AN INTRODUCTION TO SCORE SMALL CITIES ORGANIZED RISK EFFORT JOINT POWERS AUTHORITY October 26, 2017 Mission Statement The Small Cities Organized Risk Effort or SCORE, is an association of municipalities joined to protect member resources by stabilizing risk costs in a reliable, economical and beneficial manner while providing members with broad coverage and quality services in risk management and claims management. 2 What is SCORE? SCORE is a Joint Powers Authority (JPA) created under the authority of Government Code* by agreement of the member public entities, after the governing boards of the entities determined that it is in their own best interest and

the public interest that SCORE be formed. * Sections 990, 990.4, 990.8 and 6500-6515 3 Why was SCORE formed? To be free of Insurance Industry Cycles Reduce costs overall Stop riding the rollercoaster Help each other with risk management issues Provide broader coverage and services for less than members could obtain on their own. 4 SCORE History JPA and Liability Program formed in 1986 with 13 members Members: Biggs Colfax

Dunsmuir Etna Isleton Live Oak Loomis Loyalton Montague Portola Susanville Williams Yreka 5 SCORE Growth History - Cities Added 1987 - Cities of Dorris and Weed 1988 - City of Mt. Shasta 1991 - City of Ione 1992 - City of Crescent City 1993 - Cities of Ft. Jones and Shasta Lake

2002 - City of Rio Dell 2011 - City of Tulelake 6 Workers Compensation Program formed in 1993 with 10 members Members Crescent City Dunsmuir Ione Mount Shasta Shasta Lake Susanville Weed Williams Yreka Mini Cities: Colfax Ft. Jones Loomis

Portola 7 SCORE Meeting Dates 2018 Date Time Location January 19, 2018 10:00 am Gaia Hotel, Anderson, CA March 30, 2018 10:00 am Gaia Hotel, Anderson, CA

June 15, 2018 10:00 am Gaia Hotel, Anderson, CA 8 Membership The small size of member Cities limits their ability to have a risk manager on their staff. Generally, the City Manager or Finance Officer is involved in risk management. Group purchase of contract services provides an efficient way to obtain risk management expertise within cities budgets. Board attendance approaches 100%. 9 Membership City

Pop. Projected Payroll FYE 2017 Safety Biggs 1,707 $391,965 Police Colfax 1,983 $458,398 Vol. Fire

Dunsmuir 1,650 $501,535 Vol. Fire Etna 737 $382,228 Police & Vol. Fire Fort Jones 839 $316,012 Vol. Fire

Isleton 804 $216,217 Vol. Fire Live Oak 8,500 $1,319,431 None Loomis 6,430 $760,704

None 729 $140,726 Vol. Fire Loyalton 10 Membership City Pop. Projected Payroll FYE 2017 Safety Montague

1,443 $335,336 Vol. Fire Mt. Shasta 3,394 $1,817,047 Police & Fire Portola 2,104 $742,971 Vol. Fire

Rio Dell 3,369 $1,007,403 Police Only Shasta Lake 10,213 $3,534,954 None Susanville 16,616 $3,784,518 Police & Fire

993 $359,828 Police & Vol .Fire Weed 2,941 $1,588,057 Police & Vol. Fire Yreka 7,679 $2,912,181 Police & Vol. Fire

Tulelake TOTAL $20,569,511 11 SCORE Overview The Governance The Program Services Claims Administration The Programs Funding Mechanisms 12 SCORE The Governance 13 Board of Directors

All members are represented on the Board by their City-Appointed Representative and Alternate. Each Rep, or in their absence the Alternate, has a single vote. Minimum of four regular meetings a year: 4TH Friday of January, March, June, August and October Meeting length is approximately 3 hours Meeting dates are established by Board resolution adopted at the last regular Board meeting of every fiscal year. 14 The Officers President Roger Carroll Town of Loomis Vice President Steve Baker, City of Yreka Treasurer Linda Romaine Town of Fort Jones Secretary Brooke Woodcox City of Rio Dell EC Member at Large John Duckett, City of Shasta Lake Terms are 2 years, terminating on the even years 15 The Executive Committee

The Executive Committee consists of the five Officers President Vice President Treasurer Secretary Member At Large The Committee is assigned authority to conduct business when needed on items not requiring a special Board meeting. 16 Governing Documents Joint Powers Agreement JPA Bylaws Master Plan Documents Liability Workers Compensation Policies and Procedures 17 Governing Documents Joint Powers Agreement

Any Public Entity Anywhere in California Government Codes Funds belong to JPA Returns and assessments continue past termination 2/3rds of the Member governing bodies to change 18 Governing Documents Bylaws Provide more detail than JPA Agreement Establishes powers of the Board and Executive Committee 2/3rds of the Board to change Master Plan Documents Governs the procedures, rights and obligations of a program Defines process for deposits and retrospective adjustments One for each self-insured program 2/3rds of the Board to change or amend 19 Governing Documents

