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When their bite is worse than their bark:

Animal Control Liability Challenges for the public risk manager Risk Management Meets disease management Developing Your Risk Management Plan

February 2010

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Volume 26, No. 2 | February 2010 | www.primacentral.org

The Public Risk Management Association promotes effective risk management in the public interest as an essential component of public administration.

Executive Director Lisa Lopinsky, CAE

Contents

President Ron Hayes Risk Manager Calcasieu Parish School Board Lake Charles, LA Past President Sarah Perry, ARM-P Risk Manager City of Columbia Columbia, MO

6 Risk Management Meets Disease Management By Mike Kushner, CSP, ARM, HCRM and Elizabeth Moore, BS, PharmD

12 Developing Your Risk Management Plan By Claire Reiss and Mary Stewart

President-Elect Laura Peterson, JD, MPA State Risk Manager/Agency General Counsel State of Nebraska Lincoln, NE Directors Dan Hurley, ARM-P, CSP Sr. Director, Risk Management & Safety Norfolk Public Schools Chesapeake, VA Mary Sue Linville, ALCM, ARM-P Director of Risk Management and Operations Washington Schools Risk Mgt. Pool Tukwila, WA Cindy B. Mallett, AIC, CWCP, ARM-P Risk Manager City of Gainesville Gainesville, GA John J. Nacht, ARM Risk Management Program Administrator State of Washington, Employment Security Dept. Olympia, WA

16 When Their Bite is Worse than Their Bark: Animal Control Liability Challenges for the Public Risk Manager By Joseph G. Jarret, Esq

Dave Parker, ARM-P Risk Manager Pima County Sheriff’s Department Tucson, AZ Marilyn Rivers, CPCU, ARM, AIC Risk and Safety Manager City of Saratoga Springs Saratoga Springs, NY Editor Jennifer Ackerman, CAE Senior Manager, Communications 703.253.1267 • jackerman@primacentral.org Advertising Donna Stigler AHI 888.814.0022 • donna@ahi-services.com

16 In Every Issue 4 News Briefs | 19 Advertiser Index | 20 Member Spotlight

Public Risk (ISSN 0891-7183) is published 10 times per year by the Public Risk Management Association, 500 Montgomery Street, #750, Alexandria, VA 22314 tel: 703.528.7701 • fax: 703.739.0200 email: info@primacentral.org • Web site: www.primacentral.org Opinions and ideas expressed are not necessarily representative of the policies of PRIMA. Subscription rate: $140 per year. Back issue copies for members available for $7 each ($13 each for non-PRIMA members). All back issues are subject to availability. Apply to the editor for permission to reprint any part of the magazine. Periodical postage paid at Alexandria, VA, and additional mailing offices. POSTMASTER: Send address changes to PRIMA, 500 Montgomery Street, #750, Alexandria, VA 22314. Copyright 2010 Public Risk Management Association Reprints: Contact the Reprint Outsource at 717.394.7350.

February 2010 | Public Risk

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October 13 Protecting our Children: Keeping our Communities and Schools Safe

November 17 Winning Strategies for Contractual Risk Transfer

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Message from PRIMA President Ron Hayes

Planning for the Unplanned

have never had the occasion to travel to Haiti. For some reason, during the course of my travels, Haiti has never made my “bucket list.” More popular spots such as Paris, London and Hawaii have occupied the top of my list.

of the devastation seems overwhelming. Years may pass before order and stability are restored. The major hope for recovery and structure in Haiti lies in adequate procedures and supplies being in place to assist the survivors in their recovery.

However, the devastating earthquake in Haiti on Tuesday, January 12, 2010, has thrust this small island nation onto the world stage. Initial details reporting the catastrophe are sketchy at best. A common theme has begun to surface as the deadline for this column approaches. The theme centers on the destruction of Port-au-Prince, capital of Haiti, as well as untold deaths.

As the world rushes to help Haiti deal with its catastrophic loss, let’s ponder the role of risk management in this situation. Recovery efforts, adequate shelter, communication, clothing, sanitary facilities, as well as getting goods to those most in need, are just a few challenges facing those attempting to assist Haiti.

As I write this article, it has been 48 hours since the earthquake with death toll estimates at 50,000 or higher. Destruction of hospitals, schools, houses and buildings is rampant. No water, no shelter, no food, little medical supplies, no electricity and no means of communication complicate the situation. A city of 2,000,000 residents has been reduced to rubble. I want to share this tragedy with our readers in an effort to reiterate the fact that any of us might face a catastrophe of some sort one day. As risk managers, we deal with emergency crisis management response planning. Table top exercises, crisis management plans, first responder drills, crisis teams, evacuation plans and readiness evaluations are a necessary part of risk management today. When a city with four times the population of New Orleans collapses as a result of an earthquake, the sheer magnitude of the loss can be mind boggling. The enormity

For persons who might question the value of risk management and crisis management programs, I submit that it’s the most pressing need when the sudden dramatic catastrophe hits. Planning for the event and its aftermath serves as the best hope for recovery following any crisis, catastrophic or not. Join with me in prayer for those suffering and those assisting the suffering in earthquake ravaged Haiti. Sincerely,

The major hope for recovery and structure in Haiti lies in adequate procedures and supplies being in place to assist the survivors in their recovery. … Planning for the event and its aftermath serves as the best hope for recovery following any crisis,

Ron Hayes 2009–2010 PRIMA President Risk Manager, Calcasieu (La.) Parish School Board

catastrophic or not.

