July 2016 - Issue 53

Annual Board of Directors Meeting 

Celebrating Shared Success: 2016 Risk Management Awards

Risk Managers Roundtables

Insurance Tracking Document and Guide Available

Three Tennessee Officers Suspended After Facebook Posts

Ninth Circuit Shakes Up Regular Rate-of-Pay Calculations in Flores v. City of San Gabriel

Meet Your York Risk Services Team

OSHA Penalty Adjustments to Take Effect August 2016

Recurring Evidence of Coverage Letters

News: Worthy

Annual Board of Directors Meeting

The Annual Board of Directors Meeting was held in La Palma on July 20, 2016 with a quorum of delegates in attendance, representing 74 member agencies. Curtis Morris, President of the Executive Committee welcomed delegates and shared a brief overview of the Authority’s accomplishments and endeavors.

President Morris recognized the Authority’s newest member, the City of Azusa.  Azusa joined the Authority’s new Excess Liability Program on July 1, 2016.  The Authority’s membership is composed of 116 municipal agencies throughout California: 92 cities, 18 joint powers authorities, and 6 special districts.

The Board of Directors unanimously elected Margaret Finlay as Vice President of the Executive Committee. Tom Chavez. Temple City; Daryl Hofmeyer, Paramount; Mary Ann Reiss, Pismo Beach; and David Spence, La Canada Flintridge, were elected as Board of Directorsmembers of the Executive Committee, each serving a two-year term. 

President Morris presented Risk Management Awards to members that demonstrated superior risk management programs as shown by their cost of claims in both the liability and workers’ compensation programs

Chief Executive Officer, Jon Shull, presented the strategic plan, operational overview, and current initiatives of the Authority, with emphasis on continued commitment to the foundational principals of integrity, excellence, innovation, and teamwork.

The Board of Directors unanimously approved the budgets for fiscal years 2016-17 and 2017-18.  Additionally, the Board of Directors approved the proposed revisions to the Authority’s Bylaws and Joint Powers Agreement.

The meeting was adjourned to July 19, 2017.

Photo:
Front Row (l to r): Carol Chen, Cerritos; President Curtis Morris, San Dimas; Mary Ann Reiss, Pismo Beach; Vice President Margaret Finlay, Duarte
Back Row (l to r): Secretary David Spence, La Cañada Flintridge; Daryl Hofmeyer, Paramount; Sonny Santa Ines, Bellflower; Tom Chavez, Temple City
Not pictured: Lori Donchak, San Clemente 


News: Worthy

Celebrating Shared Success: 2016 Risk Management Awards

This year the California JPIA recognized six of its members for their achievements in risk management. The Authority’s Risk Management Awards Program celebrates the members’ risk management successes while it highlights an important point: as a risk pooling organization, the success of each individual member’s risk management efforts benefits all members. The significant improvements in risk management that these members made came as a result of dedicated efforts, sometimes against opposition and under tight budgets. 

The winners of the 2016 Risk Management Awards for the General Liability and Workers’ Compensation Programs were recognized at the Annual Board of Directors meeting held on July 20, 2016. 

Members were divided into groups for which awards were presented. For the Liability Program the groups were Non-Municipal Members, Members without Police exposure, and Members with Police exposure. For the Workers’ Compensation Program the groups were Non-Municipal Members, Members without Public Safety exposure, and Members with Public Safety exposure. 

This award recognizes members that have demonstrated the best overall performance in each program. Authority staff evaluated both quantitative and qualitative factors that are reflective of a member’s risk management efforts. Factors included an agency’s five-year average cost of claims per $100 of payroll, its improvement in claims severity when comparing two, five-year coverage periods, its progress toward completing Loss Control Action Plan items, its Agency Exemplar rating, and its participation in Authority trainings and risk management events.

For the Liability program, the Best Overall Performance Award winners were:Liability Risk Management Award

For non-municipal agencies:
    • Southern California Association of Governments
   
For municipal agencies without police exposure: 
    • City of Bradbury

For municipal agencies with police exposure:
    • City of San Gabriel

For the Workers’ Compensation program, the Best Overall Performance Award winners Workers' Compensation Risk Management Awardwere:

For non-municipal agencies: 
    • Southern California Association of Governments

For municipal agencies without public safety exposure: 
    • City of Malibu

For municipal agencies with public safety exposure: 
    • City of La Habra Heights

Top Photo:
Left to Right: Paul Zeglovitch, Liability Program Manager; Basil Panas, Southern California Association of Governments; Kevin Sawkins City of San Gabriel; President, Curtis Morris.

