ASSOCIATION OF CALIFORNIA WATER AGENCIES JOINT …€¦ · 8:30 a.m. Exhibit Booth #107 & 109 Monterey 5:00 p.m. Conference Center Thursday — May 10, 2012 8:00 a.m. Exhibit Booth

Board ofDirectors’Meeting

May 7, 2012

Monterey Marriott350 Calle Principal

Monterey, CA 93940

A S S O C I A T I O N O F C A L I F O R N I A W A T E R A G E N C I E S

JOINT POWERS INSURANCE AUTHORITY

ACWA/JPIA www.acwajpia.com

(800) 231-5742

— President’s WelcomeDear Board Members and Friends:

Welcome to the 2012 Spring Conference in Monterey. The past few months have been very busy and exciting as we fi nish the transition of the ACWA

Health Benefi ts Authority (HBA) programs to the JPIA. On March 28 the HBA board voted to dissolve and transfer its operations and programs to the JPIA. I believe that the JPIA is well pre-pared to take on this new program and that this will be a positive transition for everyone involved. Details of how the transition is proceeding will be discussed during the seminar at 10:15 a.m. on Tuesday morning. Members will also have an opportunity to ask questions and provide input. I encourage all of you to attend this session.

The JPIA’s conference schedule starts as usual with the business meetings on Monday. Starting the morning off will be the Executive Committee meeting; and our Town Hall meeting is in the afternoon. This always-popular meeting gives members an opportunity to have an open dialog with the JPIA staff as well as the Executive Committee members. The Board of Directors’ meeting will be at 3 p.m. The afternoon will conclude with a reception sponsored by Kronick, Moskovitz, Ti-edemann & Girard; William Malone of WGM & Associates; Law Offi ces of Robert Gokoo; Barber & Bauermeister; and Greenfi eld Hardy Law Firm.

On Tuesday, we have three great seminars for you. The fi rst session is The 21st Century World of Work, presented by Carleen MacKay of Wilcox, Miller & Nelson. During their interactive pre-sentation, you will come to understand the impact of global change on our lives and work and how other organizations are adapting and meeting new challenges.

The second session of the morning is HBA Program Transitioning to JPIA. Representatives from JPIA and HBA will discuss the status of the process, as well as provide information on the plans and expectations of this transition and information on what members need to do to complete the transition.

The third session will be in the afternoon. JPIA’s Nancy Stangel and Dick Damon will be conducting Sexual Harassment Prevention for Board Members and Managers (AB1825): Take A New Look. This course will take a new look at the issue of sexual harassment, particularly in light of new protected classes, technological advances, acceptable workplace behavior, and the age-old issue of respect for everyone.

At the end of the week, we will be at the exhibit hall at the Monterey Conference center, please take time to come by the JPIA’s booth and say hello.

The organizational growth is steady with many members participating in more than one cover-age Program. In the Liability Program, we have 288 members with a total payroll of $447,966,187. We have 165 members in the Workers’ Compensation Program with a combined total payroll of $414,517,868. And the Property Program has 259 members with over $4.3 billion collectively in total insurable values.

The new Employee Benefi ts Program (formerly HBA) has 278 members, of which 202 are current JPIA members. The Executive Committee will be recommending to the Board that the 76 HBA members (that are currently not JPIA members) be approved as JPIA members during the Board meeting at this conference.

Here in Monterey, there can be a soothing sense of tranquility being on the coast and I hope that this feeling transcends our conference this week as we conduct our business, share information, and learn new things. As always, I welcome your thoughts on how to maintain membership and improve the organization.

Sincerely,

E.G. “Jerry” GladbachBoard President

Monday — May 7, 2012 8:30 a.m. – Risk Management Committee meeting San Carlos I - II10:15 a.m.

10:30 a.m. – Executive Committee meeting San Carlos I - II11:45 a.m.

1:15 p.m. – Town Hall meeting San Carlos IV 2:30 p.m.

3:00 p.m. – Board of Directors’ meeting San Carlos I - III 5:00 p.m.

5:00 p.m. – ACWA/JPIA Reception San Carlos Foyer 6:00 p.m.

Tuesday — May 8, 2012 8:30 a.m. – The 21st Century World of Work San Carlos II - IV10:00 a.m.

10:15 a.m. – HBA Program Transitioning to JPIA San Carlos II - IV11:45 a.m.

1:30 p.m. – Sexual Harassment Prevention for Board San Carlos IV3:30 p.m. Members & Managers (AB 1825): Take A New Look

Wednesday — May 9, 2012 8:30 a.m. Exhibit Booth #107 & 109 Monterey 5:00 p.m. Conference Center

Thursday — May 10, 2012 8:00 a.m. Exhibit Booth #107 & 109 Monterey12:15 p.m. Conference Center

Monterey Marriott Hotel350 Calle Principal, Monterey, CA 93940

— Conference Schedule

CANCELLED

— Seminar Descriptions

continued on next page

The 21st Century World of WorkA New Day; A Changed Future; A Changed Workplace; Changed LivesPresenter: Carleen MacKay of Wilcox, Miller & Nelson

During this interactive presentation you will discover that our previously slow march to the future has become a race to understand and adapt to meeting unprecedented challeng-es with new strategies.

The learning objectives are: • Understand the impact of global change

on our lives and work; • To learn how other organizations are

adapting and meeting new challenges; • To see – with new eyes – both the

threats and opportunities for our business; and• To introduce and discuss our staffs’

identifi ed challenges as we move forward in the 21st century.

Our goal is for you to explore with us and to come to believe, as we do, that behind every threat - opportunity lives.

“When the past meets the future, it is a watershed moment; but sometimes it takes a few years to catch up with the implications such change portends because, unfortunately, by the time many people recognize the pres-ent; it is the past.” Carleen MacKay

Carleen MacKay, Director of Mature Workforce Initiatives for Career Partners Inter-national, the global talent management fi rm represented by Wilcox, Miller & Nelson in Northern California. She is the author of four books on workplace/workforce challenges. A fi fth book, a multi-generational guide to working in the 21st century, is in fi nal stages of development. She is a national and inter-nationally recognized keynoter on emergent workforce/workplace issues in all sectors of the economy; the Workforce Policy Advisor to AARP/California; Member California AARP/SHRM Workforce Readiness Team; Advi-sory Board Member to the San Diego Mature Workforce Coalition and…more!

HBA Program Transitioning to JPIAWalter “Andy” Sells, JPIA Chief Executive Offi cer; Nancy Stangel, JPIA Director of Administration; and Merle J. Aleshire, Director for Valley Center MWD

On March 7, 2012, ACWA members received a notice announcing the impend-ing transition of the ACWA/Health Benefi ts Authority (HBA) into the ACWA Joint Pow-ers Insurance Authority (JPIA). On March 28, 2012, the HBA Board voted to dissolve the ACWA/HBA and transfer the health benefi ts program to ACWA/JPIA.

The purpose of this seminar is to bring everyone up to date with the status of the process, as well as provide information on the plans and expectations to follow. It will also provide an opportunity for members to ask questions and provide input as the ACWA/JPIA assumes responsibility for this very important program, particularly in light of up-coming legislative changes to the health care system in the United States. Please join us as we all move forward to a new venture.

Walter “Andy” Sells was promoted to Chief Executive Offi cer of the Association of California Water Agencies Joint Powers Insurance Authority (ACWA/JPIA) in October 2011. Andy began his career with the ACWA/JPIA in 1990 when he was hired as the Fi-nance Manager after more than 12 years in the fi nance and accounting industry. In 1995 he was promoted to Chief Financial Offi cer.

During his more than 20 years in the risk pooling industry, Andy also managed a claims department that administers and adjusts property/casualty and workers’ compensation claims. As manager of the Risk Management department, he oversaw a staff of safety en-gineers responsible for working with member agencies to help them reduce and mitigate their exposure to covered and non-covered losses. Before being promoted to Chief Execu-tive Offi cer, he held the title of Chief Opera-tions Offi cer.

Nancy Stangel joined the JPIA in 1994 and has been very busy working with JPIA

— Seminar Descriptionscontinued from previous page

members with their human resource needs, manning the Employment Hotline, and con-ducting training to members around the state.

Nancy has a Bachelor’s Degree in Busi-ness Administration and Human Resource Management from California State University Sacramento and a Master’s Degree in Human Resource Management from Golden Gate University. She also holds certifi cations as a Senior Professional in Human Resource Man-agement and California certifi cation (SPHR-CA) from the Society of Human Resource Management (SHRM) and International Personnel Management Association Certifi ed Professional (IPMA-CP) from IPMA.

Merle Aleshire is Chairman of the HBA Ad Hoc Committee, which was formed to ex-plore the possibility of transitioning the HBA program to the JPIA. He has been a member of the HBA Board of Directors since it was formed in 2011 and also serves as Chairman of the HBA’s Ancillary Benefi ts Program Com-mittee.

He has served on the board of directors for the Valley Center Municipal Water District for 15 years. As an active member in ACWA, Merle has served as both Chairman and Vice Chairman for Region 10. He also served on the JPIA’s Executive Committee for six years.

Merle is a retired aerospace executive of the General Dynamics Corporation. He has ex-tensive experience in the management of large organizations, including planning, budgeting, and control of expenditures.

Sexual Harassment Prevention for Board Members & Managers (AB1825): Take A New LookPresenters: Nancy Stangel, JPIA Director of Administration and Dick Damon, JPIA Liability/Property Claims Manager

The world is changing quickly in many directions and the impact of these changes fi lter into our workplaces on a daily basis. Have you ever thought about the impact of a

sexual harassment lawsuit at your district and its effect on the Board, management, staff, and the public? This course will take a “new look” at the issue of sexual harassment, particularly in light of new protected classes, technological advances, acceptable workplace behavior, and the age-old issue of respect for anyone associ-ated with your district’s business.

Questions are often asked about how Boards should be involved in an investigation, what to do if a claim is fi led against a Board Member or General Manager, and when an investigation should take place and the steps to take to resolve the matter.

Other points covered by this course are understanding the California and federal sex-ual harassment laws, recognizing early signs of sexual harassment, and maintaining open communication in a respectful environment. The program addresses the emotional aspects of harassment and the importance of creating a safe work environment where employees can report sexual harassment violations without fear of shame or retaliation. Specifi c water dis-trict examples are discussed to bring about the understanding of the types of claims that occur not only in the offi ce, but also in the fi eld.

By equipping management and the Board with the knowledge they need to prevent and respond to harassment situations, this course helps to prevent and eliminate sexual harass-ment in the workplace.

See Nancy Stangel’s bio under the seminar description for HBA Program Transitioning to JPIA.

Dick Damon joined the JPIA as a Senior Claims Representative in 1994. Dick has used his 15 years of experience in the private sector property/casualty claims industry to help JPIA members with claims issues and to improve the JPIA claims operations. He earned a BS degree from California State University at Sacramento and a MBA degree from Univer-sity California at Davis. Dick also holds the Risk Management Associate designation.

Mailing Address

P.O. Box 619082, Roseville, CA 95661-9082

Physical Address

2100 Professional Drive, Roseville, CA 95661-3700

Phone

916.786.5742 or 800.231.5742

Voice Mail

916.774.7050 or 800.535.7899

Fax

916.774.7040

Web Site

www.acwajpia.com

E-Mail

[email protected]@acwajpia.com

[email protected]@acwajpia.com

[email protected]

or by employee’s first initial and last name @acwajpia.com

— General Information

Preliminary Agenda Issued April 1, 2012 Final Agenda Issued April 9, 2012

AGENDA BOARD OF DIRECTORS' MEETING

Monday, May 7, 2012

3:00 p.m.

San Carlos I, II, & III

350 Calle Principal, Monterey, CA 93940 (831) 649-4234

WELCOME CALL TO ORDER AND ANNOUNCEMENT OF QUORUM PLEDGE OF ALLEGIANCE EVACUATION PROCEDURES PUBLIC COMMENT Members of the public will be allowed to address the Executive Committee on any agenda item prior to the Committee's decision on the item. They will also be allowed to comment on any issues that they wish which may or may not be on the agenda. If anyone present wishes to be heard, please let the Chairman know. INTRODUCTION OF GUESTS ADDITIONS TO OR DELETIONS FROM THE AGENDA


Presenter Page#

I. CONSENT CALENDAR Gladbach * A. Approve the minutes of the meeting of November 28, 2011. 1 II. ADMINISTRATION Gilstrap * A. Review Glossary of Terms. 13 Sells * B. Update on JPIA / HBA transition. 22

Sells

* C. Review and take action to revisions to ACWA/JPIA’s Governing Documents:

1. Joint Powers Agreement 2. Bylaws

24

Sells * D. Ratify Executive Committee’s acceptance of HBA districts not

already members of the JPIA. 62

Sells * E. Ratify Executive Committee’s acceptance of new agencies. 64 III. MEMBERSHIP

Damon * A. Review and possibly take action on Rio Linda/Elverta Community

Water District’s participation in the ACWA JPIA’s joint protection programs for property and liability coverage.

65

IV. FINANCIAL Boone * A. Review and approve the audited financial statements for Year-

ending September 30, 2011. 67

deBernardi * B. Review and approve the proposed operating budget for the Fiscal

Year October 1, 2012-13. 134

deBernardi * C. Review the current Investment Portfolio performance. 140 V. POOLED PROGRAMS Gilstrap * A. Review the Loss reports for the Liability, Property, and Workers’

Compensation Programs as of March 31, 2012. 157

Gilstrap * B. Review the JPIA’s Property and Workers’ Compensation Program

renewals. 192


VI. RISK MANAGEMENT Kuchinsky * A. Announce the winners of the H.R. LaBounty Safety Award

Program. 194

VII. OTHER BUSINESS Gladbach A. Open discussion. Gladbach B. Announce the Board of Directors Reception at 5:00 p.m. following

the Board meeting and introduce sponsors in attendance.

VIII. CLOSED SESSION A. CONFERENCE WITH LEGAL COUNSEL – LIABILITY CLAIMS

Pursuant to Government Code Sec. 54956.9.

1. ACWA/JPIA and Yorba Linda Water District vs. the Insurance

Company of the State of Pennsylvania. Case number: 8:11-CV-01124-AG-RNB.

ADJOURNMENT *Related items enclosed. MISSION STATEMENT The ACWA Joint Powers Insurance Authority is dedicated to consistently and cost effectively providing the broadest possible affordable insurance coverages and related services to its member agencies.

San Carlos Foyer 5:00 to 6:00 PM


Americans With Disabilities Act – The ACWA/JPIA conforms to the protections and prohibitions contained in Section 202 of the Americans with Disabilities Act of 1990 and the Federal Rules and Regulations adopted in implementation thereof. A request for disability-related modification or accommodation, in order to participate in a public meeting of the ACWA/JPIA, shall be made to: Bobbette Wells, Executive Assistant, ACWA/JPIA, P. O. Box 619082, Roseville, CA 95661-9082; telephone (916) 786-5742. ACWA/JPIA’s normal business hours are Monday – Friday, 7:30 a.m. to 4:30 p.m. (Government Code Section 54954.2, subdivision. (a)(1).) Written materials relating to an item on this Agenda that are distributed to the ACWA/JPIA Executive Committee within 72 hours before it is to consider the item at its regularly scheduled meeting will be made available for public inspection at ACWA/JPIA, 2100 Professional Drive, Roseville, CA 95661-3700; telephone (916) 786-5742. ACWA/JPIA’s normal business hours are Monday – Friday, 7:30 a.m. to 4:30 p.m.

Board of Directors’ Meeting Minutes of November 28, 2011

ACWA/JOINT POWERS INSURANCE AUTHORITY Unapproved 11/28/11 Approved 05/07/2012

BOARD OF DIRECTORS’ MEETING Marriott Anaheim Hotel Grand Ballroom F 700 West Convention Way Anaheim, CA 92802 (714) 750-8000 MONDAY, NOVEMBER 28, 2011 MEMBERS PRESENT See list of Attendees. STAFF PRESENT See list of Attendees. OTHERS PRESENT See list of Attendees. CALL TO ORDER AND ANNOUNCEMENT OF QUORUM President Gladbach called the meeting to order at 3:02 p.m. and welcomed everyone to Fall Conference in Anaheim. He announced that a quorum was present. PLEDGE OF ALLEGIANCE All in attendance stood and recited the Pledge of Allegiance led by Chairman Gladbach. WELCOME AND INTRODUCTION OF GUESTS President Gladbach welcomed all in attendance and introduced the Executive Committee members, JPIA staff in attendance, and Robin Stewart of Kronick, Moskovitz, Tiedemann & Girard, JPIA’s Legal Counsel; Eldon Boone, JPIA’s Finance & Audit Committee Chairman; Tim Quinn, Association of California Water Agencies (ACWA), Executive Director; and Bill Malone of WGM & Associates, the JPIA’s insurance broker. Mr. Gladbach also welcomed three new districts to JPIA conference: Buena Vista Water Storage District, Pajaro/Sunny Mesa Community Services District, and Sunnyslope County Water District. Congratulations were given to Andy Sells, who was recently promoted to Chief Executive Officer of the JPIA, as well as to other staff members who received promotions: Peter Kuchinsky to Risk Management Manager, Patricia Slaven to Training Manager, and earlier in the year, Bobbette Wells to Executive Assistant. Mr. Gladbach addressed the membership on the benefits of the JPIA and encouraged participation by promoting the services provided as a part of membership.

1


PUBLIC COMMENT As stated in the agenda, members of the public would be allowed to address the Board of Directors on any agenda item prior to the Board’s decision on that item. Comments on any issues which may or may not be on the agenda were also welcome. No members of the public requested to be heard. ADDITIONS TO OR DELETIONS FROM THE AGENDA President Gladbach asked for any additions to or deletions from the Agenda. No changes were noted. CONSENT CALENDAR President Gladbach called for approval of the Consent Calendar.

M/S/C (Philip Anthony, Orange County Water District/Jace Schwarm, San Dieguito Water District (Unanimous): That the Board of Directors approve the minutes of the May 8, 2011 Board of Directors’ meeting as presented.

ADMINISTRATION GLOSSARY OF TERMS Mr. Gilstrap, JPIA’s Director of Member Services, encouraged members present to review the “Glossary of Terms” used by the JPIA in the Board packet and asked if any terms used today are not listed to please make a JPIA staff member aware, so that it can be added for future reference. ACCEPTANCE OF NEW MEMBERS Mr. Gladbach noted that at each Board meeting, a list of new members is provided for membership ratification. He stated that Buena Vista Water Storage District and Sunnyslope County Water District both joined the Workers’ Compensation Program effective July 1, 2011. Pajaro/Sunny Mesa Community Services District entered all three programs, i.e., the Liability, Property, and Workers’ Compensation Programs, effective July 28, 2011. It was staff’s recommendation that the Board of Directors ratify the Executive Committee’s acceptance of Buena Vista Water Storage District, Sunnyslope County Water District, and Pajaro/Sunny Mesa Community Services District as members of the JPIA.

M/S (Dave Breninger, Placer County Water Agency/Jack Hoagland, Rancho California Water District) (Unanimous): That the Board of Directors ratify the Executive Committee’s acceptance of Buena Vista Water Storage District, Sunnyslope County Water District, and Pajaro/Sunny Mesa Community Services District as members of the JPIA.

2


CALENDAR OF MEETING DATES 2012 A Calendar of Meeting Dates for 2012 had been included in the packet. All of these meetings are posted and open to the public. ACWA PRESENTATION Tim Quinn, Executive Director of ACWA, gave a presentation before the JPIA Board and membership on the state of ACWA. He detailed the achievements of this past year within their organization and described their goals for 2012. CHANGES TO THE JPIA’S GOVERNING DOCUMENTS At the May 9, 2011 ACWA/JPIA Board of Directors meeting, the Board approved a number of changes to both the Joint Powers Agreement and the Bylaws. Some changes were merely grammatical and some were more substantive, updating the documents to reflect the JPIA’s current business practices. During the workshop in the morning at conference and during the afternoon’s Board of Directors meeting, on May 9, 2011, there was some discussion regarding the selection of the President and the Vice President. No action was taken, and currently the governing documents call for the President and the Vice President to be selected by the Board of Directors. The Executive Committee reviewed the proposed revisions that, in addition to making a few more grammatical corrections, would change the process of selecting the President and the Vice President from election by the Board of Directors to selection by the Executive Committee. The powers and duties would not change and the total number of Executive Committee members would not change. The terms of each would be two years and selection by the Executive Committee would take place at the first Executive Committee meeting following the Board of Directors election. There would be no limit to the number of terms a member of the Executive Committee could serve as the President or the Vice President. Changes to the Joint Powers Agreement After a considerable discussion concerning the proposed changes to the governing documents, a vote was taken to ratify the changes to the Joint Powers Agreement.

M/S (Jack Hoagland, Rancho California Water District/Paul Dorey, Vista Irrigation District) (Ayes: 80 – Opposed: 21) Passed with >2/3 vote: That the Board approve the Executive Committee’s proposed changes to the Joint Powers Agreement as presented.

Changes to the Bylaws There was brief discussion concerning the changes to the Bylaws.

M/S/C (Jack Hoagland, Rancho California Water District/Philip Anthony, Orange County Water District) (Ayes: 98 – Opposed: 3) That the Board approve the Executive Committee’s proposed changes to the Bylaws as presented.

3


FINANCIAL PRESENTATION OF GFOA CERTIFICATE Presentation of the Government Finance Officers Association (GFOA) certificate was made by Vikki Beattley, Chief Financial Officer of Mesa Consolidated Water District. Ms. Beattley provided background information regarding the prestigious Certificate of Achievement for Excellence in Financial Reporting Program (CAFR) award and proceeded to present the award to the President Gladbach and the JPIA. This is the second consecutive year that the JPIA has received this award for its financial reporting. President Gladbach accepted the award and recognized David deBernardi and the Finance staff for their hard work and commitment to excellence. YEAR END FINANCIAL HIGHLIGHTS AS OF SEPTEMBER 30, 2011 Mr. deBernardi provided an overview of the unaudited Statement of Net Assets, as of September 30, 2011 and Statement of Revenues, Expenses and Changes in Net Assets for the year ended September 30, 2011. He noted total net assets of $47 million with a large portion of the assets being in cash and cash equivalents. Member premiums have risen from the prior fiscal-year due to increased payrolls and total insured values. There has been a slight increase in paid claims compared to the prior fiscal-year. The graphs of Assets and Liabilities were reviewed, showing little change since the prior fiscal-year. Total operating expenses remain stable compared to the prior fiscal-year. The Retrospective Premium Adjustments (RPA) is less than prior years due to more recent policy-years having less to be refunded. There has been an increase in claims severity with an increase of $2.73 million having been paid out of the Liability Program. Investment income is down due to the decline in interest rates. The graph of Premium vs. Costs shows a comparison of premiums received, claims paid, excess insurance, Cat Fund balance, IBNR (incurred but not reported), G&A expenses, and the RPA balance from fiscal-years 2006-07 to 2010-11. The graph showed a steady decline in the RPA balance with a very slight deficit in the 2010-11 fiscal-year. The RPA schedule as of September 30, 2011 was reviewed, highlighting the 2007-08 fiscal-year, that favorably indicates a refund to members. INVESTMENT PORTFOLIO PERFORMANCE The Investment Portfolio for the JPIA currently ranges from $90 to $110 million during a given year. Interest rates continue to provide low yields. For the month end September 2011, the Local Agency Investment Fund (LAIF) rate was 0.378%. The JPIA annualized yield for the month of September was 1.29%, which proved to be approximately 91 basis points more than LAIF for the same period. The market value is about $1.3 million more than book value, $105,721,943 vs. $104,399,997. The average life of the portfolio is just under two years. Union Bank of California provided the market values. The current report is in compliance with the JPIA’s written investment policy and there are sufficient funds to meet the pool’s cash requirements for the next six months.

4


INVESTMENT POLICY Mr. Boone, Chairman of the Finance & Audit Committee, reviewed the proposed updates to the Investment Policy. The majority of the proposed changes are minor housekeeping changes to avoid duplication and/or are for clarification. The Investment Policy was updated to remove the minimum credit rating of the Federal Agency and Federal Agency MBS. The current requirement is AAA. The change is being considered due in part to the S&P lowering the credit rating of the U.S. Government in August of 2011. Additionally, there was a change in reporting of investment transactions to the Executive and Finance & Audit Committees, from quarterly to monthly reporting. The proposed changes to the Investment Policy have been reviewed by both the JPIA’s Finance & Audit Committee and the JPIA’s Executive Committee. A majority of the proposed changes have come at the suggestion of the JPIA investment advisor, PFM Asset Management.

M/S/C (Philip Anthony, Orange County Water District/Jace Schwarm, San Dieguito Water District) (Unanimous): That the Board approve the recommendation of the Finance & Audit Committee and the Executive Committee for approval of the Investment Policy as presented.

TRAINING TRAINING UPDATE Members were directed to the meeting packet to review the training highlights for the year that had previously been reviewed at earlier meetings. POOLED PROGRAMS REPORTED LOSSES FOR LIABILITY, PROPERTY, AND WORKERS’ COMPENSATION PROGRAMS Mr. Sells briefly reviewed the pooled losses from all three programs. A full report of the losses had been provided at the Risk Management Committee earlier in the day. Losses have generally shown a favorable trend in all three programs. RENEWALS OF JPIA’S POOLED PROGRAMS Workers’ Compensation Program The workers’ compensation insurance marketplace has been unsettled and continues to exhibit a lack of unified direction. There are strong influences that indicate significant rate increases on the horizon: the California market produced a 116% combined ratio in 2010; there has been major escalations of medical and pharmacy costs; and several recent legal decisions have eroded the savings produced by the 2004 reform measures. Mr. Bill Malone, of WGM & Associates, was asked to check the market. ARCH Insurance had previously committed to a guaranteed renewal for the 2011-12 coverage year with no increase in rates. Two other carriers provided competitive proposals.

5


Safety National Insurance provided a proposal that met the expiring terms but at a rate that was approximately 20% less, a savings of nearly $95,000. Safety National is a highly regarded workers’ compensation excess carrier with a Best’s rating of A : X. They are, however, relatively new to the public entity market. The Workers’ Compensation Program Committee’s recommendation to the Executive Committee to accept the Safety National proposal was approved, and the JPIA’s Executive Committee accepted the recommendation to renew the Program with no change in the rates charged to members. This was achieved through a combination of the savings in the cost of the excess coverage as well as reductions in the amounts collected for the Self-Insured Excess Fund and the Catastrophic Reserve Fund. This is the fourth consecutive year that the JPIA has maintained stable Workers’ Compensation Program rates for its members. There are currently 165 agencies participating in the Program, with a total payroll of nearly $415 million. Liability Program The expiring Program year was structured with a $1 million per occurrence pooled self-insurance retention (SIR), a $10 million layer reinsured through Everest Reinsurance and three excess layers that provided total per-occurrence limits for the Program of $60 million. The reinsurer for the first layer expressed concern with recent unfavorable loss development, particularly for large losses. There were early indications of renewal proposals that would include significantly higher rates for that layer, or a higher SIR, or possibly both. The Liability Program Committee recommended to the Executive Committee that the JPIA increase its SIR to $2 million and accept a proposal from Starr Indemnity and Liability Company to reinsure the first layer of $9 million per occurrence. There was no change in the other excess layers. The Executive Committee accepted the Liability Program Committee’s recommendation, along with a recommendation to renew the Program with no change in the basic rates charged to members. This was the third consecutive year that the JPIA was able to maintain a stable deposit premium rate for the Program. There are currently 285 members in the Liability Program with payrolls totaling over $446 million. RISK MANAGEMENT LOW LOSS RATIO AWARDS FOR POOLED PROGRAMS Each year at its fall Conference, the JPIA recognizes those members with a loss ratio of 20% or less. The board packet reported a list of cumulative loss ratio data by rank followed alphabetically by district for the Liability, Property, and Workers' Compensation Programs. The data is for a three-year period from 2007 to 2010, as of September 30, 2011. RECIPIENTS OF THE H.R. LABOUNTY SAFETY AWARDS The JPIA has selected nominations that demonstrate proactive safety contributions. The winners of the awards are as follows:

6


BELLA VISTA WD Mike Grandmain - $100 CARMICHAEL WD Brad Stone - $75 CITRUS HEIGHTS WD David Kane - $50 COASTSIDE CWD Sean Donovan - $150 Steve Twitchell - $150 CRESCENTA VALLEY WD Alex Sandoval - $50 Roy Spaulding, Jr. - $50 Cory Whitman - $50 CUCAMONGA VALLEY WD Scott Degner - $50 EAST CONTRA COSTA ID Ricky Gonzales - $50 Butch Stevens - $50 EL DORADO ID Ron Barney - $25 John Chavers - $25 Jake Eymann - $50 Larry Olson - $25 Bill Slightam - $50 Russell St. Thomas - $25 Buddy Tanner - $50 James Young - $25 EL TORO WD Jay Curry - $75 Phillip Lingenfelder - $100 Donny Lloyd - $50 Chris Magill - $100 Steve Sanchez - $100 Alex Sepulveda - $100 Chau Vuong - $50 Dave Way - $50

FRESNO ID John Jimenez - $50 HELIX WD Dan Baker - $50 Robert Mineo - $50 Larry Moon - $50 Jason Moore - $50 Travis Powell - $50 Phil Sample - $50 LAGUNA BEACH CWD Field Operations Staff - $100 Jeremy Harrowby - $50 Boyd Schultz - $50 MESA CONSOLIDATED WD Stephen Hersey - $25 Bob Mitchell - $50 Eric Stiegler - $50 PEBBLE BEACH CSD Juan Moreno - $100 RANCHO CALIFORNIA WD Robert Avera - $50 Engineering, Water Quality, & Operations Staff - $150 Mark Hart - $25 David Holguin - $50 Chris Lopez - $75 Larry Ruddell - $50 Corey Wallace - $50 Tom Wallace - $25 SACRAMENTO SUBURBAN WD Dave Bruns - $75 Hector Segoviano - $75 Joe Crockett - $25 Matt Underwood - $25 Field Services Staff - $100 Rick Franz - $50 SOLANO ID Victor Fortenberry - $50

7


STOCKTON EAST WD Randy Anderson - $50 Manual Jimenez - $50 John Morley - $50 SWEETWATER AUTHORITY Phil Beaver - $50 Eddie Figueroa - $50 Distribution Dept. – Honorable Mention Lane Miller - $50 Purdue Plant Team - $100 Sue Slaughter - $25 VALLECITOS WD David Joiner - $50 Larry McDougle - $50

WESTERN MWD Operations Technicians - $250 Bob Froshieser - $50 Chuck Hunt - $50 WHEELER RIDGE-MARICOPA Stephen Chase - $50 Stephen Dunn - $50 Jon Kelley - $50 Greg Loveless - $100 Tom Russell - $50 YOLO COUNTY FLOOD CONTROL & WCD Greg Anderson - $50 Tim Ireland - $50 Anthony Lopez - $50 Operations & Maintenance Staff - $100 YORBA LINDA WD Doug Baker - $50

OTHER BUSINESS President Gladbach announced that there would be a reception following the Board of Directors’ meeting at 5:00 p.m. He made special note of the reception sponsors: Kronick, Moskovitz, Tiedemann & Girard; William Malone of WGM & Associates; Daley & Heft; LaMore, Brazier, Riddle & Giampaoli; Cohen & Burge. He invited everyone to the Orange County Ballroom for the reception. CLOSED SESSION At approximately 5:02 p.m. the Board of Directors, upon advice of counsel, adjourned to Closed Session pursuant to Government Code Section 54956.9 to discuss pending litigation in ACWA Joint Powers Insurance Authority and Yorba Linda Water District vs. Insurance Company of the State of Pennsylvania and Lexington Insurance Company. The Board of Directors returned to Open Session at 5:07 p.m. with no reportable action. The Board of Directors’ meeting adjourned at 5:08 p.m.

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E. G. “JERRY” GLADBACH, PRESIDENT ATTEST: WALTER A. SELLS, SECRETARY

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LIST OF ATTENDEES

DISTRICT / ORGANIZATION NAME POSITION Alta Irrigation District Norman Waldner Director Antelope Valley State Water Contractors Assoc Linda Godin Director Antelope Valley-East Kern Water Agency Andy Rutledge Director Association of California Water Agencies Jan Jennings Director Admin Association of California Water Agencies Tim Quinn Exec Director Arvin-Edison Water Storage District David A. Nixon Alt. Director Berrenda Mesa Water District Leon Elwell Director Browns Valley Irrigation District Walter Cotter Alt. Director Byron-Bethany Irrigation District Rick Gilmore Alt. Director Cachuma Operation & Maintenance Board Robert Lieberknecht Director Calaveras County Water District Don Stump Director Calleguas Municipal Water District Donald Hauser Director Calleguas Municipal Water District William Seaver Alt. Director Camrosa Water District Eugene West Director Carmichael Water District Ron Greenwood Director Carpinteria Valley Water District Robert Lieberknecht Director Castaic Lake Water Agency E.G. Jerry Gladbach Director Central California Irrigation District Gregg Rice Alt. Director Citrus Heights Water District Joseph Dion Director Corcoran Irrigation District Jacob Westra Alt. Director Crestline Village Water District Steven Farrell Director Crestline-Lake Arrowhead Water Agency Norman Meek Alt. Director Cucamonga Valley Water District Kathy Tiegs Director Del Paso Manor Water District Richard Allen Alt. Director Del Paso Manor Water District Debra Sedwick General Mgr. Desert Water Agency Ron Starrs Director Dudley Ridge Water District Jacob Westra Director El Toro Water District Ted Martin Director Empire West Side Irrigation District Jacob Westra Alt. Director Fallbrook Public Utility District Keith Lewinger Alt. Director Fresno Metropolitan Flood Control District Kendall Groom Director Friant Power Authority Carl Janzen Director Glenn-Colusa Irrigation District Dennis Michum Alt. Director Golden Hills Community Services District Eldwin Kennedy Alt. Director Helix Water District Charles Muse Director Henry Miller Recreation District #2131 Palmer McCoy Executive Asst. Hi-Desert Water District Roger Mayes Director Humboldt Bay Municipal Water District Carol Rische Alt. Director Humboldt Community Services District Kevin McKenny Director Idyllwild Water District Warren Monroe Director James Irrigation District John Mallyon Alt. Director Joshua Basin Water District Mickey Luckman Director Kern County Water Agency Terry Rogers Director Kern County Water Agency Steven Ruettgers Alt. Director Kern Water Bank Authority Wilmar Boschman Director Kings River Conservation District Norman Waldner Director

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DISTRICT / ORGANIZATION NAME POSITION Kronick, Moskovitz, Tiedemann & Girard Robin Stewart Legal Counsel La Habra Heights County Water District Michael Gualtieri Alt. Director La Habra Heights County Water District Robert Wilson Director Laguna Irrigation District Frank Zonneveld Director Little Rock Creek Irrigation District Leo Thibault Director Madera Irrigation District Carl Janzen Director Madera-Chowchilla Water &Power Authority Carl Janzen Director Mission Hills Community Services District James Mackenzie Director Moulton Niguel Water District Gary Kurtz Director Municipal Water Dist of Orange County Joan Finnegan Director North Coast County Water District Joshua Cosgrove Alt. Director Oakdale Irrigation District Steve Webb Director Orange County Water District Philip Anthony Director Orange Cove Irrigation District H.A. Collin, III Director Orchard Dale Water District Robert Noonan Director Palmdale Water District Linda Godin Director Patterson Irrigation District Toni Russell Alt. Director Placer County Water Agency Dave Breninger Alt. Director Pomona-Walnut-Rowland JWLC Scarlett Kwong Director Purissima Hills Water District Robert Anderson Director Rancho California Water District John Hoagland Director Rancho California Water District Dave Morrison Safety Officer Reclamation District No. 1606 John Mallyon Alt. Director Regional Water Authority Joseph Dion Director Richvale Irrigation District Gerald Mattson Director Richvale Irrigation District Brad Mattson Alt. Director Rincon Del Diablo Municipal Water District Mitch Dion General Mgr. Rincon Del Diablo Municipal Water District David Drake Director Rincon Del Diablo Municipal Water District Dianna Towne Alt. Director Rincon Del Diablo Municipal Water District James Murtland Alt. Director Rosedale-Rio Bravo Water Storage District Royce Fast Director Rowland Water District Ken Deck Alt. Director Sacramento Ground Water Authority Neil Schild Director Sacramento Suburban Water District Neil Schild Director San Benito County Water District Frank Bettencourt Director San Bernardino Valley Water Cons District Melody McDonald Director San Dieguito Water District Jace Schwarm Alt. Director San Gabriel Basin Water Quality Authority Bob Kuhn Director San Gabriel Valley Municipal Water District Raul Romero Director San Gorgonio Pass Water Agency John Jeter Director San Juan Water District Kenneth Miller Director San Luis & Delta-Mendota Water Authority William Pacheu Director San Luis Water District Linda Bond Alt. Director Scotts Valley Water District David Hodgin Director Semitrophic Water Storage District Wilmar Boschman Director Semitrophic-Rosamond Water Bank Authority Wilmar Boschman Alt. Director Sierra Highlands Community Services District Fred Finkbeiner Director Sierra Lakes County Water District Ulrich Luscher Director

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DISTRICT / ORGANIZATION NAME POSITION Solano Irrigation District Guido Colla Director South Coast Water District Robert Moore Director South Sutter Water District Thomas Cuquet Director Stockton East Water District Thomas McGurk Director Sunnyslope County Water District Danny Villalon Director Sweetwater Authority Margaret Welsh Director Tahoe City Public Utility District Lou Reinkens Director Three Valleys Municipal Water District Brian Bowcock Director Tulare Lake Basin Water Storage District Jacob Westra Alt. Director Twentynine Palms Water District Philip Cisneros Director Twentynine Palms Water District Nicholas Bourikas Alt. Director Vallecitos Water District Tim Shell Director Valley Center Municipal Water District Merle Aleshire Director Valley Center Municipal Water District William Jeffrey Alt. Director Valley County Water District Mariana Lake Board Member Vandenberg Village Community Svc. District Christopher Brooks Director Vista Irrigation District Paul Dorey Director Vista Irrigation District Eldon Boone Alt. Director Walnut Valley Water District Allen Wu Director West Basin Municipal Water District Ronald Smith Director West Valley Water District Earl Tillman, Jr. Director West Valley Water District Anthony Araiza Alt. Director Westborough Water District Perry Bautista Director Western Municipal Water District S.R. Al Lopez Director WGM & Associates William Malone President Wheeler Ridge-Maricopa Water Storage Dist Mark Gardner Alt. Director Yolo County Flood Control & WCD Christy Barton Alt. Director Yuima Municipal Water District W.D. “Bill” Knutson Director

JPIA STAFF - ATTENDANCE POSITION

Walter “Andy” Sells Chief Executive Officer/Secretary Dick Damon Liability/Property Claims Manager David deBernardi Director of Finance John Gilstrap Director of Member Services Peter Kuchinsky II Risk Management Manager Lee Patton Sr. Risk Manager Sylvia Robinson Publications & Web Editor Patricia Slaven Training Manager Nancy Stangel Director of Administration Michelle Stites Administrative Assistant II Bobbette Wells Executive Assistant

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Prepared by: John Gilstrap, Director of Member Services Date Prepared: April 6, 2012

ACWA/JPIA Glossary of Terms

May 7, 2012

BACKGROUND Communications and documents prepared by the JPIA frequently use words, phrases, and acronyms that may not be familiar to many readers. These terms might be unique to the JPIA, to public entity risk-sharing pools, or to the insurance industry. PRESENT SITUATION In order to eliminate confusion and to better help members understand material presented by the JPIA, the following “Glossary of Terms” has been prepared. It is also included in the ACWA/JPIA’s Board of Directors’ Manual, which is provided to each Director appointed to the JPIA Board of Directors. It can also be found on the JPIA website, www.acwajpia.com. Members are requested to let JPIA staff know if there is some term, abbreviation or acronym that needs to be included in the future. RECOMMENDATION None. Provided for informational purposes only.