Memorandum of Coverage (MOC) Defines the claims covered Follow the excess coverage for the most part Does NOT include Employment Practices Liability (EPL) Covers SOME types of inverse claims Defines rights, duties and processes to follow in the event of a claim 20 Governing Documents Policy and Procedures Administrative Liability Workers Compensation Risk Management 21 SCORE The Program Services

22 JPA Administration Program Administration Team: Marcus Beverly [email protected] Michelle Minnick [email protected] 23 JPA Administration Prepare Agendas and Coordinate Meetings Develop and Maintain Policy and Procedures Preparation of Annual Budget and Program Deposits Issue, Modify and Maintain Memorandums of Coverage for the Shared Risk layer Maintain SCORE Documents Risk Management Services Resource For Risk Management Questions and Information Coordinate Development of Loss Control Material Contract Review for Insurance Requirements 24

Risk Control Services DKF Solutions On Site Assessments, Assistance, and Training OSHA Policy Development and Training Sewer Operation Risk Management Phone and E-mail Hotline for Questions My Safety Officer Online Training 25 Other Training Provided Target Solutions Web based training and resources Lexipol Police procedures & training bulletins Conference Participation is encouraged 1. PARMA 2. CAJPA 26 SCORE Claims Administration

27 Claims Administration by York Claims Management Information System (CMIS) Online, Real-Time Client Access to Claims Information Clients May Run Reports, Loss Reports, and Claim Logs Designated Client Relations Director Dori Zumwalt Production of Monthly Loss Runs Creation of Special / Ad hoc Loss Reports Trust Account Management Claim Reviews with Members as needed or requested 28 Liability Claims Administration Managed by Cameron Dewey 1st Dollar Claims Handling 24/7 Emergency Call Out Services Negotiate Settlements with Members Approval Report and Make Recommendations to the Board for Shared Risk Layer Losses Reporting to Excess Pools and Carriers

29 Liability Claims Administration Litigation Management Policy Approved Defense Counsel Panel Assignment of Defense Counsel With Member Approval Cost Containment with Legal Budgets and Litigation Plans Recovery Services for members property losses caused by 3rd parties 30 Workers Compensation Claims Administration Claims are Managed in the Roseville Claims office Designated Claims Examiner: Ariel Leonhard Quality Assurance Department

Catastrophic Response Team Immediate notification of serious injury, death or high profile claim Comprised of seven senior management personnel Expeditious and compassionate claims handling 31 SCORE The Programs 32

SCORE Programs Liability including Automobile Public Officials Errors & Omissions Workers Compensation Property Insurance Employment Practices Liability (ERMA) Crime/Fidelity Pollution Liability Automobile Physical Damage Program 33 Liability 18 Liability Program Members Member Member Biggs

Montague Colfax Mt. Shasta Dunsmuir Portola Etna Rio Dell Fort Jones Shasta Lake Isleton Susanville Live Oak

Tulelake Loomis Weed Loyalton Yreka 34 Liability Coverage Layers CJPRMA Excess Coverage up to $40,000,000 CJPRMA Pooled Layer $500,001 - $5,000,000 Shared Risk Layer $25,001 - $500,000 Banking Layer $0 - $25,000

35 Liability Programs Mandatory Program - All SCORE members must participate MOC (policy form) follows CJPRMAs CJPRMA provides up to $40,000,000 limits General and Automobile Liability Public Officials Errors and Omissions Employment Practices Liability - $10,000,000 Limit Environmental Liability Coverage

$10,000,000 limits CSAC EIA Group purchase program Optional EPL Coverage up to CJPRMA retention of $500,000 ERMA - 10 Members 36 Workers Compensation 17 Program Members MEMBERS Biggs Colfax Dunsmuir Etna Ft. Jones Live Oak

Loomis Loyalton Montague Mt. Shasta Portola Rio Dell Shasta Lake Susanville Tulelake Weed Yreka 37 WC Coverage Layers Local Area Workers Compensation Excess JPA (LAWCX) $250,001 to Statutory Shared Risk Layer $25,001 - $250,000

Banking Layer $0 - $25,000 38 Property All Real and Personal Property Business Interruption All Risk Less Exclusions such as: Earthquake and Flood (Flood available individually) Loss Limit - $1,000,000,000 per loss Deductible: $5,000 per accident Includes Cyber Liability and Pollution Coverage Auto physical damage for replacement cost if declare value 39 Property Program 17 Members Members Biggs Mt. Shasta

