HomeMy WebLinkAbout05.b. Receive the FY 2021-22 Risk Management Annual ReportPage 1 of 45
Item 5.b.
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November 21, 2022
TO: FINANCE COMMITTEE
FROM: SHARI DEUTSCH, RISK MANAGEMENT ADMINSTRATOR
LACI KOLC, RISK MANAGEMENT SPECIALIST
REVIEWED BY: PHIL LEIBER, DIRECTOR OF FINANCE AND ADMINISTRATION
ROGER S. BAILEY, GENERAL MANAGER
SUBJECT: RECEIVE THE FY2021-22 RISK MANAGEMENT ANNUAL REPORT
Staff will review the attached FY 2021-22 Risk Management Annual Report at the meeting.
Strategic Plan Tie -In
GOAL ONE: Customer and Community
Strategy 1 - Deliver high -quality customer service
GOAL FOUR: Governance and Fiscal Responsibility
Strategy 3 - Maintain financial stability and sustainability
GOAL FIVE: Safety and Security
Strategy 1 - Reduce and eliminate risks of injury or illness, Strategy 2 - Protect personnel and assets from threats and
emergencies
GOAL SEVEN: Innovation and Agility
Strategy 3 - Be adaptable, resilient, and responsive
ATTACHMENTS:
1. Risk Management Annual Report FY 2021-22
2. Presentation
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Page 2 of 45
Attachment 1
�CENTRAL SAN
Risk Management Division
Annual Report
Fiscal Year 2021m22
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INTRODUCTION
We are pleased to present the Risk Management Division's Annual Report for Fiscal
Year (FY) 2021-22. Risk Management's role is to protect Central San from unexpected
loss or damage, and to minimize the impact of adverse events that occur. This requires
Risk Management staff to be proactive and to maintain a constant state of readiness.
The following report details some of the ways we've met that challenge.
Risk Management also plays a role in helping Central San meet its strategic goals.
Each section of this report references the FY 2020-22 Strategic Plan goals that it
supports.
In addition to the items discussed in this report, Risk Management does several things
to protect Central San that aren't as apparent. Examples of these services include pre -
bid risk assessments of capital projects, insurance and indemnity reviews for both
capital and operational contracts, coordination with excess insurers for both
underwriting and claims management, evaluation of insurance and other risk financing
measures to manage the risks of new programs and providing litigation support to
District Counsel as needed.
Our ability to manage risk at Central San has, and will always, depend on our ongoing
partnership with management and staff. These partnerships help us to 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.
Thank you all for your continued support and commitment to these efforts.
Shari Deutsch
Risk Management Administrator
Laci Kolc
Risk Management Specialist
Risk Management Division Annual Report FY 2021-22
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Table of Contents
ExecutiveSummary------------------------------------------------------------------------------------------------------------ 3
Insurance and Risk Financing--------------------------------------------------------------------------------------------5
Workers' Compensation Claims--------------------------------------------------------------------------------------- 7
LiabilityClaims---------------------------------------------------------------------------------------------------------------------16
Other Risks and Exposures-------------------------------------------------------------------------------------------- 22
Enterprise Risk Management----------------------------------------------------------------------------------------- 25
Security-------------------------------------------------------------------------------------------------------------------------------- 27
EmergencyManagement--------------------------------------------------------------------------------------------------28
Other Notable Accomplishments----------------------------------------------------------------------------------- 32
Total Cost of Risk 33
StrategicPlan Metrics--------------------------------------------------------------------------------------------------------35
A Look Ahead 36
Risk Management Division Annual Report FY 2021-22 2
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Executive Summary
Workers' Compensation: In FY 2021-22, Central San incurred six medical -only claims,
and seven indemnity claims. Other significant results include the following:
• Adverse loss development for prior year injuries resulted in the final year of an
Experience Modifier (ExMod) increase. The ExMod will drop below 1.00 next
fiscal year as prior adverse loss experience will fall out of the data set used to
calculate this factor.
Four Workers' Compensation claims arising from COVID-19.
Overflow Claims: Central San has seen an overall reduction in overflow claims from a
high of 27 in FY 2001-02 to generally less than ten claims per year since FY 2010-11.
In FY 2021-22 there were nine overflow claims, four more than in the preceding year.
Most of these were small matters which were closed with minimal property damage. As
a result, the FY 2021-22 average cost per overflow claim remains well below our
benchmark of $25,000.
Other Liability Claims: Claims in this category increased in both frequency and severity,
raising the average cost per claim from $14,583 in FY 2020-21 to $17,265 in FY 2021-
22. This is discussed in more detail later in this report.
Property Losses: During FY 2021-22 Central San spent $32,104 from the self-
insurance fund to clean up unauthorized homeless encampments on District property.
The following table summarizes claims costs for FY 2021-22 as compared to the
preceding year.
Risk Management Division Annual Report FY 2021-22
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Claim • - Cost FY 2020-21.2021-22
Liability — Auto $9,856 $670
Liability - Overflows
$40,631
$127,334
Liability— Plumbing
$1,532
$419
Liability — Other
$166,724 *
$182,420
Property
$18,995
$32,104
Auto Physical Damage
$9,228
$6,818
* Includes reserves for open claims
Enterprise Risk Management (ERM): ERM is a systematic and organization -wide
process to identify, evaluate, mitigate, and monitor strategic risks. The ERM team
meets twice per year to review, update, and prioritize items on Central San's strategic
risk register, and then identifies potential mitigations to reduce or control those risks.
Results of these team meetings are presented to the Board shortly thereafter. The top
ten strategic risks as of June 30, 2022, are shown on page 25.
Security: Staff continued to work toward implementation of the Security Master Plan
and, with the assistance of the Security Committee, made additional improvements to
security systems, procedures, and practices.
