The URL can be used to link to this page

Home My WebLink About39-09 ResolutionRECORD OF RESOLUTIONS Ina. Form No. 30045 39-09 Resolertiorl No. Passed 20 A RESOLUTION AUTHORIZING THE ADDITION OF TWO NEW MEMBERS TO THE CENTRAL OHIO RISK MANAGEMENT ASSOCIATION (CORMA), PURSUANT TO ARTICLE V, PARAGRAPH (I) OF THE CENTRAL OHIO RISK MANAGEMENT ASSOCIATION BY LAWS. WHEREAS, pursuant to Article V, paragraph (i) of the Central Ohio Risk Management Association (CORMA) Board Bylaws, the CORMA Board of Trustees has unanimously recommended the addition of the City of Grove City, Ohio and the City of Powell, Ohio for membership in the Central Ohio Risk Management Association; and WHEREAS, Section V, paragraph (i) of the Central Ohio Risk Management Association (CORMA) Bylaws requires that said Board of Trustees' recommendation be approved (by Resolution) by at least the two-thirds of the City Councils of the current CORMA membership. NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Dublin, State of Ohio, ~ members concurring: Section 1. That the addition of the City of Grove City, Ohio and Powell, Ohio as new members of CORMA is hereby approved. Section 2. That this resolution shall take effect upon passage in accordance with Section 4.04 (a) of the Revised Charter. Passed this day of , 2009. i -Presiding Officer Attest: Clerk of Council CITY OF DUBLIN.. Office of the City Manager 5200 Emerald Parkway • Dublin, OH 43017-1090 Phone: 614-410-4400 • Fax: 614-410-4490 To: Dublin City Council From: Terry Foegler, City Manager-~~~ Date: August 13, 2009 Initiated By: David Harding, Director of Human Resources Memo Re: Resolution 39-09 -New Central Ohio Risk Management Association Members Summary Attached for your consideration is Resolution 39-09, authorizing the addition of the City of Grove City, Ohio and the City of Powell, Ohio as new members of the Central Ohio Risk Management Association (CORMA). CORMA is the joint self-insurance pool formed under Chapter 2744 of the Ohio Revised Code of which the City of Dublin has been a member since its inception in 1997. For the past 12 years, CORMA has provided cost effective property and liability insurance services to its membership, which, in addition to the City of Dublin, includes the Cities of Westerville, Upper Arlington, and Pickerington. Through the assistance of CORMA's Pool Administrator (Wickert Insurance Services), the CORMA Board of Trustees has determined that it would be advantageous for CORMA to expand its membership, on a selective basis, to other cities they believe have similar risk management interests and priorities and would be a good fit for the current CORMA membership. Within the past year, the CORMA Board has established a membership committee that has engaged in the process of identifying a list of prospects, based on certain common attributes. The entities that have been identified on this prospect list are financially strong cities with a reputation for professional local government management and a commitment to sound risk management practices. Two of these entities include the City of Grove City and the City of Powell. In order to accomplish CORMA's objective of adding quality members, approval must be obtained by atwo-thirds majority of the currently member cities' governing bodies. In that regard, Article V, paragraph (i) of the CORMA Bylaws (attached) requires that new members first be approved by at least two-thirds of the CORMA Board of Trustees, followed by the approval, by resolution, of at least two-thirds of the current membership's City Councils. The CORMA Board of Trustees has unanimously approved the addition of the Cities of Grove City and Powell as new members of CORMA, thus advancing the new membership process to the second stage of the process, requiring approval by at least two-thirds of the current membership's City Councils. CORMA's Pool Administrator, Wickert Insurance Services has completed an analysis of the property and liability exposures of the Cities of Grove City and Powell and has determined that these cities present a risk profile that is appropriate for membership in CORMA. Attached for your reference is a memo from the Pool Administrator