Executive Committee Meeting

Friday — July 11, 2014

WCIA Office

320 Andover Park East, Suite 104

Tukwila, WA 98188

Phone: 206-575-6046

9:00 a.m.—Call to Order/Self Roll Call

Committee Attendance

Excuse Absent Committee Members

Consent Calendar:

Executive Committee June Minutes Page 1

June Expenditures Page 6

Claims Settlements Page 13

Executive Session

Claim Settlements and Litigation

Action Items:

2015 Liability Assessments Page 14

Director’s Report: Page 19

State Risk Manager Review

Liability Reform Coalition

Washington Risk Pool Advisory Council

Staff Recognition

Managers Reports: Eric Larson, Deputy Director of Insurance Programs Page 24

Reed Hardesty, Claims Manager Page 25

Patti Crane, Member Services Manager Page 27

Lisa Roberts, Risk Services Manager Page 30

Jill Marcell, Treasurer/Deputy Director of Admin Services Page 32

EXECUTIVE COMMITTEE MEETING June 13, 2014 WCIA Offices – Tukwila, WA

MEMBERS PRESENT: John Caulfield, Lakewood; Paul Loveless, Steilacoom; Pete Rose, Lake Forest Park; Rob Roscoe, Auburn; David Timmons, Port Townsend; Arlene Fisher, Mountlake Terrace and Stan Strebel, Pasco. OTHERS PRESENT: Ann Bennett, Executive Director; Mark Bucklin, Counsel; Director; Tina Smith, Authority Secretary; Jill Marcell, Deputy Director-Administrative Services; Eric Larson, Deputy Director-Programs; Patti Crane, Member Services Manager; Lisa Roberts, Risk Services Manager; Lisa Knapton, Sr. Risk Management Rep; Debbi Sellers, Sr. Risk Management Rep; Tanya Crites, Sr. Risk Management Rep; Chip McKenna, Sr. Risk Management Rep; Reed Hardesty, Claims Manager; Jason Barney, Sr. Claims Adjuster; Doug Martin, Sr. Claims Adjuster; Carlene Brown, Claims Representative and Arlan Danner, Evergreen Adjustment Service. CALL TO ORDER: Vice President John Caulfield called the meeting to order at 9:07 a.m. and began with self-roll call.

COMMITTEE ABSENCE LOG: January: David Timmons, Port Townsend Paul Loveless, Steilacoom

February: John Caulfield, Lakewood Dave Zabell, Fife

March: John Caulfield, Lakewood Rob Roscoe, Auburn

April: Arlene Fisher, Mountlake Terrace David Timmons, Port Townsend Paul Loveless, Steilacoom

May: John Caulfield, Lakewood

June: Dave Zabell, Fife

EXCUSED ABSENCES: P. Loveless moved to excuse Dave Zabell-Fife from the meeting and noted President Jared Burbidge was in route; S. Strebel seconded. The motion passed unanimously. The President’s Message was moved to later in the agenda to accommodate the arrival of the president. CONSENT CALENDAR: Motion S. Strebel moved to approve the consent calendar; P. Loveless seconded. The motion passed unanimously.

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EXECUTIVE COMMITTEE MEETING June 13, 2014 WCIA Offices – Tukwila, WA

EXECUTIVE SESSION Motion P. Loveless moved to enter executive session for approximately 30 minutes to discuss claims and litigation per RCW 42.30.110, paragraph (i); A. Fisher seconded. The committee entered executive session at 9:08 a.m.; staff remained for the session. President Jared Burbidge arrived during the session. The committee exited executive session at 9:27 a.m. Motion D. Timmons moved to approve amounts for claim settlements and ratifications discussed in executive session; P. Rose seconded. The motion passed unanimously. PRESIDENT’S MESSAGE Burbidge opened the floor to discuss the committee’s meeting start time and evaluate if members felt it is working for them. The consensus was to continue with the 9:00 a.m. start time. He offered his appreciation to the committee for their efforts to attend. ACTION ITEM(S):

• New Membership: Monroe Transportation Benefit District

Motion P. Rose moved to approve membership for Monroe Transportation Benefit District as a Group 5 member beginning June 13, 2014, P. Loveless seconded. The motion passed unanimously. • New Membership: Enumclaw Transportation Benefit District