Emergency Management: COVID-19 again prevented Central San from conducting on -
site exercises EOC activation exercises this year. Staff continued to monitor and
update Central San's claims for reimbursement of eligible COVID-19 expenses under
FEMA's Public Assistance program.
Other Notable Accomplishments: This year staff completed implementation of the EBIX
Insurance Compliance Service and developed a homeless camp response procedure,
both of which are discussed in more detail on page 32.
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 EHS program, as well as
Risk Management program administration, claims, and insurance premiums. This total
is reduced by any revenue accrued or funds recovered by the Self -Insurance Fund.
The TCOR for FY 2021-22 was $3,612,488, an increase of $145,695 (4.2%) from the
previous year. This increase was the result of higher insurance premiums. However,
the overall TCOR trend remains generally flat, as shown on page 33.
Risk Management Division Annual Report FY 2021-22
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Insurance and Risk Financing
GOAL 3: FISCAL RESPONSIBILITY
STRATEGY 1 — MAINTAIN FINANCIAL STABILITYAND SUSTAINABILITY
Liability Insurance Coverage
Central San purchases 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.
Despite the mitigating effects of pooled risk, Central San's Workers' Compensation
premiums have increased by 26% over the last two years, in part because of legislative
changes arising from the COVID-19 pandemic. This is discussed in more detail on page
11. Pooled and Excess Insurance Premium Cost — $977,536
Excess General Liability: This policy covers claims costs exceeding Central San's
$500,000 retention up to $15 million. Coverage includes defense and indemnification
for inverse condemnation. Insurance Premium Cost - $626,128.
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 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 - $74,856.
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 exceed this amount. Insurance Premium Cost - $19,338.
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 - $4,852.
Property Insurance Coverage
Central San purchases property insurance and crime insurance.
Risk Management Division Annual Report FY 2021-22
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Property Insurance: Central San is self -insured for damage to its property and facilities
up to $250,000 per occurrence. Insurance coverage for losses above 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.
This program also includes Identity Theft coverage for all Central San employees.
Insurance Premium Cost - $324,978.
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 - $2,061.
All Central San insurance policies renew annually on July 1st
Self -Insurance Fund
Central San has at least partially 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 use loss data through June 30, 2022.
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.
The Board also wanted to reserve funds for catastrophic losses or emergency response
costs 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. To meet these goals, the balance of the SIF has been consolidated
into a single sub -fund with a minimum $7.5 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.
Risk Management Division Annual Report FY 2021-22
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Workers' Compensation Claims
GOAL 3: FISCAL RESPONSIBILITY
STRATEGY 1 — MAINTAIN FINANCIAL STABILITYAND SUSTAINABILITY
Claim Types
Workers' Compensation claims are classified as either Medical Only (MO) or Indemnity
(IND) claims.
MO claims are those where employees only need medical treatment to cure or relieve
their injuries. Injured employees do not lose any time from work and fully recover.
IND claims are those where injured employees receive ongoing medical treatment and:
• are taken off work by their treating physician
• are given permanent physical restrictions and/or
• suffer some permanent disability or physical limitation because of their injury
Summary of Recent Claims
The following table shows the distribution of Workers' Compensation claims for
FY 2021-22, and the two prior years. The Claim Count column indicates the number of
claims occurring during the year. The Claim Costs column shows the total cost of those
claims to date.
FY 2019-20
FY 2020-21
Claim
Count
Claim
Costs
Claim
Count
Claim
Costs
Claim
Count
Claim
Costs
Medical Only
7
$16,234
5
$1,994
6
$10,134
Indemnity
3
$277,833
2
$24,033
7
$52,864
Total
10
$294,067
7
$26,027
13
$62,999
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The following tables detail these totals by functional group.
Claims Frequency (number of claims filed per FY)
MO
IND
MO
IND
MO
IND
FY
2019-20
FY 2020-21
ADM
-
-
-
-
-
-
CSO
1
1
3
-
5
3
ENG
1
0
-
-
-
-
POD
5
2
2
2
1
4
Total
7
3
5
2
6
7
Claims Severity (incurred costs for all claims per FY)
I
MO
MO
ND
omO
ADM
-
-
-
CSO
$4,189
$820
$1,543
-
$9,627
$32,321
ENG
$1,162
-
-
-
-
-
POD
$10,884
$277,013
$451
$24,033
$507
$20,543
Total
$16,234
$277,833
$1,994
$24,033
$10,134
$52,864
Trends and Analysis
Central San has very few Workers' Compensation claims in any single year making it
difficult to identify loss trends with a small data set. As a result, the following analysis
incorporates 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.
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$25,000
$20,000
$15,000
$10,000
$5,000
Workers' Compensation:
Medical Only Claims - Last 5 Years
3
ADM GO ENG POD
ENG includes HHWCF and Environmental Compliance
ADM CSO ENG POD
$1,133 $1,054 $1,334
25
20
15
10
5
0
The Collection System Operations group (CSO) had the highest number of MO claims
(20) during the five-year period. However, the average cost per MO claim is similar
across all groups.
Indemnity (IND) Claims: The following chart 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 payments 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 2021-22 9
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Workers' Compensation:
Indemnity Claims - Last 5 Years
$700,000 — 12
11
$600,000
$500,000
$400,000
$300,000
$200,000
$100,000
ADM CSO ENG POD
•
ADM
CSO
ENG
POD
$51,027
$41,409
$87,922
$52,618
10
The limitations of a small data set are evident in the Engineering (ENG) group as a
single large claim skews their 5-year average cost of IND claims when compared to
other groups.
When all IND claims over the last five years are consolidated, the average cost per
claim remains just under $49,954. In contrast, the consolidated average cost of a MO
claim over the last five years is just over $1,182.