Colfax Portola Dunsmuir Rio Dell Etna Shasta Lake Fort Jones Susanville Live Oak Tulelake Loomis Weed

Loyalton Yreka Montague 40 Alliant Motor Vehicle Program (AMVP) All Risk Equipment Floater (including EQ and Flood) All risks of direct physical loss or damage from any external cause except as excluded Enhanced Coverage Sub limits Additionally Acquired Equipment (45 days) - $250,000 Temporary Transportation Rental expense - $10,000 Unscheduled Non-owned Vehicles and Equipment - $1mil total/$500k one item Loss Limit Per Schedule on file with the company Replacement cost available for equipment up to three years old Deductible: options for $1,000, $2,000 or $5,000 per accident

41 Other Optional Coverages Crime Coverages - Faithful Performance Employee Assistance Program Airport / Aircraft Liability Pollution Liability CSAC-EIA Employment Practices Liability 42 SCORE Members Participating in Each Program FY 17/18 Liability Work Comp ERMA (EPL) ACI EAP

Special Events MEMBER CITY Deductible Biggs Colfax Dunsmuir Etna Fort Jones Isleton Live Oak Loomis Loyalton Montague Mount Shasta Portola Rio Dell Shasta Lake Susanville Tulelake Weed

Yreka $25,000 X X X X X X X X X X X X X X X X X X X


X X X X X X X X Crime (ID Fraud) $0 X X X X X X X X



Crime (ACIP) $2,500 $25,000* X X X Contractor's Vehicle CSAC EIA Property Auto Equipment Valuation Pollution (APIP) (APIP) (APIP) (APIP) $75,000 X X X

X X X X X X X X* X X X X X X X X X X X

X X $5,000* $10,000 X X X X X X* X X X X X X X X X X X X

$5,000* $10,000 X X X* X X X X X X X X $5,000* $10,000 X X X X


RC RC None ACV ACV ACV RC RC ACV RC Alliant Mobile Vehicle (AMVP) $1,000 = X $2,000 = XX XX X XX

XX X XX ERMA= Employment Risk Management Authority(Employment Practices Liability Coverage) APD= Alliant Physical Damage Program serviced by Marilyn Schley in SF office Special Events serviced by Penny DeWitt in Newport Beach Office 43 SCORE Funding Mechanisms 44 How Is Funding Determined? 1. Actuarial Study done by Bickmore Risk Services. 2. Provides rates to fund Banking and Shared Risk layers at various Confidence Levels (CLs). 3. SCORE Funds at a 70% CL for Liability 4. SCORE Funds at a 75% CL for Workers Comp

45 The Funding Mechanisms Banking And Shared Risk Layers Contribution Deposits Liability - Paid Annually WC Paid Quarterly Covers Loss Costs, Loss Cost Development, Administration and Claims Adjusting Costs 46 How Are Contributions Developed? First We Calculate an Ex Mod An Experience Modification Factor is calculated for each member. 1. Loss Rate developed = Sum of last 5 years of losses limited to $50,000 per occurrence / by the Sum of last 5 years payroll (4 years for WC) 2. Relative Loss Rate is developed for each member (Member Loss rate / Total Loss Rate for SCORE)

3. Credibility Factor = Member Payroll / (Total Members Payroll + Constant) The Credibility Factor is applied to adjust for the relatively small sample size of claims and payroll used in developing the loss rates. 4. Experience Modification = Relative Loss rate x Credibility Factor + 1.00 Credibility Factor Adjusts the average rate up or down, depending on member loss experience 47 How Are Contributions Developed? Banking Layer Contribution Payroll x Experience Modification x Actuarial Rate Shared Risk Layer Payroll x Experience Modification x Actuarial Rate Excess Premium (CJPRMA & LAWCX)

Payroll x Experience Modification x Actuarial Rate Expenses Liability - 50% allocated equally among all members 50% allocated by % of payroll Work Comp 30% allocated equally 70% allocated by % of payroll* * Transitioning to 50-50% over next two years 48 The Banking Layer NOT A SHARED RISK PROGRAM! If a Members Losses Exceed Their Deposits, They Borrow Funds from the Banking Plan The Banking Plan is Repaid Over a Period of Time Each Members Funds are Accounted for Separately 49 The Shared Risk Layer THIS IS A SHARED RISK PROGRAM! Liability Program - $25,001 - $500,000 Workers Compensation - $25,001 - $250,000

Members SHARE RISK with the other SCORE members in the program. 50 REFUNDS/ASSESSMENTS The Board of Directors Annually Declares a Refund or Assessment in the Spring Refunds are Based Upon a Positive Combined Fund Balance Assessments are Based Upon A Negative Combined Fund Balance - Assessment is a % of Negative Balance 51 Questions? President Roger Carroll 52

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