February 2010 | Public Risk

News Briefs

News

Briefs New Decade, Old Threats: Terror Threats Mean Stressful Skies for U.S. Travelers A new decade has dawned, but for Americans on the go and those flying into the United States, fresh threats of terrorism against the U.S. are making air travel almost as stressful as the days following Sept. 11, 2001, reports the Winnipeg Free Press. The attempted bombing of a Northwest Airlines flight on Christmas Day has trained a spotlight on airport security lapses and communication breakdowns among various domestic and international intelligence agencies. The federal government announced new rules aimed at travelers flying to the United States from 14 countries deemed as potential terrorist hotbeds. The directives replace the emergency order put in place immediately following the attempted Christmas Day attack. They spell relief for U.S.-bound travelers who have been subjected to additional screenings and carry-on baggage restrictions as well as being forced to remain in their seats during the last hour of flight. Instead, the TSA is now demanding that travelers flying into the United States from high-risk countries undergo additional screening, including pat-downs and full-body scans. The measures will apply to passengers flying out of countries listed as state sponsors of terrorism—Cuba, Iran, Sudan and Syria—as well as other “countries of interest,” including Nigeria.

Ohio City Settles for $2.5 million with Children of Black Woman Killed in Drug Raid by White Police Officer The family of an unarmed black woman who was shot and killed by a white police officer during a drug raid has settled a wrongful death lawsuit against the city for $2.5 million, reports the Los Angeles Times. The death of Tarika Wilson, 26, ignited protests and debate about race relations in Lima, a northwest Ohio city where one in four residents is black. Wilson was holding her 1-year-old son in her arms when she died. The child was also shot and later had a finger amputated. Police Sgt. Joseph Chavalia, who killed Wilson, was acquitted of criminal charges in her death and has since returned to work, though he is no longer allowed to patrol the streets. Chavalia was part of a SWAT team that raided Wilson’s home in January 2008 looking for her boyfriend, a suspected drug dealer who later pleaded guilty to drug trafficking. Prosecutors said Chavalia recklessly fired three shots into a bedroom where Wilson and her six children were gathered, even though he could not clearly see her or whether she had a weapon.

Public Risk | February 2010

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Boston Mayor Thomas M. Menino said he will ask the city’s lawyers to see whether leaders can block Yemeni tankers from delivering liquefied natural gas into Boston Harbor, calling such deliveries “wrong.” According to the Boston Globe, Menino and several other public officials said they would press for the tankers’ cargo—destined for an LNG terminal in Everett as soon as next month—to instead be unloaded away from the city, in light of the failed Christmas day attempt by a Nigerian man, who trained in Yemen, to blow up a U.S. airliner over Detroit.

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The ejection of Ben Vonderheide from one courtroom this fall prompted him to request copies of the surveillance tapes for his records. According to Lancaster Online, Lancaster County, Penn., refused to provide the tapes, saying it would constitute a security breach. The Pennsylvania Office of Open Records disagreed. In a Christmas Eve ruling, appeals officer Lucinda Glinn ordered the county to turn them over to Vonderheide. The state’s “final determination” may still be appealed by the county; officials involved with the case said the county has not decided whether it will appeal.

Mayor of Boston Seeks to Block Tankers

Open Records Ruling Goes Against County in Pennsylvania

February 2010 | Public Risk

Risk Management Meets Disease Management

Risk Management meets

Disease Management By Mike Kushner and Elizabeth Moore The Polk County (Fla.) Government provides medical and pharmacy benefits to more than 8,000 employees, dependents and retirees. The county has less than 10 percent employee turnover and a large population of over 800 retirees. The county’s risk management department is responsible for the employees benefit program design, administration and cost containment. The county’s risk manager, Mike Kushner, relied on the risk management process to provide a unique perspective for the county’s disease management program model. This model differs from most value-based insurance designs in that it focuses on controlling and/or alleviating current and future disease risk. Conversely, a traditional human resources perspective addresses employee coverage and cost containment. Kushner utilized the following core risk management processes in this project: identification of risk, its prioritization, management of risk and evaluation of the plan. As with most employers, medical costs and their escalation stood out in the county’s budget and made risk identification easy. Kushner felt making this particular risk a priority and allocating resources to it required analysis of the county’s unique situation and population. “To accomplish this analysis, I began by requesting already-contracted pharmaceutical, medical and consultant vendors to compile risk information into decision-making format,” said Kushner. “I engaged our consultant to provide the county’s population-based analyses. By reviewing our own historical data and comparing this information with national and vendorbased benchmarking, the county was able to confirm exorbitant future expenses and identify its high-risk populations. This step confirmed a program as a necessary priority.”