Motion P. Loveless moved to approve membership for Enumclaw Transportation Benefit District as a Group 5 member beginning June 13, 2014; D. Timmons seconded. The motion passed unanimously. DIRECTOR’S REPORT: A. Bennett began stating the indigent defense verdict is a very prominent issue and is receiving a lot of attention. WCIA provided a training session on the case at the Washington State Association of Municipal Attorney’s (WSAMA) conference in May, and staff is now focusing attention on educating court administrators. Scott Snyder, who is a contracted city attorney for some WCIA members, is the primary spokesperson for training for this issue. Managers Reed Hardesty, Patti Crane and Lisa Roberts conducted an initial workshop on this issue, and Hardesty will further personally contact members regarding additional training opportunities. More litigation is coming on this issue and staff is being prudent on the education process. D. Timmons noted his city contracted with the county for court administration and asked if there was any secondary liability exposure from the county’s inability to provide appropriate defense. Bennett deferred to Hardesty who felt there was still a limited exposure for those who contract with a county. Counsel Mark Bucklin added it was important to have strong indemnification

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EXECUTIVE COMMITTEE MEETING June 13, 2014 WCIA Offices – Tukwila, WA

language in the agreement with the county. He predicted a judge could rule that this was a non-delegable duty and municipals could still be held liable. The trainings will address how members can evaluate and monitor their contracts on this issue and make sure they comply with the Office of Justice Department case waiting system. A. Fisher further inquired if Bucklin recommended that members review the indemnification language of their contracts linking them to county services. He agreed and stated members should keep in mind they are buying a service. Bennett stated staff would be provide the best advice available to members on all these issues. Bennett continued by discussing the 2013 financials. The financials have been finalized and filed with the state risk manager; and copies of the statement of net position were provided in the agenda. As she noted throughout the year, 2013 was a very difficult claims year and she asked J. Marcell to explain the financials. Marcell stated it was an expensive year for WCIA and recapped that there was $4 million more in expenses than revenues in 2013. She pointed out $26.3 million was paid in claims; in 2012, that number was $20.1 million and 2011 was $18 million. She reviewed the statement of net position with the committee explaining some of the visible shifts in numbers. The cash/cash equivalents are investments of 90 days or less; this illustrates when WCIA was forced to leave Merrill Lynch investments in 2012 and join the State Investment Pool, but these investments have since returned to normal. There was also a noted shift in pre-paid expenses due to a late billing by the property insurer, which is typically received in December rather than January. Capital assets declined due to depreciation, contributing to the $7.6 million decline in total assets. The claims reserves significantly increased. Our actuary, PricewaterhouseCoopers, assists with further reserve calculations; 26% of their reserve calculations were for current reserves, which are those expected to be paid in less than 12 months; the remaining calculations were for non-current liabilities. The actuary placed the 2013 reserves at $101.3 million; in 2012, they were $79.2 million, resulting in a $22 million increase in claims reserves. This affects the unrestricted equity, decreasing it by $30 million. She assured the committee this shift is not actually dollars spent, but moving funds from undesignated reserve, to designated reserve. Overall, assets decreased $7.5 million due to paying out more money, a change in investment valuation, and the change in reserves. WCIA still falls within the industry range for acceptable standards, except for member equity, which has happened before in past years. WCIA is still funded at a 98% confidence level. R. Roscoe asked if this shift in the designated reserves was made by the actuary or was staff’s decision. Marcell confirmed the numbers on the balance sheet were from the actuary. P. Rose stated the organization has worked hard to position itself to sustain these kinds of financial shifts, but stressed we should evaluate if this indicates a need for changes in our approach in order to slow the losses. Bennett added that claim reserves are currently down by approximately $6 million since the end of the year. She also assured the committee that the management staff is evaluating targeted issues relevant to this financial shift, and she would like to address this in more detail at the executive retreat. She would like to invite the actuaries to the retreat to discuss rate formulas, how they affect the members and if that needs to be changed. The managers have

