Public Risk February 2016

PUBLISHED BY THE PUBLIC RISK MANAGEMENT ASSOCIATION FEBRUARY 2016

OBTAIN AND MAINTAIN AN UNDERSTANDING OF THE INTERPLAY BETWEEN

Insurance and FEMA’s Public Assistance Program PAGE 6

THE PERILS OF OUTSOURCING AND SHARED SERVICES PAGE 11

RETHINKING PUBLIC SAFETY INJURY PREVENTION PROGRAMS PAGE 16

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FEBRUARY 2016 | Volume 32, No. 2 | www.primacentral.org

CONTENTS

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

PRESIDENT Dean Coughenour, ARM Risk Manager City of Flagstaff Flagstaff, AZ PAST PRESIDENT Regan Rychetsky, ABCP Director, HHS Enterprise Risk Management and Safety Texas Health and Human Services Commission Austin, TX PRESIDENT-ELECT Terri Evans Risk Manager City of Kingsport Kingsport, TN DIRECTORS Lori J. Gray Risk Manager County of Prince William Woodbridge, VA

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OBTAIN AND MAINTAIN AN UNDERSTANDING OF THE INTERPLAY BETWEEN

Insurance and FEMA’s Public Assistance Program

Jani J. Jennings, ARM Insurance & Safety Coordinator City of Bellevue Bellevue, NE Scott Kramer Risk Manager Montgomery County Commission Montgomery, AL Amy Larson, Esq. Risk and Litigation Manager City of Bloomington Bloomington, MN Scott Moss, MPA, CPCU, ARM-E, ALCM P/C Trust Director CIS Salem, OR Tracy Seiler, ARM-P Director of Risk Management Services Texas Association of Counties Austin, TX

By Jeb McPherson and Debra Gallagher

NON-VOTING DIRECTOR Marshall Davies, PhD Executive Director Public Risk Management Association Alexandria, VA EDITOR Jennifer Ackerman, CAE Deputy Executive Director 703.253.1267 • jackerman@primacentral.org

11 The Perils of Outsourcing and Shared Services

By Joseph Profitt

IN EVERY ISSUE

16 Rethinking Public Safety Injury Prevention Programs

By Bryan Fass, ATC, LAT, CSCS, EMT-P(ret)

4 NEWS BRIEFS | 19 ADVERTISER INDEX

ADVERTISING Donna Stigler 888.814.0022 • donna@ahi-services.com

Public Risk is published 10 times per year by the Public Risk Management Association, 700 S. Washington St., #218, 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.

POSTMASTER: Send address changes to PRIMA, 700 S. Washington St., #218, Alexandria, VA 22314.

Copyright 2016 Public Risk Management Association

FEBRUARY 2016 | PUBLIC RISK

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JUNE 5–8 , 2016 // ATL ANTA , G A REGISTER BY APRIL 1 FOR THE BEST RATES!

PRIMA’ S 2016 ANNUAL CO NFERENCE

RISK MANAGEMENT

ON MY MIND

MESSAGE FROM PRIMA PRESIDENT DEAN COUGHENOUR, ARM

Y

If I Knew Then What I Know Now

OUR PRIMA has been hard at work putting the finishing touches on the new Risk Manager Speaker Bureau. This is an initiative made up of risk management professionals who have volunteered to travel to PRIMA chapters to share exciting educational topics on fine tuning your risk management program.

Through this PERI-funded and PRIMAcrafted program, national conferencelevel speakers are brought to you at your local chapter. I am excited that this is coming to fruition and I believe demonstrates yet another spectacular value of being a national member.

This is just one of the many exciting programs and initiatives that PRIMA has in the pipe line. Please plan to attend this year’s conference in Atlanta and sign up today.

In sharing with you this month, I think back on the many times I have thought, “If I only knew then what I know now.” Risk management is an ever-increasing realm of opportunities to improve results and help people. How do we stay up to speed? I think I know what I know, but do I? By example, I once KNEW that hazard communication and blood borne pathogen training “had” to be done for all employees every year, until one PRIMA meeting, a friend simply leaned in and said, “Dean, it’s not required by the standard. Let me send it to you to review.”

WOW! I was dead wrong.

I used to KNOW that at trial the facts in the case would speak for themselves. So in one case 20 years ago, I attended the deposition of the plaintiff that I still remember to this day. Even I cried in his deposition, but I was sure that the jury would be swayed by the

In sharing with you this month, I think back on the many times I have thought, “If I only knew

then what I know now.” Risk management is an

ever-increasing realm of opportunities to improve results and help people. How do we stay up to speed? I think I know what I know, but do I? facts. $350,000 later, I now KNOW that it doesn’t always matter what the facts are, people make judgments by emotion and their own past experiences and not necessarily the facts.