Public Risk | February 2010

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Polk County’s program design offers its employees and retired population the opportunity to one-on-one medication/disease The next challenge was convincing the county’s management team that prioritization and development of a disease management program was paramount. “Senior management buy-in was integral, as significant up-front expenditures for a program was required,” said Kushner. “The team was made aware that any return on investment (ROI) would be several years out and that a long-term view was required. It would take commitment, persistence and cooperation.” After reviewing the data, the management team agreed that the purpose of health care was not to decrease costs but to focus on improving health. The team agreed creating a healthier population logically should decrease medical expenses and added benefit could be a positive ROI. Kushner worked to create a program that encouraged employees to actively participate in their own health care. The program’s core design focused on prevention and centered on the risk prevention concept that healthier employees lead to decreased absenteeism, increased productivity and potentially fewer accidents. In order to manage this risk, the county collaborated with its pharmacy benefits management (PBM). Traditionally, a PBM is employed to oversee and administer the client’s pharmacy program. All clinical services offered are usually reserved for behind the scenes and are not one-on-one and face-to-face in nature. Kushner felt a program based on the Asheville project, a community-based pharmaceutical care service for diabetic patients, would work with the county’s population by creating a personalized patient experience for every covered life. The county and its PBM established mutual risk sharing. In order to secure continuous services for the provision of a full-time on-site pharmacist, both the county and the PBM agreed to include the above in their contract. The PBM offered supportive personnel and a clinical client services manager as well to ensure the programs’ success while the county allowed utilization of

its on-site employee clinic (Employee Health Services) and office space.

state counseling

Both the consultant’s data and The Accordant Book of Business indicated the national average of diabetics and hypertensive patients was approximately half of the county’s. Based on their high prevalence and their deleterious health consequences, Kushner chose these diseases for the creation of a disease management program.1

accompanied by

Polk County’s program design offers its employees and retired population the opportunity to receive one-on-one medication/disease state counseling by a pharmacist accompanied by co-pay waivers on disease-related medications (generic and preferred brands) and supplies, including related over-the-counter products.

and preferred

by a pharmacist

co-pay waivers on disease-related medications (generic

brands) and supplies, including related overthe-counter products.

“The patient’s primary care physician remains in control of care, thereby increasing the patient’s comfort level and willingness to participate,” said Kushner. “Direct communication with providers, pharmacies and patients allowed the pharmacist to positively influence patient outcomes. One of the key components to the county’s success has been the availability of the Employee Health Services.

February 2010 | Public Risk

Risk Management Meets Disease Management

The pharmacist is located on-site at risk management, which houses the Employee Health Services.” The physical locale is ideal for immediate referrals and patient’s ease of use. Employee Health Services gives the patient access to a physician, a nurse practitioner and registered nurses, completing the health care circle. This allows laboratory workups, emergent care and referrals for all services to be of a cooperative nature between the pharmacist and the clinic.

patient’s care plan is tailored to his/her needs based on the pharmacist’s professional judgment.2 This allows for overall improved patient care by increasing identification of drug/ drug interactions, drug/disease interactions, drug/food interactions, streamlining of patients’ medication regimen and allows the pharmacist to aid in the maintenance of medication preferred formulary.

The pharmacist collects patient data. The patient’s medical, pharmaceutical, educational and financial situations are paramount. Initial encounters assess the patient’s overall knowledge of their disease state as well as let the follow-up pharmacist to track the patient’s progress. The The on-site pharmacist encounters also facilitate the individualizes each patient’s patient’s movement within a risk stratification process by care. Basic guidelines are disease state severity. Risk stratification increases the followed but each patient’s care ease of tracking patients and focusing care and resources plan is tailored to his/her needs appropriately.

The core focus of the program design held patients accountable for their own care. Upon enrollment, the patient was made aware of his/ her responsibilities, incentives and consequences of non-compliance. The county developed an agreement between the patient, the county and the on-site pharmacist. The agreement known as the “Contract for Care” based on the pharmacist’s had a dual purpose. First, it It was quickly found at the is a medical information inception of the program that professional judgment. release (for HIPPA complimonetary roadblocks were ance). Next, the contract paramount in decreasing makes specific requests patient medication compliof the participant causing patient empowerment as ance. It was noted that despite waiving co-pays, many well as accountability. This contract allows the patients would still be financially unable/or unwilling to pharmacist to remove the patient obtain their medications due to a medication deductible. from participation if necessary. This This prompted the county to further invest in its employees requires the patient to be accountable and remove the medication deductible from all pharmacy for the behavioral components of care and plan participants. creates a shared leverage between the patient and the program. Evaluation of the plan, the on-going risk management component, showed approximately 7 percent (564 patients) The on-site pharmacist individualizes each of its population participating in one or both programs. patient’s care. Basic guidelines are followed but each Generalized results included: overwhelming positive

Public Risk | February 2010

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“As expected, patients’ participation was initially motivated by the financial incentive; however, the responsibility-sharing design of the program challenged patients to take charge of their own health care,” said Kushner. “The patient became motivated to be in the least severe classification, thereby being rewarded with increased time between pharmacist encounters and the reinforcement of positive self-image.”

participant feedback of a testimonial nature, documented decreased out-of-pocket spending for employees, dependents and retirees, medical expenditure trend has been more favorable and well below national average and increased formulary compliance. Data indicated a low drop-out rate of 15.4 percent. Clinical outcomes revealed positive patient changes.

“As expected, patients’ participation was initially motivated by the financial incentive; however, the responsibilitysharing design of the program challenged patients to take charge of their own health care,” said Kushner. “The patient became motivated to be in the least severe classification, thereby being rewarded with increased time between pharmacist encounters and the reinforcement of positive self-image.”

