2014 annual report - golden state risk management authority€¦ · “golden state risk management...

2 0 1 4 A N N U A L R E P O R T

“Golden State Risk Management Authority is established for the purpose of providing services and other functions necessary and appropriate for the creation, operation, and maintenance of liability, workers’ compensation, property and other risk pooling and coverage plans for the Member Agencies that are parties hereof, and to provide a forum for discussion, study, development and implementation of recommendations of mutual interest regarding risk pooling and insured programs.”

Mission Statement

Dedication

1 Letter to Members

2 History of Innovative Programs

3 GSRMA Team

4 2004-2014 Board of Directors

6 Member Agencies – Location

7 Member Agencies – Date Joined

10 Member Agency Growth

11 GSRMA Total Assets ‘79 - 2014

12 General Liability Program Workers’ Compensation Program

13 Property and Miscellaneous Coverage

15 2014 Employee Benefits Program

17 2014 Loss Prevention & Training

18 CAJPA Accreditation

19 Actuarial Policy and Program Funding

20 Financial Audit Management Discussion & Analysis

28 Member Photos

Contents

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This annual report is dedicated to the memory of R.W. “Bob” Bachman 1924-2014. His innovation and sacrifice formed the solid foundation on which GSRMA was built.

GSRMA 2014 Annual Report

Dear members,

Over thirty-five years ago, the organization that would become Golden State Risk Management Authority (GSRMA) was created as an insurance solution for a rural California county. GSRMA has since grown into a comprehensive risk management

solution for a diverse collection of over 250 public agencies statewide. Since 1979, GSRMA has met challenges and solved problems.

California local agencies are facing unprecedented challenges; a stagnant economy, shrinking revenues, and the mandates of healthcare reform to name a few. Many GSRMA member agencies have been forced to do more with less. To respond to these challenges, GSRMA continues to adapt its programs with a focus on efficiency, effectiveness and value.

In 2014, GSRMA increased regional trainings in an effort to efficiently serve as many members as possible. These events provide members with tools to mitigate losses, work more safely and meet regulatory compliance mandates. Outreach to increase participation in the Loss Prevention Incentive Program (LPIP) resulted in the highest participation levels in GSRMA’s history. In 2014, members were awarded over $200,000 in incentives by participating in GSRMA’s loss prevention programs.

GSRMA continued its commitment to adopting technology-based solutions to improve effectiveness and efficiency. GSRMA’s website was completely redesigned to be more intuitive and functional. The site features numerous enhancements including a dynamic News & Information section. This feature keeps members updated on the latest relevant topics and contains a collection of valuable risk management resources. My GSRMA, the secure member portal, has greatly increased the efficiency of the annual member data collection process. This web-based system not only saves members and staff time, but has improved the accuracy of the information that is collected.

In the face of these challenges, GSRMA’s total assets exceeded $18M for the first time. Net assets (total assets less liabilities) increased $1.2M during 2014; and stand at $4.1M. The commitment to efficiency and effectiveness not only benefits existing members, but makes GSRMA attractive to other agencies as well. Growth in membership remains steady. Eight new members joined in 2014 bringing total membership to 255 agencies. This growth further stabilizes GSRMA’s programs.

Despite prolonged economic malaise in California, the outlook for GSRMA is bright. The programs continue to be competitively priced and financially sound. The credit for GSRMA’s success goes directly to the member agencies. Members continue to proactively adopt and implement wise risk management and loss prevention strategies. This problem-solving, challenge-meeting culture de-fines GSRMA and its member agencies. On behalf of GSRMA’s staff and board of directors, thank you for your ongoing commitment to serving the needs of the public, and for your participation in Golden State Risk Management Authority.

Dan Berry, Member Services Director

Letter to Members

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A History of Innovative Programs, Personalized Service

In 1977, California public agencies were experiencing an insurance crisis; rates were skyrocketing and coverage was becoming more restrictive. Most of the public agencies in Glenn County obtained their coverage from two local insurance firms. The principals of these two agencies, R.W.”Bob” Bachman and William “Bill” Lambert understood that the situation was more serious than the normal hardening of the insurance market. Bob and Bill pursued new solutions to protect the public agencies of Glenn County.

By July 1st, 1978, the County of Glenn launched a self-insured workers compensation program. This approach was so successful, that Bob and Bill with the legal guidance of then Glenn County Counsel, Gary Krup and the leadership of Supervisor Keith Hansen formed Glenn County Joint Powers Authority (JPA). Most of the public agencies in Glenn County joined the JPA which provided not only workers compensation, but general liability and property coverage as well. On July 1st, 1979, the JPA that would become the Golden State Risk Management Authority was authorized.

In July, 2000 the JPA agreement was amended to allow public agencies outside of the Glenn County boundaries to join the program. The name was changed to Golden State Risk Management Authority to reflect the vision of a statewide insurance pool that serves the needs of medium to small public agencies statewide.

In 2003, GSRMA received the endorsement of the Public Cemetery Alliance (PCA), a trade association for California public cemeteries. Based on that endorsement, 50 public cemetery districts joined GSRMA’s programs by July 1, 2003. The GSRMA/PCA relationship has continued to flourish. Currently GSRMA provides coverage to 119 cemetery districts; making GSRMA the largest insurer of California public cemeteries.

The PCA endorsement served to “kick-start” GSRMA’s growth; over the past 11 years, GSRMA has added over 200 new members. That endorsement provided the opportunity for GSRMA to enhance its programs in ways that make GSRMA one of the best coverage options for California public agencies.

28 Glenn County agencies signed the original JPA agreement in 1979; that number had increased to 41 when the decision was made to become Golden State Risk Management in 2000. As of January 1, 2015, GSRMA consists of 255 member agencies throughout California. GSRMA remains loyal to its member-focused roots. GSRMA’s mantra “innovative programs, personalized service” describes the founding principles and continues to guide the future of GSRMA.

2 GSRMA 2014 Annual Report


Scott Schimke, ARM, Risk Manager, has been involved in Cali-fornia pool management since 1988. He is the Risk Manager and Executive Director of GSRMA. His responsibilities include overall pool management, rec-ommendation of and communication with re-insurance carriers, evaluation and recommendation of vendors and business partners and communication with the Board. Scott is Past-President of CSAC Excess Insurance Authority (EIA) Board of Directors. He currently serves on the EIA’s Executive and Underwriting committees.

Rick Krepelka, Chief Operations Officer, Rick has over 20 years of experience in technology consulting with emphasis in computerized ac-counting systems. He is responsible for all aspects of finance and accounting for GSRMA as well managing the administration and operations. Rick is Past-Chair of the Technology Committee for the California Association of Joint Powers Authorities (CAJPA) and is Vice-Chair of the Technology Committee for the CSAC Excess Insurance Authority.

Dan Berry, Director of Member Services, Dan has been in the insurance industry since 1989, and joined GSRMA in 2001. He has 19 years of public agency insurance experience. Dan oversees member communications, customer and vendor relationships, new member facilitation and GSRMA publications. He is also responsible for managing the employee benefit plans and the cemetery best practices programs. Dan serves on the EIA Health com-mittee and the California Association of Joint Powers Authorities (CAJPA) accreditation committee.

Jennifer Peters, ARM, Loss Prevention Specialist, Jennifer has five and a half years of experience as an Assistant County Safety Officer. Jennifer develops and delivers on-site training and loss prevention consultations. She is responsible for the implementation and ad-ministration of service and risk management programs including: online training, nurse triage, labor poster program and other member risk management services.

Mark Marshall, Safety Officer, Mark has 30 years in fire service, including 15 years as a fire chief. He has many years of public service as an elected official and volunteer. Mark became GSRMA’s Safety Officer in 2002. As a certified trained instructor for numerous safety, loss prevention and compliance areas, his focus is on member loss prevention with an emphasis on safety training and site reviews. Mark provides member service support for current and prospective members.

Tricia Alderman, Workers› Compensation Manager, Tricia has 20 years of workers’ compensa-tion claims processing experience. She also has extensive experience in claims auditing and claims examiner oversight and training. She is a workers’ compensation claims examiner and manages our Workers’ Compensation department.

Gale Hamon, WCCP, Workers’ Compensation Claims Administrator - Gale has over 30 years of experience in workers’ compensation claims processing and management. He is GSRMA’s senior workers’ compensation claims examiner. Gale assists with direct claims administration and oversight of the claims process.

Cynthia Connelly, WCCP, CPDM, Claims Professional, Cynthia has worked in various aspects of GSRMA processes since joining the organization in 1989. She is the workers’ compensation claims assistant and also assists the Liability Claims Manager with the processing of liability and property claims. She is the system administrator for our internal claims software as well.

Cathy Mudd, Operations Manager, Cathy has years of expe-rience in public entity accounting and operational processes. She is Operations Manager and assistant to the Director of Operations. She oversees the functioning of the office and administrative staff. She assists with day-to-day book-keeping and accounting processes as well as the accounting for the employee benefits program.

