The URL can be used to link to this page

Home My WebLink About12.a. Receive FY 2017-18 Risk Management Annual Report Page 1 of 46 Item 12.a. CENTRALSAN CENTRAL CONTRA COSTA SANITARY DISTRICT November 15, 2018 TO: HONORABLE BOARD OF DIRECTORS FROM: SHARI DEUTSCH, RISK MANAGEMENT ADMINISTRATOR REVIEWED BY: PHILIP R. LEIBER, DIRECTOR OF FINANCE AND ADMINISTRATION ANN SASAKI, DEPUTY GENERAL MANAGER ROGER S. BAILEY, GENERAL MANAGER SUBJECT: RECEIVE FISCAL YEAR 2017-18 RISK MANAGEMENT ANNUAL REPORT Attached are the Fiscal Year 2017-18 Risk Management Annual Report and the Fiscal Year 2017-18 Risk Management Annual Report Presentation. This item was reviewed by the Administration Committee on October 9, 2018. Strategic Plan re-In GOAL ONE: Provide Exceptional Customer Service Strategy 1 - Build external customer relationships and awareness GOAL TWO: Strive to Meet Regulatory Requirements Strategy 3- Comply with all federal, state, and local regulations related to District administration GOAL THREE: Be a Fiscally Sound and Effective Water Sector Utility Strategy 2- Manage costs GOAL FIVE: Maintain a Reliable Infrastructure Strategy 3- Protect District personnel and assets from threats and emergencies ATTACHMENTS: 1. FY 2017-18 Risk Management Annual Report 2. Presentation November 15, 2018 Regular Board Meeting Agenda Packet- Page 84 of 254 Page of • Costaentral Contra Sanitary District Risk Management Division Protecting Pahlic Health and the Environment Annual Fiscal Year 2017ml s i November 15, 2018 Regular Board Meeting Agenda Packet- Page 85 of 254 5 Page 3 of 46 INTRODUCTION I am pleased to present the Risk Management Division Fiscal Year (FY) 2017-18 Annual Report. Risk Management's purpose 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 both proactive and maintain a constant state of readiness. The following report details some of the ways we've met these challenges. Risk Management also plays a role in helping Central San meet its strategic goals. Each section of this report references the FY 2016-18 Strategic Plan goals that it supports. In addition to the items discussed in this report, Risk Management does a number of things to protect Central San that aren't widely seen. Examples of these services include pre-bid risk assessments of capital projects, insurance and indemnity reviews for both capital and operational contracts, maintaining Central San's insurance coverage, and providing litigation support to District Counsel. This year ended with the addition of Laci Kolc to the team. As our new Risk Management Specialist, she will assume responsibility for some programs and will assist with the other projects and services we provide. However, our success will always depend on our ongoing partnership with management and Central San staff. These partnerships are essential to help us identify new and emerging risks, to improve how Central San accepts and transfers risk, and to control and reduce risks to our employees and our operations. In FY 2018-19, we will continue to advance the risk management function by implementing elements of the Security Improvement Plan, updating and improving our risk register, taking our emergency management program to the next level, and continuing the coordination between Risk Management and the Internal Audit function. Thank you all for your continued support and commitment to these efforts. SLiari�eutsc6i Shari Deutsch Risk Management Administrator Risk Management Division Annual Report FY 2017-18 1 November 15, 2018 Regular Board Meeting Agenda Packet- Page 86 of 254 Page 4 of 46 Table of Contents ExecutiveSummary ------------------------------------------------------------------------------------------------------------ 3 Insurance and Risk Financing --------------------------------------------------------------------------------------------5 Workers' Compensation Claims --------------------------------------------------------------------------------------- ? GeneralLiability Claims -----------------------------------------------------------------------------------------------------16 Other Risks and Exposures -------------------------------------------------------------------------------------------- 22 Security----------------------------------- -------------------------------------------------------------------------------------------- 24 EmergencyManagement--------------------------------------------------------------------------------------------------25 Total Cost of Risk 28 Metrics and Other Accomplishments----------------------------------------------------------------------------- 30 Risk Management Division Annual Report FY 2017-18 2 November 15, 2018 Regular Board Meeting Agenda Packet- Page 87 of 254 Page 5 of 46 Executive Summary Workers' Compensation: In FY 2017-18, the Workers Compensation Program incurred eight medical-only claims, and four indemnity claims as compared to 10 medical-only claims and one indemnity claim in FY 2016-17. 