a committee with AGRIP, CAJPA and NLC RISC to develop PR toolkit.

6 | P a g e Updated 10/28/2014

GOALS OUTCOMES COMMITTEE ASSIGNMENT

TASKS COMPLETED

Enhance the CJPRMA claims processing, litigation

management program and the delivery of litigation/claim information to the board of

directors. 10%

The general manager will work with staff to continue to improve the delivery of claims management to members. Staff will review options for a preferred provider network of legal counsel, develop improved reporting to the board of directors on all claims and continue to provide semi-annual updates on the overall claims management process and organization experience

General Manager

and Staff

Worked to resolve cases at mediation

including Hall v. Fairfield and Glicksman v. Chico.

Working actively with Claims Administrator in communication with members on claims process and litigation.

Developing reports out of Risk Console based on new data entered into system. Prepare detailed reports based on losses.

Performing claims audits and primary claims audits to identify areas requiring improvement.

Actively managing all litigated files in CJPRMA layer. Participate actively in mediations and including members in settlement decision making process.

Manage all aspects of the operation of CJPRMA

including staff, operations and outside vendors.

10%

The general manager has the overall responsibility to oversee the performance of staff and to work with staff to develop capabilities within CJPRMA. General manager must also oversee all outside vendors to insure the highest quality and most efficient use of resources for the delivery of service to the organization and its members.

General Manager

Managed all aspects of office and

conducted ongoing meetings with staff. Evaluating their performance based on the Board Adopted Strategic Plan.

Managed transition of staff member that resigned. Conduct recruitment process including testing and interview panel.

Managed and process all aspects of office function.

Attended the AGRIP CEO Conference.

7 | P a g e Updated 10/28/2014

GOALS OUTCOMES COMMITTEE ASSIGNMENT

TASKS COMPLETED

Manage the CJPRMA facility and coordinate all aspects of

building maintenance and maintain relationship with

tenant. 5%

General Manager will be responsible for maintaining all operations of the new facility and provide oversight and coordination of tenant relationship and coordination of other condo owners at facility.

General Manager

Managing the operation of the office.

Work with tenant and owner of other suites to preserve CJPRMA asset.

Evaluating option for implementing video conferencing.

Continue ongoing management of all IT systems, security systems and all other building related infrastructure.

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STARR PUBLIC ENTITY

California Joint Powers Risk Management Authority (CJPRMA)

October 29, 2014 – Loss Control and Risk Analysis Review

To: Craig Schweikard, Claims Administrator - CJPRMA

David J. Clovis, General Manager - CJPRMA

From: Mark Anderson - Starr Companies / Public Entity

Date of Report: October 29, 2014

Date of Review: October 29, 2014

Current Policy: Starr Indemnity - 8090023

Policy Effective Date: July 1, 2014 to July 1, 2015

Evaluation Satisfactory Needs Improvement Unsatisfactory

1. Claim Handling / Results /

Capability: X

2. Loss Runs Accuracy: X

3. Reporting Compliance to Excess

Carrier: X

4. Reserving Philosophy / Accuracy: X

5. Exposure - Claim Types /

Frequency / Severity: X

6. Settlement Philosophy / Authority

Levels: X

7. Litigation Management / Results /

Attorneys / Costs / Trials: X

8. Claim Files – Access /

Documentation / Organization: X

9. Claims Administration -

Organization / Staff / Experience: X

10. Risk Management / Loss Control

/ Safety / Protocols: X

Purpose of this Loss Control and Risk Analysis Review

The main purpose for this Loss Control and Risk Analysis Review is to develop an understanding of the nature

and quality of CJPRMA’s claim handling, litigation management, risk management and loss control practices

and to:

1. Share/Discuss Starr Indemnity’s claims reporting criteria and claim staff contacts. This was previously

discussed during the August 28, 2014 meeting along with providing handout material.

2. Evaluate the quality of your present risk/litigation management practices.

3. Provide valued supportive claims services to help save claim costs within your retained limit.

4. Assess your effectiveness in economically handling and resolving your high exposure claims.

5. Help to further improve your current “Best Claim Handling Practices”.

Starr Public Entity - Loss Control and Risk Analysis Review (10/29/14) - CJPRMA

2

The following are some of the significant findings.