Patti Powers, PHR, Finance/HR Manager, Patti contributes a depth of experience in accounting and finance as well as being a certified HR professional. She handles much of the day-to-day bookkeeping and accounting processes. She also manages the accounting for our employee benefits program.

GSRMA Team

Kim McGeoghegan, Member Services Coordinator, Kim provides customer service assistance to both the Member Services and Safety and Loss Prevention departments. She is responsible for member data maintenance in various internal and external systems. Kim main-tains the property insurance and member demographic information. She is also responsible for planning GSRMA’s Annual Training Day and other events.

Naomi Whatley, Member Services Account Associate, Naomi has 15 years of experience in the insurance industry. Naomi provides member service support for all of GSRMA’s coverage and employee benefit programs. She is responsible for production of the quarterly newsletter, the Annual Report, and for maintenance of the website. In addition, she is the member contact person for certificates of insurance.

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Tracey Crosby, Administrative Assistant, Tracey is responsible for front desk and phone reception as well as office administrative support. She assists all departments with document production, data management and facilitates communication among staff, members and business partners.


2013-2014Mike Murray - Board of Supervisors - PresidentJohn Viegas - Board of Supervisors - Vice PresidentGeorge Ouzounian - Cemetery DistrictCharles Gee - City of OrlandNeal Quinn - Fire DistrictDr. Michael Karle - School District Gary Evans - Special District L. Gary Krup - Legal Council - 1979 to Current

2012-2013Mike Murray - Board of Supervisors President John Viegas - Board of Supervisors Vice President Pat Elliott - Cemetery DistrictCharles Gee - City of OrlandNeal Quinn - Fire DistrictDon Perez - School DistrictGary Evans - Special District2011-2012Mike Murray - Board of Supervisors President John Viegas - Board of Supervisors Vice PresidentPat Elliott - Cemetery DistrictCharles Gee - City of OrlandJohn Eaker - Fire District Don Perez - School District Roger Abe - Special District 2010-2011Mike Murray - Board of Supervisors PresidentJohn Viegas - Board of Supervisors Vice President Pat Elliott - Cemetery DistrictCharles Gee - City of OrlandJohn Eaker - Fire DistrictBill Boone - School District Kim Vann - Special District

2009-2010John Viegas - Board of Supervisors PresidentMike Murray - Board of Supervisors Vice PresidentEugene Kaufman - Cemetery DistrictReggie Olney - City of OrlandJohn Eaker - Fire DistrictBill Boone - School DistrictKim Vann - Special District2008-2009Bill Boone - School District PresidentMike Murray - Board of Supervisors Vice PresidentJohn Viegas - Board of SupervisorsEugene Kaufman - Cemetery District Reggie Olney - City of OrlandJohn Eaker - Fire DistrictKim Vann - Special District2007-2008Keith Hansen - Board of Supervisors PresidentTom McGowan - Board of Supervisors Vice President Sharon Marsh - Cemetery DistrictReggie Olney - City of Orland John Santi - Fire DistrictBill Boone - School DistrictSandy Cabral - Special District

2004-2014 Board of Directors

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Current Board President, Mike Murray

2006-2007Keith Hansen - Board of Supervisors PresidentTom McGowan - Board of Supervisors Vice PresidentSharon Marsh - Cemetery DistrictReggie Olney - City of Orland John Santi & Frank Koss - Fire DistrictBill Boone - School DistrictSandy Cabral - Special District2005-2006Keith Hansen - Board of Supervisors PresidentTom McGowan - Board of Supervisors Vice PresidentSharon Marsh - Cemetery DistrictReggie Olney - City of OrlandFrank Koss - Fire DistrictLonnie St. Louis - School DistrictSandy Cabral - Special District2004-2005Keith Hansen - Board of Supervisors PresidentTom McGowan - Board of Supervisors Vice PresidentSalina Jessie-Edwards - City of OrlandLonnie St. Louis - School DistrictNelson Benton & Sharon Marsh - Special District

NOTE: Effective July 1, 2005 the GSRMA Board of Directors expanded from five to seven members to better represent the composition of the member agencies.

GSRMA 2014 Annual Report 5GSRMA 2014 Annual Report


Member Agencies by Location

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Member Agencies and Date Joined

7

CitiesCity of Crescent City 7/1/2011City of Dorris 7/1/2014City of Orland 7/1/1979City of Williams 7/1/2011

County County of Glenn 7/1/1979

Cemetery Districts Alturas Cemetery District 11/10/2008Anderson Cemetery District 7/1/2003Arbuckle Cemetery District 10/24/2005Arroyo Grande Cemetery District 2/1/2005Artesia Cemetery District 6/1/2011Atascadero Cemetery District 7/1/2003Auburn Public Cemetery District 7/1/2008Bangor Cemetery District 7/1/2010Big Pine Cemetery District 7/1/2014Browns Valley Cemetery District 8/1/2005Brownsville Cemetery District 8/1/2005Burney Cemetery District 7/16/2003Byron-Brentwood-Knightsen Union Cemetery District 6/1/2004Cambria Cemetery District 7/1/2003Carters Cemetery District 8/1/2005Castroville Cemetery District 7/1/2008Cayucos-Morro Bay Cemetery District 7/1/2004Cedarville Cemetery District 10/1/2011Central Valley Cemetery District 7/1/2003Chester Cemetery District 10/10/2006Clovis Cemetery District 7/1/2003College City Cemetery District 7/1/2010Columbia Cemetery District 6/1/2004Colusa Cemetery District 3/7/2004Corning Cemetery District 7/1/2003Cottonwood Cemetery District 3/26/2003Elk Creek Cemetery District 7/1/1979Elk Grove-Cosumnes Cemetery District 7/1/2003Elsinore Valley Cemetery District 11/11/2008Fair Oaks Cemetery District 7/1/2003Fortuna Cemetery District 7/1/2013Galt-Arno Cemetery District 6/16/2003Glenbrook Cemetery District 2/7/2013Gridley-Biggs Cemetery District 4/1/2003Guadalupe Cemetery District 7/1/2013Halcumb Cemetery District 7/1/2003Hanford Cemetery District 7/1/2008Happy Homestead Cemetery District 3/31/2003Hartley Cemetery District 3/1/2011Hills Ferry Cemetery District 7/1/2003Hornbrook Cemetery District 5/12/2007

Kelsey Cemetery District 6/22/2003Kelseyville Cemetery District 4/1/2005Kern River Valley Cemetery District 7/1/2012Keystone Cemetery District 8/8/2006Kimshew Cemetery District 4/25/2003Live Oak Cemetery District 4/17/2003Lompoc Cemetery Dsitrict 7/1/2013Lookout Cemetery District 8/28/2010Los Banos Cemetery District 8/4/2006Los Molinos Cemetery District 7/1/2003Lower Lake Cemetery District 7/1/2003Madera Cemetery District 7/1/2011Manton Joint Cemetery District 1/26/2004Marvin-Chapel Cemetery District 7/1/1979Mary’s Cemetery District 2/1/2004Maxwell Cemetery District 12/13/2005Meadow Valley Cemetery District 1/1/2011Mendocino Little River Cemetery District 7/1/2003Merced Cemetery District 6/1/2008Millville Cemetery District 7/1/2003Murrieta Valley Cemetery District 7/1/2009Nevada Cemetery District 7/1/2003Newcastle, Rocklin, Gold Hill Cemetery District 7/1/2006Newville Cemetery District 3/1/2008North Kern Cemetery District 7/1/2013Oak Grove Cemetery District 11/10/2005Oak Hill Cemetery District 7/1/2008Orland Cemetery District 7/1/1983Oroville Cemetery District 7/1/2003Pajaro Valley Cemetery District 7/1/2004Paradise Cemetery District 7/1/2003Paso Robles Cemetery District 7/1/2003Patterson Cemetery District 7/1/2008Peoria Cemetery District 7/1/2003Picard Cemetery District 4/1/2006Pine Creek Cemetery District 7/1/2003Pioneer Cemetery District 7/1/2014Placer County Cemetery District #1 1/9/2005Plainsburg Cemetery District 7/1/2003Pleasant Grove Cemetery District 7/1/2005Porterville Public Cemetery District 3/10/2012Quincy-LaPorte Cemetery District 7/1/2003Ramona Cemetery District 7/1/2003Red Bluff Cemetery District 7/1/2003Riverview Cemetery District 1/1/2004Russian River Cemetery District 7/1/2005Santa Margarita Cemetery District 5/6/2003Santa Maria Cemetery District 3/20/2004Selma Cemetery District 7/1/2008