If I had only attended a PRIMA session on litigation pitfalls, I would have taken a totally different approach.

In the state of Arizona, I KNEW that the employee had the right to choose their own doctor, but what I did not KNOW was that the employer had the right to send the employee to a doctor of their choice for initial exam. Until one day, I was at a PRIMA meeting and there was a presentation on, “Workers’ Compensation Basics,” then the light of knowledge turned on. As you might imagine, the ability to control my workers’ compensation claims was dramatically improved.

It’s OK not to KNOW everything; that would be impossible. But what is good to KNOW is where to go and who to ask to get the answers. In my case, I receive affirmation that what I thought I knew is what I know. Well (and you see this one coming) that is the power of PRIMA, both from a chapter and a national level. The Annual

Conference simply brings you more sessions on more topics and puts you in contact with more vendor partners focused on the public sector than any other venue in the public risk management arena in the United States.

I certainly hope to see you there.

Thank you for everything you do. There are few jobs that afford the variety that risk management does. No two days are ever the same and just when you think you have seen it all, there is a “what in the world moment” that pops up.

Keep moving in that positive direction of motivating others, expanding your knowledge base, making a difference in people’s lives and always take time to enjoy the ride. 

Dean Coughenour, ARM 2015–2016 PRIMA President Risk Manager City of Flagstaff Flagstaff, AZ FEBRUARY 2016 | PUBLIC RISK

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NEWS BRIEFS

NEWS Briefs

BETTER FIREHOUSE SAFETY RATES TO REDUCE INSURANCE PREMIUMS Warren County, KY, Fiscal Court received confirmation from the Insurance Services Organization that five of the county’s volunteer fire departments have improved their ISO safety ratings, which will lower insurance premiums in affected areas in April, reports the Bowling Green Daily News.

Kevin Bailey, chief of the Plano Volunteer Fire Department, which went from a 6 to a 5 on the ISO’s scale, said the better rating is because of improvements in the department’s equipment, training and radio communication. The ISO’s scale, which gives scores from 1 to 10, with 1 being the best, considers aspects like quality of training and equipment, response time and water availability, he said.

Bob Skipper, chief of the Woodburn Volunteer Fire Department, said all nine volunteer fire departments in the county have improved safety ratings, though data for only Gott, Smiths Grove, Plano, Richardsville and Hadley fire departments are currently available.

“ISO is doing a major push to re-rate all the departments (nationwide),” he said. The group’s new criteria will place more emphasis on training and availability of water and revises ‘obsolete standards,’ ” he said.

Most insurance companies base their rates partly on ISO ratings, meaning areas with better safety ratings will have lower premiums, Skipper said. The decrease depends on the company providing insurance, he said.

Skipper said Woodburn’s rating went from 7 to 6 because it updated some equipment and increased the number of firefighters through “word-of-mouth recruitment.”

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PUBLIC RISK | FEBRUARY 2016

Collaboration among fire departments has also contributed to the improved scores, he said.

Through a program called Automatic Mutual Aid, 911 dispatchers send word to the four districts closest to a fire, he said.

“If there’s a call in our district…we will automatically have four districts going out to it, rather than have us go out to it and call for backup if we need it,” Skipper said.

According to both fire chiefs, their departments’ improved ratings also stem from new

“

tools fiscal court has helped them acquire.

In May, fiscal court approved the purchase of five fire engines for a price that was later lowered to $1,322,500, Fiscal Court Clerk Brenda Hale said via email. These firetrucks will go to Barren River, Gott, Hadley, Plano and Woodburn fire departments, she said.

Fabrication of the trucks has not been completed, but the stations are supposed to receive them in March, Judge-Executive Mike Buchanon said.

“

“Recently, all of that’s been beefed up,” he said.

If there’s a call in our district…we will automatically have four districts going out to it, rather than have us go out to it and call for backup if we need it.

Bob Skipper Chief of the Woodburn Volunteer Fire Department

STILL BUDGETLESS, ILLINOIS TO BORROW MILLIONS FOR CONSTRUCTION Illinois Gov. Bruce Rauner’s administration plans to borrow $480 million to pay for construction projects, reports the Chicago Tribune.

The state plans to conduct the general obligation bond sale, Rauner spokeswoman Catherine Kelly said. The money would be used for road and transit projects and to pay related costs, she said.

“Road construction and transit improvements are key factors in growing the Illinois economy, which is why Illinois is planning a bond sale,” Kelly said in a statement.

She noted that despite the impasse that’s left Illinois without a complete budget since July 1, the three major credit rating agencies have not lowered the state’s general bond rating. First-term Republican Rauner wants pro-business, unionweakening legislation opposed by Democrats, who are allied with trial lawyers and organized labor.