Bottom Photo: 
Left to Right: Jeff Rush, Workers’ Compensation Program Manager; Basil Panas, Southern California Association of Governments; Laura Rosenthal, City of Malibu; Kyle Miller, City of La Habra Heights; President, Curtis Morris.


News: Worthy

Risk Managers Roundtables

by Roy Angel, Senior Risk Manager

May Risk Managers Roundtable:  Management’s Guide to Safety

Were you aware that 85% of all workplace accidents are caused by unsafe actions, as opposed to unsafe conditions?  It has been found that unsafe actions, more so than unsafe conditions are the root cause of the vast majority of occupational injuries and accidents.  Even more interesting is that the majority of unsafe actions are due to overexertion, followed closely by slips, trips, and falls.  These were just a few interesting facts presented by Marco Guardi, Area Vice President for Arthur J. Gallagher & Co., at the Authority’s Risk Managers Roundtable series held in May.  The Risk Managers Roundtables were held at the Authority campus in La Palma, Pismo Beach, and Palm Desert with Guardi presenting at each location. 

Understanding the predominant causes of workplace accidents allows risk managers, supervisors, and executive management to implement effective risk control measures. 

One of the most important risk control measures is an agency’s Injury and Illness Prevention Program (IIPP).  An Injury and Illness Prevention Program must be a written plan that includes procedures and is put into practice. The following elements are required:

  • Management commitment/assignment of responsibilities;
  • Safety communications system with employees;
  • System for assuring employee compliance with safe work practices;
  • Scheduled inspections/evaluation system;
  • Accident investigation;
  • Procedures for correcting unsafe/ unhealthy conditions;
  • Safety and health training and instruction; and
  • Recordkeeping and documentation.

IIPPs with strong management commitment and active worker participation are effective in reducing injury risk.  This commitment must be backed by strong organizational policies, procedures, incentives, and disciplinary actions as necessary to ensure employee compliance with safe and healthful work practices.  Additionally, properly (and frequently) trained workers are more likely to avoid working in an unsafe manner, resulting in fewer workplace accidents. 

August Risk Managers Roundtable:  Property Insurance

Members are encouraged to bring their agency’s property schedule and talk with Jim Thyden, the Authority's Insurance Programs Manager and Dennis Mulqueeney, Alliant Insurance broker for the Property Insurance Program.  This Roundtable will be an open forum for all Risk Managers, Human Resources Managers, Finance Directors, City Managers, Facilities Maintenance Managers or Supervisors, Public Works Directors or anyone involved with the Property Insurance Program to discuss the property program and any property issues, including scheduling locations and vehicles, coverage questions, details about the programs, and how claims are handled.

This Roundtable will be interactive.  Members may print their property schedules from the Oasys website here.  The Memorandum of Coverage for the Property Program is available for viewing and download here.  Bring questions that you have about coverage, claims, and anything else you would like to discuss with Jim, Dennis, or the other attendees at the roundtable.

Topics covered include:

  • Overview of Property Program, Coverages and Who the Carriers Are
  • Updating Property Schedules
  • How Rates are Determined
  • Appraisals
  • Claims
  • Property Surveys
  • Lessons Learned
  • Loss Prevention Measures
  • Property Damage Recovery Program
  • Continuity of Operations Program

The roundtable will be presented live, from 12:00 p.m. to 2:00 p.m. at the following three locations; lunch will be provided:

  • August 9, 2016 - California JPIA, 8081 Moody Street, La Palma
  • August 17, 2016 - Arroyo Grande, City Hall, Council Chambers, 300 W Branch St, Arroyo Grande
  • August 23, 2016 - City of Indio, Teen Center, 81-678 Ave 46, Indio

To register for one of the three roundtable events, go to http://www.cjpia.org/ and log into myJPIA. 