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EXECUTIVE COMMITTEE MEETING June 13, 2014 WCIA Offices – Tukwila, WA

also discussed how they can better evaluate potential new members and plan to meet with the Long Range Planning Committee about appropriate topics to mitigate losses. S. Strebel inquired about the line item regarding increased confidence level on the net position statement; Marcell clarified that currently the state requires pools to reserve to a 70% confidence level with a potential increase to 80% later this year. WCIA’s goal has always been 75% so the statement reflects that difference. Bennett moved on to discuss a class action lawsuit in Illinois, filed by Farmers Insurance, regarding municipalities’ duty to accommodate their infrastructure for climate change. It has since been dropped and there currently is no evidence of venue shopping on this issue; she will keep the committee apprised on this issue. The director continued with information regarding the current litigation involving the Washington Counties Risk Pool (WSRP). Two lawsuits have been combined into one in Cowlitz County and it has been assigned to a judge who is familiar with pooling. The plaintiffs have filed another lawsuit advocating that the pool was actually selling insurance and it is accuses them of tainting witnesses. WCIA does not sell insurance; though our practices may share similarities to the insurance industry, we are not bound by insurance law. This lawsuit could change what law pools are bound to, but the insurance commissioner has never indicated interest in overseeing in pools. This issue has been a large financial strain for WCRP in terms of defense costs and staff time. P. Rose requested counsel’s insight as to how WCRP could be in this position when they are also self-governed. M. Bucklin stated the relationship between this pool and its member prosecutors has always been different from that of municipals and their corresponding pools. Bennett added that WCIA was distinguishable from the county pool, but could still be affected by the outcome of these lawsuits. Bennett closed her presentation with discussing the upcoming retreat. She provided a biography of facilitator Dave Mercier, and stated he would like to hear from the committee regarding their input for discussion topics. Bennett asked for their input so the facilitator can begin organizing the discussion. Timmons inquired about a recent request from FEMA and if other committee members have encountered this issue. E. Larson stated he has received a few phone calls from members as the inquiry relates to the National Flood Insurance Program (NFIP). M. Bucklin stated since the Oso slide there has been discussion regarding permit issuance and when cities have the authority to deny a building permit and what constitutes imminent danger. For the good of the order, Burbidge stated he had a conflict for the July meeting an inquired if any other members would be unable to attend the meeting. Bennett stressed the need for a July meeting to review proposed 2015 assessments, further retreat topics and quarterly staff reports. Burbidge and Caulfield stated they would review their schedules to ensure one of them can attend the meeting.

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EXECUTIVE COMMITTEE MEETING June 13, 2014 WCIA Offices – Tukwila, WA

The committee adjourned at 10:09 a.m. John Caulfield, Vice President Tina Smith, Authority Secretary Approved on: / /2014

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WCIA EXECUTIVE COMMITTEE SETTLEMENT CONSENT AGENDA

FOR JULY 11, 2014

The following lawsuits and/or claims are submitted for Executive Committee final review and approval of settlement:

1. Claimant name; Kathleen Stone Member; City of Olympia Date of loss; 4/15/2012 Nature of claim; Sidewalk fall down claim Settlement amount; $115,000 Settlement terms; Settles all claims with full release and no admission of

liability

2. Claimant name; Peter Hong

Member; City of Lakewood Date of loss; 6/14/2010 Nature of claim; Road design bodily injury Settlement amount; $475,000 Settlement terms; Settles all claims with full release and no admission of

liability

3. Claimant name; Kathryn Thompson Member; City of Union Gap Date of loss; 1/5/2012 Nature of claim; Wrongful termination Settlement amount; $950,000 Settlement terms; Settles all claims with full release and no admission of

liability ________________________

Authority President

Approved on ___/___/14

Attest:___________________________________________________

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Action Item 2015 Liability Assessments Background:

GASB 10 and state regulation require that all self-insured pools use actuarial projection in determining their expected and unexpected losses and to fully fund to those projections. Each year, our actuary, PricewaterhouseCoopers determines three key calculations for WCIA:

1. Estimated needed Reserves at December 31, 2013, for all prior years losses. 2. Projected 2015 Costs (losses and expenses) 3. Group and Individual Member Assessments for 2015

Overall, average percentage rate increases over the last several years have been as follows:

Year Recommended Actuarial Liability Rate Increase

WCIA Actual Liability Rate Increase

1997 6.4% 0% 1998 7.9% 0% 1999 9.1% 0% 2000 7.1% 4% 2001 11.0% 6% 2002 9.6% 9.6% 2003 6.1% 6.1% 2004 3.7% 3.7% 2005 8.1% 8.1% 2006 -4.6% -4.6% 2007 -4.3% -4.3% 2008 -3.9% -3.9% 2009 5.6% 5.6% 2010 9.5% 5.0% 2011 4.4% 0.0% 2012 1.9% 0.0% 2013 -2.8% -2.8% 2014 7.0% 3.0% 2015 10.1%

In nine of the last eighteen years, member rates were subsidized with a portion of undesignated members’ reserve. Although the 2015 overall average pool rate is 10.1%, individual member rates vary based on losses. Individual member rate changes are capped at +15%/-15% on top of the overall pool rate changes. For example, the maximum rate increase for 2015 is 25.1% (10.1% overall rate plus 15%).

