The URL can be used to link to this page

Home My WebLink About07.b. Receive Fiscal Year 2016-17 Risk Management Annual ReportPage 1 of 49 Item 7.b. Central Contra Costa Sanitary District October 5, 2017 TO: HONORABLE BOARD OF DIRECTORS FROM: SHARI DEUTSCH, RISK MANAGEMENT ADMINISTRATOR REVIEWED BY: PHILIP LEI BER, DIRECTOR OF FINANCE AND ADMINISTRATION ANN SASAKI, DEPUTY GENERAL MANAGER ROGER S. BAILEY, GENERAL MANAGER SUBJECT: RECEIVE FISCAL YEAR 2016-17 RISK MANAGEMENT ANNUAL REPORT. REVIEWED BYADMI NISTRATI ON COMMITTEE. Attached is the Fiscal Year 2016-17 Risk Management Annual Report and presentation. ATTACHMENTS: 1. FY 2016-17 Risk Management Annual Report 2. FY 2016-17 Risk Management Annual Report Presentation October 5, 2017 Regular Board Meeting Agenda Packet - Page 114 of 196 I ow Central Contra Costa Sanitary District Risk Management Division Annual Report Fiscal Year 2016-17 Page 2 of 49 October 5, 2017 Regular Board Meeting Agenda Packet - Page 115 of 196 Page 3 of 49 INTRODUCTION I am pleased to present the Risk Management Division Fiscal Year (FY) 2016-17 Annual Report. The purpose of Risk Management is to protect Central San from unexpected loss or damage, and to minimize the impact of the adverse events that occur. This requires Risk Management staff to be proactive while maintaining a constant state of readiness. The following report details some of the ways we've accomplished this dual role. Risk Management also plays a role in helping Central San to meet its strategic goals. Each section of this report references the FY 2016-18 Strategic Plan goals that it supports. This was a busy and productive year. However, our success depends on an ongoing partnership with management and other workgroups. These partnerships are essential to help us identify new and emerging risks, improve how Central San accepts and transfers risk, and control and reduce risks to our employees and our operations. In FY 2017-18, we will continue to advance the risk management function by refining our agency -wide risk inventory, reviewing mitigation measures to address these risks, and communicating the status of our efforts to the Board. Thank you all for your continued support and commitment to these efforts. Shari Deutsch Risk Management Administrator Risk Management Division Annual Report FY 2016-17 October 5, 2017 Regular Board Meeting Agenda Packet - Page 116 of 196 Page 4 of 49 Table of Contents ExecutiveSummary----------------------------------------------------------------------- ---------------------------------------3 Insurance and Risk Financing _________________-------------------------------- ___________________________________________5 Workers' Compensation Claims---------------------------------_______________________________________________________.7 General Liability Claims--------------------------------------------------------- ____________________________________________17 Other Risks and Exposures _________________--------------------------------_____________________________________________23 Security--------------------------------------------------------------------------------------------- ------------------------------------.25 Emergency Management--------------------------------------------------------------------------------------------------26 Total Cost of Risk 30 Metrics and Other Accomplishments----------------------------------- ____________________________________________33 Risk Management Division Annual Report FY 2016-17 October 5, 2017 Regular Board Meeting Agenda Packet - Page 117 of 196 2 Page 5 of 49 Executive Summary Workers' Compensation: In FY 2016-17, the Workers Compensation Program incurred 10 medical -only claims, and one indemnity claim as compared to 17 medical -only claims and four indemnity claims in FY 2015-16. Other significant results include the following: • Central San's Experience Modifier, one factor used to calculate the Worker's Compensation premium, remained well below the target of 1.00 but increased from .64 last year to .67 in FY 2016-17; • Strains and sprains remain the most common cause of injuries that result in Workers' Compensation claims; • Slips, trips, and falls have replaced repetitive motion as the most common causes of injury; • Injuries to the lower back and shoulder areas continue to be the most expensive types of Workers' Compensation claim; • Recent loss development data indicates some success in reducing the cost of Indemnity claims over time. Overflow Claims: Central San has seen a reduction in overflow claims per year from a high of 27 in FY 2001-02. Despite a record-breaking wet season, there were 9 overflow claims this year. This year, Central San's average cost per overflow claim was $12,221. By comparison, the average cost per overflow claim for the California Sanitation Risk Management Authority liability pool exceeds $17,000. Number 15 11 11 9 Cost $87)653 $103)948 $1507948 $109)993 Average Cost $57884 $97450 $137723 $12,221 Liability Claims: Our claims experience for overflows, vehicle accidents, and plumbing reimbursements were similar to those of last year. However, the number of other liability claims filed increased from two in FY 2015-16, to nine in 2016-17. This resulted in a total of 27 liability claims filed in FY 2016-17, compared to 22 claims filed in FY 2015- 16, and 29 claims filed in FY 2014-15. This is discussed in more detail later in this report. Property Losses: There were no property losses this year. However, there were five Auto Physical Damage losses totalling $11,034 in repair costs. The following table summarizes the cost of retained claims by type for FY 2015-16 and FY 2016-17. Risk Management Division Annual Report FY 2016-17 October 5, 2017 Regular Board Meeting Agenda Packet - Page 118 of 196 3 Liability — Auto Liability - Overflows Liability — Plumbing Liability — Other Property Auto Physical Damage $8,777 $8,385 $150)948 $109)943 $2,655 $3,141 $2,170 $247241 $3)738 $117034 Page 6 of 49 Security: Security improvements and accomplishments in FY 2016-17 included installation of additional card readers in the Headquarters Office Building (HOB) lobby, and completion of a comprehensive physical security assessment of all Central San facilities. Emergency Management: Significant developments in the Emergency Management Program this year include: • Coordination and preparation for disaster cost recovery under the Stafford Act and the California Disaster Assistance Act for damages arising from the Winter Storms of 2017; • Serving on the Local Hazard Mitigation Plan Update Steering Committee, a group representing the 39 public agencies collaborating on this plan; and • Completion and submission of Central San's updated jurisdictional annex to the Local Hazard Mitigation Plan. Total Cost of Risk: The Total Cost of Risk (TCOR) is a risk management industry benchmark that allows an organization to evaluate the cost of its Risk Management program over time. TCOR includes the cost of the District's Safety program, as well as Risk Management program administration, claims, and insurance premiums. This total is reduced by any revenue accrued by the Self -Insurance Fund. The TCOR for FY 2016-17 was $2,528,960, a decrease of over $1.1 million from the previous year. This decrease resulted from a significant reduction in claims costs compared to FY 2015-16. Risk Management Division Annual Report FY 2016-17 October 5, 2017 Regular Board Meeting Agenda Packet - Page 119 of 196 4 Page 7 of 49 Insurance and Risk Financing Strategic Plan Tie -In: Goal 3: Be a Fiscally Sound and Effective Water Sector Utility Liability Insurance Coverage Central San purchases commercial liability insurance for Workers' Compensation, Employers' Liability, Excess General Liability, Pollution Legal Liability, Employment Practices Liability, and Fiduciary Liability. Workers' Compensation: Central San participates in the California Sanitation Risk Management Authority (CSRMA) Workers' Compensation insurance pool, a joint powers authority comprised of over 50 sanitary districts within California. Risk Management staff serves as Central San's representative on the Authority's Board of Directors. Insurance Premium Cost - $456,930. Excess General Liability: This policy covers claims in excess of Central San's $500,000 retention. Coverage includes defense and indemnification for inverse condemnation. Insurance Premium Cost - $321,450. Pollution Legal Liability_: This policy covers claims and losses arising from the collection and disposal of household hazardous waste. It applies only to the Household Hazardous Waste Collection Facility and the contracted non -owned disposal sites. It does not cover claims alleging pollution conditions arising from the operation or maintenance of the collections system. Insurance Premium Cost - $71,320 Employment Practices Liability: This is a gap policy that reduces the self-insured retention for employment-related claims from $500,000 to $35,000 per occurrence. The policy is limited to $500,000 in coverage as the Excess General Liability policy will respond to claims that exceeds this amount. Insurance Premium Cost - $9,510. Fiduciary Liability: This policy protects Central San from claims filed by participants in District -maintained retirement and other post -employment benefit funds. Insurance Premium Cost - $3,812. Property Insurance Coverage Central San purchases property insurance, and crime insurance. Property Insurance: Central San is self-insured for damage to its property and facilities up to $250,000 per occurrence. Insurance coverage for losses in excess of this retention is purchased through the Alliant Property Insurance Program (APIP), a group purchasing program administered by Alliant Insurance Services. The APIP policy includes Boiler and Machinery coverage, and Cyber Liability coverage. Risk Management Division Annual Report FY 2016-17 5 October 5, 2017 Regular Board Meeting Agenda Packet - Page 120 of 196 Page 8 of 49 This program was recently enhanced to provide Identity Theft coverage to the employees of agencies participating in the program. Insurance Premium Cost - $124,433. Crime Insurance: This policy covers losses caused by employee theft, forgery or alteration, funds transfer fraud and certain types of computer fraud. It does not cover cyber -attacks or loss of data. Insurance Premium Cost - $1,601. All Central San insurance policies renew on July 1 of each year. Self Insurance Fund Central San has self-insured most of its liability and some of its property risks since July 11 1986, when the Board approved the establishment of the Self -Insurance Fund (SIF). In 1994, the Government Accounting Standards Board issued Statement No. 10 (GASB -10) which established requirements on how public agencies must fund their self- insured risks. To comply with GASB -10, Central San segregated reserves for certain types of liability risks into asub-fund that must be actuarially reviewed at least every two years. The next actuarial study will begin in July 2018. In 2014, the Board established a reserve policy to maintain reserves for losses covered by Excess Liability insurance of at least three times the amount of Central San's self- insured retention. With the current retention of $500,000, this reserve is $1.5 million. Retained losses and claims expenses are paid from this fund during the year. The fund is replenished annually after the Board adopts the Self Insurance Fund budget via transfer from the Operations and Maintenance Fund. The Board also wanted to reserve funds for catastrophic losses or emergency response and sought to simplify reserving for all risks that do not require GASB 10 compliance by consolidating other liability claim reserves and property loss reserves into a single fund. In order to meet these goals, the balance of the SIF has been consolidated into a single sub -fund with a $5 million reserve. Other claims and program expenses are paid from this fund during the year. The fund is replenished annually after the Board adopts the Self Insurance Fund budget via transfer from the Operations and Maintenance Fund. Risk Management Division Annual Report FY 2016-17 October 5, 2017 Regular Board Meeting Agenda Packet - Page 121 of 196 0 Page 9 of 49 Workers' Compensation Claims Strategic Plan Tie -In: Goal 3: Be a Fiscally Sound and Effective Water Sector Utility Claim Types Workers' Compensation claims are classified as either Medical Only (MO) or Indemnity (IND) claims. MO claims are those where injured employees only need medical treatment to cure or relieve their injuries. In these circumstances employees did not lose any time from work and suffered no permanent effects from the injury. IND claims are those where injured employees received ongoing medical treatment and: • were taken off work by their treating health care providers; • were given permanent physical restrictions; and/or, • suffered some permanent disability or physical limitation as a result of their injuries. Summary of Recent Claims The following table shows the distribution of Workers' Compensation claims for FY 2016-17 ,and the two prior years. The Claim # column indicates the number of claims occurring during the year. The Claim $ column indicates the total cost of those claims to date. The following tables detail these totals by functional group. Risk Management Division Annual Report FY 2016-17 October 5, 2017 Regular Board Meeting Agenda Packet - Page 122 of 196 7 nm�FIY 2014-1 LAEk FY 2015-16,AI&IFY 2016-17 A Claim # Claim $ Claim # Claim $ Claim # Claim $ Medical Only 10 $147833 17 $31,265 10 $217598 Indemnity 1 $777297 4 $1577856 1 $22,939 Total 11 $927129 21 $1897121 11 $44)537 The following tables detail these totals by functional group. Risk Management Division Annual Report FY 2016-17 October 5, 2017 Regular Board Meeting Agenda Packet - Page 122 of 196 7 Page 10 of 49 Trends and Analysis Since Central San has very few Workers' Compensation claims in any single year, it is difficult to identify any trends with such a small data set. As a result, the following analysis uses Workers' Compensation claims data from the last five years. Medical Only Claims: The chart below shows the total number and cost of MO claims by functional group for the last five years. The following table shows the average cost per MO claim for each group during that same period. Risk Management Division Annual Report FY 2016-17 October 5, 2017 Regular Board Meeting Agenda Packet - Page 123 of 196 0 FrClaims equency (# claims filed MO IND MO IND MO IND � -�FY 2014-75 jjjrFY 2015-1�rY - 2016-1'7= $37739 - $24,158 $61246 $57176 - E N G $97380 $777297 $47170 - $121785 - POD $17713 - $87190 $151,610 $3,052 $227939 Total $147833 � � 000000 $157)856 $217598 $221939 Trends and Analysis Since Central San has very few Workers' Compensation claims in any single year, it is difficult to identify any trends with such a small data set. As a result, the following analysis uses Workers' Compensation claims data from the last five years. Medical Only Claims: The chart below shows the total number and cost of MO claims by functional group for the last five years. The following table shows the average cost per MO claim for each group during that same period. Risk Management Division Annual Report FY 2016-17 October 5, 2017 Regular Board Meeting Agenda Packet - Page 123 of 196 0 Claims Severity ($ for all claims by FY) MO IND MO IND MO IND ADM - $21937 - $585 - CSO $37739 - $24,158 $61246 $57176 - E N G $97380 $777297 $47170 - $121785 - POD $17713 - $87190 $151,610 $3,052 $227939 Total $147833 $777297 $39,455 $157)856 $217598 $221939 Trends and Analysis Since Central San has very few Workers' Compensation claims in any single year, it is difficult to identify any trends with such a small data set. As a result, the following analysis uses Workers' Compensation claims data from the last five years. Medical Only Claims: The chart below shows the total number and cost of MO claims by functional group for the last five years. The following table shows the average cost per MO claim for each group during that same period. Risk Management Division Annual Report FY 2016-17 October 5, 2017 Regular Board Meeting Agenda Packet - Page 123 of 196 0 Page 11 of 49 $60,000 $50,000 $40,000 $30,000 $20,000 $10,000 - 4 Medical Only Claims - Last 5 Years ADM CSO ENG POD ENG includes HHWCF and Environmental Compliance 45 40 35 30 25 20 15 10 5 0 1!