Medication adherence was evaluated for clinical as well as compliance purposes. Medium- and high-severity patients were targeted for calculation of medication possession ratio. A higher value indicates the patient is filling the prescription at the drug store at appropriate intervals. This helps ensure the patient is actually taking the medicine as prescribed. Typically, a patient should have an 80 percent medication possession during a monthly period.3 We reviewed patients’ pre- and post-program enrollment. Angiotensin converting enzyme inhibitors and angiotensin-renin blocking medications (anti-hypertensive agents) showed an increase in possession ratio for both diabetes and hypertensive patients by 11 percent and 13 percent respectively. Beta-blockers and calcium channel blockers, another category of antihypertensive agents, also saw an increase of eight and nine percent. Also, an increase in an anti-cholesterol medication category of four percent was unexpected, since it was not part of the co-pay waiver.

The program’s success can be attributed to its design, which focused on preventative care and health education by integrating health programs offered through its benefits package. To address prevention, voluntary health risk assessments are offered along with multiple screening programs, including blood pressure, diabetes, cholesterol, prostate, osteoporosis and cancer screenings. Health education has been supported through disease management programs, employee assistant services, nutrition/fitness curriculums and 24-hour nurse hotline.

Preliminary medical data has been very favorable. First year program results show a decrease from baseline in hospitalizations. Diabetic patients had a 30 percent reduction in admissions while the hypertensive population had a 20 percent decrease. Emergency room visits revealed similar results for year one of the programs. Diabetic patients saw a 24 percent drop in emergency room visits while the hypertensive population had an 18 percent decrease. These results translated into a total savings of $272,237 (approximately 1.2 percent of total annual spending) or 28 fewer hospitalizations and 22 fewer emergency room visits.

Mike Kushner, CSP, ARM, HCRM, is the director of risk management for Polk County Government in Bartow, Fla.

This model drives the consumer to take responsibility for his/her health and wellness. “The program empowers patients to better manage their health by giving them professional education and support,” said Kushner. “It brings together the best of risk management, pharmaceutical management and disease management to drive better healthcare choices and outcomes.”

References 1. Centers for Disease Control and Prevention. National Center for Chronic Disease Prevention and Health Promotion Diabetes Public Health Resource. Available at: www.cdc.gov/ diabetes. Accessed August 24, 2006. 2. Centers for Disease Control and Prevention. National Center for Chronic Disease Prevention and Health Promotion Diabetes Public Health Resource. Available at: www.cdc.gov/ diabetes. Accessed August 24, 2006. 3. DiMatteo Variations in patients’ adherence to medical recommendations: a quantitative review of 50 years of research. Med Care 2004; 42:200-209.

Elizabeth Moore, BS, PharmD, is the clinical pharmacist responsible for design, implementation and administration of the Polk County Government disease management program.

February 2010 | Public Risk

RISK MANAGEMENT:

PRIMA’s 31st Annual Conference June 6 – 9, 2010 | Orlando, FL For more information, visit www.primacentral.org.

Register Today for the ONLY Conference Dedicated to Risk Management in the Public Sector! In 2010, PRIMA is planning another outstanding conference, where attendees will enjoy dynamic risk management educational sessions, fun and productive networking events and an exhibit hall that highlights vendors from all areas of the public risk management arena. PRIMA’s Annual Conference is the forum for all levels of risk managers in the public sector as well as professionals in related fields such as school administration, human resources, employee benefits, health and safety, legal and regulatory, risk financing, claims management and pooling.

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Public Risk Management Association

Your

Risk Management Journey Begins Here

Are you taking advantage of all that PRIMA has to offer? Professional Development

Networking

• PRIMA Annual Conference • Online education opportunities including PRIMA’s Webinar Series and the industry’s only Associate in Risk Management and Risk Management for Public Entities online tutorials. • PRIMA Institute: The industry’s premier risk management four-day training program for professionals new to the field.

• Leadership Opportunities: Get Involved! Join a committee, task force or even become a director on PRIMA’s board and provide input in what PRIMA does and how we do it. • PRIMA Chapters: Make contacts on your local level, share what you know, and learn from experts and innovators in meetings, workshops, and seminars in your area. • Online Membership Directory: A members-only resource where you can locate and contact PRIMA members in various risk management fields.

Information Resources • PRIMA Cybrary • PRIMA Job Bank • PRIMAtalk: Member-only listserv that provides access to more than 500 industry specialists. • RiskWatch: Weekly e-news service for public risk managers

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Developing Your Risk Management Plan

Developing Your Risk Management Plan By Claire Reiss and Mary Stewart

Developing a risk management plan is like having an annual physical. We may tell ourselves we don’t need one because everything seems fine. Or we know we need one, but we keep putting it off because we don’t have time. We may even think we have it covered because we did it a few years ago. Some of us are simply overwhelmed at the prospect. Much of this discomfort arises from the lack of a good road map. What are our goals? Where do we begin? What are the steps? What does a risk management plan look like? We will look at these questions, but first let’s consider what a risk management plan is and why a public entity needs one.

A risk management program is a system comprised of policies, procedures, goals, relationships, accountability, activities, planning and reporting the entity uses to continually assess and control the effects of risk on its ability to achieve its purpose.

