Service • Stability • Security

StandingStrong

Since 1994 the Ohio Transit Risk Pool has offered stable property and casualty coverage to its coalition of Ohio Public Transit members. We are pleased to offer this annual report as an overview of our operations and to meet the statutory requirements under Ohio Revised Code Section 2744.081. OTRP staff and members work hard to control pricing through training, pool wide implementation of best practices, aggressive claims handling and open forums such as the Loss Control Summit in which new ideas are openly embraced. We hope this report will illustrate the strength and resources found within the Ohio Transit Risk Pool.

All financial information in this annual report is unaudited and subject to review and acceptance by the Auditor of State’s office, and the requirements of Ohio Revised Code § 117.25 are not met until the Auditor of State certifies this report and these reports are subject to change if the Auditor of State determines that modification of a report is necessary to comply with required accounting or auditing standards or OMB Circular A-133.

CONTENTS

Mission Statement & Board of Dir.

Message from Barbara J. Rhoades

OTRP Members

Staff Profiles

OTRP Service Providers

OTRP Members

Core Values

Management’s Discussion & Analysis

Net Assets

Service Highlights

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ACRTA Participates in the annual Labor Day Parade

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MISSION STATEMENT

Our mission is to provide property and liability coverage supported by risk management services that minimize the loss exposure of our members. We will deliver these services tailored to our members needs, on a long-term financially sound and cost effective basis.

Standing: Ben Capelle, Kirt Conrad, Richard Enty, Dennis Schooley, Shelia Haney, Dean Soroka, Jim GeeSeated: Robert Ruzinsky, Claudia Amrhein, Howard Stewart, Jr.

MISSION STATEMENT

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bOarD OF DirectOrS

Board Member: Shelia Haney, Executive DirectorAlternate: Patricia Stein, Finance Director

OTRP MEMBER

Lima/Allen County Regional Transit Authority (ACRTA)

MESSAGE FROM BARBARA J. RHOADES

2016 was a year of movement, exploration and change. OTRP said good bye to three long term friends, Andy Altenweg from Laketran, Robert Ruzinsky from BCRTA and Becky Yurchiak from OTRP and we welcomed a new staff person, Lisa Lamb.

At a time when the Ohio Transit Risk Pool (OTRP) has achieved rate, funding and membership stability, our membership has pressed our resources to respond further to the cry for efficient utilization of all shared resources. During 2016, OTRP continued handling under contract the administration of the Health Transit Pool of Ohio and the fiscal administration for NEORide. These contracts were performed in conjunction with our administration of Transit RE, a nationwide captive for transit reinsurance. OTRP staff has risen to the occasion to support and provide maximum utilization of resources.

Beyond the core objectives, 2016 was a very busy year for OTRP.

• We successfully assisted OPTA in making a jump with their annual conference from a hotel venue to the Columbus Convention Center which included the software development for on-line registration and tracking. We also assisted in the update of the OPTA By-Laws and continue to assist in the current management transition.

• OTRP began a Bureau of Workers’ Compensation Savings group with participation from almost all of the membership with rebate savings to be realized in 2018.

• OTRP Legal Counsel provided our bi-annual coverage document review and reviewed the Public Records policy and procedure.

2016 marked the first year in the pools history that the membership retained a $2M SIR for group self-insured claims. The claims department finalized claims from 2012 and 2013 and a return of equity was made for loss years 2008, 2010 and 2011. A special assessment was issued for 2012 and we anticipate a future assessment for 2013, both of which will fall within net equity. The claims department continues to work aggressively with our qualified legal defense counsel. 2014, 2015 and 2016 continue to develop with expected claims.

During 2016 OTRP completed two major projects. We explored the possibility of management for OPTA including researching the legal possibility of offering services under a contract. We also performed a legal review of our Personnel Policy and Job Descriptions in conjunction with the acceptance of a 10 year operational plan which focuses on succession planning, cross-training and mentoring. Staff is anxious to being implementing the plan in 2017.

Risk Management was highlighted with the Loss Control Summit which focused on fire safety and emergency planning. We welcomed Mr. John Barylick to share the story of the Rhode Island Station Nightclub Fire, Killer Show. We also provided a training session for legalized marijuana issues and concealed carry law in Ohio. Additional Risk Management services were granted for Human Resources and Operations through a legal “help line”.