Findings / Conclusions / Recommendations:

Based on our review of the completed questionnaire and our review of a sampling of CJPRMA’s highest

exposure claims we selected for review, we confirmed CJPRMA, competently handles and aggressively litigates

and resolves CJPRMA’s high exposure claims within CJPRMA’s $5,000,000 retained limit, and timely

communicates important loss/claim information to their excess carriers when it is appropriate to do so. Overall,

our technical findings were quite positive and we confirmed CJPRMA maintains a skilled and dedicated pro-

active Claims Administrator and General Manager. We further confirmed that CJPRMA and their risk

management staff promptly investigate, proactively manage, aggressively defend and appropriately reserve and

settle CJPRMA’s liability claims.

We had full access to CJPRMA’s claim files, which were reviewed remotely in the Risk Console and Business

Intelligence (RCBI) claim system. RCBI is currently paperless with some paper back up. CJPRMA maintains

older claim files in paper files. The CJPRMA risk management staff has been very cooperative and hospitable

during our review process and Livermore, CA on-site visit.

CJPRMA provides pooled coverage for Auto Liability, General Liability, Directors & Officers coverage for its

17 member Cities and 4 liability pool members (over 100 individual cities). The insurance coverage is above

either a $500,000 or $1,000,000 retention amount. CJPRMA only monitors large exposure claims. The

CJPRMA Claims Administrator, Craig Schweikhard, handles all claims for the members. There are currently

189 open claims and they receive an average of 65 newly reported Member claims per year. CJPRMA’s Claims

Administrator has 28 years of claims experience, which includes 25 years of handling claims for public

agencies. The vast majority of that time he handled claims for excess pools. He holds Bachelors in Political

Science and an MBA. In addition, he has an ARM-P designation.

The organization, maintenance and documentation of CJPRMA’s claim files is consistent with the insurance

industry’s and legal community’s best practices. Files reflect the Claims Administrator’s involvement when

appropriate. Reserve and payment amounts were properly summarized with corresponding documentation

attached along with a Reserve Request Work Sheet covering Facts/Liability/Damages/Status. The claim files all

had detailed notes and action plans and up to date claim file diaries established by the Claims Administrator.

CJPRMA’s investigations are timely and sufficient with the claim files containing police reports, property

damage estimates and photographs of vehicles and accident scenes for verification of damages and the facts of

the loss. The CJPRMA’s risk management staff verifies liability and confirms damage and injury amounts.

CJPRMA may consider settling cases with merit and will aggressively defend non-meritorious cases. CJPRMA

does not consider paying any nuisance claims. CJPRMA is an Excess Liability Pool and all excess claims are

reviewed internally by the Claims Administrator. CJPRMA also provides oversight and advice to the members

on claims in the underlying layer. CJPRMA view their relationship with its members as cooperative and

provides them with assistance and information on their claims. CJPRMA provides a primary claims audit for its

members every three (3) years. CJPRMA also reviews the Member Cities claims handling procedures, reserving

practices and litigation management and provide them with a comprehensive report. CJPRMA’s members

represent a mix of in-house and TPA managed claims programs. CJPRMA also conducts an annual claims audit

of all excess exposure claims for all our members by an outside auditor

CJPRMA reviews high exposure cases at every Board of Directors meeting and Executive Committee meeting.

A “Watch List” is prepared for each meeting with a summary of each of the significant cases that are being

monitored by the pool. CJPRMA present claims statistic to the members twice per year with a focus on trends in

their losses. CJPRMA encourages its members to engage is Loss Control and Claims Management at their Cities

and Pools. CJPRMA also has a strong commitment to Risk Management and provide frequent training

opportunities to their Member Cities.

Starr Public Entity - Loss Control and Risk Analysis Review (10/29/14) - CJPRMA

3

For litigated claims, Defense of the case within the SIR is up to each Member City. CJPRMA’s Pool members

have approved panel counsel lists of outside attorneys and also have litigation management programs. The

individual City members practice a broad range of approaches with some member Cities defending cases

primarily with in-house counsel through the City Attorney’s Office. These Cities however will assign cases to

outside counsel on more difficult and conflict cases. If the case is reportable to CJPRMA, they will review the

case and assign monitoring counsel if CJPRMA is concerned about the case. Most of the member cities assign

cases to outside counsel. Each member is responsible for managing cases within the SIR. If a case merits

additional attention CJPRMA will consider assigning monitoring counsel to assist on the case. On cases that are

being managed by the Pool, CJPRMA does require that attorneys abide by their litigation management

guidelines and further encourages all Member Cities to do the same. For the most part, the handling defense

attorney’s status report, in the claim files we reviewed, outlined important items which include; liability,

damages and recommendations/efforts to resolve claims concerning clear liability to minimize the Member’s

ultimate costs and exposures.