- 5 Yr • . ADM CSO ENG POD Yr • 7U $1, 839 $1, 374 $2,144 $9791 1 Collection System Operations (CSO) had the highest number of MO claims but also had the second lowest average cost per MO claim. The data alone suggests that this group has more frequent, but less serious injuries than other groups. However, CSO is also the most active participant in Central San's Return to Work Program, which is discussed in more detail later in this section. CSO's active participation allows their employees to recover and to return to work faster than if they did not participate as fully, and also reduces the cost of these claims. Indemnity Claims: The chart below shows the total number and cost of IND claims by functional group for the last five years. The costs include medical expenses and other payments made by the program (i.e. temporary disability paid to employees while off work). The following table shows the average cost per IND claim for each group during that same period. Risk Management Division Annual Report FY 2016-17 October 5, 2017 Regular Board Meeting Agenda Packet - Page 124 of 196 0 Indemnity Claims - Last 5 Years $400,000 $350,000 $300,000 $250,000 $200,000 $150,000 $100,000 1 1 $50,000 $7,813 $6,246 ADM CSO $77,2! ENG POD Page 12 of 49 6 5 4 3 2 1 0 • ADM CSO ENG POD 5 Yr • $71813 $61246 $771297 $721375 These results illustrate the limitations of a small data set when looking for trends. Both the CSO and Administration (ADM) claims were relatively minor when compared to the overall population of IND claims. At the same time, a single severe claim within Engineering pushed its five year average well above those of ADM and CSO. During this same time, Plant Operations Division (POD) had five IND claims at an average cost of over $72,000 per claim. Cost Drivers Despite the limitations of a small data set, it is clear that IND claims are significantly more expensive than MO claims, as shown in the following chart. Risk Management Division Annual Report FY 2016-17 10 October 5, 2017 Regular Board Meeting Agenda Packet - Page 125 of 196 Page 13 of 49 Average Incurred Cost per Claim Last 5 Years Medical Only vs. Indemnity $77,297 $801000 $72,375 $601000----- c $407000 .� $7,g13 $6 $201000 $1,839 $1.374$2,144 ADM 4M $979 CSO ENG POD This illustrates the differential costs between MO and IND claims. Because of this differential, Risk Management and Safety staff work with Human Resources, injured employees and their supervisors to reduce the amount of time employees lose from work, to ensure ongoing and proper medical treatment is received, and help employees recover as soon as possible. In many cases, these efforts prevent MO claims from becoming IND claims. Over the last five years, IND claims costs are 3,887% higher than MO claims costs. When evaluated using data over the last 10 years, that differential rises to 5,092%, indicating that our collaborative efforts to control these more expensive claims have been effective. Soft Costs: The above chart only shows the claims cost difference between MO and IND claims. Since IND claims usually include time away from work, there are additional costs associated with these injuries not captured by claims data. These include lost productivity, overtime for other staff needed to fill in while an injured employee is off work, time off work to attend medical appointments, and supplemental benefit costs including salary continuation provided to augment temporary disability payments. Expert opinions vary on the scope of these soft costs but estimates range from three to five times the claims cost. Considering that indemnity claims costs for the last five years exceeded $450,000, this equates to $1.3 million to $2.2 million in soft costs incurred by Central San. Risk Management Division Annual Report FY 2016-17 11 October 5, 2017 Regular Board Meeting Agenda Packet - Page 126 of 196 Page 14 of 49 Loss Control As noted above, IND claims constitute the most severe injuries and are the primary cost driver in Workers' Compensation. This is why Risk Management and Safety staff work closely together to reduce both the risk and the frequency of injuries to employees, and to reduce the cost of claims. Such loss control activities are addressed more fully in the Safety Annual Report provided after the end of each calendar year. The following charts serve as a snapshot of these more severe claims by injury type, cause, and affected body parts. IND Claims by Type of Injury Last 10 Years vs. Last 5 Years 10 Yr 5 Yr I 0 5 10 15 20 25 ■ Pain Other ■ Hearing Loss Strain/Sprain ■ Fracture 0 Cut/Bruise Strains and sprains remain the most common type of IND claim. Recovery often requires time off to rest, physical therapy, and, depending on the severity of the injury, might also require surgery. However only six (27%) of these 22 claims occurred in the last five years, indicating a significant reduction in these types of injuries in recent years. IND Claims By Cause of Injury Last 10 Years vs. Last 5 Years Other Transportation Pushing/Pulling Exposure Strike/Impact (Contact) Slip/Trip/Fall/Jump Repetitive Motion Lifting/Reaching 0 2 4 6 8 10 12 ■10Yr ■5Yr Risk Management Division Annual Report FY 2016-17 October 5, 2017 Regular Board Meeting Agenda Packet - Page 127 of 196 12 Page 15 of 49 Recovery from repetitive motion injuries requires rest, as injured employees need to stop performing the repetitive activity that caused the initial injury. Follow up is essential for these injured employees to prevent reoccurrence. Additional needs may include ergonomic adjustments, customized ergonomic equipment, and implementation of procedural changes or work modifications. As Safety staff has implemented these practices, the number of repetive motion injuries, and the frequency and severity of repetitive motion claims have decreased. Only three of the 11 repetitive motion claims occurred in the last five years and only one occurred in FY 2016-17. IND Claims by Injured Body Part Last 10 Years vs. Last 5 Years 8 6 5 4 3 2 1 0 ■5Yr ■10Yr As with the preceding charts, data from the last five years demonstrates continuous improvement. While shoulder, back and knee injuries are still the most common IND claims, the frequency of such claims has diminished significantly in recent years. Of the seven shoulder injuries in the last 10 years, only two occurred in the last five years. Similarly, only two of the seven back injuries occurred in the last five years, and only one of the six knee injuries occurred in the last five years. In spite of the reduced frequency, injuries to backs, shoulders and knees most often impact an employee's ability to return to regular or even modified work. Risk Management and Safety staff will continue to work throughout Central San to expand modified duty opportunities for employees with these more severe injuries. Return to Work In 2007, Risk Management implemented a Return to Work Program to facilitate employees' recovery from work-related injuries and to help reduce the number and cost of IND claims. In many cases, Central San's ability to provide temporary modified duty Risk Management Division Annual Report FY 2016-17 13 October 5, 2017 Regular Board