Cost Drivers
IND claims are more expensive as they usually arise from more severe injuries and
often include time away from work. Whenever someone is off work with an injury,
Central San incurs additional `soft' costs that cannot be captured by claims data. These
include lost productivity, overtime for staff needed to fill in while an injured employee is
off work, paid release time 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 IND claim costs for the last five years
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exceeded $1 million, this equates to $3 million to $5 million in soft costs incurred by
Central San.
The following chart illustrates the disparity in cost between MO claims (blue columns)
and IND claims (red columns) across functional groups for the last five years.
Total Incurred Claims Cost
Last 5 Years - Medical Only vs. Indemnity
$600,000 _
$500,000 $578,801
$400,000
$300,000 $331,275
--------------------
$200,000
$100,000 $22,650
ADM ---
CSO
ENG
POD
Since the high cost of IND claims is the primary cost driver in Workers' Compensation,
Environmental Health and Safety (EHS) staff work with employees, supervisors, and
managers to identify the root causes of injuries to reduce the frequency and severity of
future incidents. These loss control activities are addressed more fully in the EHS
Division's Annual Report provided after the end of each calendar year.
COVID-19
California State Senate Bill 1159, passed in Fall 2020, made workplace transmission of
COVID-19 a presumptive Workers' Compensation injury. The legislation amended the
Labor Code requiring staff to report all employees who test positive for COVID-19 to our
Workers' Compensation Claims Administrator. The Claims Administrator must then
monitor such reports to determine whether the location and timing of infections
constitute an outbreak as defined by the Department of Industrial Relations, Division of
Workers' Compensation. SB 1159 also required staff to provide a Workers'
Risk Management Division Annual Report FY 2021-22 11
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Compensation claim form to anyone who tested positive and had been on District
property within the preceding 14 days.
If someone believed they contracted COVID-19 at the workplace they could file a claim
and, if their infection occurred during a confirmed outbreak, then their medical expenses
(including hospitalization) and wage loss would be paid or reimbursed by Workers'
Compensation. In FY 2021-22 Central San experienced several outbreaks which
generated four claims.
No medical expenses were incurred from these claims, but Workers' Compensation
paid wage loss benefits for three temporary employees (for whom Supplemental Sick
Leave benefits were not available) and one regular employee (for whom Supplemental
Sick Leave benefits had been eroded through multiple quarantines). These four claims
are included in the following charts.
Behind the Dollars
These charts show all Workers' Compensation claims by type of injury and cause of
injury for the last five years. The four claims arising from COVID-19 are shown as the
blue lines in 2021-22
Workers' Comp Claims by Type of Injury:
Last 5 Years
2021-22 ■ Strain/Sprain
■ Illness
■ Cut/Bruise
2020-21 Bite/Sting
2019-20
2018-19
2017-18
10
Overall, strains and sprains remain the most common type of injury and
often result in ongoing medical treatment and lost time.
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Workers' Comp Claims by Cause of Injury:
Last 5 Years
2021-22
2020-21
■ Slip/Trip/Fall/Jump
2019-20 ■ Lifting/Reaching (OE)
■ Infectious Agent
- Contact w/Obj/Eq
2018-19
2017-18
The cause labeled Contact w/Obi/Eg is a cumulative category encompassing injuries
arising from bumping into, stepping on, or being hit by falling objects or equipment.
Lost Time and Return to Work
In 2007, Risk Management implemented a Return -to -Work Program to facilitate
employees' recovery from work -related injuries and to reduce the number and cost of
IND claims. The program incorporates use of the interactive process which is required
by the Fair Employment and Housing Act (FEHA) and the Americans with Disabilities
Act Amendments Act (ADAAA).
Risk Management and EHS staff work to identify additional TMD opportunities across
the organization. When a TMD assignment is not available within an injured employee's
work group, staff asks other groups if they have small projects or other short-term needs
that the recovering employee can perform within their physical restrictions.
In many cases, Central San's ability to provide TMD assignments will prevent an injured
employee from losing time at work. This single change of circumstance may stop a MO
claim from becoming a more expensive IND claim. As a result, our Return -to -Work
Program is an essential element in both employees' recovery and cost control.
It is not easy to compare Return -to -Work Program metrics from year to year as each
potential TMD assignment depends on the nature of each injured employee's regular
duties and Central San's ability to offer TMD assignments within their physical
restrictions.
Risk Management Division Annual Report FY 2021-22 13
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During FY 2021-22 COVID-19 infection rates in either Contra Costa County or among
Central San employees increased rapidly on more than one occasion. Out of an
abundance of caution, staff did not offer on -site TMD assignments to injured employees
during these surges. However, the March 2020 rapid conversion to a partially remote
workforce provided new TMD opportunities, allowing some injured employees to
complete training or perform other tasks within their work restrictions remotely.
Improving Outcomes
Central San continued to offer two tools implemented in FY 2019-20 to improve
outcomes for injured employees.
On -Call Nurse: Central San implemented a Nurse First Call Program which allows a
nurse to evaluate non -emergency injuries over the phone before medical treatment can
be provided. Employees now get direction from a medical professional regarding their
immediate and ongoing treatment needs. This service also routes detailed injury
information to the clinic to inform subsequent treatment.
Medical Provider Network (MPN): Central San joined CSRMA's MPN to provide injured
employees access to many medical specialists. After seeing a doctor at a designated
occupational injury clinic, an injured employee may follow up with a doctor in the
network rather than wait for an approved referral to a specialist. Medical treatment is
subject to review as required by law, but injured employees may receive follow-up care
faster within the MPN.
Over time, these programs may reduce overall claims costs but for now we are
confident that speedy medical advice, faster treatment and a wider selection of
providers will improve outcomes for injured employees.