CJPRMA are advocates for Alternative Dispute Resolution (ADR) among our members, as evidenced in the

claim files which were reviewed and loss data provided (two (2) largest claims were successfully mediated prior

to litigation). When applicable CJPRMA has used arbitration to resolve cases with reduced defense cost.

CJPRMA frequently will use this settlement technique to resolve certain disputes with other co-defendants in

litigated cases. Virtually all of CJPRMA’s cases involve mediation at some point in the litigation process.

Reserves were generally appropriate and adequate for the current exposure. CJPRMA’s reserving philosophy is

to reserve to value, considering damages/injuries drive the value of the case. Factors CJPRMA consider in

establishing reserves include; damages/injuries, joint and several liability, Proposition 51, extent of permanency,

prior experience with comparable claims, applicable law, legal liability, comparative fault issues (California-

Pure Negligence), jurisdiction involved (State or Federal), the Judge, the reputation and ability of both defense

and plaintiff counsel involved, potential value of the claim and anticipated legal fees and expenses. Reserving

for expenses and legal fees are evaluated based on defense counsel’s anticipated strategy. If the Member City is

known to aggressively defend all cases, CJPRMA considers a legal expense reserve amount through trial. If

early resolution is anticipated, CJPRMA may place a lower legal expense reserve amount. CJPRMA will rarely

reserve to the amount of anticipated expenses to Motion of Summary Judgment (MSJ) considering they are

rarely granted by the Court. If a case has a potential exposure for an award of attorney fees (1983-Civil Rights,

Employment Practice Liability/EPL, Inverse etc.) to the plaintiff, CJPRMA will consider increasing those

reserve amounts, considering the plaintiff’s attorney may try to run up their potential attorney fees. CJPRMA

also considers the reputation of the plaintiffs’ attorney, recognizing that some plaintiff attorneys may take their

cases to trial while others never try cases and only look to settle.

CJPRMA’s member City claims frequency is driven predominately by the Police Departments and Public

Works Departments. 52% of the claims reported to CJPRMA concern the Police Department and 25% involve

the Public Works Departments. The remaining 23% are spread among other departments significantly,

Administration (EPL claims) 5% and Fire/EMS 5%. CJPRMA, as the excess pool claims administrator, receives

around 65 new claims each year with an average of 5-6 newly reported claims per month. Overall Auto claims

are only about 3%, EPL 16% and the remaining claims fall under GL. Given CJPRMA’s current limited annual

pattern of reported large loss AL, GL, PD and EPL claims, CJPRMA’s current risk management team, appears

to be adequately staffed and skilled to handle them.

There have been no claims in the last (5) years that have exceeded CJPRMA’s $5,000,000 retained limit.

Presently there are potential pending losses (Incurred over $1M - listed on page #5) that may pose an exposure

approaching or over CJPRMA’s $5,000,000 retained limit. All of these claims (listed on page #5), occurred

prior to the Star Indemnity policy effective dates of 07/01/14 to 07/01/15.

CJPRMA currently maintains claim reserves totaling $16,212,707, involving 163 open claims reported to

CJPRMA by its Members. The review concerned 48 claim files (36 open and 12 closed), administrated by

CJPRMA and selected from the five year loss run provided by CJPRMA. The review of the individual pre-

selected claim files was conducted remotely via access to CJPRMA’s RiskConsole paperless claim system.