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Glossary of Terms ACOEM Guidelines (American College of Occupational and Environmental

Medicine) – A medical utilization review system of evidence-based, nationally recognized standards of medical care. Utilization of ACOEM Guidelines is intended to control over-utilization and end unreasonable medical care.

ACV (Actual Cash Value) – Value of property at the time of its loss or damage, determined by subtracting depreciation of the item from its replacement cost. Applies to vehicles and mobile (contractor’s) equipment covered under the JPIA’s MOPC, hypalon reservoir covers, hypalon bladder tanks, and other property subject to a higher rate of depreciation than the typical property types.

Aggregate – The term used to describe the cumulative amount of all losses for a period of time.

AGRIP (Association of Governmental Risk Pools) – A national organization of JPAs and public agency insurance pools. Formed for educational, information gathering and political lobbying purposes. Affiliated with PRIMA.

AIS – Associate in Insurance Services.

ALCM – Associate in Loss Control Management.

ARM – Associate in Risk Management.

ARM-P – Public risk management designation.

ASP – Associate Safety Professional

Attachment Point – The dollar amount of a loss where the next layer of insurance begins to pay for the loss.

Automobile Liability – Designed to afford bodily injury and property damage liability coverage associated with owned, non-owned and hired vehicles.

Automobile Physical Damage – Usually a first party coverage; however, some entities have “Bailment” or “care, custody and control” liability exposures such as garages, maintenance facilities that service vehicles of others, and parking lots.

BI – Bodily injury.

C&R (Compromise and Release) – A final settlement in workers’ compensation.

CAFR (Comprehensive Annual Financial Report) – An award program established by the GFOA to encourage and assist state and local governments to go beyond the minimum requirements of generally accepted accounting principles to prepare comprehensive annual financial reports that evidence the spirit of transparency and full disclosure and then to recognize individual governments that succeed in achieving that goal.

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CAJPA (California Association of Joint Powers Authorities) – It is pronounced ka jaup’ a. Performs regulatory and legislative lobbying as well as accreditation of Joint Powers Authorities to promote the financial stability of JPAs.

CAMP – California Asset Management Program is a California Joint Powers Authority ("JPA") established in 1989 to provide California public agencies with professional investment services. JPIA sometimes uses it as a short term investment vehicle.

Catastrophic Loss Reserve Fund – A separate JPIA reserve account designated to pay losses without additional premium assessments to members. The Fund can be used when actual incurred losses for a given coverage year exceed 150% of projected losses. A portion (currently 10%) of each member’s annual deposit premium is set aside in this fund. The monies are held, earning interest, until all claims for that coverage year are closed. At that time, the money is refunded to members or credited to their Retrospective Premium Adjustment Fund account.

CIGA (California Insurance Guarantee Association) – A state agency that administers and pays claims on behalf of admitted insurance carriers that have been declared insolvent. Since the JPIA is not an insurance company, it does not participate in CIGA, which is funded by a surcharge on premiums. However, some of the carriers that provide excess coverage to the JPIA do participate in CIGA.

CIH – Certified Industrial Hygienist.

CIPRA (California Institute for Public Risk Analysis) – Organized to develop, analyze and disseminate information on risk management in California’s public sector, especially self-insured entities and Joint Powers Authorities.

Claim – A demand of a right. In general a demand for compensatory damages resulting from the actions of another.

Claims Made – A provision of an insurance policy that requires it to pay only for claims presented during the policy period with no regard for when the action causing the claim took place. (See “Occurrence”)

CNP (Closed No Payment) – Status of a claim that was closed out without any claim payments having been made.

CPCU – Chartered Property and Casualty Underwriter.

CSP – Certified Safety Professional.

DDC – Defensive Driving Class.

Deductible – It is that portion of each claim that is paid by the member at the time of loss. It is in addition to any premium already paid. Only the JPIA’s Property Program uses a deductible.

Defense – A defendant's denial to a complaint or cause of action.

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Deposit Premium – Premium required at the beginning of a policy period based on estimated costs.

DIC (Difference In Conditions) – A specialized property insurance policy written to provide coverage for perils not covered in a standard property policy or in the JPIA’s Memorandum of Property Coverage. In particular, it is most often used to provide coverage for earthquake and/or flood losses.

Directors, Officers and Trustees Liability – Intended to protect nonprofit board members, officers, and directors for faulty decisions which imperil the entity. Usually written to include entity reimbursement for legal actions and personal liability of specific wrong-doers.

E-mod – See Experience Modification.

Employers’ Liability – Included as part of a worker’s compensation insurance policy. Covers liability for losses arising out of injuries to employees that are not covered by statutory workers’ compensation benefits.

Environmental Impairment Liability (EIL) – Also referred to as “Pollution” and “Pollution Legal” Liability; can be written to protect an entity from actions resulting from contamination of air, water, property. First-party (damage to owned property) and third-party (liability for damage to others) protection can often be combined.

EPL (Employment Practices Liability) – Written to protect an entity from liabilities arising from allegations of discrimination, failure to promote or hire, harassment, ADA responsibilities, wrongful termination, etc. A relatively new coverage, this is one of the fastest growing areas of litigation.

Errors and Omissions Liability – Excludes bodily injury and property damage; intended to afford protection for the “misfeasance, malfeasance or non-feasance” of public officials, employees and volunteers. May also include incidental medical personnel (paramedics), police and fire personnel, architects and plan checkers, engineers, and on-staff attorneys.

Excess Insurance – Insurance that is purchased to provide higher limits than the primary policy provides.

Excess Loss – The portion of a loss that is allocated to, or paid by, excess insurance. The JPIA Liability Program self-insures, through a pool, the first $1 million of each occurrence. Losses in excess of that amount are paid by an excess liability insurance policy purchased by the JPIA on behalf the Program members.

Experience Modification – A mathematical factor used to modify a member’s premium in both the JPIA Liability Program and the Workers’ Compensation Program. It is based on a member’s previous actual loss experience compared to the average or expected loss experience. A calculated factor of greater than 1.0 is a debit and reflects higher than expected loss experience. Conversely, a factor of less than 1.0 is a credit and reflects more favorable loss experience. Also known as E-mod, Ex-mod, and X-mod.

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Experience Modifier – A numerical factor developed by measuring the difference between a member’s actual loss experience and the expected losses of the payroll classifications (for workers’ compensation) or the average losses of the pool (for liability). The experience period used is the earliest three of the last four years. The factor may increase or decrease a member’s standard premium in response to their past lost experience. Members with a favorable loss record will have a factor lower than 1.0 and will pay a lower premium. Member with a poorer loss record will have a factor greater than1.0 and will pay a higher premium. Also known as experience modification factor, e-mod, ex-mod, and X-mod.

FASB – Financial Accounting Standards Board.

Fidelity Bonds – Written as financial guarantees of employees’ honesty. Personnel with money-handling responsibilities are considered exposures to loss.

Fiduciary Liability – Covers board members, executives and other decision-making personnel with responsibilities for pension funds, retirement plans and employee benefit monies for negligent decisions that result in losses to such funds.

Full Value – A term used in the JPIA’s MOPC to provide “guaranteed” replacement cost coverage, which will pay the full cost to replace damaged property regardless of the “limit” carried. Applies to buildings and personal property.

G&A – General & Administrative.

GAAP – Generally Accepted Accounting Principles.

GASB – Governmental Accounting Standards Board.

General Liability – Written to protect the member's assets against liability for property damage of or bodily injury to third parties (see definition of parties).

GFOA (Government Finance Officers’ Association) – International association whose purpose is to enhance and promote the professional management of governments for the public benefit by identifying and developing financial policies and best practices and promoting their use through education. The GFOA is the organization that oversees the CAFR Program.

HIPPA – Health Insurance Portability and Accountability Act. Federal Law, passed in 1996, that, among other things, places restrictions on the privacy of individuals’ medical information.

HRCP – Human Resources Certification Program. One of the professional certification “tracks” within the JPIA’s Professional Development Program (PDP).

IBNR (Incurred But Not Reported) – This is a claim term. It is that part of the total claims that is unknown at any point in time. When a claim is reported, its final value must be estimated. The JPIA tracks how accurately it estimates and knows that historically the average claims' value will grow over time. The JPIA also understands that at any point in time occurrences have taken place that will certainly generate claims that have not yet been reported.

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Incurred Loss – This is the ultimate expected total value of any claim. It includes the amount already paid, plus the estimated amount yet to be paid (reserves).

Inverse Condemnation – Both the United States Constitution and the California Constitution require that a private citizen be compensated if property is "taken" by a public entity. When the property is taken proactively it is called eminent domain. When the property is taken "accidentally," without due course, it is called inverse condemnation. Negligence need not be proven. The claimant’s legal expenses are payable in addition to actual damages.

LAIF – Local Agency Investment Fund is part of the California State Pooled Money Investment Account (PMIA), sometimes used by JPIA as a short-term investment vehicle.

Lending Library – Library of videos, tapes, DVDs, and booklets available for borrowing by members to use in their training efforts.

Limit – The most that will be paid in a loss.

MOLC (Memorandum of Liability Coverage) – The JPIA’s agreement providing liability coverage to Member Agencies.

MOPC (Memorandum of Property Coverage) – The JPIA’s agreement providing property coverage to Member Agencies.

Occu-Med – Providers of a service program for members in the JPIA’s Workers’ Compensation Program, which assists in facilitating pre-employment physicals, fit-for-duty exams, etc.

Occurrence – A) In order for the JPIA to pay a liability claim, it must arise out of an occurrence. This is an accident, event, act or omission to act, which results in "damages", "bodily injury", or "property damage" neither expected nor intended from the covered parties’ conduct. B) A provision of an insurance policy that requires it to pay for a claim caused during the policy period regardless of when it is presented. (See “claims made”)

PARMA (Public Agency Risk Managers Association) – A state-wide association for risk managers in the public sector. Educational and lobbying activities.

Parties – The participants in any claim or suit are referred to as the "parties" to the action. When dealing with insurance claims, the following terms are used: First Party - This is the member district; Second Party - This is the ACWA/JPIA; and Third Party -This is anyone other than the member or ACWA/JPIA.

PD – Property damage.

PD (Permanent Disability) – Results when an injury diminishes a worker's future earning capacity. Permanent disability is essentially the disability that remains once the employee's condition has become permanent and stationary. A worker's medical condition is considered permanent and stationary after it has reached maximum medical improvement.

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PDP – Professional Development Program. The framework for JPIA’s training program, providing members’ employees with opportunities to learn or refine job-related skills while pursuing certifications in their fields of interest.

PE – Registered Professional Engineer.

Plaintiff – The party who complains or sues in a personal action. A claimant becomes a plaintiff by filing suit.

Pooled Loss – The portion of a loss that is allocated to, or paid by, the self-insured pool. The JPIA Liability Program pools, or self-insures, the first $1 million of each occurrence. Loss costs exceeding this amount are paid by excess insurance.

PPD (Permanent Partial Disability) – A permanent disability rating from 1% to 99.75%. It is possible for the worker to be permanently partial disabled, even if the worker has returned to the previous job and is doing the same work as before the injury.

PRIMA (Public Risk Management Association) – A national association for risk managers in the public sector. Formed for educational, information gathering and political lobbying purposes.

Property Insurance – This covers the member for damage to its own property, sometimes called first-party coverage.

PTD (Permanent Total Disability) – A permanent disability rating of 100%.

QME (Qualified Medical Evaluator) – A doctor selected from a State panel to address medical, disability, and compensability disputes between the parties.

RAP (Retrospective Allocation Point) – In the JPIA's liability and workers’ compensation programs, it is that portion of each claim that the member will be responsible for when the RPA is made. The deposit premium includes an estimate of the expected losses below the RAP. It is not a deductible; the member does not pay additional money at the time of loss. RAP losses are included in the RPA calculation. Members share in the pooled losses of other members only for losses above their RAP. The Liability Program offers RAPs of $2,500; $5,000; $10,000; $25,000; and $50,000. Retentions above these amounts are treated differently; they are considered SIRs.

REA – Registered Environmental Assessor.

REHS – Registered Environmental Health Specialist.

Reinsurance – Insurance that is purchased by an insurance company (insurer) from another insurance company (reinsurer) as a means of risk management, to transfer risk from the insurer to the reinsurer. The JPIA uses a mix of both reinsurance and excess insurance in its pooled coverage programs.

RC (Replacement Cost) – The cost to replace damaged property with like kind and quality, with no deduction for depreciation.

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http://en.wikipedia.org/wiki/Insurance

http://en.wikipedia.org/wiki/Insurance_company

http://en.wikipedia.org/wiki/Risk_management

http://en.wikipedia.org/wiki/Risk

Reserve – In order to budget for its expected costs, the JPIA estimates the ultimate expected total value of each claim and "reserves" part of the deposit premium to pay for it. As moneys are paid out for a claim, the reserve amount is decreased.

RIMS (Risk and Insurance Management Society) – National professional organization to promote principles of risk management and assist risk managers in their daily activities.

Risk Control – Those risk management techniques designed to minimize the frequency and/or severity of claims. Risk control techniques include exposure avoidance, loss prevention, loss reduction, segregation of loss exposures, and contractual transfer to shift losses to others.

Risk Financing – Techniques for generating funds to pay for losses that risk control methods do not entirely eliminate. There are two types of risk financing techniques -- retention and transfer. Retention involves paying for losses using an organization’s own assets; transfer involves covering losses using an outside intermediary for a consideration (such as a payment of a premium). Each agency that participates in the JPIA practices these techniques. Losses are retained to the extent of an agency’s RAP; they are transferred to the JPIA pool in excess of this amount.

Risk Management – One of the specialties within the general field of management, the process of managing an organization’s activities to minimize the adverse effects of accidental losses on a cost-effective basis. Risk management has two components -- risk control and risk financing.

RPA (Retrospective Premium Adjustment) – At the beginning of each policy period, the JPIA collects a deposit premium representing the estimated costs for that year. Forty-five months after its inception, the JPIA looks back at that estimate and determines how accurate it was and makes an RPA. If it collected too much, a refund is made. If it collected too little, the member is charged for the difference. The process is repeated annually for each coverage year until all claims for that year are closed out.

RPA Fund (Retrospective Premium Adjustment Stabilization Fund) – A separate JPIA fund designed to stabilize the RPA process. A member’s refunds from the Catastrophic Loss Fund and from the RPA process are credited to this fund. Any RPAs resulting in additional premiums due will be charged against this fund. When a member’s Fund balance exceeds 60 percent of its basic premium, the excess money will be refunded. Members will not be billed for additional premiums unless they have a negative balance in the Fund exceeding 40 percent of their basic premium.

RTW – Return to work.

SCIF (State Compensation Insurance Company) – A state agency that provides workers’ compensation insurance to California employers.

SCP – Supervisor Certification Program. One of the professional certification “tracks” within the JPIA’s Professional Development Program (PDP).

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SIR (Self Insured Retention) – In the JPIA’s liability program, members may choose SIRs of $100,000, $300,000 or $500,000. This is the amount of each loss the member will be responsible for. It is payable at the time of the loss. An up-front premium credit is given to members selecting these high SIRs. Retentions below these levels are treated differently; they are considered RAPs.

Special Events – Designed to cover your sponsorship of events, such as fireworks shows, festivals, community/entity celebrations; often written to protect other policies’ loss integrity. Another type of special event coverage, known as a “tenants’ and users’” policy, can be issued for third parties who rent or use your owned facilities.

TD (Temporary Disability) – An impairment of bodily function, or physical incapacity that is reasonably expected to be cured or materially improved with proper medical care. This is the healing period following an injury. Temporary disability benefits are intended to be a substitute for lost wages (subject to minimums and maximums) during a period of temporary incapacity.

TIV (Total Insured Values) – The values shown on a Member Agency’s schedule or appraisal for property coverage. Only those items shown on the schedule are covered for loss.

UST (Underground Storage Tanks) – Refers primarily to underground fuel tanks; used most often in reference to the JPIA’s Memorandum of Underground Storage Tank Pollution Liability Program. This program protects member agencies against third-party claims for bodily injury and property damage caused leaks from USTs. It also includes coverage for government mandated clean-up costs.

UTEL – JPIA’s Memorandum of UTEL Liability Coverage; a separate JPIA liability program for private, not-for-profit water mutuals as well as public entities associated with the water industry but that do not primarily purvey water. The UTEL Program is not currently active.

Workers’ Compensation – A statutory coverage designed as the “sole remedy” for workers injured in the course and scope of their duties.

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Prepared by: Walter A. Sells, Chief Executive Officer Prepared: April 10, 2012

ACWA/JPIA UPDATE ON TRANSITION OF HBA TO JPIA

May 7, 2012

BACKGROUND The ACWA/JPIA (JPIA) was approached by the ACWA/Health Benefits Authority (HBA) in December 2011 to explore the possibility of providing administrative services or consider joining forces. An ad hoc committee was formed to explore this possibility with direction to work with HBA staff, Board members, JPIA staff, and other relevant parties. In January 2012, based on the recommendation of staff and the HBA Ad Hoc Committee, both the JPIA Executive Committee and the HBA Board of Directors approved the transition of the HBA program into the JPIA. In March, the HBA Board of Directors formally voted to dissolve the ACWA/HBA programs. CURRENT SITUATION At the beginning of April, a packet of information was mailed to every HBA member. The packet contained a formal resolution for each member agency to pass. The resolution consents to join the Employee Benefits Program of the JPIA and ratifies the action of the HBA Board of Directors to terminate the Health Benefits Authority Joint Powers Agreement. The staff at HBA has developed a program to track the progress of each member in completing the resolution and returning the signed documents to HBA. Staff is currently working with legal counsel to complete the legal and financial requirements. Human Resources, employment, and computer technology needs are being completed in anticipation of a July 1, 2012 transition date. RECOMMENDATION None, informational only.

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Prepared by: Walter “Andy” Sells, Chief Executive Officer Date Prepared: April 5, 2012

ACWA/JPIA ACWA/JPIA Document Revisions

May 7, 2012

BACKGROUND The JPIA Governing Documents were last reviewed and revised at the May 2011 Conference in Sacramento and again at the November 2011 Conference in Anaheim. CURRENT SITUATION Transitioning the ACWA/Health Benefit Authority into the JPIA makes it necessary to update the Joint Powers Agreement and Bylaws of the Authority. Included in the packet are proposed revisions that add the necessary language to include employee benefits as a separate program in the JPIA. Any action to change the Joint Powers Agreement requires a two-thirds (2/3) majority vote. Any action to change the Bylaws and Executive Committee Manual requires a majority vote by the Board of Directors. The proposed revisions have been reviewed and approved by the JPIA Executive Committee. RECOMMENDATION The JPIA Executive Committee recommends approval of documents as presented.

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Joint Powers Agreement

Creating The

Association of California Water Agencies Joint Powers Insurance Authority

Adopted May 9, 1979 Revised on November 28, 2011May 7, 2012

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Joint Powers Agreement — Table of Contents Recitals ........................................................................................................................... 1

Article 1 — Definitions ..................................................................................................... 2

Article 2 — Purposes ....................................................................................................... 4

Article 3 — Parties To Agreement ................................................................................... 4

Article 4 — Term Of Agreement ...................................................................................... 4

Article 5 — Creation Of Authority .................................................................................... 4

Article 6 — Powers Of Authority ...................................................................................... 5

Article 7 — Board Of Directors ........................................................................................ 5

Article 8 — Powers Of The Board Of Directors ............................................................... 6

Article 9 — Meetings Of The Board Of Directors ............................................................. 6

Article 10 — Executive Committee .................................................................................. 7

Article 11 — Powers Of The Executive Committee ......................................................... 7

Article 12 — Meetings Of The Executive Committee....................................................... 8

Article 13 — Officers Of The Authority ............................................................................ 8

Article 14 — Standing Committees.................................................................................. 9

Article 15 — Insurance Coverage ................................................................................... 9

Article 16 —Implementation Of The Joint Protection Program ...................................... 10

Article 17 — Accounts And Records ............................................................................. 10

Article 18 — Responsibility For Monies ......................................................................... 11

Article 19 — Responsibilities Of The Authority .............................................................. 11

Article 20 — Responsibilities Of Members .................................................................... 12

Article 21 — New Members ........................................................................................... 13

Article 22 — Withdrawal ................................................................................................ 13

Article 23 — Cancellation Of Membership Or Participation ........................................... 14

Article 24 — Effect Of Withdrawal Or Cancellation ....................................................... 15

Article 25 — Termination And Distribution ..................................................................... 15

Article 26 — Provision For Bylaws And Manuals .......................................................... 16

Article 27 — Notices ...................................................................................................... 16

Article 28 — Amendment .............................................................................................. 16

Article 29 — Prohibition Against Assignment ................................................................ 17

Article 30 — Agreement Complete ................................................................................ 18

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JPIA Agreement Revised November 28,, 2011May 7, 2012

Joint Powers Agreement

Creating The

Association Of California Water Agencies Joint Powers Insurance Authority

THIS AGREEMENT is made and entered into in the County of Placer, State of California, by and among the water districts and agencies (hereinafter "Districts") and other public entities (hereinafter "Friends of ACWA") organized and existing under the laws of the State of California, which are parties signatory to this Agreement and listed in Appendix "A", which is attached hereto and made a part hereof. Said Districts and Friends of ACWA are sometimes referred to herein as "parties" or "Members".

Recitals

WHEREAS, California Government Code Section 6500 et seq. provides that two or more public agencies may by agreement jointly exercise any power common to the contracting parties; and

WHEREAS, California Government Code Section 990.4 provides that a local public entity may self-insure, purchase insurance through an authorized carrier, or purchase insurance through a surplus lines broker, or any combination of these; and

WHEREAS, California Government Code Section 990.8 provides that two or more local entities may, by a joint powers agreement, provide insurance or reinsurance for any purpose by any one or more of the methods specified in Government Code Section 990.4; and

WHEREAS, the parties to this Agreement desire to join together for the purpose of establishing pools for self-insured losses and purchasing excess insurance or reinsurance and administrative services in connection with joint protection programs for said parties; and

WHEREAS, it appears economically feasible and practical for the parties to this Agreement to do so;

NOW THEREFORE, for and in consideration of all of the mutual benefits, covenants and agreements contained herein, the parties hereto agree as follows:

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Article 1 — Definitions

The following definitions shall apply to the provisions of this Agreement:

(a) "Auditor/Controller" shall mean that person, designated by the Executive Committee who is required to draw, or cause to be drawn, checks, warrants, and electronic payments on behalf of the Authority, and to provide for an annual audit.

(b) "Authority" shall mean the Association of California Water Agencies Joint Powers Insurance Authority (ACWA/JPIA) created by this Agreement.

(c) "Board of Directors" or "Board" shall mean the governing body of the Authority.

(d) “Chief Executive Officer” shall mean that employee of the Authority who is so appointed by the Executive Committee and ratified by the Board of Directors at the next meeting, unless approved unanimously by the Executive Committee.

(e) "Claims" shall mean demands made against Members which are within the Authority's joint protection programs as developed by the Board of Directors.

(f) "Deposit Premium" shall mean the amount determined by the Executive Committee annually, as necessary to fund each joint protection program of the Authority.

(g) “Director” shall mean that individual selected by the Member, from its governing body, to represent the Member on the ACWA/JPIA Board of Directors.

(h) "District" shall mean those entities of local government empowered by law to replenish ground waters, distribute, control, treat, develop, acquire, use, store or supply water, or empowered by laws to protect, drain or reclaim lands within the State of California, including but not limited to irrigation districts, California water districts, municipal water districts, county water districts, municipal utility districts, and drainage, water replenishment, reclamation districts, flood control districts, conservation districts, sanitation districts, sanitary districts, special act districts, cities, and joint powers authorities which are signatories to this Agreement and are members of the Association of California Water Agencies (ACWA), or are affiliated with ACWA based on their meeting the criteria currently specified by ACWA for ACWA Affiliates – “Friends of ACWA”.

(i) "Duly Constituted Board Meeting" shall mean any Board of Directors meeting noticed and held in the required manner and at which a Quorum was determined to be present at the beginning of the meeting.

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(j) "Excess Insurance" shall mean that insurance or reinsurance which may be purchased on behalf of the Authority to protect the funds of the Members.

(k) "Executive Committee" shall mean the Executive Committee of the Board of Directors of the Authority.

(l) "Finance and Audit Committee" shall mean the committee of the Authority composed of financial staff of districts appointed by the Board President and ratified by their Districts.

(m) "Fiscal Year" shall mean that period of twelve (12) months which is established as the fiscal year of the Authority.

(n) “Friends of ACWA” shall mean those public agencies that do not meet the definition of “District” who are members of the ACWA or are affiliated with ACWA based on their meeting the criteria currently specified by ACWA for ACWA Affiliates – “Friends of ACWA,” and which are also signatories to this Agreement.

(o) "Insurance" shall mean and include a joint protection program, self-insurance through a funded program, and/or any commercial insurance or reinsurance contract.

(p) "Member" shall mean either a "Friend of ACWA" or a "District" which is a signatory to this Agreement.

(q) "Policy Year" shall mean a period of time, usually twelve (12) months, determined by the Executive Committee into which each joint protection program is segregated for ease in determining deposit premiums, incurred losses, and retrospective premium calculations.

(r) "Retrospective Premium Adjustment" shall include the terms "Retrospective Premium" and "Retrospective Adjustment" and shall mean the amount determined by the cost allocation plans and formulas adopted from time to time by the Board as a Member's share of losses, expenses, and contribution to the catastrophe fund or other reserve.

(s) “Secretary” shall mean the person appointed by the Executive Committee to record or cause to be recorded, and keep or cause to be kept, at the principal executive office or such other place as the Executive Committee may order, a book of minutes of actions taken at all meetings of the Board of Directors and Executive Committee.

(t) “Treasurer” shall mean the person appointed by the Executive Committee to keep and maintain, or cause to be kept and maintained, adequate and correct financial records of the Authority.

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Article 2 — Purposes

This Agreement is entered into by Members pursuant to the provisions of California Government Code sections 990, 990.4, 990.8 and 6500 et seq., in order to provide comprehensive and economical public liability, workers' compensation, unemployment, health, accident and/or dental, and property coverage, or coverage for other risks to which the Board of Directors may agree.

Additional purposes are to reduce the amount and frequency of losses, and to decrease the cost incurred by Members in the handling and litigation of claims. These purposes shall be accomplished through the exercise of the powers of such Members jointly in the creation of a separate entity, the Association of California Water Agencies Joint Powers Insurance Authority (the Authority), to administer joint protection programs wherein Districts and Friends of ACWA will separately pool their losses and claims, and jointly purchase excess insurance and/or reinsurance and administrative and other services, including claims adjusting, data processing, risk management consulting, loss prevention, legal, and other related services.

It is also the purpose of this Agreement to provide, to the extent permitted by law, for the inclusion at a subsequent date of such additional Members organized and existing under the laws of the State of California as may desire to become parties to the Agreement and members of the Authority, subject to approval by the Board of Directors.

Article 3 — Parties To Agreement

Each party to this Agreement certifies that it intends to and does contract with all other parties who are signatories to this Agreement and, in addition, with such other parties as may later be added as parties to and signatories to this Agreement pursuant to Article 21. Each party to this Agreement also certifies that the deletion of any party from this Agreement, pursuant to Article 22 or Article 23, shall not affect this Agreement or such party's intent to contract as described above with the other parties to the Agreement then remaining.

Article 4 — Term Of Agreement

This Agreement became effective on the date of execution hereof by the last of sixty (60) Districts with a combined 1978/79 liability policy premium of $2 million, and it shall continue until and unless terminated as hereinafter provided.

Article 5 — Creation Of Authority

Pursuant to Section 6500 et seq. of the California Government Code, there is hereby created a public entity separate and apart from the parties hereto, to be known as the Association of California Water Agencies Joint Powers Insurance Authority. Pursuant to Government Code Section 6508.1, the debts, liabilities and

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obligations of the Authority shall not constitute debts, liabilities or obligations of any party to this Agreement or of any District or Friend of ACWA.

Article 6 — Powers Of Authority

(a) The Authority shall have the powers common to Members and is hereby authorized to do all acts necessary for the exercise of said common powers, including, but not limited to, any or all of the following:

(1) To make and enter into contracts;

(2) To incur debts, liabilities or obligations;

(3) To acquire, hold or dispose of property, contributions and donations of property, funds, services and other forms of assistance from persons, firms, corporations and governmental entities;

(4) To sue and be sued in its own name; and

(5) To exercise all powers necessary and proper to carry out the terms and provisions of this Agreement, or otherwise authorized by law.

(b) Said powers shall be exercised pursuant to the terms hereof and in the manner provided by law, and in accordance with Government Code Section 6509, the foregoing powers shall be subject to the restrictions upon the manner of exercising such powers pertaining to the Walnut Valley Water District as specified in The California Water District Law (California Water Code Sections 34000 et seq.).

Article 7 — Board Of Directors

(a) The Authority shall be governed by the Board of Directors which is hereby established and which shall be composed of one representative from each Member, who shall be a Member director selected by the governing board of that Member. Each Member, in addition to appointing its member of the Board, shall appoint at least one alternate who shall be an officer, member of the governing board, or employee of that Member. The alternate appointed by a Member shall have the authority to attend and participate in any meeting of the Board when the regular member for whom he or she is an alternate is absent from said meeting.

(b) Each Director or alternate of the Board shall serve until a successor is appointed. Each Director or alternate shall serve at the pleasure of the Member by which he or she has been appointed.

(c) Each Director representing a Member, or his or her alternate, shall have one vote.

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Article 8 — Powers Of The Board Of Directors

The Board of Directors of the Authority shall have the following powers and functions:

(a) The Board shall elect from its voting members pursuant to Article 10 of this Agreement an Executive Committee.

(b) The Board may review all acts of the Executive Committee, and shall have the power to modify and/or reverse any decision or action of the Executive Committee upon a majority vote of the voting Directors present at any Duly Constituted Board Meeting.

(c) The Board shall review, modify if necessary, and approve the annual operating budget of the Authority, prepared by the Executive Committee pursuant to Article 11 (d).

(d) The Board shall receive and review periodic accountings of all funds under Articles 17 and 18 of this Agreement.

(e) The Board shall have the power to conduct on behalf of the Authority all business of the Authority, including that assigned to the Executive Committee, which the Authority may conduct under the provisions hereof and pursuant to law.

(f) The Board shall have such other powers and functions as are provided for in this Agreement or in the Bylaws.

Article 9 — Meetings Of The Board Of Directors

(a) Meetings. The Board shall provide for at least one annual regular meeting. It may also provide for adjourned regular meetings, special meetings, or meetings upon call of the President of the Board.

(b) Minutes. The Secretary of the Authority shall cause minutes of regular, adjourned regular, and special meetings (but not of any closed-session portion of any such meeting) to be kept and shall, as soon as possible after each meeting, cause a copy of the minutes to be forwarded to each member of the Board and to each Member.

(c) Quorum. Any fifty (50) voting members of the Board present when the meeting is called to order shall constitute a quorum for the transaction of business, except that less than a quorum may adjourn from time to time. A vote of the majority of those voting members present and voting in the prescribed manner at any Duly Constituted Board Meeting shall be sufficient to constitute action by the Board except as otherwise specifically set forth in this Agreement or in the Bylaws.

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(d) Compliance with the Brown Act. All meetings of the Board, including, without limitation, regular, adjourned regular, and special meetings, shall be called, noticed, held and conducted in accordance with the provisions of the Ralph M. Brown Act, California Government Code Section 54950 et seq.

Article 10 — Executive Committee

(a) There shall be an Executive Committee of the Board of Directors which shall consist of nine (9) members, as provided in the Bylaws. Eight (8) members of the Executive Committee shall be elected by the Board of Directors from its voting members as provided in the Bylaws. The ninth member of the Executive Committee shall be the Vice President of the Association of California Water Agencies, who shall be an ex officio member of the Executive Committee.

(b) The Executive Committee shall appoint a President and a Vice President of the Board of Directors from among the eight (8) Executive Committee members elected by the Board of Directors, as provided in the Bylaws. The President of the Board, or the Vice President in his or her absence, shall serve as the Chair of the Executive Committee.

(c) The unexcused absence of a member of the Executive Committee, other than the Vice President of the Association of California Water Agencies, from two consecutive meetings may be cause for the removal of said member by the Executive Committee.

(d) Vacancies on the Executive Committee shall be filled as provided in the Bylaws.

Article 11 — Powers Of The Executive Committee

The Executive Committee shall have the following powers:

(a) The Executive Committee shall determine details of and select the joint protection program or programs of the Authority.

(b) The Executive Committee shall determine and select all insurance, including excess insurance and reinsurance, necessary to carry out the joint protection program or programs of the Authority.

(c) The Executive Committee shall have authority to contract for or develop various services for the Authority, including, but not limited to, claims adjusting, loss control and risk management consulting.

(d) The Executive Committee shall cause to be prepared the operating budget of the Authority for each fiscal year, subject to review, modification and approval by the Board, as provided for in Article 8 (c).

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(e) The Executive Committee shall receive and act upon reports of all other committees and from the Chief Executive Officer.

(f) The Executive Committee shall appoint the President, Vice President, Chief Executive Officer, Secretary, Treasurer, and Auditor/Controller of the Authority.

(g) The Executive Committee shall have the authority to engage, retain, and discharge persons, firms, or other organizations as the Executive Committee deems necessary for the administration of the Authority. The Executive Committee may delegate this authority to the Chief Executive Officer of the Authority.

(h) The Executive Committee shall exercise general supervisory control of and provide policy to the Chief Executive Officer.

(i) Additional committees and sub-committees shall be established by the Executive Committee as it deems necessary to best serve the interests of the Authority.

(j) The Executive Committee shall have such other powers and functions as are provided for pursuant to this Agreement.

Article 12 — Meetings Of The Executive Committee

The meetings of the Executive Committee shall be held and conducted as provided in the Bylaws. The Committee shall make periodic reports to the Board of Directors, advising the Board of its decisions and activities.

Article 13 — Officers Of The Authority

(a) President and Vice President. The President and Vice President of the Board shall be appointed by the Executive Committee from among the Executive Committee’s eight (8) elected members. In the event the President or Vice President so appointed ceases to be a member of the Board, the resulting vacancy in the office of President or Vice President may be filled on either an interim or a permanent basis at the next regular meeting of the Executive Committee held after such vacancy occurs. In the absence or inability of the President to act, the Vice President shall act as President. The President, or in his or her absence the Vice President, shall preside at and conduct all meetings of the Board, and shall chair the Executive Committee.

(b) Chief Executive Officer. The Chief Executive Officer shall have the general administrative responsibility for the activities of the Authority and shall appoint all necessary employees thereof, subject to prior authorization of

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each position by the Executive Committee and shall perform such other duties as may be assigned by the Executive Committee.

(c) Auditor/Controller. The Auditor/Controller shall be appointed by the Executive Committee. The duties of the Auditor/Controller shall be as set forth in Articles 17 and 18 of this Agreement.

(d) Secretary. The Secretary shall be appointed by the Executive Committee and shall be responsible for all minutes, notices, and records of the Authority.

(e) Treasurer. The Treasurer shall be appointed by the Executive Committee. The duties of the Treasurer shall be as set forth in Articles 17 and 18 of this Agreement.

(f) The Executive Committee shall have the power to appoint such other officers as may be necessary to carry out the purposes of this Agreement.

Article 14 — Standing Committees

The Board or the Executive Committee may establish standing committees from time to time, as provided in the Bylaws.

Article 15 — Insurance Coverage

(a) The Authority shall maintain such levels of insurance coverage for Members as may be determined by the Executive Committee. Such coverage may provide for binding arbitration before an independent arbitration panel of any disputes concerning coverage between the Authority and a Member.

(b) The Insurance coverages provided for Members by the Authority may include protection for comprehensive and economical public liability, property, workers' compensation, unemployment, health, and accident and/or dental coverageemployee benefits, or coverage for other risks which the Executive Committee may determine to be advisable.

(c) The Executive Committee may arrange for group policies to be issued for Members interested in obtaining additional coverage, at an additional cost to those participating Members.

(d) The Executive Committee may arrange for the purchase of Excess Insurance. The Executive Committee may discontinue purchase of this Excess Insurance, if at a future time it is no longer needed to protect the Authority's funds.

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Article 16 —Implementation Of The Joint Protection Program

(a) The Board of Directors shall establish the insurance coverages provided for in Article 15, the amount of deposit premiums, and the precise cost allocation plans and formulas, and shall provide for the handling of claims, and the pro forma financial statements of each joint protection program, and shall specify the amounts and types of Excess Insurance or reinsurance to be procured.

(b) The Deposit Premium for each Member for each joint protection program shall be determined by the Executive Committee.

(1) Deposit Premiums shall be based on estimated costs for a given program year. Costs shall include estimates for claims, excess insurance/reinsurance, general & administrative expenses, program reserves and include an estimate for interest earnings.

(2) Each Member’s share of the Deposit Premium for the given program year shall generally be based on its payroll and past loss history for the Liability, and Workers’ Compensation, and Employee Benefits Programs and scheduled values for the Property Program.

The Executive Committee may make retrospective premium adjustments to prior program years.

(c) The Retrospective Premium Adjustment, and all other adjustments to the Authority’s financial records respecting each Member shall be made annually. All premiums shall be due and payable within thirty (30) days after the invoice date.