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 .67 in FY 2016-17 to .71 in FY 2017-18; • Strains and sprains remain the most common types of injuries that result in Workers' Compensation claims; • Slips, trips, and falls remain the most common causes of injury; • Back injuries continue to be the most expensive types of Workers' Compensation claim; Overflow Claims: Central San has seen a reduction in overflow claims per year from a high of 27 in FY 2001-02. In FY 2017-18 there were four overflow claims as compared to nine overflow claims in FY 2016-17. While the number of claims went down, the cost of those claims were somewhat higher, increasing the annual average cost per overflow claim to $25,639 from the previous average of $12,221. Number 11 11 9 4 Cost $103,948 $150,948 $109,993 $102,557 Average Cost $9,450 $13,723 $12,221 $25,639 Other Liability Claims: While the types of other liability claims were similar to those of last year, the volume of those claims has notably dropped, decreasing from 22 in FY 2016-17 down to only 12 other claims in FY 2017-18. This resulted in a total of 16 liability claims filed in FY 2017-18. This is discussed in more detail later in this report. Property Losses: There were two small property losses this year; one vehicle repair and a theft. The total cost for these losses was $4,855. Risk Management Division Annual Report FY 2017-18 3 November 15, 2018 Regular Board Meeting Agenda Packet- Page 88 of 254 Page 6 of 46 The following table summarizes the cost of retained claims by type for FY 2016-17 and FY 2017-18. Claim Type Cost FY 2016-17 . 2017-18 Liability—Auto $8,385 - Liability - Overflows $142,109 $102,557 Liability— Plumbing $3,141 $1,978 Liability— Other $26,341 $7,743 Property - $1,000 Auto Physical Damage $11,034 $3,855 Security: Security improvements and accomplishments in FY 2017-18 included completion of the Security Vulnerability Assessment and development of the Security Master Plan as well as establishment of the Security Committee to maintain communication and coordination among the various capital and administrative projects to be implemented under the plan. Emergency Management: Significant developments in the Emergency Management Program this year include: • Receipt of $620,011.92 in disaster recovery funds from the Federal Emergency Management Agency (FEMA) and the California Office of Emergency Services (CaIOES); • Completing the Local Hazard Mitigation Plan Update which was adopted by the Board on March 15, 2018, and approved by FEMA on April 19, 2018. 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 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 TCOR for FY 2017-18 was $2,430,462, a decrease of over $500,000 from the previous year. This decrease resulted from a reduction in personnel and claims costs compared to FY 2016-17. Personnel costs were lower in FY 2017-18 because of one retirement and one vacant position. Risk Management Division Annual Report FY 2017-18 4 November 15, 2018 Regular Board Meeting Agenda Packet- Page 89 of 254 Page 7 of 46 Insurance and Risk Financing 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 - $411,607. 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 - $341,889. 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 - $64,500. 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 - $9,687. 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 - $4,157. 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 2017-18 5 November 15, 2018 Regular Board Meeting Agenda Packet- Page 90 of 254 Page 8 of 46 This program was recently enhanced to provide Identity Theft coverage to the employees of agencies participating in the program. Insurance Premium Cost - $119,370. 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 - $1,780. 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 1, 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 a sub-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 2017-18 6 November 15, 2018 Regular Board Meeting Agenda Packet- Page 91 of 254 Page 9 of 46 Workers' Compensation Claims 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 2017-18, and the two prior years. The cost of claims indicates the total cost of those claims to date. FY 2015-16 Number of Cost of Number of Cost of Number of Cost of Claims Claims Claims Claims Claims Claims Medical Only 17 $31,265 10 $49,610 8 $17,259 Indemnity 4 $233,683 1 $42,808 4 $213,967 Total 21 $264,948 11 $92,418 12 $231,226 Risk Management Division Annual Report FY 2017-18 7 November 15, 2018 Regular Board Meeting Agenda Packet- Page 92 of 254 Page 10 of 46 The following tables detail these totals by functional group. Claims Frequency (number of claims filed by FY) MO IND MO IND MO IND FY 2015-16 ADM 1 0 1 0 0 0 CSO 13 1 4 0 7 3 ENG 2 0 1 0 1 0 POD 1 3 4 1 0 1 Total 17 4 10 1 8 4 Claims Severity (costs for all claims by FY) MO IND MO IND MO IND ADM $2,937 - - - CSO $24,158 $6,246 $5,719 - $12,079 $185,167 ENG $4,170 - $39,645 - $5,180 - POD - $227,437 $3,661 $42,808 - $28,800 Total $31,265 $233,683 $49,610 $42,808 $17,259 $213,967 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 (MO) 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 2017-18 8 November 15, 2018 Regular Board Meeting Agenda Packet- Page 93 of 254 Page 11 of 46 Medical Only Claims - Last 5 Years $70,000 40 38 $60,000 - 35 $50,000 30 25 $40,000 20 $30,000 15 $20,000 10 $10,000 5 $3,521 $- 0 ADM CSO ENG POD ENG includes HHWCF and Environmental Compliance . ADM CSO ENG POD 5 Yr • $1,174 $1,575 $6,567 $743 Collection System Operations (CSO) had the highest number of MO claims (38) over this period but also had the second lowest average cost per MO claim. Overall, CSO has more frequent, but generally less serious injuries than other groups. CSO is also the most active participant in Central San's Return to Work Program, which is discussed 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. This improves recovery time and further reduces the cost of MO claims. Engineering had fewer claims (9) than CSO but its total MO claims cost was similar, resulting in a much higher average cost per claim than CSO. As noted earlier, a small data set can have a significant effect on the metrics we use. One Engineering claim involves ongoing medical treatment far in excess of what would normally occur in the treatment of a MO claim. Thanks to participation in our Return To Work program the injured employee has not missed any work, thus keeping the claim in the MO column. This single event skews the total cost for Engineering higher than one would normally expect. Risk Management Division Annual Report FY 2017-18 9 November 15, 2018 Regular Board Meeting Agenda Packet- Page 94 of 254 Page 12 of 46 Indemnity (IND) Claims: The chart below shows the total number and cost of Indemnity 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. Indemnity Claims - Last 5 Years $700,000 8 $600,000 7 $500,000 6 5 $400,000 4 4 $300,000 3 $200,000 2 $100,000 1 $ $7,813 ADM CSO ENG POD • ADM CSO ENG POD 5 Yr • $7,813 $47,853 $26,660 $87,403 These results illustrate the limitations of a small data set when looking for trends. The single Administration (ADM) claim was relatively minor when compared to the overall population of IND claims. However, a single claim within Engineering pushed its five year average well above those of ADM. During this same time, CSO had four claims averaging over $47,000 each and POD had six IND claims at an average cost of over $85,000 each. When IND claims over the last five years are consolidated, the average cost per claim remains just above $64,000. In contrast, the consolidated average cost of a MO claim over the last five years is just over $2 000. Risk Management Division Annual Report FY 2017-18 10 November 15, 2018 Regular Board Meeting Agenda Packet- Page 95 of 254 Page 13 of 46 Cost Drivers Even with a small data set, it is clear that IND claims are significantly more expensive than MO claims, as shown in the following chart. Average Incurred Cost per Claim Last 5 Years Medical Only vs. Indemnity POD $101,971 $743 ENG $26,660 $6,567 As a • • , Central San's $47,85 •- • CSO 11,575 average of 3194% more ADM $7,813 than Medical Only claims. 1$1,761 This illustrates the differential costs between MO and IND claims. Since IND claims are so expensive, 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 3194% higher than MO claims costs. When evaluated using data over the last 10 years, that differential rises to 3951%, indicating that our collaborative efforts to control these more expensive claims has been somewhat 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. Risk Management Division Annual Report FY 2017-18 11 November 15, 2018 Regular Board Meeting Agenda Packet- Page 96 of 254 Page 14 of 46 Expert opinions vary on the scope of these soft costs but estimates range from three to five times the claims cost. Considering that indemnity claim costs for the last five years exceeded $837,000, this equates to $2.5 million to $4.1 million in soft costs incurred by Central San. 