Starr Public Entity - Loss Control and Risk Analysis Review (10/29/14) - CJPRMA

4

CJPRMA’s Five Highest Paid Individual Claims (loss & expense) in the Past Five (5) Years

Claimant Type of Claim Legal Paid Loss Paid Outcome

BIELIK Auto $40,442 $2,750,000 Settled-Mediation-

Prior to litigation

SABBAH Sex Misconduct $10,000 $780,000 Settled-Mediation-

Prior to Litigation

GLIKSMAN Auto $541,126 $450,000 Settled-Mediation

HOGYA Police-Excessive

Force $66,238 $500,000 Settled-Mediation

HALL Police-Excessive

Force $284,102 $275,000

Settled-During

Appeal – 9th Circuit

CJPRMA’s Cases Taken to Trial in the Last Three (3) years (averages 3-5 trials per year)

Resolution Member City Date Closed Claimant Paid/Settlement

Defense Verdict Santa Rosa 10/20/2010 PATEL $0

Defense Verdict San Leandro 04/28/2010 WILLINGHAM $0

Plaintiff Verdict Santa Rosa 02/26/2014 DESANTIS $1,050,000

Defense Verdict Fairfield 12/10/2009 MARTINEZ $0

Defense Verdict REMIF 10/11/2011 ALFORD $0

Defense Verdict Fremont 12/16/2010 DUNN $0

Defense Verdict Sunnyvale 05/21/2013 CANAS $0

Plaintiff Verdict Roseville 04/25/2013 AVERY $575,000

Plaintiff Verdict REMIF - COTTON $4,500,000

Defense Verdict NCCSIF - FUNK $0

Defense Verdict REMIF 05/11/2011 HERBOLD $0

Defense Verdict REMIF 05/21/2013 BOCK $0

Defense Verdict YCPARMIA 02/28/2013 GUTIERREZ $0

Plaintiff Verdict Fairfield HALL $275,000

Defense Verdict NCCSIF 04/28/2014 JEFFRIES $0

Defense Verdict Santa Rosa 12/04/2013 ARIAL $0

CJPRMA’s reported Trial Philosophy includes; “One cannot be afraid to take a case to trial. Realistically

evaluate your case as to settlement value, cost of defense and probability of outcome and based on these factors

decide if case is one you are willing to take to trial. Always recognize that there is a chance that the outcome

may surprise you. You will win cases you should have lost. You will lose cases you should have won. Verdicts

will be bigger or smaller than you anticipated. Do not make too much of a single outcome. You cannot always

trust what defense counsel is telling you so always objectively evaluate your case independent of their opinion.

Bad judges and bad juries make for bad days. Remember that your case will not be tried in a vacuum, look at

what is going on in the world around your case. Avoid the impulse to settle on the courthouse steps without a

significant change in the factors surrounding your case. If it is worth that much today it was worth that much

before you spent all the money defending the case.”

Starr Public Entity - Loss Control and Risk Analysis Review (10/29/14) - CJPRMA

5

Highest Total (Member & CJPRMA) Incurred (2009-2014) Claims over $1,000,000

Member Date of

Loss Claimant Type of Loss Department

Member

Incurred

CJPRMA

Incurred

Total

Incurred

REMIF 07/03/09

Julia

Bertoli-BI

brain, neck

injury, etc.

Roadway -

Dangerous

Conditions

Public

Works $500,000 $3,375,742 $3,875,742

FREMONT 06/26/13

Bipasha

Dani-

“Bubbles”-

brain

injury

Summer

Camp -

Disabled

Child -

Injury

Parks &

Recreation $500,000 $3,000,000 $3,500,000

NCCSIF 12/29/03

Insurance

Company-

Dentist-

Subro - PD

Sewer Back

-Up -

Dentist

Sewer $2,366,832 $1,103,162 $3,469,994

YCPARMIA 09/14/12

“Multiple”

Female

Plaintiffs-

rape/sexual

Police

Officer-

Sexual

Misconduct

Police $500,000 $2,501,573 $3,001,573

STOCKTON 09/02/09

John Perez-

BI - leg,

arm, back

Police

Excessive

Force-

Taser/Baton

Police $1,000,500 $2,000,000 $3,000,500

NCCIF 05/25/12

Nancy

Bielik -

death

MVA/Bike-

Fatality

Public

Works $1,000,000 $1,809,804 $2,809,804

NCCIF 05/29/12

Katrina

Haught-

sexual/rape

Police

Officer

Sexual

Misconduct

Police $1,118,115 $750,169 $1,868,284

RICHMOND 06/06/13

Sami

Sabbah-

sexual

assault-

minors

Rec. Center

Dir. Sexual

Misconduct-

“Multiple”