(d) Inasmuch as some Members may experience an unusually high dollar value of losses during a single Policy Year, which would increase their Retrospective Premium substantially above the Deposit Premium for that joint protection program for that Policy Year and cause budgetary problems, the Executive Committee may allow for payment of a portion of such additional Retrospective Premium to be made over a period of time, not to exceed five years, with reasonable interest.

(e) The Executive Committee shall have the power to disburse or distribute reserve funds for their intended purposes.

Article 17 — Accounts And Records

(a) Annual Budget. The Authority shall annually adopt an operating budget, pursuant to Article 8 (c) of this Agreement.

(b) Funds and Accounts. The Treasurer of the Authority shall establish and maintain such funds and accounts as required by the Executive Committee

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and as required by generally accepted accounting principles. Books and records of the Authority shall be open to any inspection at all reasonable times by authorized representatives of Members as otherwise required by law.

(c) Treasurer's Report. The Treasurer shall present a complete written report of all investment activities for the most recently completed fiscal year to the Board at its regularly scheduled meeting.

(d) Annual Audit. The Auditor/Controller shall provide for a certified, annual audit of the accounts and records of the authority, which audit shall be made by a certified public accountant and shall conform to generally accepted auditing standards. Such report shall be presented to the Executive Committee and, following its approval by the Executive Committee, shall be presented to the Board of Directors for concurrence.

Article 18 — Responsibility For Monies

(a) The Treasurer of the Authority shall have the authority to delegate the signatory function of Treasurer to such persons as are authorized by resolution of the Executive Committee.

(b) A bond in the amount determined adequate by the Executive Committee shall be required of all officers and personnel authorized to disburse funds of the Authority, such bond to be paid for by the Authority.

(c) The Treasurer of the Authority shall assume the duties described in California Government Code Section 6505.5, including:

(1) Receive and acknowledge receipt for all money of the Authority and place it in the treasury of the Authority;

(2) Be responsible upon his or her official bond for the safekeeping and disbursement of all of the Authority's money so held by him or her;

(3) Pay, when due, out of money of the Authority so held by him or her, all sums payable on outstanding bonds and coupons of the Authority;

(4) Pay any other sums due from Authority money only upon checks, warrants, or electronic payments approved by the Chief Executive Officer or his or her designee. The checks, warrants, or electronic payments shall be reviewed by the President of the Board and the Chair of the Finance & Audit Committee.

Article 19 — Responsibilities Of The Authority

The Authority shall perform the following functions in discharging its responsibilities under this Agreement:

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(a) Provide insurance coverage as necessary, including but not limited to a self-insurance fund and commercial insurance, as well as excess coverage, reinsurance, and umbrella insurance, by negotiation or bid, and purchase, as necessary.

(b) Assist Members in obtaining insurance coverage for risks not included within the coverage of the Authority.

(c) Assist each Member's designated risk manager with the implementation of that risk management function as it relates to risks covered by the joint protection programs within the Member.

(d) Provide loss prevention and safety consulting services to Members as required.

(e) Provide claims adjusting and subrogation services for Claims covered by the Authority's joint protection programs.

(f) Provide loss analysis and control by the use of statistical analysis, data processing, and record and file keeping services, in order to identify high exposure operations and to evaluate proper levels of self-retention and deductibles.

(g) Review Member contracts to determine sufficiency of indemnity and insurance provisions when requested.

(h) Conduct risk assessments for each Member.

(i) The Authority shall have such other responsibilities as deemed necessary by the Board of Directors or Executive Committee.

Article 20 — Responsibilities Of Members

Members shall have the following responsibilities:

(a) The governing board of each Member shall appoint a representative and at least one alternate representative to the Board of Directors, pursuant to Article 7 of this Agreement.

(b) Each Member shall appoint an employee of the Member to be responsible for the risk management function within that Member and to serve as a liaison between the Member and the Authority as to risk management.

(c) It is recommended that each Member maintain an active safety officer and/or committee. Each Member shall consider all recommendations of the Authority concerning unsafe practices.

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(d) Each Member shall pay its deposit premium and premium adjustments, including any Retrospective Adjustment, within thirty (30) days after the invoice date. After withdrawal or termination, each Member or former Member or its successor shall pay within 45 days to the Authority its share of any additional premium, when and if required of it by the Executive Committee under Article 24 or Article 25 of this Agreement.

(e) Each Member shall provide the Authority with such other information or assistance as may be necessary for the Authority to carry out the joint protection programs under this Agreement.

(f) Each Member shall in any and all ways cooperate with and assist the Authority, and any insurer or reinsurer of the Authority, in all matters relating to this Agreement and covered claims, and shall also comply with all Bylaws, rules and regulations adopted by the Board of Directors and Executive Committee.

Article 21 — New Members

The Authority shall allow new Members entry into its joint protection programs only upon approval by the Board, or by the Executive Committee if specifically delegated such authority by resolution of the Board, which resolution may impose such conditions or limitations upon such authority of the Executive Committee as the Board deems appropriate. Members entering under this Article may be required to pay their share of the organizational expenses as determined by the Executive Committee, including expenses necessary to analyze their loss data and determine their Deposit Premiums.

Article 22 — Withdrawal

(a) A Member may withdraw as a party to this Agreement any time prior to its consenting in writing to enter the joint protection program.

(b) A Member that does not consent in writing to enter the joint protection program must withdraw as a party to this Agreement prior to the effective date of the program, or it will be considered to have voluntarily withdrawn upon such effective date.

(c) As respects to coverage Programs of the Authority, other than the Employee Benefits Program:

(c1) A Member that enters or has entered any pooled joint protection program may not withdraw as a participant of that program, as a party to this Agreement, or as a Member of the Authority, for a three-year period commencing on the Member's date of entry into said pooled joint protection program.

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(d2) After the initial three-year non-cancellable commitment to each pooled joint protection program, a Member may withdraw only at the end of said program's Policy Year, provided it has given the Authority a twelve-month written notice of its intent to withdraw from said pooled joint protection program.

(1i) No later than ninety (90) days prior to the end of said pooled joint protection program's Policy Year, any Member having given an Article 22 (d) conditional notice shall make clear to the Authority its final decision on withdrawal. Final notice of actual withdrawal must be given and received by that date in clear, unambiguous form. The staff is instructed to rely on such final notice received on or before ninety (90) days prior to the end of the program's Policy Year, and no rescission of such final notice can be made after close of business ninety (90) days prior to the end of the program's Policy Year. If no such final notice is received by close of business on the required date, staff shall treat the original notice with all its conditions and ambiguities as final notice of withdrawal.

(2ii) Any participation by a former Member must be effected as a new Member. No benefits will be held over from the withdrawing Member's former status as a previous program participant.

(e3) Members may withdraw from any group purchase program at the conclusion of its Policy Year, without being required to give the twelve-month written notice required for withdrawal from pooled joint protection programs.

(d) Members may withdraw as a party of the Employee Benefits Program to be effective on the first day of any month by providing written intention of withdrawing to the Authority at least 60 days prior to the proposed effective date of the withdrawal. Any such withdrawal shall be effective only upon receipt of the notice of withdrawal by the Authority which shall acknowledge receipt of such notice of the withdrawal in writing effective upon the proposed filing date, or such other date as the Executive Committee may designate which is not more than 90 nor less than 60 days from the notice in order to bring such notice of withdrawal in compliance with the terms hereof.

(fe) A Member may not withdraw as a party to this Agreement nor as a member of the Authority until it has withdrawn from all of the programs of the Authority.

Article 23 — Cancellation Of Membership Or Participation

(a) Notwithstanding the provisions of Article 22, the Authority shall have the right to cancel any Member's participation in any joint protection program upon a two-thirds vote of the voting Directors present at any Duly

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Constituted Board Meeting, provided that a reasonable time shall be afforded, at the discretion of the Board of Directors, to place coverage elsewhere.

(b) Notwithstanding any other provisions of this Agreement, the participation of any Member of the Authority, including participation in any of the Authority's programs, shall cease and be canceled automatically at the end of the next complete Policy Year for each program whenever such Member's membership in the Association of California Water Agencies, or its affiliation with said Association based on its meeting the criteria currently specified by ACWA for ACWA Affiliates – “Friends of ACWA,” ceases. Such automatic cancellation shall not relieve the Member or former Member of its responsibilities as provided for in Article 24 (b).

(c) Notwithstanding any other provisions of this Agreement, the participation of any Member of the Authority, including participation in any of the Authority’s programs, may be canceled at the discretion of the Executive Committee whenever such Member is dissolved, consolidated, merged or annexed. A reasonable time shall be afforded, in the discretion of the Executive Committee, to place coverage elsewhere. Any such cancellation shall not relieve the Member or former Member of its responsibilities as provided for in Article 24 (b).

Article 24 — Effect Of Withdrawal Or Cancellation

(a) The withdrawal or cancellation of any Member from this Agreement shall not terminate the same and a Member by withdrawing or being canceled shall not be entitled to payment or return of any premium, consideration or property paid, or donated by the Member to the Authority, or to any distribution of assets, except as provided in Article 25 (c).

(b) The withdrawal or cancellation of any Member after the effective date of any joint protection program shall not terminate its responsibility to contribute its share of deposit premium, premium adjustments or funds to any funds or insurance program(s) created by the Authority until all claims, or other unpaid liabilities, covering the Program period any part of which the Member was signatory thereto have been finally resolved and a determination of the final amount of payments due by the Member or credits to the Member for the period of its participation has been made by the Executive Committee. In connection with this determination, the Executive Committee may exercise similar powers to those provided for in Article 25 (b) of this Agreement.

Article 25 — Termination And Distribution

(a) This Agreement may be terminated at any time by the written consent of three-fourths (3/4) of the voting Members, provided, however, that this Agreement and the Authority shall continue to exist for the purpose of

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disposing of all claims, distribution of assets and all other functions necessary to wind up the affairs of the Authority.

(b) The Executive Committee is vested with all powers of the Authority for the purpose of winding up and dissolving the business affairs of the Authority. These powers shall include the power to require Members and former Members, including those which were signatory hereto at the time the Claim arose or was incurred, to pay their share of any additional amount of premium in accordance with loss allocation formulas for final disposition of all Claims and losses covered by this Agreement. A Member's or former Member’s share of such additional premium shall be determined on the same basis as that provided for Retrospective Premiums in Article 16 of this Agreement.

(c) Upon termination of this Agreement all assets of the Authority shall be distributed only among the Members that have been signatories hereto, including any of those Members which previously withdrew pursuant to Article 22 (d) or were canceled pursuant to Article 23 of this Agreement, in accordance with and proportionate to their cash contributions (including premium payments and property at market value when received) made during the term of this Agreement. The Executive Committee shall determine such distribution within six (6) months after disposal of the last pending Claim or loss covered by this Agreement.

(d) In the absence of an Executive Committee, the Chief Executive Officer shall exercise all powers and authority under this Article. The decision of the Executive Committee or Chief Executive Officer under this Article shall be final.

Article 26 — Provision For Bylaws And Manuals

As soon as practicable after the first meeting of the Board of Directors, the Board shall cause to be developed Authority Bylaws and a Mission Statement.

Article 27 — Notices

Notices to Members hereunder shall be sufficient if delivered to the principal office of the respective Member.

Article 28 — Amendment

This Agreement may be amended at any time by a two-thirds (2/3) vote of the voting Directors present at any Duly Constituted Board Meeting.

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Article 29 — Prohibition Against Assignment

No Member may assign any right, claim or interest it may have under this Agreement, and no creditor, assignee or third party beneficiary of any Member shall have any right, claim or title or any part, share, interest, fund, premium or asset of the Authority.

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Article 30 — Agreement Complete

The foregoing constitutes the full and complete Agreement of the parties. There are no oral understandings or agreements not set forth in writing herein.

IN WITNESS WHEREOF, the parties hereto have first executed this Agreement by authorized officials thereof on the date indicated below:

DATE: _________________ ____________________________________ Member BY: ____________________________________ Signature of Authorized Representative

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Bylaws


June 15, 1979 Revised on November 28, 2011May 7, 2012

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JPIA Bylaws Revised November 28, 2011May 7, 2012

Bylaws — Table of Contents Article I — Offices ......................................................................................................... 1

Section 1. Principal Executive Office. ......................................................................... 1

Section 2. Other Offices. ............................................................................................. 1

Article IA — Definitions ................................................................................................ 1

Article II — Board Of Directors .................................................................................... 1

Section 1. Composition and Selection. ....................................................................... 1

Section 2. Vacancies. ................................................................................................. 2

Section 3. Annual Meeting. ......................................................................................... 2

Section 4. Special Meetings. ....................................................................................... 3

Section 5. Place of Meetings....................................................................................... 3

Section 6. Quorum. ..................................................................................................... 4

Section 7. Adjourned Meetings. .................................................................................. 4

Section 8. Nominations for Executive Committee Members. ...................................... 4

Section 9. Voting. ........................................................................................................ 5

Section 10. Inspectors of Election. .............................................................................. 5

Article III — Executive Committee ............................................................................... 6

Section 1. Composition, Selection and Term of Office. ............................................... 6

Section 2. Vacancies. ................................................................................................. 6

Section 3. Meetings. ................................................................................................... 7

Section 4. Action at Meetings: Quorum and Required Vote. ....................................... 7

Section 5. Adjourned Meetings. .................................................................................. 7

Article IV — Standing Committees .............................................................................. 8

Section 1. Finance and Audit Committee. ................................................................... 8

Section 2. Liability Program Committee. ..................................................................... 8

Section 3. Property Program Committee. ................................................................... 8

Section 4. Workers’ Compensation Program Committee. ........................................... 8

Section 5. Risk Management Committee. ................................................................... 9

Section 6. Meetings. ................................................................................................... 9

Article V — Officers And Employees ........................................................................... 9

Section 1. Officers. ...................................................................................................... 9

Section 2. Election and Term of Office. ....................................................................... 9

Section 3. Officers and Employees. .......................................................................... 10

Section 4. Vacancies. ............................................................................................... 10

Section 5. Removal and Resignation. ....................................................................... 10

Section 6. President. ................................................................................................. 10

Section 7. Vice President. ......................................................................................... 11

Section 8. Chief Executive Officer. ............................................................................ 11

Section 9. Treasurer. ................................................................................................ 11

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Section 10. Auditor/Controller. .................................................................................. 11

Section 11. Secretary. ............................................................................................... 12

Article VI — Miscellaneous ......................................................................................... 12

Section 1. Annual Report. ......................................................................................... 12

Section 2. Defense of Agents of the Authority........................................................... 12

Section 3. Contribution Among Members of the Authority. ....................................... 12

Section 4. Inspection of Authority Records. .............................................................. 13

Section 5. Checks and Drafts. ................................................................................... 13

Section 6. Register of Checks. .................................................................................. 13

Section 7. Execution of Contracts. ............................................................................ 13

Section 8. Rules of Procedure for Meetings. ............................................................. 14

Article VII — Amendments ......................................................................................... 14

Section 1. Power of Board of Directors. .................................................................... 14

Section 2. Power of Executive Committee. ............................................................... 14

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Bylaws Of The


For the Regulation, Except as Otherwise Provided by Statute or the Agreement Creating the Association of California Water Agencies Joint Powers Insurance Authority.

Article I — Offices

Section 1. Principal Executive Office.

The principal executive office for the transaction of business of the Authority is hereby fixed and located at 2100 Professional Drive, Roseville, CA 95661-3700; mailing address P.O. Box 619082, Roseville, CA 95661-9082. The Executive Committee of the Authority shall have the authority to change the location of the principal executive office from time to time. Any such change shall be noted in the Bylaws by the Secretary, opposite this section, or this section may be amended to state the new location.

Section 2. Other Offices.

Other business offices may at any time be established by the Executive Committee at any place or places where the Authority is qualified to do business.

Article IA — Definitions

The definition of terms used in these Bylaws shall be those definitions contained in the Agreement creating the Authority unless the context requires otherwise.

Article II — Board Of Directors

Section 1. Composition and Selection.

The Board of Directors shall be composed of one representative from each Member of the Authority, who shall be a member of the governing board thereof selected by the governing board of that Member, as provided for in the Agreement creating the Authority. Each Member shall also appoint at least one alternate, who shall be an officer, member of the governing board or employee of that Member. The alternate may vote, but only in the absence of the regular representative. "Absence", as the term is used in this section, includes "vacancy" as defined in Section 2 of this Article II.

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If a Member's membership in the Authority is terminated for whatever reason and by whatever method, that Member shall no longer have a representative on the Board of Directors, Executive Committee, or any other Committee of the Authority, except that the Vice President of the Association of California Water Agencies may serve ex officio as a member of the Executive Committee even though he or she does not represent a Member.

Section 2. Vacancies.

A vacancy or vacancies in the Board of Directors shall be deemed to exist in case of death, resignation, expiration of term, removal by the Member that made the appointment, or when the Director ceases to be a member of the governing board of the appointing Member. Vacancies in the positions of Director or alternate shall be filled in the manner provided for regular appointment of such persons in the Agreement creating the Authority and these Bylaws.

Section 3. Annual Meeting.

(a) Time and Place Held. The annual meeting of the Board of Directors shall be held each year on a date, place, and time designated by the Executive Committee. Written notice of each annual meeting shall be given to each Member and its Director electronically or by mail or other means of written communication, in the manner provided by the Ralph M. Brown Act, California Government Code Section 54950, et seq., not later than forty-five (45) days preceding the meeting. Such notice shall specify the place, the date, and the hour of such meeting. Notice shall be given by first-class mail when it cannot be given by electronic mail.

(b) Business to be Transacted.

(1) Election of Executive Committee members shall take place as required under the Agreement creating this Authority and by these Bylaws.

(2) The Board shall review, modify if necessary, and approve the annual operating budget of the Authority.

(3) The Board shall receive reports of the operations and affairs of the Authority.

(4) Any other business may be transacted which is within the powers of the Board of Directors.

(c) Additional Notice. An additional written notice shall be given to each Member and its Director in the same manner as set forth above in Section 3. (a), but not later than fourteen (14) days before the meeting. This additional notice shall list:

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(1) Those matters which are intended to be presented for action by the Board of Directors;

(2) If members of the Executive Committee are to be elected, the names of nominees intended at the time of the notice to be presented for election;

(3) The general nature of any proposal to be presented for action with respect to approval of (i) a new Member, (ii) a contract or other transaction of the Authority with an interested Member, (iii) amendment of the Agreement creating the Authority, (iv) the cancellation of a Member's participation in the joint program, (v) voluntary termination of the Agreement creating the Authority, or (vi) a distribution in termination; and

(4) Such other matters, if any, as may be expressly required by statute or by the Agreement creating the Authority.

Section 4. Special Meetings.

Special meetings of the Board of Directors, for the purpose of taking any action permitted by statute and the Agreement creating the Authority, may be called at any time by the President, or by the Vice President in the absence or disability of the President, or by three (3) members of the Executive Committee of the Authority or by not less than one-third (1/3) of the voting Directors. Upon request in writing that a special meeting of the Board of Directors be called for any proper purpose, directed to the President, Vice President, or Secretary of the Authority, by any person or persons entitled to call a special meeting of the Board of Directors, the officer receiving such request forthwith shall cause notice to be given to the Members that a meeting will be held at a time requested by the person or persons calling the meeting, not less than thirty-five (35) or more than sixty (60) days after receipt of the request. Notice of any special meeting shall be given in compliance with the Ralph M. Brown Act, California Government Code Section 54950, et seq. Such notice shall specify the place, date and hour of such meeting, the nature of the business to be transacted, and if applicable, the names of nominees for members of the Executive Committee intended at the time of the notice to be presented for election. No business other than that specified in the notice of a special meeting may be transacted at that meeting.

Section 5. Place of Meetings.

All annual or other meetings of the Board of Directors shall normally be held at the location of the Association of California Water Agencies' Spring or Fall Conference and at a time immediately before or after such conference. Special meetings at other times shall be held at locations designated by the President or the Executive Committee or approved by the consent of the voting Directors given either before or after the meeting and filed with the Secretary of the Authority.

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Section 6. Quorum.

At any meeting, the presence in person by the Director or alternate of at least fifty (50) Members shall constitute a quorum for the transaction of business. The Members present at a duly called or held meeting at which a quorum is present may continue to do business until adjournment, notwithstanding the withdrawal from the meeting of enough Members to leave less than a quorum. If any action taken (other than adjournment) is approved by a number of Members at least equal to a majority of the Members required to constitute a quorum, except for actions specifically requiring more than a majority, the validity of such action shall not be subject to question on the basis that a quorum was not present at the time such action was taken.

Section 7. Adjourned Meetings.

(a) Adjournment. Any Board of Directors' meeting, annual or special, whether or not a quorum is present may be adjourned from time to time by the vote of a majority of the Directors of Members present, but in the absence of a quorum, except as provided in Section 6 of this Article II, no other business may be transacted at such a meeting.

(b) Notice. When any Board of Directors' meeting, either annual or special, is adjourned for forty-five (45) days or more, notice of the adjourned meeting shall be given as in the case of an original meeting. Except as specifically provided herein, or by the Ralph M. Brown Act, it shall not be necessary to give any notice of the time and place of the adjourned meeting or of the business to be transacted thereat, other than by announcement of the time and place thereof at the meeting at which such adjournment is taken and posting such notice as required by Section 54955 of the Government Code.

Section 8. Nominations for Executive Committee Members.

Members may nominate members from the Board of Directors to the Executive Committee in the following manner:

(a) On forms provided by the Authority, a Member may place into nomination its member of the Board of Directors for any open position with the concurrence of three (3) Members in addition to the nominating Member.

(b) Nominating forms must be completed and received by the Authority at least forty-five (45) days before the Board of Directors’ meeting, at which the election will occur.

(c) This Member nomination process shall be the sole method for placing candidates into nomination for Executive Committee positions.

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Section 9. Voting.

Unless a record date for voting purposes is set by the Executive Committee, Districts and Friends of ACWA which are Members on the day of the meeting of the Board of Directors shall be entitled to vote at such meeting. Such vote may be by any acceptable means, provided, however, that all elections for members of the Executive Committee must be by ballot upon demand made by a Member at any election and before the voting begins, and no action may be taken by secret ballot. If a quorum is present, the affirmative vote of the majority of the Members voting in the prescribed manner shall be the act of the Board, unless the vote of a greater number is required by the Agreement creating the Authority or other sections of these Bylaws. Every Member shall have only one vote.

Section 10. Inspectors of Election.

(a) Appointment. In advance of any meeting of the Board of Directors, the Executive Committee may appoint any persons, other than nominees for office, as inspectors of election to act at such meeting or any adjournment thereof. If inspectors of election be not so appointed, the President or Vice President in his or her absence, may, and on the request of any Member’s representative or alternate, shall make such appointment at the meeting. The number of inspectors shall be three (3), at least one of whom shall be a voting member of the Board of Directors. In case any person appointed as inspector fails to appear or fails or refuses to act, a vacancy shall be deemed to exist, and on the request of any Member, shall be filled by appointment by the Executive Committee in advance of the meeting, or at the meeting by the President, or the Vice President in his or her absence.

(b) Duties. The duties of such inspectors shall include: Determining the current number of Members, the Members represented at the meeting, and the existence of a quorum; receiving votes, ballots or consents; hearing and determining all challenges and questions in any way arising in connection with the right to vote; counting and tabulating all votes or consents; determining when the polls shall close; determining the results; and all such other acts as may be proper to conduct the election or vote with fairness to all Members.

(c) Procedure. The inspectors of election shall perform their duties impartially, in good faith, to the best of their ability and as expeditiously as is practical. The decision, act or certificate of a majority of the inspectors shall be effective in all respects as the decision, act or certificate of all. Any report or certificate made by the inspectors of election is prima facie evidence of the facts stated therein.

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Article III — Executive Committee

Section 1. Composition, Selection and Term of Office.

The Executive Committee shall consist of nine (9) members, including eight (8) members elected by the Board of Directors from its voting Members and the Vice President of the Association of California Water Agencies, who shall be an ex officio member of the Executive Committee. Commencing with the first Board of Directors’ meeting held in 2013 four (4) members shall be elected in every odd-numbered year and shall serve four-year terms until their respective successors are elected. Commencing with the first Executive Committee meeting held after the 2013 Board of Directors’ election, the Executive Committee shall appoint two of its members to serve two-year terms as President and Vice President of the Board of Directors. There shall be no limit to the number of two-year terms a person may serve as the President or the Vice President of the Board of Directors. All members of the Executive Committee, except the Vice President of the Association of California Water Agencies, shall be Directors of Members which participate in the ACWA/JPIA’s Liability, Property, and Workers’ Compensation, and Employee Benefits Programs.

Upon their adoption by the Members, these four-year terms shall be implemented as agreed upon by the Executive Committee.

The President, or in his or her absence, the Vice President shall serve as Chair of the Executive Committee.


(a) Existence of Vacancies. A vacancy or vacancies in the Executive Committee shall be deemed to exist in case of the death, resignation, expiration of term, termination of membership on the Board of Directors, removal of any member by the Board of Directors, declaration of unsound mind by order of court, conviction of a felony, increase in the authorized number of members, or if the Board of Directors fail, at any annual or special meeting of the Board at which any members of the Executive Committee are elected, to elect the full authorized number of members to be voted for at that meeting. A vacancy may also be deemed to exist because of the unexcused absence of a member of the Executive Committee, other than the Vice President of the Association of California Water Agencies, from two (2) consecutive meetings thereof, and may be cause for removal of said member by the Executive Committee.

(b) Vacancies Filled by Executive Committee. Vacancies in the Executive Committee, except for a vacancy created by the removal of any member by the Board of Directors and a vacancy in the office of Vice President of the Association of California Water Agencies, may be filled on an interim basis by a vote of the majority of the remaining voting members, though less than

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a quorum, or by a sole remaining voting member of the Executive Committee, and each member so appointed shall hold office until his or her successor is elected at the next election meeting of the Board of Directors.

(c) Vacancies Filled by Board of Directors. The voting members of the Board of Directors may elect a member of the Executive Committee at any time to fill any vacancy or vacancies or seat filled on an interim basis by the Executive Committee. A vacancy on the Executive Committee created by the Board of Directors removing a member may be filled only by the vote of a majority of the representatives of Members at a Duly Constituted Board Meeting at which a quorum is present.

Section 3. Meetings.

(a) Call. Meetings of the Executive Committee for any purpose or purposes may be called at such times and places as designated by the President, or in his or her absence, by the Vice President or by three (3) members of the Executive Committee.

(b) Notice. Notice of the time and place of special meetings shall be given in writing to the members of the Executive Committee, and it shall be delivered personally, electronically, or by mail to each member at least twenty-four (24) hours before the time of such meeting. Such notice shall specify the business to be transacted at the meeting.

Section 4. Action at Meetings: Quorum and Required Vote.

The presence of any five (5) of the nine (9) voting members of the Executive Committee at a meeting shall constitute a quorum for the transaction of business. Every act by a majority of the voting members of the Executive Committee present at a meeting duly held at which a quorum was present shall be regarded as an act of the Executive Committee, unless a greater number is required by law, by the agreement creating the Authority, or by these Bylaws. A meeting at which a quorum is initially present may continue to transact business notwithstanding the withdrawal of members, provided that any action taken is approved by at least five (5) members.

Section 5. Adjourned Meetings.

(a) Adjournment. A quorum of the members may adjourn any Executive Committee meeting to a stated day, hour and place; provided, however, that in the absence of a quorum, a majority of the voting Committee members present at any meeting may adjourn from time to time.

(b) Notice of Adjournment. If a meeting is adjourned for more than twenty-four (24) hours, at least twenty-four (24) hours written notice of such adjournment to another time or place shall be given prior to the time of the adjourned meeting to the members who were not present at the time of

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adjournment. Otherwise, notice of the time and place of holding an adjourned meeting need not be given if the time and place are fixed at the time of adjournment.

Article IV — Standing Committees

Section 1. Finance and Audit Committee.

The Finance and Audit Committee shall be composed of seven (7) representatives chosen from Members, each of whom shall be a finance officer of the District from which said person is selected and have a financial background. The Board President shall appoint the members and designate the Chair and Vice Chair of the Committee. The Executive Committee shall specify the duties delegated to this committee.

The Chair of the Finance and Audit Committee, or in the event of the Chair’s inability to attend, the Vice Chair, may attend meetings of the Executive Committee and participate in discussion, but shall not vote.

Section 2. Liability Program Committee.

The Liability Program Committee shall be composed of nine (9) representatives. Members of the Executive Committee will serve as Chair and Vice Chair; seven (7) representatives will be selected from member agencies participating in the Liability Program. These committee members will be a combination of Directors and staff of member agencies. The Board President shall appoint the members of the Committee.

Section 3. Property Program Committee.

The Property Program Committee shall be composed of nine (9) representatives. Members of the Executive Committee will serve as Chair and Vice Chair; seven (7) representatives will be selected from member agencies participating in the Property Program. These committee members will be a combination of Directors and staff of member agencies. The Board President shall appoint the members of the Committee.

Section 4. Workers’ Compensation Program Committee.

The Workers’ Compensation Program Committee shall be composed of nine (9) representatives. Members of the Executive Committee will serve as Chair and Vice Chair; seven (7) representatives will be selected from member agencies participating in the Workers’ Compensation Program. These committee members will be a combination of Directors and staff of member agencies. The Board President shall appoint the members of the Committee.

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Section 5. Employee Benefits Program Committee.

The Employee Benefits Program Committee shall be composed of nine (9) representatives. Members of the Executive Committee will serve as Chair and Vice Chair; seven (7) representatives will be selected from member agencies participating in the Employee Benefits Program. These committee members will be a combination of Directors and staff of member agencies. The Board President shall appoint the members of the Committee.

Section 56. Risk Management Committee.

The Risk Management Committee shall be composed of nine (9) representatives. Members of the Executive Committee will serve as Chair and Vice Chair; seven (7) representatives will be selected from member agencies participating in any of the Programs. These committee members will be a combination of Directors and staff of member agencies. The Board President shall appoint the members of the Committee.

Section 67. Meetings.

The Committees shall meet from time to time as directed by the Executive Committee or by the Committee Chair.

Article V — Officers And Employees

Section 1. Officers.

The officers of the Authority shall be a President, a Vice President, a Chief Executive Officer, a Secretary, an Auditor/Controller, and a Treasurer. The Executive Committee may, in addition, provide for such other officers as it deems necessary for the performance of the business of the Authority.

Section 2. Election and Term of Office.

The Executive Committee shall appoint a President and Vice President of the Authority from the Executive Committee’s eight (8) elected members for two-year terms. The President and Vice President shall also serve as Chair and Vice Chair of the Executive Committee. In the event the President or Vice President so appointed ceases to be a member of the Board, the resulting vacancy in the office of President or Vice President may be filled, on either an interim or a permanent basis, at the next regular meeting of the Executive Committee held after such vacancy occurs. In the absence or inability of the President to act, the Vice President shall act as President. The President, or in his or her absence the Vice President, shall preside at and conduct all meetings of the Board and shall chair the Executive Committee.

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Section 3. Officers and Employees.

The Executive Committee shall appoint, or may empower the President to appoint, subject to ratification by the Executive Committee, all officers of the Authority. Except as may otherwise be provided in the agreement creating the Authority or the Bylaws, such officers shall hold office at the pleasure of the Executive Committee or for such term as the Executive Committee may provide by agreement. The Executive Committee shall also appoint such other officers as may be necessary to carry out the purposes of the Authority. All officers and employees shall have such authority and perform such duties as are provided in the Agreement creating the Authority, or as are provided in the Bylaws or as the Executive Committee may from time to time determine. The Executive Committee may provide for the payment of compensation to officers or employees for their services to the Authority.


A vacancy in any office because of death, resignation, removal, disqualification, expiration of term, or any other cause shall be filled in the manner prescribed in the agreement creating the Authority and the Bylaws for regular appointments to such office.

Section 5. Removal and Resignation.

(a) Removal. The President, the Vice President or any other Executive Committee member other than the Vice President of the Association of California Water Agencies may be removed, without cause, by the Board of Directors, at any regular or special meeting thereof by a two-thirds (2/3) vote of the voting members of the Board at any Duly Constituted Board Meeting. An officer chosen by the Executive Committee may be removed without cause, by that Committee by a two-thirds (2/3) vote of all of the members of that Committee (subject to the rights, if any, of an officer or employee under any contract of employment).

(b) Resignation. Any officer or Executive Committee member may resign at any time by giving written notice to the Executive Committee or to the President, or to the Chief Executive Officer of the Authority, without prejudice, however, to the rights, if any, of the Authority under any contract to which such officer is a party. Any such resignation shall take effect at the date of the receipt of such notice or at any later time specified therein; and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.

Section 6. President.

The President shall be one of the eight (8) elected members of the Executive Committee and shall be the chief elected official of the Authority. The President shall preside at all meetings of the Board of Directors and Executive Committee.

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The President shall be ex officio a member of all the standing committees and shall have such other powers and duties as may be prescribed by the Board of Directors, the Executive Committee, the Agreement creating the Authority or these Bylaws.

Section 7. Vice President.

In the absence or disability of the President, the Vice President shall perform all the duties of the President, and when so acting shall have all the powers of, and be subject to all the restrictions upon, the President. The Vice President shall be a member of the Executive Committee and have such other powers and perform such other duties as from time to time may be prescribed by the Board of Directors or the Bylaws.

Section 8. Chief Executive Officer.

The Chief Executive Officer shall keep, or cause to be kept, at the principal executive office of the Authority a list of all designated representatives and alternates of each Member.

The Chief Executive Officer shall give, or cause to be given, notice of all the meetings of the Board of Directors and of the Executive Committee required by the Bylaws or by statute to be given, and shall have such other powers and perform such other duties as may be prescribed by the Executive Committee, the Agreement creating the Authority, or the Bylaws.

The Chief Executive Officer shall have the duty of administering the joint protection programs of the Authority, as provided for in the Agreement creating the Authority, shall have direct supervisory control of and responsibility for the operation of the Authority including appointment of necessary employees thereof, subject to prior authorization of each position by the Executive Committee, and shall have such other related duties as may be prescribed by the Executive Committee or elsewhere in the Bylaws.

Section 9. Treasurer.

The Treasurer shall keep and maintain, or cause to be kept and maintained, adequate and correct financial records of the Authority, including accounts of its assets, liabilities, receipts, and disbursements, and shall have such other duties as are provided for in the Agreement creating the Authority.

Section 10. Auditor/Controller.

The Auditor/Controller shall perform those duties required by California Government Code Sections 6505 and 6505.5, including the following:

(a) Contract with a certified public accountant to make an annual audit of the accounts and records of the Authority as such audit is provided for in the

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agreement creating the Authority. The minimum requirements of the audit shall be prescribed by the State Controller, as provided in Section 26909 of the Government Code; and

(b) Draw, or cause to be drawn, warrants, and electronic payments used to pay demands against the Authority when the demands have been approved by the Chief Executive Officer or his or her designee; and

(c) Such other duties as may be provided by the Executive Committee, the Agreement creating the Authority, or the Bylaws.

Section 11. Secretary.

The Secretary shall record or cause to be recorded, and shall keep or cause to be kept, at the principal executive office of the Authority or such other place as the Executive Committee may order, a book of minutes of actions taken at all meetings of the Board of Directors and Executive Committee, whether regular or special (and, if special, how authorized), the notice thereof given, the names of those present at the meetings, and the proceedings thereof.

Article VI — Miscellaneous

Section 1. Annual Report.

The Board of Directors of the Authority shall cause an annual report to be made available to the Members not later than twelve (12) months after the close of each fiscal year. Such report shall contain the audited financial statements and such other information as may be required by law.

Section 2. Defense of Agents of the Authority.

(a) For the purposes of this Article, "agent" means any person who is or was an officer, employee or other duly authorized agent of the Authority, while acting on behalf of the Authority.

(b) The Authority shall provide for the defense of any civil action or proceeding brought against any such agent of the Authority in his or her official or individual capacity or both, on account of an act or omission within the scope of his or her employment as an agent of the Authority, and to the extent of such defense as is provided for in California Government Code Section 995 et seq.

Section 3. Contribution Among Members of the Authority.

Pursuant to the provisions of Government Code Section 895 et seq., the Members of the Authority are jointly and severally liable for any liability which is otherwise imposed by law upon any one of the Members or upon the Authority for injury caused by a negligent or wrongful act or omission occurring in the

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performance of the ACWA JPIA’s Joint Powers Agreement. However, as between the Authority’s Members themselves, if a Member of the Authority is held liable for any such liability and pays in excess of its pro rata share in satisfaction of such liability, such Member is entitled to contribution from the other Members of the Authority. An ACWA JPIA Member’s pro rata share will be based on that Member’s premium contributions paid in the fiscal year in which the liability arose, compared with the premium contributions paid by all ACWA JPIA Members in such fiscal year. No Member may be compelled to make a contribution to the satisfaction of such a liability, beyond its own pro rata share of the entire liability.

Section 4. Inspection of Authority Records.

The accounting books and records, the list of Members' designated representatives, and minutes of proceedings of the Board of Directors and the Executive Committee and all other committees of the Authority shall be open to the inspection of any Member at any reasonable time. Members shall provide ten (10) days notice of intent to inspect records. Such inspection by a Member may be made in person or by agent or attorney, and the right of inspection includes the right to copy and make extracts.

Section 5. Checks and Drafts.

All checks, drafts or other orders of payment of money, notes or other evidences of indebtedness, issued in the name of or payable to the Authority, shall be signed or endorsed by the President and Treasurer or by such person or persons and in such manner as, from time to time, shall be determined by the Executive Committee.

Section 6. Register of Checks.

A register of all checks, warrants, and electronic payments not previously reviewed and approved by the Executive Committee shall be made available to the Executive Committee at each of its meetings for the Committee's review and approval.

Section 7. Execution of Contracts.

The Executive Committee may authorize any officer or officers, or agent or agents, to enter into any contract or execute any instrument in the name of and on behalf of the Authority, and such authorization may be general or confined to specific instances except as otherwise provided by these Bylaws. Unless so authorized by the Executive Committee, no officer, agent or employee shall have any power or authority to bind the Authority by any contract or engagement or to pledge its credit or to render it liable for any purpose or for any amount.

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Section 8. Rules of Procedure for Meetings.

All meetings of the Board of Directors and Executive Committee including, without limitation, regular, adjourned regular and special meetings, shall be called, noticed, held and conducted in accordance with the provisions of the Ralph M. Brown Act, California Government Code Sections 54950 et seq.

Article VII — Amendments

Section 1. Power of Board of Directors.

New bylaws may be adopted or these Bylaws may be amended or repealed by the affirmative vote of a majority of the voting members present at any Duly Constituted Board Meeting.

Section 2. Power of Executive Committee.