At the request of the Board, during 2014 OTRP began serving on the executive committee for the Ohio Public Transit Association (OPTA). During 2016, we stepped down from this position while considering our future relationship with them. Also during 2016, I completed my first year as an elected member of the Board of Directors for the Association of Governmental Risk Pools (AGRiP). We are glad to provide these additional resourcesfor our association partners.

As we work towards continuing to be a full resource for our Public Transit Members, we are pleased to provide this OTRP Annual Report for 2016.

CHIEF EXECUTIVE OFFICER

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OTRP MEMBERS

Board Member: Matt Dutkevicz, Operations ManagerAlternate: Bob Ruzinsky, Chief Financial Officer Delene Weidner, Finance Manager

Butler County Regional Transit Authority (BCRTA)

Board Member: Jim Gee, General ManagerAlternate: Stacey Clink, Comptroller

Toledo Area Regional Transit Authority (TARTA)

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BCRTA Participates in a senior citizens fair atFountain Square.

BCRTA Participates in a senior citizens fair atFountain Square.

The Toledo Mud Hens mascot rides a TARTA bus.

Board Member: Kirt Conrad, Executive DirectorAlternate: Mark Finnicum, Director of Maintenance

Stark Area Regional Transit Authority (SARTA)

Board Member: Richard Enty, General ManagerAlternate: Dean Harris, Director of Finance

Metro Regional Transit Authority (Metro RTA)

OTRP MEMBERS

Metro RTA participates in helping a local elementary school build a greenhouse.

Activity and community school supply drive.

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Angel M. Wisenburg, AICSenior Claims Specialist

Ms. Wisenburg is responsible for adjusting property/casualty claims and has been with OTRP since 2005. She is also responsible for all claims department reporting to management and coordination with OTRP’s Reinsurance partners. Ms. Wisenburg holds an Associates in Claims from the IIA/CPCU program. She holds a BA in Sociology from Kent State University.

Kenneth F. Reed, AIC, ARM-PLoss Control Services Manager

Mr. Reed is responsible for the oversight of loss control, training and risk auditing activities and has been with OTRP since 2003. He has worked in, or with, public transit since 1998. Ken is currently the Treasuer Ohio-Kentucky-Indiana Regional Council of Governments, which coordinates regional transportation planning. He also serves as Vice Chair on the Board of the Southwest Ohio Regional Transit Authority. He holds a BSBA from The Ohio State University in marketing/transportation logistics and has post graduate designations from the Insurance Institute of America (AIC, ARM-P).

Jessica GissinerSr. Administrative Specialist

Ms. Gissiner is responsible for all day to day administrative duties and support for OTRP, including financial reconciliations, assisting and planning all OTRP meetings and functions. She has been with OTRP since December, 2012 and holds a bachelor’s degree from Kent State University.

Andy L. HodovanClaims Specialist / Senior IT Specialist

Mr. Hodovan is responsible for adjusting property/casualty claims and has been with OTRP since 2010. He has worked in the insurance industry since 2007 and brings experience from Allstate. Mr. Hodovan also manages the network as well as software and web development projects for the office. Andy holds an AS in Computer Science & Engineering from Stark State Technical College.

Rebecca A. YurchiakOffice Manager

Ms. Yurchiak is responsible for administrative support for OTRP. Her duties include administrative oversight of all office functions. She has been with OTRP since 2002.

Lisa LambAdministrative Specialist

Ms. Lamb is responsible for the office administrative support with focus on Health Transit Pool of Ohio. Her duties include the financial coordination between vendors and HTPO members. She has a strong financial background and administrative skills from her experience as executive director for a professional association for several years. She has been with us since 2015.

