NEW JERSEY PUBLIC HOUSING AUTHORITY JOINT INSURANCE FUND OCTOBER 22, 2014 MIDDLETOWN HOUSING AUTHORITY 10:30 AM

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1 NEW JERSEY PUBLIC HOUSING AUTHORITY JOINT INSURANCE FUND OCTOBER 22, 2014 MIDDLETOWN HOUSING AUTHORITY 10:30 AM Meeting Called to Order by Commissioner John Mahon. Open Public Meeting Statement read into the record. Salute to American Flag ROLL CALL OF EXECUTIVE COMMITTEE: William Cottman CHAIRMAN Pleasantville Housing Authority Present Madeline Cook SECRETARY Edison Housing Authority Absent EXECUTIVE COMMITTEE MEMBERS Robert DiVincent W. New York Housing Authority Absent Sandra Niemiec Sayreville Senior Housing Corp. Present Mary Harrison Red Bank Housing Authority Present John Mahon Bayonne Housing Authority Present Lillian Ciufo Fort Lee Housing Authority Excused ALTERNATE EXECUTIVE COMMITTEE MEMBERS: Douglas Dzema Perth Amboy Housing Authority Absent Larry Stratton South Amboy Housing Authority Absent Sherry Sims Boonton Housing Authority Absent John Clarke New Brunswick Housing Authority Present Grace Dekker Berkeley Housing Authority Present Joseph Billy Summit Housing Authority Absent APPOINTED OFFICIALS PRESENT: Executive Director Perma Risk Management Services Steve Sacco Present /Administrator Attorney DeCotiis, Fitzpatrick & Cole, LLP Frank Borin Present Co-Treasurers Execu-Tech, Inc. William Snyder Louis Riccio Present Absent Claims Service Qual-Lynx Kathleen Kissane Present Safety Director PMA James Rhoads Present Auditor Nisivoccia & Co. Valerie Dolan Absent Actuary Actuarial Advantage Dennis Henry Absent Insurance Broker Conner Strong & Buckelew Joseph Hrubash Absent Managed Care Consolidated Services Group Stephen McNamara Present Marketing Warren Risk Marketing, LLC Jack Warren Present

2 ALSO PRESENT Kathy Young, RMC Larry Coyle, Phillipsburg HA Zach Edelman, RMC Jack Zisa, RMC Amy Pieroni, RMC Commissioners Grace Dekker and John Clarke served as voting alternates in the absence of excused Commissioner Ciufo and absent Commissioner Robert DiVincent. Fund Attorney said although Chairman Cottman is present via telephone, Commissioner Mahon will act as Chairman for the purposes of this meeting. APPROVAL OF MINUTES: September 29, 2014 Open Minutes MOTION TO APPROVE THE OPEN MINUTES AS REFERENCED ABOVE ALL IN FAVOR: Commissioner Clarke Commissioner Harrison Correspondence Executive Director referred to the distributed letters of correspondence; Linden Housing Authority and Linden Housing Corp. have advised that they are seeking alternative quotes for their renewal of 2014; they will advise status of renewal when it becomes available. In addition, Pleasantville Housing Authority has provided their letter of non-renewal of membership, however requested a quote for 2015 which the Fund will provide once assessments are certified. Underwriting Manager Executive Director referred to the listing of Certificates of Insurance as distributed BUDGET PROCESS EXECUTIVE DIRECTOR REPORT Executive Director said the Operations Committee met this past Monday to discuss and review several options regarding the proposed 2015 Budget, assessments and dividend distribution. The purpose of this meeting is to introduce the proposed budget which has been distributed for review. Executive Director said the first six lines of the budget are comprised of loss projections provided by the Fund Actuary by line of coverage and has decreased by 4.59%. The excess premium portion of the budget is comprised of all underwriting data provided by members of the Fund and indicates an increase of 6.60% which includes a 27.64% increase to the EPL/POL line item. Executive Director said as expected, as of 2015 XL Insurance will begin to rate members based on their individual loss experience in all statewide JIFs, this Fund has six members that will be affected by the increased premium for this line of coverage. Executive Director said the increase is based on this line of coverage only, not the overall budget.