Subject to the provisions of Section 1 of this Article, amendments to these Bylaws, other than amendments changing the authorized number of members of the Executive Committee, may be adopted by the Executive Committee. Any amendment adopted by the Executive Committee shall be on the agenda of the next meeting of the Board of Directors for ratification.

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Prepared by: Walter A. Sells, Chief Executive Officer Date Prepared: April 5, 2012

ACWA/JPIA Membership Admission for HBA Members not already in the JPIA Pooled Programs

May 7, 2012

BACKGROUND The Authority’s joint powers agreement allows new Members entry into its joint protection programs upon approval by the Board of Directors. CURRENT SITUATION The HBA Board and the JPIA Executive Committee have voted to proceed with the transition of HBA to the JPIA. Currently, there are 76 Districts that are HBA members, but do not participate in at least one of the JPIA Pooled Programs. In order to continue participation in the employee benefits program, these 76 districts need to be added as members of the JPIA. The Executive Committee voted to add these members to the JPIA at their March meeting. Their membership now needs to be ratified by the Board of Directors for membership in the JPIA. RECOMMENDATION The Executive Committee recommends the Board of Directors ratify the acceptance of those members of HBA not currently members of the JPIA for admission into the JPIA joint protection program.

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ACWA JPIA HBA Districts for Admission

May 7, 2012

1 Alameda County Water District

2 Bay Area Water Supply & Conservation Agency

3 Big Bear Area Regional Wastewater Agency

4 Big Bear City Community Services District 5 Bighorn-Desert View Water Agency

6 Brookstrail Township Community Services District

7 Carlsbad Municipal Water District 8 Casitas Municipal Water District 9 Cawelo Water District

10 Chino Basin Watermaster 11 City of Blue Lake 12 City of Fillmore 13 City of San Juan Bautista 14 City of Tehachapi 15 Contra Costa Water District 16 Cordua Irrigation District 17 Delhi County Water District 18 East Bay Municipal Utility District 19 East Valley Water District 20 Elk Grove Water Services 21 Exeter Irrigation District 22 Firebaugh Canal Water District 23 Forresthill Public Utility District 24 Grassland Water District 25 Greenfield County Water District 26 Henry Miller Reclamation District #2131

27 Hidden Valley Lake Community Services District

28 Humboldt Bay Harbor Recreation & Conservation District

29 Indian Wells Valley Water District 30 Irvine Ranch Water District 31 Jurupa Community Services District

32 Kern Tulare Water District (Formerly Rag Gulch)

33 La Puente Valley County Water District

34 Lake Arrowhead Community Services District

35 Lake Don Pedro Community Services District

36 Las Virgenes Municipal Water District 37 Le Grand Community Services District 38 Lost Hills Water District 39 Lower San Joaquin Levee District 40 Main San Gabriel Basin Watermaster

41 Malaga County Water District 42 Mariposa Public Utility District 43 McKinleyville Community Services District 44 Mid-Peninsula Water District 45 Mojave Water Authority 46 Montara Water & Sanitary District 47 Montecito Sanitary District

48 Monterey Peninsula Water Management District

49 Nevada Irrigation District 50 Newhall County Water District 51 North Kern Water Storage District 52 Olivenhain Municipal Water District 53 Orland-Artois Water District 54 Padre Dam Municipal Water District

55 Phelan Pińon Hills Community Services District

56 Planada Community Services District 57 Rainbow Municipal Water District 58 Reclamation District #1000 59 Rosamond Community Services District 60 San Andreas Sanitation District

61 San Bernardino Valley Municipal Water District

62 San Francisquito Creek Joint Powers Authority

63 Santa Ana Watershed Power Authority 64 Santa Clara Valley Water District 65 Santa Margarita Water District 66 South San Joaquin Irrigation District 67 South Tahoe Public Utility District 68 Stone Corral Irrigation District 69 The West Side Irrigation District 70 Tri-Dam Project 71 Tulelake Irrigation District 72 Tuolumne Utilities District 73 United Water Conservation District 74 Ventura River County Water District 75 West Kern Water District 76 West Stanislaus Irrigation District

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Prepared by: Debbie Kyburz, Member Services Representative Date Prepared: April 5, 2012

ACWA/JPIA NEW JPIA MEMBER AGENCIES

May 7, 2012 BACKGROUND At each Board meeting a list of new members is provided for membership ratification. CURRENT SITUATION The following agencies joined the ACWA/JPIA: Agency: Devil’s Den Water District Effective Date: December 1, 2011 Program: Liability and Property Director: E.G. Gladbach Agency: Upper Santa Clara Valley Joint Powers Authority Effective Date: December 1, 2011 Program: Liability and Property Director: E.G. Gladbach RECOMMENDATION That the Board of Directors ratify the Executive Committee’s acceptance of above agencies into JPIA.

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ACWA/JPIA Rio Linda/Elverta Community Water District

May 7, 2012 BACKGROUND Article 23(a) of the ACWA/JPIA Joint Powers Agreement requires a two-thirds vote of the voting Directors present at any duly constituted Board meeting in order to cancel a Member’s participation in any joint protection program of the Authority. The Article also provides that a reasonable period of time, as determined by the Board, shall be afforded to the Member to place coverage elsewhere. On January 31, 2012, Staff reported to the ACWA/JPIA Executive Committee about recent employment practices liability claims (EPL) filed against the Rio Linda/Elverta Community Water District (District). The Executive Committee also reviewed the Sacramento Grand Jury Final Report 2010-2011, Local Agency Formation Commission (LAFCO) reports, articles from the Sacramento Bee and the North County News, as well as some District Board Minutes. The Grand Jury found that the District continues to be mismanaged by the District Board of Directors, that the “parade of managers” (8 in less than 5 years) has been unable to manage the District operations, that there are internal conflicts among staff, the General Manager and the District Board and that the District has an uncertain financial future. LAFCO’s Executive Officer opined that the District Board does not function in a professional manner and is fragile and fractured. There have been four EPL claims submitted to the ACWA/JPIA since 2005. There have been three claims submitted by former general managers and one by the District’s former accountant; two are still in litigation. All of the claims involve allegations of inappropriate actions by the District Board of Directors. The exposure to the pool for those claims is in excess of $500,000. There have been several incidents of District Board of Directors conflicts and a report of alleged excess expenses incurred by the District that have appeared in the Sacramento Bee (The Bee). The Bee reports that a majority of the Board walked out of a recent Board meeting, that a recall election filed against a Board member by two other Board members has been rescinded, the resignation of a Board member and that last year’s legal expenses at the District were $415,000 or 28% of the District’s annual budget. CURRENT SITUATION On January 21st, after reviewing the information presented by Staff and hearing information presented by representatives of the District and a member of the public, the Executive Committee voted to recommend to the ACWA/JPIA Board of Directors that the District’s participation in the property and liability claims programs be cancelled.

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Prepared by: Dick Damon, Liability Claims Manager Date Prepared: April 9, 2012

On March 28, 2012, the Executive Committee again heard a presentation from the District General Manager, Board President and two Board members regarding steps that had been taken to improve the situation and remedy some of the deficiencies noted in the various reports. The Executive Committee chose not to change their recommendation at that time, but agreed to review the matter again on May 7, 2012, prior to this Board meeting. RECOMMENDATION The Executive Committee recommends that the Board cancel Rio Linda/Elverta Community Water District’s participation in the ACWA JPIA joint protection programs for liability and property claims.

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Prepared by: David deBernardi, Director of Finance Date Prepared: April 9, 2012

ACWA/JPIA Audited Financial Statements Year Ending September 30, 2011

May 7, 2012

BACKGROUND Each year the JPIA provides for an independent audit of the JPIA’s financial statements. Maze & Associates performed the annual audit of the JPIA for the fiscal year of October 1, 2010 through September 30, 2011. CURRENT SITUATION The JPIA has received an unqualified opinion. The drafted opinion states that the financial statements present fairly, in all material respects, the financial position of ACWA/JPIA as of September 30, 2011, and the results of its operations and cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America. As in the previous year, the JPIA prepared a Comprehensive Annual Financial Report (CAFR) in accordance with the Government Finance Officers Association (GFOA) standards. Management intends to submit this report to the GFOA for review in order to again obtain a Certificate of Achievement for Excellence in Financial Reporting. Consequently, the annual report has additional reports therein to meet these high standards. RECOMMENDATION The Finance & Audit Committee and the Executive Committee have reviewed the 2010-11 Audited Financial Statements and both recommend approval by the Board of Directors as presented.

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ASSOCIATION OF CALIFORNIA WATER AGENCIES

JOINT POWERS INSURANCE AUTHORITY

COMPREHENSIVE ANNUAL FINANCIAL REPORT

For the Years Ended September 30, 2011 and 2010

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ASSOCIATION OF CALIFORNIA WATER AGENCIESJOINT POWERS INSURANCE AUTHORITY

Years Ended September 30, 2011 and 2010

TABLE OF CONTENTS

INTRODUCTORY SECTIONLetter of TransmittalExecutive CommitteeOrganizational ChartCertificate of Achievement for Excellence in Financial Reporting

Page

ivvivii

FINANCIAL SECTIONIndependent Auditor’s Report 1

Management’s Discussion and Analysis 3Statements of Net Assets 14Statements of Revenues, Expenses, and Changes in Net Assets 15Statements of Cash Flows 16Notes to Financial Statements 17

REQUIRED SUPPLEMENTARY INFORMATIONReconciliation of Claims Liabilities by Type of Contract 36Ten-Year Claims Development Information 37Notes to Required Supplementary Information 40

SUPPLEMENTARY INFORMATIONSchedule of Revenues and Expenses by Program (Cumulative) 41

STATISTICAL SECTION (Not covered by Independent Auditor’s Report)Statistical Section 42Statements of Net Assets 43Statements of Revenues, Expenses and Changes in Net Assets 44Revenues by Program 45Expenses by Program 46Schedule of Rate Stabilization Fund Activity 47Economic Statistics 48Liability & Workers’ Compensation Covered PayrollProperty Total Insured Value

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OTHER INDEPENDENT AUDITORS’ REPORTReport on Compliance and Other Matters and on Internal Control overFinancial Reporting Based on an Audit of Financial StatementsPerformed in Accordance with Government Aud i t ing S tandards

50

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INTRODUCTORY SECTION

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PO Box 619082 Roseville, CA 95661-9082

phone 916.786.5742 800.231.5742

direct line 916.774.7050 800.535.7899

fax 916.774.7040

www.acwajpia.com

President E.G. “Jerry” Gladbach

Vice President Tom Cuquet

Chief Executive Officer Walter “Andy” Sells

Executive Committee Tom Cuquet Joseph Dion

E.G. “Jerry” Gladbach David T. Hodgin

W.D. “Bill” Knutson Melody A. McDonald

Charles W. Muse Randy Record Lou Reinkens

JOINT POWERS Insurance Authority

i

71

ASSOCIATION OF CALIFORNIA WATER AGENCIESJOINT POWERS INSURANCE AUTHORITY PROFILE

LOCAL ECONOMY

ii

72

LONG-TERM FINANCIAL PLANNING

INTERNAL ACCOUNTING CONTROLS

iii

73

AWARDS & ACKNOWLEDGEMENTS

iv

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ASSOCIATION OF CALIFORNIA WATER AGENCIES JOINT POWERS INSURANCE AUTHORITY

COMPREHENSIVE ANNUAL FINANCIAL REPORT

FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2011

EXECUTIVE COMMITTEE

Name Office District

E.G. “Jerry” Gladbach President Castaic Lake WA Tom Cuquet Vice-President South Sutter WD Joseph Dion Director Citrus Heights WD David T. Hodgin Director Scotts Valley Water District W.D. “Bill” Knutson Director Yuima Municipal WD Melody McDonald Director San Bernardino Valley WCD Charles Muse Director Helix Water District Lou Reinkens Director Tahoe City Public Utility District Randy Record At-Large ACWA Vice-President Dan Klaff CEO Walter “Andy” Sells COO

Office Address

2100 Professional Drive Roseville, California 95661

Report Prepared By The Finance Department

David deBernardi, CPA, Director of Finance

Dianna Sutton, Finance Manager Dalisay Matias, Accountant III

Lindsey Johnson, Accountant II Cece Reynolds, Administrative Assistant II

v

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FINANCIAL SECTION

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INDEPENDENT AUDITOR’S REPORT

Government Auditing Standards



79

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MANAGEMENT’S DISCUSSION AND ANALYSISAs management of the Association of California Water Agencies Joint Powers Insurance Authority (the JPIA) we offer readers of the JPIA’s financial statements this narrative overview and analysis of the financial activities of the JPIA for the fiscal year ended September 30, 2011. We encourage readers to consider the information here in conjunction with the additional information that we have furnished in our letter of transmittal, which can be found on pages i to iv of this report.

DESCRIPTION OF BASIC FINANCIAL STATEMENTS

The JPIA operates as an enterprise fund and utilizes an accrual basis of accounting. The report includes the basic financial statements for the JPIA in accordance with generally accepted accounting principles. The Statements of Net Assets present a snapshot of the JPIA’s assets, liabilities and net assets as of September 30, 2011 and 2010. The Statements of Revenue, Expenses, and Changes in Net Assets, report the revenues and expenses for the fiscal years resulting in the changes to net assets. The Statements of Cash Flows provide the reader with details on cash inflows and outflows during the fiscal years ended. The Notes to the Financial Statements present the reader with additional information to enhance and complement understanding of the financial statements.

CONDENSED FINANCIAL STATEMENTSFor the fiscal year ending September 30, 2011, there were some changes to the Statement of Net Assets. Total assets decreased by $1.2 million. This fluctuation waslargely the result of the $2.5 million increase in claims paid from the prior year. Total liabilities declined $4.5 million. The primary cause for this decrease was the reduced retrospective premium adjustment payable which lessened by $2.2 million. Member refunds totaling $6.4 million served to reduce this liability. Overall, the JPIA is in a positive cash position with current assets exceeding current liabilities by $5.9 million. Net assets continued its upward trend by rising $3.3 million.

For the fiscal year ending September 30, 2011, there were a number of notable variancesto the Statement of Revenues, Expenses and Changes in Net Assets. Total operating revenues improved by $1 million. This increase was caused by higher covered payroll for members’ in both the Liability (2% growth) and Workers’ Compensation (2.5% growth) Programs as well as a rise in total insured values in the Property Program (7.9% growth).The provision for claims dropped by $448,000. The primary driver to this decrease was the smaller actuarial estimates of $3.2 million in claims losses for prior policy years in the Workers’ Compensation Program. General & administrative expenses rose by $568,000.Most of this increase was due to the additional depreciation from the new JPIA headquarters and an increase in claims coverage related legal fees. Investment income decreased by $1.4 million which reflects the low yields offered in the investment market over the past 2 years.

For the fiscal year ending September 30, 2010, there were some prominent fluctuationsin the Statement of Net Assets. Total assets increased by $3.8 million. Current assets decreased by $26 million. In preparation of a building renovation and distribution of $8 million in member refunds, the JPIA held more than usual in current assets as of September 30, 2009. During fiscal year ending September 30, 2010, the JPIA encountered little change in total liabilities. This consistency was the result of a decrease

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in retrospective premium adjustments payable being offset by an increase in claims liabilities.

For the fiscal year ending September 30, 2010 there were a few noteworthy shifts in the Statement of Revenues, Expenses and Changes in Net Assets. Total operating revenues were up by $5.96 million. This variance was mostly due to less retrospective premium adjustments than in the previous year. Total operating expenses increased by $345,000. This was mainly due to an increased provision for claims as a result of actuarial loss estimates. Investment income dropped by $3.4 million which was the result of the significant declines in interest rates offered by the market.

CONDENSED STATEMENT OF NET ASSETS2011 vs 2010 2010 vs 2009

9/30/2011 9/30/2010 9/30/2009 Variance VarianceASSETSCurrent Assets $47,799,175 $48,403,357 $74,941,366 ($ 604,182) ($26,538,009)Noncurrent Assets 78,970,791 79,562,048 49,125,661 (591,257) 30,436,387

Total Assets 126,769,966 127,965,405 124,067,027 (1,195,439) 3,898,378

LIABILITIESCurrent Liabilities 41,867,839 38,507,711 38,564,342 3,360,128 (56,631)Noncurrent Liabilities 37,590,083 45,455,820 45,429,021 (7,865,737) 26,799

Total Liabilities 79,457,922 83,963,531 83,993,363 (4,505,609) (29,832)

NET ASSETS $47,312,044 $44,001,874 $40,073,664 $3,310,170 $3,928,210

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CONDENSED STATEMENT OF REVENUES, EXPENSES,AND CHANGES IN NET ASSETS

2011 vs 2010

2010 vs 2009

9/30/2011 9/30/2010 9/30/2009 Variance VarianceOPERATING REVENUESMembers Premiums $32,175,664 $ 30,328,626 $29,469,780 $ 1,847,038 $ 858,846 Retrospective Premium Adjustments (4,026,190) (3,276,537) (8,387,426) (749,653) 5,110,889 Total Operating Revenues 28,149,474 27,052,089 21,082,354 1,097,385 5,969,735

OPERATING EXPENSESProvision for Claims 11,880,268 12,328,854 11,325,832 (448,586) 1,003,022Excess Insurance 8,507,507 8,350,340 8,439,434 157,167 (89,094)General & Administrative 5,898,455 5,330,063 5,898,704 568,392 (568,641)Total Operating Expenses 26,286,230 26,009,257 25,663,970 276,973 345,287

OPERATING INCOME (LOSS) 1,863,244 1,042,832

(4,581,616) 820,412 5,624,448

NONOPERATING REVENUESInvestment Income 1,446,926 2,885,378 6,294,982 (1,438,452) (3,409,604)CHANGE IN NET ASSETS 3,310,170 3,928,210 1,713,366 (618,040) 2,214,844 NET ASSETS, BEGINNING 44,001,874 40,073,664 38,360,298 3,928,210 1,713,366

NET ASSETS, ENDING $ 47,312,044 $ 44,001,874 $40,073,664 $3,310,170 $3,928,210

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FINANCIAL HIGHLIGHTS

Amidst the challenging economic times endured in California, the JPIA continues to hold a favorable financial place. At year end September 30, 2011, 85% of the JPIA’s total assets were in cash and investments. This percentage puts the JPIA in a solid position to mitigate any severe claims that arise while negating the need to assess memberdistricts additional monies. The JPIA completed the renovation of an office building ($5.3 million total cost) and relocated its offices to Roseville in January 2011. This move was the byproduct of years of planning and has enabled the JPIA to provide added training to its members using the new facilities. The provision for insured events of the current fiscal year (see note 7) for all programs grew from $12.7 million for fiscal year ending September 30, 2010, to $13.7 million in fiscal year ending September 30, 2011, a 7.7% increase. This variance represents mostly an upward adjustment by the JPIA actuary of the ultimate losses for older policy years in the Liability Program.

The chart above illustrates the changes in the Catastrophic Fund, the Rate Stabilization Fund and the Self Insured Excess Fund. The Rate Stabilization Fund represents funds held on members’ behalf (capped at 60% of their current year’s basic liability premium) to mitigate adverse changes in premiums as well as minimize any future assessments when necessary. After two years of significant refunds to members the balance in this fund has started to level off.

The Catastrophic Fund represents funds collected in addition to the normal member premiums to buffer the effect of claims losses that exceed 150% of the original estimate. These funds have continued to grow since losses exceeding 150% of the original estimate have been minimal.

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The Self Insured Excess Fund was created to buffer changes made to the self insured retention (SIR) levels. To the extent that claims losses breach the prior SIR level in a given policy year, they are used to pay for these claims losses. Claims activity over the years has been steady enough at this level that such funds have not grown significantly.

LIABILITY PROGRAMThe Liability Program in its most recent policy year 2010-2011 covered $453 million in member districts’ payroll. This was an increase of 2% from the previous year. The membership in this program has been rock steady with 286 participating members whose average tenure was 24 years in policy year 2010-11.

The Liability Program’s incurred loss rates show a favorable trend in 3 out of 4 of the most recent policy years, however, it is premature to draw any conclusions from this data. The exception to this is policy year 2008-2009 where there were two auto accident claims and two claims related to fire damage. There was also increased claim severity in policy years 2005 through 2007. A majority of these claims were associated with flooding and leaking damage to third party property. The JPIA continues to focus its member training to prevent these large claims. Based on the recent actuarial projections the Liability Program is cumulatively overfunded by $7.9 million. These projections place the JPIA in a favorable position to buffer rate increases and adverse claims experience. The graph below depicts these loss figures net of any excess losses:

PROPERTY PROGRAMThe Property Program has 258 participating districts in its current policy year (2011-12) compared to 256 participants for the previous policy year. The average tenure of the currently participating members is 22 years. Premium rates have remained the same for the past four policy years. In the recently completed policy years 2010-11, 2009-10 and 2008-09, the JPIA collected $4.3 million, $4 million and $3.7 million, respectively, in member premiums. The JPIA has been self insured up to $50,000 per claim since the 2001-02 policy year, thus limiting the severity of the pooled losses. The incurred loss rates per $1 million of total insured values are as follows:

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Studying the graph above one can see the incurred loss rates have been steady at around $200 each policy year. The exceptions to this are policy years 2002 through 2005 where many of the claims were the result of widespread fire damage in Southern California. The 2008-09 policy year has had only one claim exceed the $50,000 self insured retention making the loss rate more favorable. The Property Program is in an excellent financial position with $2 million due back to members should the recent actuarial study prove accurate.

WORKERS’ COMPENSATION PROGRAMThe Workers’ Compensation Program has enjoyed modest growth in recent times.Participating districts for the past three policy years have gone from 154 to 164 and covered payroll has increased from $387 million to $414 million, a 7% rise. Legislative changes, such as SB899 which was passed in 2004, have shown very positive results throughout the State of California. Coupled with an emphasis on workplace safety through training, the JPIA has benefited from these law changes. Since 2004-05, the JPIA has reduced the rates charged to members by nearly 50 percent. Rates for the current policy year remained unchanged even though losses and rates in the industry, as a whole, increased. Member premiums have ranged from $9.2 million to $10.3 million over the past three policy years. Since changing its self insured retention level from $650,000 per claim in policy year 2002-03 to $2 million per claim in policy year 2003-04, the JPIA has had no claims in excess of $650,000, thus rewarding the program financially. The following chart portrays the incurred losses per $1 million of payroll:

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Reviewing the above data, the favorable trend from 2002 through 2007 is apparent.Since then the loss rates have been leveling off around $8,000. It is too early to make any judgments about the most recent policy years as workers’ compensation policy years can take many years to fully develop loss history. Recently proposed legislative changes combined with a hardening market and sluggish economy has dampened future expectations. Despite these market conditions the recent actuarial estimates reflect adecrease of $2.2 million from the prior year’s report. The Workers’ Compensation Program is well funded with $3.5 million due to participating members should the above estimates hold true.

CASH AND INVESTMENTSCash and investments continue to make up the majority of the JPIA’s assets. The cash and investment declined by $3.78 million during fiscal year ending September 30, 2011. The main reason for this change is the monies were used to renovate the new JPIA headquarters. The cash and cash equivalents increased approximately $6 million for the year-ended September 30, 2010. This was primarily due to a timing difference of the Liability Program’s excess insurance payment of $4.8 million.

The management of the cash and investments is twofold. The JPIA internally manages the cash needed for operations and the majority of the short-term investments. The noncurrent portion of investments is managed by PFM Asset Management LLC. The JPIA’s investment policy prioritizes safeguarding of principal first, followed by meeting liquidity needs and then optimum yield. Total investments were $81.9 and $78.6 million, respectively, at year end September 30, 2011 and 2010. The following chart depicts the totals by investment type:

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Overall the most significant changes in the investment makeup were in agencies and corporate & medium term notes. Corporate and medium term notes increased by $9.6 million during the fiscal year ending September 30, 2011. This change was part of an effort to increase the portfolio’s diversity and take advantage of some market opportunities that made it possible for the JPIA to purchase these investments. Agencies declined by $7.3 million as part of the portfolio’s reallocation to add medium term notes. As agencies matured or were sold at favorable times, they were replaced with medium term notes.

On September 30, 2011, the average number of days to maturity was 644 compared to 617 as of year-end 2010. By and large, there was little variance in the duration of the JPIA’s investments. At September 30, 2011 the effective rate of return was 1.29%compared to 1.58% a year earlier. Contributing factors to the declining yield include heightened concern over European sovereign and bank debt, budget and debt ceiling wrangling in Washington, the recent downgrade by S&P of the U.S. government’s credit rating and new Federal Reserve initiatives. These factors coupled with the renewed slowdown of the U.S. economy have suppressed investment returns. The following graph illustrates the effective rate of returns over the year and the impact the investment market has had on these returns:

10

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In the graph above the JPIA’s effective rate of return is compared to both the U.S. Treasury 2-year yield and the Merrill Lynch 1-5 Year Government Index. The JPIA’s effective rate of return peaked in 2007 at 5% and since then has gradually declined due to the lowered interest rates the marketplace offered in the challenged economy. In the two most recent years the JPIA’s effective rate of return has continued this decline but to a lesser extent than the U.S. Treasury 2-year. It is important to remember the JPIA’s effective rate of return includes both short-term and long-term investments. The Merrill Lynch 1-5 Government Index is the JPIA’s benchmark used for its long-term investments. Consequently, this index is a measurement of investments with longer duration than the total portfolio of the JPIA. The yield difference between this benchmark and the JPIA’s effective rate of return was as high as 300-400 basis points in 2008 and 2009, but in the recent years this gap has significantly narrowed, again demonstrating the change in the overall market where the difference between short-term and long term investment rates of return has significantly narrowed. Given these conditions, the JPIA has not made any significant changes to the duration of the portfolio. In the prior year the JPIA lengthened the duration of the portfolio to take advantage of the yield curve seen above.

Current investments for fiscal year ending September 30, 2011 increased by $5.7 million.As of September 30, 2011, 2010 and 2009 the current investments were $12.3, $6.6 and$36.3 million, respectively. The JPIA continues to use LAIF to invest a majority of its short term investments that are needed to meet operational needs. The following graph details duration of the JPIA cash and investments as of September 30, 2011.

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FACTS OR CONDITIONS THAT ARE EXPECTED TO HAVE A SIGNIFICANT EFFECT ON THE FINANCIAL POSITION OR

RESULT OF OPERATIONS

In May 2007 an ad-hoc building and property subcommittee was formed for purposes ofdetermining whether to 1) renovate the 5620 Birdcage building, 2) purchase an existing building, or 3) purchase land and develop a new building. After careful analysis and discussion in May 2009, the Board of Directors provided the Executive Committee theauthority to purchase an existing building. In November 2009 after completing due diligence, the JPIA closed escrow to purchase a building in Roseville, CA for $2,780,000. In January 2011, the JPIA moved its office to the new location. Costs of approximately $3.4 million related to preparing this building for its intended use were capitalized as “Building Under Construction” and then upon moving, were transferred into “Building &Tenant Improvements” during fiscal year ending September 30, 2011 where it is beingdepreciated over 30 years. The JPIA is leasing out the old building and intends to sell it when the market is advantageous.

For the Liability Program policy year 2011-12 the Executive Committee opted to increase the self insured retention from $1 million per claim to $2 million per claim. This modification was made to minimize the proposed price increases obtained from the excess carriers’ competitive bids.

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CONCLUSION

This financial report is designed to provide a general overview of the JPIA’s finances. For further information, the JPIA has a website, www.acwajpia.com, which provides the most current approved independent audited financial statements. Questions concerning any of the information can be sent to the following address.

ACWA/JPIA - Finance Department2100 Professional Drive, Roseville, CA 95661-3700

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See accompanying notes to financial statements.


STATEMENTS OF NET ASSETSSEPTEMBER 30, 2011 AND 2010

2011 2010ASSETS

CURRENT ASSETSCash and cash equivalents 25,574,381$ 32,684,538$ Investments 12,312,420 6,602,223Accounts receivable:

Aggregate insurance receivable 391,594 176,066Member premiums 3,041,025 2,776,229Excess insurance proceeds 375,545 57,957Investment income 409,109 510,686Retrospective premium adjustment receivables 3,465,798 3,464,450Other receivables 97,439 63,113

Prepaid excess insurance 1,971,629 1,913,859Other prepaid expenses 160,235 154,236

TOTAL CURRENT ASSETS 47,799,175 48,403,357

NONCURRENT ASSETSInvestments 69,662,229 72,047,054Net other post employment benefits 2,445,571 2,540,401Capital assets - net 6,862,991 4,974,593

TOTAL NONCURRENT ASSETS 78,970,791 79,562,048

TOTAL ASSETS 126,769,966$ 127,965,405$

LIABILITIESCURRENT LIABILITIES

Accounts payable 112,207$ 893,495$ Accrued expenses 343,501 302,946Unearned member premiums 19,044,716 18,685,066Retrospective premium adjustment payables 12,289,828 10,130,466Provision for claims 10,077,587 8,495,738

TOTAL CURRENT LIABILITIES 41,867,839 38,507,711

NONCURRENT LIABILITIESRetrospective premium adjustment payables 12,349,793 18,412,509Claims reserves 4,879,422 6,898,002Claims incurred but not reported 18,344,175 17,960,519Unallocated loss adjustment liability 2,016,693 2,184,790

TOTAL NONCURRENT LIABILITIES 37,590,083 45,455,820

TOTAL LIABILITIES 79,457,922$ 83,963,531$

NET ASSETSInvested in capital assets 6,862,991$ 4,974,593$ Unrestricted 40,449,053 39,027,281

TOTAL NET ASSETS 47,312,044$ 44,001,874$

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STATEMENTS OF REVENUES, EXPENSES, AND CHANGES IN NET ASSETSYEARS ENDED SEPTEMBER 30, 2011 AND 2010

2011 2010

Member premiums 32,175,664$ 30,328,626$ Retrospective premium adjustments (4,026,190) (3,276,537)

TOTAL OPERATING REVENUES 28,149,474 27,052,089

Claims expense:Claims paid 12,316,974 9,818,161Change in excess aggregate recovery (215,529) (87,603)Change in claims reserves (451,162) 2,112,946Change in claims incurred but not reported 383,658 352,164Change in unallocated loss adjustment expense (153,673) 133,186

Total claims expense 11,880,268 12,328,854

Excess insurance 8,507,507 8,350,340General and administrative 5,664,370 5,278,142Depreciation 234,085 51,921

TOTAL OPERATING EXPENSES 26,286,230 26,009,257

OPERATING INCOME 1,863,244 1,042,832

Investment income 1,822,097 2,396,686Net increase (decrease) in investment fair value (375,171) 488,692

TOTAL NONOPERATING REVENUES 1,446,926 2,885,378

CHANGE IN NET ASSETS 3,310,170 3,928,210

NET ASSETS, BEGINNING OF YEAR 44,001,874 40,073,664

NET ASSETS, END OF YEAR 47,312,044$ 44,001,874$

OPERATING REVENUES

OPERATING EXPENSES

NONOPERATING REVENUES

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2011 2010

CASH FLOWS FROM OPERATING ACTIVITIESCash received from members 30,765,961$ 29,891,662$ Cash received from excess/aggregate insurance 423,029 2,589,362Payments for claims (12,316,974) (9,818,161)Payments for excess/aggregate claims (719,392) (2,616,823)Payments for excess insurance (8,565,278) (3,639,953)Payments for billings & RPA fund (6,458,871) (8,014,717)Payments to vendors (1,415,995) (1,094,708)Payments to employees (4,076,849) (3,864,651)

NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES (2,364,369) 3,432,011

CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIESPurchase of capital assets (2,921,136) (3,246,547)

CASH FLOWS FROM INVESTING ACTIVITIESInterest received 1,931,858 2,341,573Purchase of investments (53,511,133) (75,987,332)Proceeds from maturities of investments 49,754,623 79,496,567

NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES (1,824,652) 5,850,808

Increase (decrease) in cash and cash equivalents (7,110,157) 6,036,272Cash and cash equivalents, beginning of year 32,684,538 26,648,266Cash and cash equivalents, end of year 25,574,381$ 32,684,538$

RECONCILIATION OF OPERATING INCOME TO NET CASHPROVIDED BY OPERATING ACTIVITIESOperating income 1,863,244$ 1,042,832$ Adjustments to net cash used by operating activities:

Depreciation 234,085 51,921Member premiums (264,796) 146,456Excess/aggregate insurance proceeds (533,116) (119,260)Retrospective premium adjustment receivables (1,348) (1,921,827)Other post employment benefits (OPEB) 94,830 148,857Other 44,611 131,972Prepaids and other assets (98,095) 4,782,718Accounts payable 20,537 (46,265)Accrued expenses 40,555 41,712Unearned member premiums 359,650 373,738Retrospective premium adjustment payables (3,903,354) (3,799,141)Claim liabilities (221,172) 2,598,298

NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES (2,364,369)$ 3,432,011$

Non cash items:OPEB / Original OPEB accrual reversal 0$ 148,857$Change in unrealized market value of investments 1,321,946 1,697,117


STATEMENTS OF CASH FLOWSYEARS ENDED SEPTEMBER 30, 2011 AND 2010

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NOTES TO FINANCIAL STATEMENTSYears Ended September 30, 2011 and 2010

(1) General InformationOrganization and Operations – The Association of California Water Agencies Joint Powers Insurance Authority (ACWA/JPIA) was created effective July 5, 1979, by a joint powers agreement among water member districts and agencies organized and operating under the laws of the State of California. ACWA/JPIA was organized pursuant to provisions of the California Government Code for the purpose of providing insurance coverage for its member districts.

ACWA/JPIA currently offers four joint protection programs:

Public Auto and General LiabilityWorkers’ CompensationProperty InsuranceUnderground Storage Tank Liability

The Utility Excess Liability (UTEL) Program was closed as of September 30, 1997, and is no longer available.

ACWA/JPIA also purchases group insurance for dam failure, pass through insurance (including employee fidelity bonding, difference in condition, boiler and machinery stand alone, and crime), and for the period of July 1, 1995 through June 30, 1998, workers’ compensation for electing member districts.

ACWA/JPIA provides joint protection coverage for losses in excess of the member districts’ individually specified self-insurance retention levels.

Reporting Entity – The reporting entity includes all activities (operations of the administrative staff, officers, executive board, and board of directors) as they relate to ACWA/JPIA considered to be part of (controlled by or dependent on) ACWA/JPIA. This includes financial activity relating to all of the membership years.

In determining its reporting entity, ACWA/JPIA considered all governmental units that were members since inception. The criteria did not require the inclusion of these entities in these financial statements principally because ACWA/JPIA is not financially accountable for any members.

Admission of Members – ACWA/JPIA shall allow entry of new members into its joint protection programs only upon approval by the Board of Directors (the Board), or by the Executive Committee if specifically delegated such authority by resolution of the Board, which may impose such conditions or limitations upon such authority of the Executive Committee as the Board deems appropriate. New member districts shall be required to pay their share of the expenses as determined by the Executive Committee, including expenses necessary to analyze their loss data and determine their premiums.

Withdrawal of Members – Member entities may withdraw from any pooled joint protection program, after a three-year period commencing on the date of the member entity’s entry into the pooled joint protection program, by providing written notice twelve months prior to the end of the policy year. In addition, no later than 90 days prior to the end of the policy year, any

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member giving the twelve month notice must make clear its final decision on withdrawal in clear, unambiguous form. Withdrawal from the program does not relieve the former member of any obligation assumed for the years of participation. Member entities may withdraw from any group purchase program at the conclusion of its policy year without being required to give twelve months written notice.

(2) Significant Accounting PoliciesBasis of Accounting – The accounting records of ACWA/JPIA are kept on the accrual basis of accounting. Under this method, revenues are recorded when earned and expenses are recorded at the time liabilities are incurred.

Pursuant to Governmental Accounting Standards Board (GASB) Statement No. 20, all Financial Accounting Standards Board (FASB) statements and authoritative pronouncements issued before November 30, 1989 are applied unless they conflict with GASB pronouncements. ACWA/JPIA has elected not to apply FASB statements issued subsequent to November 30, 1989.

Insurance Coverage and Deductibles – ACWA/JPIA provides the following major insurance coverage and deductibles:

a) Liability Program – The Liability Program was established to account for the payment of liability claims and administrative costs. Funding is based upon rates established by ACWA/JPIA’s Executive Committee. ACWA/JPIA administers claims in-house on behalf of participating members.

ACWA/JPIA provides the following insurance coverage and self-insured retention (SIR):

Member District Retrospective Allocation Point (RAP): $2,500 to $100,000

The SIRs for this program by year are as follows:

Year SIR Amount10/1/79 - 9/30/86 $500,00010/1/86 - 9/30/87 1,000,000 10/1/87 - 9/30/05 500,000 10/1/05 - 9/30/11 1,000,000 10/1/11 - 9/30/12 2,000,000

Excess of: $2,000,000 to a total of $60,000,000 coverage through various carriers. Policy Year: October 1 through September 30.

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b) Property Program – The Property Program was established to account for the payment of property claims and administrative costs. Funding is based upon rates established by ACWA/JPIA’s Executive Committee. ACWA/JPIA administers claims in-house on behalf of participating members.

ACWA/JPIA provides the following insurance coverage, deductibles and SIR:

Member District RAP: $500 to $25,000


Year SIR Amount1/1/83 - 3/31/85 Various4/1/85 - 3/31/86 $5,0004/1/86 - 3/31/88 50,0004/1/88 - 3/31/01 10,0004/1/01 - 3/31/12 50,000

Excess of: $50,000 up to a total of $100,000,000 coverage with various sublimits through Chubb.

Policy Year: April 1 through March 31.

c) Workers’ Compensation Program – The Workers’ Compensation Program was established to account for the payment of workers’ compensation claims and administrative costs. Funding is based upon rates established by ACWA/JPIA’s Executive Committee. ACWA/JPIA administers claims in-house on behalf of participating members.

ACWA/JPIA provides the following insurance coverage and SIR:

Member District RAP: $250 to $25,000

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Year SIR Amount7/1/86 - 6/30/87 $125,0007/1/87 - 6/30/88 150,0007/1/88 - 6/30/89 175,0007/1/89 - 6/30/91 200,0007/1/91 - 6/30/92 225,0007/1/92 - 6/30/01* 250,0007/1/01 - 6/30/02 350,0007/1/02 - 6/30/03 650,0007/1/03 - 6/30/12 2,000,000

Excess of: $2,000,000 to statutory limits through Safety National. Policy Year: July 1 through June 30

*From July 1, 1995 through June 30, 1998, the Workers’ Compensation Program functioned as a group purchase program.

Statements of Cash Flows – With regards to the statements of cash flows, ACWA/JPIA considers cash in banks, all money market funds, cash in Capital Asset Management Program (CAMP) and Local Agency Investment Fund (LAIF) to be cash equivalents. Investments maturing within three months from date of purchase are also considered to be cash equivalents.