Member Agencies and Date Joined

8

Plaza School District

Shasta Valley Cemetery District 5/13/2003Shaws Flat-Springfield Cemetery District 7/1/2004Shiloh Cemetery District 7/1/20012Sierra County Cemetery District #5 5/12/2004Silveyville Cemetery District 7/1/2010Snelling Cemetery District 5/1/2009South Kern Cemetery District 7/1/2012Stonyford Cemetery District 7/1/2000Sunnyside Cemetery District 7/1/2011Sutter Cemetery District 7/1/2003Sylvan Cemetery District 4/26/2003Tehachapi Cemetery District 7/1/2012Tehama Cemetery District 7/1/2003Tipton-Pixley Cemetery District 5/6/2004Township No. 2 Cemetery District 9/1/2013Tracy Public Cemetery District 6/15/2005Truckee Cemetery District 1/31/2004Upham Cemetery District 6/1/2004Upper Lake Cemetery District 6/1/2003Visalia Public Cemetery District 5/1/2003West Side Cemetery District 7/1/2012Wheatland Cemetery District 7/1/2007Wildomar Cemetery District 1/31/2008Williams Cemetery District 7/1/2005Willows Cemetery District 7/1/1979Wilmington Cemetery District 11/20/2013Winton Cemetery District 7/1/2003

Fire AgenciesAlbion-Little River Fire Protection District 4/1/2005Anderson Valley Community Services District 7/1/2010Artois Fire District 7/1/1979Bayliss Fire Protection District 7/1/1979Bear Valley/Indian Valley Fire District 7/1/1989Big Pine Fire Protection District 7/1/2014Burney Fire Protection District 7/1/2010Camptonville Community Services District 7/1/2008Capay Fire Protection District 7/1/1991Coffee Creek Volunteer Fire District 11/1/2008Comptche Community Services District 4/1/2005Crescent Fire Protection District 7/1/2012Dobbins-Oregon House Fire Protection District 7/1/2009Downieville Fire Protection District 1/3/2011El Medio Fire Protection District 7/1/2011Elk Community Services District 3/31/2008Elk Creek Fire District 7/1/1979Fall River Mills Fire Protection District 11/1/2005Foothill Fire Protection District 7/1/2009Glenn-Codora Fire District 7/1/1979Glenn-Colusa Fire District 7/1/1979

Hamilton City Fire Protection District 7/1/1979Jackson Valley Fire Protection District 4/1/2010Knights Landing Fire Protection District 7/1/2010La Porte Fire Protection District 7/1/2010Little Valley Community Services District 2/1/2004Long Valley Fire Protection District 7/1/2012Maxwell Fire Protection District 7/1/2002Mendocino Fire Protection District 7/1/2004Meridian Fire Protection District 12/3/2009Mount Shasta Fire Protection District 5/1/2002Northshore Fire Protection District 7/1/2014Ord Bend Fire Protection District 7/1/1979Orland Rural Fire District 7/1/1979Piercy Fire Protection District 4/1/2006Pliocene Ridge Community Services District 7/1/2005Redwood Coast Fire Protection District 7/1/2009River Delta Fire District 1/10/2011Siskiyou County Service Area No. 4 7/1/2012Trinity Center Community Services District 11/1/2008Ukiah Valley Fire District 4/1/2006Williams Fire Protection Authority 7/1/2005Willows Rural Fire Protection District 7/1/1979Yolo Fire Protection District 11/1/2010Zamora Fire Protection District 7/1/2009

School DistrictsCapay Joint Union Elementary School District 7/1/1982Glenn County Office of Education 7/1/1979Hamilton Unified School District 7/1/1979Lake Elementary School District 7/1/1979Plaza School District 7/1/1979Princeton Joint Unified School District 7/1/1979Stony Creek Joint Unified School District 7/1/1979Willows Unified School District 7/1/1979

Special DistrictsArbuckle Public Utility District 7/1/2008Artois Community Services District 7/1/1982Berry Creek Community Services District 9/1/2003Biggs-West Gridley Water District 1/1/2013


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Orland Cemetery District

Brannan-Andrus Levee Maintenance District 12/1/20100Broadmoor Police Protection District 7/1/2014Butte City Community Services District 7/1/1979Cachuma Resource Conservation District 9/1/2014Capitol Southeast Connector 1/25/2005Chowchilla Red Top Resource Conservation District 9/1/2013Churchtree Community Services District 4/1/2013Colusa Basin Drainage District 4/1/2007Colusa County One-Stop Partnership 7/1/2003Colusa County Resource Conservation District 7/1/2010Colusa County Water District 4/1/2012Colusa County Water Works #1 8/26/2011Concord/Pleasant Hill Health Care District 10/1/2012Cortina Creek Flood Control and Flood Water Conservation District 5/15/2009Cortina Water District 4/1/2012East Merced Resource Conservation District 7/1/2010Elk County Water District 2/12/2010Elk Creek Community Services District 7/1/1979First 5 Colusa 7/1/2008First 5 Glenn County 7/1/2000First 5 Yuba 1/1/2009Glenn County In-Home Supportive Services Public Authority 7/1/2003Glenn County Olive Pest Management District 7/1/2002Glenn County Resource Conservation District 7/1/2000Glenn County Transit Service 7/1/1996Glenn LAFCO 11/1/2013Hamilton City Community Services District 7/1/1979Holthouse Water District 7/11/2013IHSS Public Authority of Marin 7/1/2012Lake Berryessa Resort Improvement District 8/1/2009Levee District I 7/1/1979Levee District II 7/1/1979Levee District III 7/1/1979Los Carneros Water District 7/15/2009Madera Resource Conservation District 9/1/2013Merced County Law Library 1/28/2013Maxwell Irrigation District 1/1/2013Maxwell Public Utility District 7/1/2003Maxwell Recreation and Park District 7/29/2003Mendocino City Community Services District 7/1/2004Merced County IHSS Public Authority 7/1/2012N. E. Willows Community Services District 7/1/1979Napa-Berryessa Resort Improvement District 1/23/2009Nevada-Sierra Regional IHSS Public Authority 10/1/2003North Central Counties Consortium 7/1/2006North Willows County Service Area 7/1/1987Ord Bend Community Services District 7/1/1979Orland-Artois Water District 10/1/2008

Proberta Water District 3/7/2013Rancho Murieta Community Services District 7/1/2010Reclamation District No. 317 3/10/2011Reclamation District No. 407 3/10/2011Reclamation District No. 563 3/1/2011Reclamation District No. 784 12/1/2009Reclamation District No. 833 4/2/2010Reclamation District No. 1002 4/3/2011Reclamation District No. 2067 3/10/2011Reclamation District No. 2140 7/25/2006Sacramento Area Council of Governments 7/1/2014Sacramento County IHSS Public Authority 7/1/2012Sacramento Metropolitan Cable Television Commission 7/1/2012Salsipuedes Sanitary District 5/15/2003San Joaquin IHSS Public Authority 7/1/2012Sand Creek Flood Control District 7/1/2013Sierra-Sacramento Valley Emergency Medical Services 9/1/2009Solano County Transit 8/16/2012Storm Drain Maintenance District I 7/1/1979Storm Drain Maintenance District III 7/1/1979Tehama-Colusa Canal Authority 4/1/2007Tulare County IHSS Public Authority 7/1/2012Ukiah Valley Sanitation District 1/1/2011Westside Water District 7/1/2012Yuba LAFCO 7/1/2009

GSRMA 2014 Annual Report10

MembersAgencies

On July 1, 1979 Glenn County Joint Powers Authority was founded with 28 original members, all located within Glenn County. As of January 1, 2015, Golden State Risk Management Au-thority consists of 256 member agencies located in 48 California Counties. GSRMA members have a combined total of over 2,900 employees, 900 volunteers and over 1,000 elected or appointed public officials. Total member payroll is in excess of $109 million. Growth in total members has been steady. During the 2013-14 coverage period, 9 new agencies joined GSRMA.

New members have contributed to greater stability and increased assets. GSRMA continues to have excellent member retention. Growth is expected to continue as more entities find GSRMA to be an excellent solution to their insurance and risk management needs.