3 From 2011 through 2014, the JIF did not receive a premium increase from XL for EPL/POL. However, the loss ratio for the MEL system (19 JIF s) has increased. XL insurance has increased its premium to all members of the MEL for They have completed a thorough review of losses, by member, and have assigned premium increases for those members with an adverse loss ratio. They are offering members affected by the EPL/POL premium increases options to reduce the amount of the increase. A member could elect to increase its current deductible for a premium offset. The Operations Committee reviewed the projected increases from XL and will recommend not to equalize the assessments for EPL/POL. Each member will stand on its on for that line of coverage. The Executive Director continued with the 2015 budget and referred to the Professional Fees portion of the budget which outlines a 2% increase for Fund professionals and also referred to the contingency/stranded cost which will be reviewed under Resolution # Executive Director said the Operations Committee reviewed the Loss Ratio Options which outlined assessments received for all lines of coverage other than POL/EPL, compared to claims paid over a five year period. The Committee reviewed a total of four assessment options and agreed to implement Option #3 which is 0% over budget at a minimum surcharge of 2.5% for members exceeding a loss ratio of 100% or greater. Those members with an adverse loss ratio over the 5 year rolling period will receive a surcharge based on the sliding scale previously established. Those surcharges will then be redistributed to the members with loss ratios under 100%. The amount of surcharges for all lines other than POL/EPL total $97,407. With nothing further, Executive Director asked if there were any questions regarding the proposed 2015 budget which as increased by a total of.68%. Hearing none, MOTION TO INTRODUCE THE 2015 BUDGET FOR THE NEW JERSEY PUBLIC HOUSING AUTHORITY JOINT INSURANCE FUND IN THE AMOUNT OF $8,086,398 AND SCHEDULE A PUBLIC HEARING FOR NOVEMBER 17, 2014 AT THE GOLDEN NUGGET HOTEL & CASINO, ATLANTIC CITY, NJ AT 3:00 P.M. VOTE: Commissioner Clarke Commissioner Niemiec Commissioner Mahon publicly thanked the Executive Director and the Operations Committee for their professionalism in the preparation of the 2015 Budget; job well done.

4 2014 Dividend Executive Director said the Operations Committee has agreed to recommend a dividend distribution of $750,000 and referred to Resolution #28-14 for consideration. The Resolution will be filed with the State for final approval; pending receipt of same, the option of applying the dividend to the 2015 assessment or receiving a check will be sent to members of the Fund. MOTION TO ADOPT RESOLUTION # AUTHORIZING A TOTAL RETURN DIVIDEND OF $750,000. VOTE: Stranded Cost Resolution Commissioner Niemiec Commissioner Clarke Executive Director said Resolution #30-14 was reviewed by the Operations Committee and has been distributed for your review. Executive Director said the resolution is being recommended based on the additional costs associated with a member should they decide to leave the Fund. The basis of the resolution states that even though a member leaves the fund, there are still numerous administrative costs associated with the departed member. Examples would be the Fund Attorney, Claims Administrator, Managed Care provider, actuary and Executive Directors office. The premises would allow for the JIF to use a departed member s closed years surplus to off set these expenses. The resolution calls for this process for a three year period. Dividend would resume after that time frame, if applicable. MOTION TO ADOPT RESOLUTION #30-14 ESTABLISHING A STRANDED COST MANAGEMENT PLAN. VOTE: RESIDUAL CLAIMS FUND Commissioner Niemiec Commissioner Harrison Executive Director said The Residual Claims Fund introduced its 2015 budget at it s September meeting. The public hearing to adopt the 2015 budget (distributed) was held on October 15 th at 10:30AM in Jamesburg, NJ. Commissioner Cook s report of the meeting is included for your review. Executive Director said The Fund should nominate its 2015 representative to the RCF. Currently, Commissioner Cook is the RCF representative. MOTION TO NOMINATE MADELINE COOK TO SERVE AS THE FUND'S REPRESENTATIVE TO THE RCF FOR THE 2015 FUND YEAR. Commissioner Mahon Commissioner Harrison