STAFF PROFILES

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ACTUARIAL SERVICES

Pinnacle Actuarial Resources, Inc. Timothy C. Mosler, FCAS, MAAOne Glenlake Parkway #1285 Senior Actuarial ConsultantAtlanta, GA 30328

AUDIT SERVICES

Plante Moran Terry Olejnik, CPA, Partner1111 Michigan Ave.East Lansing, MI 48823

BROKER CONSULTANT

Arthur J. Gallagher & Co. John G. Chino, ARM, Area Sr. Vice PresidentInsurance Brokers of Calif., Inc.15 Enterprise, Suite 200Aliso Viejo, CA 92656

CORPORATE COUNSEL

Isaac Wiles Burkholder & Teetor, LLC Mark Landes, Esq., Equity Partner Two Miranova Place, Suite 700Columbus, OH 43215

INVESTMENT COUNSEL

Finacial Advisory Corporation Ryan Allen, CFA4251 Cascade Rd. SEGrand Rapids, MI 49546

REINSURANCE INTERMEDIARY / PROPERTY BROKER SERVICES

JLT Towers RE Olivia Rogers, Vice-President30 South 17th St.United Plaza 17th FloorPhiladelphia, PA 19103

OTRP SERVICE PROVIDERS

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Board Member: Dennis Schooley, Executive DirectorAlternate: Crystal James, Administrative Manager Tina Smith, HR Coordinator / Financial Clerk

Delaware County Transit Board (DATA)

Board Member: Jim Ferraro, Executive DirectorAlternate: Dean Soroka, HR Director

Western Reserve Transit Authority (WRTA)

OTRP MEMBERS

WRTA executive director discuess publictransportation options with a local area senior.

DATA volunteering with Meals on Wheels.

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Board Member: Andrew Altenweg, Deputy General ManagerAlternate: Ben Capelle, Operations Manager

Laketran

OTRP MEMBERS

Laketran marching in the Lake County Fair Parade.

• Integrity

• Member Owned

• Transparent

• Data Driven

• By Collective Action We Are Stronger

CORE VALUES

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MANAGEMENT’S DISCUSSION & ANALYSISThis section of Ohio Transit Risk Pool annual financial report presents our discussion and analysis of OTRP’s financial performance during the year ended November 30, 2016. Please read it in conjunction with OTRP’s audited financial statements. It is available online at www.OTRP.org.

OTRP is a not-for-profit corporation that provides property and liability coverage to its participating members. Membership in OTRP is comprised exclusively of Ohio Political Subdivisions, Regional Transit Authorities, County Transit Boards, and other Ohio County Transit operations. OTRP uses the accrual method of accounting in accordance with accounting principles generally accepted in the United States of America.

The three basic financial statements presented are as follows:

• Statement of Net Assets - This statement presents information reflecting OTRP’s assets, liabilities, and net assets and is categorized into current and noncurrent assets and liabilities.

• Statement of Revenue, Expenses, and Changes in Net Assets - This statement reflects the operating and nonoperating revenue and expenses for the previous two fiscal years. Operating revenue consists primarily of member contributions, with the major sources of operating expenses being claims and claims adjustment expense, general and administrative expenses, and reinsurance costs. Non-operating revenue and expenses consist primarily of investment activity and distributions to members.

• Statement of Cash Flows - This statement is presented on the direct method of reporting and reflects cash flows from operating activities. Cash collections and payments are reflected in this statement to arrive at the net increase or decrease in cash and cash equivalents for the fiscal year.

uSing thiS annual repOrt

Financial cOntact

This financial report is designed to provide a general overview of OTRP’s finances. Questions concerning any of the data contained herein or requests for additional financial information should be directed to the Chief Executive Officer of OTRP, 1 Park Centre Drive, #300, Wadsworth, OH 44281.

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In addition to net assets, when assessing the overall health of OTRP, the reader needs to consider other nonfinancial factors such as the legal climate in the state, the general state of the financial markets, and the level of risk prevention undertaken by OTRP and its members.

CONDENSED FINANCIAL INFORMATION

The financial statements report OTRP’s net assets and how they have changed. Net assets - the difference between OTRP’s assets and liabilities - are one way to measure OTRP’s financial health or position. Over time, increases and decreases in OTRP’s net assets are an indicator of whether its financial health is improving or deteriorating, respectively. Summarized financial information follows:A.