For more information about the Risk Managers Roundtable, contact your regional Risk Manager.


News: Worthy

Insurance Tracking Document and Guide Available

The Authority has developed a new spreadsheet resource and guide to assist members in tracking information related to contracts, certificates of insurance, and insurance policies.

The new resource and guide are available in electronic format, and can be accessed via the Authority's website, under Resources and Documents, Category Search/ Risk Transfer. Members will need their myJPIA login credentials in order to access the documents.

Insurance Tracking Spreadsheet

Insurance Tracking Spreadsheet Guide

The purpose of the spreadsheet is to assist members in tracking contract and insurance policy information, such as effective dates, coverage limits, certificates of insurance, and contract expiration dates. Although the template should cover most insurance tracking categories, members may consult the guide to make revisions to the spreadsheet.

For more information about these resources, please contact Abraham Han, Administrative Analyst, by email or phone at (562) 467-8778. 


Legal Matters

Three Tennessee Officers Suspended After Facebook Posts

(Reprinted from the USA Today Network July 8, 2016)

NASHVILLE — A police officer here had his commission revoked Thursday (July 7) pending the results of an internal investigation after making what he contended was a sarcastic Facebook comment — one of a long line of law-enforcement officials whose careers have been affected by what they posted on social media.

"Yeah. I would have done 5." Officer Anthony Venable wrote in a Facebook conversation, according to a police release announcing suspension of duties for the eight-year veteran. The comment appeared to reference the number of shots in a Falcon Heights, Minn., case where Philando Castile, 32, was killed in a police-involved shooting.

Venable told police investigators that his comment was in answer to a post from a woman criticizing the officer who reportedly shot Castile four times.

In Memphis, officials said Friday that they have suspended two Memphis Police officers for posting what Interim Director Michael Rallings called a "disturbing image." on social media. Rallings did not name the officers but said the incident would be thoroughly investigated and the individuals involved would be held accountable.

Last year Venable, a midnight shift officer in the Hermitage Precinct in the eastern part of Nashville, was named one of seven officers of the year for 2014, according to the city's website. He was named field operations bureau police officer of the year for his work in the West Nashville Precinct, but Nashville police Chief Steve Anderson did not appear to take that into account in announcing his removal.

“The police department is treating this matter very seriously and took immediate action, regardless of what he claims the context to have been,” Anderson said.

Whether Venable will remain on the force will be determined in the next several weeks. He has turned in his gun and credentials.

Hermitage Precinct supervisors said they became aware of his post at 3 p.m. CT Thursday, about three hours before the chief released a statement saying he was disturbed by the videos and accounts coming out of Minnesota and Louisiana.

Castile was killed Wednesday, and Alton Sterling, 37, was killed Tuesday in Baton Rouge, La.

Just in the past year, others in law enforcement also have had their careers put on hold because of comments on social media. Among them:

• June: Kenneth Lewis, an assistant state attorney in Florida, was fired for violating his office's social-media policy in a Facebook post that condemned Orlando nightclubs as "zoos; utter cesspools of debauchery," the Orlando Sentinel reported.

• June: Ashley Carlson, a Massachusetts Bay Transportation Authority officer, is under investigation for posting a photo of an unconscious man with his pants around his knees who defecated on the floor of a transit station, according to the Boston Globe.

• March: Fairborn, Ohio, Officer Lee Cyr was fired after calling a Black Lives Matter activist's suicide a "happy ending" in an off-duty comment on an Ohio Politics Facebook page, WDTN-TV, Dayton, Ohio, reported.

• March: Officer Jason Montalbano of the Medford, Mass., Police Department apologized for a January Facebook post in which he shared a picture of a mushroom cloud depicting an atomic blast and said, "It's time we made peace with Islam," the Medford Transcript reported. He said the post was misconstrued and not intended to incite violence against Muslims, but he was placed on leave while officials investigated.

• February: Sgt. Jeffrey M. Rothecker, a 22-year-veteran, resigned from the St. Paul, Minn., Police Department a month after an activist noticed a Facebook comment on a (St. Paul) Pioneer Press story from a "JM Roth" urging people to "run them over" if Black Lives Matter protesters block streets, the (Minneapolis) StarTribune reported.