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 Injury Type Last 5 Years vs. Last 10 Years 10 Yr 5 Yr 0 5 10 15 20 25 30 Pain Other ■Hearing Loss Strain/Sprain ■Fracture ■Cut/Bruise Strains and sprains remain the most common type of IND claim. It is worth noting that the majority of these claims occurred more than five years ago. However, four of the 10 strain/sprain claims shown in the five year span occurred in FY 2017-18. Risk Management Division Annual Report FY 2017-18 12 November 15, 2018 Regular Board Meeting Agenda Packet- Page 97 of 254 Page 15 of 46 IND Claims By Cause of Injury Last 5 Years vs. Last 10 Years Other Transportation Pushing/Pulling Exposure Strike/Impact... Slip/Trip/Fall/Jump Repetitive Motion Lifting/Reaching 0 1 2 3 4 5 6 7 8 9 ■10Yr ■5Yr Repetetive Motion remains the most frequent cost of IND claims over the last 10 years but there has only been one such claim in the last five years. Lifting/Reaching and Slips/Trips/Falls/Jumps are now the most common causes of injury. IND Claims by Injured Body Part Last 5 Years vs. Last 10 Years 12 10 8 6 4 2 0 �a& 00�\\ �� otyo ■5Yr ■10Yr As with the preceding charts, data from the last five years demonstrates some improvement. While shoulder, back and knee injuries are still the most common IND claims, the frequency of knee and shoulder claims has diminished significantly in recent years. Of the six shoulder injuries in the last 10 years, only two occurred in the last five years and only one of the five knee injuries occurred in the last five years. Unfortunately, back injuries, especially lower back injuries, are on the rise. Four of the six back injuries occurring in the last five years occurred during FY 2017-18. Risk Management Division Annual Report FY 2017-18 13 November 15, 2018 Regular Board Meeting Agenda Packet- Page 98 of 254 Page 16 of 46 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 (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 2017-18, Central San provided TMD assignments to two of the four employees who would otherwise have been off work and received temporary disability payments. The other two employees were taken off work by their treating physicians until they could return to some form of modified duty. 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 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. Risk Management Division Annual Report FY 2017-18 14 November 15, 2018 Regular Board Meeting Agenda Packet- Page 99 of 254 Page 17 of 46 Workers' Comp ExMod - Last 10 Years 1.20 1.00 7 0.90 0.80 0.79 .73 74 .71 0.60 0.40 0.20 0.00 200$,09 2009.10 2010.11 2011,12 2012.13 2013.1 201 ,15 2015,16 2016,1 10- There are two primary reasons for the increasing ExMod. First, we settled a few severe claims which increases the amount paid within the timeframe used to calculate ExMods. Second, as the entire membership controls losses and reduces costs, high dollar losses take on a greater weight in the aggregate loss portfolio. As Central San's losses comprise a higher percentage of the combined pool losses, its ExMod will increase to offset that effect. Over time, as the the rolling three year loss data moves forward, higher cost claims will drop out of the data used to calculate the ExMod. At that time, staff would anticipate some reduction in the ExMod. 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 2017-18 15 November 15, 2018 Regular Board Meeting Agenda Packet- Page 100 of 254 Page 18 of 46 General Liability Claims Goal 3: Be a Fiscally Sound and Effective Water Sector Utility Claims Philosophy Central San's focus on customer service informs it's 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 for the last five years, followed by a table showing the average cost per Auto Liability claim for each of those years. There were no Auto Liability claims in FY 2017-18. Risk Management Division Annual Report FY 2017-18 16 November 15, 2018 Regular Board Meeting Agenda Packet- Page 101 of 254 Page 19 of 46 Auto Liability Claims $10,000 3 $9,000 $8'777 $8,000 $7,000 PAW 2 $6,000 $5,000 $4,000 $3,000 1 $2,000 $1,000 . $ 0 2013-14 2014-15 2015-16 2016-17 2017-18 Total Cost — Number FY 2013-14 FY 2014-15 FY 2015-16 FY 2016-17 FY 2017-18 Avg $ per $2,157 $1,546 $4,388 $4,192 - Claim 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. The chart below shows the total number and cost of plumbing reimbursement claims for the last five years, followed by a table showing the average cost per plumbing reimbursement claim for each of those years. Risk Management Division Annual Report FY 2017-18 17 November 15, 2018 Regular Board Meeting Agenda Packet- Page 102 of 254 Page 20 of 46 Plumbing Reimbursements $5,000 14 $4,000 12 10 $3,000 8 $2,000 6 4 $1,000 2 $- 0 2013-14 2014-15 2015-16 2016-17 2017-18 Total Cost Number 7FY013-14 FY 2014-15 FY 2015-16 FY 2016-17 FY 2017-18 Avg $ per $384 $330 $379 $449 $495 Claim 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. The following chart shows the total number and cost of overflow claims for the last five years, followed by a table showing the average cost per overflow claim for each year. Risk Management Division Annual Report FY 2017-18 18 November 15, 2018 Regular Board Meeting Agenda Packet- Page 103 of 254 Page 21 of 46 Sanitary Sewer Overflow Claims $160,000 $150,948 16 $140,000 14 $120,000 12 $100,000 $102,557 10 $80,000 8 $60,000 6 $40,000 4 $20,000 2 $- 0 2013-14 2014-15 2015-16 2016-17 2017-18 Total Cost Number FY 2013-14 FY 2014-15 FY 2015-16 FY 2016-17 FY 2017-18 $5,844 $9,450 $13,723 $13,777 $25,639 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, it's