GSRMA Member Agency Growth from 1979 - 2014

Year1979-801980-811981-821982-831983-841984-851985-861986-871987-881988-891989-901990-911991-921992-931993-941994-951995-961996-971997-981998-9999-20002000-012001-022002-032003-042004-052005-062006-072007-082008-092009-102010-112011-122012-132013-14

Year1979-801980-811981-821982-831983-841984-851985-861986-871987-881988-891989-901990-911991-921992-931993-941994-951995-961996-971997-981998-9999-20002000-012001-022002-032003-042004-052005-062006-072007-082008-092009-102010-112011-122012-132013-14

228209

194173

159147

134120

10852

47414141414140404040404038383838383837363434

28

247256

$6,687,140 $6,990,425

$6,442,384 $5,728,943

$5,558,992 $5,238,718

$4,919,322 $4,794,319

$4,371,617 $3,915,737

$3,498,125 $2,371,307

$1,864,995 $1,777,189

$1,534,228

$1,563,326

$1,510,098

$1,487,223$1,332,045

$1,148,517$977,075$948,480$936,927$978,197$1,057,710

$800,000

$848,823

$703,749

$736,219

$795,336$904,172

$1,388,960

$1,625,808

$1,611,809

Year1979-801980-811981-821982-831983-841984-851985-861986-871987-881988-891989-901990-911991-921992-931993-941994-951995-961996-971997-981998-9999-20002000-012001-022002-032003-042004-052005-062006-072007-082008-092009-102010-112011-122012-132013-14

$17,212,842$18,406,688

$15,337,142$14,804,783

$14,361,964$13,724,070

$12,165,604$10,899,507

$8,876,312$7,581,124

$6,562,615$5,931,379

$5,077,109

$6,010,909$5,416,262

$5,423,971

$6,547,709

$6,268,852

$4,893,706$4,542,337

$4,414,034$4,284,301$4,070,412$3,738,336

$3,313,199$3,146,301$2,991,064

$945,532

$2,668,254

$380,833

$2,205,611$1,662,401

$5,848,088

$7,057,830

$6,797,628

$1,844,423

ContributionsUS Dollars

Year1979-801980-811981-821982-831983-841984-851985-861986-871987-881988-891989-901990-911991-921992-931993-941994-951995-961996-971997-981998-9999-20002000-012001-022002-032003-042004-052005-062006-072007-082008-092009-102010-112011-122012-132013-14

Year1979-801980-811981-821982-831983-841984-851985-861986-871987-881988-891989-901990-911991-921992-931993-941994-951995-961996-971997-981998-9999-20002000-012001-022002-032003-042004-052005-062006-072007-082008-092009-102010-112011-122012-132013-14

228209

194173

159147

134120

10852

47414141414140404040404038383838383837363434

28

247256

$6,687,140 $6,990,425

$6,442,384 $5,728,943

$5,558,992 $5,238,718

$4,919,322 $4,794,319

$4,371,617 $3,915,737

$3,498,125 $2,371,307

$1,864,995 $1,777,189

$1,534,228

$1,563,326

$1,510,098

$1,487,223$1,332,045

$1,148,517$977,075$948,480$936,927$978,197$1,057,710

$800,000

$848,823

$703,749

$736,219

$795,336$904,172

$1,388,960

$1,625,808

$1,611,809

Year1979-801980-811981-821982-831983-841984-851985-861986-871987-881988-891989-901990-911991-921992-931993-941994-951995-961996-971997-981998-9999-20002000-012001-022002-032003-042004-052005-062006-072007-082008-092009-102010-112011-122012-132013-14

$17,212,842$18,406,688

$15,337,142$14,804,783

$14,361,964$13,724,070

$12,165,604$10,899,507

$8,876,312$7,581,124

$6,562,615$5,931,379

$5,077,109

$6,010,909$5,416,262

$5,423,971

$6,547,709

$6,268,852

$4,893,706$4,542,337

$4,414,034$4,284,301$4,070,412$3,738,336

$3,313,199$3,146,301$2,991,064

$945,532

$2,668,254

$380,833

$2,205,611$1,662,401

$5,848,088

$7,057,830

$6,797,628

$1,844,423

Mt. Shasta Fire DistrictCachuma Resource Conservation District

Glenn County Reclamation Conservation District Mural Painting

GSRMA 2014 Annual Report 11

GSRMA Total Assets from 1979 - 2014

Total AssetsUS Dollars

Year1979-801980-811981-821982-831983-841984-851985-861986-871987-881988-891989-901990-911991-921992-931993-941994-951995-961996-971997-981998-9999-20002000-012001-022002-032003-042004-052005-062006-072007-082008-092009-102010-112011-122012-132013-14

Year1979-801980-811981-821982-831983-841984-851985-861986-871987-881988-891989-901990-911991-921992-931993-941994-951995-961996-971997-981998-9999-20002000-012001-022002-032003-042004-052005-062006-072007-082008-092009-102010-112011-122012-132013-14

228209

194173

159147

134120

10852

47414141414140404040404038383838383837363434

28

247256

$6,687,140 $6,990,425

$6,442,384 $5,728,943

$5,558,992 $5,238,718

$4,919,322 $4,794,319

$4,371,617 $3,915,737

$3,498,125 $2,371,307

$1,864,995 $1,777,189

$1,534,228

$1,563,326

$1,510,098

$1,487,223$1,332,045

$1,148,517$977,075$948,480$936,927$978,197$1,057,710

$800,000

$848,823

$703,749

$736,219

$795,336$904,172

$1,388,960

$1,625,808

$1,611,809

Year1979-801980-811981-821982-831983-841984-851985-861986-871987-881988-891989-901990-911991-921992-931993-941994-951995-961996-971997-981998-9999-20002000-012001-022002-032003-042004-052005-062006-072007-082008-092009-102010-112011-122012-132013-14

$17,212,842$18,406,688

$15,337,142$14,804,783

$14,361,964$13,724,070

$12,165,604$10,899,507

$8,876,312$7,581,124

$6,562,615$5,931,379

$5,077,109

$6,010,909$5,416,262

$5,423,971

$6,547,709

$6,268,852

$4,893,706$4,542,337

$4,414,034$4,284,301$4,070,412$3,738,336

$3,313,199$3,146,301$2,991,064

$945,532

$2,668,254

$380,833

$2,205,611$1,662,401

$5,848,088

$7,057,830

$6,797,628

$1,844,423

Sacramento Area Council of Governments Color Buttes

Pioneer Cemetery District

Biggs West-Gridley Water District Banion Facility

Annual contributions have increased steadily since 2002 due to new members and increased payroll and property values of existing members. Contribution rates, based on cost of insurance per unit of coverage, have held stable through the years; a desired result of pooled insurance programs. This stability can be attributed to the administrative efficiency that growth has provided and reduced claims costs due to member loss prevention efforts.

GSRMA’s total assets have grown from $380,833 as of June 30, 1980, the end of the first program year, to over $18.4 million as of June 30, 2012.

In July 2000, GSRMA adopted a Capital Target Reserve Policy to

protect assets and return excess funds to members. This policy resulted in a downward adjustment of GSRMA as-sets as dividends were paid back to the members in the late 1990’s. GSRMA has a strong history of returning excess contributions to the members in the form of dividends.

Total assets have grown to keep pace with claims exposures due to the steady growth in membership that started in 2002. GSRMA continues to be well funded. Net equity, assets less liabilities, in the program is estimated to be $4.1 million as of June 30, 2014, an increase of $1.16 million from the prior period.


$50 million Per Occurrence Limits•First-dollarcoverage-nomemberretentionordeductibleforliabilitylosses

•Bodilyinjury&propertydamage

•Personalinjury

•Publicofficialserrors&omissions

•Automobileliability

•Contractualliability

•Employmentpracticesliability

•Pollutionliabilityandcrime-bondcoverageareprovidedwithseparatelimits

GSRMA participates in the CSAC-Excess Insurance Authority (EIA) General Liability Program for excess liability coverage. The program is one of the largest public agen-cy excess pooling programs in the country. The size and reputation of the program provides unmatched stability and leverage in the insurance market.

GSRMA schools participate in both the CEAC-EIA program and Schools Excess Liability Fund (SELF) which provides member schools coverage that is designed specifically for education risks.

Statutory Limits – $5 million Employers Liability•First-dollarcoverage

– no member retention or deductible for workers’ compensation claims

•Completeself-administrationofclaims

•Coordinatedphone-inreportingandinjurytriage

•Customizedreturn-to-workprograms

•GSRMAhasbeennationallyrecognizedforitsinnovativeclaimsmanagementsolutions

GSRMA participates in the CSAC-EIA Excess Workers’ Compensation (EWC) Program. The EWC has the financial strength and stability to remain strong in all market conditions. The program utilizes pooled, fully-insured and quota-sharing coverage layers to spread risk. The GSRMA Workers’ Compensation Program provides its members with stable, competitive rates through responsible funding and administrative efficiency.

$25 Million Catastrophic Liability Insurance Protection (CLIP)

– Lexington Insurance Company $25M excess of $25M

$25 Million Reinsurance Layer

– Starr Indemnity and Liability Company $10M excess of $15M

$15 Million Reinsurance Layer

– Ironshore Indemnity, Inc. $10M excess of $5M pool

$5 Million CSAC EIA Pool

– Covers difference between $250K and $5M

$250 Thousand GSRMA Pool

– Covers the first $250,000

Comprehensive General Liability Program

Workers’ Compensation Program

Statutory Excess Insurance Layer

– National Union Fire Insurance Company (An AIG Company) Statutory excess of $50M

$50 Million Excess Insurance Layer

– ACE American Insurance Company $45M excess of $5M Pool


– Difference between SIR and $5,000,000 per occurrence.