Investments in debt securities are recorded at fair value. For purposes of these financial statements, fair value is equivalent to investment market value at September 30, 2011 and 2010. Changes in the fair value of investments, both realized and unrealized, are included in the Statement of Revenues, Expenses, and Changes in Net Assets as a component of non-operating revenues.

Prepaid Excess Insurance – Expenses for the portions of excess insurance that extend into future accounting periods have been recorded as prepaid excess insurance.

Capital Assets – Capital assets are stated at cost and depreciated using the straight-line method over the estimated useful lives of 3 years for computer equipment, 5 years for office equipment and building improvements, and 30 years for buildings. ACWA/JPIA uses a capitalization threshold of $10,000 when determining capital asset additions.

Unearned Member Premiums – ACWA/JPIA bills its members in advance for certain of its programs. The amount billed represents unearned member premium revenue until earned.

Claims Liabilities – ACWA/JPIA establishes liabilities for claims based on estimates of the ultimate cost of claims (including future claim adjustment expenses) that have been reported but not settled, and of claims that have been incurred but not reported. The length of time for

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which such costs must be estimated varies depending on the coverage involved. Because actual claims costs depend on such complex factors as inflation, changes in doctrines of legal liability, and damage awards, the process used in computing claims liabilities does not necessarily result in an exact amount, particularly for coverage such as general liability and workers’ compensation. Claims liabilities are recomputed annually using a variety of actuarial and statistical techniques to produce current estimates that reflect recent settlements, claims frequency, and other economic and social factors. A provision for inflation in the calculation is implicit in the calculation of estimated future claims costs because reliance is placed both on actual historical data that reflect past inflation and on other factors that are considered to be appropriate modifiers of past experience. Adjustments to claims liabilities are charged or credited to expense in the periods in which they are made.

Compensated Absences – ACWA/JPIA’s vacation policy provides for the accumulation of earned vacation leave with such leave being fully vested when earned. Pending years of service, employees are allowed to accrue a maximum of 40 days of vacation. A liability for accrued vacation has been computed and recorded based on unused vacation days times the current rate of pay. As of September 30, 2011 and 2010, the accrued vacation was $217,593and $190,216, respectively.

ACWA/JPIA’s sick leave policy provides for accumulation of sick leave. Unused sick leave will not be paid if an employee is terminated, or voluntarily resigns prior to retirement from ACWA/JPIA.

At retirement, any unused sick leave will be converted to CalPERS service credit by number of days of ACWA/JPIA reported sick leave times .004.

Claims Administration – Prior to July 1, 1995, ACWA/JPIA self-insured workers’ compensation claims. Third party administrators handled these claims until January 1998, at which time the remaining open claims were brought in-house. For three years beginning July 1, 1995, ACWA/JPIA was fully insured for workers’ compensation claims incurred during that time period. Then, effective July 1, 1998 to current, ACWA/JPIA once again began self-insuring and administering workers’ compensation claims in-house. Claims for ACWA/JPIA’s Liability and Property Programs are administered in-house.

Unallocated Loss Adjustment Expenses – Amounts have been estimated for the cost of administering current and future claims. An actuary, in connection with other loss development information, determined these amounts.

Member Premiums are calculated based upon each member district’s respective payroll (or insured values for the Property Program) and loss history.

Member premiums are recognized as revenue over the periods covered by the policies. For the liability, property and workers’ compensation policies, a retrospective premium adjustment for each policy year is made annually, starting four years after a program policy year begins.

Operating and Non-operating Revenues – Operating revenues include all program contributions, related fees and assessments that are integral to the financing of the insurance programs. Investment income is classified as non-operating revenue.

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Allocation of Indirect Expenses – Indirect expenses are allocated among insurance programs based on predefined formulas that approximate each programs’ share.

Income Taxes – As a public agency under the State of California, ACWA/JPIA is exempt from federal and state income taxes under Internal Revenue Code Section 115 and California Revenue and Taxation Code Section 17131, respectively.

(3) Cash and InvestmentsCash and investments as of September 30 are classified in the accompanying financial statements as follows:

2011 2010Current Assets: Cash and cash equivalents $ 25,574,381 $ 32,684,538 Investments 12,312,420 6,602,223Noncurrent Assets: Investments 69,662,229 72,047,054Total cash and investments $107,549,030 $111,333,815

Cash and investments as of September 30 consist of the following:

2011 2010Cash on hand $ 200 $ 200Deposits with financial institutions 2,380,784 901,513CAMP 25,031 912,907LAIF 23,168,366 30,869,919Investments 81,974,649 78,649,276Total cash and investments $107,549,030 $111,333,815

Investments Authorized by ACWA/JPIA’s Investment Policy – The following table identifies the investment types authorized for ACWA/JPIA by the California Government Code Section 53601 (or ACWA/JPIA’s investment policy where more restrictive). Also following are tables identifying certain provisions of the California Government Code (or ACWA/JPIA’s investment policy where more restrictive) that address interest rate risk, credit risk, and concentration of credit risk.

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AUTHORIZED INVESTMENT TYPEMAXIMUMMATURITY*

MAXIMUMPERCENTAGE

OFPORTFOLIO

MAXIMUMINVESTMENT

INONE ISSUER

MINIMUMCREDIT

QUALITY

Federal Agency 5 years 100% 50% Aaa

Federal Agency MBS 5 years 20% 20% Aaa

Bankers’ Acceptances 180 days 20% 5%Highest by NRSRO

Commercial Paper 270 days 25% 5%Highest by NRSRO

Negotiable Certificates of Deposits 5 years 30% 5% A2

Time Certificates of Deposits 5 years 30%FDIC

& NCUA Limits

BanksS&L / CU Insured

Repurchase Agreements 92 days 20% 20%Primary Dealer

Medium-Term Notes 5 years 30% 5% A2

Local Government Investment Pools N/A 50% N/A Aaa

Local Agency Investment Funds Daily 50% N/A N/A

Money Market Funds Daily 20% 20%Treasury

Agency Only

U.S. Treasury 5 years 100% 100% N/A

* The average life of the total portfolio at any time shall not exceed four years.

Concentration of Credit Risk – Investments at September 30 in any one issuer, other than U.S. Treasury Securities, LAIF and LGIP, that represent 5% or more of the total investments of ACWA/JPIA are as follows:

Issuer Investment Type 2011 2010Federal Home Loan Mortgage Corp U.S. Agency Securities $13,768,631 $13,359,661Federal National Mortgage Corp U.S. Agency Securities 13,391,266 11,303,579

Custodial Credit Risk – ACWA/JPIA maintains deposits with financial institutions in excess of federal depository insurance limits. California Law requires banks and savings and loan institutions to pledge government securities with a market value of 110% of ACWA/JPIA’s cash on deposit, or first trust deed mortgage notes with a market value of 150% of the deposit, as collateral for these deposits. Under California Law this collateral is held in a separate investment pool by another institution in ACWA/JPIA’s name and places it ahead of general creditors of the institution.

Interest Rate Risk is the possibility that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. As a means of highlighting exposure to interest rate risk, the fair value of all securities is calculated and

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reported monthly to the two oversight committees of ACWA/JPIA for investments. Investment fair value and duration at September 30 are as follows:

Authorized Investment Type 2011 Effective DurationU.S. Treasury Obligations $17,474,515 2.870U.S. Agency Securities 30,980,101 2.395Mortgage Pass-through Securities 497 2.669Medium-Term Notes 23,518,376 2.095Certificates of Deposit 10,001,160 0.801

Authorized Investment Type 2010 Effective DurationU.S. Treasury Obligations $18,739,070 3.085U.S. Agency Securities 38,540,443 1.471Mortgage Pass-through Securities 3,103 0.641Medium-Term Notes 14,073,265 2.089Certificates of Deposit 7,293,395 0.641

Disclosures Relating to Credit Risk – Information about the risk that an issuer or other counterparty to an investment will not fulfill its obligations is provided by the following tables:

Authorized Investment Amount

Exemptfrom

Disclosure Aaa Aa (1-3) A (1-3) Not Rated

As of September 30, 2011

Cash $ 200 $ 200 $ 0 $ 0 $ 0 $ 0

Deposits with FinancialInstitutions 2,380,784 2,380,784

CD’s 10,001,160 10,001,160

CAMP 25,031 25,031LAIF 23,168,366 23,168,366U.S. Treasury 17,474,515 17,474,515U.S. Agency Securities 30,980,101 30,980,101 0Mortgage Pass thruSecurities 497 497

Medium-Term Notes 23,518,376 __________ __________ 15,667,705 7,850,671 __________

Totals $107,549,030 $17,474,715 $31,005,132 $15,667,705 $7,850,671 $35,550,807

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Authorized Investment Amount

Exemptfrom

Disclosure Aaa Aa (2-3) A (1-2) Not Rated

As of September 30, 2010

Cash $ 200 $ 200 $ 0 $ 0 $ 0 $ 0

Deposits with FinancialInstitutions 901,513 901,513

CD’s 7,293,395 7,293,395

CAMP 912,907 912,907LAIF 30,869,919 30,869,919U.S. Treasury 18,739,070 18,739,070U.S. Agency Securities 38,540,443 38,540,443Mortgage Pass thruSecurities 3,103 3,103

Medium-Term Notes 14,073,265 __________ __________ 7,902,043 6,171,222 __________

Totals $111,333,815 $18,739,270 $39,456,453 $7,902,043 $6,171,222 $39,064,827

Local Agency Investment Funds – ACWA/JPIA is a participant in the Local Agency Investment Fund (LAIF) that is regulated by the California Government Code Section 16429 under the oversight of the Treasurer of the State of California. The fair value of ACWA/JPIA’s investment in this pool is reported in the accompanying financial statements at amounts based upon ACWA/JPIA’s pro-rata share of the fair value provided by LAIF for the entire LAIF portfolio (in relation to the amortized cost of the portfolio). The balance available for withdrawal is based on the accounting records maintained by LAIF, which is recorded on an amortized cost basis.

Local Government Investment Pools – ACWA/JPIA is a participant in the Capital Asset Management Program (CAMP) which invests available cash under California GovernmentCode Section 53601 and 53635. CAMP is a joint powers authority organized under California law and is managed by participant elected trustees. The fair value of ACWA/JPIA’s investment in this pool is reported in the accompanying financial statements at amounts based upon ACWA/JPIA’s pro-rata share of the fair value. Financial information can be obtained from 50 California Street, Suite 2300, San Francisco, CA 94111.

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(4) Capital Assets The following is a schedule of changes in capital assets for the years ended September 30:

9/30/2010 Additions Deductions Transfers 9/30/2011

NON-DEPRECIABLE ASSETS:

Land $ 283,696 $ 0 $ 0 $ 590,545 $ 874,241

Building Under Construction 4,208,230 2,039,252 (6,247,482) 0

Undeveloped Software 0 22,443 0 0 22,443Total Non-depreciable Assets: 4,491,926 2,061,695 0 (5,656,937) 896,684

DEPRECIABLE ASSETS:Building & Tenant Improvements 1,277,039 46,607 5,321,778 6,645,424

Furniture & Equipment 111,877 14,181 335,159 461,217

Software 306,191 0 (82,922) 0 223,269

Total Depreciable Assets 1,695,107 60,788 (82,922) 5,656,937 7,329,910

LESS ACCUMULATED DEPRECIATION:Building & Tenant Improvements (824,162) (172,232) (996,394)

Furniture & Equipment (87,223) (58,716) (145,939)

Software (301,055) (3,137) 82,922 0 (221,270)Total Accumulated Depreciation (1,212,440) (234,085) 82,922 0 (1,363,603)

Capital Assets - Net $ 4,974,593 $1,888,398 $ 0 $ 0 $ 6,862,991

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9/30/2009 Additions Deductions 9/30/2010NON-DEPRECIABLE ASSETS:

Land $ 283,696 $ 0 $ 0 $ 283,696Building Under Construction 159,858 4,048,372 _________ 4,208,230Total Non-depreciable Assets: 443,554 4,048,372 0 4,491,926

DEPRECIABLE ASSETS:Building & Tenant Improvements 1,277,039 1,277,039Furniture & Equipment 111,877 111,877Software 306,191 ________ _________ 306,191

Total Depreciable Assets 1,695,107 0 0 1,695,107LESS ACCUMULATED DEPRECIATION:Building & Tenant Improvements (786,035) (38,127) (824,162)Furniture & Equipment (79,971) (7,252) (87,223)Software (294,513) (6,542) _________ (301,055)

Total Accumulated Depreciation (1,160,519) (51,921) 0 (1,212,440)

Capital Assets - Net $ 978,142 $3,996,451 $ 0 $ 4,974,593

Building Under Construction – On August 25, 2009, ACWA/JPIA purchased a building for $2,780,000 located in Roseville, California. Since the time of purchase, ACWA/JPIA has been in the process of readying the building for its use. ACWA/JPIA moved its office to this buildingin mid January 2011. The new building is being depreciated over 30 years.

(5) Excess Insurance and ReinsuranceACWA/JPIA purchases specific occurrence excess insurance from commercial excess carriers, reinsurance carriers, or other pooling agencies for the Liability, Workers’ Compensation, and Property Programs. The specific excess insurance provides coverage for losses related to individual occurrences above the corresponding policy year’s specified self-insured retention (SIR) and is limited to that policy year’s specific excess coverage limit. Additionally, for Liability Program policy years 1983-84 through 1986-87 and 1991-92 through 2004-05, ACWA/JPIA purchased aggregate excess insurance that provides coverage for losses, net of specific excess insurance recoveries, to the extent that the net losses exceed the policy year’s specified aggregate attachment point. The aggregate excess coverage is limited to the amounts by policy year.

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Reinsurance contracts do not relieve ACWA/JPIA from its obligations to policyholders. Failure of these reinsurers to honor their obligations could result in losses to ACWA/JPIA. Any amounts deemed uncollectible from reinsurers have been written off. ACWA/JPIA evaluatesthe fiscal condition of its reinsurers to minimize exposure to significant losses for insolvencies.

(6) Retrospective Premium AdjustmentsRetrospective premium adjustments are determined for each policy year as the sum of the following:

a) Direct charge for the portion of each loss incurred within the member’s allocation level.

b) Losses in excess of a member’s allocation level are shared by the members in the same and greater allocation levels, based on each member’s premiums as a percentage of all members’ premiums in each allocation level.

c) Other costs, net of investment income, including unallocated claims expense, excess insurance premiums, and administrative expense are charged to each member, based on premiums.

d) The allocation for contributions to that portion of designated equity designated for catastrophic losses and the reserve for claims incurred but not reported is based on each member’s premiums as a percentage of all members’ premiums.

The retrospective premium adjustments (RPA) for all applicable policy years have been estimated based on losses and other costs, net of investment income, incurred through September 30, 2011 and 2010. RPAs are subject to change as the ultimate cost of claims becomes known, investment income is realized, and ACWA/JPIA’s indirect costs are allocated to each policy year.

The initial RPA is made at the end of the fourth full year of operations of each program of ACWA/JPIA. After that, RPAs represent annual cumulative adjustments to the original premiums (net of prior RPAs, if any) previously billed and held at ACWA/JPIA. Although accrued RPA payables to and receivables from program members are calculated monthly, the accrual billing/refunding process takes place only once per year. RPAs are calculated separately for each policy and program year.

Beginning with fiscal year 1998-99, ACWA/JPIA established an RPA Stabilization Fund for the Liability Program to help stabilize future RPAs. ACWA/JPIA maintains a separate RPA Stabilization Fund for each member and future RPAs are to flow through the member’s individual RPA Stabilization Fund. When the balance of a member’s fund exceeds 60% of the current year’s basic liability premium, the difference will be refunded to the member. During the fiscal year 2002-03 the RPA Stabilization Fund was expanded to include the Property and Workers’ Compensation pooled Programs.

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(7) Reconciliation of Claims LiabilitiesThe following represents changes in the aggregate liabilities for all programs during the past year:

September 30: 2011 2010Discounted Unpaid Claims and Claim AdjustmentExpenses at Beginning of Fiscal Year $35,539,049 $32,940,751Incurred Claims and Claim Adjustment Expenses:

Provision for Insured Events of the Current Fiscal Year 13,771,763 12,787,210Decrease in Provision of Insured Events of Prior Fiscal

Years (1,675,961) (370,751)Total Incurred Claims and Claim Adjustment Expenses 12,095,802 12,416,459

PAYMENTS:Claims and Claim Adjustment Expenses Attributable to

Insured Events of the Current Fiscal Year 2,830,849 3,422,412Claims and Claim Adjustment Expenses Attributable to

Insured Events of Prior Fiscal Years 9,486,125 6,395,749Total Payments 12,316,974 9,818,161Discounted Unpaid Claims and Claim AdjustmentExpenses at End of Fiscal Year $35,317,877 $35,539,049COMPONENTS:

Provision for Claims (Current) $ 10,077,587 $ 8,495,738Claims Reserves 4,879,422 6,898,002Claims Incurred But Not Reported 18,344,175 17,960,519Unallocated Loss Adjustment Liability 2,016,693 2,184,790Total Claims Liability $35,317,877 $35,539,049

At September 30, 2011, unpaid losses of $36,780,659 are presented at their net present value of $35,317,877. These losses are discounted at a rate of 2%.

At September 30, 2010, unpaid losses of $36,614,282 are presented at their net present value of $35,539,049. These losses are discounted at a rate of 2%.

(8) Operating LeasesACWA/JPIA owns its previously occupied building and leases it out under separate operating leases. ACWA/JPIA intends to sell this building when the market is more favorable. Total gross rental income received during the years ended September 30, 2011 and 2010 was $71,172 and $77,497, respectively.

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Minimum future rentals to be received under these leases as of September 30

Year EndingSeptember 30, Amounts

2012 $ 55,4092013 49,8492014 49,8492015 49,8492016 49,849

Thereafter 91,483TOTAL $346,288

(9) Net Assets DesignationsThere are three categories that make up net assets: the Catastrophic Reserve (CAT) Fund, Self Insured Excess Fund, and the RPA Stabilization Fund. The CAT Fund is established to protect members from excessive losses, shared by all members in a given policy year. Contributions to the CAT Fund are typically calculated as 10% of premiums earned for the Liability, Workers’ Compensation, and Underground Storage Tank Programs. The Self Insured Excess Fund is established to minimize the costs of the liability and workers’ compensation excess insurance. The RPA Stabilization Fund is established to minimize excessive RPA’s for prior policy years.

Net assets are designated in the following manner:

September 30: 2011 2010Catastrophic Reserve (CAT) Fund $32,638,138 $30,063,621Self Insured Excess Fund 3,372,714 2,635,837RPA Stabilization Fund 11,301,192 11,302,416Net Assets $47,312,044 $44,001,874

(10) Joint VenturesACWA/JPIA participated in a joint venture under a joint powers agreement with Local Agency Workers’ Compensation Excess (LAWCX) during the fiscal years 1992-93; 1993-94; and 1994-95. The relationship between ACWA/JPIA and LAWCX is such that LAWCX is not a component unit of ACWA/JPIA for financial reporting purposes.

LAWCX arranges for and provides excess workers’ compensation coverage for its members. A board consisting of a representative from each member agency governs LAWCX. The board controls the operations of LAWCX, including selection of management and approval of operating budgets, independent of any influence by the member agencies beyond their representation on the board. Each member agency pays a premium commensurate with the level of coverage requested and shares surpluses and deficits proportionate to its participation in LAWCX.

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LAWCX prepares separate annual financial statements, which may be obtained from Bickmore Risk Services, Inc., 1750 Creekside Oaks Drive, Suite 200, Sacramento, CA 95833.

ACWA/JPIA also participated in a joint venture under a joint powers agreement with ACWA Health Benefits Authority (HBA). The relationship between ACWA/JPIA and HBA is such that HBA is not a component unit of ACWA/JPIA for financial reporting purposes.

HBA arranges for and provides employee medical and dental benefits for its members. Amember elected board governs HBA. The board controls the operations of HBA, including selection of management and approval of operating budgets, independent of any influence by the member agencies. Each member agency pays a premium commensurate with the level of benefits requested and shares surpluses and deficits proportionate to its participation in HBA.

HBA prepares separate annual financial statements, which may be obtained from ACWA Health Benefits Authority, 4600 Northgate Blvd., Suite 100, Sacramento, CA 95834-1121.

(11) Pension PlanPlan Description - ACWA/JPIA’s defined benefit pension plan, the Miscellaneous Plan of ACWA/JPIA, provides retirement (2% at age 60) and disability benefits, annual cost-of-living adjustments, and death benefits to plan members and beneficiaries. The Miscellaneous Plan of ACWA/JPIA is part of the Public Agency portion of the California Public Employees’ Retirement System (CalPERS), a cost-sharing multiple-employer plan administered by CalPERS, which acts as a common investment and administrative agent for participating public employers within the State of California. State statutes within the Public Employees’ Retirement Law establish a menu of benefit provisions as well as other requirements.ACWA/JPIA selects optional benefit provisions from the benefit menu by contract with CalPERS and adopts those benefits through board approval. ACWA/JPIA’s additionallyelected benefits are the highest 12 months of pay for the final compensation, post retirement survivor, improved non-industrial disability allowance, and fourth level 1959 survivor benefits. CalPERS issues a separate comprehensive annual financial report. Copies of the CalPERS annual financial report may be obtained from the CalPERS Executive Office, 400 Q Street, Sacramento, California 95814.

Funding Policy - Active plan members in the Miscellaneous Plan of ACWA/JPIA are required to contribute 7% of their annual covered salary. ACWA/JPIA is required to contribute the actuarially determined remaining amounts necessary to fund the benefits for its members. The actuarial methods and assumptions used are those adopted by the CalPERS Board of Administration. The board approved the prepayment of $461,840 for ACWA/JPIA’s Side Fundwhich was paid to CalPERS during fiscal year 2008-09. This reduced the rate from the original rate of 10.107% by 1.826% for a final rate of 8.281% beginning June 28, 2009. The required employer contribution rate for the period of October 1, 2010 through June 30, 2011 was 7.995%. Beginning July 1, 2011 the rate was 8.902%. The contribution requirements of the plan members are established by State statute and the employer contribution rate is established and may be amended by CalPERS.

Beginning in fiscal year 1998-99, ACWA/JPIA also pays the employees’ portion of their CalPERS salary reduction, provided the employee has been employed for five years or more. For ACWA/JPIA fiscal years 2011 and 2010, the contribution for the employees’ portion of

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CalPERS amounted to $170,350 and $157,690, respectively.

Annual Pension Cost - For fiscal year 2010-11, ACWA/JPIA’s annual pension cost and contribution was $234,190. For fiscal year 2009-10, ACWA/JPIA’s annual pension cost and contribution was $227,462. ACWA/JPIA’s covered payroll for PERS was $2,856,377 and $2,768,238 for the years ended September 30, 2011 and 2010, respectively. The required contribution for fiscal year 2010-2011 was determined as part of the June 30, 2008 actuarial valuation using the entry age normal actuarial cost method with the contributions determined as a percent of pay. The actuarial assumptions included a 7.75% investment rate of return (net of administrative expenses); (b) projected salary increases that vary by duration of service ranging from 3.25 to 14.45% for miscellaneous members, (c) an inflation component of 3.0% and payroll growth of 3.25%. Changes in liability due to plan amendments, changes in actuarial assumptions, or changes in actuarial methods are amortized as a level percentage of payrolls on a closed basis over fifteen years. The actuarial value of the Miscellaneous Plan of ACWA/JPIA was determined using a technique that smoothes the effect of short-term volatility in the market value of investments over a fifteen year period. For each of the fiscal years shown below, ACWA/JPIA contributed at the actuarially determined rate provided by CalPERS actuaries.

Annual Pension Costs, representing the payment of all contributions required by CALPERS, for the last three fiscal years were as follows:

Fiscal Year

Ending

AnnualPension

Cost(APC)

Percentageof APC

Contributed

NetPension

Obligation9/30/2009 $274,528 100.00% $09/30/2010 $227,462 100.00% $09/30/2011 $234,190 100.00% $0

The schedule of funding progress presents multi-year trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liability for benefits. As required by State law effective July 1, 2005, ACWA/JPIA’sMiscellaneous Plan was terminated and the employees in the plan were required by CALPERS to join a state-wide pool. CALPERS’ latest actuarial value (which differs from market value) and funding progress for the state-wide pool is shown below:

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ValuationDate

AccruedLiabilities

(AL)

ActuarialValue of

Assets (AVA)

UnfundedLiabilities

(UL)

FundedRatio

(AVA/AL)

AnnualCoveredPayroll

UL as a % of

Payroll

6/30/2005 $484,351,523 $459,996,995 $24,354,528 95.0% $174,127,476 14.0%6/30/2006 $478,122,215 $454,602,459 $23,519,756 95.1% $170,458,082 13.8%6/30/2007 $498,934,859 $479,520,670 $19,414,189 96.1% $171,052,819 11.4%6/30/2008 $532,483,463 $513,147,099 $19,336,364 96.4% $183,387,608 10.5%6/30/2009 $582,841,869 $553,953,526 $28,888,343 95.0% $184,319,666 15.7%6/30/2010 $624,423,437 $594,492,164 $29,931,273 95.2% $186,777,830 16.0%

(12) Retiree Medical BenefitsDuring fiscal year 2008-09, ACWA/JPIA implemented the provisions of Governmental Accounting Standards Board Statement No. 45,

. This Statement establishes uniform financial reporting standards for employers providing postemployment benefits other than pensions (OPEB). Required disclosures are presented below.

ACWA/JPIA employees who retire at age 55 or older with a minimum of ten years of service with the organization are eligible to receive lifetime medical benefits. Benefits are also provided to spouses and surviving spouses of participating retirees. As of September 30, 2011, there were eight participants receiving these health care benefits.ACWA/JPIA contributes 100% of the cost of coverage for employees who retire with age plus years of service equal to 75 or more.

The amount of benefit a retiree receives is based on the following schedule:

Age + Years of Service 65 66 67 68 69 70 71 72 73 74 75+

Percentage of Premium

50% 55% 60% 65% 70% 75% 80% 85% 90% 95% 100%

During fiscal year 2008-09, ACWA/JPIA joined the California Employers’ Retiree Benefit Trust (CERBT), an agent multiple-employer plan administered by CalPERS, consisting of an aggregation of single-employer plans. The CERBT issues a publicly available financial report that includes financial statements and required supplementary information. That report may be obtained from the California Public Employees’ Retirement System, CERBT, P.O. Box 942703, Sacramento, CA 94229-2703.

Funding Policy and Actuarial Assumptions - ACWA/JPIA’s policy is to prefund these benefits by accumulating assets with CERBT discussed above pursuant to the ACWA/JPIA’s Executive Committee approval in March 2009. The annual required contribution (ARC) was determined as part of an October 1, 2010 actuarial valuation using the entry age normal cost method. This is a projected benefit cost method, which takes into account those benefits that

111



are expected to be earned in the future as well as those already accrued. The actuarial assumptions included (a) 7.75% Investment rate of return, (b) 3.25% annual rate of increase in payroll (c) health care cost trend rates from 5.5% to 7.6%. The actuarial methods and assumptions used include techniques that smooth the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets. Actuarial calculations reflect a long-term perspective and actuarial valuations involve estimates of the value of reported amounts and assumptions about the probability of events far into the future. Actuarially determined amounts are subject to revision at least triennially as results are compared to past expectations and new estimates are made about the future. The ACWA/JPIA’s OPEB unfunded actuarial accrued liability is being amortized as a level percentage of projected payroll using a 30 year amortization period on a closed basis. The study indicates that as of October 1, 2010, the actuarial accrued liability was estimated to be $3,640,718.

Funding Progress and Funded Status - Generally accepted accounting principles permit contributions to be treated as OPEB assets and deducted from the Actuarial Accrued Liability when such contributions are placed in an irrevocable trust or equivalent arrangement. As ACWA/JPIA is fully funded during the fiscal year 2010-11, no contributions were made to the Plan. As a result, ACWA/JPIA has calculated and recorded the Net OPEB Asset, representing the normal cost of the ARC, amortization and contributions, as presented below:

September 30: 2011 2010Annual required contribution $127,730 $175,339Interest on net OPEB obligation (196,881) (203,583)Adjustment to annual required contribution 163,981 177,101Annual OPEB cost 94,830 148,857

Contributions made:Premiums paid 80,014 52,419Premiums reimbursed by CERBT (80,014) (52,419)

Net contributions 0 0

Change in net OPEB asset 94,830 148,857Net OPEB Obligation (Asset) at beginning of year (2,540,401) (2,689,258)

Net OPEB Obligation (Asset) at end of year ($2,445,571) ($ 2,540,401)

The actuarial accrued liability (AAL) representing the present value of future benefits at September 30, 2011 and 2010 was estimated to be $3,640,718 and $3,281,365, respectively. The AAL was fully funded due to the transferring of assets into CERBT during the fiscal year September 30, 2009. The Plan’s annual OPEB cost and actual contributions for the fiscal year ended September 30 are set forth as follows:

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ASSOCIATION OF CALIFORNIA WATER AGENCIES JOINT POWERS INSURANCE AUTHORITY

NOTES TO FINANCIAL STATEMENTS Years Ended September 30, 2011 and 2010

Fiscal YearOPEB

Annual CostActual

Contribution

Percentage of Annual OPEB

CostContributed

Net OPEB Obligation (Asset)

9/30/2009 $338,201 $3,027,459 877% ($2,689,258) 9/30/2010 148,857 0 0% ( 2,540,401) 9/30/2011 94,830 0 0% ( 2,445,571)

The Schedule of Funding Progress presents trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liability for benefits. Contributions to the CERBT did not begin until April 2009, thus these assets were excluded from the October 1, 2008 actuarial study. Trend data from the October 1, 2010 actuarial study is presented following:

ActuarialValuation

Date

ActuarialValue of Assets

(A)

Entry Age ActuarialAccruedLiability

(B)

Unfunded(Overfunded)

ActuarialAccruedLiability (A - B)

FundedRadio(A/B)

Covered Payroll

( C )

Unfunded(Overfunded)

ActuarialLiability as

Percentage of CoveredPayroll

(A - B)/C]

10/1/2008 $0 $2,965,074 $2,965,074 0.00% $2,715,061 0%

10/1/2010 $4,509,414 $3,640,718 ($868,696) 1.23% $2,856,377 (30%)

(13) Deferred Compensation PlanACWA/JPIA employees may defer a portion of their compensation under an employer sponsored deferred compensation plan created in accordance with Internal Revenue Code Section 457 and administered by ING Direct. Under this plan, participants are not taxed on the deferred portion of their compensation until distributed to them; distributions may be made only at termination, retirement, death or in an emergency as defined by the Plan.

The laws governing deferred compensation plan assets require plan assets to be held by a Trust for the exclusive benefit of plan participants and their beneficiaries. Since the assets held under these new plans are not ACWA/JPIA’s property and are not subject to its control, they have been excluded from these financial statements.

(14) Pending LitigationACWA/JPIA has purchased excess insurance policies with the Insurance Company of the State of Pennsylvania (ISOP). ACWA/JPIA contends that the ISOP policy covers certain lawsuits that are currently pending with a member district. ISOP has declined all coverage. The costs of defending the underlying claims could ultimately total $3 million in additional exposure which ACWA/JPIA plans to pay if ISOP continues to deny coverage for which ACWA/JPIA will pursue recovery against ISOP. At year end September 30, 2011 ACWA/JPIA had paid $288,989 in this excess layer for which it has booked a receivable for excess insurance proceeds.

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REQUIRED SUPPLEMENTARY INFORMATION

114

Workers'Liability Property Compensation

Program Program Program TotalUnpaid Claims and Claim Adjustment at Beginning of the Fiscal Year: 13,818,289$ 181,130$ 21,539,630$ 35,539,049$

Incurred Claims and Allocated Claim Adjustment Expense: Provisions for Insured Events of the Current Fiscal Year 8,243,443 607,779 4,920,541 13,771,763 Increase (Decrease) in Provision for Incurred Events of Prior Fiscal Years 1,362,498 173,649 (3,212,108) (1,675,961)

Total Incurred Claims and Allocated Claim Adjustment Expenses: 9,605,941 781,428 1,708,433 12,095,802

Payments: Claims and Allocated Claim Adjustment Expenses Attributable to Insured Events of the Current Fiscal Year 1,304,594 420,946 1,105,309 2,830,849 Claims and Allocated Claim Adjustment Expenses Attributable to Insured Events of Prior Fiscal Years 6,585,987 245,036 2,655,102 9,486,125

Total Payments: 7,890,581 665,982 3,760,411 12,316,974

Discounted Unpaid Claims and Allocated Claim Adjustment Expense at the End of the Fiscal Year: 15,533,649$ 296,576$ 19,487,652$ 35,317,877$

Components:Provision for Claims (Current) 6,901,011$ 296,576$ 2,880,000$ 10,077,587$Claims Reserves 540,090 0 4,339,332 4,879,422Claims IBNR 7,737,686 0 10,606,489 18,344,175Unallocated Loss Adjustment Liability 354,862 0 1,661,831 2,016,693Total Claims Liablility 15,533,649$ 296,576$ 19,487,652$ 35,317,877$


RECONCILIATION OF CLAIMS LIABILITIES BY TYPE OF CONTRACT

SEPTEMBER 30, 2011

11

5

11

6

11

7

11

8


Notes to Required Supplementary InformationYear Ended September 30, 2011

(1) Reconciliation of Claims Liabilities by Type of ContractThese schedules represent the changes in claims liabilities in the past year for the liability, property, and workers’ compensation programs.

(2) Claims Development InformationThe table illustrates how earned revenue (net of reinsurance) and investment income compare to related costs of loss (net of loss assumed by reinsurers) and other expenses as of the end of each of the past ten years.

The rows of the table are defined as follows:

1. This line shows the total of each fiscal year’s gross earned contribution revenue and investment revenue, contribution revenue ceded to reinsurers, and net earned contribution revenue and reported investment revenue.

2. This line shows each fiscal year’s other operating costs including overhead and claims expense not allocable to individual claims.

3. This line shows the gross incurred claims and allocated claim adjustment expense (both paid and accrued) as originally reported at the end of the first year in which the event that triggered coverage under the contract occurred.

4. This section of ten rows shows the cumulative net amounts paid as of the net of successive years for each policy year.

5. This line shows the latest re-estimated amount of claims assumed by reinsurers as of the end of the current year for each accident year.

6. This section shows the annually re-estimated results from new information received on known claims, reevaluation of existing information on known claims, and emergence of new claims not previously known.

7. This line compares the latest re-estimated net incurred claims amount to the amount originally established (line 3) and shows whether this latest estimate of net claims cost is greater or less than originally thought.

As data for individual policy years mature, the correlation between original estimates and re-estimated amounts commonly is used to evaluate the accuracy of net incurred claims currently recognized in less mature policy years. The columns of the table show data for successive policy years.

119

SUPPLEMENTARY INFORMATION

120

DAM PASS - WORKERS' STORAGE

LIABILITY FAILURE PROPERTY THROUGHS COMP TANKS UTEL TOTAL

REVENUE:

Deposit Premiums Earned 309,790,450$ 10,740,050$ 57,582,810$ 5,234,000$ 138,648,927$ 1,205,716$ 357,585$ 523,559,538$

Net Investment & Other Income 40,828,735 2,927,254 13,100,835 235,240 71,745 57,163,809

Less: Doubtful Recoveries (1,789,128) (3,000) (1,792,128)

Total Revenue 348,830,057 10,740,050 60,510,064 5,234,000 151,746,762 1,440,956 429,330 578,931,219

EXPENSES:

Paid Claims - JPIA - Primary 131,410,794 9,406,616 45,549,962 28,119 256,404 186,651,895

Expected "Aggregate" Excess Insur.Recoveries (2,167,371) (2,167,371)

Reserves for Reported Claims - Primary 7,441,101 282,152 7,219,332 14,942,585

Reserves for IBNR Claims/Claims Dev. - Primary 7,737,687 10,606,489 18,344,176

Unallocated Loss Adj. Expense 354,862 14,425 1,661,831 2,031,118

Claims Expense Sub-Total 144,777,073 0 9,703,193 0 65,037,614 28,119 256,404 219,802,403

Purchased Excess Insurance 90,247,430 10,598,436 29,993,271 4,885,626 13,101,545 558,466 200,716 149,585,490

General & Administrative Expenses 46,238,973 141,614 6,619,179 348,374 31,902,055 61,825 30,419 85,342,439

Total Expenses 281,263,476 10,740,050 46,315,643 5,234,000 110,041,214 648,410 487,539 454,730,332

Catastrophic Fund Contributions 31,874,984 12,272,162 120,564 35,759 44,303,469

Self Insured Excess Fund 1,146,235 2,226,480 3,372,715

Approriated Catastrophic Funds for Members (680,806) (680,806)

EXCESS REVENUE OVER EXPENSES

Retro Prem Adj (Due From Member) 35,226,168$ 0$ 14,194,421$ 0$ 27,206,906$ 671,982$ (93,968)$ 77,205,509$


SCHEDULE OF REVENUE AND EXPENSES BY PROGRAMCUMULATIVE FROM INCEPTION THROUGH SEPTEMBER 30, 2011

12

1

STATISTICAL SECTION

122

STATISTICAL SECTION

This part of the Association of California Water Agencies Joint Powers Insurance Authority’s (ACWA/JPIA) comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about ACWA/JPIA’s overall financial health.

Financial TrendsThese schedules contain trend information to help the reader understand how ACWA/JPIA’s financial performance and well-being have changed over time. They show how revenues and expenses have developed over years. They show how the Net Assets have increased.

PageStatements of Net Assets……………………………….……………………………........43 Statements of Revenues, Expenses and Changes in Net Assets…………………..…44 Revenues by Program……………………………………………………………….……..45 Expenses by Program …………………………………………………….……………….46 Schedule of Rate Stabilization Fund Activity…………………………….………………47

Demographic and Economic InformationThese schedules offer demographic and economic information indicators to help the reader understand the environment with ACWA/JPIA’s financial activities take place. The number of liability, property and workers’ compensation claims is an indicator of the claims expenses. Payrolls for liability and workers’ compensation, together with claims experience are an indicator for premium revenues. Property values are indicators for property premiums. PageEconomic Statistics…………………………………………………………………………48 Covered Payrolls/Property Values……..…………………………………………………49

Schedules showing trends for property tax rates and revenues along with corresponding assessed valuations are not presented since ACWA/JPIA does not levy such taxes.

Schedules showing bonded debt and related legal debt ratios are also not applicable.