Still, it’s unclear what kind of rate the state could get with the bond sale, given the uncertainty surrounding finances. Illinois is expected to end the budget year on June 30 at least $8 billion in the red. Key programs continue to be paid for under various laws and court orders, even as the state’s revenues dipped by billions following the rollback of the income tax rate hike in January 2015.

The Rauner administration would not provide an estimate of what it expects to pay for the loan, saying it’s a competitive bidding process and “we will take the lowest rate offered.”

Rauner’s office said there was “sufficient dedicated revenues to cover the payments.”

INJURED PLAINTIFF DENIED INSURANCE POLICY DOUBLE DIPPING Plaintiffs in a personal injury case cannot collect from two policies under the policies’ anti-stacking provisions, says an appeals court, in affirming a lower court ruling, reports Business Insurance.

In January 2012, Thomas Campbell attempted to remove a tree from a property being developed for a residential subdivision in Waynesville, Missouri, according to documents filed with the district court, and the tree fell on John Gohagan, who suffered serious injuries as a result, according to the ruling by the 8th U.S. Circuit Court of Appeals in John Gohagan; Jessica Gohagan v. The Cincinnati Insurance Co. Gohagan and his wife filed suit against Campbell and reached a settlement that included a payment by Cincinnati Insurance Co., a unit of Fairfield, Ohio-based Cincinnati Financial Corp., of the $1 million per occurrence limit under the commercial general liability policy held by Campbell and his wife.

However, the Gohagans filed suit seeking payment of another $1 million under the

Campbells’ business owners package, which was also issued by Cincinnati.

The federal District Court in Springfield, Missouri, dismissed the case, holding that the language of the BOP and CGL policies prohibited stacking coverage when both policies covered the same injury, and a three-judge appeals court panel unanimously agreed.

The policies’ anti-stacking provisions are unambiguous, said the appeals court. The Gohagans “ignore the stipulation that the aggregate maximum limit ‘shall not exceed the highest applicable limit of insurance under any one policy,’ ” said the ruling.

“Thus the aggregate maximum limit of insurance under both policies combined may not exceed the each-occurrence limit under either policy—in this case $1 million.”

Therefore, the Gohagans “received the full amount of coverage owed to them under the BOP and CGL policies when Cincinnati paid them the $1 million pursuant to the CGL policy,” said the ruling in affirming the case’s dismissal.

FEBRUARY 2016 | PUBLIC RISK

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PUBLIC RISK | FEBRUARY 2016

OBTAIN AND MAINTAIN AN UNDERSTANDING OF THE INTERPLAY BETWEEN

Insurance and FEMA’s Public Assistance Program

BY JEB MCPHERSON AND DEBRA GALLAGHER

H

ow does the Federal Emergency Management Agency (FEMA) address insurance within their Public Assistance Program? This question can be rather complicated, especially for public entities who have actually gone through the FEMA process first-hand. Imagine if this was your first encounter with FEMA. Would you know how to manage both your insurance AND FEMA claims simultaneously?

FEBRUARY 2016 | PUBLIC RISK

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INSURANCE AND FEMA’S PUBLIC ASSISTANCE PROGRAM

After the president declares a disaster event (due to a hurricane, flood, earthquake, fire, drought, mudslide, snow storm, severe storm, winter storm, tornado, volcano, terrorism, etc.), FEMA assistance may be available to cover your uninsured losses if you qualify as an eligible Applicant. Eligible Applicants in the public assistance sector include states, state agencies, local governments, private non profit organizations and indian tribes.

HISTORY OF FEMA’S POLICY ON INSURANCE

FEMA rescinded its Disaster Assistance Policy on insurance in February 2013 after encountering significant insurance related issues from Applicants involved in ongoing disaster events.

On June 29, 2015, FEMA issued an updated recovery policy, FP 206-086-1 – Public Assistance Policy on Insurance. The entire policy can be found at www.FEMA.gov.

This updated policy guides decision making and interprets statutes and regulations related to insurance requirements under FEMA’s Public Assistance Program. Let’s discuss some of the highlights!

expects you to carry flood insurance for NFIP-insurable properties (National Flood Insurance Program) equal to the lessor of the value of that property or the maximum amount of insurance available under an NFIP scenario ($500,000 per building and a separate $500,000 for contents within that building). FEMA will not provide flood assistance to properties in a SFHA unless losses exceed this pre-disaster coverage threshold. For example, after a declared disaster, Applicant X sustained $2,000,000 of eligible flood losses at a facility in FEMA flood zone A. The Applicant did not carry any flood coverage. FEMA assistance

FEMA rescinded its Disaster Assistance Policy on insurance in February 2013 after encountering significant insurance related issues from Applicants

involved in ongoing disaster events. On June 29, 2015, FEMA issued an

updated recovery policy…This updated policy guides decision making and

interprets statutes and regulations related to insurance requirements under

FEMA’s Public Assistance Program.