• February: Matt Cicero, a Cleveland police school resource officer, received a 30-day suspension in February after officials said he posted insensitive comments about the decision not to indict the officer who killed Tamir Rice, The (Cleveland) Plain Dealer reported.

• December: Deputy Jason Shierling of the Thomas County Sheriff's Office in Georgia resigned after being suspended without pay for a Facebook post appearing to joke about shooting Black Lives Matter activists, the Thomasville Times-Enterprise reported.

• December: Officer Daryl Carle of the San Antonio Police Department was suspended for 30 days without pay after an August Facebook post, reportedly parroting a YouTube series, in which he said he loved his job because he could legally "kill people and not go to jail," the San Antonio Express-News reported.

• November: The Terre Haute, Ind., Police Department's merit board reversed a two-day suspension of Lt. Gary Shook after he made a post in October supporting a mayoral candidate, the (Terre Haute) Tribune-Star reported. His chief had said it violated department policy.

• October: Wakulla County Sheriff Charlie Creel in Florida was called out for violating his own social-media policy when he used profanity and directed a deputy to "go after" a critic in private Facebook messages, the Tallahassee Democrat  reported. He later apologized.


The Court Report

Ninth Circuit Shakes Up Regular Rate-of-Pay Calculations in Flores v. City of San Gabriel

(Reprinted from Public CEO, June 21, 2016)

Employers May Need to Restructure “Cash in Lieu of” Payments

The City of San Gabriel was underpaying its police force by miscalculating their regular rate of pay, the U.S. Ninth Circuit Court of Appeals held in Flores v. City of San Gabriel. The City offered cash-in-lieu of benefits to its police officers, to be used for purchasing medical, vision and dental benefits. While employees were required to use a portion of these funds to purchase vision and dental insurance, employees with access to alternative medical coverage (for example, through a spouse) could decline to use the remaining benefits and opt for a cash payment instead. The cash payment would then be added to the employee’s regular paycheck. The City did not consider the value of that cash payment when calculating the employees’ regular rate of pay and resulting overtime rate. A group of current and former officers sued, claiming they were underpaid for overtime hours worked because the cash provided to employees in-lieu of benefits should have been used in calculating their overtime rate.

In an opinion issued earlier this month, the court agreed with the plaintiffs, finding that the City’s failure to consider the cash-in-lieu of was a mistake, resulting in the employees not being paid sufficient overtime pursuant to the Fair Labor Standards Act. The City argued that the cash-in-lieu of benefits should be exempted from regular rate of pay calculation under FLSA section 207(e)(2), which provides a list of payments that are not considered when calculating the regular rate of pay. The list includes a series of specific exemptions, such as vacation and holiday pay, and at the end includes a catch-all provision for “other similar payments to an employee which are not made as compensation for his hours of employment.” The City argued that the cash-in-lieu of benefits qualified under that catch all provision. The court rejected the City’s argument, noting that the simple fact that the cash-in-lieu of benefits were not tied to hours worked or amount of services provided did not mean that the cash-in-lieu benefits were not considered compensation for employment. Rather, the court focused on whether the character of the payment was considered compensation for work. The court explained that payments properly excluded under the “other similar payments” clause of section 207(e)(2) were those for non-working time, such as vacation or sick time, and that the cash-in-lieu payments at issue were not similar to payments for non-working time or reimbursement for expenses.

The City went on to argue that even if the cash-in-lieu of benefits were not exempt under section 207(e)(2), the payments should be exempt under 207(e)(4), which exempts “contributions irrevocably made by an employer to a trustee or third person pursuant to a bona fide plan for providing… health insurance or similar benefits for employees.” The court disagreed, holding that because the cash-in-lieu payments were made directly to the employees, no such exception could apply.

The court further found that, even if the payments had been made to a third party, the City’s Flexible Benefits Plan did not qualify as a “bona fide plan” under 207(e)(4), so even the City’s payments to trustees or third parties could not be excluded from the regular rate of pay. The court considered the Department of Labor’s definition of the term “bona fide plan” as set forth in 29 C.F.R. Section 778.215, which requires any cash payments under a plan (in lieu of benefits) to be purely incidental. The court found that the City’s plan did not qualify because 40 percent or more of the City’s contributions were paid directly to employees rather than received as benefits, which was not an incidental amount.