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 preceding three years to the
entire pool's combined loss data for that same period. Members' ExMods are then
adjusted to align a portion of the members' premium with their relative loss experience.
Because the pool calculates a member's 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.
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1.40
1.20
1.00
0.80
0.60
0.40
0.20
0.00
Workers' Comp ExMod - Last 10 Years
1.19
1.06 1.10 fJ
'13 .1N 15 .16 .1� '15 19 .2� 21 1-
2012, 2�13 201� 2�1$ 2�19 2�20 2�21
Open Workers' Compensation claims from FY 2018-19 and FY 2019-20 have
developed more significantly than anticipated, which increased Central San's loss ratio
compared to other members of the pool. This has driven the increasing ExMods shown
above.
It is important to note that while Central San's ExMod has increased, it has not been the
primary driver of increased Workers' Compensation costs. The two largest factors have
been increased insurance costs and increases in payroll. Also, the relative effect of the
ExMod will be reduced in FY 2022-23 as the earlier claims fall out of the data set used
to calculate this factor.
Overall Performance
Despite an increasing ExMod and increasing insurance premiums, staff continues to
embrace Central San's proactive approach to safety. Risk Management staff remains
focused on active case management, and other staff, supervisors and managers
continue to participate in our Return -to -Work Program, the Nurse First Call and the
Medical Provider Network.
Risk Management Division Annual Report FY 2021-22
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Liability Claims
GOAL 3: FISCAL RESPONSIBILITY
STRATEGY 1 — MAINTAIN FINANCIAL STABILITYAND SUSTAINABILITY
Claims Philosophy
Central San's focus on customer service informs its 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 generally satisfied claimants and in reduced
cost.
Liability Claim Types
We categorize self -insured liability claims into four types: Auto Liability, Plumbing
Reimbursements, Sanitary Sewer Overflows, and Other 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. It does not include staff time to adjust and settle claims.
Auto Liability Claims
Auto Liability claims are those filed by third parties for damages they believe Central
San personnel caused while operating its vehicles. This includes claims for injuries to
persons or damage to others' property.
These claims do 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
and discussed under the Auto Physical Damage section of this report.
The chart below shows the total number and cost of Auto Liability claims for the last five
years. There was one Auto Liability claim in FY 2021-22.
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Auto Liability Claims
$12,000 2.5
$10,000 2
$8,000
1.5
$6,000
1
$4,000
$2,000 0.5
$- 0
2017-18 2018-19 2019-20 2020-21 2021-22
Total Cost Number
FY 2017-18
FY 2018-19
FY 2019-20
FY 2020-21
FY 2021-22
Avg $ per -
Claim I
$3,735
$500
$4,928
$670
Plumbing Reimbursement Claims
Plumbing reimbursements are small claims usually made by homeowners after they
have called a plumber for service, only to learn that the problem was in Central San's
main sewer line. CSO field staff respond to these situations and often provide the
homeowner with a claim form while they are on site. 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 are often included as part of a larger
claim. 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.
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Plumbing Reimbursements
$4,000 6
$3,500
5
$3,000
$2,500 4
$2,000 3
$1,500
2
$1,000
$500 1
$ • 0
2017-18 2018-19 2019-20 2020-21 2021-22
Total Cost Number
FY 2017-18
FY 2018-19
FY 2019-20
FY 2020-21
FY 2021-22
$533
$873
$224
$511
$210
Sanitary Sewer Overflow Claims
Sanitary Sewer Overflow (SSO) claims are those filed by customers whose property has
been damaged by a sewer overflow. CSO staff respond to the overflow and contact
Risk Management when they become aware of an overflow that causes property
damage. This allows Risk Management staff to:
• respond immediately to begin coordination of emergency clean up and
remediation as needed
• provide for 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 our customers.
The following chart shows the total number and cost of SSO claims for the last five
years, followed by a table showing the average cost per SSO claim for each year.
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SSO Claims
$200,000
10
$180,000
- 9
$160,000
8
$140,000
7
$120,000
00�5
6
$100,000
$80,000
1
4
$60,000
3
$40,000
$20,000
-
Iril ,
2
1
$-
0
2017-18 2018-19 2019-20 2020-21
2021-22
Total Cost Number
0 M- FY 2017-18
FY 2018-19
FY 2019-20
FY 2020-21
FY 2021-22
Avg $ per $25,639
Claim .
$10,332
$25,757
$8,126
$14,148
Staff benchmarks SSO claims costs against the average cost per SSO claim incurred
by CSRMA's Primary Insurance 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 per overflow claim is about $20,000. Central
San has outperformed this benchmark three of the last five years.
Thanks to the partnership with CSO and the ongoing support of management and the
Board, it is not uncommon for staff to resolve SSO claims at a lower cost than that of
Central San's peers. Larger overflow claims do occur, although infrequently, but any
overflow claim can develop into a significant loss, even when addressed in a timely,
thoughtful, and professional manner.
Other Liability Claims
This category includes claims that don't readily fit in the preceding categories.
Examples include damage to customers' property caused by sewer cleaning activities,
damages alleged to arise from field work, damage to other utilities' infrastructure from
maintenance or construction activities and other claims where the affected party
believes Central San caused their loss. As of FY 2021-22 we assign this category to
claims alleging SSOs that could not be substantiated in the claim investigation.
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There is little similarity among the claims in this group but does incorporate litigated or
complex claims that take longer to settle and may incur reserves and legal expenses.
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.
Because these claims defy any ready classification, claims within this group fluctuate in
frequency and severity over time. A claim filed today might settle for $500 while one
filed tomorrow could exceed the self -insured retention. This makes annual comparisons
difficult.
The chart below shows the total number and cost of these Other Liability claims for the
last five years, followed by a table showing the average cost per claim for each year.