123

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Assets

Current assets 45,756,982$ 53,332,190$ 36,935,218$ 32,566,115$ 75,048,968$ 90,677,479$ 69,852,266$ 74,941,366$ 48,403,357$ 47,799,175$

Noncurrent assets 16,791,345 20,551,594 46,356,900 59,091,461 27,167,262 20,799,234 48,012,298 49,125,661 79,562,048 78,970,791

TOTAL ASSETS 62,548,327 73,883,784 83,292,118 91,657,576 102,216,230 111,476,713 117,864,564 124,067,027 127,965,405 126,769,966

Liabilities

Current liabilities 27,080,141 29,208,311 29,646,838 36,876,348 29,496,534 36,651,610 35,783,642 38,564,342 38,507,711 41,867,839

Noncurrent liabilities 18,096,555 24,838,629 32,432,476 29,753,515 43,852,343 43,299,236 43,720,624 45,429,021 45,455,820 37,590,083

TOTAL LIABILITIES 45,176,696 54,046,940 62,079,314 66,629,863 73,348,877 79,950,846 79,504,266 83,993,363 83,963,531 79,457,922

Net Assets

Invested in capital assets 1,116,821 1,208,505 1,182,266 1,119,835 1,039,286 964,200 875,335 978,142 4,974,593 6,862,991

Unrestriced 16,254,810 18,628,339 20,030,538 23,907,878 27,828,067 30,561,667 37,484,963 39,095,522 39,027,281 40,449,053 TOTAL NET ASSETS 17,371,631$ 19,836,844$ 21,212,804$ 25,027,713$ 28,867,353$ 31,525,867$ 38,360,298$ 40,073,664$ 44,001,874$ 47,312,044$


STATEMENTS OF NET ASSETSLast Ten Fiscal Years

Fiscal Year September 30,

12

4

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

REVENUES

Member premiums 19,872,558$ 24,954,395$ 29,615,344$ 30,917,293$ 34,421,079$ 30,636,804$ 31,155,506$ 29,469,780$ 30,328,626$ 32,175,664$

Retrospective premium adjustments (1,567,751) 4,085,368 (3,497,666) (7,944,835) (17,257,023) (11,224,912) (4,279,423) (8,387,426) (3,276,537) (4,026,190)

TOTAL OPERATING REVENUES 18,304,807 29,039,763 26,117,678 22,972,458 17,164,056 19,411,892 26,876,083 21,082,354 27,052,089 28,149,474

EXPENSES

Claims paid 8,271,688 9,933,731 8,712,505 8,308,231 8,422,347 10,361,897 10,075,155 9,134,958 9,818,161 12,316,974

Change in excess aggregate recovery (181,405) (92,571) (52,985) 0 0 (95,777) 0 (88,462) (87,603) (215,529)

Change in claim reserves 699,085 934,116 4,270,269 (3,210,048) (1,379,012) (448,216) (1,086,328) 2,281,381 2,112,946 (451,162) Change in claims incurred but not reported 1,231,843 6,686,097 582,625 2,847,345 (2,336,107) (917,405) (642,041) (65,834) 352,164 383,658 Change in unallocated loss adjustment expenses (103,603) 832,613 572,586 478,982 (431,939) (161,063) (109,356) 63,789 133,186 (153,673)

TOTAL CLAIMS EXPENSE 9,917,608 18,293,986 14,085,000 8,424,510 4,275,289 8,739,436 8,237,430 11,325,832 12,328,854 11,880,268

Excess insurance 4,782,947 5,710,834 7,452,496 7,584,856 7,443,235 7,974,435 8,447,857 8,439,434 8,350,340 8,507,507

General and administrative 3,103,078 3,438,531 3,953,155 4,108,304 4,414,648 4,453,752 4,837,353 5,841,653 5,278,142 5,664,370

Depreciation 85,946 69,376 94,642 102,237 95,289 87,086 88,865 57,051 51,921 234,085

TOTAL OPERATING EXPENSES 17,889,579 27,512,727 25,585,293 20,219,907 16,228,461 21,254,709 21,611,505 25,663,970 26,009,257 26,286,230

OPERATING INCOME (LOSS) 415,228 1,527,036 532,385 2,752,551 935,595 (1,842,817) 5,264,578 (4,581,616) 1,042,832 1,863,244

NONOPERATING REVENUES AND EXPENSES

Net investment income 1,569,625 938,991 843,575 910,121 2,894,232 4,501,331 1,569,853 6,294,982 2,885,378 1,446,926

Other (12,000) (814) 0 0 9,813 0 0 0 0 0 CHANGE IN NET ASSETS 1,972,853$ 2,465,213$ 1,375,960$ 3,662,672$ 3,839,640$ 2,658,514$ 6,834,431$ 1,713,366$ 3,928,210$ 3,310,170$

STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS

JOINT POWERS INSURANCE AUTHORITYASSOCIATION OF CALIFORNIA WATER AGENCIES

Last Ten Fiscal Years

Fiscal Year Ended September 30,

12

5

Change in RatePass- Workers' Underground Stabilization

Fiscal Year Liability Dam Property Througs Compensation Storage Tanks UTEL Fund Totals2001-02 10,609,587$ 245,704$ 1,327,740$ 129,874$ 7,279,383$ 16,417$ 0$ 253,727$ 19,862,432$

53.42% 1.24% 6.68% 0.65% 36.65% 0.08% 0.00% 1.28%2002-03 12,954,662 245,704 2,478,981 230,957 12,193,647 14,719 0 1,859,270 29,977,940

43.21% 0.82% 8.27% 0.77% 40.68% 0.05% 0.00% 6.20%2003-04 9,002,687 254,174 2,524,245 244,340 15,430,449 15,903 0 (510,545) 26,961,253

33.39% 0.94% 9.36% 0.91% 57.23% 0.06% 0.00% -1.89%2004-05 5,759,133 249,581 4,834,686 232,687 13,333,606 14,296 0 (541,410) 23,882,579

24.11% 1.05% 20.24% 0.97% 55.83% 0.06% 0.00% -2.26%2005-06 15,874,115 306,958 2,501,186 219,013 1,668,654 14,603 0 (516,428) 20,068,101

79.10% 1.53% 12.46% 1.09% 8.31% 0.07% 0.00% -2.56%2006-07 14,229,262 316,615 4,388,159 273,531 5,277,836 13,891 (64,999) (521,072) 23,913,223

59.50% 1.32% 18.35% 1.14% 22.07% 0.06% -0.27% -2.17%2007-08 14,304,593 315,872 2,869,123 298,048 6,752,445 12,415 0 3,893,440 28,445,936

50.29% 1.11% 10.09% 1.05% 23.74% 0.04% 0.00% 13.68%2008-09 14,546,456 288,670 3,108,219 275,582 7,601,621 (31,136) (35,759) 1,623,683 27,377,336

53.13% 1.05% 11.35% 1.01% 27.77% -0.11% -0.13% 5.93%2009-10 11,993,302 272,341 3,431,116 263,801 12,222,543 10,822 0 1,743,542 29,937,467

40.06% 0.91% 11.46% 0.88% 40.83% 0.04% 0.00% 5.82%2010-11 18,307,796 272,341 3,785,935 258,198 6,963,609 9,747 0 (1,226) 29,596,400

61.86% 0.92% 12.79% 0.87% 23.53% 0.03% 0.00% 0.00%


REVENUES BY PROGRAMFor the Fiscal Year Ending September 30,

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6

OPEBPass- Workers' Underground Reclass Not

Fiscal Year Liability Dam Property Througs Compensation Storage Tanks UTEL Allocated Totals2001-02 9,407,886$ 245,704$ 1,327,740$ 129,874$ 6,764,983$ 13,392$ 0$ 0$ 17,889,579$

52.59% 1.37% 7.42% 0.73% 37.82% 0.07% 0.00% 0.00%2002-03 11,789,064 245,704 2,478,981 177,544 53,413 12,756,124 11,897 0 27,512,727

42.85% 0.89% 9.01% 0.65% 0.19% 46.37% 0.04% 0.00%2003-04 8,614,843 254,174 2,524,245 244,340 13,934,784 12,907 0 0 25,585,293

33.67% 0.99% 9.87% 0.96% 54.46% 0.05% 0.00% 0.00%2004-05 4,419,004 249,581 4,835,670 232,687 10,472,452 11,492 0 (45,675) 20,175,211

21.90% 1.24% 23.97% 1.15% 51.91% 0.06% 0.00% -0.23%2005-06 13,719,826 306,958 2,501,186 219,013 (485,601) 11,802 0 (44,723) 16,228,461

84.54% 1.89% 15.41% 1.35% -2.99% 0.07% 0.00% -27.00%2006-07 12,756,384 316,615 4,388,159 273,531 3,622,251 11,066 (65,000) (48,297) 21,254,709

60.02% 1.49% 20.65% 1.29% 17.04% 0.05% -0.31% -0.23%2007-08 12,226,757 315,872 2,869,122 298,048 5,924,044 9,590 0 (31,928) 21,611,505

56.58% 1.46% 13.28% 1.38% 27.41% 0.04% 0.00% -0.15%2008-09 14,437,187 288,670 3,108,219 275,582 7,270,670 6,461 0 277,181 25,663,970

56.25% 1.12% 12.11% 1.07% 28.34% 0.03% 0.00% 1.08%2009-10 11,206,756 272,341 3,431,116 263,801 10,826,804 8,439 0 0 26,009,257

43.09% 1.05% 13.19% 1.01% 41.63% 0.03% 0.00% 0.00%2010-11 16,161,779 272,341 3,785,935 258,198 5,797,445 10,532 0 0 26,286,230

61.48% 1.04% 14.40% 0.98% 22.06% 0.04% 0.00% 0.00%


EXPENSES BY PROGRAMFor the Fiscal Year Ending September 30,

12

7

Fiscal Year 2002 2003 2004 2005 ** 2006 2007 2008 2009 2010 2011LiabilityPayroll Adjustments * (216,344)$ (151,463)$ (273,528)$ 0$ (950,168)$ (194,895)$ (424,268)$ (417,934)$ (360,462)$ (233,722)$ RPA's * 1,819,472 2,438,571 1,201,922 0 2,796,161 1,065,131 4,205,849 (1,500,203) 1,598,011 1,602,017 10% Program * 0 0 0 0 0 (912,697) (453,659) (610,203) (546,891) (1,165,719) Cat Funds * 0 0 979,257 0 0 0 0 997,823 1,000,197 0

PropertyRPA's * 401,673 584,465 554,540 0 442,540 229,549 19,494 34,265 593,611 496,479

Workers' CompRPA's * (1,307,711) (507,759) (1,907,977) 0 (2,190,329) 472,072 3,009,393 6,489,431 7,473,796 5,745,357

Underground -Storage TanksRPA's * 0 0 0 0 0 0 0 169,480 0 10,713 Cat Funds * 0 0 0 0 0 0 0 40,274 0 2,521

UTELRPA's * 0 0 0 0 0 0 (93,969) 0 0 0 Cat Funds * 0 0 0 0 0 0 0 35,762 0 0

Totals 697,090$ 2,363,814$ 554,214$ 0$ 98,204$ 659,160$ 6,262,840$ 5,238,695$ 9,758,262$ 6,457,646$

Cash FlowMembers Billed 89,008 261,345 91,169 316,594 683,283 236,074 59,044 56,923 0 89 Refunds to Members (532,371) (765,889) (1,155,928) (858,004) (1,297,915) (1,416,305) (2,428,441) (3,671,934) (8,014,717) (6,458,960)

Net Total 253,727$ 1,859,270$ (510,545)$ (541,410)$ (516,428)$ (521,071)$ 3,893,443$ 1,623,684$ 1,743,545$ (1,225)$

* The Rate Stabilization Fund (RSF) contains the Retrospective Premium Adjustments (RPA's), Liability Payroll Adjustments, and closed Catastrophic Funds. For qualifying members of the 10% Liability Program, the RSF is used to reduce current Liability Premiums. Where noted "*" a bracketed number "( )" means the members owed the JPIA funds and it reduces the RSF account while a positive amount increases the account. Each September 30th members' accounts are reconciled. Active members' with accounts over 60% of their current basic Liability Program Premium receive a refund.

** The 2005 fiscal year RSF process was recorded in the 2006 fiscal year.

SCHEDULE OF RATE STABILIZATION FUND ACTIVITYFor the Fiscal Years Ending September 30


12

8

Fiscal Year 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Liability

Total Number of Claims (Cumulative) 7,295 7,686 8,018 8,352 8,717 9,015 9,275 9,551 9,769 10,063

Closed Claims (Cumulative) 7,095 7,470 7,805 8,139 8,480 8,806 9,130 9,381 9,598 9,897

Open Claims (at year end) 200 216 213 213 237 209 145 170 171 166

Covered Payroll (Cumulative) 3,882,325$ 4,200,897$ 4,540,129$ 4,905,511$ 5,273,435$ 5,738,277$ 6,139,822$ 6,577,859$ 7,029,623$ 7,482,521$

Property





Workers' Compensation





Number of Employees 34 35 35 34 36 37 37 38 39 39

Ratio of Premium to Payroll/TIV

Liability Program 4.06% 3.78% 3.93% 3.78% 4.12% 3.67% 3.64% 3.60% 3.56% 4.14%

Property Program 0.14% 0.16% 0.13% 0.13% 0.12% 0.13% 0.12% 0.11% 0.11% 0.12%

Workers' Comp. Program 3.42% 4.04% 4.55% 4.39% 3.73% 2.68% 2.46% 2.34% 2.40% 2.82%


ECONOMIC STATISTICS(000's Omitted)

For the Fiscal Year September 30,

12

9

00/01 01/02 02/03 03/04 04/05281,161,274 293,025,083 321,945,564 347,874,665 360,896,946177,372,374 192,048,405 242,003,379 293,616,158 312,794,884

00/01 01/02 02/03 03/04 04/051,829,677,454 1,441,234,300 1,586,533,427 2,085,132,904 2,297,805,921

$-

$500,000,000

$1,000,000,000

$1,500,000,000

$2,000,000,000

$2,500,000,000

$3,000,000,000

$3,500,000,000

$4,000,000,000

$4,500,000,000

00/01 01/02 02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11 11/12

ACWA/JPIA PROPERTY TOTAL INSURED VALUES

September 30, 2011

$0

$50,000,000

$100,000,000

$150,000,000

$200,000,000

$250,000,000

$300,000,000

$350,000,000

$400,000,000

$450,000,000

$500,000,000

00/01 01/02 02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11

ACWA/JPIA LIABILITY & WORKERS' COMP PAYROLL

September 30, 2011

Liability W/C

130

OTHER INDEPENDENT AUDITORS’ REPORT

131

INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE

WITH GOVERNMENT AUDITING STANDARDS

Government Auditing Standards,

Internal Control Over Financial Reporting

132

Compliance and other Matters

Government Auditing Standards.

133

Prepared by: David deBernardi, Director of Finance Date Prepared: April 9, 2012

ACWA/JPIA Proposed Operating Budget for Fiscal Year 10/1/2012-13

May 7, 2012

BACKGROUND In March of each year, a proposed operating budget is submitted to the Finance & Audit Committee and then to the Executive Committee for review. At the May conference, the proposed operating budget is presented for approval to the Board of Directors. The budget covers General & Administrative (G&A) expenses for the fiscal year ending September 30, 2013. CURRENT SITUATION The most significant changes to the G&A budget for the fiscal year are an increase in staff salaries and employee benefits (lines 1 and 2). These changes are due to the transition of HBA. The overall increase in the operating budget is 17.9% (line 38). Salaries remain the largest line item in the budget. RECOMMENDATION The Finance & Audit Committee and the Executive Committee have reviewed the Operating Budget for the fiscal year ending September 30, 2013 and both recommend approval by the Board of Directors as presented.

134

dd-BUDGET2012-2013 SALARY latest 3/ 16/ 2012 3:20 PM


GENERAL & ADMINISTRATIVE EXPENSES

APPROVED PROPOSED % OFBUDGETED ACTUAL DIFFERENCE BUDGET BUDGET DIFFERENCE CHANGEFYE 9/30/11 FYE 9/30/11 ACT - BUD FYE 9/30/12 FYE 9/30/13 2012 vs. 2013 12 vs. 13

ACWA/JPIA STAFF SERVICES1 Staff Salaries & Temporary Services 2,942,551$ 2,944,081$ 1,530$ 2,849,479$ 3,347,574$ 498,095$ 17.5%2 Staff Employee Benefits 1,308,418 1,252,970 (55,448) 1,244,091 1,499,152 255,061 20.5%3 Office Buildings 139,320 102,419 (36,901) 130,000 90,000 (40,000) -30.8%4 Postage and Freight 52,500 40,611 (11,889) 53,000 50,000 (3,000) -5.7%5 Telephone Service 42,000 47,855 5,855 45,000 48,000 3,000 6.7%6 JPIA Perspective Printing & Distribution 21,000 17,170 (3,830) 26,000 18,000 (8,000) -30.8%7 Outside Printing 16,500 22,453 5,953 22,000 23,000 1,000 4.5%8 JPIA Office Insurance 7,500 10,440 2,940 9,000 10,000 1,000 11.1%9 General Office Supplies 33,200 39,899 6,699 31,000 31,000 - 0.0%

10 Computer Equipment Software, Office Furniture 35,000 22,020 (12,980) 20,000 18,000 (2,000) -10.0%11 Dues, Subscriptions, & Misc. Publications 19,000 20,519 1,519 23,000 21,000 (2,000) -8.7%12 Staff Ed/Training Seminars & Coursework Reimbs 25,000 16,591 (8,409) 25,000 21,000 (4,000) -16.0%13 Maintenance & Repairs: Office Equip. & Computers 131,000 127,691 (3,309) 135,000 115,000 (20,000) -14.8%14 Depreciation on Capital Assets 244,000 234,085 (9,915) 250,000 250,000 - 0.0%15 Staff Travel Related Expenses* 70,000 60,327 (9,673) 70,000 65,000 (5,000) -7.1%16 Staff Risk Assessment Travel Related Expenses* 38,000 29,383 (8,617) 36,000 30,000 (6,000) -16.7%17 Member Informational Workshops 65,000 85,969 20,969 66,000 86,000 20,000 30.3%18 Lending Library 26,000 21,110 (4,890) 30,000 26,000 (4,000) -13.3%19 Member Safety & Loss Control Incentive Awards 13,000 6,825 (6,175) 7,500 7,000 (500) -6.7%20 Total ACWA/JPIA Staff Services 5,228,989 5,102,418 (126,571) 5,072,070 5,755,726 683,656 13.5%

COMMITTEES & BD. OF DIRECTORS' SERVICES21 Executive Committee Member Expenses 97,000 98,533 1,533 100,000 100,000 - 0.0%22 Finance/Audit Committee & Sub-Committee Expenses 32,500 27,005 (5,495) 31,000 30,000 (1,000) -3.2%23 Semi-Annual ACWA Conf. & Bd of Directors' Expense 35,000 67,419 32,419 50,000 60,000 10,000 20.0%24 Total Committees & Board of Directors' Services 164,500 192,957 28,457 181,000 190,000 9,000 5.0%

EXTERNAL CONSULTING AND PROF. SERVICES25 Insurance Program Actuarial Analysis 25,000 26,230 1,230 24,000 26,000 2,000 8.3%26 Consulting Services 4,000 2,750 (1,250) 5,000 3,000 (2,000) -40.0%27 Occu-Med 95,000 97,224 2,224 97,000 85,000 (12,000) -12.4%28 Target Safety 101,000 108,766 7,766 105,000 118,750 13,750 13.1%29 General Legal/Attorney Services 35,000 36,585 1,585 44,000 50,000 6,000 13.6%30 Specific Claims & Coverage Related Legal Fees 70,000 205,329 135,329 85,000 150,000 65,000 76.5%31 External Claims Administration 75,000 92,297 17,297 85,000 90,000 5,000 5.9%32 ACWA/JPIA Financial Audit 33,000 33,899 899 30,000 35,000 5,000 16.7%33 Insurance Programs Claims Audits 0 0 0 6,000 0 (6,000) 0.0%34 Personnel Consulting Services - - - 5,000 - (5,000) 0.0%35 Total External Consulting / Professional Services 438,000 603,080 165,080 486,000 557,750 71,750 14.8%

36 Health Benefits Operating Expenses - - - - 180,000 180,000 -37 PROGRAM DEVELOPMENT / CONTINGENCIES 100,000 - (100,000) 100,000 200,000 100,000 100.0%

38 TOTAL GENERAL & ADMINISTRATIVE EXPENSES 5,931,489$ 5,898,455$ (33,034)$ 5,839,070$ 6,883,476$ 1,044,406$ 17.9%

13

5

PERCENT OF GROSS PAYROLL

PROPOSED PROPOSED DOLLAR PERCENT BUDGETED PROPOSED PERCENT2011-2012 2012-2013 DIFFERENCE CHANGE 2011-2012 2012-2013 DIFFERENCE CHANGE

SALARIES 2,849,479$ 3,347,574$ 498,095$ 17.5%

PERS 409,229$ 479,077$ 69,848$ 17.1% 14.4% 14.3% -0.1% -0.3%

MEDICARE 39,613 46,737 7,124 18.0% 1.4% 1.4% 0.0% 0.7%

MEDICAL 678,848 811,572 132,724 19.6% 23.8% 24.2% 0.4% 1.8%

DENTAL 32,601 46,173 13,572 41.6% 1.1% 1.4% 0.2% 21.1%

LIFE 14,632 23,269 8,637 59.0% 0.5% 0.7% 0.2% 37.3%

DISABILITY 20,794 23,108 2,314 11.1% 0.7% 0.7% 0.0% -5.5%

EMP.ASSIST.PROG. 1,487 1,741 254 17.1% 0.1% 0.1% 0.0% 0.0%

WORK COMP 32,655 57,832 25,177 77.1% 1.2% 1.7% 0.6% 50.4%

VISION 8,232 9,643 1,411 17.1% 0.3% 0.3% 0.0% 0.0%

UNEMPLOYMENT 6,000 - (6,000) -100.0% 0.2% 0.0% -0.2% -100.0%

SUB TOTAL 1,244,091 1,499,152 255,061 20.5% 43.7% 44.8% 1.1% 2.6%

NON - CASH BENEFITS

VACATION 212,242 248,298 36,056 17.0% 7.5% 7.4% 0.0% -0.4%

SICK LEAVE / HOLIDAY 179,904 212,407 32,503 18.1% 6.3% 6.4% 0.0% 0.6%

TOTAL 1,636,237$ 1,959,856$ 323,619$ 19.8% 57.4% 58.6% 1.1% 2.0%

ACWA/JPIA2012-2013 BUDGET WORK PAPERS - BENEFITS COMPARISON

13

6

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011

ACWA/JPIA General & Administrative Expenses as a Percent of

Assets

Actual G&A Budgeted G&A

13

7

Salaries 49%

Benefits 22%

Other Services 15%

Committees Expense 3%

Professional Services 11%

ACWA/JPIA General & Administrative Expenses

Fiscal year 10/1/12-13

Salaries Benefits Other Services Committees Expense Professional Services

13

8

BUDGET PROPOSED % OFW/O HBA BUDGET DIFFERENCE CHANGE

FYE 9/30/13 FYE 9/30/13 nonHBA vs. HBA w/o vs. withACWA/JPIA STAFF SERVICES

1 Staff Salaries & Temporary Services 3,009,337$ 3,347,574$ 338,237$ 11.2%2 Staff Employee Benefits 1,365,033 1,499,152 134,118 9.8%3 Office Buildings 90,000 90,000 - 0.0%4 Postage and Freight 50,000 50,000 - 0.0%5 Telephone Service 48,000 48,000 - 0.0%6 JPIA Perspective Printing & Distribution 18,000 18,000 - 0.0%7 Outside Printing 23,000 23,000 - 0.0%8 JPIA Office Insurance 10,000 10,000 - 0.0%9 General Office Supplies 31,000 31,000 - 0.0%

10 Computer Equipment Software, Office Furniture 18,000 18,000 - 0.0%11 Dues, Subscriptions, & Misc. Publications 21,000 21,000 - 0.0%12 Staff Ed/Training Seminars & Coursework Reimbs 21,000 21,000 - 0.0%13 Maintenance & Repairs: Office Equip. & Computers 115,000 115,000 - 0.0%14 Depreciation on Capital Assets 250,000 250,000 - 0.0%15 Staff Travel Related Expenses* 65,000 65,000 - 0.0%16 Staff RAS Travel Related Expenses* 30,000 30,000 - 0.0%17 Member Informational Workshops 86,000 86,000 - 0.0%18 Lending Library 26,000 26,000 - 0.0%19 Member Safety & Loss Control Incentive Awards 7,000 7,000 - 0.0%20 Total ACWA/JPIA Staff Services 5,283,371 5,755,726 472,355 8.9%

COMMITTEES & BD. OF DIRECTORS' SERVICES21 Executive Committee Member Expenses 100,000 100,000 - 0.0%22 Finance/Audit Committee & Sub-Committee Expenses 30,000 30,000 - 0.0%23 Semi-Annual ACWA Conf. & Bd of Directors' Expense 60,000 60,000 - 0.0%24 Total Committees & Board of Directors' Services 190,000 190,000 - 0.0%

EXTERNAL CONSULTING AND PROF. SERVICES25 Insurance Program Actuarial Analysis 26,000 26,000 - 0.0%26 Consulting Services 3,000 3,000 - 0.0%27 Occu-Med 85,000 85,000 - 0.0%28 Target Safety 118,750 118,750 - 0.0%29 General Legal/Attorney Services 50,000 50,000 - 0.0%30 Specific Claims & Coverage Related Legal Fees 150,000 150,000 - 0.0%31 External Claims Administration 90,000 90,000 - 0.0%32 ACWA/JPIA Financial Audit 35,000 35,000 - 0.0%33 Insurance Programs Claims Audits 0 0 - 0.0%34 Personnel Consulting Services - - - 0.0%35 Total External Consulting / Professional Services 557,750 557,750 - 0.0%

36 Health Benefits Operating Expenses - 180,000 180,000 -37 PROGRAM DEVELOPMENT / CONTINGENCIES 100,000 200,000 100,000 100.0%

38 TOTAL GENERAL & ADMINISTRATIVE EXPENSES 6,131,121$ 6,883,476$ 752,355$ 12.3%

JOINT POWERS INSURANCE AUTHORITYASSOCIATION OF CALIFORNIA WATER AGENCIES

GENERAL & ADMINISTRATIVE EXPENSES

13

9

Prepared by: Dianna Sutton, Finance Manager Date Prepared: April 11, 2012

ACWA/JPIA Investment Portfolio Update

May 7, 2012

BACKGROUND The Investment Portfolio reports being reviewed with this packet are as of March 31, 2012. PFM Asset Management LLC has been advising the JPIA since November of 2008 and as of March 31, 2012 this includes $72 million of the JPIA’s portfolio. CURRENT SITUATION The overall Investment Portfolio had a yield to maturity of 1.318% as of March 31, 2012 compared to 1.642% as of March 31, 2011. The duration was 2.501 as of March 31, 2012 compared to 1.944 as of March 31, 2011. The JPIA meets the liquidity requirements for the next six months. RECOMMENDATION None, for information only.

140

Fixed Income Management Monthly Market Review

March 2012

The views expressed within this material constitute the perspective and judgment of PFM Asset Management LLC (PFMAM) at the time of distribution and are subject to change. Information is obtained from sources generally believed to be reliable and available to the public; however, PFMAM cannot guarantee its accuracy, completeness or suitability. This material is for general information purposes only and is not intended to provide specific advice or recommendation. The information contained in this report is not an offer to purchase or sell any securities.

Economic Highlights • Economists raised their forecasts for first-quarter gross

domestic product growth in the U.S. based on strong consumer spending and improvements in the labor market.

• During its March 13 meeting, the Federal Open Market Committee (FOMC) upgraded its economic outlook but kept the target federal funds rate at near-zero levels. Another possible round of quantitative easing (QE3) has not been ruled out by the Federal Reserve (Fed), but was interpreted as being less likely.

• The National Association of Home Builders reported that the Home Builder Confidence Index for March remained at the highest level since June 2007 after five consecutive months of gains through February.

• The Conference Board’s consumer confidence index came in at 70.2 for March, reflecting continued optimism due to improvements in the jobs market and rising stock prices.

• The Producer Price Index jumped 0.4% in February, the fastest increase in five months, primarily driven by higher energy prices.

• The Institute for Supply Management (ISM) indexes for both manufacturing and non-manufacturing (or services) activity have continued to post numbers over 50, which is considered to be expansion for both sectors. Although manufacturing activity remains healthy, growth in the services sector has begun to outpace manufacturing.

• Both Europe and China showed signs of cooling economic activity amid weaker manufacturing data.

• Oil prices fell modestly from record highs for the year, as Western nations discussed the possibility of releasing some of their oil reserves into the global market.

Bond Markets • The yield curve steepened sharply after the FOMC’s

March 13 meeting, which included a more positive perspective on the economy and less likelihood that the Fed would implement QE3.

• Agency spreads narrowed from already low spreads, benefiting from economic improvement, investors’ search for yield, reductions in new issuance by government-sponsored enterprises, and liquidity measures implemented to ease the European debt crisis.

• Corporate spreads also continued to narrow across the curve, especially on the front end, driven by the expectation that the economic recovery will aid corporate

earnings and that low short-term rates will benefit corporate balance sheets.

• Corporate bonds across the yield curve continued to outperform Treasuries and Agencies due to a brighter outlook for economic recovery and reduced concerns surrounding the European sovereign debt crisis.

Equity Markets • Continued signs of economic recovery and the Fed’s

prolonged commitment to record-low interest rates have continued to push investors towards riskier assets like equities.

• The S&P 500 Index ended March up 12%, its strongest first-quarter return since 1998.

PFM Outlook • Several months of strong economic news have improved

the outlook for the U.S. economy, but we expect interest rates to remain range-bound due to the Fed’s loose monetary policy, worries about Europe and China, and the low level of increases in core prices.

• With short-term investments pegged near zero for the foreseeable future and interest rates staying within a range, investments with maturities in the one- to three-year area are attractive for their income and roll-down potential.

• Federal Agencies have little value at current spreads; in many cases, they are trading at (and in some cases lower than) levels on Treasuries at comparable maturities.

• Most of the excess value in corporate bonds that resulted from the spread-widening in the second half of 2011 is now gone, and there are few corporate names that are attractive currently.

• Mortgage-backed securities retain some value, but uncertainty with regard to the federal housing policy and protracted litigation over mortgage originations are resulting in some unquantifiable event risk.

• In the money market sector, short-term rates are likely to drift lower as seasoned Treasury bills mature, LIBOR stabilizes, and bank deposit issuers resort to alternative financing. With little value in traditional non-Treasury sectors, Treasuries are the investment of choice, as they provide liquidity and flexibility, and the give-up in yield is small when compared with alternatives.

141

Fixed Income Management Monthly Market Review

March 2012

U.S. Treasury Yields Upcoming Indicators to WatchMarch 31, 2011 February 29, 2012 March 31, 2012 Monthly Change (BP) Release Date Release For Consensus Prior

3 Month 0.09% 0.08% 0.07% (0.01%) Apr 04 ISM Non-Manf. Composite MAR 56.8 57.36 Month 0.17% 0.13% 0.13% 0.00% Apr 06 Consumer Credit FEB $12.000B $17.776B2 Year 0.83% 0.30% 0.33% 0.04% Apr 10 Wholesale Inventories FEB 0.50% 0.40%5 Year 2.28% 0.86% 1.04% 0.18% Apr 12 Trade Balance FEB -$52.0B -$52.6B10 Year 3.47% 1.97% 2.21% 0.24% Apr 12 Producer Price Index (MoM) MAR 0.30% 0.40%30 Year 4.33% 2.84% 3.11% 0.27% Apr 12 Producer Price Index (YoY) MAR - - 3.30%

Apr 13 Consumer Price Index (MoM) 0.30% 0.40%Federal Agency Yields Apr 13 Consumer Price Index (YoY) MAR - - 2.90%

March 31, 2011 February 29, 2012 March 31, 2012 Monthly Change (BP) Apr 13 U. of Michigan Confidence APR 76.6 76.23 Month 0.12% 0.11% 0.09% (0.02%) Apr 16 Advance Retail Sales MAR - - 1.10%6 Month 0.17% 0.13% 0.14% 0.01% Apr 17 Housing Starts MAR - - 698K2 Year 1.00% 0.40% 0.42% 0.03% Apr 19 Existing Home Sales MAR - - 4.59M5 Year 2.62% 1.14% 1.30% 0.16% Apr 19 Leading Indicators MAR - - 0.00710 Year 3.73% 2.62% 2.86% 0.23% Apr 25 Durable Goods Orders MAR - - 2.20%20 Year 4.76% 3.63% 3.85% 0.22% Apr 27 GDP QoQ (Annualized) 1Q A - - 3.00%

Spot Prices Benchmark RatesMarch 31, 2011 February 29, 2012 March 31, 2012 Monthly Change March 31, 2011 February 29, 2012 Monthly Change

US Dollars per Euro $1.42 $1.33 $1.33 0.1% 1 Month LIBOR 0.24% 0.24% (0.9%)Crude Oil $/Barrel $106.72 $107.07 $103.02 (3.8%) Fed Funds Target Rate 0.25% 0.25% 0.0%

Short-term federal agency and Treasury securities remain range bound due to the low Federal Funds target rate. High-quality commercial paper continues to be attractive relative to similar maturing Treasury and federal agency securities.

Consistent with the Fed's statement about keeping rates low "until at least through late 2014," the market expects no significant change in the federal funds target rate in the near future.

March 31, 2012

The yield on the two-year U.S. Treasury Note rose by 4 basis points (0.04%) in March.

0.24%0.25%

Domestic stocks continued their positive streak for the month of March due to signs of economic recovery, while Treasury prices fell.

Spreads narrowed across the spectrum of maturities for the month.The shape of the Treasury yield curve moved upward for the month.

0.00%

0.50%

1.00%

1.50%

2.00%

2.50%

3.00%

3.50%

4.00%

4.50%

5.00%

U.S. Treasury Yield Curve

March 31, 2011

February 29, 2012

March 31, 2012

3mo 6mo 2yr 5yr 10yr 30yr

-0.10%0.00%0.10%0.20%0.30%0.40%0.50%0.60%0.70%0.80%0.90%

3 Month 6 Month 2 Year 5 Year 10 Year 20 Year

Difference in Yield Between U.S. Treasuries and Federal Agencies

March 31, 2011 February 29, 2012 March 31, 2012

0.00%

0.25%

Apr-12 Jun-12 Aug-12 Oct-12 Dec-12 Feb-13

Contract Expiration Date

Fed Funds Futures Contracts

February 29, 2012 March 31, 2012

-1.03%

3.29% 2.56%

-0.41%

8.52% 8.54%

-0.18%

-5.27%

Merrill Lynch U.S. TreasuryMaster Index S&P 500 Russell 2000

EAFE (Europe,Australia/Asia, Far East)

Index

Total Return of Major IndicesFor Periods Ended March 31, 2012

Prior Month Past 12 Months

0.00%

0.10%

0.20%

0.30%

0.40%

0.50%

0.60%

Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12

30-Day Money Market Yields

Commercial Paper (A1/P1) Federal Agency Discount Note U.S. Treasury Bill

0.00%

0.50%

1.00%

1.50%

2.00%

2.50%

Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12

2-Year U.S. Treasury Yields

10-Year Average: 2.29%

142

CD's10%

Treasuries33%

Agencies25%

CORP & Medium Term Notes

19%

LAIF12%

Money Markets1%

ACWA/JPIAInvestment Portfolio

March 31, 2012

14

3

$-

$5,000,000

$10,000,000

$15,000,000

$20,000,000

$25,000,000

$30,000,000

$35,000,000

Money Markets

CAMP LAIF CD's Negotiable CD's

Treasuries Agencies Medium Term Notes

ACWA/JPIAInvestment PortfolioMarch 2011 & 2012

3/31/2011 3/31/12 14

4

TOTAL INVESTMENTS $91,783,235

-

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

FY 9/30/2012 FY 9/30/2013 FY 9/30/2014 FY 9/30/2015 FY 9/30/2016 FY 9/30/2017 +5 Years

ACWA/JPIAInvestment Portfolio By Maturity

March 31, 2012

MONEY MKTS LAIF CAMP CD's TREASURIES AGENCIES CORP & MTN 14

5

-1.000%

0.000%

1.000%

2.000%

3.000%

4.000%

5.000%

6.000%

7.000%

9/00 9/01 9/02 9/03 9/04 9/05 9/06 9/07 9/08 9/09 9/10 9/11 3/12

ACWA/JPIAInvestment Yields

March 31, 2012

JPIA Merill Lynch 1-5 LAIF

14

6

ACWA/JPIAPortfolio Management

March 31, 2012

ACWA/JPIA

Portfolio Summary

% ofPortfolio

BookValueInvestments

MarketValue

ParValue

YTM365 Equiv.

Days toMaturity

YTM360 Equiv.

YTM

Certificates of Deposit - Bank 5,998,410.00 2407.45 1.1211.1375,998,410.005,998,410.00 1.132Negotiable CDs 3,500,000.00 4994.35 0.9690.9823,503,815.003,500,000.00 0.969Medium Term Notes 17,894,079.51 90022.24 1.6431.66618,171,671.7517,615,000.00 1.665Federal Agency Coupon Securities 23,006,504.66 95128.59 1.0631.07823,270,881.6022,695,000.00 1.078Treasury Coupon Securities 30,077,372.16 1,15137.37 1.3541.37330,708,874.0029,650,000.00 1.373GNMA Mortgage Backed Securities 454.28 1,5970.00 9.3569.486455.56453.57 9.486

80,476,820.61 100.00%Investments

81,654,107.9179,458,863.57 942 1.319 1.301 1.318

Cash and Accrued Interest

(not included in yield calculations)Passbook/Checking 11,306,414.08 1 0.3580.36211,306,414.0811,306,414.08 0.362

91,796,950.64Total Cash and Investments11,320,130.03Subtotal

13,715.95

92,974,237.9490,765,277.65

11,320,130.03

13,715.95

942 1.319 1.301 1.318

Accrued Interest at Purchase

Current YearMarch 31

120,067.08Fiscal Year To Date

852,960.69

Average Daily BalanceEffective Rate of Return

91,866,823.91 95,259,570.481.79%1.54%

Total Earnings Month Ending

The JPIA meets the liquidity requirements for the next six months.This portfolio complies with the JPIA investment policy.