Examples of uninsured losses that may be considered eligible for FEMA reimbursement include: • Locations and/or expenditures with no insurance coverage • Losses measured in excess of insurance policy limits • Insurance policy deductibles • Insurance policy exclusions such as asbestos abatement, mold remediation, etc.

• Uninsurable assets such as road infrastructure, vehicles, etc.

Understanding the interplay between insurance and FEMA’s Public Assistance Program is essential in order for you to maximize recoveries after any declared disaster event. Let’s get started…

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PUBLIC RISK | FEBRUARY 2016

CORE INSURANCE PRINCIPLE

FEMA’s guidelines center on their Requirement to Obtain and Maintain Insurance.

For example, “When FEMA provides an Applicant assistance for permanent work to replace, restore, repair, reconstruct, or construct a facility, the Applicant must insure that facility against future loss.” FEMA refers to this as the obligation to “obtain and maintain” insurance or the “insurance purchase requirement.” By law, Applicants must comply with this requirement for all buildings, contents, equipment, and vehicles as a condition of receiving FEMA assistance following a disaster declaration.

KEY CONCEPTS

 Perils DO make a difference: • Pre-Loss Flood Requirements—FEMA’s only pre-disaster insurance requirement relates to flood events and only when those flood damaged facilities are located in a Special Flood Hazard Area (SFHA). Prior to your first flood loss event in a SFHA, FEMA

will be available to cover eligible program losses up to $1,500,000 ($2,000,000 in total losses less the $500,000 pre-disaster flood requirement).

• After a Flood Loss—From the example above and going forward, the Applicant would need to carry $2 million of flood insurance coverage for the damaged facility as a condition of receiving the $1.5 million of FEMA assistance.

• After a First Time Flood Loss—What would happen if the first time flood loss was less than FEMA’s $500,000 pre-loss flood requirement?

Let’s assume Applicant X sustained $200,000 in damage at a facility in FEMA flood zone AE and Applicant X had no flood coverage.

FEMA would apply their Mandatory NFIP reduction penalty against the total losses and only cover the hypothetical deductible of a would-be NFIP policy.

• Non-Flood Pre Loss Requirements—No pre-disaster insurance requirements exist for non-flood perils. For example, after a declared

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INSURANCE AND FEMA’S PUBLIC ASSISTANCE PROGRAM

disaster, Applicant X sustained $2 million of eligible Earthquake losses at a facility. The Applicant did not carry any Earthquake coverage. FEMA assistance will be available to cover eligible losses up to $2 million ($2 million in total losses the less $0.00 pre-disaster earthquake requirement).

• After an Earthquake or any other Non Flood peril—from the example above and going forward, the Applicant would need to carry $2 million of earthquake coverage for the damaged facility as a condition of receiving the $2 million of FEMA assistance.

HELPFUL HINT! FEMA’s insurance requirement is peril specific! The hazard(s) that caused the damage drives the type of insurance coverage commitment you are required to carry.  Applicants may comply with FEMA’s insurance purchase requirement for both flood and non-flood hazards using coverage available through commercial property insurance, which may include blanket policies; standard flood insurance policies; insurance pools; or a combination of these sources. With FEMA’s approval, Applicants may also use self-insurance plans to comply.

HELPFUL HINT! Any self-insurance plan must be deemed acceptable by FEMA and include specific criteria (see FEMA’s detailed policy at www.FEMA.gov).  The Obtain and Maintain insurance requirement does not pertain to emergency work performed prior to, during or after an event. Examples include FEMA Category A – Debris Removal and Category B – Emergency Protective Measures. Only “permanent” work project worksheets activate FEMA’s Obtain and Maintain requirements.

HELPFUL HINT! Permanent work project worksheets less than $5,000 do not trigger FEMA’s Obtain and Maintain insurance requirement. While managing your disaster recovery process, your project worksheets should be categorized into two groups: • Group 1—FEMA funding that requires future insurance commitments; and • Group 2—FEMA funding that does not impact future insurance commitments.

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CONSEQUENCES OF NON COMPLIANCE

Failure to comply with FEMA’s insurance purchase requirement following a disaster could render your public entity ineligible to receive future FEMA assistance at the same damaged facility(ies). Since insurance verification is performed at FEMA closeout, any recovery funds you received for a current disaster may also be jeopardized.

BE PREPARED

• Assessing whether your insurance policy limits comply with FEMA’s regulations should be on your annual checklist if you are a public entity that has received or could receive FEMA assistance.

• FEMA maintains a database of historic assistance received by all public entities, on a facility-by-facility basis. FEMA will utilize this data to enforce its insurance purchase requirements more carefully than they have in the past.