Other Liability Claims
$600,000 $537,105 9
8
$500,000
7
$400,000 6
5
$300,000
4
$200,000 $182,420 3
$100,000 2
1
$_ 0
2017-18 2018-19 2019-20 2020-21 2021-22
Total Cost Number
FY 2017-18
FY 2018-19
FY 2019-20
FY 2020-21
FY 2021-22
Avg $ per $968
Claim I
$67,138
$6,663
$33,345
$30,403
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Liability Claims Overall
The following chart combines the four liability claim types and compares costs by fiscal
year and type of claim over the last five years.
Cost of Liability Claims by Type
2021-22
2020-21 9"ME I
MEME
2019-20
2018-19
2017-18
$- $100,000 $200,000 $300,000 $400,000 $500,000 $600,000
■SSO ■PL ■OL ■AL
From this perspective, plumbing reimbursements and auto liability claims comprise a
very small portion of Central San's liability claim costs. SSO claims have a more
noticeable impact but have not changed significantly in either frequency or total cost in
the last few years. As indicated earlier, other liability claims, shown above as `OU,
fluctuate more widely in both frequency and severity from year to year.
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Other Risks and Exposures
GOAL 3: FISCAL RESPONSIBILITY
STRATEGY 1 — MAINTAIN FINANCIAL STABILITYAND SUSTAINABILITY
Property Losses
Central San is self -insured for damage to its property and facilities up to $250,000 per
occurrence. Insurance coverage for losses costing more than $250,000 per occurrence
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 two property
losses in FY 2021-22 totaling $32,164.
Self -Insured Property Losses
$35,000 $32,104 6
$30,000 5
$25,000
4
$20,000
3
$15,000
$10,000 — 2
$5,000 1
$- — — 0
2017-18 2018-19 2019-20 2020-21 2021-22
Total Cost Number
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 earthquake insurance pricing, and the results of FEMA's 2017 update to HAZUS, its
hazard model using multiple earthquake and flood scenarios. After some discussion,
the Committee decided against purchasing flood or earthquake insurance at that time.
Risk Management Division Annual Report FY 2021-22 22
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Staff will continue to monitor hazard models and the insurance market and report back
to the Committee when more favorable options emerge.
As a result, Central San is essentially self -insured for flood and earthquake damage.
Any losses arising from these hazards would be paid from the catastrophic loss fund
described in more detail on page 6. Central San has not suffered any flood or
earthquake losses to date.
Auto Physical Damage
Central San is entirely self -insured for Auto Physical Damage. Damage to other parties'
vehicles is insured by the Excess Liability policy, but the cost to repair or replace
Central San vehicles is not. If a Central San 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.
The following chart shows the number and cost of Auto Physical Damage losses for the
last five years.
Retained Auto Physical Damage Losses
$14,000 4.5
$12,000 4
3.5
$10,000
3
$8,000 2.5
$6,000 2
$4,000 1.5
1
$2,000
0.5
$- 0
2017-18 2018-19 2019-20 2020-21 2021-22
Total Cost Number
Two vehicles were damaged during FY 2021-22, for a total retained loss of $6,818.
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
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claims have been filed since the Household Hazardous Waste Collection Facility
opened in 1997.
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. As with flood and earthquake
damage, liabilities or claims costs arising from an alleged pollution condition would be
paid from the SIF's Catastrophic Loss Fund. No pollution claims have been filed since
the fund was created.
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Enterprise Risk Management
GOAL 7: AGILITY AND ADAPTABILITY
STRATEGY 2 — PLAN AHEAD FOR SCENARIOS WITH DIRECT ADVERSE IMPACTS
Introduced in 2004 by the Committee of Sponsoring Organizations Treadway
Commissions (COSO), Enterprise Risk Management (ERM) is a process used to
identify, assess, and respond to strategic risks that may affect an organization's ability
to meet its goals and objectives. Utilities and very large public agencies began
implementing ERM over twenty years ago.
Since then, smaller public entities have gradually implemented some form of ERM with
enough success that ERM has become a best practice in public sector risk
management.
ERM requires that agencies continuously identify their strategic risks, rank and prioritize
those risks for oversight, mitigation or elimination, and periodically report progress to
key stakeholders.
Central San's ERM team includes the Executive Team, Human Resources and
Organizational Development Manager, Risk Management Administrator, and Internal
Auditor. This group meets at least twice per year to review risk rankings, to review
mitigations and risk reduction priorities, and to identify any new strategic risks or
opportunities that may affect Central San's ability to meet its objectives.
The team scores each risk from one to ten points each on four factors: frequency,
severity, speed of onset and remaining mitigation work still to be performed. The
updated combined score of these factors is shown below.
Top Ten Strategic Risks - Summer 2022
40
30
20
10
0
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�co et�'e J°x��
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al°O�ya t`�a�
eta\ �e Combined
Risk Score:
30-40
❑ 20-29
❑ 10-19
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The four risks shown in red scored 30 or more total points of a possible 40 points.
These represent the most significant risks to Central San's normal operations.
The other six risks are significant but scored lower on one or more of the factors, thus
resulting a potentially smaller impact than the others should any occur. Although the
relative position of the top strategic risks has fluctuated over time, the items comprising
this list have remained constant since 2019. As a result, management considers all
these strategic risks in both the strategic planning and budgeting process.
Staff presents the results of these updates to the Board twice per year.
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Security
GOAL 5: INFRASTRUCTURE RELIABILITY
STRATEGY 3 — Protect Personnel and Assets from Threats and Emergencies
Risk Management is responsible for the physical security of Central San's facilities.
Day-to-day security operations includes oversight of, and coordination with, the security
guards, issuance of badges and keys to staff and the maintenance and support of the
electronic security systems including security cameras, card readers, panic buttons,
burglar alarms and related software.