2016 2015 2014

2016/2015 Increase

(Decrease)

Condensed Statement of Net position

Assets

Cash and cash equivalents and short-term investments 2,615,556$ 2,740,364$ 1,973,049$ (124,808)$

Other assets 151,852 56,044 178,738 95,808$

Total current assets 2,767,408 2,796,408 2,151,787 (29,000)$

Long-term assets:

Investments 6,617,109 6,177,920 6,488,632 439,189$

Capital assets - Net of depreciation 28,252 35,955 38,300 (7,703)$

Total assets 9,412,769 9,010,283 8,678,719 402,486$

Deferred O utflows of Resources - Pension 188,395 70,434 - 117,961$

Liabilities

Current 3,161,187 2,013,692 2,159,781 1,147,495$

Long term 1,907,381 2,173,450 2,331,076 (266,069)$

Total liabilit ies 5,068,568 4,187,142 4,490,857 881,426$

Deferred Inflows of Resources - Pension 5,708 5,717 - (9)$

Net Position

Invested in capital assets 28,252 35,955 38,300 (7,703)$

Unrestricted 4,498,636 4,851,903 4,149,562 (353,267)$

Total net position 4,526,888$ 4,887,858$ 4,187,862$ (360,970)$

November 30

B.

2016 2015 2014

2016/2015 Increase

(Decrease)

Condensed Statement of Changes in Net Position

Changes in Net Position

Total Operating Revenue 3,647,791$ 2,675,690$ 3,119,590$ 972,101$         

Operating Expenses

Claims and claims adjustment expenses (2,341,332) (844,214) (1,245,649) (1,497,118)      

Administrative expenses (879,790) (846,614) (911,484) (33,176)              

Total operating expenses (3,221,122) (1,690,828) (2,157,133) (1,530,294)      

O perating Income (Loss) 426,669 984,862 962,457 (558,193)           

Nonoperating Expense

Investment earnings and realized and unrealized

gains and losses on investments 61,146 101,145 150,328 (39,999)              

Loss on disposal of fixed assets - 4,138 (4,693) (4,138)                 

Distributions to members (848,785) (128,839) (1,210,702) (719,946)           

Total nonoperating expenses (787,639) (23,556) (1,065,067) (764,083)           

Increase (Decrease) in Net Position (360,970) 961,306 (102,610) (1,322,276)      

Year Ended November 30

Portage Area Regional Transportation Authority (PARTA)

OTRP MEMBERS

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CONDENSED COMPARATIVE FINANCIAL HIGHLIGHTS

C.

Total current assets decreased by $29,000 while long-term assets increased by $431,486 between 2016 and 2015. These changes were caused by a change in strategy of increasing long term investments.

OTRP’s capital assets, net of depreciation, decreased from 2016 by $7,703. This is due to

ordinary depreciation of OTRP capital assets.

OTRP’s liabilities increased from 2015 by $881,426. The increase is reflective of negative claims development. There were no liabilities in the current year for prepayments related to (LY23) 2017.

The difference between assets and liabilities, or “net position,” decreased from 2015 by

$360,970. This was impacted by an increase in claims liabilities. OTRP operating expenses were fairly stable with continued reflection of the reduced impact

by claims and claims adjustment expense.

Total OTRP operating revenue (net of reinsurance/excess insurance premiums) increased to $3,647,791 in 2016 from $2,675,690 in 2015. The increase is due to the raising of the retention in the loss fund which lowered the purchased insurance premiums and additional voluntary shock loss contributions.

 

Board Member: Claudia Amrhein, General ManagerAlternate: Brian Trautman, Director of Operations and Maintenance Kelly Jurisch, Director of Human ResourcesPARTA premiering the Veterans Memorial.

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STATEMENT OF NET POSITION

ReseRves foR Claims

OTRP administers claims and pays for covered losses experienced by its members. All claims are processed and managed by OTRP. Reserves are established for the estimated amount that will be paid at some future date to settle the loss. Reserves are also established for claims that have occurred, but are not yet known to OTRP and for reported claims that are expected to develop. Pinnacle Actuarial Resources, Inc. conducts an independent actuarial analysis to determine the adequacy and reasonableness of these reserves.

NET ASSETS

CLAIMS LIABILITIES

F. Note 6 - Self-insured Retention

OTRP retains responsibility for the payment of claims within specified self-insured retention limits prior to the application of coverage provided by excess insurance and reinsurance contracts, as described in Note 7. For 2016 and 2015, OTRP's per-occurrence retention for auto physical damage was $250,000 and the per-occurrence retention for commercial property damage was $100,000. Beginning in 2016, OTRP's per-occurrence retention for liability claims (including auto liability, public officials' liability, and general liability) was increased from $1,000,000 to $2,000,000. For each per-occurrence claim within OTRP’s self-insured retention, the member is charged the indicated deductible as described in “Note 1 Claims Deductible.”