loss data presents a relevant benchmark for comparison. As of the last available data, CSRMA's average cost exceeded $17,000 per overflow claim. Central San has met this benchmark four of the last five years. Thanks to the partnership with CSO and the ongoing support of management and the Board, Risk Management staff frequently resolves sanitary sewer overflow claims at a 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. Risk Management Division Annual Report FY 2017-18 19 November 15, 2018 Regular Board Meeting Agenda Packet- Page 104 of 254 Page 22 of 46 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 for the last five years, followed by a table showing the average cost per claim for each year. Other General Liability Claims $1,200,000 14 $1,063,620 $1,000,000 12 $800,000 10 8 $600,000 6 $400,000 4 $200,000 ■ 2 $- 0 2013-14 2014-15 2015-16 2016-17 2017-18 Total Cost Number FY 2013-14 FY 2014-15 FY 2015-16 FY 2016-17 FY 2017-18 Avg $ per $18,3291 $88,635 $1,085 $10,535 $968 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 claims for FY 2014-15 would only be $5,748. FY 2017-18 is unusual for its high number of claims but minimal cost. Of the eight claims received in this category, four were tendered to contractors for resolution and two were denied. Only two claims were paid in FY 2017-18. Liability Claims Overall The following chart ties together each of the liability claims types. This shows the impact of each type of claim compared to other types and gives a consolidated view of Central San's overall liability losses. Risk Management Division Annual Report FY 2017-18 20 November 15, 2018 Regular Board Meeting Agenda Packet- Page 105 of 254 Page 23 of 46 Cost of Liability Claims - Last 10 Years $1,400,000 $1,200,000 $1,000,000 $800,000 $600,000 $400,000 $200,000 o� do titi titi ti3 ti� tih do ti� tiw ti°oma ti ti ti°yam ti°yam ti°1'1 ti°y� ti°yh ti°y° ti°y� ■AL ■GL ■PL ■SSO In the larger view, plumbing and auto liability claims comprise a very small portion of Central San's losses. Overflow claims have a larger impact but not as much as one might expect. The greatest expense arises from other liability claims, often including litigated matters. Risk Management Division Annual Report FY 2017-18 21 November 15, 2018 Regular Board Meeting Agenda Packet- Page 106 of 254 Page 24 of 46 Other Risks and Exposures Goal 3: Be a Fiscally Sound and Effective Water Sector Utility Goal 5: Maintain a Reliable Infrastructure Property Losses 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 was one small property loss in FY 2017-18. 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 with 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 when 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. Central San has not suffered any catastrophic losses to date. 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 pursues cost recovery from the at-fault party. When damage is caused by Central San staff, the SIF pays repair costs in excess of $1,000. All vehicle repairs are coordinated through Central San's Vehicle Shop. Risk Management Division Annual Report FY 2017-18 22 November 15, 2018 Regular Board Meeting Agenda Packet- Page 107 of 254 Page 25 of 46 The following chart shows the number and cost of Auto Physical Damage losses over the last five years. Auto Physical Damage Losses $12,000 $11,034 6 $10,000 5 $8,000 4 $6,000 3 $4,000 2 $2,000 1 $- 0 2013/14 2014/15 2015/16 2016/17 2017/18 � Total Cost Number Although there were an unusually high number of damaged vehicles in FY 2016-17, 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 CSO TV truck, one was a Pump Station pickup, and one was a Laboratory vehicle. 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. Other 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. No pollution claims have been filed in the last five years Risk Management Division Annual Report FY 2017-18 23 November 15, 2018 Regular Board Meeting Agenda Packet- Page 108 of 254 Page 26 of 46 Security 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: • Senior Management to create a Security Committee to oversee projects with District-wide impact, and to ensure coordination and consistency in policy, procedure and practice; • Capital Projects to begin implementation of the Security Master Plan; • Plant Operations Control Systems to develop Cybersecurity best practices; • Information Technology to support existing electronic security systems, and to plan for expected improvements. The Information Technology Division has implemented software and tools to identify and control unauthorized access to Central San's networks, and has developed an education and training program to increase employee awareness and reporting of potential threats. Risk Management staff is also working on longer term projects including updates to security procedures, security system upgrades, and facility