providing further perspective on their Memo re. Resolution 39-09 -New CORMA Members August 13, 2009 Page Two efforts to assist the CORMA Board in this process of adding new members; their assessment of the risk exposures in the Cities of Grove City and Powell; and the advantages of expanding the CORtMA membership. Three major advantages cited in this memo are the lower fixed costs for each current member of the Pool (i.e. pool administration, actuarial, and accounting fees); spreading the risk over a larger base of like exposures; and making CORMA more attractive to excess insurance carriers. Accompanying the Pool Administrator's memo are two exhibits ("Exhibits A and B") labeled "CORMA 2009 -10 Exposure Allocation." (Exhibit A shows the exposure allocation for the current CORMA membership while Exhibit B shows the exposure allocation for CORMA with the addition of the Cities of Powell and Grove City.) As noted in these exhibits, the factors determining each entity's proportionate share of the risk include the following: • Population • Number ofFull-Time Police Officers • Property Values • Titled Vehicles • Ratable Expenditures • Loss Experience Although not appearing on the Exhibits, each of the first four factors is weighted at 15 percent, respectively, while the Loss Experience factor is weighted at 2S percent. One item to note on "Exhibit B" is that the proportionate share assigned to the Cities of Grove City and Powell is 15.27 percent and S.S6 percent, respectively. Given the relative size and complexity of their operations, these cities do not represent a significant increase in exposure for the current CORMA membership. Jay Hutchinson, Principal, and Richard Studenic, Director of Claims, Wickert Insurance Services will accompany staff at the August 17`h Council meeting to assist in responding to any questions Council may have on this matter. Recommendation Staff recommends the adoption of Resolution No. 39-09 at the August 17, 2009 Council meeting. Attachments Central Ohio Risk Management Association (CORMA) Bylaws Article V, Paragraph (il An approving Resolution passed by the governing bodies of at least two-thirds (2/3) of the Members after recommendation by two-thirds (2/3) of the Board of Trustees shall be required for the following matters: (1) Admission of New Members (2) Amendment of these Bylaws. `_. c_~ ~~ I N S U R A N C E solutions from Trusted Partners Office: (740) 654-0532 Toll Free: (888) 455-5~3~ Fax: (6~4) 837-0709 www.wichert.com 40o N. Memorial Dr. P.O. Box z78 Lancaster, Ohio 4330 MEMO TO: City Councils of CORMA Members FROM: Wichert Insurance -- CORMA Pool Administrator RE: CORMA -New Members Dear Members: DATE: 08/11/2009 As the CORMA Pool Administrator, part of our assignment is to assist the Board in seeking new membership in future years. Working in conjunction with CORMA's marketing committee, we established a prospects list consisting of A, B & C candidates based upon the following criteria: - Type of city government -- city manager, mayor, etc... City Manager form of government was preferred. - Growing communities - Financially strong communities - Documented claims activity for prospective city. Claims history closely examined to determine any adverse patterns or adverse development. - Interest in a practicing risk management and/or loss control measures to control losses Agreed growth of CORMA members to be between 8 - 12 members. Consensus is to have a "close knit group of like-minded communities building a manageable group where each has avoice/vote in the Pool." Following these criteria, prospects from the "A" list were identified and invited to an introductory "meet & greet" session outlining the benefits of CORMA membership. Public Entity Risk Management & Insurance The cities of Grove City and Powell expressed interest in proceeding further with the underwriting, cost analysis and due diligence phase of membership. As the administrator, we gathered all essential underwriting data, loss information, financials, exposures (i.e. number of vehicles, officers, property values, ratable expenditures, etc..). After close review of all data and approval of the CORMA Board, we met with both