D. Statement of Net Position November 30,

2016November 30,

2015Assets

Current assetsCash and cash equivalents (Note 2) $1,253,174 $1,253,473Investments - Fixed income (Note 2) 1,362,382 1,486,891 Accounts receivable - Members 148,537 52,484 Prepaid expenses 3,315 3,560

Total current assets 2,767,408 2,796,408

Noncurrent assets:Investments (Note 2) 6,617,109 6,177,920 Capital assets - Net of depreciation (Note 4) 28,252 35,955

Total noncurrent assets 6,645,361 6,213,875

Total assets 9,412,769 9,010,283

Deferred Outflows of Resources (Note 11) 188,395 70,434

Liabilities - CurrentAccounts payable 11,487 1,672 Current portion of reserves for claims (Note 5) 1,706,605 677,000 Accrued compensation 9,576 107,972 Members' payable (Note 8) 1,101,509 697,966 Current portion of unearned contributions 332,010 496,082

Total current liabilites 3,161,187 1,980,692

Noncurrent liabilities:Reserves for claims - Net of current portion (Note 5) 1,088,614 1,370,967 Net pension liability (Note 12) 463,510 320,365 Unearned contributions - Net of current portion 355,257 515,118

Total noncurrent liabilities 1,907,381 2,206,450

Total liabilities 5,068,568 4,187,142

Deferred Inflows of Resources 5,708 5,717

Equity - Net positionNet investment in capital assets 28,252 35,955 Unrestricted 4,498,636 4,851,903

Total net position $4,526,888 $4,887,858

E. Note 5 - Reserve for Unpaid Claims and Claims Adjustment Expenses

OTRP establishes reserves for claims and claims adjustment expenses for both reported and unreported insured events. A summary of changes in the reserves for claims and claims adjustment expenses for OTRP for the years ended November 30, 2016, 2015, and 2014 is as follows:

2016 2015 2014 Reserves for Unpaid Claims and Claims

Adjustment Expenses- Beginning of year $ 2,047,967 $ 2,290,603 $ 2,159,657

Incurred Claims and Claims Adjustment Expenses Provision for claims incurred in current

year 1,776,025 1,339,502 1,277,737 Change in provision for claims incurred in

prior years 565,307 (495,288) (32,088)

Total incurred claims and claims adjustment expenses 2,341,332 844,214 1,245,649

Payments Claims and claims adjustment expenses

paid for claims incurred in current year 69,420 150,264 412,022 Claims and claims adjustment expenses

paid for claims incurred in prior years 1,524,660 936,586 702,681

Total payments 1,594,080 1,086,850 1,114,703

Reserves for Unpaid Claims and Claims Adjustment Expenses- End of year $ 2,795,219 $ 2,047,967 $ 2,290,603

The provision for incurred prior year claims changed due primarily to claims settling for amounts different than originally estimated or known.

OTRP MEMBERS ARE PROVIDED WITH THE FOLLOWING SERVICES:

SAFE OPERATORS AWARD RECOGNITION - SOAR

SERVICE HIGHLIGHTS

• Claims handling from dollar $1• Personalized Risk Management• Operator Training Programs• Safety Performance Audits• Ghost Riding Coordination

• Shared Lending Library• Fire Safety Inspections• Subrogation Services • Contract Review• Yearly Loss Control Summit

To learn more about OTRP please log onto our website at www.OTRP.org for further information.

Each year, OTRP Awards the Safe Operator Award Recognition (or SOAR) award for the lowest incurred losses per mile operated. The award includes recognition on a traveling plaque.

Awarded During 2016

• DIVISION 1 - LAKETRAN

• DIVISION 2 - BCRTA

• DIVISION 3 - SEAT

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OTRP MEMBERS

SEAT participating in first responders training.Board Member: Howard Stewart, Jr., Transit DirectorAlternate: Dianne Gill, Administrative Manager

South East Area Transit (SEAT)

www.OTRP.org

One Park Centre Drive, Suite 300 • Wadsworth, Ohio 44281Phone: 330-334-OTRP (6877) • Fax: 330-336-7130