Children

Parks &

Recreation $0 $1,008,154 $1,008,154

ROSEVILLE 09/22/12

Paul

Storey-

shot/death

Excessive

Force -

Shooting

Police $862,286 $500,000 $1,362,286

YCPARMIA 09/23/11

Lianna

Glicksman-

BI - brain

injury

MVA -

Struck Bike

in

Crosswalk

Public

Works $541,127 $500,820 $1,041,947

Starr Public Entity - Loss Control and Risk Analysis Review (10/29/14) - CJPRMA

6

CJPRMA Individual Members - Reported Claims - Five Year Data:

Member

Claims

Reported to

CJPRMA

CJPRMA

Bodily Injury

Indemnity

Reserve

CJPRMA

Property

Damage

Reserve

CJPRMA

Legal Reserve CJPRMA Total Reserve

Alameda 14 $0 $0 $0 $0

Chico 11 $0 $0 $0 $0

Fairfield 7 $425,000 $0 $0 $425,000

Fremont 6 $3,000,000 $0 $0 $3,000,000

Livermore 7 $0 $0 $0 $0

Lodi 13 $0 $0 $0 $0

NCCSIF 41 $749,918 $1,500,000 $247,180 $2,497,097

Petaluma 9 $0 $0 $0 $0

REMIF 4 $2,500,000 $0 $541,023 $3,041,023

Redding 10 $0 $250,000 $0 $250,000

Richmond 32 $1,000,000 $0 $0 $1,000,000

Roseville 16 $500,000 $0 $0 $500,000

SCORE 9 $0 $0 $0 $0

San Leandro 12 $0 $0 $0 $0

San Rafael 4 $0 $0 $0 $0

Santa Rosa 31 $0 $0 $0 $0

Stockton 25 $1,999,588 $0 $0 $1,999,588

Sunnyvale 10 $0 $0 $0 $0

Vacaville 6 $0 $0 $0 $0

Vallejo 24 $500,000 $0 $0 $500,000

YCPARMIA 12 $3,000,000 $0 $0 $3,000,000

TOTALS: 303 $13,674,505 $1,750,000 $788,202 $16,212,707

Starr Public Entity - Loss Control and Risk Analysis Review (10/29/14) - CJPRMA

7

Risk Management Settlement Authority Levels:

Executive Director - $50,000

Executive Committee - $500,000

Full Board of Director - over $500,000

CJPRMA’s reported Settlement Philosophy includes; “Do the hard work up front and look for the bad news

early. Within the first 90-180 days of a case you should have sufficient information to make a realistic

evaluation of a case. If a case has any weaknesses at all early resolution should be considered. Cases generally

don’t get better the farther along you go. Settle a case before you sink more money in defense. Evaluate a case

on a regular basis to see if anything has changed your initial evaluation. Get stakeholders involved in the

discussions from the very beginning and keep them focused on the facts of case as opposed to their emotional

investment in the case. Make defense counsel provide realistic budgets and have them address the real

probability that a case will be eliminated on the pleadings.”

For critical claim trends and any unique problems:

CJPRMA reports they were seeing a rise in the number of EPL claims and problems with the high cost

of defense and member Cities slow reporting to the Pool. Cases are often be handled by the Human

Resource Department and the City Attorney’s office and weren’t shared with Risk Management.

Consequently CJPRMA receives late notice of those cases, which were already out of control.

CJPRMA immediately instituted training for the member Cities and made a point of addressing those

EPL late notice cases during CJPRMA’s annual audit. CJPRMA also amended the Memorandum of

Coverage document to include language that stated that member Cities had a duty to report those claims

within 30 days of service of the lawsuit. If the Member City did not report all defense cost between the

30 days and the date reported, those costs would not erode the SIR and would have to be borne by the

Member City.

CJPRMA also recognizes that Police Department liability cases represented 50% of the total frequency

and 60% of the total severity. CJPRMA has focused their training efforts on addressing those issues.

CJPRMA is also in the process of creating an annual conference for police command staff to attend and

discuss liability issues and conduct training on issues related to their liability exposures.

CJPRMA has also made Lexipol model policies and procedures available to its members.

CJPRMA is actively involved in CAJPA’s lobbying efforts that keeps them up to date on changes that

affect our members.

Issuance of police body cameras that assist the member Cities in the defense of cases may in the future

cause involve liability exposures for invasion of privacy. When a police video is released to the media

by staff or by people hacking into our systems CJPRMA anticipates this may have an impact on future

cases. Entities failure to protect personal data that they maintain in their computer systems is a cause of

action that we have not experienced but anticipate this exposure in the future.