Risk Management staff partners with other work groups to accomplish a variety of tasks
and projects to secure Central San property and protect its employees and the public
from security breaches.
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 actual
or potential cyber security threats.
Risk Management staff is also working on longer term projects including updates to
information security protocols, electronic security systems, and facility hardening
measures to protect employees and further restrict access to Central San facilities from
unauthorized parties.
Risk Management Division Annual Report FY 2021-22 27
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Emergency Management
GOAL 5: INFRASTRUCTURE RELIABILITY
STRATEGY 3 — Protect 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 later in this section.
FEMA Reimbursement for COVID-19 Expenses
As mentioned earlier in this report Risk Management staff have assumed new
responsibilities since the pandemic began. In addition to compliance tasks associated
with the new Workers' Compensation rules, staff also initiated Central San's application
for reimbursement under FEMA's Public Assistance (PA) Program.
On March 2020 the President declared the COVID-19 pandemic to be of "sufficient
severity and magnitude to warrant a major declaration" pursuant to the Stafford Act (42
U.S.C. 5121-5207). Declaration number DR-4482-CA enabled local governments in
California to seek reimbursement for certain pandemic -related expenses under the PA
Program.
Shortly after his inauguration in January 2021 President Biden authorized a retroactive
increase to the federal reimbursement rate under the PA program from 75% to 100% of
eligible expenses. This authorization has been extended for all eligible expenses
incurred through June 30, 2022. Central San has two pending applications for
reimbursement of such expenses which must be finalized and submitted by December
31, 2022.
Emergency Management Program Elements
1) Plan Development and Maintenance
Risk Management is responsible for developing, maintaining, and continuously
improving 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
staff produced and the Board adopted a major EOP update in 2010 to reflect changes in
Risk Management Division Annual Report FY 2021-22 28
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Page 31 of 45
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. 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 emergency supplies caches.
Local Hazard Mitigation Plan: Before a local government may apply for hazard
mitigation grants, it must prepare and maintain a FEMA-approved Local Hazard
Mitigation Plan. FEMA approval expires in five years. Thereafter, a local government
must follow FEMA's detailed procedures to update the plan and submit it for FEMA's
review, comment, and hopeful approval to maintain compliance with this grant
requirement.
The FEMA-mandated update procedures are quite burdensome for small agencies but
can be easily scaled to include multiple participants. To take advantage of this situation
Contra Costa County sponsors a multi -jurisdictional plan update project for any
interested local governments within its boundaries.
Central San has participated in these combined plan update projects since 2011. The
current plan will expire in 2022 and Central San has already filed a Notice of Intent to
Participate in the County's 2023-2028 plan update.
Continuity of Operations Plan: The Continuity of Operations Plan (COOP) was
activated when the COVID-19 pandemic reached Contra Costa County. During
February and March 2020 staff updated and then modified the Pandemic Response
segment of the plan to keep up with the changing information and direction received
from County and State public health professionals. Since then, staff has made minor
adjustments to the plan as public health rules changed the way we work, and
technology expanded the universe of alternative workspaces.
This Pandemic Response segment of the COOP should not be confused with the
pandemic Exposure Prevention Plan, which was prepared by, and is expertly
maintained by, our EHS staff. This critical document governs current workplace
operations under pandemic conditions. The Exposure Prevention Plan has been
incorporated into the Pandemic Response section of the COOP as a deliverable within
the overall response protocol.
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 EHS
staff.
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2) Training and Exercises
During the year, Risk Management usually offers training classes and conducts
exercises for emergency response staff. However, most exercises require on -site
participants in greater concentrations than have been allowed under Central San's
Pandemic Exposure Prevention Plan. Instead, staff has recommended online training
for interested employees from FEMA's Online Independent Study Program.
On -site activation exercises will resume in FY 2022-23, but online training tools help
Central San to maintain SEMS compliance.
3) 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 supplies and equipment to enable
immediate set up and operation of the EOC. Risk Management staff conducts inventory
audits of each location to ensure that items are available on site, secured as needed
and maintained in an operable condition, including replacement of any expired or non-
functional items. During these audits, staff also tests the analog phones, satellite
television service and the satellite internet service to ensure continued operability.
Communications: Contra Costa and Alameda Counties are partners in the East Bay
Regional Communications System Authority (EBRCSA), a Joint Powers Authority (JPA)
that developed and maintains an interoperable radio communications infrastructure
using the P25 standard. 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 radios.
Risk Management staff configured and now manages the Everbridge Mass Notification
Software. This allows authorized users to send messages to all employees or selected
groups through multiple communications mediums. The system is currently configured
to contact personnel via desk phone, email, cell phone and then by text message, using
the next device in the chain until each person responds. If someone does not respond
through an entire cycle, Everbridge will wait five minutes then restart contact attempts
until the person responds or the authorized user cancels the notification.
Central San also maintains handheld amateur (HAM) radios at both the Walnut Creek
and Martinez campus and has four licensed HAM radio operators on staff.
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4) Coordination with Other Agencies
As a single -service agency, Central San must coordinate its emergency response with
first responders from 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).
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.
Central San is also a member of the California Water and Wastewater Agency
Response Network (CalWARN), which coordinates the distribution of members'
specialized equipment and trained personnel to other member agencies to help with
disaster and emergency response.
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Other Notable Accomplishments
GOAL 3: FISCAL RESPONSIBILITY
STRATEGY 1 — MAINTAIN FINANCIAL STABILITYAND SUSTAINABILITY
GOAL 5: INFRASTRUCTURE RELIABILITY
STRATEGY 3 — PROTECT PERSONNEL AND ASSETS FROM THREATS AND EMERGENCIES
GOAL 6: INNOVATION AND OPTIMIZATION
STRATEGY 2 — EVALUATE AND INVEST IN COST-EFFECTIVE AND INNOVATIVE TECHNOLOGY
TO ENHANCE BUSINESS PROCESSES
Implementation of EBIX Insurance Compliance Service
Risk Management staff completed the implementation of the EBIX Insurance
Compliance service. This included creating a matrix of insurance profiles to help both
Project Managers and Buyers in the Purchasing Division assess the risk of contracted
services and to identify applicable insurance requirements based on industry best
practices.