– Reinsured by Wesco Insurance Co. (AmTrust Group) Subject to a $23,509,716 Corridor Retention


– Covers the first $300 Thousand per occurence


$600 million Limits Per Loss

•Lowmemberdeductibles

•All-risk,fullreplacementcostcoverage

•Realandpersonalproperty

•Automobile,mobileequipment,watercraft,boilerandmachinery

•Floodcoverageincluded

•Noco-insuranceclause

•Optionalearthquake,andaviation/airportcoverageavailable

GSRMA participates in the CSAC-EIA Property Program. The unique structure of the program diversifies risk geographically throughout the State. This innovative ap-proach reduces the impacts of large losses to the individual members and insurers. The program is insured by numerous separate insurance carriers further stabilizing the program and protecting against carrier insolvency due to large losses.

In addition to property coverage, GSRMA members have access to reduced cost coverage for watercraft, medical malpractice, aviation and other exposures.

$600 Million

– $300M excess $300M All Risk

$300 Million

– $275M excess $25M All Risk & Flood Limits (Flood Limits Annual Aggregate)

$25 Million Primary Layer

– $25M All Risk Including Earthquake, Flood and Boiler & Machinery


– $3M per occurrence/$10M Annual Aggregate Excess of Underlying Deductibles (Excludes earthquake and flood)


– $4,000 after member deductible

$1 Thousand Member

– Member deductible per covered loss

Property and Miscellaneous Coverage

13GSRMA 2014 Annual Report

GSRMA 2014 Annual Report14 GSRMA 2014 Annual Report


GSRMA’s employee benefits program launched on July 1, 2007 with six member agencies, 25 covered employees and 50 covered lives. As of January 1, 2014, GSRMA health provides coverage to 34 agencies with 810 employees and 1,900 total lives!

GSRMA plans are available to Cali-fornia public agencies with less than 250 employees. The plans are offered through EIA Health’s small group plans. EIA Health utilizes proven pooling concepts to reduce costs by spreading them over a large population. EIA Health partners with Self-Insured Schools of California (SISC), to create one of largest employee benefit programs in the country, which affords tremendous funding leverage.

The challenges of health care reform are being met, and all GSRMA offerings are compliant with the regulations as they become law. The plans promise to remain an excellent option well into the future. GSRMA provides administration, billing and

2015

2014

2013

2012

2011

2010

2009

2008

MembersAgencies / Employees

31

34

30

26

18

12

11

6

GSRMA 2014 Employee Benefits Program

757

811

715

469

231

46

36

25

enrollment to plan members. The plans utilize Blue Shield and Anthem PPO (Preferred Provider Organization) networks, the two largest in California. Currently, there are 8 plan designs available. The selection includes three traditional PPO’s, two high-deductible Health Savings Account (HSA) compatible PPO’s, two HMO’s (Health Maintenance Organizations) and an EPO (Exclusive Provider Organization) to provide an HMO style option to areas where no HMO exists.

Dental, vision, group life and disability coverage is also available. Like the medi-cal coverage, these programs are offered through the CSAC-EIA and utilize the same efficient funding principles.


Golden State Risk Management Authority is committed to offering members comprehensive Safety and Loss Prevention Services. This commitment serves to assure that members are provided the resources necessary to develop effective safety and loss prevention programs. A core component of these services is training. GSRMA offers a variety of training opportunities and resources to our member agencies.

The 10th Annual GSRMA Training Day was held at Rolling Hills Resort on Thursday October 23. 2014 and was attended by 128 individuals from 49 member agencies. The event featured sessions to improve the understanding of the workers’ compensation system; creating a healthier workplace and an update on the Affordable Care Act. CEO/Risk Manager Scott Schimke addressed the members with a “State of GSRMA” presentation, and members were afforded time to network, and share concerns. The training day concluded with a social hour and dinner which was held in collaboration with the Public Cemetery Alliance. The event was a great success.

GSRMA staff travel to member agencies’ locations and conducts on-site visits as well as training. GSRMA is pleased to offer a variety of on-site training topics for our members, including but not limited to: Introduc-tion to Safety, Heat Illness Prevention, Defensive Driving, Customer Service

2014 Loss Prevention & Training Highlights

2014, 10th Annual GSRMA Training Conference at Rolling Hills Resort


and How to Conduct Tailgate Safety Trainings. Over the past year, GSRMA staff have conducted 257 member site visits and provided training to 1024 attendees, on the topics listed in the chart at right.

To supplement this on-site training, GSRMA also provides web-based training, through our online training program TargetSolutions. TargetSo-lutions offers quality training, as well as a completely customizable records management system. TargetSolutions provides a wide variety of training courses with topics ranging from Fleet Safety to Occupational Safety and Health to Hazard Communication, and many more topics in between. Fire, EMS and water agencies are provided 100’s of hours of continuing education courses at no additional cost.

In 2014 there were several changes to TargetSolutions including but not limited to:

• Enhanced Notifications• New report generating features• Topical webinar recordings added

to Help Site• New custom activities functions• Courses updated to meet the GHS

Standard• Updated and re-released education

courses

TargetSolutions has proven to be a valuable tool for GSRMA members, and will be an important piece of our program for years to come. GSRMA members’ utilization of this program for the past year is shown in the table below.

GSRMA continues to offer the Loss Prevention Subsidy Fund (LPSF) program. The goal of this program is to encourage our member agencies participation in safety and loss prevention training by assisting with offsetting some of the associated cost. For 2013/2014 thirty-two member agencies applied for funding through this program, requests totaled $21, 232.90.

The Loss Prevention Incentive Program (LPIP) continues to be successful. This program was developed to assist our members in the reduction of losses, enhancement of existing safety pro-grams and compliance with state and federal regulations by providing an incentive. The incentive is that member agencies can receive contribution reduc-

Training Course Number of Individuals Trained

AB 1825 Mandated Harassment for Supervisors 207

AB 1234 Mandated Ethics Training 185

Best Practices for Public Cemeteries 71

CPR/First Aid 101

Customer Service – Dealing with Difficult People 49

Defensive Driving 81

Fire Extinguisher Training 8

Heat Illness Prevention Training 167

Introduction to Safety in the Workplace 83

Playground Safety and Supervision 10

Site Hazard Identification 36

Traffic Control and Flagging 26

TargetSolutions Program UtilizationJuly 1, 2013 – June 30, 2014

1,695 Registered users

2,378 Total Courses Completed

910 Total Custom Activities Completed

tions based on specific loss prevention activities they perform. In 2013/2014 thirty-two member agencies received incentives totaling $195,864.58.

One of GSRMA’s most successful loss prevention tools is the HR Legal Resource Program. Members are able to obtain legal advice from the attorneys at Hunt-Jeppson, LLP a firm that specializes in employment law. The program has saved members thousands in legal fees and GSRMA has benefited from the mitigation of countless employment-related losses. Since the program’s launch in August 2011, hundreds of member issues have been addressed, and feedback regarding the service has been overwhelmingly positive.

1217 173

160

336 169

323

Fire District School District Special District Cemetery District County of Glenn Cities

TargetSolutions Course Completion By Member Type


CAJPA Acreditation

The California Association of Joint Powers Authorities (CAJPA) spon-sors what is considered the nation’s first risk management accreditation program. This program is designed to ensure quality and professional stan-dards for all California risk manage-ment pools regardless of size, scope of operation, or membership structure. The process involves a detailed pro-gram study and evaluation, committee review and issuance of a report. The process is an extremely detailed audit conducted by an independent consul-tant and subject to CAJPA’s exacting standards.

Since 1992 GSRMA has maintained CAJPA’S highest award: “Accredita-tion With Excellence.” GSRMA com-pleted the tri-annual process spring of 2013, and was awarded continuous accreditation through May, 2016.


It is the policy of the Authority to have an independent actuarial study performed annually to establish the adequacy of reserves in the Workers’ Compensation and Liability/Property programs. The study also determines the appropriate funding levels for anticipated future losses, and the amount of equity in each program.

Confidence Levels

Confidence level is an estimated probability that a given level of funding will be adequate to pay claims costs. For example, the 85% confidence level refers to an estimate for which there is an 85% chance that the amount will be sufficient to pay loss costs.

Expected level refers to the best estimate of the full, ultimate value of loss costs. It is considered prudent to maintain asset levels at an amount that exceeds the expected level. Generally, a confidence level of 70% is considered marginally acceptable, 75%-85% confidence level (conservative) is recommended, and confidence levels above 90% are considered very conservative.

Discounted v. Undiscounted

Discounted figures take into account anticipated invest-ment income during the life of the claim. Undiscounted figures do not. Based on market conditions and historically low interest rates, GSRMA is currently utilizing a discounting rate of 2%.