Risk management plans differ from risk management programs. A risk management program is a system comprised of policies, procedures, goals, relationships, accountability, activities, planning and reporting the entity uses to continually assess and control the effects of risk on its ability to achieve its purpose. The components of this system are not all traditional risk management. They also include operational programs, for example crisis management, business continuity, fleet management, and any other activity that has a direct impact on the entity’s risk. A risk management plan is the written summary that documents the important components of the entity’s risk management program. The risk management plan aggregates the components of the risk management program into an accessible form that shows the interrelationships between the entity’s activities and its risks. A risk management plan that makes this connection increases the efficiency and predictability of the public entity’s operations and helps the entity achieve its mission and goals throughout the year by doing the following: • Acting as an umbrella document that summarizes risk management processes and provides links to relevant materials • Assigning risk-related responsibilities

Public Risk | February 2010

• Documenting working relationships • Expediting response to changes and emerging challenges • Preserving institutional knowledge about the risk management program • Establishing risk management performance measures • Creating a mechanism for identifying and reporting goal and mission failures or other areas of concern • Establishing a framework for evaluating and choosing risk control and financing strategies and monitoring outcomes • Establishing a framework for training personnel • Increasing risk awareness through better communication • Establishing a framework for record-keeping • Organizing information for audits The process of assembling the components of a risk management plan has its own benefits. It provides an opportunity to identify and address gaps, flaws, conflicts and inconsistencies in existing risk management-related activities. The next question is what are the goals? The goal of the risk management plan is to enable the risk management program to help the entity achieve its mission. Some of the important goals that an entity may have for its risk management program include: • • • • • • • • • •

Integrating risk management into all operations and planning Reducing risk silos Enabling positive change by managing the accompanying risk Protecting members of the public and the entity’s employees Protecting the entity’s resources and reputation Complying with the law Encouraging all employees to participate as stakeholders Ensuring preservation of risk management records Enhancing risk communication Keeping the risk management program cost-effective by eliminating redundancies and unintended effects

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Where do we begin? Borrowing from a neighboring jurisdiction or from plans you find on the internet can give you ideas, but will not meet your needs. Good risk management plans are customized for the entity: no two plans should be identical. But the process for developing that customized risk management plan follows basic steps that will work for most entities. The following five-step process can help guide plan development. Step One: Develop a risk management policy. A risk management policy is a brief written statement of an entity’s broad risk management objectives. It does not usually discuss specific risk exposures or risk management approaches. The policy should be issued by the entity’s highest ranking officials and communicated throughout the entity. Common elements in risk management policies include: • A statement of the officials’ support of risk management throughout the entity • A mandate that all operations and employees cooperate with risk management and include risk management in planning efforts • Confirmation that the safety and security of the public, the entity, its employees and its assets are priorities for the entity • A commitment to legal compliance, social and humanitarian concerns and continuity of public services • A schedule for periodic review of the risk management program by the officials who issue the policy Policy statements should address the needs of the specific entity. The goal is to promote at all levels throughout the entity an understanding that risk management is a high priority. Step Two: Define the scope of covered activities; determine the entity’s tolerance for risk. First define the scope of the activities that will be covered under the plan. Public entities can be very complex organizations, involving public-private partnerships and collaborations with other local governments. To ensure that all activities are addressed, identify covered activities in the plan. Next, determine the level of uncertainty and loss that the entity can tolerate. The plan does not need to include a specific statement about risk tolerance. Ultimately, however, the entity’s and leaders’ risk tolerance will determine how the following steps proceed. Tolerance is determined both by the entity’s financial capacity to respond to risk events and its leaders’ subjective comfort with assuming risk. Tolerance may be greater if the entity has greater resources with which to address risk events or if its leaders are

accustomed to hazardous activities. Mutual aid agreements and risk financing mechanisms such as insurance are examples of how additional resources can extend risk tolerance. To make determining risk tolerance more concrete, think about settlements of lawsuits that would tax the entity’s financial resources and events that would tax the entity’s tangible resources. Annual events such as county fairs, carnivals, air shows, car rallies, and marathons are examples of nonemergency events that require higher than normal resources. Step Three: Describe the procedure for identifying and analyzing risk, establishing priorities and adopting risk control and financing strategies. Steps One and Two produce an outcome that is similar to an architectural drawing of a house. It may identify the owner and the geographic location and sketch the exterior, but it does not explain the details of each room or how to build it. Just as the final blueprint for a house fills in these omitted details, Step Three fills in the details of the risk management plan by describing in more detail the procedure the entity will use to address risk.

Operations to consider in risk management planning: • Administrative • Animal control • Attorney (city/county/ state/commonwealth) • Building inspection and permits • Code enforcement • Courts • Contracting and purchasing • Department of Motor Vehicles • Elections • Emergency management • Environmental services • Finance and treasury

The risk management process used by most entities seeks to answer the following questions about each activity:

• Governing body

• What can go wrong? (Risk identification) • If it does go wrong, what will be the consequences? Physical injury, civil disorder, property damage, judgments and legal expenses, adverse media attention or damage to the entity’s reputation? (Risk analysis) • Which potential losses have the greatest consequences and should be addressed first? (Identification of priorities) • How will the entity control and finance the risk associated with the activity? (Risk control and financing)

• Land use planning

Although the questions are the same for most public entities, they will take different paths to find the answers. The risk management plan should describe this path in sufficient detail to ensure that it produces the expected outcomes and has continuity, but include sufficient flexibility to allow those responsible to shape it to fit their operations. Some elements to consider including are: • Appointment of a risk coordinator to oversee the process (for larger entities, this may be a professional risk manager) • Appointment of risk management committee(s) • Assignment of responsibilities, including broad involvement and accountability of operational heads • Adoption of forms and criteria that guide the procedure, document the results and can be incorporated by reference into the plan to document the action plans for managing specific risks.