hardening measures to protect employees and further restrict access to Central San facilities from unauthorized parties. Risk Management Division Annual Report FY 2017-18 24 November 15, 2018 Regular Board Meeting Agenda Packet- Page 109 of 254 Page 27 of 46 Emergency Management 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 that work together 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 following the Highlights section below. Highlights In FY 2017-18, Central San received reimbursements from both FEMA and CalOES for damages and expenses occurring during the winter storms of 2017. The most notable event was the collapse of Miner Road in Orinda, which damaged two sewer mains, resulting in many months of bypass pumping and coordination with the City of Orinda to make repairs. After all repairs were completed in June, 2017, staff continued to work with FEMA to prepare and submit three projects to the Public Assistance program. Central San's reimbursement request totaled $620,011 .92. By the end of FY 2017-18, all requested funds had been received. 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. 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). Risk Management Division Annual Report FY 2017-18 25 November 15, 2018 Regular Board Meeting Agenda Packet- Page 110 of 254 Page 28 of 46 Since then, Risk Management staff reviews the EOP at least annually and posts needed updates to the intranet. No changes were made during this fiscal year. Hard copies of the EOP are kept in the primary and backup Emergency Operations Centers (EOCs). Additional hard copies of the plan are stored in the emergency supplies cache. A major EOP update is planned for next fiscal year. Local Hazard Mitigation Plan: FEMA requires local governments to update their plans every five years as a prerequisite to seek grants under the Hazard Mitigation Grant Program and the Pre-Disaster Mitigation Program. Central San's first plan was adopted in 2011 , and accepted by FEMA in 2012. FEMA acceptance is valid for five years. After that, an updated plan must be submitted to maintain program compliance. In keeping with its commitment to coordinate emergency planning and responses with other agencies, Central San joined with 35 other agencies to prepare a multi- jurisdictional update to the 2012 Local Hazard Mitigation Plan. Staff served on the Steering Committee managing this process. The Board adopted Central San's portion of the updated plan on March 1 , 2018. The update was submitted to FEMA for review and was approved on April 19, 2018. Continuity of Operations Plan: Improvements to the Continuity of Operations Plan (COOP) were limited in FY 2017-18, primarily because staff time was reallocated to work on the Local Hazard Mitigation Plan and working with FEMA and CalOES toward the Public Assistance reimbursement. However, staff was able to start work on a new section of the COOP detailing essential vendors for services and supplies. Emergency Action Plan: The Emergency Action Plan (EAP) is required by CalOSHA 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 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. Introduction to Emergency Management 10/25/17 EOC Activation Exercise 10/26/17 CSTI 4-day Earthquake Class * 5/14-18/18 Disaster Service Worker Program Management 5/24/18 Risk Management Division Annual Report FY 2017-18 26 November 15, 2018 Regular Board Meeting Agenda Packet- Page 111 of 254 Page 29 of 46 Supplies and Equipment Primary and Backup EOC: The Multi-Purpose Room is Central San's 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. In FY 2017-18, 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, including replacement of any outdated or non-operational items. During these audits, staff also tested the analog phones, satellite television and the 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 FY 2014-15, and purchased its first batch of radios in FY 2016-17. The Radio Unit of the County's Department of Information Technology has programmed all the handheld and mobile radios and installed the mobile radios in selected Collections System vehicles. Central San also maintains Handheld Amateur (HAM) radios at both the Walnut Creek and Martinez campus. 