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Action Item 2015 Liability Assessments Page 2 Resolution 151-97 requires a 3% annual growth rate of the Undesignated Members’ Reserve, with annual review, and requires the all years’ reserve to be funded at a minimum 75% confidence level. Discussion:

2015 Actuarial Report Each year the actuary determines reserves needed to cover all losses (ultimate losses) of the pool from prior years. The chart below shows the actuary’s projection at “expected” and at increased confidence level intervals.

Actuarial Confidence Level

Actuarial Total Reserves Required

54% (Expected) $78,019,000 70% $95,755,000 75% $101,318,000 85% $115,932,000 95% $141,017,000 98% $159,600,000 99% $172,642,000 WCIA Total Assets 12/31/13: $167,236,847

WCIA remains funded for all years of operation at a 98% confidence level, well exceeding the 75% confidence level goal. As a mature pool with a high self-insured retention, this level of funding for contingencies is prudent. During the last twenty years, WCIA has been funded between a 93-99% confidence level. The graph attached shows the growth of the Undesignated Members’ Reserve and the Claims Reserve since 2000. The Designated Claims Reserves at the 75% confidence level increased $22 million or 28% from 2012 to 2013. At the same time, pool assets decreased approximately $7.6 million or 4.4% in 2013. The net effect was a decrease in the Undesignated Members’ Reserve of approximately $30 million or 34% in one year. Financial Ratios Financial ratios are often used as a tool to measure the overall financial solvency of a pool. A series of five financial ratios (attached) have been established and reviewed annually. Because of the significant increase in claims reserve and the large decrease in members’ equity, all five ratios trended adversely. One ratio falls outside the desirable range and two additional ratios are close to being outside the desirable range. The five ratios are a gauge to evaluate how the pool is trending financially. The AGRIP accreditation program requires pools to review financial ratios annually.

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Action Item 2015 Liability Assessments Page 3 Solvency Standard Testing The revised Washington Administrative Code (WAC) 200-100 includes various actuarial solvency standards for risk pools in Washington State. Specifically, the WAC requires pools to obtain an annual actuarial review which provides estimates of the unpaid claims measured at the expected 70% confidence level. The State Risk Manager and State Auditor’s Office annually review all pools to ensure compliance with these solvency standards. Under the defined solvency standard, assets are compared to unpaid claims estimates. In each of the two tests, the requirement is to have more assets than unpaid claims.

1. In the first test, the unpaid claims estimate at the expected level is compared to primary assets, which are defined as cash and investments less non-claims liabilities.

Primary Assets = $156,761,000 Unpaid Claims at Expected Confidence Level = $78,019,000 WCIA Passes

2. The second test compares the unpaid claims estimate at the 70% confidence level with primary and secondary assets. Secondary assets are defined as insurance receivables, real estate, or other assets, the value of which can be independently verified by the State Risk Manager.

Primary and Secondary Assets = $163,551,000 Unpaid Claims at 70% Confidence Level = $95,755,000 WCIA Passes

Target Fund Balance Review Last year, WCIA retained PricewaterhouseCoopers (PwC) to provide a Target Fund Balance Study in addition to the annual actuarial assessment study. The Target Fund Balance Study is a more comprehensive assessment of the pool’s total capital needs. Traditionally, the confidence level measurement was completed annually with a focus on the funds required to meet claims reserve demands at various levels of certainty. However, confidence levels are not a complete measure of the overall risk faced by a pool. The Target Fund Balance Review also includes Underwriting and Reserving risks, Asset & Credit risks, and Operational risks. In the insurance industry, the standard is target funding at or above the risk of a 1-in-100 event. In July 2013, the Executive Committee passed Resolution 227-13, setting a goal of a funding between the 1-in-100 to 1-in-250 year event range. WCIA was within this range last year but is currently out of the target range due to changes in equity and claims reserves at 12/31/13. 2015 Liability Rates The actuary’s analysis recommends a 10.1% rate increase for 2015. (See attached chart.)