• FEMA’s measurement of a public entity’s “obtain and maintain” insurance obligation may not always be consistent with your own assessment. It is your responsibility to perform your own due diligence and properly evaluate your insurance commitment levels.

• Under the new regulation, insurance policy deductibles funded by FEMA in prior disasters are unlikely to be covered in subsequent, same peril disaster events. A common misconception is that FEMA will cover your deductible more than once.

WHAT IF YOU CAN’T AFFORD THE INSURANCE FEMA REQUIRES? With stakes this high, and when FEMA assistance can make all the difference, do everything you can to mitigate your exposures by implementing careful protocols and procedures intended to protect against future, uninsured losses.

At a minimum, a FEMA insurance analysis and review will help you: • Identify prior FEMA insurance purchase requirements; • Validate if FEMA’s “starting point” for your insurance commitment analysis is accurate and reliable—utilizing the guidelines above; and,

• Reconcile FEMA’s insurance commitment against your existing insurance policy limits of liability.

If your analysis confirms your existing insurance policy limits meet FEMA’s requirements, you should submit your assessment to the Grantee (State) in an effort to demonstrate FEMA compliance and avoid future disputes.

If your analysis confirms that your existing insurance policy limits do not meet FEMA’s requirements, you should: • Calculate the coverage placement differential.

• Coordinate with risk management and/ or your insurance broker to determine the options available to address FEMA’s insurance gap.

If FEMA’s coverage requirements are not reasonable and/or affordable, you should submit a formal request to the State Insurance Commissioner to certify that the types and extent of insurance required by FEMA are not reasonably available, adequate or necessary. The certification should include detailed supporting information including: • A listing of the specific facility(ies) impacted by the certification.

• Insurance market conditions such as pricing and capacity.

• Examples of reasonable risk management practices based on historic function, size and operating budget.

ARE YOU A FEMA EXPERT YET? If you have received FEMA assistance in the past and/or consider utilizing FEMA’s Public Assistance program to offset potential, uninsured losses in the future, make certain you understand FEMA’s insurance regulations today. Do not let FEMA be the one to inform you that your location is not FEMA eligible after the next disaster event—perform your due diligence and confirm that your public entity is in compliance before it’s too late!

Debra Gallagher and Jeb McPherson are senior vice presidents with Marsh USA.

PERILS

THE

OF

Outsourcing AND Shared Services

BY JOSEPH PROFITT

FEBRUARY 2016 | PUBLIC RISK

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THE PERILS OF OUTSOURCING AND SHARED SERVICES

L

ocal governments have been struggling with budgetary pressures brought on originally by the 2008 recession that have

continued due to the overall drop in real estate valuations, which have lowered their tax revenue base. As a response, many local governments have looked to lower their costs by privatizing governmental services—replacing government workers with contract employees whom they hope will perform the same tasks for less.1

As an example: In Olmstead Falls, Ohio, city officials have recently decided to outsource their building department with the goal of saving $105,000 annually.2 In the state of Michigan, there are currently 363 school districts that contract out for at least one of the services they provide, and 182 districts contract out for at least two. For comparison sake, in 2013, only 160 districts were contracting out any services. Now 65 percent of local governments in Michigan outsource some of their municipal services and, according to a study by the University of Michigan Ford School of Public Policy, nearly 75 percent of the officials polled were satisfied with the outcomes of these contracts with private providers.3

TYPES OF PRIVATIZATION AGREEMENTS

There are many different types of outsourcing arrangements for local governments to consider:4 • Contracting Out—where the entity outsources a municipal service to a private company.

• Public Private Partnership—where public entities enter in to a joint venture with a private company for the planning, funding or operating of a project.

• Competitive Contract Bidding—where

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PUBLIC RISK | FEBRUARY 2016

municipal departments bid against private sector companies.

• Selling or leasing a public entity’s assets to a private company for instance land or buildings.

• Vouchers that are issued with a monetary value to be used in the private sector marketplace.

• Establishment of a quasi-government agency that acts more like a private corporation.

• Volunteer Partnerships • Privatization—a complete transfer of service to a private company—note police and fire responsibilities cannot typically be privatized.

BENEFITS

There are many benefits for a public entity to privatize its services. Some of these include: • Cost savings • Private sector proficiencies and expertise • Red tape reduction and less bureaucracy

DISADVANTAGES TO PRIVATIZATION

There are disadvantages that include: • Conflict of interest—profit-seeking entity may seek to cut corners • Decreased control and less oversight • Citizen dissatisfaction as well as public union opposition • Imprecise performance measurement

SHARED SERVICES

Another approach public entities are using to reduce costs are Shared Servicing Agreements.5 In 2011, a poll of New Jersey town officials found that 82 percent had entered a shared services agreement in the past year.6 For example: Five Macomb County communities in Michigan contract with the sheriff’s office for police protection and one for dispatching services.7 In 2013, the city of Camden dissolved its entire police department and created a new Camden County Police force.