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 2017-18 27 November 15, 2018 Regular Board Meeting Agenda Packet- Page 112 of 254 Page 30 of 46 Total Cost of Risk 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 TCOR for FY 2017-18 was $2,430,462, a decrease over $500,000 from the preceding year. The differential resulted from reduced personnel costs and lower claims costs. Personnel costs were lower in FY 2017-18 because of one retirement and one vacant position. This position was filled in FY 2018-19. The following chart shows Central San's TCOR for the last 10 years. The years with the highest TCOR are shown in orange while the year with the lowest TCOR is shown in green. TCOR Totals and Trend $4,500,000 $4,133,585 $4,176,262 $4,000,000 $3,500,000 $3,000,000 $2,500,000 $2,317,447 $2,430,462 $2,000,000 $1,500,000 $1,000,000 — $500,000 — $- p°> �� titi titi ti� ti� ti� ti(0 ti 00 ti Note: Prior year totals have been adjusted to 2018 dollars The FY 2010-11 and FY 2014-15 spikes in TCOR are the result of a few large claims occurring in those years. In spite of the two spikes, the TCOR trend is stable. Risk Management Division Annual Report FY 2017-18 28 November 15, 2018 Regular Board Meeting Agenda Packet- Page 113 of 254 Page 31 of 46 The costs that make up the TCOR generally fall into five categories: personnel, insurance, claims, risk management program costs and safety program costs. The following chart shows these categories for the last 10 years. TCOR Categories by Fiscal Year $4,500,000 $4,000,000 $3,500,000 $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 p°� ti� yti titi yb tiA yh ti� til Ib tioo, tioo� boyor y tioy� tioy� � h boyo yeti ,yo ■Personnel ■Insurance ■Claims ■RM Program Safety Expenses Note 1: Chart does not include productivity loss or other soft costs arising from losses. Note 2: TCOR segment totals have not been adjusted for inflation. Personnel costs were lower in FY 2017-18 as explained earlier. Additionally, claims costs were around $125,000 lower in FY 2017-18 than in FY 2016-17. Risk Management Division Annual Report FY 2017-18 29 November 15, 2018 Regular Board Meeting Agenda Packet- Page 114 of 254 Page 32 of 46 Metrics and Other Accomplishments Central San's Strategic Plan covering FY 2017-18 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 2017-18 performance for the metrics associated with these goals. Goal 3: Be a Fiscally Sound and Effective Water Sector Utility ,I Strategy: Evaluate and implement risk management practices to minimize loss. Metric Succcess Measure Year End Result Workers' Comp Experience Maintain ExMod at 1.0 or .71 ✓ Modifier (ExMod) lower Provide Temporary Return to Work Modified Duty to at least 100% ✓ 80% of employees injured on the job Reduce the Average Cost of Maintain cost at $25,000 or $25,639 x Overflow Claims lower Provide an Annual Risk Management Report to the Present Report Presented Oct 2017 ✓ Board Goal 5: Maintain a Reliable Infrastructure Strategy: Enhance Capability to Mitigate, Prepare, Respond and Recover from Emergencies P��- I Succcess Measure Year End Result Emergency Operations Center Conduct one exercise per Completed Oct 2017 ✓✓ Activation Exercise year by the third quarter Participate in multi- Plan Update has Complete 5 year update to the jurisdictional process with been approved by ✓ Local Hazard Mitigation Plan other agencies to facilitate FEMA completion. Evaluate and implement Develop a Comprehensive Plan completed June security improvements to meet Security Master Plan 2018 ✓ new or evolving threats Provide Annual Emergency Provided March, Management Report to the Present Report 2018 ✓ Board Risk Management Division Annual Report FY 2017-18 30 November 15, 2018 Regular Board Meeting Agenda Packet- Page 115 of 254 RISK MANAGEMENT DIVISION r � ANNUAL REPORT Shari Deutsch Risk Management Administrator 1 Board Meeting - T November 15, 2018 14" November 1 � r Board M - WORKERS " COMPF M C% " T'ON Medical Only Claims - Last 5 Years • CSO has the highest number of $70,000 — 38 — — 40 MO claims but the second lowest $60,000 35 $50,000 30 average cost per Medical Only ' $40,000 25 (MO) claim. i 20 $30,000 15 $20,000 10 • CSO remains the most active $10,000 $3,52 5 $_ 2 o participant in Return to Work ADM CSO ENG POD Program. • POD has the highest number Indemnity Claims - Last 5 Years of Indemnity (IND) claims but $100,000 8 the fewest opportunities to $600,000 7 7 provide temporary modified $500,000 6 5 duty to bring injured $400,000 4 4 employees back to work $300,000 3 sooner. $200,000 2 $100,000 1 1 $7,813 $_ . M 0 ADM CSO ENG POD Ndvern 15, 2018 Regular Board Meeting A - IND Claims by Injury Type IND Claims By Cause of Injury Last 5 Years vs. Last 10 Years Last 5 Years vs. Last 10 Years Other Transportation 10 Yr Pushing/Pulling Exposure Strike/Impact(Contact) 5 Yr Slip/Trip/Fall/Jump Repetitive Motion Lifting/Reaching 0 5 10 15 20 25 30 0 1 2 3 4 5 6 7 8 9 Pain Other ■Hearing Loss Strain/Sprain ■Fracture ' Cut/Bruise ■10 Yr 5 Yr IND Claims by Injured Body Part • Strains/Sprains are still the Last 5 Years vs. Last 10 Years most common type of I N D 12 claim 10 • 8 Lifting/Reaching and Slips 6 and Falls have replaced 4 2 repetitive motion as the ° , ' ' ' ' ' ' ' ' most common cause of IND Fay\\ off\\ claims Four of the six back injuries 05Yr ■10Yr in the last five years occurred in FY 2017-18. 2 ` Average Incurred Cost per Claim Last 5 Years Medical Only vs. Indemnity POD I$743 $101,971 ENG $26,660 -$6,567 As a group, CSO 0 $47,85 • ' • 11,575 average • ' more edical ADM $7,813 than MOnly claims. J$1,761 Chart shows the claims cost difference between MO and IND claims. 