Meeting Agenda Packet - Page 128 of 196 Page 16 of 49 (TMD) can prevent a MO claim from becoming an IND claim. This makes the Return to Work Program an essential component of both employees' recovery and cost control. The program incorporates use of the interactive process which is required for compliance with the Fair Employment and Housing Act (FEHA) and the Americans with Disabilities Act Amendments Act (ADAAA). It is not easy to compare metrics from year to year as each potential TMD assignment is considered individually and depends on the nature of each employee's physical restrictions, and Central San's ability to offer TMD within those restrictions. In FY 2016-17 Central San provided TMD assignments to six of the seven employees who would otherwise have been off work and received Temporary Disability benefits. The program has since been expanded to include non -occupational injuries or other medical conditions where a temporary modification to an employee's duties would be beneficial to both Central San and the employee. As a result, Human Resources assumed responsibility for this program in 2015. Experience Modification Factor (ExMod) One of several factors used to calculate Central San's annual Workers' Compensation premium is the Experience Modification factor (ExMod). CSRMA calculates each pool member's ExMod by comparing its loss data from the three prior years with all members' combined loss data for that same period. Each member's premium rate is adjusted up or down to reflect its performance compared to the pool as a whole. This calculation is adjusted each policy year. Because the pool determines its members, ExMod using a rolling three-year period of loss data, no member is penalized for poor performance (higher than average claims frequency or severity) in a single year indefinitely. Central San's ExMod has been reduced from a high of .97 in FY 2011-12 to a low of .56 in FY 2013-14. The following table shows this trend. ExMods in the two most recent years have increased slightly, possibly reflecting the overall reduction in loss costs across the pool membership. Risk Management Division Annual Report FY 2016-17 October 5, 2017 Regular Board Meeting Agenda Packet - Page 129 of 196 14 Page 17 of 49 1.20 1.00 0.80 0.60 0.40 0.20 0.00 Workers'Comp ExMod - Last 10 Years 0.73 0.67 0.56 0� 2$ O$.09 Og.tiO ,�O.ti� ,��.ti2 .L.ti3 ,�3.tiN ,�p�.ti5 ,��.ti6 ,�6.ti1 TLO ,LO ,LO ,LO ,LO ,LO ,LO ,LO ,LO ,LO Workers' Compensation Net Loss Ratio Central San's Workers' Compensation Net Loss Ratio is determined by dividing the incurred claims cost (the total cost of claims occurring within a policy year) by the net premium Central San paid to insure against those claims. Incurred costs include all payments made on claims as well as reserves for ongoing and future medical treatment, temporary and permanent disability payments and the projected costs of other Workers' Compensation benefits to which injured employees might be entitled. The net premium includes adjustments for any retrospective rating changes and any dividends issued by CSRMA. Since MO claims tend to be short-lived, loss costs from these claims are reasonably well known by the time medical treatment ends. As a result, these claims do not develop significantly over time. IND claims are much more volatile. These claims usually involve more serious injuries which may require longer recovery periods, more frequent and expensive medical treatment and temporary or permanent disability payments. Injured employees may suffer flare-ups or aggravation of injuries over several years. Also, recommended future medical treatment may expand over time. Reserves for these claims include estimates of these costs as well as any projected legal expenses for litigated cases. Risk Management Division Annual Report FY 2016-17 15 October 5, 2017 Regular Board Meeting Agenda Packet - Page 130 of 196 Page 18 of 49 Workers' Compensation Net Loss Ratio Total Incurred /Net Premium 2.50 2.24 2.00 1.50 1.00 0.50 0.29— 0.13 0.00 N `l• Ocb 00 NQ) ;` ;` ;`"b N �O � N N N �O eqr �O �O �O (_p (_p rO �O As of June 30, 2017, Central San's loss ratio for policy years FY 2007-08 and FY 2008- 09 exceeded 1.00. This means that CSRMA paid and reserved more money to cover the cost of these claims than Central San paid in premium. The loss ratio for the more recent years remains under 1.00. Claims occurring in FY 2009-10 through FY 2012-13 have not developed as significantly as those from earlier years. This improved performance is one factor in Central San's generally stable ExMod factor. There are a number of open claims in the FY 2014-15, FY 2015-16 and FY 2016-17 policy years. Since these claims will mature, payments will continue and reserves will be adjusted, staff therefore anticipates future increases in these loss ratios. Overall Performance Central San's overall Workers' Compensation performance remains generally better than its peers within the CSRMA pool of similar agencies. Minor increases in Central San's ExMod factor reflect improved performance of other member agencies as much as it reflects Central San's continued active management of losses and focus on employee recovery. This steady improvement is the result of Central San's proactive approach to safety, Risk Management staff's focus on active case management, and the commitment of staff, supervisors and managers who actively participate in the Return To Work Program. Risk Management Division Annual Report FY 2016-17 October 5, 2017 Regular Board Meeting Agenda Packet - Page 131 of 196 16 Page 19 of 49 General Liability Claims Strategic Plan Tie -In: Goal 3: Be a Fiscally Sound and Effective Water Sector Utility Claims Philosophy Central San's focus on customer service informs the claims management process. Claimants are contacted immediately, their claims are investigated thoroughly, and when damages are found to be Central San's responsibility, claims are settled promptly and fairly. This approach has resulted in satisfied claimants and in reduced cost. Liability Claim Types Self-insured general liability claims are classified into four types; Auto Liability , Plumbing Reimbursements , Sanitary Sewer Overflow claims, and other General Liability claims . These claims are all paid from the Self Insurance Fund and would be covered by Central San's excess liability insurance if the losses exceeded the self- insured retention. Claim costs include emergency response expenses, settlements, legal expenses and reserves for open claims. Auto Liability Claims Auto Liability claims are those filed by third parties for damages caused by Central San personnel while operating its vehicles. This includes claims for injuries to persons or damage to others' property. The data for these claims does not include costs to repair or replace damaged Central San vehicles from such events. Repairs to these vehicles are paid from a different Self - Insured Fund. The chart below shows the total number and cost of Auto Liability claims since 2007, followed by a table showing the average cost per Auto Liability claim for each of the last five years. Risk Management Division Annual Report FY 2016-17 17 October 5, 2017 Regular Board Meeting Agenda Packet - Page 132 of 196 Page 20 of 49 $90,000 $80,000 $70,000 $60,000 $50,000 $40,000 $30,000 $20,000 $10,000 I Auto Liability Claims n 0� 0$.09 09.ti0 ,�O.ti� ,��.ti2 ,�Z.ti3 ,�3.ti� ,�p�. N5 ,��.ti6 ,�6.tiI 'LO 20 20 'LO 'LO 'LO TO 20 -0 v r- 5 5 4 3 2 1 I0 Year FY 2012-13 FY 2013-14 FY 2014-15 FY 2015-16 FY 2016-17 Avg $ per $4)226 $27157 $17546 $47388 $47192 Claim Auto Liability claims mostly involve reimbursement for property damage. The one exception since 2007 is a FY 2010-11 accident where the claimant was represented by counsel and alleged both bodily injury and property damage. The total cost of this claim, including defense costs, was $64,274. Plumbing