Once these profiles were uploaded to Central San's EBIX account, EBIX was able to
automate requesting required insurance documentation from contractors and notifying
contractors when their insurance documentation expired or otherwise became non-
compliant.
While some staff time is required to monitor the program and to address non-standard
situations, it takes far less time than administrative staff have historically spent on these
tasks and has greatly improved overall contract compliance with Central San's risk
transfer practices.
Homeless Encampment Response Procedure
In the last 18 months there has been a notable increase in the number of unhoused
persons loitering or camping on or near District property in Martinez. District efforts to
address these issues had been ineffective as no single work group had the authority to
address all aspects of the problem. To improve these efforts Risk Management
coordinated with multiple work groups to develop AP 016-3, the Homeless Encampment
Response procedure to ensure a comprehensive response and to identify
responsibilities of specific workgroups.
Staff would like to thank Director of Finance and Administration Phil Leiber, Plant
Maintenance Manager Neil Meyer and Planning and Development Manager Danea
Gemmell for their support and participation in the development of the procedure.
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Total Cost of Risk
GOAL 3: FISCAL RESPONSIBILITY
STRATEGY 1 — MAINTAIN FINANCIAL STABILITYAND SUSTAINABILITY
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 EHS program, as well as Risk Management program
administration, claims and insurance premiums. This total is reduced by any revenue
accrued or recovered by the Self -Insurance Fund.
FY 2021-22 TCOR is $3,612,488, an increase of $145,695 (4.2%) from the preceding
year.
The following chart shows Central San's TCOR for the last 10 years.
$6,000,000
$5,000,000
$4,000,000
$3,000,000
$2,000,000
$1,000,000
TCOR Totals and Trend *
LOyti ti0,� LOyR ti0,� ys, ti0,� Ltiti�' tiy0' LSO L �ti
O O O O O
* Totals have been adjusted for inflation
TCOR is the sum of five categories of expenses: personnel, insurance, claims, risk
management program costs and EHS program costs. The following chart illustrates
theses costs by category for the last ten years.
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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
ti3 ti� ti`' ti° ti� ti� ti� ,yo titi titi
ti°tip ti°tip ti°tip 451
■ Personnel ■ Insurance ■ Claims ■ RM Program ■ Safety Expenses
Note 1: Chart does not include lost productivity or other soft costs arising from claims.
Note 2: TCOR segment totals have not been adjusted for inflation.
Totals for most categories are fixed at the end of each fiscal year. However, claims
costs (red segment) often include reserves for open claims occurring in specific fiscal
years. This may result in fluctuation of claims costs over time as losses develop or
claims resolve favorably.
Risk Management Division Annual Report FY 2021-22 34
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Strategic Plan Metrics
Central San's Strategic Plan includes seven goals with associated strategies, initiatives,
and metrics to track performance toward achieving these goals. Risk Management is
responsible for metrics under three of the goals. The tables below summarize Risk
Management's FY 2021-22 performance for the metrics associated with these goals.
GOAL 1: PROVIDE EXCEPTIONAL CUSTOMER SERVICE AND MAINTAIN AN EXCELLENT
REPUTATION
STRATEGY: SUPPORT MEMBER ORGANIZATIONS AND SISTER AGENCIES.
Juccess Measur Year • Result
Continue participation in Support sister agencies via Mutual 3 requests [r,/ j
CalWARN Aid 9
GOAL 3: FISCAL RESPONSIBILITY
STRATEGY: EVALUATE AND APPLY RISK MANAGEMENT PRACTICES.
Maintain and report on
Enterprise Risk Management
oroaram
Provide Return to Work
Program
Manage the Cost of
Overflow Claims
Coordinate ERM Team, monitor risk
scores over time, present results to
Board twice per vear
Provide Temporary Modified Duty to at
least 95% of employees injured on the
job
Average cost per claim
< $25,000
GOAL 5: INFRASTRUCTURE RELIABILITY
Year • Result
Updated Board
in April and Sept
2021
100%
excludes time during
pandemic surges
$14,148 0
STRATEGY. PROTECT PERSONNEL AND ASSETS FROM THREATS AND EMERGENCIES
Ensure the currency of
Emergency Plans
Evaluate and implement
security improvements to
meet new or evolving
threats
Updated Pandemic Response
section of Continuity of Operations Ongoing
Plan
Implement the Security Master Plan Ongoing
0
0
Risk Management Division Annual Report FY 2021-22
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A Look Ahead
As staff presents this report, the first quarter of FY 2022-23 is complete. Staff has
included this new section to provide updates on the items discussed in this report since
FY 2021-22 ended. Many of these items will be included in the FY 2022-23 Annual
Report,
• In September 2022 Risk Management staff conducted the first live, real-time
EOC activation exercise in the MPR since 2018. The October 2019 exercise was
postponed and ultimately cancelled by an actual EOC activation and PG&E's
subsequent Public Safety Power Shutoff.
• The following day staff conducted the first live, real-time EOC activation exercise
in the backup EOC; the Crew Room at CSO. The participants helped to identify
bugs and/or features in that location that would not otherwise have come to light.
• With help from Capital Projects, staff interviewed and contracted with a new
security consulting company to update elements of our vulnerability assessment
and to help us develop physical security guidelines to ensure consistency in
capital improvements to District facilities.