• Information technology systems

• Libraries • Motor vehicle operation/ fleet management • Personnel/human resources • Premises and public areas (public buildings, sidewalks, streets) • Public health • Public records • Public safety (police, fire, sheriff, jail) • Parks, recreation and arts • Refuse/solid waste • Schools/education • Social services/human services • Special events • Tax assessment and collection/revenue • Transportation • Volunteers

February 2010 | Public Risk

Developing Your Risk Management Plan

Examples of Risk Action Plan Topics • Claims management • Crisis management and business continuity • Internal controls • Fleet management • Personnel/human resources

One important point to remember is that risk management responsibilities will not lie solely with any one person or department. Operations will be heavily involved, even if the entity has a risk manager/coordinator or a risk management department. Many responsibilities, such as implementation of risk control policies and risk communication, will be shared between risk management and operations. At the end of Step Three the entity has a procedure and assigned responsibilities for managing risk. In Step Four, the entity uses that procedure to develop its plans for specific areas of risk.

• Risk communication • Risk financing • Risk management reporting • Risk management training • Security for government premises • Special events • Volunteers • Workplace injury/ workers’ compensation • Workplace safety

Step Four: Develop risk action plans and incorporate existing risk control and financing plans; assign responsibilities. The previous three steps developed the “blueprint” for the risk management plan. Step Four is where the “house” is actually built. The entity uses the procedures and forms developed in Step Three to identify, analyze, prioritize and develop action plans to control and finance its risks. These risk action plans become part of the entity’s risk management plan. Other relevant plans may already exist, such as fleet management, building maintenance, building security, workers’ compensation, self-insurance plans. Incorporate those existing plans into the risk management plan by reference. This is also a useful opportunity to work with the appropriate parties to make necessary adjustments or additions to existing plans. Each risk action plan should also identify the responsible personnel, establish milestones and deadlines for completion of individual tasks, and have a back-up plan for assigned

personnel and non-personnel resources. Assign responsibility and accountability to specific job titles. Adopt performance measures for each risk action plan to help you in Step Five. Step Five: Monitor and revise the plan. Step Five keeps the risk management plan relevant. Public entities are constantly generating new risk exposures, and some risk control techniques do not work as well as expected. Include in the risk management plan a procedure for ongoing monitoring and adjustment of the plan, at least annually. Build in mechanisms to alert the risk coordinator or other responsible party to interim changes. Such changes include new activities (risk management ideally begins when the activity is in the planning stages) and changes in the outcome of performance measures. A monthly review of losses, inclusion of risk management in planning committees and a good risk management network within the entity can all help flag changes that warrant an update to the plan. Your final risk management plan will look like an umbrella. It will bind together the relevant documents that address specific events and operations throughout the entity. An electronic format is ideal, because you will not have to republish a paper document whenever an update is required, and it can be easily accessible to all who need it. By making updates easier, it is likely that your plan will stay more current. Claire Reiss is the deputy executive director and general counsel for the Public Entity Risk Institute (PERI). Mary Stewart is the director of research and development for the Public Entity Risk Institute (PERI).

Distribution and Interaction of Risk Management Responsibilities

Risk Management

Joint

Operations

Program Policy

Communication

Operational Goals

Program Goals

Committees

Operational Activities

Operations Covered

Monitoring and Reporting

Operational Procedures

by the Program

Recordkeeping

and Processes

Program Procedures

Implementation

Cooperation

Inspections

Contribution

Planning

Culture

and Processes

Training Claims

Public Risk | February 2010

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Calendar of Events The Public Risk Management Association (PRIMA) hosts or sponsors a wide variety of educational programs for public risk practitioners. These meetings and events provide an optimum forum for public risk professionals to acquire new knowledge or skills, exchange ideas and expand peer networks.

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PRIMA’s calendar of events is current at time of publication. For the most up-to-date schedule, visit www.primacentral.org. Webinars 2010 February 24 Wrong(ed) and Right(s)—Recent Trends Related to Wrongful Conviction and Government Liability April 21 The Anatomy of a Lawsuit May 19 Public Sector HR Basics September 15 Key Issues in Loss Mitigation— Is Your Organization Prepared to Respond? October 13 Protecting our Children: Keeping our Communities and Schools Safe November 17 Winning Strategies for Contractual Risk Transfer PRIMA Annual Conferences June 6–9, 2010 PRIMA 2010 Annual Conference Orlando, FL Orlando World Center Marriott June 5–8, 2011 PRIMA 2011 Annual Conference Portland, OR Portland Convention Center June 3–6, 2012 PRIMA 2012 Annual Conference Nashville, TN Opryland Hotel

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June 2-5, 2013 PRIMA 2013 Annual Conference Tampa, FL Tampa Convention Center

February 2010 | Public Risk

Animal Control Liability Challenges for the Public Risk Manager

When Their Bite is Worse than Their Bark:

Animal Control Liability Challenges for the Public Risk Manager By Joseph G. Jarret, Esq

One of the more frequently overlooked public sector departments or divisions that can give rise to liability and workers’ compensation claims is the animal services function of government. On any given day, public sector animal services personnel capture, house, feed, treat, adopt out and euthanize domestic animals. They deploy vehicles to public and private roads, enter private property and are often exposed to animals that are diseased and dangerous. With the aforementioned duties and responsibilities comes potential for liability, necessitating the expertise of the public risk manager.