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Action Item 2015 Liability Assessments Page 4 The rate increase is due to two factors:

• 6.3% from indicated loss rate – i.e. claims experience • 3.9% from last year – not fully funded prior year

Staff asked the actuary to calculate the expected return on equity as various assessment rate options.

Indicated Rate Change

Total Projected Assessments

Dollar Amount of Subsidy

Expected Net Income

Expected Change in Equity

10.1% $27,991,707 0 $2,972,790 3.8% 7.0% $27,211,069 $780,638 $2,192,152 2.8% 4.0% $26,448,142 $1,543,565 $1,429,225 1.8%

Recommendation:

The Budget Committee met on June 20th and reviewed the recommended 10.1% assessment rate increase and the Target Fund Balance projected decline as presented by the actuary. The Budget Committee recommends using a portion of the interest earning on equity to subsidize the rate change to no less than 7% due to the sharp decline in members’ equity and the increase in claims reserves in 2013. This recommendation takes into consideration the membership’s difficult financial situations but also recognizing WCIA’s current condition.

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$0

$20,000,000

$40,000,000

$60,000,000

$80,000,000

$100,000,000

$120,000,000

$140,000,000

$160,000,000

$180,000,000

$200,000,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Washington Cities Insurance Authority Assets and Reserves History

Designated Claim Reserves/Liabilities (75% Confidence Level)

Total Assets

Undesignated Members' Reserves

2013 figures are unaudited.

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Executive Director Report July 11, 2014 Executive Committee Meeting State Risk Manager Review

The State Risk Manager’s office is responsible for regulatory oversight of local government joint self-insured risk pools. As part of their oversight, they conduct periodic in-person reviews of our operations. Shannon Stuber, Program Administrator for Local Government Self-Insurance, visited our office on June 25, 2014. Ms. Stuber reviewed our financial statements, the actuary’s report, discussed our operations, and reviewed our rating procedures. She also provided a copy of a peer review of our actuary that her office conducted. I am happy to report that we are in full compliance and Ms. Stuber will be attending one of our fall meetings to discuss her findings and answer any questions. Liability Reform Coalition (LRC)

WCIA has been a long time member of the LRC whose mission is to limit the expansion of tort law. I recently met with their Executive Director Dana Childers and Chairman of the Board Cliff Webster to discuss the legislative outlook and any items of unique concern to our membership. Unfortunately, the outlook for tort reform is not good given the makeup of the legislature and our current governor being a former plaintiff attorney. The LRC’s role in recent legislative sessions has been more defensive than offensive and it will not be changing anytime soon. We discussed several of our cases and various exposures to our members that could be aided with legislation. The LRC also offered to assist us with amicus support on future cases that may expand liability. Washington Risk Pool Advisory Council (WRAC)

The State Risk Manager’s office convened a meeting of the WRAC to discuss how their office can insure rates are fair to pool members and are sufficient to support the costs of the pool. Ideas on the topic were shared by the various pools with the main theme being transparency and process. This will be a continuing discussion as there are very different opinions among pools. We also heard from Jenny Emery of AGRIP regarding the future of pooling, national trends, and changes in pooling. AGRIP is working on a messaging program that communicates effectively what separates pools from commercial insurance. Staff Recognition

We began a quarterly recognition program where the managers each have tickets they can give to staff members to recognize positive contributions to the office and membership. This was our first quarter and one employee received all six, manager tickets – Shelley O’Keefe. Six employees received five of the six – Jason Barney, Tanya Crites, Katie Madsen, Danielle Stephens, Tina Smith, and Tiffany Woods. We held a staff meeting to celebrate their achievements and the managers really enjoyed acknowledging all of the good work of staff!

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2014 – Second Quarter Report —Programs by Eric Larson, Deputy Director of Programs Programs Status

• Year two of the five-year fieldwork appraisals by AssetWORKS is near completion;

appraisals for members in southern King and in Pierce County are already completed. After the fieldwork is completed, AssetWORKS will issue draft appraisal reports for the membership and WCIA to review.