GSRMA Actuarial Policy and Program Funding

General Workers Compensation & General Liability Confidence Levels Combined$000’s

General Liability$000’s

Workers Compensation$000’s Workers Comp

Expected -DiscountedExpected Undiscounted

70% Discounted70% Undiscounted





$9,008 $9,915 $10,087 $11,103 $10,329 $11,369 $10,609 $11,677 $10,956 $12,059 $11,420 $12,570

Total Assets$10,146

Combined Workers Comp and General Liability







Available Assets$15,668








$1,793$1,850 $2,107 $2,174 $2,268 $2,340 $2,455 $2,533 $2,686 $2,771 $2,993 $3,088

General Liability

$10,801 $11,765 $12,194 $13,277 $12,597 $13,709 $13,064 $14,210 $13,642 $14,830 $14,413 $15,658

Expected -Discounted Expected Undiscounted70% Discounted 70% Undiscounted 75% Discounted 75% Undiscounted 80% Discounted 80% Undiscounted 85% Discounted 85% Undiscounted 90% Discounted 90% Undiscounted$9,008$9,915$10,087$11,103$10,329$11,369$10,609$11,677$10,956$12,059$11,420$12,570 Total Assets$10,146

Expected -Discounted Expected Undiscounted70% Discounted70% Undiscounted75% Discounted75% Undiscounted80% Discounted80% Undiscounted85% Discounted85% Undiscounted90% Discounted90% Undiscounted$10,801$11,765$12,194$13,277$12,597$13,709$13,064$14,210$13,642$14,830$14,413$15,658Total assets$15,185







$1,793$1,850$2,107$2,174$2,268$2,340$2,455$2,533$2,686$2,771$2,993$3,088Available assets$5,039

Workers Comp







$9,008 $9,915 $10,087 $11,103 $10,329 $11,369 $10,609 $11,677 $10,956 $12,059 $11,420 $12,570

Total Assets$10,146
















$1,793$1,850 $2,107 $2,174 $2,268 $2,340 $2,455 $2,533 $2,686 $2,771 $2,993 $3,088

General Liability

$10,801 $11,765 $12,194 $13,277 $12,597 $13,709 $13,064 $14,210 $13,642 $14,830 $14,413 $15,658










Workers Comp







$9,008 $9,915 $10,087 $11,103 $10,329 $11,369 $10,609 $11,677 $10,956 $12,059 $11,420 $12,570

Total Assets$10,146
















$1,793$1,850 $2,107 $2,174 $2,268 $2,340 $2,455 $2,533 $2,686 $2,771 $2,993 $3,088

General Liability

$10,801 $11,765 $12,194 $13,277 $12,597 $13,709 $13,064 $14,210 $13,642 $14,830 $14,413 $15,658










1. The graph at top illustrates GSRMA’s available assets vs. outstanding claims liabilities ($000’s) for the self-funded liability and workers’ compensation programs combined at June 30, 2014. The estimated claims liability for the combined programs is $10,801,000 discounted and $11,765,000 undis-counted. The available assets of $15,158,000 equate to a funding level that exceeds the 90% (very conservative) discounted confidence level.

2. The graph above left illustrates GSRMA’s available assets vs. outstanding claims liabilities ($000’s) for the self-funded Liability Program at June 30, 2014. The estimated claims liability for the Liability Program is $1,793,000 discounted and $1,850,000 undiscounted. The available assets of $5,039,000 equate to a funding level that exceeds the 95% (very conservative) confidence level.

3. The graph left illustrates GSRMA’s available assets vs. outstanding claims liabilities ($000’s) for the self-funded workers’ compensation program at June 30, 2014. The estimated claims liability for the workers’ compensation programs is $9,008,000 discounted and $9,915,000 undiscounted. The available assets of $10,146,000 equate to a funding level that exceeds the 70% (marginally acceptable) confidence level on a discounted basis.



BACKGROUNDThe Golden State Risk Management Authority (GSRMA) was originally formed on July 1, 1979 under the name Glenn County Joint Powers Authority (GCJPA). It was created as a direct result of the “hard” insurance market public agencies dealt with in the mid-1970s. It was established and is governed by Government Code Section 6500, et seq.

In response to continued inquiries by public agencies physically located outside of Glenn County, GCJPA was renamed Golden State Risk Manage-ment Authority (GSRMA), effective July 1, 2000. This name was adopted by the Board to better identify the JPA with its current and future membership.

A seven (7) person Board, as established in its by-laws, governs GSRMA. The Board is comprised of two members from the Board of Supervisors of a member county (Mike Murray and John Viegas, County of Glenn), one member from the City Council of a member city (Charles Gee, City of Orland), one member from the Board of Trustees of a member school district (Michael Karle, Lake School District), one member from the Board of Directors from a member cemetery that belongs to the Public Cemetery Alliance (George Ouzounian, Visalia Cemetery District), one member from the Board of Directors of a member fire protection district (Neil Quinn, Bayliss Fire Department) and one member from the Board of Directors of any other

member special district (Gary Evans, Colusa Basin Drainage District).

The Risk Manager and staff conduct the day-to-day administration and operation of policies and procedures as set forth by the Authority’s Joint Powers Agreement, By-Laws, and Board of Directors.

FINANCIAL HIGHLIGHTSTotal revenue, from all sources, was $13.6 Million, an increase of 6% or $740K from 2012/2013. However, most of this increase ($427K) was due to an increase in premium for the employee benefits program. The remainder was due to member contri-bution in the workers’ compensation and liability programs which actually increased $302K or 4.5% compared to no change in the prior year.

Total expenses were $12.6 Million, a decrease of 5% totaling $648K from 2012/2013. Insurance expense decreased by 3% or $227K due to the prior year’s one-time expense due to the estimate of total assessment from prior participation in SELF’s excess workers’ compensation program. Claims costs and admin decreased 24% and 8% respectively. The former was due to positive actuarial change in estimated claims cost while the latter was mostly due to no dividend being given in 2013/2014 vs. a $200K dividend given in the prior year.

GSRMA assets of $18.4 Million exceeded its liabilities of $14.3 Million at June 30, 2014 by $4.1 Million. This amount increased $1.2M or 40%

due mainly to increased investment values, and decreased claims expense. This compares to a relatively small decrease in net assets of $291K or 9% between 2011/2012 and 2012/2013. The $4.1 Million of fund equity may be used to meet GSRMA’s ongoing obligations to members, claimants and creditors.

INSURANCE MARKET CONDITIONS AND OUTLOOKAs a “primary coverage” insurance pool, GSRMA relies heavily on the transfer of risk to excess coverage pools and reinsurance. Currently, GSRMA uses CSAC Excess Insur-ance Authority (CSAC-EIA) and, to a lesser extent, Schools Excess Liabil-ity Fund (SELF) for excess coverage. GSRMA and these excess programs are impacted by the insurance market which, in turn, is greatly influenced by a number of conditions.

GSRMA, and its excess insurance providers, continue to face an “up-ward” phase of the insurance market. With many natural disasters affect-ing the property market, the erosion of gains from prior year legislative reforms, a weak investment market, level payrolls and increases in both the frequency and severity of claims, the industry is now in a hard market cycle.

GSRMA and its members will see workers’ compensation rates increase while coverage possibly shrinks as this hardened phase continues.

Savings from prior legislative reforms have been largely nullified by actions both in the courts and at the State legislative level. Increased enforce-ment of Medicare set-aside rules have increased administrative costs and will increase the cost of applicable claims. SB 863, the 2012 workers’ compensation reform bill, has not

INTRODUCTION As the management of Golden State Risk Management Authority (GSRMA), we offer readers of GSRMA’s financial statements this narrative overview and analysis of the financial activities of GSRMA for the fiscal years ended June 30, 2014.


resulted in any noticeable savings for our pool specifically, likely because one of the main targets of the legisla-tion, the relief from tardy liens from providers, was much more prevalent in other areas of the State. AB 1035, extending the time period in which a claim can be filed by a firefighter for job relate illness, will likely have a negative effect on claims costs or at least the cost of excess insurance. The possibility of approval of legislation re-introduced in the next few years, especially those affecting emergency response personnel, could have sig-nificant negative impact on rates in the next few years. In addition, an anticipated increase in reporting requirements over the next few years from the California Division of Workers’ Compensation may increase administrative expense as well.

Though the stock market has recov-ered significantly from the lows expe-rienced in the midst of the recession, safe investments with good returns are still non-existent. This is especially true for public entities in California who, by law, can only invest in excep-tionally safe investment vehicles that, currently, provide very little return. Public entity insurance pools, such as CSAC-EIA and our own pool, enjoy very little assistance from investment returns in keeping rates low. We assume the Federal Reserve Bank will not change its short term policies before 2015, at the earliest. Earnings on investments are expected to remain extremely low for the short term.

Health costs are a significant portion of total claims costs and they continue to increase annually faster than over-all inflation.

Though previously decreasing payrolls for public entities have mostly leveled

off, payrolls do continue to affect costs both positively and negatively. When payrolls do not increase, the exposure to individual members and pools simi-larly does not increase. However, new hires tend to introduce younger, often healthier, employees to these agencies and without them, the resulting aging workforce can increase the frequency and cost of workplace injuries.

GSRMA should continue to benefit in the future from the implementation of new operational software. The re-cently implemented claims software is allowing more automation to processes. The features and functionality of internal pool management software continues to be increased which not only improves customer service but improves internal efficiency as well. The recent review and selection of new business partners for services such as medical bill review and pharma-ceutical management should result in some savings and an increase in efficiency as well.