_____________________________________________ _____ ____________________David deBernardi, Treasurer

Portfolio JPIAAP

Reporting period 03/01/2012-03/31/2012

Run Date: 04/11/2012 - 15:10 PM (PRF_PM1) 7.3.0eport Ver. 7.3.3

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bwells

David deBernardi

YTM365

Page 1

Par Value Book ValueMaturity

DateStated

RateMarket Value

March 31, 2012Portfolio Details - Investments

AverageBalanceIssuer

Portfolio ManagementACWA/JPIA

Moody'sDays to

MaturityCUSIP Investment #Purchase

Date

Certificates of Deposit - Bank1.227First Federal Bank Texas493 250,000.00 250,000.00 10/26/20121.21004/26/2011 250,000.00 208SYS4930.750Ameriprise Financials558 250,000.00 250,000.00 03/04/20130.75003/04/2012 250,000.00 337SYS5580.600Asian Pacific National Bank540 250,000.00 250,000.00 01/31/20130.60001/31/2012 250,000.00 305SYS5400.860Beal Bank492 250,000.00 250,000.00 04/15/20120.86004/15/2011 250,000.00 14SYS4920.650Bank of Napa504 250,000.00 250,000.00 07/14/20120.65007/14/2011 250,000.00 104SYS5041.000Bank of Sacramento467 250,000.00 250,000.00 04/22/20121.00010/22/2010 250,000.00 21SYS4671.340Borrego Springs Bank498 250,000.00 250,000.00 11/18/20121.34005/18/2011 250,000.00 231SYS4980.810Brookline Bank559 249,000.00 249,000.00 06/16/20130.81003/16/2012 249,000.00 441SYS5590.862Cathay Bank539 100,000.00 100,000.00 01/17/20130.85001/17/2012 100,000.00 291SYS5390.900Cathay Bank541 150,000.00 150,000.00 01/31/20130.90001/31/2012 150,000.00 305SYS5411.100Commercial Bank505 100,000.00 100,000.00 07/22/20121.10007/22/2011 100,000.00 112SYS5050.900Commercial Bank542 150,000.00 150,000.00 01/31/20130.90001/31/2012 150,000.00 305SYS5420.850Commonwealth Bank482 250,000.00 250,000.00 08/22/20120.85002/22/2011 250,000.00 143SYS4820.913Coronado First Bank529 100,000.00 100,000.00 11/04/20120.90011/04/2011 100,000.00 217SYS5290.600Coronado First Bank538 150,000.00 150,000.00 01/03/20130.60001/03/2012 150,000.00 277SYS5383.840First Republic Bank406 250,000.00 250,000.00 12/11/20143.84012/11/2009 250,000.00 984SYS4060.688First California Bank530 250,000.00 250,000.00 11/12/20120.68811/12/2011 250,000.00 225SYS5301.379First Choice Bank486 250,000.00 250,000.00 09/17/20121.36003/25/2011 250,000.00 169SYS4861.600Marshall & Ilsley Bank446 250,000.00 250,000.00 07/20/20121.60006/20/2010 250,000.00 110SYS4461.250Mission National Bank465 250,000.00 250,000.00 10/21/20121.25010/21/2010 250,000.00 203SYS4650.790National Consumer Bank506 250,000.00 250,000.00 01/02/20130.79007/02/2011 250,000.00 276SYS5060.608Northern California National537 250,000.00 250,000.00 03/15/20130.60012/21/2011 250,000.00 348SYS5370.950Opus Bank515 250,000.00 250,000.00 10/28/20120.95008/01/2011 250,000.00 210SYS5150.750Pacific Western Bank469 250,000.00 250,000.00 05/09/20120.75011/09/2010 250,000.00 38SYS4690.946Paragon Commercial Bank522 250,000.00 250,000.00 03/20/20130.94609/20/2011 250,000.00 353SYS5220.913State Bank of New Richland523 249,410.00 249,410.00 09/09/20120.90009/09/2011 249,410.00 161SYS5232.890Tristate Capital Bank383 250,000.00 250,000.00 07/13/20122.85007/13/2009 250,000.00 103SYS383

5,998,410.00 2405,998,410.005,998,410.005,845,700.32Subtotal and Average 1.137

Negotiable CDs0.497ROYAL BANK OF CANADA NY556 1,750,000.00 1,750,000.00 02/08/20130.49002/10/2012 1,753,815.00 31378009NDY9 P-11.468WESTPAC BANKING CORP557 1,750,000.00 1,750,000.00 02/14/20141.44802/16/2012 1,750,000.00 684SYS557 Aa2


Portfolio JPIAAP

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YTM365

Page 2


DateStated

RateMarket Value




Moody'sDays to


Date

Medium Term Notes1.5513M COMPANY520 590,000.00 585,523.89 09/29/20161.37509/29/2011 593,929.40 1,64288579YAD3 Aa21.4963M COMPANY521 1,160,000.00 1,153,941.85 09/29/20161.37509/29/2011 1,167,725.60 1,64288579YAD3 Aa21.828ABBOTT LABORATORIES495 750,000.00 769,807.53 05/27/20152.70005/17/2011 789,735.00 1,151002824AX8 A11.197BERKSHIRE HATHAWAY FIN509 1,325,000.00 1,325,000.00 08/15/20141.20308/15/2011 1,342,702.00 866084670BA5 Aa21.310BANK OF NEW YORK MELLON455 1,275,000.00 1,341,832.30 08/27/20135.12508/24/2010 1,351,857.00 51306406HBK4 Aa31.231BANK OF NEW YORK MELLON548 475,000.00 474,583.77 02/20/20151.20002/21/2012 475,574.75 1,05506406HCC1 Aa31.393CATERPILLAR FIN SERV CRP496 400,000.00 399,849.05 05/20/20141.37505/20/2011 405,964.00 77914912L4V0 A20.986WALT DISNEY531 1,250,000.00 1,246,363.30 12/01/20140.87512/02/2011 1,255,550.00 97425468PCQ7 A22.382GENERAL ELECTRIC CAP CORP508 1,000,000.00 1,071,632.61 05/13/20145.90008/12/2011 1,099,130.00 77236962G4C5 A12.186GENERAL ELECTRIC CAP CORP543 1,565,000.00 1,563,495.98 01/09/20152.15001/09/2012 1,598,584.90 1,01336962G5M2 A11.292IBM CORP494 1,100,000.00 1,099,046.64 05/12/20141.25005/12/2011 1,113,596.00 771459200GW5 Aa31.342IBM CORP546 225,000.00 224,033.71 02/06/20171.25002/06/2012 223,195.50 1,772459200HC8 Aa31.294JOHN DEERE532 380,000.00 379,563.81 12/02/20141.25012/02/2011 384,917.20 97524422ERK7 A22.405JP MORGAN CHASE & CO535 1,670,000.00 1,748,407.64 06/01/20144.65012/21/2011 1,780,253.40 79146625HHN3 Aa31.973PROCTER & GAMBLE CO470 1,200,000.00 1,192,876.98 11/15/20151.80011/18/2010 1,238,052.00 1,323742718DS5 Aa31.433US BANCORP461 1,500,000.00 1,498,769.42 09/13/20131.37509/14/2010 1,513,020.00 53091159HGYO Aa31.739WACHOVIA CORP BDS454 1,750,000.00 1,819,351.03 05/01/20135.50008/24/2010 1,837,885.00 39592976WBJ4 A2


Federal Agency Coupon Securities1.535FHLMC501 2,000,000.00 2,014,197.89 09/10/20151.75010/05/2010 2,066,400.00 1,2573137EACM9 Aaa0.517FHLMC525 3,020,000.00 3,019,203.30 10/15/20130.50010/21/2011 3,020,181.20 5623134G23H3 Aaa0.655FHLMC534 665,000.00 670,417.52 08/20/20141.00012/19/2011 673,126.30 8713134G2UA8 Aaa1.673FHLMC AGENCY424 1,975,000.00 1,974,077.51 04/15/20131.62503/04/2010 2,003,104.25 3793137EACJ6 Aaa1.683FNMA459 1,750,000.00 1,788,492.96 07/28/20152.37509/07/2010 1,845,025.00 1,21331398AU34 Aaa1.312FNMA484 2,500,000.00 2,497,123.53 02/27/20141.25002/04/2011 2,545,200.00 6973135G0AP8 Aaa0.936FNMA500 2,285,000.00 2,294,507.81 06/27/20141.12506/30/2011 2,325,010.35 8173135GOBJ1 Aaa0.569FNMA514 2,125,000.00 2,256,602.28 10/15/20134.62508/03/2011 2,264,485.00 56231359MTG8 Aaa0.931FNMA518 3,050,000.00 3,123,959.18 10/26/20151.62509/26/2011 3,141,683.00 1,30331398A4M1 Aaa0.910FNMA519 1,225,000.00 1,255,631.62 10/26/20151.62509/16/2011 1,261,823.50 1,30331398A4M1 Aaa1.244FNMA536 2,100,000.00 2,112,291.06 11/15/20161.37512/28/2011 2,124,843.00 1,6893135G0ES8 Aaa


Treasury Coupon Securities2.474US TREASURY386 2,300,000.00 2,263,098.59 12/31/20131.50008/10/2009 2,347,173.00 639912828JW1 Aaa2.589US TREASURY411 4,000,000.00 3,953,840.09 11/30/20142.12512/31/2009 4,173,440.00 973912828LZ1 Aaa

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YTM365

Page 3


DateStated

RateMarket Value




Moody'sDays to


Date

Treasury Coupon Securities2.444US TREASURY412 4,000,000.00 4,015,816.37 07/31/20142.62512/31/2009 4,203,760.00 851912828LC2 Aaa1.115US TREASURY471 2,950,000.00 2,963,815.22 10/31/20151.25011/04/2010 3,008,764.00 1,308912828PE4 Aaa1.111US TREASURY524 1,500,000.00 1,524,079.48 06/30/20161.50010/14/2011 1,539,720.00 1,551912828QR4 Aaa1.064US TREASURY526 2,000,000.00 2,036,686.33 07/31/20161.50010/31/2011 2,052,040.00 1,582912828QX1 Aaa0.655US TREASURY527 1,750,000.00 1,848,195.97 04/30/20152.50010/31/2011 1,853,355.00 1,124912828MZ0 Aaa0.333US TREASURY528 745,000.00 749,954.09 07/15/20140.62511/07/2011 748,605.80 835912828QU7 Aaa0.912US TREASURY544 250,000.00 249,567.24 12/31/20160.87501/26/2012 248,692.50 1,735912828RX0 Aaa0.313US TREASURY545 2,360,000.00 2,488,808.99 01/31/20152.25001/27/2012 2,474,861.20 1,035912828MH0 Aaa0.879US TREASURY550 1,500,000.00 1,499,712.56 01/31/20170.87502/27/2012 1,490,745.00 1,766912828SC5 Aaa0.467US TREASURY560 2,075,000.00 2,189,356.46 02/28/20152.37503/01/2012 2,185,244.75 1,063912828MR8 Aaa0.939US TREASURY561 1,000,000.00 996,943.03 02/28/20170.87503/15/2012 992,970.00 1,794912828SJ0 Aaa0.512US TREASURY562 1,475,000.00 1,554,345.41 02/28/20152.37503/29/2012 1,553,366.75 1,063912828MR8 Aaa0.302US TREASURY563 1,485,000.00 1,483,788.13 10/31/20130.25003/29/2012 1,483,604.10 578912828RN2 Aaa5.984US TREASURY63 110,000.00 110,119.17 02/15/20266.00002/09/1998 151,765.90 5,068912810EW4 Aaa5.563US TREASURY75 150,000.00 149,245.03 08/15/20285.50008/20/1998 200,766.00 5,980912810FE3 Aaa

30,077,372.16 1,15130,708,874.0029,650,000.0026,887,331.05Subtotal and Average 1.373

GNMA Mortgage Backed Securities9.486GNMA37 453.57 454.28 08/15/20169.50008/01/1997 455.56 1,59736216NBK8

454.28 1,597455.56453.57457.37Subtotal and Average 9.486

94291,866,823.91 79,458,863.57 1.31981,654,107.91 80,476,820.61Total and Average

Portfolio JPIAA

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YTM365

Page 4

Par Value Book ValueStated

RateMarket Value

March 31, 2012Portfolio Details - Cash



Moody'sDays to


Date

Managed Pool Accounts0.260CAMP380 25,055.29 25,055.29 0.26025,055.29 1SYS380

Local Agency Investment Funds0.383LAIF1 10,613,209.01 10,613,209.01 0.38310,613,209.01 1SYS1

Passbook/Checking Accounts0.050CALIFORNIA BANK & TRUST313 537,087.06 537,087.06 0.050537,087.06 1SYS3130.000HIGHMARK MONEY MARKET4 131,062.72 131,062.72131,062.72 1SYS4

0.00

94291,866,823.91 90,765,277.65 1.319

111,320,130.03

13,715.9511,320,130.03

13,715.95SubtotalAccrued Interest at PurchaseAverage Balance

92,974,237.94 91,796,950.64Total Cash and Investments

Portfolio JPIAAP

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Page 1

March 2011 through March 2012Activity Summary

Month

Portfolio Management

End YearNumber ofSecurities

TotalInvested

360Equivalent

365Equivalent

ManagedPool

RateAverage

TermAverage

Days to Maturity

ACWA/JPIA

Numberof Investments

Purchased

Numberof Investments

Redeemed

Yield to Maturity

91,074,413.26March 2011 67 1,073 7421.620 1.643 0.180 2 191,180,906.65April 2011 67 1,095 7541.614 1.636 0.180 5 591,552,995.19May 2011 68 1,088 7251.616 1.639 0.130 5 489,450,551.42June 2011 71 1,101 7201.617 1.639 0.120 2 389,528,687.74July 2011 70 1,091 7011.574 1.596 0.120 4 599,977,526.23August 2011 69 935 6181.360 1.379 0.120 7 10

104,399,997.19September 2011 76 931 6441.276 1.294 0.120 6 495,463,163.06October 2011 73 1,045 7431.318 1.336 0.130 4 795,589,930.60November 2011 75 1,042 7191.308 1.327 0.150 3 380,533,402.22December 2011 74 1,254 8981.407 1.427 0.000 7 880,274,123.64January 2012 76 1,259 8941.392 1.411 0.000 8 780,051,869.28February 2012 73 1,290 9161.418 1.438 0.000 5 780,476,820.61March 2012 78 1,288 9421.301 1.319 0.000 6 4

Average 89,965,722.08 1.448% 1.468% 0.096 5 5 1,115 77072

Portfolio JPIAA

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Page 1

March 2011 through March 2012Distribution of Investments By Type


AverageAprilMarch May2011 2011 by Period

JulyJune August2011 2011

OctoberSeptember November2011 2011

December February2011 2012

March2012Security Type

January2012201120112011

7.1 7.47.3Certificates of Deposit - Bank 7.3 9.87.3 10.2 10.29.6 11.8 7.212.1 7.5 8.8%Certificates of Deposit - S & L

0.0 0.01.0Managed Pool Accounts 0.0 0.00.0 0.0 0.00.0 0.1%11.0 10.913.0Local Agency Investment Funds 9.3 19.09.3 14.9 15.222.2 9.6%0.6 0.80.7Passbook/Checking Accounts 0.6 0.50.7 0.8 0.60.5 0.5%

Negotiable CDs 4.4 4.4 0.7%17.0 20.316.3Medium Term Notes 20.7 21.620.7 24.4 23.622.3 24.6 24.924.5 22.2 21.8%

Bankers Acceptances -AmortizingCommercial Paper - Interest BearingCommercial Paper Disc. -AmortizingRepurchase Agreements

38.9 35.535.7Federal Agency Coupon Securities 39.6 30.636.2 29.4 29.429.4 35.7 33.839.1 28.6 34.0%Federal Agency Disc. -Amortizing

25.3 25.226.1Treasury Coupon Securities 22.6 18.525.8 20.2 21.016.0 27.9 29.824.4 37.4 24.6%Treasury Discounts -AmortizingMiscellaneous Coupon SecuritiesMiscellaneous Discounts -AmortizingGNMA Mortgage Backed SecuritiesFNMA Mortgage Backed SecuritiesFHLMC Mortgage Backed SecuritiesMunicipal Bonds

Portfolio JPIAAP

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ACWA/JPIADuration Report

Sorted by Investment Type - Investment Class

ACWA/JPIA

Through 03/31/2012

Investment #Security ID IssuerInvestmentClass

BookValue

ParValue

MarketValue

CurrentRate

YTM Current Yield

Maturity/Call Date Duration

Effective360Fund

Investment Type: Certificates of Deposit - BankAsian Pacific National Bank540 LIQUID 250,000.00 250,000.00SYS540 0.600 01/31/2013 0.828250,000.00 0.592.6000000

Cathay Bank541 LIQUID 150,000.00 150,000.00SYS541 0.900 01/31/2013 0.826150,000.00 0.888.9000000

Cathay Bank539 LIQUID 100,000.00 100,000.00SYS539 0.850 01/17/2013 0.790100,000.00 0.850.8500000

Commercial Bank542 LIQUID 150,000.00 150,000.00SYS542 0.900 01/31/2013 0.826150,000.00 0.888.9000000

Commercial Bank505 LIQUID 100,000.00 100,000.00SYS505 1.100 07/22/2012 0.306100,000.00 1.0851.100000

Coronado First Bank529 LIQUID 100,000.00 100,000.00SYS529 0.900 11/04/2012 0.591100,000.00 0.900.9000000

Coronado First Bank538 LIQUID 150,000.00 150,000.00SYS538 0.600 01/03/2013 0.755150,000.00 0.592.6000000

National Consumer Bank506 LIQUID 250,000.00 250,000.00SYS506 0.790 01/02/2013 0.752250,000.00 0.779.7900000

Tristate Capital Bank383 LIQUID 250,000.00 250,000.00SYS383 2.850 07/13/2012 0.281250,000.00 2.8502.850000

State Bank of New Richland523 LIQUID 249,410.00 249,410.00SYS523 0.900 09/09/2012 0.439249,410.00 0.900.9000000

First Republic Bank406 LIQUID 250,000.00 250,000.00SYS406 3.840 12/11/2014 2.551250,000.00 3.7873.840000

Commonwealth Bank482 LIQUID 250,000.00 250,000.00SYS482 0.850 08/22/2012 0.390250,000.00 0.838.8500000

First California Bank530 LIQUID 250,000.00 250,000.00SYS530 0.688 11/12/2012 0.613250,000.00 0.679.6883000

Marshall & Ilsley Bank446 LIQUID 250,000.00 250,000.00SYS446 1.600 07/20/2012 0.301250,000.00 1.5781.600000

Bank of Napa504 LIQUID 250,000.00 250,000.00SYS504 0.650 07/14/2012 0.286250,000.00 0.641.6500000

Mission National Bank465 LIQUID 250,000.00 250,000.00SYS465 1.250 10/21/2012 0.551250,000.00 1.2331.250000

Bank of Sacramento467 LIQUID 250,000.00 250,000.00SYS467 1.000 04/22/2012 0.057250,000.00 0.9861.000000

Pacific Western Bank469 LIQUID 250,000.00 250,000.00SYS469 0.750 05/09/2012 0.106250,000.00 0.740.7500000

Ameriprise Financials558 LIQUID 250,000.00 250,000.00SYS558 0.750 03/04/2013 0.923250,000.00 0.740.7500000

First Choice Bank486 LIQUID 250,000.00 250,000.00SYS486 1.360 09/17/2012 0.455250,000.00 1.3601.360000

Beal Bank492 LIQUID 250,000.00 250,000.00SYS492 0.860 04/15/2012 0.038250,000.00 0.848.8600000

First Federal Bank Texas493 LIQUID 250,000.00 250,000.00SYS493 1.210 10/26/2012 0.564250,000.00 1.2101.210000

Borrego Springs Bank498 LIQUID 250,000.00 250,000.00SYS498 1.340 11/18/2012 0.626250,000.00 1.3221.340000

Opus Bank515 LIQUID 250,000.00 250,000.00SYS515 0.950 10/28/2012 0.568250,000.00 0.937.9500000

Paragon Commercial Bank522 LIQUID 250,000.00 250,000.00SYS522 0.946 03/20/2013 0.963250,000.00 0.933.9456000

Northern California National537 LIQUID 250,000.00 250,000.00SYS537 0.600 03/15/2013 0.947250,000.00 0.600.6000000

Brookline Bank559 LIQUID 249,000.00 249,000.00SYS559 0.810 06/16/2013 1.204249,000.00 0.799.8100000

5,998,410.00 1.1325,998,410.00 5,998,410.00 0.648Subtotal

Portfolio JPIAA

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BookValue

ParValue

MarketValue

CurrentRate

YTM Current Yield


Effective360

Sorted by Investment Type - Investment ClassDuration Report

ACWA/JPIA

Through 03/31/2012

Fund

Investment Type: Negotiable CDsROYAL BANK OF CANADA NY556 PFM 1,750,000.00 1,753,815.0078009NDY9 0.239 02/08/2013 0.8571,750,000.00 0.490Amort .4900000

WESTPAC BANKING CORP557 PFM 1,750,000.00 1,750,000.00SYS557 1.448 02/14/2014 1.8731,750,000.00 1.448Amort 1.448000

3,500,000.00 0.8433,500,000.00 3,503,815.00 1.364Subtotal

Investment Type: Medium Term NotesGENERAL ELECTRIC CAP CORP508 PFM 1,000,000.00 1,099,130.0036962G4C5 1.147 05/13/2014 1.9751,071,632.61 2.349Fair 5.900000

GENERAL ELECTRIC CAP CORP543 PFM 1,565,000.00 1,598,584.9036962G5M2 1.359 01/09/2015 2.6761,563,495.98 2.156Fair 2.150000

CATERPILLAR FIN SERV CRP496 PFM 400,000.00 405,964.0014912L4V0 0.671 05/20/2014 2.095399,849.05 1.374Fair 1.375000

JOHN DEERE532 PFM 380,000.00 384,917.2024422ERK7 0.760 12/02/2014 2.613379,563.81 1.276Fair 1.250000

BERKSHIRE HATHAWAY FIN509 PFM 1,325,000.00 1,342,702.00084670BA5 0.635 08/15/2014 2.3341,325,000.00 1.181Fair 1.202600

IBM CORP494 PFM 1,100,000.00 1,113,596.00459200GW5 0.660 05/12/2014 2.0761,099,046.64 1.274Fair 1.250000

IBM CORP546 PFM 225,000.00 223,195.50459200HC8 1.422 02/06/2017 4.676224,033.71 1.324Fair 1.250000

WACHOVIA CORP BDS454 PFM 1,750,000.00 1,837,885.0092976WBJ4 0.834 05/01/2013 1.0391,819,351.03 1.715Fair 5.500000

BANK OF NEW YORK MELLON548 PFM 475,000.00 475,574.7506406HCC1 1.157 02/20/2015 2.825474,583.77 1.214Fair 1.200000

BANK OF NEW YORK MELLON455 PFM 1,275,000.00 1,351,857.0006406HBK4 0.804 08/27/2013 1.3641,341,832.30 1.292Fair 5.125000

US BANCORP461 PFM 1,500,000.00 1,513,020.0091159HGYO 0.772 09/13/2013 1.4331,498,769.42 1.413Fair 1.375000

JP MORGAN CHASE & CO535 PFM 1,670,000.00 1,780,253.4046625HHN3 1.541 06/01/2014 2.0441,748,407.64 2.372Fair 4.650000

PROCTER & GAMBLE CO470 PFM 1,200,000.00 1,238,052.00742718DS5 0.908 11/15/2015 3.4861,192,876.98 1.946Fair 1.800000

ABBOTT LABORATORIES495 PFM 750,000.00 789,735.00002824AX8 0.991 05/27/2015 3.008769,807.53 1.803Fair 2.700000

3M COMPANY520 PFM 590,000.00 593,929.4088579YAD3 1.222 09/29/2016 4.346585,523.89 1.530Fair 1.375000

3M COMPANY521 PFM 1,160,000.00 1,167,725.6088579YAD3 1.222 09/29/2016 4.3461,153,941.85 1.476Fair 1.375000

WALT DISNEY531 PFM 1,250,000.00 1,255,550.0025468PCQ7 0.707 12/01/2014 2.6251,246,363.30 0.972Fair .8750000

17,894,079.51 0.98717,615,000.00 18,171,671.75 2.385Subtotal

Investment Type: Federal Agency Coupon SecuritiesFNMA484 PFM 2,500,000.00 2,545,200.003135G0AP8 0.298 02/27/2014 1.8842,497,123.53 1.294Fair 1.250000

FNMA519 PFM 1,225,000.00 1,261,823.5031398A4M1 0.770 10/26/2015 3.4471,255,631.62 0.897Fair 1.625000

FNMA500 PFM 2,285,000.00 2,325,010.353135GOBJ1 0.339 06/27/2014 2.2072,294,507.81 0.923Fair 1.125000

FNMA514 PFM 2,125,000.00 2,264,485.0031359MTG8 0.345 10/15/2013 1.4722,256,602.28 0.561Fair 4.625000

FNMA459 PFM 1,750,000.00 1,845,025.0031398AU34 0.720 07/28/2015 3.1971,788,492.96 1.660Fair 2.375000

FNMA518 PFM 3,050,000.00 3,141,683.0031398A4M1 0.770 10/26/2015 3.4473,123,959.18 0.918Fair 1.625000

FNMA536 PFM 2,100,000.00 2,124,843.003135G0ES8 1.112 11/15/2016 4.4472,112,291.06 1.227Fair 1.375000

FHLMC534 PFM 665,000.00 673,126.303134G2UA8 0.484 08/20/2014 2.355670,417.52 0.646Fair 1.000000

FHLMC501 PFM 2,000,000.00 2,066,400.003137EACM9 0.771 09/10/2015 3.3402,014,197.89 1.514Fair 1.750000

FHLMC525 PFM 3,020,000.00 3,020,181.203134G23H3 0.496 10/15/2013 1.5273,019,203.30 0.510Fair .5000000

FHLMC AGENCY424 PFM 1,975,000.00 2,003,104.253137EACJ6 0.253 04/15/2013 1.0251,974,077.51 1.650Fair 1.625000

Portfolio JPIAA


15

5


BookValue

ParValue

MarketValue

CurrentRate

YTM Current Yield


Effective360

Sorted by Investment Type - Investment ClassDuration Report

ACWA/JPIA

Through 03/31/2012

Fund

23,006,504.66 0.57322,695,000.00 23,270,881.60 2.532Subtotal

Investment Type: Treasury Coupon SecuritiesUS TREASURY526 PFM 2,000,000.00 2,052,040.00912828QX1 0.887 07/31/2016 4.1832,036,686.33 1.049Fair 1.500000

US TREASURY75 LIQUID 150,000.00 200,766.00912810FE3 2.891 08/15/2028 11.576149,245.03 5.487Fair 5.500000

US TREASURY524 PFM 1,500,000.00 1,539,720.00912828QR4 0.864 06/30/2016 4.0991,524,079.48 1.096Fair 1.500000

US TREASURY545 PFM 2,360,000.00 2,474,861.20912828MH0 0.518 01/31/2015 2.7452,488,808.99 0.309Fair 2.250000

US TREASURY550 PFM 1,500,000.00 1,490,745.00912828SC5 1.006 01/31/2017 4.7111,499,712.56 0.867Fair .8750000

US TREASURY544 PFM 250,000.00 248,692.50912828RX0 0.988 12/31/2016 4.627249,567.24 0.900Fair .8750000

US TREASURY561 PFM 1,000,000.00 992,970.00912828SJ0 1.022 02/28/2017 4.791996,943.03 0.926Fair .8750000

US TREASURY562 PFM 1,475,000.00 1,553,366.75912828MR8 0.533 02/28/2015 2.8211,554,345.41 0.505Fair 2.375000

US TREASURY563 PFM 1,485,000.00 1,483,604.10912828RN2 0.310 10/31/2013 1.5731,483,788.13 0.298Fair .2500000

US TREASURY560 PFM 2,075,000.00 2,185,244.75912828MR8 0.533 02/28/2015 2.8212,189,356.46 0.461Fair 2.375000

US TREASURY63 LIQUID 110,000.00 151,765.90912810EW4 2.700 02/15/2026 10.120110,119.17 5.902Fair 6.000000

US TREASURY412 PFM 4,000,000.00 4,203,760.00912828LC2 0.429 07/31/2014 2.2654,015,816.37 2.411Fair 2.625000

US TREASURY386 PFM 2,300,000.00 2,347,173.00912828JW1 0.324 12/31/2013 1.7222,263,098.59 2.440Fair 1.500000

US TREASURY527 PFM 1,750,000.00 1,853,355.00912828MZ0 0.565 04/30/2015 2.9491,848,195.97 0.646Fair 2.500000

US TREASURY471 PFM 2,950,000.00 3,008,764.00912828PE4 0.686 10/31/2015 3.4822,963,815.22 1.100Fair 1.250000

US TREASURY411 PFM 4,000,000.00 4,173,440.00912828LZ1 0.487 11/30/2014 2.5823,953,840.09 2.553Fair 2.125000

US TREASURY528 PFM 745,000.00 748,605.80912828QU7 0.412 07/15/2014 2.267749,954.09 0.328Fair .6250000

30,077,372.16 0.60729,650,000.00 30,708,874.00 3.039Subtotal

Investment Type: GNMA Mortgage Backed SecuritiesGNMA37 LIQUID 453.57 455.5636216NBK8 9.544 08/15/2016 2.364454.28 9.356Fair 9.500000

454.28 9.544453.57 455.56 2.364Subtotal

0.731 2.50180,476,820.61 79,458,863.57 81,654,107.91Report Total

Portfolio JPIAA


15

6


ACWA/JPIA Liability Program

Reported Losses Per $1 Million of Payrolls May 7, 2012

BACKGROUND This graph shows the actual dollars incurred in losses for each million dollars of payroll. CURRENT SITUATION Pooled losses for the past several years have remained relatively constant at right around $15,000 per $1 million of payrolls, the exceptions being the 2004-05 and 2008-09 policy years. These policy years include a major auto accident, a child drowning in a canal, two large fires that involve allegations of insufficient water and an increase in the severity of infrastructure failure claims. The 2011-12 policy year is off to a good start, but it is too early to make any predictions. RECOMMENDATION None. For informational purposes only.

157

FOR MONTH ENDING

REPORTED LOSSES PER $1 MILLION OF PAYROLL

ACWA/JPIA - LIABILITY PROGRAM

3/31/2012

0

10,000

20,000

30,000

40,000

50,000

2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011 2011-2012

EXCESS LOSSES PER

$1 MILLION OF

PAYROLL

POOLED LOSSES PER

$1 MILLION OF

PAYROLL

POLICY YEAR

YEAR (10/1) LOSSES LOSSES PAYROLLMEMBERS OF PAYROLL OF PAYROLL

PROGRAM POOLED EXCESS TOTAL ACTUAL# OF $1 MILLION $1 MILLION

LOSSES PER LOSSES PER

LOSSES

POOLED TOTAL

RETENTION

INSURED

SELF

1997-1998 301 5,844,405 3,270,759 9,115,165 264,396,159 22,105 34,475 500,000

1998-1999 293 4,179,698 575,976 4,755,674 263,270,803 15,876 18,064 500,000

1999-2000 287 4,114,259 455,627 4,569,886 274,586,314 14,983 16,643 500,000

2000-2001 283 3,732,967 0 3,732,967 281,161,274 13,277 13,277 500,000

2001-2002 281 4,513,253 293,000 4,806,253 293,025,083 15,402 16,402 500,000

2002-2003 283 4,837,909 219,344 5,057,252 321,945,564 15,027 15,708 500,000

2003-2004 286 3,584,119 2,600,000 6,184,119 347,874,665 10,303 17,777 500,000

2004-2005 287 8,877,902 7,947,215 16,825,117 360,896,946 24,600 46,620 500,000

2005-2006 286 7,902,882 532,492 8,435,374 380,897,839 20,748 22,146 1,000,000

2006-2007 286 7,396,961 455,000 7,851,961 411,559,778 17,973 19,079 1,000,000

2007-2008 285 3,538,911 1,505,039 5,043,951 436,649,863 8,105 11,551 1,000,000

2008-2009 284 7,082,563 7,959,620 15,042,183 435,872,180 16,249 34,511 1,000,000

2009-2010 285 5,121,666 0 5,121,666 445,710,401 11,491 11,491 1,000,000

2010-2011 286 3,085,026 0 3,085,026 450,204,505 6,852 6,852 1,000,000

2011-2012 285 736,651 0 736,651 463,272,510 3,180 3,180 2,000,000

1PAGE

- Latest Policy Year's 'Losses' include partial activity.

- Latest Policy Year's 'Losses Per $1 Million of Payroll' have been annualized 6 months.

158


ACWA/JPIA Liability Program

Occurrences Per $1 Million of Payrolls May 7, 2012

BACKGROUND This graph tracks the frequency of claims per $1 million of payrolls. While not always an accurate predictor of financial activity, generally speaking, the lower the frequency rate, the lower the severity. CURRENT SITUATION Frequency has had a steady gradual decline for the past ten years and that is a very favorable trend. The five-year average from 2001 to 2005 was .749. The current five-year average is down to .430. Controlling and reducing frequency is an important aspect of the JPIA. RECOMMENDATION None. For informational purposes only.

159


OCCURRENCES PER $1 MILLION OF PAYROLLS REPORT

FOR MONTH ENDING 3/31/2012

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011 2011-2012

Policy Years

PROGRAM ADJUSTMENTOF INFLATION ADJUSTED

PER $1 MILLION OF

PAYROLLS

# OF OCCURRENCES

YEAR (10/1) OCCUR

ACTUAL

INFLATION

FACTOR

INFLATION

ADJUSTED

PAYROLLS PAYROLLS

NUMBER

INCREASE

HISTORICAL

1997-1998 306 264,396,159 1.9 1.376 363,762,116 0.841 %

1998-1999 258 263,270,803 3.0 1.350 355,460,084 0.726 %

1999-2000 300 274,586,314 3.9 1.311 359,939,744 0.833 %

2000-2001 272 281,161,274 3.3 1.262 354,724,243 0.767 %

2001-2002 285 293,025,083 1.8 1.221 357,881,991 0.796 %

2002-2003 288 321,945,564 1.9 1.200 386,251,087 0.746 %

2003-2004 281 347,874,665 2.2 1.177 409,577,308 0.686 %

2004-2005 304 360,896,946 4.1 1.152 415,762,578 0.731 %

2005-2006 277 380,897,839 3.0 1.107 421,521,731 0.657 %

2006-2007 253 411,559,778 2.5 1.074 442,188,211 0.572 %

2007-2008 226 436,649,863 4.3 1.048 457,702,936 0.494 %

2008-2009 190 435,872,180 0.0 1.005 438,051,541 0.434 %

2009-2010 201 445,710,401 0.0 1.005 447,938,953 0.449 %

2010-2011 243 450,204,505 0.5 1.005 452,455,527 0.537 %

2011-2012 55 463,272,510 3.5 1.000 463,272,510 0.237 %

1PAGE

- Factor based on CPI for West Coast from US Dept of Labor

- Payrolls Adjusted for Inflation - CNP's Omitted - Small Claims Included.

- Latest Policy Year's '# Of Occurrences Per $1 Million of Inflation Adjusted Payrolls' has been annualized 6 months.

- Latest Policy Year's 'Number of Occur' include partial activity.

160

DESCRIPTIONNUMBER

LOSS

DATE

FOR MONTH ENDING SIGNIFICANT LARGE CLAIMS (IN MILLIONS)


CLAIM

AMOUNT

LOSS

DISTRICT

3/31/2012

STATUS

1982-1983POLICY YEAR SELF INSURED RETENTION 500,000

3/1/83 Arvin-Edison Water Storage

District

Flooding Closed045137 3.1

3/1/83 Kern Delta Water District Flooding as a result of canal bank

break

Closed037514 0.6

1982-1983 TOTAL 3.7


12/1/84 Ramona Municipal Water

District

Reparian rights dispute over water

storage in reservoir

Closed051301 0.8

5/17/85 Ramona Municipal Water

District

Construction dispute with contractor Closed052420 0.9

1984-1985 TOTAL 1.7


2/18/86 American River Flood Control

District

Flooding as a result of heavy rainfall Closed040892 1.0

4/1/86 San Bernardino Valley Water

Conservation District

City owned streets damaged by

recharge operations

Closed059596 4.4

3/1/86 Westlands Water District District's failure to provide tailwater

drainage resulted in damage to crops

Closed040275 0.5

1985-1986 TOTAL 5.8

1986-1987POLICY YEAR SELF INSURED RETENTION 1,000,000

8/25/87 Rancho California Water

District

District groundwater pumping

operations damaged property

Closed063825 4.7

1986-1987 TOTAL 4.7


7/28/88 Desert Water Agency Auto accident with 3 people seriously

injured

Closed029044 1.4

2/22/88 Kern Delta Water District Herbicide overspray damaged crops Closed047976 1.0

6/15/88 Trabuco Canyon Water District Negligent administration resulted in

personal injury

Closed067446 0.9

1987-1988 TOTAL 3.4


10/1/88 Fallbrook Public Utility District Flooding as result of improper

maintenance of valve

Closed057674 0.5

8/9/89 Friant Water Users Authority Auto accident forced claimant vehicle

into canal severe injury to driver

Closed049235 1.1

1988-1989 TOTAL 1.6


5/26/90 Montecito Water District Flooding as a result of diversion of

rainfall runoff by District facilities

Closed001026 1.3

3/1/90 Rainbow Municipal Water

District

District's failure to supply sewer

service resulted in diminished property

values

Closed057798 1.0

1989-1990 TOTAL 2.3

1PAGE

161

DESCRIPTIONNUMBER

LOSS

DATE



CLAIM

AMOUNT

LOSS

DISTRICT

3/31/2012

STATUS


2/25/91 Elsinore Valley Municipal

Water District

Flooding of vacant land as a result of

water releases by District

Closed100586 0.6

10/1/90 Vandenberg Village Community

Services District

Contaminated water Closed100345 0.6

1990-1991 TOTAL 1.2


1/16/93 Rancho California Water

District

Flooding as a result of water main line

break

Closed101220 0.6

1/9/93 Yorba Linda Water District Flooding as a result of water main line

break

Closed100929 1.2

1992-1993 TOTAL 1.9


8/29/94 Alta Irrigation District Seepage from District canal damaged

orchards

Closed101883 2.0

1/25/94 North of the River Municipal

Water District

Wrongful termination based upon age

discrimination

Closed101638 0.7

1993-1994 TOTAL 2.6


8/25/95 ACWA/JPIA Wrongful termination based upon

alleged retaliation

Closed96-2270 5.4

3/10/95 Fresno Irrigation District Flooding as a result of rainfall runoff

backing up behind District canal banks

Closed102462 1.0

4/10/95 Kings River Conservation

District

Flooding as a result of canal bank

break

Closed102170 1.0

3/30/95 Las Virgenes Municipal Water

District

Flooding as a result of water main line

break caused by landslide

Closed102729 0.6

6/10/95 Madera Irrigation District Seepage from canal damaged orchard Closed102314 0.9

5/17/95 Walnut Valley Water District Landslide allegedly caused by leaks

from District main lines damaged

homes

Closed102240 0.7

1994-1995 TOTAL 9.6



Water District

Water pipe leak damaged sand

reserve

Closed102934 4.8

12/13/95 Kern Delta Water District District headwall allowed rainfall to

backup onto road contributing to the

cause of an auto accident

Closed102728 1.5


District

Wrongful termination based upon

alleged racial discrimination and

retaliation

Closed97-3781 0.7

1995-1996 TOTAL 7.0


1/26/97 Crestline Village Water District Flooding as a result of water main line

break

Closed103075 0.7

1996-1997 TOTAL 0.7

2PAGE

162

DESCRIPTIONNUMBER

LOSS

DATE



CLAIM

AMOUNT

LOSS

DISTRICT

3/31/2012

STATUS



Water District

Wrongful termination based upon

alleged retaliation

Closed99-1171 0.6


District

Landslide allegedly caused by leaks


homes

Closed103686 2.4

1/15/98 Merced Irrigation District Claimants allege District facilities

contributing to flooding around their

property

Closed103621 1.7

1997-1998 TOTAL 4.8


9/15/99 Fresno Metropolitan Flood

Control District

Auto accident with two serious injuries Closed00-1986 0.9

2/17/99 Tahoe City Public Utility District Sewer backup damaged restaurant

and well

Closed99-1603 0.7

1998-1999 TOTAL 1.6


1/1/00 Castaic Lake Water Agency District sued several corporations for

contamination of its aquifer. The

corporations sued the District claiming

that the District caused the

contamination.