• The cyber insurance policy, effective March 1, 2014, was sent this quarter to all members via email. The stringent loss reporting requirements were emphasized to all in the email.

• For 2015, we will not be sending the Liability Exposure Questionnaire to the

membership. We have built a good relationship with our reinsurers Ironshore and AWAC who have indicated they no longer require the detailed information, as they understand the exposures of our membership.

• The broker RFP process was completed with the selection of Marsh, the incumbent broker. A new Client Service Agreement was executed with a five-year term and reciprocal cancellation provision.

• Staff participated in renewal strategy meetings with the broker for property and liability. The insurance markets remain relatively soft, and we anticipate favorable renewals barring any unforeseen changes due to catastrophic events.

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2014 – Second Quarter Report — Claims by Reed Hardesty, Claim Manager • The number of new claims and new lawsuits filed in the second quarter (Q2) of 2014 was

366 an 8% decrease from Q2 2013. The largest decrease was in auto liability and public safety. Employment claims increased from six to nine. All other loss types were flat. We had 622 open claims at the end of Q2.

• For Q2 2014 we received 18 new lawsuits, including those filed on existing claim files, a

30% decrease from Q2 2013. The largest decrease was in land use litigation.

• Indemnity and Legal payments totaled $8,875,960 o Indemnity - $6,426,853 (a 243% increase from Q2 2013)

• $2.2M was Public Defender plaintiff fees o Legal/Expense -$2,177,916 (a 17% decrease from Q2 2013)

0

50

100

150

200

250

Auto General Land Use Personnel Police 1st PartyQ2 13 54 229 19 6 47 42Q2 14 39 222 16 9 38 42

Q2 13 Q2 14

02468

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Auto General Land Use Personnel PoliceQ2 13 0 6 10 3 7Q2 14 0 8 2 2 6

Q2 13 Q2 14

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2014 – Second Quarter Report — Claims by Reed Hardesty, Claim Manager Page 2

• We closed 456 files in Q2, 49% of closed claim files resulted in payments to claimants and

this includes payments to members on 1st party claims. Of 27 lawsuits closed, 56% resulted in no payment being made to the plaintiff.

• Members continue to utilize Pre-defense review services. The majority of issues continue to be employment. We’ve had three assignments on latecomer agreements.

• Q2 saw 11 successful summary judgment dismissals.

• We had two Q2 trials with two defense verdicts. Both were police cases. The Snohomish

Blondin verdict ended a long procedural trip through all the federal courts of appeal. The Grandview Sinclair verdict reinforced the extra legal expense of “everyone for themselves” interlocal task force agreements versus the more common “all for one with equal shares” agreements WCIA recommends.

• The claims staff is pursuing ongoing commitment to managing financial resources for claims resolution. We are focusing on legal defenses and careful evaluations of claims to enhance performance for the membership. We are communicating with the claims contact at the Member when extended negotiations may create political feedback. We appreciate the unique challenges provided in adjusting claims for the public.

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2014 - Second Quarter Report – Member Services by Patti Crane, Member Services Manager Training • Attendance- We doubled our training attendance to 4,504 in the second quarter compared to

2,103 in the 1st Quarter.

2014 TRAINING ATTENDANCE TRENDS

• Topics Offered - Personnel (Supervisory & Performance Management) led with Public Works taking second (Road & Street & Contracts) over Land Use (Short Courses & Public Officials Training). New ESB5964 legislation produced a popular Risk Management Fundamentals for Public Officials.

• COMPACT -75% of members completed the required Audit trainings in Land Use, 911 Communications and RM 101 topics. Over 30% of members have completed 6 of the 7 training requirements. Member Services will send notices by August, suggesting trainings for achievement.

• WCIA Staff Trainings- Staff conducted trainings continued a steady pace in the second quarter with 24 for a total of 51 conducted for the year. New Delegate and /or Alternate Orientations top the list. Again many thanks for staff’s valuable field ventures.

• On-Line Training– Local GovU’s success is evident in the increasing number of users. We

have exceeded the 2013 total video views of 2,343. We currently have 2,687 viewings among 95 members. Member Services has created our own WCIA On-line Academy featuring WCIA trainings with a testing component and tracking of participation. The launch is expected in August and the first video will be Anti-Harassment for employees; helping to fulfill the demand for individual trainings in employee turnover and seasonal staff orientations.