Reimbursement Claims Plumbing reimbursements are small claims usually made by homeowners after they called a plumber for service only to learn that the problem was in Central San's main line. In most cases, collection system staff provide the homeowner with the claim form while they are on scene. This facilitates a simple reimbursement process where Risk Management receives the claim, confirms the call out and the findings, then processes reasonable reimbursements. Plumbing reimbursements do not include reimbursement requests arising out of an overflow or any event where sewage escaped from the collection system. These circumstances involve additional expenses and often include other property damage. Claims arising from these situations are considered overflow claims, which are discussed in the following section. Risk Management Division Annual Report FY 2016-17 October 5, 2017 Regular Board Meeting Agenda Packet - Page 133 of 196 18 Page 21 of 49 The chart below shows the total number and cost of plumbing reimbursement claims since 2007, followed by a table showing the average cost per plumbing reimbursement claim for each of the last five years. $5,000 $4,500 $4,000 $3,500 $3,000 $2,500 $2,000 $1,500 $1,000 $500 Plumbing Reimbursements .0$ x$.09 �(,- ,��.ti� ZO ,��.ti2 ,�Z.ti3 ,�3.1� ,�p.ti5 ,��.ti6 ,�6.ti� ZO -LO -ZO - ZO -ZO ZO ZO -LO -ZO - 14 12 10 8 6 4 2 0 FY 2012-13 FY 2013-14 FY 2014-15 FY 2015-16 FY 2016-17 $201 $384 $330 $379 $449 Sanitary Sewer Overflow Claims Sanitary Sewer Overflow claims are filed by customers whose homes or businesses are damaged by a sewer overflow. Collections System staff respond to the overflow and contacts Risk Management as soon as they become aware of an overflow affecting a home or business. This allows Risk Management staff to: • immediately respond and begin coordination of emergency clean up and remediation as needed; • provide for the affected customers' immediate needs; • work with the customers to define damages; • help customers prepare their claims; and • settle the claims in a timely and reasonable manner. This process has evolved into a partnership between CSO and Risk Management staff that benefits both Central San and the customer. Risk Management Division Annual Report FY 2016-17 October 5, 2017 Regular Board Meeting Agenda Packet - Page 134 of 196 19 Page 22 of 49 The chart below shows the total number and cost of overflow claims since 2007, followed by a table showing the average cost per overflow claim for each of the last five years. Sanitary Sewer Overflow Claims $450,000 18 17 $400,000 0"" $422,575 $350,000 $300,000 $250,000 $200,000 $150,000 $100,000 $50,000 EL 0 _M 0 �� .0`0 x$.09 �gAp ,��Ati .tiI .ti3 , "-'tiN ,�p�A5 ,��A10 ,�6Al 20 20 V 20 -ZO 20 -ZO 20 20 -V 16 14 12 10 9 8 6 993 4 2 X - . FY 2012-13 FY 2013-14 FY 2014-15 FY 2015-16 FY 2016-17 Avg $ per $11466 $51844 $91450 $13723 $127221 SSO Claim Costs in FY 2007-08 and FY 2010-11 each include one large sanitary sewer overflow claim. The claim in FY 2007-08 cost $322,315 and the claim in FY 2010-11 cost $2207741. Staff benchmarks sanitary sewer overflow claims costs against the average cost per overflow claims incurred by the CSRMA general liability pool. Although Central San does not participate in this pool, its' loss data presents a relevant benchmark for comparison. As of the last available data, CSRMA's average cost exceeded $17,000 per overflow claim. Since 2007, Central San has met this benchmark in all but the two years mentioned above. Risk Management Division Annual Report FY 2016-17 20 October 5, 2017 Regular Board Meeting Agenda Packet - Page 135 of 196 Page 23 of 49 Thanks to the partnership with CSO and the ongoing support of management and the Board, Risk Management staff frequently resolves sanitary sewer overflow claims for much lower cost than that of Central San's peers. Still, as the chart above suggests, while large overflow claims occur infrequently they are not unlikely. Any overflow claim can develop into a significant loss, even if addressed in a timely, thoughtful and professional manner. Other General Liability Claims Other general liability claims include losses arising from Central San's operations that don't readily fit in the categories above. Examples of these claims include damage to homeowners' property caused by sewer cleaning activities, damages alleged to arise from offset manholes, damage to other utilities' infrastructure from maintenance or construction activities and other claims where the affected party believes Central San caused their loss. All such claims are investigated and, if found to be Central San's responsibility, promptly settled for reasonable amounts. Claims found not to be Central San's responsibility are either denied or tendered to the at -fault party. The chart below shows the total number and cost of other general liability claims since 2007, followed by a table showing the average cost per claim for each of the last five years. Other General liability Claims $1,200,000 $1,000,000 $800,000 $600,000 $400,000 $607,003 $200,000 - �n 0� .0$ 0$.09 Og.tiOti6 Al 20 20 20 20 20 20 20 20 20 20 Risk Management Division Annual Report FY 2016-17 14 12 10 8 6 4 2 0 October 5, 2017 Regular Board Meeting Agenda Packet - Page 136 of 196 21 Page 24 of 49 EEMF FY 2012-13 FY 2013-14 FY 2014-15 FY 2015-16 FY 2016-17 Avg $ per $191175 $18,431 $881635 $943 $81527 GL Claim .- The average cost per claim for FY 2014-15 is skewed by the inclusion of Central San's $1 million contribution toward a flood loss arising from construction activities. Absent that single event, the average cost of these claims for FY 2014-15 would only be $5,748. FY 2012-13 included one litigated bodily injury claim that cost almost $70,000, most of which was spent on legal defense. As noted above, Central San will vigourously defend claims for damages where it believes it has no responsibility. This was one such example. FY 2013-14 included two litigated claims for bodily injury from bicyclists and a claim from Riverwatch related to operation of the collection system. Household Hazardous Waste Claims Central San purchases a separate Pollution Legal Liability insurance policy to cover losses arising out of the collection and disposal of household hazardous waste. No claims have been filed since the Household Hazardous Waste Collection Facility opened in 1997. Risk Management Division Annual Report FY 2016-17 October 5, 2017 Regular Board Meeting Agenda Packet - Page 137 of 196 22 Other Risks and Exposures Strategic Plan Tie -In: Goal 3: Be a Fiscally Sound and Effective Water Sector Utility Goal 5: Maintain a Reliable Infrastructure Property Claims Page 25 of 49 Central San is self-insured for damage to its property and facilities up to $250,000 per occurrence. Insurance coverage for losses in excess of this retention is purchased through the Alliant Property Insurance Program (APIP), a group purchasing program administered by Alliant Insurance Services. The APIP policy includes Boiler and Machinery, and Cyber Liability coverage. There were no property losses in FY 2016-17. Earthquake and Flood Risks The APIP policy does not include coverage for damages arising out of flood or earthquake. Risk Management staff periodically evaluate the cost of insuring these risks through the commercial insurance market. This evaluation considers recent hazard modeling results and Central San's implementation of mitigation projects that reduce the potential impact of earthquake and flood damage against available insurance coverage and pricing. In March and June 2017, staff presented the Administration Committee an analysis of current earthquake insurance pricing, and the results of a February 2017 hazard model using multiple earthquake and flood scenarios. After some discussion, the Committee decided against purchasing earthquake insurance