5 VOTE: MEL 2015 BUDGET MEETING Executive Director said the MEL s 2015 Budget (distributed) was introduced on Wednesday, October 15, 2014 in Jamesburg, NJ. The public hearing on the MEL budget will be held on November 19, 2014 at 5:00 PM in the Convention Center in Atlantic City. (Room 305). Chairman Cottman s report of the meeting is included for your review. Also, the MEL's nominating committee will be beginning its deliberations for the November meeting. The Fund should nominate its 2015 representative to the MEL. Currently, Chairman Cottman is the Fund s MEL representative. MOTION TO NOMINATE WILLIAM COTTMAN TO SERVE AS THE FUND'S REPRESENTATIVE TO THE MEL. VOTE: Commissioner Clarke Commissioner Harrison 1 Abstain, Chairman Cottman MEMBERSHIP RENEWAL RESOLUTIONS This year, members of the JIF are scheduled to renew their membership in the NJPHA JIF. The listing of members that have submitted their renewal documents was distributed. ELECTED OFFICIALS TRAINING Executive Director said this year s elected officials training program will focus on Employment Practices. A session is scheduled at the League of Municipalities Conference for 3:45 pm in Atlantic City on Wednesday, November 19, (Room 302, Atlantic City Convention Center) PRO FORMA FINANCIAL REPORTS Monthly report submitted to Executive Committee included the August Financial Fast-track, Fixed Income Interest Rate Summary Comparison, Expected Loss Ratio Analysis, Claim Activity Report, Lost Time Accident Frequency Report, Interest Rate Summary Comparison, All JIFs Lost Time Accident Frequency, Monthly and Annual Regulatory Checklist. TREASURERS REPORT Mr. Snyder reviewed the distributed Treasurer s report for the month of August, The reports summarized the Summary of Cash Transactions, Summary of Cash and Investment and Certification & Reconciliation of Claim Payments. Mr. Snyder said in review of the Executive Director s report of the Financial Fast Track the Fund is in excellent financial shape. FUND YEAR AMOUNT 2010 $ 1, $127, TOTAL $128,607.01

6 MOTION TO ACCEPT RESOLUTION #29-14 OCTOBER BILL LIST AND THE REPORT OF THE TREASURER AS DISTRIBUTED. MARKETING ALL IN FAVOR: Commissioner Clarke Commissioner Dekker Marketing Director referred to his report as distributed. ATTORNEY Fund Attorney said that his office completed a review of the submissions of the Defense Attorney RFQ responses previously advertised with a return date of July 30, Upon completion of the review there were several submissions that were out of compliance and had not submitted required documents. Fund Attorney suggested that there may have been some confusion as to what is required within the original RFQ and his office would like to recommend that the submissions be rejected and the Fund re-issue an RFQ which will tighten wording on the requirements and provide a check list for submissions. Fund Attorney requested authorization as stated in distributed Resolution # MOTION TO ACCEPT THE RECOMMENDATION OF THE FUND ATTORNEY TO REJECT RFQ SUBMISSIONS FOR DEFENSE ATTORNEY IN RESPONSE TO THE JULY 30, 2014 DEADLINE AND RE-ISSUE AN RFQ FOR SAME. VOTE: Commissioner Clarke Commissioner Dekker SAFETY Safety Director referred to the distributed report which outlined a Technical Bulletin entitled Winter The bulletin provides recommendations for snow/ice removal relating to parking lots and sidewalks, snow throwers and de-icing materials. Safety Director said as the winter approaches, the members bear the heightened degree of responsibility to keep walkways, parking lots and any other place for snow or ice to accumulate, clear. As discussed in prior meetings, it is also very important to keep the salt/sweep and snow log up to date. Claims Administrator agreed with Safety Director, the log sheets are a key piece of information when defending a claim associated with slips and falls due to snow/ice. Lastly, Safety Director said that they remain interested in identifying members who currently use Stove Top Firestop Canisters in residents kitchen range hoods. They are small canisters which open when exposed to flame and release an extinguishing agent. They are interested in learning any practices regarding usage, resident education and experience with activations. Anyone with experience with the canisters is asked to reach out to Mr. Rhoads at james_rhoads@pmagroup.com.