Animal Services Employees Animal services employees are subject to animal bites and scratches and consequently, zoonotic diseases (diseases transferable between people and animals such as rabies, Lyme disease and ring worm), as well as personal injuries while operating public vehicles and claims of excessive use of force (by pet owners who resist the removal of their beloved pet) when attempting to enforce animal control rules and regulations. Animal services workers are charged with the capture and removal of stray, uncontrolled or abused animals from undesirable conditions, using nets, nooses or tranquilizer darts as necessary. It is essential that your employees are trained in the proper use of such equipment, as well as provided with guidelines as to what to do when

Public Risk | February 2010

they encounter “exotic animals.” For instance, during my tenure as a public risk manager in Florida, it wasn’t uncommon for our county’s animal services personnel to be summoned to remove errant alligators, skunks, raccoons, large snakes, bats, foxes and even a monkey or two. Unless your employees have had specialized training, such removals are best left to professional wranglers who are experienced in dealing with non-domesticated creatures. Due to the emotional attachment people have with their animals, some animal owners aren’t beyond forcibly resisting attempts by an employee to remove the family pet, regardless of the aggressive nature of the animal. Depending on your jurisdiction, an inspection warrant may need to be sworn out prior to entering private property for enforcement purposes. Likewise, depending on the case, it may be advisable for the animal services employee to be accompanied by a uniformed police officer or sheriff’s deputy. Further, some homes or structures from which animals must be removed contain biohazards that can induce illness in an employee not equipped with appropriate hazardous material (hazmat) equipment. Like other public employees, animal services workers take to the highways and byways in entity-owned vehicles, exposing the entity to liability for personal injury damages. It goes without saying that all of the above duties and responsibilities of animal services

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personnel have the propensity to translate into workers’ compensation or general liability claims. Finally, most animal services entities are located “off campus” away from the main government facilities and often in remote areas. It is worth the public risk manager’s time to motor over to the facility as well as accompany an animal services employee on his or her rounds in an effort to identify potential risks as well as suggest risk transfer and avoidance techniques.

disease or infecting non-quarantined animals. They must be admonished not to represent themselves as an agent or employee of the entity. Finally, volunteers are often called upon to transport animals to and from their medical appointments when on-site veterinary services are not available either using their personally owned vehicles or an entity-owned vehicle, raising obvious liability issues.

Animal Services Volunteers

One of the mainstays and goals of animal services is adoptions. Prior to permitting animals to be adopted, the entity should provide would-be adopters with full written disclosure of an animal’s known or suspected dangerous propensities, ailments, medications, abuse and ownership history, if available. Such disclosure must be in writing and signed by all parties to the adoption. Civil liability will invariably result from adopting out an animal that is known to be dangerous, is known to have dangerous propensities, is afflicted with a zoonotic disease or is misrepresented as being safe and/or healthy when the entity has no reasonable basis to make such representations.

Over the course of the last several decades, there has been a proliferation of volunteer activity at publicly operated animal shelters. Regardless of how essential and well-meaning volunteers are, we have to recognize the fact that we are living in a litigious society. Volunteers must be trained in proper animal care and handling techniques to minimize their risk of getting injured by the animal. Due to the dangers inherent in volunteering at an animal shelter in the form of zoonotic diseases, not to mention animal bites and scratches, the use of a volunteer application that contains a solid hold-harmless clause is in order. Volunteers need to be advised, in writing and with great specificity, the potential dangers of their volunteer service, as well as the fact that by so volunteering, they are holding the public entity harmless from any and all claims that may arise as a result of their volunteer service. Volunteers must unequivocally agree not to enter unauthorized areas containing “bite animals” and quarantined animals and must refrain from touching animals that are in unauthorized areas due to the risk of transmitting zoonotic

Adoptions

An entity may also be liable for breach of a promise, representation or warranty if an animal’s health or temperament turns out to be contrary to that which is represented by the entity. These can be made orally or in writing and can be express or implied. The most common problem is when the entity represents that an animal is safe with children and other animals when, in fact, the entity has no reasonable basis for making such an assertion. At the present time,

February 2010 | Public Risk

Animal Control Liability Challenges for the Public Risk Manager

there exist a number of temperament tests for evaluating whether a dog is suitable for placement, but despite the practical advantages of such tests, their use has not become so universal as to provide a reliable shield against liability. Therefore it is difficult under any circumstances to predict that a dog or other animal will be safe in a new environment, hence the need for full, written disclosure, liability waivers and prudence in adopting out animals for which there does not exist a temperament history.