at that time. Staff will continue to monitor hazard models and the insurance market and report back to the Committee if more favorable options emerge. At this time, Central San is essentially self-insured for flood and earthquake risks. To finance this risk, the Board approved and funded a $5 million catastrophic loss fund within the Self -Insurance Fund (SIF) to pay for emergency repairs after a natural disaster. Auto Physical Damage Central San is self-insured for Auto Physical Damage. Auto Liability is covered under the Excess Liability policy but the cost to repair or replace its damaged vehicles is not. When our vehicle is damaged by a third party, the SIF pays for repairs and Risk Management staff files a claim to recover those costs from the at -fault party. Repair of vehicles damaged by Central San staff is coordinated through the Vehicle Shop. The first $1,000 of such repairs are charged to the at -fault Department while the balance is paid from the SIF. Risk Management Division Annual Report FY 2016-17 23 October 5, 2017 Regular Board Meeting Agenda Packet - Page 138 of 196 Page 26 of 49 The following table shows the number (#) and cost ($) of Auto Physical Damage losses for the last several years. Although there were somewhat higher than normal number of damaged vehicles this fiscal year, there does not appear to be a trend at work. Two of the five vehicles belonged to construction inspectors (two different drivers), one was a TV truck, one was a pump station pickup, and one was a Laboratory vehicle. Pollution Risks Central San has chosen to self -insure pollution -related risks other than those arising from providing the Household Hazardous Waste Facility. Coverage for such pollution losses is either not available or extremely expensive. Claims costs arising from an alleged pollution condition would be paid from the SIF's Catastrophic Loss Fund. Risk Management Division Annual Report FY 2016-17 October 5, 2017 Regular Board Meeting Agenda Packet - Page 139 of 196 24 Page 27 of 49 Security Strategic Plan Tie -In: Goal 5: Maintain a Reliable Infrastructure Strategy 3 —Protect District Personnel and Assets from Threats and Emergencies Risk Management is responsible for the security of Central San's facilities. Day-to-day security operations includes oversight of, and coordination with, the contracted security guard company, issuance of badges and keys to staff and the maintenance and support of the electronic security systems including security cameras, panic buttons, burglar alarms and related software. Risk Management staff partners with other work groups to accomplish a variety of tasks and projects in order to secure Central San property and protect its employees and the public from security breaches. Major security initiatives this year included Risk Management staff working with: • Capital Projects to conduct a Physical Security vulnerability Assessment of all facilities and structures; • Capital Projects to implement security improvements to the HOB Lobby; • New Security Guard personnel to update POST orders and meet changing needs over time. Staff is also working on longer term projects including the next phase in the development of a Security Master Plan and the implementation of additional procedures and facility hardening measures to protect employees and further restrict access to Central San facilities from unauthorized parties. Risk Management Division Annual Report FY 2016-17 25 October 5, 2017 Regular Board Meeting Agenda Packet - Page 140 of 196 Page 28 of 49 Emergency Management Strategic Plan Tie -In: Goal 5: Maintain a Reliable Infrastructure Strategy 3 — Protect District Personnel and Assets from Threats and Emergencies Central San's Emergency Management Program is comprised of four elements, all of which are essential to ensure a prompt and effective emergency response to disasters, to make sure such response is properly documented for potential cost recovery, and to make permanent repairs to damaged infrastructure as soon as practicable. These four elements are discussed in more detail below. FY 2016-17 provided Central San an opportunity to evaluate the effectiveness of this program in response to severe weather. The winter storms of 2017 generated three federal disaster declarations. The first declared disaster opened the door for cost recovery from damages occurring during the January 2017 storms. Central San suffered infrastructure damage in two locations during this period. A sinkhole appeared on Miner Rd. in Orinda which closed the road to traffic and affected two sewer lines that served large residential areas. Collections System staff set up bypass pumping within hours of notification and maintained that bypass pumping operation until permanent repairs were completed in late June. Capital Projects staff worked with the City of Orinda to identify the best repair solution, and, after many hurdles, was able to hire the same contractor to repair Central San's pipes as was performing stormwater and road repairs for the city. This approach saved both time and money, and resulted in a completed multi -jurisdictional project with due haste. Risk Management staff worked with both Collections System and Capital Projects staff to track response and repair progress, ensure proper documentation, and identify opportunities to improve Central San's disaster response and recovery efforts going forward. Staff also began work with the California Office of Emergency Services (CalOES) and the Federal Emergency Management Agency (FEMA) to initiate the cost recovery process. Staff expects to recover funds in the next fiscal year. The Four Elements Risk Management is responsible for developing, implementing, evaluating and improving Central San's Emergency Management Program. The program includes the four components discussed below. Risk Management Division Annual Report FY 2016-17 October 5, 2017 Regular Board Meeting Agenda Packet - Page 141 of 196 26 Page 29 of 49 1. Plan Development and Maintenance Risk Management is responsible for developing and maintaining the Emergency Operations Plan, Local Hazard Mitigation Plan, and the Continuity of Operations Plan. Emergency Operations Plan: The California Emergency Services Act requires all public entities to prepare and maintain an Emergency Operations Plan (EOP) that complies with the Standardized Emergency Management System (SEMS). Risk Management released and the Board adopted a major EOP update in 2010 to reflect changes in the EOC staffing structure and to comply with the federal National Incident Management System (NIMS). Since then, Risk Management staff reviews the EOP at least annually and posts needed updates to the intranet. We released and posted a minor update in September 2016 to further clarify duties and to reflect changes in EOC personnel. Hard copies of the EOP are kept in the primary and backup Emergency Operations Centers (EOGs). We keep additional hard copies of the plan in the emergency supplies cache. A major EOP update is planned for 2018 that will be more aligned with the 2016 changes made to the Contra Costa County EOP. Local Hazard Mitigation Plan: Central San has aFEMA-approved Local Hazard Mitigation Plan (LHMP) that expires in 2017. FEMA requires local governments to update their plans every 5 years as a prerequisite to seek grants under the Hazard Mitigation Grant Program and the Pre -Disaster Mitigation Program. In keeping with its' commitment to coordinate its emergency planning and responses with other agencies, Central San submitted a Notice of Intent to Participate with Contra Costa County and other planning partners in the 2017 update. Staff served on the Steering Committee for the planning partnership and submitted updates to Central San's portion of the jurisdictional annexes. The plan will be submitted for FEMA's tentative approval and subsequent adoption by all planning partners in Fall 2017. Continuity of Operations Plan: Further development of the Continuity of Operations Plan (COOP) was delayed, and ultimately not accomplished in FY 2016-17, primarily because staff time was reallocated to disaster response tracking and working with FEMA and CalOES. Emergency Action Plan: The Emergency Action Plan (EAP) is required by CaIOSHA and details the specific responsibilities and procedures to follow if Central San staff need to evacuate or shelter in place. Since the EAP is part of Risk Management Division Annual Report FY 2016-17 October 5, 2017 Regular Board Meeting Agenda Packet - Page 142 of 196 27 2. 