39-09 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_~ ~~
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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%
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