There are many types of options and agreements to share services. Some of these include: • Informal cooperation—two neighboring jurisdictions offer reciprocal services • Interlocal Service Contracts—contractually handling services among multiple entities • Joint Power Agreements—two or more governments providing shared planning or services like transit authorities • Extraterritorial Powers—municipalities exercising authority over unincorporated areas for zoning and planning development • Councils of Government counties or municipalities—serving a region through

•

•

• •

•

•

• • •

cooperation like Metropolitan Planning Authorities Federally Encouraged Single Purpose Regional Bodies—created to administer a Federal Aid program for nutrition, health, aging, etc.

State Planning and Development Districts—similar to Councils of Government set up by the state Contracting with other government bodies Regional Purchasing Agreements— municipalities banning together for bulk purchasing Local Special Districts—set up to provide a single service for multiple jurisdictions like a water reclamation project Transfer of Functions—where for example a town can transfer a responsibility like policing to a county Annexation—entities expands jurisdiction and service boundaries Special Districts and Authorities—for instance transit or water authorities Metropolitan Multipurpose Districts—a

regional authority is created to perform diverse functions like running a zoo or convention center • Reformed Urban County—a county seeks more authority over municipalities • Regional Asset Districts— tax districts to fund sports stadiums or parks • Merger or Consolidation—municipalities and counties reallocate responsibilities or functions

TRANSFER OF LIABILITY

A third approach to be taken in lieu of outsourcing or sharing services is to transfer the exposure to another party through an indemnification Agreement.

Indemnification Agreements can be: Favorable—You are indemnified for accidents/ claims arising from the agreement Unfavorable—The other party is indemnified by you for accidents/claims arising from the agreement Mutual—Each party is indemnified for accidents/claims resulting from the negligence of another party

Some examples of these types of risk transfers are: • Sharing Mobile Equipment • Code Enforcement Officers • Garages/Facilities • Law Enforcement • Purchasing • Fueling Stations

GUIDELINES TO A SUCCESSFUL OUTSOURCING DEAL Before outsourcing a governmental function to a private sector entity here are some things that need to be considered:8

A thorough cost benefit analysis should be performed to confirm that the services that can be provided by a private company are in fact cheaper than having public employees providing those same services. Hire an outside consultant to provide an independent assessment reviewing the major exposures such as Contractual Liability, Operational Risk, Political Risk, Accident/Hazard Risk and Reputational Risk.

A thorough cost benefit analysis should be performed to confirm that the services that can be provided by a private company are in fact cheaper than having public employees providing those same services. Hire an

outside consultant to provide an independent assessment reviewing the major exposures such as Contractual Liability, Operational Risk, Political Risk, Accident/Hazard Risk and Reputational Risk.

FEBRUARY 2016 | PUBLIC RISK

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Everyone else is doing it.

Why aren’t you?

Join PRIMA’s 2016 Enterprise Risk Management training and learn how to add value to your risk management program by implementing an enterprise-wide approach to risk.

PRIMA developed this training program to teach attendees how to apply the framework of the ISO/ANSI/ASSE 31000 Standard. Participants will learn the basics of the standard as well as how to fully integrate the framework in their organization’s risk management program.

Visit primacentral.org/ermtraining for 2016 training locations and dates.

As an example of what can go wrong—in 2008 Chicago privatized its parking meters in a deal with Morgan Stanley.9 In return for $1.15 billion it gave up for $11.6 billion of future revenue. The city also gave up some control of its roads because now any road with a meter that becomes closed for repairs, street fairs, parades etc.—requires the city to reimburse Chicago Parking Meters LLC (currently under control of Abu Dhabi) for the lost revenue.

Review the current insurance policies in place to address exposures. Here are some examples of coverage concerns that need to be considered prior to entering in to any agreement: Workers’ Compensation—who is the employer and who provides the workers compensation coverage?

Mobile Equipment—is there coverage for the equipment operator?

Motor Vehicles—is there any mobile

equipment or automobiles? Are there permissive use issues to be considered?

Commercial General Liability—Contractual liability issues?

Inland Marine/Floaters—Subrogation waivers?

Privatization of municipal services has become more common in the last decade. While cost concerns continue to be a big factor other reasons that may contribute are the need for expertise, time constraints, risk transfer or the necessity for a new revenue source. The sale or long term lease of public assets such as lotteries or toll roads are decisions that especially need to be carefully thought through. These agreements tend to be much longer in duration. So the valuation of these types of transactions can be difficult to assess due to the long term assumptions that need to be made.10 Joseph Proffitt is a second vice president with Genesis Management and Insurance Services Corporation – Public Entity division.