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. Target loss control efforts on type/cause of injuries that become Indemnity claims: Strain/Sprain Slips/Trips/Falls 77 TtL _.. ._ ` `November 15, 2018 Regular Board Meeting A - LIABILITY CLAIMS Auto Liability Claims Plumbing Reimbursements $10,000 $8,777 — 3 $5,000 15 $8,000 $4,000 $6,000 2 10 $3,000 $4,000 $2,000 1 fi 5 $2,000 0 . ■ $1,000 $- A 0 2013-14 2014-15 2015-16 2016-17 2017-18 2013-14 2014-15 2015-16 2016-17 2017-18 Total Cost Number Total Cost Number Other General Liability Claims $1,200,000 $1,063,620 14 $1,000,000 12 $800,000 / 10 8 $600,000 6 $400,000 4 $200,000 ■ 2 $- 0 2013-14 2014-15 2015-16 2016-17 2017-18 Total Cost Number 4 ` OVERFLOW CLAIMS Sanitary Sewer Overflow Claims $160,000 $150,948 16 $140,000 14 $120,000 12 $100,000 $102,557 10 $80,000 8 $60,000 6 $40,000 4 $20,000 2 $- 0 2013-14 2014-15 2015-16 2016-17 2017-18 Total Cost Number FY 2013-14 FY 2014-15 FY 2015-16 FY 2016-17 FY 2017-18 Avg $ per $5,844 $9,450 $13,723 $12,221 $25,639 Claim 5 ` LIABILITYCLAIMSTYPES Cost of Liability Claims - Last 10 Years $1,400,000 $1,200,000 $1,000,000 $800,000 $600,000 $400,000 $200,000 o� ti� titi ti� ti� ti� tih ti� ti� ti� oo� �oo� �otio otiti �oti� �oti� �oti� ti�tih oti� o��. ■AL ■GL ■PL ■SSO 6 =_ EMERGENCY MANAGEMENT Cal M A p Plff A r OFFICE t' ND 5� ' , F EMERGENCY SEFtVICES Received $620 ,012 in Disaster Recovery funds from Federal Emergency Management (FEMA) and the California Office of Emergency Services (CalOES). Updated Local Hazard Mitigation Plan adopted by Board 3/15/18 , then approved by FEMA on 4/19/18 . Annual Emergency Operations Center (EOC) exercise on 10/26/17 . A. "November 15, 2018 Regular Board Meeting A - EMERGENCY MANAGEMENT Emergency Operations Plan Local Hazard Mitigation Plan Staff serves on Local Hazard Mitigation Planning Steering Committee Jurisdictional Annex submitted Continuity of Operations Plan Vital Records 'N6vember 15 2018 Regular Board Meeting Age - ms - SECURITY Completed Security Vulnerability Assessment and developed Security Master Plan — now being implemented . Established the Security Committee to maintain communication and coordination among various capital and operational security improvement projects . 'N6vem6er 15 2018 Regular Board Meeting AgPnriq Pnrkct- Pana 1 9s�f Asa 9 '//�1 WHAT IS " TOTAL COST OF RiSK33 ? 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 on insurance coverage and brokers'commissions. Retained losses The next element is retained losses.The retained loss value is the amount of money that a firm spends "out of pocket"for losses incurred.These are costs that are below a company's deductible.An example is a small mishap such as dry-cleaning a client's suit due to spillage from an employee. Costs to protect employees/customers from injury The next applicable costs may not be as easy to track but are still important components captured in the TCoR calculation.These are the costs needed to protect your employees or customers from injuries. Examples are safety equipment,mats,warning signs,training,etc.These costs should be tracked as part of the TCoR for your business internally. Costs to engage firms for help with risk & insurance issues The next component is money spent with professional firms to help you handle insurance or other risk associated issues.These would include costs for an attorney to respond to a complaint or to review a contract's indemnification agreement.These are also part of the TCoR calculation and are considered external risk control costs. Productivity loss Other relevant cost is productivity loss due to injuries or losses.Having your employees spend their time either driving other employees to the doctor,investigating incidents,cleaning up spills,etc.are also costs that are risk related and are taking away from your bottom line. 10 -_ ` TCORCOMPONENTS TCOR Categories by Fiscal Year $4,500,000 $4,000,000 $3,500,000 $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 o� do titi titi ti� ti° tih ti(0 �oo� �oo�, Boyo ti�ti� ti�y� ti�y� ti�y� ti�y� ti�ti� oti�y ti ■Personnel ■Insurance ■Claims ■RM Program ■Safety Expenses Note 1: Chart does not include productivity loss or other soft costs arising from losses. Note 2: TCOR segment totals have not been adjusted for inflation. Reduced personnel costs in FY 2017-18 reflect one retirement and R one vacant position. The vacant position was filled in FY 2018-19. rygT t'L. . °November 15, 2018 Regular Board Meeting A - PUTTING TOGETHER IT ALL TCOR Totals and Trend $4,500,000 $4,133,585 $4,176,262 $4,000,000 $3,500,000 $3,000,000 $2,500,000 $2,430,462 $2,000,000 $1,500,000 $1,000,000 - $500,000 p� y0 yti yL �' yo Y� y(0 y1 g tippy tippy, O tips, tip�,L � � I ti Prior year TCOR has been adjusted to 2018 dollars. 12 "November 15, 2018 Regular Board Meeting A - -_- y_ r __