At this time, due to the diligence and fiscally conservative nature of their governing boards, GSRMA is in solid financial position as is its excess pool, CSAC-EIA. However, these pools will need to continue to be vigilant and conservative to maintain this position during these challenging times.

MEMBERSHIPAs of June 30, 2014, GSRMA had two-hundred fifty-one (251) member agencies. Current membership categories include: Counties, Cities, School Districts, Fire Districts, Cemetery Districts, and Special Districts. During the fiscal year 2013/2014, GSRMA added nineteen (19) new members. The management of GSRMA has identified additional potential member sources including cemetery districts, fire departments,

irrigation districts and various types of special districts and expects new member growth in 2014/2015 to be 5% to 10%.

SERVICES AND PROGRAMSLoss Prevention and Training

GSRMA is a strong proponent of loss prevention and safety training activities. Safety officer Mark Mar-shall and Loss Prevention Specialist Jennifer Peters provided numerous on-site inspections and trainings for the membership during 2013/2014. The requests from members for such training continue to increase.

GSRMA provides its members with the Loss Prevention Subsidy Fund (LPSF), a grant program to help its members offset their third-party loss prevention and safety training. In 2013/2014, twenty-nine members utilized this Subsidy fund - a decrease of 31% over 2012/2013. Another GSRMA program, the Loss Preven-tion Incentive Program (LPIP), pro-vides contribution reduction incen-tives to member agencies as a result of specific loss prevention activities that they complete. Fiscal year 2013/2014 was the eighth year of the LPIP and thirty-two member districts received credits totaling over $195,000, a 22% increase from 2012/2013 and a 150% increase from 2011/2012.

We continue to expand and improve various safety and training programs within GSRMA. Annually, GSRMA provides its membership with an extensive Orientation and Training day. For 2013/2014, the training day was held in Corning, California in conjunction with the Public Cem-etery Alliance annual meeting. Fred Shafer, a Performance Improvement Expert, known across America for his striking presentations, provided an



educational and entertaining presen-tation dedicated to moving others to “Perform Better, Live Stronger and Dream Bigger”.

Membership Communication

GSRMA provides its member-ship with an informative and useful website, www.gsrma.org, which was recently revamped. The site content is updated regularly. Forms, a calen-dar, contact information and more are available online. A member portal has been launched as well that allows members to review their specific in-formation such as description of cov-erage, property inventories, contact information and perform a variety of data maintenance and sharing tasks.

A professional quality newsletter is delivered to members throughout the year. A blog of short informational articles and answers to frequently asked questions is maintained on the website as well. The GSRMA Member Services Director and Safety Officer have been very active in on-site visits and inspections.

General Liability Program

The General Liability program started in 1979 as a self-insured program. Currently all claims covered under GSRMA’s Memorandum of Coverage and Certificates of Coverage are ad-justed in-house by staff. The program has several excess layers in place. Specifically, GSRMA places excess coverage through CSAC-Excess Insurance Authority (CSAC-EIA). The 2013/2014 Self Insured Reten-tion (SIR) was $250K per occurrence. GSRMA places some of its school-related coverage through the Schools Excess Liability Fund (SELF) as well.

Program contribution rates are presented at the March Board of Directors meeting. They are formally adopted at the May Board of Directors

meeting. Rates are calculated based on an annual actuarial study, the fiscal needs of the pool, the loss experience of each individual member agency, and loss exposure indicators such as number of employees and payroll.

In July, 2011, GSRMA introduced an HR Legal Resource Program that offers members access to human resource attorneys so that they can receive legal advice regarding employment-related issues at no cost. As more and more members embrace this service, it is making a significant impact in reducing employment practice losses.

Workers’ Compensation Program

The Workers’ Compensation program was created on July 1, 1979. Currently all claims covered under GSRMA’s Memorandum of Coverage and Certificate of Coverage are adjusted in-house by staff.

Program contribution rates are presented at the March Board of Directors meeting and formally adopted at the May Board of Directors meeting. Rates are calculated based on an annual actuarial study of the financial needs of the pool, the loss experience of each individual member agency, and loss exposure indicators such as number of employees, job classifica-tions and payroll.

GSRMA procures its excess workers’ compensation coverage through CSAC-EIA. The 2013/2014 Self Insured Retention (SIR) was $300K per occurrence. GSRMA utilizes the Workers’ Compensation Program to cover all member agency employees and volunteers who are injured during the course and scope of their employment. The coverage includes payment for:

• Medical Costs

• Temporary Disability

• Permanent Disability GSRMA 2014 Annual Report


GSRMA uses the “OUR System,” an early return to work system for the County of Glenn and other members that have shown interest. The program has been successful and is available to all GSRMA members. Additionally, a nurse triage program has been fully implemented and is in use by most members. The nurse triage program allows members to phone a nurse-on-call service when a workplace injury occurs. The nurse triages the injury, suggests treatment options and then completes the forms that otherwise would need to be completed by the member. The service then forwards the forms to GSRMA. This process greatly improves efficiency and quality of service to our members.

In addition, GSRMA utilizes a medical bill review service and recently imple-mented a pharmacy management service to help reduce costs in the workers’ compensation program.

Property Program

The Property Program was created in 1979. It is a group purchase program that combines the insured values of all member agencies to obtain the broadest coverages at the lowest cost. Currently GSRMA participates in CSAC-EIA’s Property Program which has tremendous participation by Cali-fornia counties, cities and special dis-tricts. Total insured value of GSRMA member property is $460 million.

The program allows GSRMA to offer its members an “All-risk” full replace-ment cost Property Program with $600 million per occurrence in limits at a cost that is far below typical market rates. GSRMA’s deductible is $5,000 per occurrence and its member agencies have a $1,000 per occurrence deductible. Rates are calculated based on relative amount of property covered

for each member.

Miscellaneous Coverage

GSRMA provides its membership several outstanding miscellaneous in-surance programs on a group purchase basis. This includes Special Events and Course of Construction Coverage.

These miscellaneous programs are placed through CSAC-EIA program. They are very competitively priced for today’s insurance market.

Employee Benefits

Beginning in July, 2007, GSRMA of-fered its members employee insurance products including health insurance, group dental and vision, life and disability. At the end of the 2013/2014 fiscal year, the program had grown to approximately 538 enrollees in 32 member entities. GSRMA management expects this program to continue to grow.

Services

GSRMA currently has a Special Events Program in place. This program allows member agencies the ability to refer liability coverage to any individual or organization wanting to use their district facilities. This is an excellent risk transfer program with limits of $1 million per occurrence.

MemberLink is the GSRMA branded version of Target Solution’s online train-ing, certification tracking and member communication Web-based application. Roughly 3,000 classes are completed by member employees annually.

WeTip is an anonymous crime reporting system. It helps in the identification and resolution of crimes against our members and acts as a significant crime deterrent. The service has been instrumental in recovering member property and solving crimes.

The HR Legal Resource Program

offers members access to human resource attorneys so that they can receive legal advice regarding employ-ment-related issues at no cost.

CAJPA ACCREDITATIONGSRMA voluntarily undergoes a thor-ough review of all operations through California Association of Joint Powers Authorities’ (CAJPA’s) Accreditation process. This is a very detailed audit conducted by an independent consul-tant and subject to CAJPA’s exacting standards. Since 1992 GSRMA has maintained CAJPA’S highest award: “Accreditation with Excellence.” GSRMA most recently completed this tri-annual process in the Spring of 2013. It will go through the process again in the Spring of 2016.

FINANCIAL MANAGEMENT AND CONTROLGSRMA management is responsible for establishing and maintaining an internal control structure designed to ensure that assets are protected from loss, theft, or misuse and to ensure that adequate accounting data is compiled to allow for preparation of financial statements in conformity with accounting principles generally accepted in the United States of America.

GSRMA has adopted a conservative investment policy according to state guidelines designed to optimize the rate of return on available assets not re-quired for current operations while still keeping these assets readily available.

Budgetary control is provided by veri-fication of budgeted amounts prior to expenditures and analysis of all account totals compared to budgeted amounts. Detailed reports of the budget to-actual comparisons are provided to the JPA Board. In addition, an Income State-ment, Balance Sheet and Checking



Account Disclosure Report are reviewed three times annually by the GSRMA Board of Directors. Also, disbursement and bank transactional reports are reviewed by the Executive Director and/or the Board Officers regularly.

OVERVIEW OF THE FINANCIAL STATEMENTSThis management’s discussion and analysis is intended to serve as an in-troduction to GSRMA’s basic financial statements. Accounting principles generally accepted in the United States of America require financial statements to distinguish functions of the govern-ment that are principally supported by taxes and intergovernmental revenues, referred to as “governmental activities” from other functions that are intended to recover all, or a significant portion, of their cost through user fees and charges, referred to as “business-type activities”. All of the activities of GSRMA are classified as “business-type activities”. These activities include the development and operation of a public entity risk pool and the purchase of insurance and services for members.