Animal Shelter Euthanasia According to the United States Humane Society, national euthanasia statistics are difficult to pinpoint because animal care and control agencies are not uniformly required to keep statistics on the number of animals taken in, adopted, euthanized or reclaimed. While many shelters know the value of keeping statistics, no national reporting structure exists to make compiling national statistics on these figures possible. It is generally known, however, that 56 percent of dogs and 71 percent of cats that enter animal shelters are euthanized. More cats are euthanized than dogs because they are more likely to enter a shelter without any owner identification. Further, only 15 percent of dogs and 2 percent of cats that enter animal shelters are reunited with their owners and 25 percent of dogs and 24 percent of cats that enter animal shelters are adopted. Research indicates that the vast majority of public animal shelters have no set time limit for holding an animal. In the vast majority of shelters, decisions about adoption and euthanasia are based on factors that include the temperament and health of the animal and the space and resources available to humanely house and properly care for the animal. It is imperative that, if your animal shelter has promulgated a euthanasia schedule, that it strictly adheres to it. More than one lawsuit has been successfully brought against public shelters as a result of the euthanasia of a wayward family pet before the enumerated holding period. Further, some

Public Risk | February 2010

states have begun to recognize the viability of claims for emotional distress due to the untimely loss of a beloved pet at the hands of animal services personnel. A growing number of states have enacted legislation mandating that the euthanasia of animals in an animal control agency may only be performed by a licensed veterinarian, including a licensed veterinary technician employed by and functioning under the direct supervision of a licensed veterinarian or a certified animal euthanasia technician. Itâ€™s essential that your entity complies with those regulations promulgated by state statute or local ordinance. Further, the more accepted practice of animal euthanasia concerns the use of the drug sodium pentobarbital. Unfortunately, this same drug is a short-acting barbiturate and hypnotic that is attractive to those involved in a growing black market/illicit drug trade culture. Great care should be taken in securing, administering and accounting for this drug.

A Word About Insurance Due to the fact that most, if not all, states enjoy some form of sovereign immunity (the doctrine that the sovereign or state cannot commit a legal wrong and as such is either immune from civil suit or enjoys a limitation on possible damages), some entities have taken to purchasing excess insurance policies akin to those that private shelters purchase. Such policies often include protection from claims filed as a result of the negligent death or destruction of an animal while in the entityâ€™s care, professional errors and omissions coverage for staff or volunteer veterinarians, premises and vehicle liability. By taking the time to appreciate the structure and function of your animal services department/division, by emphasizing the need for animal services personnel to quickly and accurately report injuries, record their claims history and insure the proper training of personnel and volunteers, the risk manager can go a long way in reducing the frequency and severity of claims this often overlooked entity has the potential to generate. Joseph G. Jarret, Esquire, is the chief deputy Knox County (Tenn.) law director, a mediator and a former public risk manager.

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Has your entity launched a successful program? An innovative solution to a common problem? A money-saving idea that kept a program underbudget? Each month, Public Risk features articles from practitioners like you. Share your successes with your colleagues by writing for Public Risk magazine! For more information, or to submit an article, contact Jennifer Ackerman at jackerman@primacentral.org or 703.253.1267.

RISKWATCH RiskWatch is PRIMA’s weekly e-news service that delivers handpicked, high-quality news articles relating to the public risk management industry directly to your email inbox. In addition, RiskWatch will provide PRIMA members with valuable association-related news. Distributed each Thursday, RiskWatch is an excellent opportunity for you to increase the value of your PRIMA membership and share valuable knowledge with your peers!

Want others in your entity—such as your senior management—to receive this new benefit of PRIMA membership? Subscribe up to two additional recipients in your entity by contacting Jessica Konrath at jkonrath@primacentral.org and provide the name, title and email address of your colleague(s).

February 2010 | Public Risk

Member Spotlight

Oregon County Creates Tracking System

to Streamline Its Insurance Tracking Each month, Public Risk features a member who has gone above and beyond in a feature column titled “Member Spotlight.” Do you know someone who deserves recognition, has made a contribution or excelled in their profession? If so, we’d like to hear from you for this exciting column, as PRIMA shines the spotlight on its members. To be considered for the Member Spotlight column, contact Jennifer Ackerman at jackerman@primacentral.org or 703.253.1267.

ith a rash of misplaced insurance certificates and a tight budget, the Multnomah (OR) County Risk Management Unit decided it needed to create a systemized way to keep track of its insurance documents. The result is an insurance certificate tracking program that utilizes the financial system the county already had in place. “Multnomah County received approximately 2,000 insurance certificates per year,” said Marc Anderson, risk manager. “Our decentralized insurance certificate tracking process often resulted in redundant calls to vendors and brokers by county employees, which wasted time and increased frustration to all parties involved. There was also no process in place to track when a vendor’s insurance was about to expire or had expired.” Anderson’s department, along with staffers from information technology, procurement and finance, created the tracking system. A key component of the system is a certificate email box, which is a central email address where insurance brokers and agents send all of the county’s insurance certificates. Certificates are then reviewed by risk management and stored on a county-wide shared directory that can be accessed by all county employees.

“The average off-the-shelf insurance certificate tracking program would have cost us $50,000–$75,000,” said Anderson. “Instead, we utilized existing tools and a data system we already had in place. We calculated the total cost of the hours invested in the project is $19,150, which is a substantial cost savings over other options.” Anderson goes on to say that effective insurance certificate tracking has resulted in more consistent insurance information distribution throughout the county, in addition to being less work for county employees and vendors, who spend less time searching for documents. He also says that the tracking system contributes to better overall risk management practices, “Our insurance tracking program reduces the county’s liability exposure related to contractual risk transfer in procurement documents and contracts,” said Anderson. “We have also received a favorable review from our liability carrier since the tracking program has been in place.” For more information on Multnomah County’s insurance certificate tracking system, contact Marc Anderson at marc.r.anderson@co.multnomah.or.us.

Multnomah County also harnessed the power of its financial system software to generate notification letters for its vendors prior to their insurance policy’s expiration date. Anderson says that there are no longer contracts being held up in the routing process due to lack of required certificates.

Public Risk | February 2010

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