FOOTNOTES 1 Motoko Ricjh NY Times 11/7/11 “Working for Less a Hidden Toll as States Shift to Contract Workers” 2 Efficient GOV 12/31/14 3 Diana Dillaber Murray Oakland Press News 10/27/14 “Privatization of services continue to increase in public school district” 4 Stephanie Rozsa and Caitlin Geary 2010 “Privatizing Municipal Services “ 5 John Parr, Joan Riehm and Christiana McFarland October 2006 “Guide to Successful Local Government Collaboration in America’s Regions 6 Jonathan Oosting,, 12/28/11 MLIVE , Megan DeMarco Statehouse Bureau 2/2/11 NJ.COM 7 Todd McInturf the Detroit New 11/18/2014 “Michiganians favor privatization” 8 Audie Cornish NPR 9/2/14 “How a New Police Force in Camden helped the City Around” 9 Russell Nichols December 2010 “Pros and Cons of Privatizing Government Functions” 10 Alternet 11/17/11 “ Privatization Nightmare: 5 Public Services That Should Never Be Handed Over to Greedy Corporations “

CALENDAR OF EVENTS PRIMA’s calendar of events is current at time of publication. For the most up-to-date schedule, visit www. primacentral.org.

WEBINARS 2016 • February 17 – Checking In With Your ERM Program • March 16 – Mastering the Art of Communication • April 13 – ERM: A Project Plan for Implementation • May 18 – Recreation and Risk: It’s All Fun and Games Until…

• June 15 – ERM: Risk Maps and Registers • July 13 – Risk, HR and Legal Interactions for the New Risk Professional • August 17 – ERM & Pools • September 14 – Implementing an Effective Return to Work Program • October 19 – Cyber Threats Faced by Public Entities • November 2 – ERM: Mandate & Commitment in 60 Minutes • December 14 – Communicating ERM Progress

PRIMA ANNUAL CONFERENCES June 5–8, 2016 PRIMA 2016 Annual Conference Atlanta, GA Hyatt Regency Atlanta June 4–7, 2017 PRIMA 2017 Annual Conference Phoenix, AZ Phoenix Convention Center June 3–6, 2018 PRIMA 2018 Annual Conference Indianapolis, IN Indiana Convention Center

PRIMA INSTITUTE 2016 October 24–28, 2016 Pittsburgh, PA

FEBRUARY 2016 | PUBLIC RISK

15

RETHINKING PUBLIC SAFETY

INJURY PREVENTION PROGRAMS

BY BRYAN FASS, ATC, LAT, CSCS, EMT-P(RET)

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PUBLIC RISK | FEBRUARY 2016

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nother claim just came across your desk, a back injury from your EMS department from lifting a patient. A quick search shows that this is the fourth claim this month and you are on par to meet or

exceed your normal claim rate for the quarter. The last meeting you had with the EMS and fire chief, while positive, presented few solutions to the recordable injury issue other than the usual request for more money to buy new equipment. You already have the new powered stretchers and tracked stair chairs yet the rate and severity of the claims continues to rise.

If the above scenario sounds familiar, that’s because we see and hear this from risk managers and chiefs on an almost daily basis. The level of frustration at the lack of lasting change and employee buy-in is a hot topic with both risk managers and first responders. During the past 10 years, I have seen every type, model and design of EMS and fire services and the vast majority suffers from three consistent breakdowns that lead to the recordables you see.

1. WELCOME TO EMS/FIRE; PLEASE LET ME TEACH YOU ALL MY BAD HABITS

The first issue I see, especially in EMS, is a lack of proper patient and patient-handling equipment training. Most, if not all EMTs, have had no

ergonomics training since they hit the street and the little they had was not based on solid biomechanical principles. To further complicate the problem, patient handling is usually taught via DVD; there is no way to teach proper biomechanics while sitting in your chair.

As an example most EMTs will use a sheet to move patents onto the expensive powered stretcher you just bought. The sheet increases friction adding to patient weight and to use it requires an extreme trunk angle that can place compressive spine loads well over NIOSH (1) recommendations. On top of that, one of the EMTs will usually be on the opposite side of the stretcher, often on their knees, placing their spine and upper extremities in a dangerous pattern. Solution = use a soft stretcher with handles to reduce spine angle and reduce friction at the same time.