CJPRMA’s past/current Member Claim Reporting Requirements include:

1. One or more fatalities

2. Loss of limb

3. Loss of use of any sensory organ

4. Quadriplegia or paraplegia

5. Third degree burns involving ten present of more the body

6. Serious facial disfigurement

7. Paralysis; or

8. Closed head injury

Starr Public Entity - Loss Control and Risk Analysis Review (10/29/14) - CJPRMA

8

In addition to the above items, CJPRMA and its Member Cities should also report all Special Serious Claims,

concerning liability claims occurring within the Starr Indemnity policy effective dates, and as listed in the Starr

Indemnity & Liability Company Declarations, which states:

D. Prompt written notice shall be given as soon as reasonably practicable by the Covered Parties to STARR

INDEMNITY of any occurrence, accident, or wrongful act (whichever may be applicable), which, without

regard to liability, appears likely to involve this reinsurance including:

i) A serious occurrence, accident or wrongful act in which in the Covered Parties’

judgment or the judgment of the Covered Parties’ counsel the exposure may

exceed fifty percent (50%) of the applicable retention;

ii) Any claim where a reserve of fifty percent ( 50%) or more of the applicable

retention has been posted by the Covered Parties;

iii) Fatality or death of a person;

iv) Paralysis, paraplegia, quadriplegia;

v) Loss of eye(s) or limb(s);

vi) Spinal cord or brain injury;

vii) Sensory organ or nerve injury, or neurological deficit;

viii) Serious burns involving twenty five percent (25%) or more of the body

regardless of degree;

ix) Sexual abuse or molestation;

x) Substantial disability or disfigurement;

xi) Loss of work time of six months or more;

xii) All claims that exhibit a pattern, or could potentially create a class action, as

well as all class actions.

Upon request by STARR INDEMNITY, the Covered Parties shall furnish material claim information

known to the Covered Parties in respect of claims or possible claims notified in accordance with this

clause.

CJPRMA should continue to encourage the Members to comply with the above Claim Reporting

Requirements along with maintaining industry standards for Litigation Management, which are

contained in the Model Policies and Procedures listed in the CJPRMA website under;

http://www.cjprma.org/libraries.html for members to utilize in managing litigation matters. A sample

phase Litigation Budget outline is also included in these documents.

Specifically and crucial to the litigation management process and legal cost containment, requires

receiving timely and accurate status reports from defense counsel on those claims being monitored by

CJPRMA, that could potentially exceed the Member’s Self Insured Retention ($500,000 to $1,000,000)

amount(s) and as outlined in CJPRMA Mandatory Case Reporting Policy and Starr Indemnity policy

conditions.

CJPRMA is encouraged to continue to audit each Member City, on a regular basis, to ensure the

Member Cities continue to comply with the requirements for reporting severe claims and that they also

adhere to litigation management Best Practices.

Starr Public Entity - Loss Control and Risk Analysis Review (10/29/14) - CJPRMA

9

Additionally, Starr Public Entity offers various educational seminars to CJPRMA and the Member Cities, at no

cost, which include:

Reserving Philosophy

Claim Cost Containment Strategy

Litigation Management

Claim Best Practices

Handling Catastrophic Claims

The separately attached “Addendum” outlines some of the more global suggestions (for your consideration),

which I thought were CJPRMA’s potential opportunities for further improvement and cost savings.

On behalf of Starr Indemnity, our underwriter, Richard Wilson and myself, I again thank you for CJPRMA’s

continued business through wholesale broker Robert M. Lowe/Aon Risk Solutions/Public Entity Practice Group.

We would like to perform a follow-up Loss Control and Risk Analysis Review, at a date to be determined in the

future, to ensure we continue to maintain a mutually beneficial long-term partnership. If in the interim I can be

of any assistance, or answer any questions, please let me know.

Thank you,

Mark S. Anderson, AIC, SCLA

Public Entity Risk Management Analyst

Starr Public Entity

A Division of Starr Companies

500 West Monroe Street, 31st Floor

Chicago, IL 60661

(312) 577-7843 - Office

(312) 340-9236 - Cell

(309 550-8990 - Cell

(312) 896-1534 - Fax

Mark.Anderson@starrcompanies.com

www.starrcompanies.com

Cc:

Robert.lowe@aon.com

Richard.Wilson@StarrCompanies.com