0

500

1000

1500

2000

2500

3000

Auto Land Use Parks Personnel PublicOfficials

PublicSafety

PublicWorks

Quarter One

Quarter Two

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2014 - Second Quarter Report – Member Services by Patti Crane, Member Services Manager Page 2 Reimbursements & Sponsorships • Money Received by Members-The WCIA Reimbursement programs continue to gain

momentum for exceptional second quarter response! To date we have received 117 requests with 66 in the second quarter. We have returned a total of $49,103 this year with $31,376 distributed in the second quarter.

REIMBURSEMENTS BY DEPARTMENT

• On-line Capability-In June, Member Services introduced a new process for obtaining reimbursements via the website. Members are responding positively commenting on the ease and efficiency of the system. The initial use is encouraging an average of 5 web submittals per week. Our goal is 100% web use by December 2014. In 2015, the on-line feature will be the only method for submittal of reimbursements. Until then we will accept reimbursements via email or hard copy through December 4.

• Municipal Scholarships and Sponsorships- This quarter’s opportunity to support Member staff development totaled 22. Members took advantage of courses through APCO/NENA Washington Chapter, Criminal Justice Training Commission, CJTC Crisis Intervention Team, Law Enforcement Information Records Association, Washington Association of Parks & Recreation, AWC -Labor Relations Institute, American Public Works Association Northwest Public Works Institute, Department of Commerce – Short Course on Local Planning and Washington Municipal Clerks Association Professional Development Level I, II, III and IV.

$- $2,000.00 $4,000.00 $6,000.00 $8,000.00

$10,000.00 $12,000.00 $14,000.00 $16,000.00 $18,000.00

Auto Parks Personnel PublicSafety

PubicWorks

Quarter One

Quarter Two

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2014 (April – June) WCIA Staff Trainings

Municipal Associations April - Washington Recreation and Park Association (WRPA) & Washington Chapter American Society of Landscape Architects (WASLA)

• Facility Risk Management – Chip McKenna • Risk Management for Parks Maintenance Staff – Lisa Knapton

June – Washington Municipal Clerks Association (WMCA) Northwest Clerks Institute, Professional Development I

• Municipal Risk Management – Lisa Roberts

WCIA Trainings Council Do’s & Don’ts

• Benton City Ann Bennett • Issaquah Lisa Roberts • Richland Ann Bennett • Union Gap Lisa Roberts

New City Manager Orientation • Ridgefield Tanya Crites, Reed Hardesty

New Delegate/Alternate Orientations • Coupeville Debbi Sellers • Edmonds Chip McKenna • La Conner Chip McKenna • Ridgefield Tanya Crites • Thurston 911 Debbi Sellers • Tukwila Pool MPD Chip McKenna • Walla Walla JCDA Lisa Knapton • Walla Walla MPO Lisa Knapton • Chewelah Lisa Knapton

New HR Director Orientation • Des Moines Tanya Crites, Reed Hardesty

Assistant City Attorney Orientation • Mercer Island Tanya Crites, Reed Hardesty

Claims & Incident Trainings • Anacortes Jason Barney

Risk Management 101 Trainings • Volunteer Tanya Crites • Parks (Regional) Tanya Crites

Special Events Training • Poulsbo Tanya Crites

Anti-Harassment Training • Sammamish Lisa Knapton

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2014 – Second Quarter Report — Risk Services by Lisa Roberts, Risk Services Manager

COMPACT • The reps have met with over half of our 172 members to complete the Annual Review

and Audit. Staff is able to access online audits with tablets allowing access to resource links and city codes while meeting with members.

• Initial Land Use audit statistics indicate over 90% compliance in most areas of the audit. The land use audit focuses on member cities’ land use codes to ensure proper authority is provided for land use actions taken.

• Land use statistics are used to direct member services resources such as training and risk management consultation to those areas of concern. For example:

o Over 91% of the members use hearings examiners; however, only 53% hear all quasi-judicial matters;

o 48% of the members have design review, landmark or historical preservation committees, of which 41% make final land use decisions.

• The 911 center audit results from the 11 centers audited indicate nearly 100% compliance in all areas.

• The public works, parks, and fleet audits results have also been favorable.

• Meeting with the Long Range Planning Committee on July 11 to review COMPACT recommendations. Employment, public works, and police are leading loss indicators from 2010 to 2013 data analyses.