7 MANAGED CARE Managed Care provider referred to the report as of September 2014 as distributed. CLAIM ADMINISTRATION Claim Review Committee Claims Administrator said there were a total of 10 PARs presented by Qual-Lynx during the Claims Committee meeting, three (3) of which exceeded $50,000 and provided to the Board for review. MOTION TO ACCEPT THE REPORT OF THE CLAIMS COMMITTEE, APPROVE THE PARS AS PRESENTED BY THE CLAIMS ADMINISTRATOR VOTE: Commissioner Harrison Commissioner Dekker Old Business None New Business None Public Comment None Executive Session No MOTION TO ADJOURN THE MEETING VOTE: Commissioner Niemiec Commissioner Dekker Meeting adjourned at: 10:55 AM

8 RESOLUTION #28-14 RESOLUTION OF THE EXECUTIVE COMMITTEE OF THE NEW JERSEY PUBLIC HOUSING AUTHORITY JOINT INSURANCE FUND AUTHORIZING A REFUND AVAILABLE IN CLOSED YEAR ACCOUNTS WHEREAS, N.J.A.C. 11: provides that a FUND may seek approval from the Commissioner of Insurance for a refund of excess monies from any FUND year upon compliance with certain requirements; and WHEREAS, the FUND has obtained a calculation from its Actuary and Executive Director as to the amount of money which is available for distribution consistent with the aforementioned regulations, and the financial integrity of the FUND; and WHEREAS, the Executive Committee has determined that it would be in the best interest of the FUND and its member authorities to make certain refunds; NOW, THEREFORE, BE IT RESOLVED by the Executive Committee of the New Jersey Public Housing Authority Joint Insurance Fund, As Follows: 1. Section B of N.J.A.C. 11: provides that the FUND may seek approval for refunds from any claim fund which has been completed for not less than twenty-four months. Based upon this requirement and the closure of old Fund Years, available surplus monies in the closed year accounts are eligible for refunds. 2. The Executive Committee has balanced the interests of the member authorities in obtaining the benefit of such monies as are available for refund against the need for the FUND to protect and preserve its financial integrity. Because the reserve figures and the IBNR figures utilized by the FUND Actuary are conservative, it is the conclusion of the Executive Committee that the following amount can be refunded at this time: Total Amount Approved for Distribution $750,000 Closed Year Accounts 3. The Executive Director is, therefore, authorized and directed to submit such documents as the regulations require to the Department of Insurance and the Department of Community Affairs for the approval of the refunds in the amounts set forth above. 4. This authorization is based upon the Auditor's Report of the Historical Operating Results as of December 31, The aforementioned refund monies shall be allocated, as required and necessary, from the closed year available surplus accounts. 5. The FUND Treasurer is authorized to prepare and execute checks for the pro-rated amount of the aforementioned refunds due to each member authority for the year in question, provided, however, the FUND Treasurer shall deduct the amount owed by the member local unit for

9 any outstanding balances without regard for Fund year, upon receipt of written documentation of approval or acquiescence of these refunds from the Department of Insurance and the Department of Community Affairs. Said refunds shall be made to the authorities which were members of the FUND for the years in question in the same ratio as said authorities were assessed for the years in question.