3. Page 30 of 49 the Safety Directive catalog, responsibility for EAP maintenance, testing and exercises resides with the Safety Division in the Operations Department. Training and Exercises During the year, Risk Management offered the following classes and exercises to emergency response staff. Items marked with an asterisk (*) were funded through a Bay Area Urban Area Security Initiative grant from Homeland Security. Disaster Management in Wastewater Operations EOC Activation Exercise Rapid Damage Assessment and Reponse CSTI 4 -day Earthquake Class * Disaster Service Worker Oath and Responsibilities Interoperable Data for the Public Sector * Supplies and Equipment 8/22-23/16 9/22/16 12/1-2/16 1/23-26/17 Jan/Feb 2017 4/18/17 Primary and Backup EOC: The Multi -Purpose Room is Central Sanas primary Emergency Operations Center (EOC). The Crew Room at the CSO facility in Walnut Creek serves as Central San's backup EOC. Both locations are designed as `warm' sites, meaning that all needed supplies and equipment are stored on site, but must be set up before the EOC becomes operational. These facilities must be continuously stocked with the necessary supplies and equipment to enable immediate set up and operation of the EOC. During FY 2016-17, Risk Management staff conducted inventory audits of each location to ensure that the necessary items were available on site, secured as needed and maintained in an operable condition. At the same time, staff also tested the analog phones and satellite internet to ensure continued operability. Communications: Several years ago, Contra Costa and Alameda Counties created a Joint Powers Authority (JPA) to develop and maintain an interoperable radio communications infrastructure, the East Bay Regional Communications System Authority (EBRCSA). Central San joined this group in 2014. In 2015, staff purchased the radios that work on the interoperable system (P25 standard). The Radio Unit of the County's Department of Information Technology is the designated programmer for all radios intended for use on the Contra Costa County portion of the EBRCSA infrastructure. During FY 2016-17, the Radio Unit programmed all the handheld and mobile radios and installed the mobile radios in selected Collections System vehicles. Risk Management Division Annual Report FY 2016-17 28 October 5, 2017 Regular Board Meeting Agenda Packet - Page 143 of 196 Page 31 of 49 In addition to developments in interoperable communications, staff also enhanced Central San's ability to communicate on older systems. Staff purchased and deployed HAM radios at both the Walnut Creek and Martinez campus. 4. Coordination with Other Agencies As a single -service agency, Central San must coordinate its emergency response with first responders in other local governments within its service area. All local governments in the County report incidents, damage and resource requests to the Operational Area EOC. The Operational Area EOC is housed at the Contra Costa County Sheriff's Office of Emergency Services (OES). The County EOC analyzes and forwards local status reports and unfilled resource requests to the regional, state and federal emergency management coordinators. Risk Management staff continues to serve on the Operational Area Council, a group of emergency managers from within the County who meet quarterly to share information and best practices, coordinate multi -agency drills and training opportunities, and facilitate coordinated area emergency planning. The Council is sponsored by the Contra Costa County Sheriff's OES. As the Operational Area point of contact, County OES also works with state and federal agencies to collaborate on projects of regional or national concern. Operational Area Council members are encouraged to participate in these larger group meetings. Risk Management Division Annual Report FY 2016-17 October 5, 2017 Regular Board Meeting Agenda Packet - Page 144 of 196 29 Page 32 of 49 Total Cost of Risk Strategic Plan Tie -In: Goal 3: Be a Fiscally Sound and Effective Water Sector Utility The Total Cost of Risk (TCOR) is a risk management industry benchmark that allows an organization to evaluate the cost of its Risk Management program over time. TCOR includes the cost of Central San's Safety program as well as Risk Management program administration, claims and insurance premiums. This total is reduced by any revenue accrued by the Self -Insurance Fund. The following table shows Central San's TCOR from FY 2007-08 through FY 2016-17. 2007-08 1 $1,688,751 2008-09 1 $1,864,082 2009-10 1 $1,537,230 2010-11 1 $2,150,548 2011-12 $2,123,433 2012-13 $2,402,335 2013-14 $213721743 2014-15 $3,013,114 2015-16 $3,640,266 2016-17 $2,528,960 Despite an extreme winter and the two resulting losses, the TCOR for FY 2016-17 was substantially lower than the preceding two years, owing primarily to low losses and no new litigated matters. Since the SIF funded the cost of emergency response activities during the January Winter Storms, the total TCOR for FY 2016-17 may be adjusted downward in future years. Any storm -related disaster recovery funds received from FEMA and CaIOES will be allocated to FY 2016-17, thus reducing the net TCOR by that amount. Risk Management Division Annual Report FY 2016-17 30 October 5, 2017 Regular Board Meeting Agenda Packet - Page 145 of 196 Page 33 of 49 The following chart shows this same information graphically. The highest TCOR is shown in orange while the lowest TCOR is shown in green. $4,000,000 $3,500,000 $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 OOl 00� TCOR By Fiscal Year $1,537,230 0 LOO ,LOQ' ,LOQ' ,LOQ' ,LOQ $3,640,266 I 2,528,960 ,tib b ,til The following chart shows the TCOR for each Fiscal Year by its component parts SIF expenses were very high in FY 2012-13 as this fund assumed emergency reponse and repair costs after the Cogeneration Unit event. Insurance proceeds were applied against this expense, resulting in a small net effect to TCOR from the preceding year. However, since revenue reduces the net TCOR, the itemized chart below looks much more dramatic. Risk Management Division Annual Report FY 2016-17 31 October 5, 2017 Regular Board Meeting Agenda Packet - Page 146 of 196 TCOR Components by Fiscal Year O' Off' ti ,LO -40% -20% I 0% 20% 40% $890,714 $1,600,616 $1,333,519 ),466 $858,739 $810,849 $1,003,115 $496,612 $838,727 $945,973 60% 80% 100% Page 34 of 49 ■ Personnel RM Div Expenses Safety Expenses SIF Revenue SIF Expenses Risk Management Division Annual Report FY 2016-17 32 October 5, 2017 Regular Board Meeting Agenda Packet - Page 147 of 196 Page 35 of 49 Metrics and Other Accomplishments Central San's Strategic Plan includes six goals with associated strategies, initiatives and metrics to track performance toward achieving these goals. Risk Management is responsible for metrics under two of the goals. The tables below summarize Risk Management's FY 2016-17 performance for the metrics associated with these goals. Goal 3: Be a Fiscally Sound and Effective Water Sector Utility Strategy: Evaluate and implement risk management practices to minimize loss. IR -I" r V V Metricp WrTarget Year End Result 111111L -A -A I M Workers' Comp Experience Maintain ExMod at 