Stewardship Reports: • The Stewardship Reports are completed and have been added to the rep’s Annual Review

packet and will soon be available online. This report displays the value of member services provided in Pre-Defense, Consultation, and Reimbursement Programs as compared to the average group. Reps indicate the report has encouraged dialogue with the member regarding the value-added services they receive in addition to the coverages provided, which distinguishes WCIA from the insurance industry.

• This report was developed in response to 2014 Annual Goal IV, C: Communicate to WCIA members the value of the risk management services they receive.

Risk Reduction Grant Program: • All three grant recipients of the PRIMA conference conveyed positive experiences and

gratitude to WCIA for the opportunity.

• Three mitigation projects have been completed and invoices received.

Property Loss Control Inspections: • Staff has begun property loss-control inspections, using the electronic inspection sheet on

their tablets. Initial response from the membership is very positive.

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2014 – Second Quarter Report — Risk Services by Lisa Roberts, Risk Services Manager Page 2

Marketing: • Feedback from Communications Survey was overwhelmingly positive, with above

average member participation numbers, and showcased for the most part that WCIA is reaching our members and our members are getting what they need.

• Development of print work deliverables targeted for July, with discussion and review of more robust email campaign software and increased functionality in some areas of the web as next steps.

• Have begun initial dialog with two potential new members who have requested quotes. Two potential members were rejected due to unfavorable loss history.

Consultations: • Risk Management Bulletins issued this quarter include Bulletin #65 that provides revised

recommendations for Taser training as a result of the recent Michelbring case, in which a State Trooper was successful in alleging intentional injury and outrage theories to defeat the State’s summary judgment motion; and Bulletin #64 regarding the recent Wilbur v. Mount Vernon case, which provides recommendations to assist members in responding before the ACLU serves intent to sue notice.

• Land use is the most frequent consultation this quarter, many from city attorneys arising from the land use audit, such as code update reviews.

• Police consultations have increased, several regarding the school alert system state grant, 911 center policy updates, jail contract updates, as well as police policy reviews.

• Employment consultations remain consistent this quarter, with questions regarding the application of ACA for seasonal employees, FMLA - particularly regarding new religious leave, citizenship, the ADA and smoking policies.

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2014 – Second Quarter Report — Financial by Jill Marcell, Deputy Director of Administrative Services

Investment Diversification by Type: Amount Percent State Investment Pool $42,277,408 23% Other Short Term 2,567,720 1% Discount Notes 15,747,952 9% Mortgage-Backed Securities 110,741,449 62% FNMA ($68,886,713) Freddie Mac ($22,400,695) GNMA ($19,454,041) US Treasury/Agency Securities 8,598,692 5% TOTAL as of 5/31/14 $179,933,221 100%

Investment Diversification by Institution: Amount Percent State Investment Pool $42,277,408 23% Morgan Stanley 57,555,059 32% Cambridge 80,100,754 45% TOTAL as of 5/31/14 $179,933,221 100%

Expense Summary by Month:

Month Claims Expense

Operating Expense*

2014 Claims & Operating Total

Expense

2013 Claims & Operating Total

Expense January $ 1,633,143 $ 6,501,758 $ 8,134,902 $ 4,494,062 February 1,322,186 511,112 1,833,298 2,787,632 March 1,964,465 512,372 2,476,836 1,726,904 April 3,912,392 695,307 4,607,699 2,609,656 May 2,181,031 498,189 2,679,220 1,723,476 June 2,730,699 482,114 3,212,813 2,561,861 Total $13,743,916 $9,200,852 $22,944,768 15,903,591

*Building operating expenses are not included in figures above.

• 2014 Operating expenses paid are at about 50% half way through the year. At 6/30/14 claims expenses continued to rise. Hopefully the trend does not continue through the second half of the year.

• The WCIA Wellness Program has received the 2014 WellCity award of Commitment, which is awarded to third year recipients. Thanks goes out to our Wellness Committee for all of their hard work: Tina Smith, Tanya Crites, Maria Orozco and Gordy Van. Staff has already completed/exceeded 50% of the 2014 application towards earning the 2015 Well City Award.

• Recent tenant renewals will have the office building completely leased by January of

2015. The vast majority of the building will be leased through 2018/2019.

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