10 NEW JERSEY PUBLIC HOUSING AUTHORITY JOINT INSURANCE FUND BILLS LIST Resolution No OCTOBER 2014 WHEREAS, the Treasurer has certified that funding is available to pay the following bills: BE IT RESOLVED that the New Jersey Public Housing Auth. Joint Insurance Fund s Executive Board, hereby authorizes the Fund treasurer to issue warrants in payment of the following claims; and FURTHER, that this authorization shall be made a permanent part of the records of the Fund. FUND YEAR CLOSED CheckNumber VendorName Comment InvoiceAmount MORRIS COUNTY HOUSING AUTH. RETURN OF RMC FEE , , Total Payments Closed Year 1, FUND YEAR 2014 CheckNumber VendorName Comment InvoiceAmount DECOTIIS,FITZPATRICK&COLE, LLP PROFESSIONAL FEE 09/30/ DECOTIIS,FITZPATRICK&COLE, LLP ATTORNEY FEE 09/2014 3, , QUAL-LYNX CLAIMS ADMIN - 10/ , , SHERRY L. SIMS MEETING ATTENDANCE FEE 09/ GRACE DEKKER MEETING ATTENDANCE FEE 09/ JOSEPH M. BILLY, JR. MEETING ATTENDANCE FEE 09/ PERMA POSTAGE FEE 09/ PERMA EXECUTIVE DIRECTOR FEE 10/ , , CONNER STRONG & BUCKELEW UNDERWRITING MANAGER FEE 10/2014 1, , MARY M. HARRISON MEETING ATTENDANCE FEE 09/ WEST NEW YORK HOUSING AUTHORIT MEETING ATTENDANCE FEE 09/ BAYONNE HOUSING AUTHORITY MEETING ATTENDANCE FEE 09/ WILLIAM G. COTTMAN, SR. MEETING ATTENDANCE FEE 09/2014

11 SANDRA L. NIEMIEC MEETING ATTENDANCE FEE 09/ NJ ASSOC OF HOUSING & REDEVELO SPONSORSHIP FEE 4TH QTR , , ASBURY PARK PRESS ACCT ASB /6/14 - PUBLIC NOTICE ASBURY PARK PRESS ACCT ASB SPECIAL MTG ALLSTATE INFORMATION MANAGEMNT DEPT: ACT & STOR 10/ EXECU TECH, INC MONTHLY WEBSITE MAINTENANCE FEE 10/ EXECU TECH, INC TREASURER FEE 4TH QTR , , NJ ADVANCE MEDIA ACCT XNJPU /27/14 - SPECIAL MTG THE ACTUARIAL ADVANTAGE ACTUARIAL CONSULTING FEE 10/2014 2, , WARREN RISK MARKETING, LLC MARKETING DIRECTOR FEE 10/2014 2, , PMA COMPANIES, INC. LOSS CONTROL SERVICES - 10/2014 5, , EDISON HOUSING AUTH. MEETING ATTENDANCE FEE 09/ NJ NAHRO SPONSORSHIP FEE 3RD QTR , , NEIS, INC. PHYSICAL AUDIT - 9/10/ , , PRINCETON PUBLIC AFFAIRS GROUP PROFESSIONAL SERVICES - 10/2014 5, , SCIROCCO FINANCIAL GROUP, INC. RMC FEE HACKENSACK HA 9, , REGIONAL RISK MANAGERS LLC RMC FEE LODI HA 4, , NEW BRUNSWICK HOUSING AUTH. MEETING ATTENDANCE FEE 09/2014 Total Payments FY , TOTAL PAYMENTS ALL FUND YEARS $ 128,607.11