cities to further discuss membership in CORMA versus a traditional insurance program. Also, we measured each City's desire to be a long-term member, implement and adhere to loss control measures of CORMA and accept the time commitment required as a CORMA member. The analysis of these cities is displayed in attached Exhibits A & B (CORMA Allocation Documents): - Exposures for each new city are compared to all CORMA members to see how they fit into the mix of the Pool. - 4+ years of loss experience demonstrates both prospective members have similar experience as compared to current CORMA members. Please note CORMA's experience over the past 4+ years is exceptional. Identifying reasons for additional CORMA membership: - By adding quality members, the cost allocation by member city generally will be reduced. - Additional members allow for increasing the aggregate stop loss (required by the CORMA by-laws). The aggregate stop loss is the maximum amount CORMA will be required to pay in casualty claims in a given year. Increasing the aggregate stop loss allows flexibility in several areas: - Risk Retention by CORMA increases and is spread over more members to absorb the risk. This should make this process risk neutral. - Costs for the excess insurance will be reduced through process. - Helps to stabilize coverage, rates and market availability in a tightening marketplace. - Law of larger numbers applies to assist in controlling costs through increased predictability. This means that as you increase members, you are adding more premium and spreading the risk of losses among more member/risks. This assists in predicting future losses. - Costs for almost every CORMA member are reduced as a result of adding two new members. - Most of allocated costs for the Pool do not change proportionally as the Pool grows. As the Pool grows, some cost savings will be obtained in various allocated cost areas. - By CORMA becoming a larger risk Pool, more insurance carriers become interested in pursuing a risk with more members and premium. As required by CORMA By-Laws, Council of each member city must approve the addition of new members. Hopefully, the above information will assist with this process. ~~ ~: r' ~ .~,~ Exhibit A CORMA 2009 - 2010 Exposure Allocation (Current Membership) Exposures 2009 Population # FT Officers Property Values Titled Vehicles Ratable exp * 4+ yrs experience Dublin 38,909 74 $76,714,970 349 $27,229,000 $347,931 Pickerington 16,575 26 $27,766,446 61 $4,714,000 $177,142 Upper Arlington 31,326 50 $34,400,445 182 $19,504,000 $328,810 Westerville 35,380 74 $100,070,529 221 $23,462,000 $223,983 Totals 122,190 224 $238,952,390 813 $74,909,000 $1,077,866 Share 2009 Population # FT Officers Property Values Titled Vehicles Expenditures Experience Dublin 31.84% 33.04% 32.10% 42.93% 36.35% 32.28% Pickerington 13.56% 11.61% 11.62% 7.50% 6.29% 16.43% Upper Arlington 25.64% 22.32% 14.40% 22.39% 26.04% 30.51 Westerville 28.95% 33.04% 41.88% 27.18% 31.32% 20.78% Totals 100.00% 100.00% 100.00% 100.00% 100.00% 100.00°/ TOTALS 34.51 11.70% 24.24% 29.55% 100.00°/ Page 1 Exhibit B CORMA 2009 - 2010 Exposure Allocation (W/Prospective New Members) Exposures 2009 Population # FT Officers Property Values Titled Vehicles Ratable exp 4+ yrs experience Dublin 38,909 74 $76,714,970 349 $27,229,000 $347,931 Pickerington 16,575 26 $27,766,446 61 $4,714,000 $177,142 Upper Arlington 31,326 50 $34,400,445 182 $19,504,000 $328,810 Westerville 35,380 74 $100,070,529 221 $23,462,000 $223,983 Grove City Powell 27,075 12,500 60 18 $28,096,892 $13,364,276 104 20 $6,255,000 $2,569,000 $337,926 $123,984 Totals 161,765 302 $280,413,558 937 $83,733,000 $1,539,776 Share 2009 Population # FT Officers Property Values Titled Vehicles Expenditures Experience TOTALS Dublin 24.05% 24.50% 27.36% 37.25% 32.52% 22.60% 27.50% Pickerington 10.25% 8.61 % 9.90% 6.51 % 5.63% 11.50% 9.01% Upper Arlington 19.37% 16.56% 12.27% 19.42% 23.29% 21.35% 18.97% Westerville 21.87% 24.50% 35.69% 23.59% 28.02% 14.55% 23.69% Grove City' Powell 16.74% 7.73% 19.87% 5.96% 10.02% 4.77% 11.10% 2.13% 7.47% 3.07% 21.95% 8.05% 15.27% 5.56% Totals 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% Page 1