GSRMA’s financial statements are prepared in conformity with generally accepted accounting principles and include amounts based upon reliable estimates and judgments. James Marta & Company, Certified Public Accoun-tants, has performed independent audit examinations of our financial statements. The opinion on the Authority’s finan-cial statements as of June 30, 2014 is included in page 1 of this report.

GSRMA maintains one type of proprietary fund. Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial account for its one risk management and insurance pool.

Increase/(Decrease) Increase/(Decrease)June 30, 2014 June 30, 2013 2014 to 2013 June 30, 2012 2013 to 2012

Assets:Current Assets 12,842,298$ 13,086,672$ (244,374)$ 12,723,922$ 362,750$ Non-Current Assets 5,564,390 4,126,170 1,438,220 2,613,220 1,512,950

Total Assets 18,406,688 17,212,842 1,193,846 15,337,142 1,875,700

Liabilities:Current Liabilities 4,837,143$ 4,526,578$ 310,565$ 3,520,650$ 1,005,928$ Noncurrent Liabilities 9,477,625 9,759,146 (281,521) 8,597,989 1,161,157

Total Liabilities 14,314,768 14,285,724 29,044 12,118,639 2,167,085

Net Assets 4,091,920$ 2,927,118$ 1,164,802$ 3,218,503$ (291,385)$

18,406,688$ 17,212,842$ 1,193,846$ 15,337,142$ 1,875,700$

Condensed Statements of Net AssetsJune 30, 2014, 2013, 2012

Total Liabilities and Net Assets

Condensed versions of the financial statements below and on the next page are provided by management and comply with GASB requirements to show three years of comparisons.


Total non-employee benefits contribution revenues increased 3.5% or $231K over 2012/2013. The increase was prin-cipally due to new members. Estimated payroll increased negligibly at approxi-mately 1%. We expect the payroll for existing members to continue to level off in 2014/2015 though total payroll for the year should increase due mainly to an increase in membership. Investment income increased from $67K in 2012/2013 to $135K in 2013/2014. We expect no change or slight growth in the next year as bond prices remain flat or inch up and higher paying notes retain their value.

The employee benefits participation increased to 32 members with a total of 538 employees and 1,220 lives.

Though this is mostly a “pass-through” product provided for the benefit of our members, its increased growth does have a small positive affect to pool net revenues.

Insurance Premiums. The insurance premium revenues and the expenses are dependent on the cyclical insurance market. Currently, the market continues on its path of hardening. Claims costs directly related to medical costs and administrative costs, due to increased reporting and regulatory compliance,

increase premium costs. The forecast for extremely low return for investment of public agency reserves as well as the unpredictable state of financial markets worldwide have an overall negative affect as well. GSRMA should expect to see excess rates continue to increase.

Excess insurance costs from 2012/2013 to 2013/2014 decreased 16% or $245K. This was due to a “one-time” expense in 2012/2013 as we booked the estimated the total amount owed, per SELF’s actuarial study, in assessment for prior years’ participation in their excess workers’ compensation program. Without this expense, excess insurance actually increased roughly 4% or $80K. While payroll increased slightly (1%), the non-as-sessment excess costs increased due to the overall increase in our excess pool’s costs.

Provision for Insured Events. The provision for insured events is a management estimate of the cost of insured claims. This estimate is based on a variety of actuarial and statistical techniques considering claims history, claim payment history, claim frequency, changes in doctrines of legal liability, inflation and other economic and social factors. Claim cost estimates are constantly re-evaluated.

Changes to prior year claim cost are ad-justed as they occur. The provision was significantly lower over the past year due to an increase in workers’ compensation claims that have reached the excess layer after which all expense will be paid by excess carriers and a declining trend in general liability claims expense that significantly affected the actuarial estimates for future claims costs.

Financial SummaryDuring the fiscal year 2013/2014, the overall financial picture of GSRMA strengthened significantly due to decreased claims costs, the lack of a dividend and no expense for actuarial adjustment to the SELF assessment as occurred in the prior year. The result is that net assets increased almost $1.4M or 40%. Since this amount can change significantly from year to year, this is not unexpected. The pool remains adequately and conservatively funded above the 90% confidence level.

For the future, the following are negative factors that will impact GSRMA:The California State Legislature passed SB 899 in 2004. Since its implementation, case law and subsequent legislative


Increase/(Decrease) Increase/(Decrease)

June 30, 2014 June 30, 2013 2014 to 2013 June 30, 2012 2013 to 2012

Operating Income

Operating Revenues 13,605,249$ 12,865,441$ 739,808$ 10,899,203$ 1,966,238$ Operating Expenses 12,575,578 13,223,837 (648,259) 12,963,896 259,941

Operating income (loss) 1,029,671 (358,396) 1,388,067 (2,064,693) 1,706,297

135,131 66,971 68,160 110,533 (43,562)

Increrase (decrease) in net assets 1,164,802 (291,425) 1,456,227 (1,954,160) 3,410,387

Net assets - beginning of year 2,927,118 3,218,543 5,172,703

Net assets - end of year 4,091,920$ 2,927,118$ 3,218,543$

Non-operating revenue - investment income

Condensed Statements of Revenue, Expenses, and Changes in Net AssetsFiscal year ended June 30, 2014, 2013, 2012

GSRMA 2014 Annual ReportGSRMA 2014 Annual Report26


activity has occurred that has weakened the positive financial impact of the bill. AB 2253 (public safety employees cancer presumptive), signed into law late in 2010, will have a significant negative impact on claims cost over time. Legislation that will result in increased workers’ compensation costs continues to be introduced annually and are beginning to have more success in being signed by the Governor.

Low interest rates continue to erode the amount of additional funds generated by investments that help offset claims and administrative costs. This will continue to have an impact in 2014/2015 as most excess funds are kept in safe but low yielding cash accounts and bond instruments. Notably related to this, our excess carrier is being significantly affected by the decrease in the level of discounting they exercise in calculating their outstanding claims liability. Discounting takes into account future returns on investment to offset claims liability. As interest rates have plummeted this offset amount has decreased substantially requiring CSAC-EIA to increase their reserves by increasing the amount they collect from members. In ad-dition, the volatility of financial markets will force carriers to increase their prices as their return from safe investments is reduced.

Though the effects of the State’s fiscal crisis were partially alleviated with tax in-creases approved by the voters through Proposition 30, many special districts in California are still struggling - including the members of GSRMA. These struggles could continue to negatively affect the budgets of these districts including their employee counts and total payroll amounts. A decline in payroll could result in higher contribution rates (i.e. per employee or per payroll dollar) and lower total contribution to GSRMA.

It is expected that state, federal and busi-ness partner reporting requirements will

continue to increase in both the amount of data required and complexity of the reporting requirements. This increases costs due to changes and additions of software and systems to meet these requirements as well as staff or contractor time to manage them.

Future positive impacts on GSRMA include:It is projected that SB 863, the 2012 workers’ compensation reform bill, may result in a savings of up to 5% statewide. However, most of the savings will be seen in the southern areas of the State and the legislation is not expected to have that great of an effect in our geo-graphic area. GSRMA is seeing little, if any, savings due to this legislation.

Improved administrative processes will continue to streamline the operation of this pool. New claims processing and pool management software are being more fully implemented and should result in more efficient claims processing and pool administration. These changes should allow us to adequately respond to a continued increase of reporting requirements and regulation by carriers and from State agencies.

Introduction of a new pharmaceutical benefits management company is expected to lower pharmacy costs significantly.

Overall, GSRMA remains in a very strong fiscal position that, barring loss of significant membership, should remain so for the foreseeable future.Budgetary control is provided by verification of bud-geted amounts prior to expenditures and analysis of all account totals compared to budgeted amounts. Detailed reports of the budget-to-actual comparisons are provided to the JPA Board annually. In addition an Income Statement, Balance Sheet and Checking Account Disclosure Report are reviewed bi-monthly by the GSRMA Board of Directors.



1. North Shore Fire Protection District

2. Upper Lake Fire Protection District

3. Colusa County Resource Coservation District

4. Rancho Murietta Community Services District Granless Latter

5. Williams Fire Protection Authority

6. Meridian Fire Protection District

7. Santa Maria Cemetary District

8. Comptche Volunteer Fire Department

9. Paso Robles Cemetary District

10. Albion Little River Fire Dept.

11. Orland Volunteer Fire Depart-ment

12. Lake Elementary School District

13. Pajaro Valley Cemetery District

14. Trinity Center Community Services District, Fire Station

15. Mendocino Fire Protection District, Fire Station

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2014 GSRMA Member Photos

P.O. Box 706 | Willows, CA 95988 | P 530 934-5633 | F 530 934-8133 | www.gsrma.org

California Association of Joint Powers AuthoritiesAccredited with Excellence since 1992

2014 annual report - golden state risk management authority€¦ · “golden state risk management...

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