• Staff contracted with a new security technology supplier and service provider to
implement an asset management program for security systems.
• The Workers' Compensation ExMod dropped from 1.19 in FY 2021-22 to .82 in
FY 2022-23.
• Staff accepted an offer to help develop the 2023 PRIMA Institute. The Institute is
sponsored by the Public Risk Managers Association (PRIMA) and is considered
the premier educational opportunity regarding public agency risk management in
the United States.
Risk Management Division Annual Report FY 2021-22
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Attachment 2
November 21, 2022
Risk Management
Annual Report
Fiscal Year 2021-22 1
Finance Committee Meeting
Shari Deutsch
Risk Management Administrator
Laci Kolc
Risk Management Specialist
1
2
!i
November 21, 2022 Regular FINANCE Committee Meeting Agenda Packet - Page 232 of 244 1
Page 40 of 45
Workers' Compensation: Claims and Costs
5 Yr. Avg Cost - Med Only: $1,182 5 Yr. Avg Cost - Indemnity: $49,954
Workers' Compensation: Workers' Compensation:
Medical Only Claims - Last 5 Years Indemnity Claims - Last 5 Years
$25,000
$20,000
$15,000
$10,000
$5,000
3
ADM C50 ENG
Workers' Comp:
Claims and Costs
Medical Only vs Indemnity Claims
4
4
Total Incurred Claims Cost
Last 5 Years- Medical Only vs. Indemnity
zs $7001000
$600,000
20
$500,000
15 $400,000
10 $300,000
$200,000
5
$100,000
0 $-
POD
$600,000
$500,000 $578,801 �-
$400,000
$300,000 $331,275
$200,000
$100,000 $22,650
$- U
4� _
ADM _
C50
ENG
POD
ADM Ci0 ENG
In the last 5 years:
The average cost of an
indemnity claim is 26x
the average cost of a
medical only claim.
• Strains and sprains
remain the most
common type of
injury.
12
10
s
6
4
2
0
POD —.A
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_oi-CENTRAL SAN
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Page 41 of 45
Liability Claims
Cost of Liability Claims by Type
2oz1-zz
2020-21
2019-20 I-
2018-19
2017-18 I�
$- $100,000 $200,000 $300,000 $400,000 $500.000 $600,000
•SSO ■PL ■OL •AL
5
5
In FY 2021-22:
9 SSO claims
• Average cost per
SSO claim is
$14,150.
Benchmark is
$20,000.
Enterprise Risk Management (ERM)
lmm� M
Economic Uncertainty/ Recession 7 a 2 8 25 1
'A
Global Pandemic 6 10 3 5 24 2
Internal Controls Failure d 3 2 7 16 3
Top Ten Strategic Risks - Summer 2022
40
30
20
10
0
101
6
I
All j-1111
IN
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Page 42 of 45
W
FEMA
Emergency Management
❑ Fact Sheet: Procurement Under Grants:
Under Exigent or Emergency
Circumstances
❑COVID-19 Pandemic Public Assistance
(PA) Disposition Requirements for
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November 21, 2022 Regular FINANCE Committee Meeting Agenda Packet - Page 235 of 244 4
Page 43 of 45
Total Cost of Risk - The Metric
Elements of Total Cost of Risk (TCoR)
Insurance premiums
The first and moss easily tracked component of Total Cast of Risk is insurance premiums. This includes the
amount a firm spends on insurance coverage and brokers commissions.
Retained losses
The neat element is retained lasses. The retained loss value is the am— of money that, firm spends
out of packet" for losses incurred. These are costs that are below a company's deductible. An example m a
small mishap such as dry,I—mg a client's suit due to spillage from an employee.
Costs to protect employees/customers from injury
The nextapplic,bl, costs may not be as easy to back but are still important compenems captured in the
TCoR calculation. These are the costs needed to protect your employees . customers from injuries.
E—ples 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 ar other risk
a adatetl issues. These would include costs far an alto rney to respond to a complaint or to review a
onbact's indemnification agreement. These are also part of the TCoR calculation and are considered
e#e rnal risk comrol costs.
I
TCOR Elements - Last 10 Years
TCOR Categories by Fiscal Year The most
$4,000,000 significant
$3500'000 — change since FY
$3,000,000
$2,500,000 2020-21 is the
$2,000.000
$1,500.000 increased cost of
$1,000,000insurance.
$500,00,000
5 L 4 do ti ,ti The cost of
ti ^.' K 5' K �, ,p, sq• �•
ti� his tip\ tip\ tip\ ti� ti0 ti� vpti rypti
claims is the least
■ Personnel • Insurance ■ Claims ■ RM Program • Safety Expenses
consistent and
Elements have not been adjustedfor inflation. least predictable
element of TCOR.
10
10
November 21, 2022 Regular FINANCE Committee Meeting Agenda Packet - Page 236 of 244 5
Page 44 of 45
TCOR Trending - Last 10 Years
TCOR Totals and Trend *
$6,000,000
$5,000,000 $4907,260
$4,000,000 $3,612,488
$3,000,000 -
$2.000,000
$1.000,000
11
Totals have been
adjusted for inflation.
TCOR does not include
productivity loss or
other soft costs arising
from employee
injuries.
Trend remains flat /
stable.
A Look Ahead ®ISTR"MAJOR
INCIDENTS r
J -
s
We resumed in -person EOC Activation Exercises in Sept. 2022.
Our Workers' Comp ExMod dropped from 1.19 to .82.
Two FEMA applications for COVID-19 expense reimbursement
will be submitted in early December 2022.
12
November 21, 2022 Regular FINANCE Committee Meeting Agenda Packet - Page 237 of 244 6
Page 45 of 45
Questions?
13
November 21, 2022 Regular FINANCE Committee Meeting Agenda Packet - Page 238 of 244 7