1.0 or .67 ✓ Modifier (ExMod) lower Prnvirla Tamnnraru Return to Work Reduce the Average Cost of Overflow Claims Provide an Annual Risk Management Report to the Board Modified Duty to at least 80% of employees injured on the job Maintain cost at $25,000 or lower Present Report Goal 5: Maintain a Reliable Infrastructure 86% ✓ $12,221 ✓ Completed Sept. 2016 Strategy: Enhance Capability to Mitigate, Prepare, Respond and Recover from Emergencies -PW -1 Vr Metric r Target Year End Result 6L -A IV hL A AW I Emergency Operations Center Conduct one exercise per Completed Sept 2016 ✓ Activation Exercise year by the third quarter p p Board Risk Management Division Annual Report FY 2016-17 33 October 5, 2017 Regular Board Meeting Agenda Packet - Page 148 of 196 Participate in multi- Staff served on Plan Complete 5 year update to the jurisdictional process with Steering Committee. Local Hazard Mitigation Plan g Count and other y All phases of Central ✓ jurisdictions to facilitate San'sp ortion of the completion. plan completed. Update Emergency Operations Up date p Ian by third quarter Update Completed ✓ Plan as needed. Sept. 2016 Provide Annual Emergency Management Report to the Present Report Completed Jan. 2017 Board Risk Management Division Annual Report FY 2016-17 33 October 5, 2017 Regular Board Meeting Agenda Packet - Page 148 of 196 Page 36 of 49 Risk Management Division Annual Report FY 2016-17 October 5, 2017 Regular Board Meeting Agenda Packet - Page 149 of 196 34 Xi y 4 �'•P F � • 41. 1 r� RISK MANAGEMENT DIVISION ►Cto N _ 1, ANNUAL REPORT Board of Directors Meeting October 5, 2017 Shari Deutsch Risk Management Administrator $60,000 $50,000 $40,000 $30,000 $20,000 $10,000 WORKERS' COMPENSATION Medical Only Claims - Last 5 Years ADM CSO ENG POD Indemnity Claims: • Plant Operations Division (POD) has the highest number of these claims. • POD also has the fewest temporary modified duty opportunities. • One bad Engineering and Technical Services claim shows the imitations of a small data set. October 5, 2017 Reaular Bo 45 Medical Only Claims: 3° Collection Systems Operations 30 (C50) has the highest number but 25 20 the lowest average cost per claim. 15 10 5 CSO is the most active participant ° in Return to Work Program. $400,000 $350,000 $300,000 $250,000 $200,000 $150,000 $100,000 $50,000 Indemnity Claims - Last 5 Years 1 $7,813 ADM 1 $6,246 CSO ENG POD 6 5 4 3 2 1 0 $80,000 $607000 $40,000 $207000 WORKERS' COMPENSATION Average Incurred Cost per Claim Last 5 Years Medical Only vs. Indemnity ip& $1,37 $2,14 4jup October 5, 2017 $72,375 $979 4111010 • Average cost of an Indemnity claim is 35 — 50 times greater than the cost of a Medical Only claim. • Does not include soft costs (overtime, lost productivity, time off for follow-up medical appointments, salary continuation). Soft costs can be three to five times the costs shown here. Data used to target loss control efforts on type/kind of injuries that become indemnity claims: Strain/Sprain Slip/Trip/Fall Back Shoulders � 2 Parkcf -Pana 157 of 1QF \-- � WORKERS' COMPENSATION Indemnity Claims by Type of Injury Last 10 Years vs. Last 5 Years 10 Yr = 1"M 5 Yr 0 5 10 15 20 25 Pain Other ■ Hearing Loss Strain/Sprain ■ Fracture ® Cut/Bruise Indemnity Claims by Injured Body Part Last 10 Years vs. Last 5 Years 8 7 6 5 4 3 2 - 1 � 0 L ®5Yr ■10Yr a i CI 4, October 5, 2017 Rp-otil Indemnity Claims By Cause of Injury Last 10 Years vs. Last 5 Years Other Transportation Pushing/Pulling Exposure Strike/Impact (Contact) Slip/Trip/Fall/Jump Repetitive Motion Lifting/Reaching 0 2 4 6 8 10 ■10Yr m5Yr WORTH NOTING: • 67% reduction in strain/sprain injuries. • 91% reduction in repetitive motion injuries. • 70.4% reduction in number of indemnity claims, M ?JU'UUU $80,000 $70,000 $60,000 $50,000 $40,000 $30,000 $20,000 $10,000 c vN vc> TjP- TO- -�13N LIABILITY CLAIMS Auto Liability Claims Other Liability Claims U 5 4 3 2 $t"200,000 $1,000,000 12 $800,000 $1,134,540 $600,000 $400,000 $607,003 $200,000 $2,170 -09 C Isp "I 5- Qr ,_ ..�' ., e' .q. "'✓ _.. �ki.� ... `ca�:� is �� 4' t� T - Val; - 06to--ber 5, 2017 Plumbing Reimbursements $5,000 $4,500 12 $4,000 $3,500 $3,000 $4,611 7 $2,500 $2,000 $1,500 $1,000 $500 425 14 12 10 8 6 4 2 0 Observations: • It is hard to identify trends in a small data set. It is better to have a small data set than to identify trends, 14 12 to 8 6 4 2 0 OVERFLOW CLAIMS Overflow Claims by Fiscal Year $450,000 17 $400,000 $422,575 $350,000 $300,000 $250,000 $200,000 $150,000 $100,000 0$.09 .tiO ,�O.titi ,�V. 1- ,�Z.ti3 ,�3.ti� ,�t�,ti5 ,��.ti6 ,�6.ti1 -0130,20 20 20 20 20 20 20 18 16 14 12 10 8 6 4 2 0 FY 2012-13 FY 2013-14 FY 2014-15 FY 2015-16 FY 2016-17 $17466 $57844 $97450 $137723 $127221 572017 _ _ 5 hLA EMERGENCY MANAGEMENT d�4R� RFEMIIA F� a 4"e ND 5 We had two damaged sites from storms within federally declared emergency time/locations. Our request for Public Assistance was approved. Staff is working with the Federal Emergency Management Agency (FEMA) to develop project worksheets so that funds will be " obligated ". Developing documentation as we go to facilitate the project close out process and reduce the risk of de -obligated funds. er 5, 2017 CCCS D Cost FEMA/CDAA CLAIM $504,195.06 $80,106.00 $34,135.37 pir $618,436.43 FEMA -75% $378,146.30 $60,079.50 $25,601.53 $463,827.32 CalO ES -18.75% $94,536.57 $15,019.88 $6,400.38 $115,956.83 Max Recovery $472,682.87 $75,099.38 $32,001.91 $579,784.15 CCCSD Share: 6.25% $31,512.19 $5,006.63 $2,133.46 $38,652.28 :r 5, 2017 EMERGENCY MANAGEMENT Emergency Operations Plan Local Hazard Mitigation Plan Staff serves on Local Hazard Mitigation Plan (LHMP) Steering Committee Jurisdictional Annex submitted Completed Plan under FEMA/CalOES review Continuity of Operations Plan �.'.. Vital Records Section CENTRAL `= October 5, 2017 SECURITY Completed Comprehensive Physical Security and Vulnerability Assessment. Scope of work included a Cyber Security Assessment Recommendations presented to Board in closed session Implementation of Phase 1 items began Fiscal Year 2017-18 Installed new Card Readers in Headquarters Office Building (HOB) lobby. Lobby is now isolated from work spaces and the treatment plant er 5, 2017 Use your badge. � i WHAT "TOTALIS COST OF RISK"? Elements of Total Cost of Risk (TCoR} Insurance premiums The first and most easily tracked component of Total Cost of Risk is. insurance premiums. This includes the amount a firm spends an Insurance coverage and brokers" commissions. Retained losses The next element is retained losses. The retained loss value is the amount of maney that. a firm spends 4 C out of pocket" for losses Incurred. These are costs that are below a company's deductible. An example Is a sm,all mish-ap SLIch as dry-r-leaaning a client's SUit dUe tO spill -age from an employee. Costs to protect employees/customers from injury The next applicable costs may not be as easy to track heat Still important components captured in the TCDD calculation. These are the costs needed to protect your employees or custommers 1rom injuries. Exampl-es, are safety equiprnent,. mats, warning signs, training, etc. These costs should be tracked as part of the TCOFF for YOUr l�usinL:lss internr--illy Costs to engage firms for help with risk & irsur arice issues The next comparient is money spent withi professional firms to help you handle insurance or other risk associated issues. These would include costs for an attc)rney to re spore.,-- to a complaint or to review a contract's indemnification agreement. These are also part of the TCcR calc,jh,:,dion and are considered external risk control costs. October 5, 2017 I 1 PUTTING IT ALL TOGETHER: Overall, a good year - TCOR falls below the long term trend line. $4x000x000 $3,500,000 $31000.F000 $2,500,000 $2,000,000 $11500,000 $11000.F000 $500,000 TCOR By Fiscal Year ucioger 5, 2017 MORROW 53j6409266 $2r528.r960 572017