The same soft stretcher can be used to change the lift height also reducing the trunk flexion angle and changing the lift height. You see the same data I do; a lot of the injuries come from getting the patient from the floor to that nice expensive powered stretcher. Let’s face it: EMS/ fire is one of the few professions left where it’s ok to lift catastrophically heavy loads up off the floor all day long without the assistance of an engineered solution. What we have noticed is that most fire and EMS departments have a tool on the truck that will quickly fix this but the device has both been marketed incorrectly

FEBRUARY 2016 | PUBLIC RISK

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RETHINKING PUBLIC SAFET Y INJURY PREVENTION PROGRAMS

and never trained on in the first place. The soft stretcher I mentioned above goes by many names, “mega-mover™” or the “Titan™” to name just two, the name alone biases the crews thinking to only use them for bariatric patients. Yet as the NIOSH lift equation for EMS says the single person lifting load limit is 51 lbs. because a 51 lb. object can place up to and over 751 lbs. of compressive load on the spine when lifting from the floor. We know that in most first responder injury begins to occur at around 800 lbs. of compressive load. That’s a 51 lb. object…average patient weight is now pushing 215 lbs., the deeper the lift the greater the compressive and shearing forces the spine experiences. Change your crews lift height and improve the spine flexion angle and your injuries will drop.

2. STOP HIRING YOUR NEXT INJURY

Pre-hire physical abilities testing (PAT) is a hot topic, especially for EMS. Fire departments for the most part have embraced PAT’s, EMS on the other hand is a problem. For years there was no PAT that was specific to the industry. Thankfully now there is a well-validated and vetted PAT for pre-hire EMS employees that has no bias and is a job task simulation. The consistent breakdown I see is that either departments have avoided PAT’s do a perceived litigation risk or risk of injury or the EMS department has a ‘self-made’ PAT that was developed in house (or worse borrowed from another department) with good intentions but when help up to test construct and validation standards is a litigation waiting to happen and the ultimate question is will the PAT weed out the 5–7 percent that would have gotten hurt? . The bottom line is that all perspective EMS employees must go through an externally validated PAT that is job task specific. Solution = stop hiring your injuries and then test your incumbents as well.

3. TAKE AWAY THEIR PAIN

I started my career in physical therapy, athletic training and sports medicine. When I walked into the world of public safety, EMS, fire and police, I quickly realized that almost all first responders are in pain. As I teach in all my classes, “no one can teach you to lift, move, push, pull, carry, run or fight well if your body does not possess the underlying physical ability to do it safely.” What good is an ergonomics or biomechanics program if the employee has poor mobility? If you do not

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PUBLIC RISK | FEBRUARY 2016

possess the ability to move you well how can you expect to move objects well?

This is one of the biggest disconnects I see in every department; a complete lack of self-care and pain management. I had my eyes opened to the complexity of the issue twice in my career.

First as a new paramedic, I choose to use the ambulance to stretch and stay loose so I did not get hurt, let me just say that I did not fit in and got a lot of strange looks. The biggest eye opener is when we developed some pre-shift mobility drills for industry and then asked our EMS departments to adopt pre-shift mobility/ stretching, every excuse was made as to why they could not ‘invest’ in themselves and their crews yet the injuries just kept piling up.

The amazing thing is that there are readily available and inexpensive tools like foam rollers and massage balls that a first responder can be taught to use pre-shift, between calls or before training to drastically reduce their risk of soft tissue trauma from both job specific tasks and or training.

RISK MANAGEMENT TAKE AWAY It’s all about systems and processes. There is not one fix for the injuries that you see in EMS, fire and law enforcement. What will begin to fix the problem and eventually change the culture of public safety with positive employee buy in-is simple: teach them to get rid of their pain but do it in a way that ties back into their job.

Using a massage ball on your glute/hip will reduce back and knee pain, teach them how the tools will benefit them. Give them the tools to improve mobility and manage pain and use them pre-shift and pre-training.

As a profession public safety departments must realize that fitness is job requirement and a necessity; “your fitness will save your life one day and every day.” Test them at hire and annually but also have the resources available to help them get back into shape when they struggle.

Practice makes permanent, perfect practice makes perfect. You must understand that as fire and EMS providers, we are taught to help at all costs and that often means using our bodies where we should use a tool, this is where re-branding the focus of training and outcomes matters. Follow a system that reduces soft tissue torque and load not one that inadvertently increases it with the misdirected pursuit of patient and equipment handling. “Use the tool, don’t be the tool.”

Bryan Fass, ATC, LAT, CSCS, EMT-P(ret) is the president and founder of Fit Responder Injury Free FOOTNOTES 1 Oregon OSHA. Firefighter and Emergency Medical Services Ergonomics Curriculum, www.cbs.state.or.us/osha/grants/ff_ergo/ index.html.

It’s all about systems and processes. There is not one fix for the injuries that you see in EMS, fire and law enforcement. What will begin to fix the problem and eventually change the culture of public safety with positive employee buy in-is simple: teach them to get rid of their pain but do it in a way that ties back into their job.

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