While it is expected that the Flores decision will be appealed, at this point employers have no choice but to live with the ruling, which could include looking at options to restructure “cash in lieu of” payments.


Pro: Files

Meet Your York Risk Services Team

York Risk Services has added two experienced claims examiners to the team working on behalf of the California JPIA members.  Jesenia Gutierrez and Chrisi Fajardo each have over a decade of claims handling experience and have hit theChrisi Fajardo ground running.

When asked what led them to join the team at York, Jesenia noted that she had several friends and industry colleagues that had moved to York and “raved about how much they loved working there.”  Chrisi added “there is a lot of opportunity for career development” and she also cited the opportunity to “build my skills and continue to develop in a growing company.”

Jesenia Gutierrez
Chrisi and Jesenia also have a similar outlook as to what makes them successful in their job.  Chrisi identified her ability to connect with employees and help them navigate and understand the complex workers’ compensation system.  She also recognized the importance of taking the time to explain the process in a way that makes sense.

Jesenia pointed out her nurturing personality and her ability to enjoy being able to help people.  She added, “most people just want to know someone is there to guide them through their claim and get back to their normal life.”

When they are not working, they find time for fun.  Jesenia likes to spend time travelling, trying new restaurants, and shoe shopping.  Chrisi can be found at country concerts, spending time with her family at the beach, or spending the day at Disneyland.

Photos:
Top Right: Chrisi Fajardo
Bottom Left: Jesenia Gutierrez


Risk Solutions

OSHA Penalty Adjustments to Take Effect August 2016

In November 2015, Congress enacted legislation requiring federal agencies to adjust their civil penalties to account for inflation. The Department of Labor is adjusting penalties for its agencies, including the Occupational Safety and Health Administration (OSHA).

OSHA's maximum penalties, which were last adjusted in 1990, will increase by 78%. Going forward, the agency will continue to adjust its penalties for inflation each year based on the Consumer Price Index.

The new penalties will take effect after August 1, 2016.  Any citations issued by OSHA after that date will be subject to the new penalties if the related violations occurred after November 2, 2015.


 Type of Violation

Current Maximum
Penalty

New Maximum
Penalty

 Serious
 Other-Than-Serious
 Posting Requirements

$7,000 per violation

$12,471 per violation

 Failure to Abate

$7,000 per day beyond the abatement date

$12,471 per day beyond the abatement date

 Willful or Repeated

$70,000 per violation

$124,709 per violation


Adjustments to Penalties
To provide guidance to field staff on the implementation of the new penalties, OSHA will issue revisions to its Field Operations Manual by August 1. To address the impact of these penalty increases on smaller businesses, OSHA will continue to provide penalty reductions based on the size of the employer and other factors.

State Plan States
States that operate their own Occupational Safety and Health Plans are required to adopt maximum penalty levels that are at least as effective as Federal OSHA's.

For More Assistance
OSHA offers a variety of options for employers looking for compliance assistance.

The On-site Consultation Program provides professional, high-quality, individualized assistance to small businesses at no cost.

OSHA also has compliance assistance specialists in most of our 85 Area Offices across the nation who provide robust outreach and education programs for employers and workers.


Coverage Matters

Recurring Evidence of Coverage Letters

by Jim Thyden, Insured Programs Manager

The 2016 recurring Evidence of Coverage (EOC) webpage is live and ready for members to access EOCs showing coverage through June 30, 2017.  Evidence of Coverage, sometimes referred to as a Certificate of Insurance (not to be confused with the Certificates of Coverage provided by the Authority), provides documentation of liability and/or workers' compensation coverage, and is commonly issued to third parties, such as individuals, vendors, companies, schools and/or other agencies.

This year, the Authority has added functionality that allows members to reissue an EOC for the 2015 – 2016 coverage year. The Authority is encouraging members to carefully review all current EOCs and delete any that are no longer needed.  Members can revise EOCs immediately, and PDFs will be emailed to the requestor to distribute as necessary to those who require the EOC.

If you have any questions, comments, or suggestions, please contact Jim Thyden, Insurance Programs Manager, by email or (562) 467-8784.