12 RESOLUTION NO: NEW JERSEY PUBLIC HOUSING AUTHORITY JOINT INSURANCE FUND (hereafter referred to as THE FUND ) ESTABLISHING A STRANDED COST MANAGEMENT PLAN WHEREAS, The FUND has adopted various premium and assessment plans; and WHEREAS, In the event that a member leaves the Fund, the remaining members could experience higher assessments to cover stranded costs; and WHEREAS, the Executive Committee deems it appropriate to assess any withdrawing member s balance in the closed fund year account an amount equal to the member s share of these stranded costs for a period not to exceed three years; and NOW, THEREFORE BE IT RESOLVED, that the Executive Committee amends the Plan of Risk Management as follows (additions underlined) 9. Procedures for the closure of Fund years, including the maintenance of all relevant accounting records. a.) b.) c.) d.) The Fund utilizes the Municipal Excess Liability Residual Claims Fund (RCF) to facilitate the closure of Fund years. Upon the transfer of outstanding liabilities of a Fund year to the RCF, the Fund adopts a resolution closing that year and transfers all remaining assets to the closed Fund year account. This amount is allocated by member local units using the same procedure as is used to calculate a dividend. Each month, interest is credited to the closed Fund year account by member. Each year, the Fund's governing body will determine if a dividend is appropriate from the closed Fund year account, and will make application to the Department of Insurance as appropriate. Further, in the event an open Fund year incurs a deficit, the Fund's governing body will consider an inter-year transfer from the closed Fund year account to offset the deficit. In either case, the dividend or inter-fund year transfer will be calculated on a member by member basis. In the event a member leaves the Fund, the Fund s governing body may assess the member s closed Fund Year account an amount not exceeding three (3) years stranded costs that the Fund incurs as a result of the member s withdraw. Stranded costs are those expenses incurred by the Fund that would otherwise have been paid from the withdrawing member s assessments had the member remained in the Fund. A member may apply to the Fund's governing body for a return of that member's remaining share of the closed Fund year account when five (5) years have passed since the last Fund year in which the member participated has been closed. The Fund's governing body will decide on the former member's

13 request after evaluating the likelihood of any additional assessments from the RCF. e.) f.) All dividends from the RCF will be deposited in the closed Fund year account on a member by member basis. The Fund will retain all records in accordance with the Fund's record retention program. ADOPTED: this 22 nd day of October, 2014 before the Governing Body

14 RESOLUTION NO: RESOLUTION OF THE COMMISSIONERS OF THE NEW JERSEY PUBLIC HOUSING AUTHORITY JOINT INSUANCE FUND WHEREAS, it is necessary for the New Jersey Public Housing Authority Joint Insurance Fund ( NJPHAJIF ) to establish a Defense Panel comprised of qualified attorneys for the defense of various actions that are brought against its members and for which the NJPHAJIF has an obligation to defend and indemnify, subject to and in accordance with applicable NJPHAJIF insurance policies; and WHEREAS, pursuant to the Local Public Contracts Law (N.J.S.A. 40A:11-1 et seq.), such services are recognized as professional services, as same shall be performed by persons authorized by law to practice a recognized profession, whose practice is regulated by law, and the performance of such services requires knowledge of an advanced type in a field of learning acquired by a prolonged formal course of specialized instruction and study; and WHEREAS, the NJPHAJIF solicited responses ( Request for Qualifications (RFQ) for Defense Attorney ), dated June 20, 2014 and due July 30, 2014, for the 2015 Fund Year from law firms pursuant to a fair and open process, in accordance with the requirements of N.J.S.A. 19:44A-20.4 et seq.; and WHEREAS, the Commissioners of the NJPHAJIF desire to reject all responses received from law firms by or on July 30, 2014, in response to the RFQ for Defense Attorney for the 2015 Fund Year; and WHEREAS, the Commissioners of the NJPHAJIF further desire to proceed with authorizing a new competitive procurement to establish a Defense Panel for the 2015 Fund Year that satisfies the requirements of a fair and open process pursuant to N.J.S.A. 19:44A-20.4 et seq. NOW, THEREFORE, BE IT RESOLVED by the Commissioners of the New Jersey Public Housing Authority Joint Insurance that the following actions are hereby authorized:

15 (1) Responses received from law firms by or on July 30, 2014, in response to the NJPHAJIF s RFQ for Defense Attorney to establish a Defense Panel for the 2015 Fund Year are hereby rejected; and (2) The NJPHAJIF hereby authorizes a new competitive procurement that satisfies the requirements of a fair and open process pursuant to N.J.S.A. 19:44A-20.4 et seq. for the establishment of a Defense Panel for the 2015 Fund Year; and (3) The NJPHAJIF hereby authorizes re-advertisement of the RFQ for Defense Attorney for the 2015 Fund Year. BE IT FURTHER RESOLVED that the Chairman of the New Jersey Public Housing Authority Joint Insurance is hereby authorized to execute this resolution. ADOPTED this 22 nd day of October, 2014 before the Governing Body