Closed01-3179 1.0

1999-2000 TOTAL 1.0


6/7/02 El Toro Water District District mainline leaked water onto

road contributing to cause of auto

accident one serious injury

Closed02-4265 0.8

2001-2002 TOTAL 0.8


2/10/03 Camrosa Water District Flooding as a result of water main line

break

Closed03-4901 0.6

1/21/03 Rainbow Municipal Water

District

Wrongful termination as a result of

alleged retaliation

Closed04-5381 0.6

2002-2003 TOTAL 1.2


10/9/03 Citrus Heights Water District Serious injury as a result of using

District air bleed-off valve

Closed04-5607 3.1

2003-2004 TOTAL 3.1

3PAGE

163

DESCRIPTIONNUMBER

LOSS

DATE



CLAIM

AMOUNT

LOSS

DISTRICT

3/31/2012

STATUS


1/1/05 Castaic Lake Water Agency Plntff contends that swale cut on

District property above plntff's property

caused rainfall runoff to travel downhill

and damage the slope of plntff's

property.

Open08-9758 1.0

7/28/05 Goleta Water District Auto accident District driver hit

bicyclist

Closed06-7432 0.9

5/25/05 Merced Irrigation District A 4 year old boy fell into a District

owned canal and drowned.

Closed06-7603 0.5

9/11/05 Palmdale Water District Smith rendered quadriplegic as a

result of auto accident at District job

site.

Closed07-8252 0.5

5/16/05 South Coast Water District Landslide allegedly caused by leaks


homes

Closed05-7191 6.9

5/26/05 Tulare Irrigation District Flooding as a result of a break in berm

damaged private property

Closed05-7225 1.0

3/1/05 Yorba Linda Water District Clmnt alleges seepage from District

water line trench caused a landslide

that damaged his house.

Closed06-7456 0.5

2004-2005 TOTAL 11.3


4/20/06 Arvin-Edison Water Storage

District

Flooding as a result of a break in berm

damaged private property

Closed06-8065 0.8

4/3/06 Merced Irrigation District Grimes canal broke during storm event

and flooded numerous homes.

Open06-8142 1.5

12/9/05 North Yuba Water District Clmnt contends that he was wrongfully

terminated from his job as District GM.

Closed06-7929 1.0

6/18/06 Orchard Dale Water District Flooding as a result of water main line

break

Closed06-8199 0.5

1/25/06 Sweetwater Authority Flooding as a result of water main line

break

Closed06-7817 1.0

2005-2006 TOTAL 4.9


6/27/07 Merced Irrigation District Clmnt filed EPL claim with District in

which he alleges racial discrimination

and retaliation.

Closed09-0113 1.5

2006-2007 TOTAL 1.5


7/15/08 San Luis & Delta-Mendota

Water Authority

Clmnt was driving a truck on the

District's canal bank road. She ran a

STOP sign at the intersection of the

canal bank road and a main road and

was struck by a truck. Both trucks

went into the District canal and all

occupants died.

Open09-0563 2.5

2007-2008 TOTAL 2.5

4PAGE

164

DESCRIPTIONNUMBER

LOSS

DATE



CLAIM

AMOUNT

LOSS

DISTRICT

3/31/2012

STATUS


4/6/09 Oakdale Irrigation District District vehicle hit claimant in street Closed09-0704 0.6

8/20/09 Walnut Valley Water District Vehicle lost control and hit fire hydrant

& light pole

Open10-1108 0.8

9/12/09 Weaverville Community

Services District

District provides water to local sawmill.

When a fire started in the mill

employees tried to use the fire

suppression system but there was no

water.

Open10-1146 3.0

11/15/08 Yorba Linda Water District Houses damaged by fire. Allegations

against the District is that there wasn't

enough water pressure to fire

hydrants.

Open09-0419 6.9

2008-2009 TOTAL 11.3

5PAGE

165

(10/1) PAID RESERVE TOTAL CHGTOTAL CHG OPN CLSD TOTAL CHG AMOUNTCLAIM OCR CLMS PAYROLL

3/31/2012

YEAR # OF OCCUR NUMBER OF CLAIMS * PAID CLAIMS and CASE RESERVES *

AVERAGE

COST PER PAYROLL

# PER

$1M OF P/R

LOSSES

PER $1M

POLICY

FOR MONTH ENDING CLAIMS STATUS REPORT (CNP'S OMITTED - SMALL CLAIMS INCLUDED)

ACWA/JPIA - GENERAL AND AUTO LIABILITY PROGRAM

Prev Yrs 10,361,812 0 10,361,812 0 916 0 0 1,120 1,120 0 255,549,070 8,712 3.58 4.38 40,547

1983-1984 2,414,604 0 2,414,604 0 217 0 0 244 244 0 68,571,107 9,896 3.16 3.56 35,213

1984-1985 2,913,112 0 2,913,112 0 209 0 0 231 231 0 76,316,375 12,611 2.74 3.03 38,172

1985-1986 7,155,141 0 7,155,141 0 287 0 0 327 327 0 93,056,293 21,881 3.08 3.51 76,891

1986-1987 6,709,755 0 6,709,755 0 260 0 0 286 286 0 115,989,553 23,461 2.24 2.47 57,848

1987-1988 5,131,319 0 5,131,319 0 253 0 0 295 295 0 123,134,528 17,394 2.05 2.40 41,672

1988-1989 4,569,948 0 4,569,948 0 294 0 0 354 354 0 138,004,540 12,909 2.13 2.57 33,114

1989-1990 5,694,134 0 5,694,134 0 268 0 0 335 335 0 154,851,392 16,997 1.73 2.16 36,772

1990-1991 4,646,907 0 4,646,907 0 310 0 0 340 340 0 171,730,238 13,667 1.81 1.98 27,059

1991-1992 3,993,149 0 3,993,149 0 287 0 0 327 327 0 195,117,001 12,211 1.47 1.68 20,465

1992-1993 5,625,963 0 5,625,963 0 357 0 0 394 394 0 204,139,142 14,279 1.75 1.93 27,559

1993-1994 6,205,315 0 6,205,315 0 315 0 0 363 363 0 215,513,605 17,095 1.46 1.68 28,793

1994-1995 14,240,759 0 14,240,759 0 382 0 0 439 439 0 218,677,090 32,439 1.75 2.01 65,122

1995-1996 11,164,142 0 11,164,142 0 310 0 0 347 347 0 233,258,628 32,173 1.33 1.49 47,862

1996-1997 4,280,425 0 4,280,425 0 291 0 0 343 343 0 247,895,168 12,479 1.17 1.38 17,267

1997-1998 9,115,165 0 9,115,165 0 306 0 0 365 365 0 264,396,159 24,973 1.16 1.38 34,475

1998-1999 4,755,674 0 4,755,674 0 258 0 0 289 289 0 263,270,803 16,456 0.98 1.10 18,064

1999-2000 4,559,100 10,787 4,569,886 0 300 0 1 328 329 0 274,586,314 13,890 1.09 1.20 16,643

2000-2001 3,732,967 0 3,732,967 0 272 0 0 303 303 0 281,161,274 12,320 0.97 1.08 13,277

2001-2002 4,806,253 0 4,806,253 0 285 0 0 355 355 0 293,025,083 13,539 0.97 1.21 16,402

2002-2003 4,977,570 79,682 5,057,252 0 288 0 1 336 337 0 321,945,564 15,007 0.89 1.05 15,708

2003-2004 6,184,119 0 6,184,119 0 281 0 0 325 325 0 347,874,665 19,028 0.81 0.93 17,777

2004-2005 16,314,129 510,989 16,825,117 0 304 0 1 369 370 0 360,896,946 45,473 0.84 1.03 46,620

2005-2006 8,027,077 408,297 8,435,374 0 277 0 1 326 327 0 380,897,839 25,796 0.73 0.86 22,146

2006-2007 7,816,960 35,001 7,851,961 0 253 0 2 310 312 0 411,559,778 25,167 0.61 0.76 19,079

2007-2008 2,579,674 2,464,277 5,043,951 7,833 226 0 14 271 285 0 436,649,863 17,698 0.52 0.65 11,551

2008-2009 6,353,564 8,688,619 15,042,183 45,995 190 0 25 211 236 0 435,872,180 63,738 0.44 0.54 34,511

2009-2010 3,635,662 1,486,004 5,121,666 41,329 201 0 24 230 254 0 445,710,401 20,164 0.45 0.57 11,491

2010-2011 1,953,420 1,131,606 3,085,026 (416,954) 243 18 37 261 298 18 450,204,505 10,352 0.54 0.66 6,852

2011-2012 237,131 499,520 736,651 292,367 55 16 45 30 75 25 463,272,510 9,822 0.12 0.16 1,590

180,154,950 15,314,781

195,469,731 (29,430)

8,695 34

151 10,054

10,205 43 7,943,127,613

19,721 TOTAL 1.09 1.28

24,609

1PAGE

16

6


ACWA/JPIA Property Program

Reported Losses Per $1 Million of Insured Values May 7, 2012

BACKGROUND This graph represents the actual dollars lost for each $1 million of insured property. As the JPIA currently has over $4 billion in insured values, the actual dollar amount appears small. The striped portion of the bars represents the portion paid by the JPIA's excess insurance company, the dark portion paid by the pool. CURRENT SITUATION Losses have generally trended downward since the 2002-03 policy year, which included a $1.3 million Boiler and Machinery loss. The Southern California fires in 2003-04 and 2007-08 impacted those years and a hydroelectric plant was damaged in 2006-07, valued at $1.5 million. A large electrical transformer was damaged in the 2009-10 policy year and a large machinery loss, the result of a lightning strike, is included in the 2010-11 policy year. The information for the 2011-12 policy year represents a full year of data. The actual dollar amount of insured values has more than tripled between 1990 and the present. RECOMMENDATION None. For informational purposes only.

167

ACWA/JPIA - PROPERTY PROGRAM

REPORTED LOSSES PER $1 MILLION OF INSURED VALUES

FOR MONTH ENDING 3/31/2012

0

200

400

600

800

1,000

1,200

1,400

2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011 2011-2012

EXCESS LOSSES PER

$1 MILLION OF TIV

POOLED LOSSES PER

$1 MILLION OF TIV

POLICY YEAR

LOSSESYEAR (4/1)

POLICY POOLED EXCESS INCURRED

LOSSES LOSSESVALUES

INSURED

TOTAL

OF VALUES

$1 MILLION

LOSSES PER

POOLED

OF VALUES

$1 MILLION

LOSSES PER

TOTAL

RETENTION

INSURED

SELF

1997-1998 230,960 836,287 1,067,247 1,563,121,976 148 683 10,000

1998-1999 219,959 739,783 959,743 1,582,791,230 139 606 10,000

1999-2000 203,389 420,479 623,868 1,704,819,833 119 366 10,000

2000-2001 232,900 970,299 1,203,199 1,829,677,454 127 658 10,000

2001-2002 284,611 143,091 427,702 1,441,234,300 197 297 50,000

2002-2003 580,878 1,475,294 2,056,172 1,586,533,428 366 1,296 50,000

2003-2004 611,837 962,625 1,574,462 2,085,097,904 293 755 50,000

2004-2005 678,698 616,127 1,294,824 2,297,770,921 295 564 50,000

2005-2006 553,692 364,480 918,173 2,573,935,926 215 357 50,000

2006-2007 733,998 1,864,119 2,598,117 2,770,682,970 265 938 50,000

2007-2008 696,768 1,375,733 2,072,501 3,264,125,569 213 635 50,000

2008-2009 514,799 189,526 704,325 3,462,577,809 149 203 50,000

2009-2010 720,602 2,748,665 3,469,267 3,717,131,267 194 933 50,000

2010-2011 815,274 1,515,926 2,331,200 4,011,142,202 203 581 50,000

2011-2012 795,892 1,277,500 2,073,392 4,231,075,441 188 490 50,000

1PAGE

168


ACWA/JPIA Property Program

Occurrences Per $1 Million of Insured Values May 7, 2012

BACKGROUND This graph represents the actual number of losses for each policy year. The frequency of loss is often an indicator of severity and that appears to be the case here. CURRENT SITUATION There has been a moderate downward trend in the frequency of claims since the 2002-03 policy year. Trends in the Property Program are hard to project due to the relatively small number of claims. As always, this Program is designed to provide coverage primarily for large losses. RECOMMENDATION None. For informational purposes only.

169

FOR MONTH ENDING

OCCURRENCES PER $1 MILLION OF INSURED VALUES


3/31/2012

0.00

0.01

0.02

0.03

0.04

0.05

2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011 2011-2012

POLICY YEAR


PER $1 MILLION OF

VALUES (TIV)

# OF OCCURRENCES

YEAR (4/1) OCCUR

INSURED

INFLATION

FACTOR

INFLATION

ADJUSTED

TIV TOTAL INSURED VALUES

NUMBER

ANNUAL %

TOTAL

ADJUSTMENT

INFLATION

1997-1998 1.427 1,563,121,976 83 2,230,910,131 0.0372 1.60

1998-1999 1.405 1,582,791,230 83 2,223,407,847 0.0373 3.30

1999-2000 1.360 1,704,819,833 94 2,318,321,519 0.0405 2.80

2000-2001 1.323 1,829,677,454 92 2,420,341,231 0.0380 3.90

2001-2002 1.273 1,441,234,300 72 1,834,936,774 0.0392 2.60

2002-2003 1.241 1,586,533,428 97 1,968,740,073 0.0493 2.00

2003-2004 1.217 2,085,097,904 96 2,536,678,537 0.0378 1.90

2004-2005 1.194 2,297,770,921 90 2,743,288,782 0.0328 3.30

2005-2006 1.156 2,573,935,926 83 2,974,830,385 0.0279 3.40

2006-2007 1.118 2,770,682,970 91 3,096,925,611 0.0294 3.30

2007-2008 1.082 3,264,125,569 117 3,531,916,879 0.0331 3.50

2008-2009 1.045 3,462,577,809 85 3,619,951,970 0.0235 0.00

2009-2010 1.045 3,717,131,267 97 3,886,074,883 0.0250 1.50

2010-2011 1.030 4,011,142,202 86 4,131,476,468 0.0208 3.00

2011-2012 1.000 4,231,075,441 77 4,231,075,441 0.0182 0.00

1PAGE

170

NUMBER DISTRICT DESCRIPTION STATUS AMOUNT

CLAIM LOSS

FOR MONTH ENDING SIGNIFICANT LARGE CLAIMS OVER $75,000


3/31/2012

TOTAL

YEAR

POLICY

DATE

LOSS

1987-1988POLICY YEAR

87011 Glenn-Colusa Irrigation

District

Fire destroyed shop building Closed 100,5928/11/87

87020 Yuima Municipal Water

District

Mudslide damaged building Closed 145,32210/22/87

245,9141987-1988POLICY YEAR 505,530


89011 Central California

Irrigation District

Fire destroyed building Closed 100,2597/14/89

100,2591989-1990POLICY YEAR 292,058


91035 Oakdale Irrigation

District

Vandals damaged canal Closed 85,2506/10/91

85,2501991-1992POLICY YEAR 237,995


92017 Ramona Municipal

Water District

Seam on water tank cover split Closed 260,4748/22/92

92015 South Coast Water

District

Garage and shop destroyed by fire Closed 223,3598/17/92

483,8331992-1993POLICY YEAR 687,046


95006 San Diego County

Water Authority

Mudslide damaged control room. Closed 94,7295/24/95

94,7291995-1996POLICY YEAR 262,843


96057 East Orange County

Water District

Wind damaged reservoir roof Closed 113,89811/26/96

96072 Lower Tule River

Irrigation District

Capacitor fire resulted in business

interruption claim

Closed 75,8602/15/97

96032 Semitropic Water

Storage District

Turbine flooded during power outage Closed 75,4958/11/96

96028 Valley Center

Municipal Water

District

Power surge damaged electrical panel Closed 127,2658/6/96

392,5181996-1997POLICY YEAR 591,187


97001 East Orange County

Water District

Wind damaged reservoir roof Closed 85,5354/2/97

1PAGE

171


CLAIM LOSS



3/31/2012

TOTAL

YEAR

POLICY

DATE

LOSS


97015 Elsinore Valley

Municipal Water

District

Fire damaged building Closed 94,4837/3/97

97050 Orange County Water

District

Power surge damaged electrical panel Closed 89,85110/4/97

97035 Reclamation District

#108


533,7981997-1998POLICY YEAR 1,067,247


99-1633 Madera-Chowchilla

Water and Power

Authority

Hydro generator down Closed 181,7861/15/99

98002 Palmdale Water

District

Water backed up into water treatment

plant

Closed 176,0274/9/98

98008 Wheeler

Ridge-Maricopa Water

Storage District


507,4781998-1999POLICY YEAR 959,743



Water and Power

Authority

Hydro-electric plant turbine sustained

damage of unknown origin.

Closed 155,0956/13/99

00-2212 Rancho California

Water District

Fire damaged building and contents Closed 80,82212/29/99

235,9161999-2000POLICY YEAR 623,868


01-2850 Arvin-Edison Water

Storage District

Fire damaged a pump motor Closed 151,56710/10/00

01-2747 Bella Vista Water

District

Lightning strike damaged transformer Closed 123,1139/1/00

01-3162 Castaic Lake Water

Agency

Water leaked into ozone output line,

flooding 2 ozone generator units.

Closed 202,4002/26/01

01-2770 Yorba Linda Water

District

Toilet backed up in District office Closed 146,1769/11/00

623,2562000-2001POLICY YEAR 1,203,199


02-4208 Kern Water Bank

Authority

Lightning strike damaged 3 recovery

wells and pump station

Closed 81,3484/25/02


Water and Power

Authority

Plant shutdown - cause - unknown. Closed 1,321,8428/2/02

1,403,1902002-2003POLICY YEAR 2,056,172

2PAGE

172


CLAIM LOSS



3/31/2012

TOTAL

YEAR

POLICY

DATE

LOSS


03-5189 Berrenda Mesa Water

District

2000 HP motor & control switch was

damaged due to PG&E interruption

Closed 76,4885/22/03

04-5514 Friant Power Authority Fire damaged electrical panel and

resulted in business interruption claim

Closed 386,1498/1/03

04-5662 Helix Water District Fire damaged residential building and

garage

Closed 380,03610/28/03

04-6013 Mountain Gate

Community Services

District

Hail damaged the District office Closed 79,8952/26/04

922,5682003-2004POLICY YEAR 1,574,462


05-6526 Calaveras County

Water District

Fire damaged District's "602" tank Closed 205,3419/4/04

05-6805 Cucamonga Valley

Water District

Fire damaged control panel Closed 107,93812/20/04

05-6398 Merced Irrigation

District

Vandalism to heavy equipment Closed 111,9287/21/04

05-6378 Serrano Water District District pump failed - damage to pump

and control panel.

Closed 111,3407/16/04

04-6239 Stockton-East Water

District

Fire damaged control panel Closed 153,3146/11/04

05-6797 Western Canal Water

District

Water/sewage backed up into ice

maker drain - flooded office

Closed 77,33712/19/04

767,1982004-2005POLICY YEAR 1,294,824


07-8600 American River Flood

Control District

District employee embezzled funds

from District.

Closed 104,2213/1/06

06-7661 Mission Hills

Community Services

District


06-7741 North Coast County

Water District

Fire damaged vactor truck Closed 124,05712/22/05

06-7777 Reclamation District

#108

Electrical short damaged pump motor Closed 82,13412/22/05

546,2972005-2006POLICY YEAR 918,173



Storage District


07-8725 Golden Hills

Community Services

District

Fire sprinkler line broke & flooded

office

Closed 145,3481/14/07

07-8891 San Diego County

Water Authority

Flood damaged hydroelectric plant

when two water supply lines ruptured

Closed 1,575,0003/19/07

1,915,1972006-2007POLICY YEAR 2,598,117

3PAGE

173


CLAIM LOSS



3/31/2012

TOTAL

YEAR

POLICY

DATE

LOSS


08-9455 Fallbrook Public Utility

District

Rice Canyon Fire burned 2 chlorine

stations

Closed 968,91810/22/07

08-9450 Helix Water District Fire destroyed caretaker's residence

@ diversion dam.

Closed 180,40410/26/07

07-9107 San Luis Water District Fire damaged residence Closed 104,1296/5/07

08-9424 Yolo County Flood

Control & Water

Conservation District

Fire destroyed Hunting Lodge rental Closed 145,80910/12/07

1,399,2602007-2008POLICY YEAR 2,072,501



District

Rented boomlift rolled Closed 98,95910/1/08

98,9592008-2009POLICY YEAR 704,325


10-0956 Cachuma Operation

and Maintenance

Board

Fire damaged Core Shed Closed 312,0355/7/09

10-1202 Calleguas Municipal

Water District

Boiler & Machinery - Well #12 Closed 90,0845/28/09

10-1458 Kanawha Water

District

Fire damaged shop Closed 440,5772/15/10


District

Contractor dropped washer into 100

MVA transformer

Open 1,042,00011/7/09

10-1650 Mission Springs Water

District

Employee embezzeled funds. Open 116,2283/12/10

10-1143 West Basin Municipal

Water District

Water damaged building due to pump

failure

Closed 108,2759/20/09

2,109,1992009-2010POLICY YEAR 2,619,047


11-0352 Beaumont-Cherry

Valley Water District

Diesel spill near Well 21 Closed 160,5589/2/10

10-1581 Friant Power Authority Lightening strike hit KV line and

shorted out circuit breaker starting fire

that burned for 45 minutes.

Closed 1,244,8454/12/10

11-0409 Mammoth Community

Water District

Quonset hut #1 collapsed Closed 109,34912/21/10

11-0413 Serrano Water District PLD failed causing overflow in filtration

tank into gallery

Closed 75,95912/16/10

1,590,7112010-2011POLICY YEAR 2,331,200



Storage District

Lightning strike damage 3 - 5,500 HP

motors @ Forest Frick Pump Station

Open 450,0009/10/11

12-0101 Fresno Irrigation

District

Kitchen fire @ 9451 E. Olive Open 147,5008/12/11

4PAGE

174


CLAIM LOSS



3/31/2012

TOTAL

YEAR

POLICY

DATE

LOSS


12-0049 Helix Water District Explosion in Ozone Destruct Unit #2 Open 250,0007/13/11

12-0190 Kern County Water

Agency

Switch gear @ 2B & 4B melted Open 200,0009/10/11

12-0112 Lower Tule River

Irrigation District

Bearing damage @ LakeSuccess

Turbine

Open 370,0007/7/11

12-0171 Mission Springs Water

District

Sprinkler system went off sending 3"

of water into building

Open 100,0009/7/11

1,517,5002011-2012POLICY YEAR 2,073,392

15,573,031GRAND TOTAL

5PAGE

175

FOR MONTH ENDING CLAIMS STATUS REPORT (CNP'S OMITTED)


(4/1) CLAIM TIV RATIO

YEAR # OF OCCUR NUMBER OF CLAIMS * PAID CLAIMS and CASE RESERVES * COST PER TIV CLAIMS TO

AVERAGE REPORTEDPOLICY

PAID RESERVE TOTAL CHGTOTAL CHG OPN CLSD TOTAL CHG AMOUNTCLAIM

3/31/2012

1983 33 33 0 0 33 0 115,052 0 115,052 0 3,486.43 $55,137,239.00 $0.21 %

1984 45 45 0 0 45 0 237,923 0 237,923 0 5,287.18 $328,433,553.00 $0.07 %

1985-1986 22 22 0 0 22 0 61,007 0 61,007 0 2,773.03 $410,283,618.00 $0.01 %

1986-1987 31 31 0 0 31 0 154,408 0 154,408 0 4,980.90 $621,839,967.00 $0.02 %

1987-1988 41 41 0 0 41 0 505,530 0 505,530 0 12,330.00 $629,926,275.00 $0.08 %

1988-1989 54 54 0 0 54 0 217,588 0 217,588 0 4,029.41 $654,172,529.00 $0.03 %

1989-1990 42 42 0 0 42 0 292,058 0 292,058 0 6,953.77 $753,623,213.00 $0.04 %

1990-1991 56 56 0 0 56 0 257,360 0 257,360 0 4,595.71 $825,667,149.00 $0.03 %

1991-1992 56 56 0 0 56 0 237,995 0 237,995 0 4,249.91 $936,322,706.00 $0.03 %

1992-1993 54 54 0 0 54 0 687,046 0 687,046 0 12,723.07 $1,118,859,900.00 $0.06 %

1993-1994 58 58 0 0 58 0 369,210 0 369,210 0 6,365.69 $1,174,144,880.00 $0.03 %

1994-1995 64 64 0 0 64 0 345,719 0 345,719 0 5,401.86 $1,249,532,518.00 $0.03 %

1995-1996 54 54 0 0 54 0 262,843 0 262,843 0 4,867.46 $1,357,084,867.00 $0.02 %

1996-1997 69 69 0 0 69 0 591,187 0 591,187 0 8,567.93 $1,382,142,590.00 $0.04 %

1997-1998 83 83 0 0 83 0 1,067,247 0 1,067,247 0 12,858.39 $1,563,121,976.00 $0.07 %

1998-1999 83 83 0 0 83 0 959,743 0 959,743 0 11,563.17 $1,582,791,230.00 $0.06 %

1999-2000 94 94 0 0 94 0 623,868 0 623,868 0 6,636.90 $1,704,819,833.00 $0.04 %

2000-2001 92 92 0 0 92 0 1,203,199 0 1,203,199 0 13,078.25 $1,829,677,454.00 $0.07 %

2001-2002 72 72 0 0 72 0 427,702 0 427,702 0 5,940.31 $1,441,234,300.00 $0.03 %

2002-2003 97 97 0 0 97 0 2,056,172 0 2,056,172 0 21,197.65 $1,586,533,428.00 $0.13 %

2003-2004 96 96 0 0 96 0 1,574,462 0 1,574,462 0 16,400.64 $2,085,097,904.00 $0.08 %

2004-2005 90 90 0 1 89 0 1,294,823 1 1,294,824 -100 14,386.94 $2,297,770,921.00 $0.06 %

2005-2006 83 83 0 0 83 0 918,173 0 918,173 0 11,062.32 $2,573,935,926.00 $0.04 %

2006-2007 90 90 0 0 90 0 2,598,117 0 2,598,117 0 28,867.96 $2,770,682,970.00 $0.09 %

2007-2008 117 117 0 0 117 0 2,072,501 0 2,072,501 0 17,713.68 $3,264,125,569.00 $0.06 %

2008-2009 79 79 0 1 78 0 701,548 2,777 704,325 0 8,915.51 $3,462,577,809.00 $0.02 %

2009-2010 97 97 0 3 94 0 1,752,910 1,716,358 3,469,267 0 35,765.64 $3,717,131,267.00 $0.09 %

2010-2011 85 85 2 5 80 2 2,272,567 58,633 2,331,200 20,000 27,425.88 $4,011,142,202.00 $0.06 %

2011-2012 77 77 6 26 51 6 667,277 1,406,115 2,073,392 29,189 26,927.17 $4,231,075,441.00 $0.05 %

TOTAL 2,014 8 8 36 1,978 2,014 24,525,233 3,183,884 27,709,117 49,089 $49,618,889,234.00 13,758.25 0.056 %

1PAGE

17

6


ACWA/JPIA Workers' Compensation Program

Reported Losses Per $1 Million Of Payrolls May 7, 2012

BACKGROUND The graph represents reported losses per $1 million of payrolls. CURRENT SITUATION Since the 2001-02 policy year, the JPIA has seen a very favorable trend. These good results suggest that the JPIA is making significant progress. Losses ticked slightly upwards in 2007 and 2008, as economic conditions deteriorated, but appear to be trending downward again. Legislative changes, such as SB899 which was passed in 2004, are showing very positive results throughout the state of California. The JPIA has benefited from the changes in the law, as well as our own emphasis on workplace safety. Beginning in 2006, the JPIA reduced the rates charged to members by more than 50 percent. Since 2008, including the current policy year, JPIA rates has remained unchanged, even as losses and rates in the industry, as a whole, have increased. The years 1995 through 1997 were fully insured by Cal Comp. They are now bankrupt and the JPIA is no longer able to update the numbers for those years with any confidence. In all probability they are higher than the tables would suggest, as the results have not been updated for several years. The California Insurance Guaranty Association is handling the remaining claims. RECOMMENDATION None. For informational purposes only.

177

FOR MONTH ENDING

REPORTED LOSSES PER $1 MILLION OF PAYROLL REPORT

ACWA/JPIA - WORKERS' COMPENSATION PROGRAM

3/31/2012

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011 2011-2012

EXCESS LOSSES PER$1 MILLION OF PAYROLL

POOLED LOSSES PER$1 MILLION OF PAYROLL

Policy Year

YEAR (7/1) LOSSES LOSSES PAYROLLMEMBERS OF PAYROLL OF PAYROLL

PROGRAM POOLED EXCESS TOTAL ACTUAL# OF $1 MILLION $1 MILLION

LOSSES PER LOSSES PER

LOSSES

EXCESS TOTAL

RETENTION

INSURED

SELF

1997-1998* 3,029,775 0 3,029,775 119,065,741 97 0 25,446 0

1998-1999 2,420,102 1,373,100 3,793,202 128,322,884 98 10,700 29,560 250,000

1999-2000 2,273,473 530,075 2,803,548 136,098,329 99 3,895 20,599 250,000

2000-2001 4,164,952 1,986,629 6,151,581 177,372,374 116 11,200 34,682 250,000

2001-2002 3,529,721 0 3,529,721 192,048,405 116 0 18,379 350,000

2002-2003 4,049,329 0 4,049,329 242,003,379 127 0 16,733 650,000

2003-2004 3,561,589 0 3,561,589 293,616,158 148 0 12,130 2,000,000

2004-2005 3,210,463 0 3,210,463 312,794,884 152 0 10,264 2,000,000

2005-2006 2,727,931 0 2,727,931 323,741,627 152 0 8,426 2,000,000

2006-2007 2,130,383 0 2,130,383 334,492,981 152 0 6,369 2,000,000

2007-2008 3,646,027 0 3,646,027 383,200,027 152 0 9,515 2,000,000

2008-2009 4,543,084 0 4,543,084 378,195,701 151 0 12,013 2,000,000

2009-2010 3,879,978 0 3,879,978 387,417,448 154 0 10,015 2,000,000

2010-2011 3,834,288 0 3,834,288 397,715,865 161 0 9,641 2,000,000

2011-2012 2,276,633 0 2,276,633 409,725,158 164 0 7,409 2,000,000

1PAGE

* Cal-Comp years were fully insured.

- Latest Policy Year's 'Losses' include partial activity.

- Latest Policy Year's 'Losses Per $1 Million of Payroll' have been annualized 9 months.

178


ACWA/JPIA Workers' Compensation Program Claims Per $1 Million Of Payrolls

May 7, 2012 BACKGROUND The information in this graph represents the frequency of claims. For reporting purposes, the graph shows frequency as the number of claims per $1 million of payrolls. CURRENT SITUATION Since 1994, the JPIA has made steady progress in reducing frequency. A slight increase in frequency in the 2008-09 policy year corresponds to the increase in total losses during the same period. Frequency is usually a good predictor of future severity. That is, when there are fewer claims, they are usually less severe. Our training for the last several years has focused heavily on workplace safety and management training. The results for all three Programs suggest that it is the right emphasis. The full impact of legislative changes appears to be having a very favorable impact. The initial results look very good; however, proposed changes to the law may dampen the positive trends and the benefits gained may begin to level off. RECOMMENDATION None. For informational purposes only.

179

FOR MONTH ENDING

CLAIMS PER $1 MILLION OF PAYROLLS REPORT

ACWA/JPIA - WORKERS' COMPENSATION PROGRAM

3/31/2012

0.0

0.5

1.0

1.5

2.0

2.5

2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011 2011-2012

Policy Year


PER $1 MILLION OF

PAYROLLS

NUMBER OF CLAIMS

YEAR (7/1) CLAIMS

ACTUAL

INFLATION

FACTOR

INFLATION

ADJUSTED

PAYROLLS PAYROLLS

NUMBER

1997-1998 329 119,065,741 1.400 166,676,539 1.974

1998-1999 302 128,322,884 1.372 176,113,072 1.715

1999-2000 280 136,098,329 1.339 182,228,547 1.537

2000-2001 354 177,372,374 1.292 229,239,705 1.544

2001-2002 363 192,048,405 1.240 238,202,792 1.524

2002-2003 413 242,003,379 1.222 295,727,376 1.397

2003-2004 464 293,616,158 1.198 351,762,776 1.319

2004-2005 420 312,794,884 1.170 365,956,625 1.148

2005-2006 404 323,741,627 1.136 367,731,889 1.099

2006-2007 392 334,492,981 1.091 364,979,966 1.074

2007-2008 400 383,200,027 1.061 406,737,705 0.983

2008-2009 420 378,195,701 1.008 381,221,266 1.102

2009-2010 409 387,417,448 1.008 390,516,787 1.047

2010-2011 414 397,715,865 1.008 400,897,592 1.033

2011-2012 272 409,725,158 1.000 409,725,158 0.885

1PAGE

- Payrolls Adjusted for Inflations - CNP's Omitted.

- Factor based on CPI for West Coast from US Dept of Labor

- Latest Policy Year's 'Number of Claims Per $1 Million of Inflation Adjusted Payrolls' has been annualized 9 months.

- Latest Policy Year's 'Number of Claims' include partial activity.

180

DISTRICT NUMBER AMOUNT

FOR MONTH ENDING WITH LOSS AMOUNTS OVER $100,000

ACWA/JPIA - WORKERS' COMPENSATION PROGRAMSIGNIFICANT LARGE CLAIMS - OPEN & CLOSED

3/31/2012

CLAIM

STATUSDESCRIPTION

LOSS


Valley Center Municipal Water District 96248517 slipped hurt both ankles 220,004Closed

220,0041984-1985 TOTALS


Helix Water District 96108611 valley fever 260,065Closed

260,0651985-1986 TOTALS


Western Municipal Water District 96268907 hands- applying pressure on ha 155,552Closed

155,5521988-1989 TOTALS


Mission Springs Water District 96089006 r. shoulder & back-strained du 132,131Closed

Western Municipal Water District 96269002 back- removing meter box. 126,817Closed

Yolo County Flood Control & Water Conservation District96279002 sharp pain in neck-ee picking 107,393Closed

366,3421989-1990 TOTALS


Palo Verde Irrigation District 96349108 l. shoulder-muscle pulled 104,997Closed

104,9971990-1991 TOTALS


Browns Valley Irrigation District 96029203 injury climbing on stairs 152,157Closed

San Diego County Water Authority 96189201 uppr back strain 232,655Open

Yolo County Flood Control & Water Conservation District96279206 leg, hip and foot 367,333Open

752,1451991-1992 TOTALS


Butte Water District 96039301 lft thumb;amputated when his h 165,952Closed

Reclamation District #108 96379301 low back strain 196,880Closed

362,8321992-1993 TOTALS


Palo Verde Irrigation District 96349505 shldr - strn,sprn,dsloc-liftin 255,099Closed

Paradise Irrigation District 01-3253 bilateral upper extremities, left and

right shoulder including hands, low

back bilateral lower extremities

caused from unknown reasons. the

district first notice of this was from an

attorney.

143,843Closed

Walnut Valley Water District 96259503 low back/while working ee had 226,618Closed

625,5601994-1995 TOTALS

1PAGECalComp Years

181




3/31/2012

CLAIM

STATUSDESCRIPTION

LOSS


Calaveras County Water District 83158 possible chemical expos 216,177Open

Mission Springs Water District 09667 turning/water valve 100,646Closed

Rancho California Water District 62037 lifting vault lid 128,349Closed

San Diego County Water Authority 69669 pulling meter 132,129Closed

Western Municipal Water District 09184 lifting a concret meter 100,577Closed

677,8771995-1996 TOTALS


Elsinore Valley Municipal Water District 91769 tire blow out 131,739Closed

Oakdale Irrigation District 40940 cleaning trash fr gate 106,631Closed

Paradise Irrigation District 18354 painting overhead 196,570Open

Reclamation District #108 90522 boom fell 683,778Open

Reclamation District #108 90525 picked up boom off co-wk 114,138Open

Soquel Creek Water District 83351 using jackhammer 124,649Open

Valley Center Municipal Water District 24013 open electrical panel 266,602Open

1,624,1071996-1997 TOTALS


East Contra Costa Irrigation District 75977 twisted his right knee 383,845Open

Elsinore Valley Municipal Water District 56277 loosening water valve 139,708Open

Humboldt Community Services District 38478 running wacker 277,584Open

Rainbow Municipal Water District 54476 putting equipment back 103,033Open

South Sutter Water District 49729 lifting spray tank 240,271Open

Tahoe City Public Utility District 81104 situational stress 139,098Closed

Walnut Valley Water District 75607 moving meter assembler 102,184Open

1,385,7231997-1998 TOTALS

2PAGECalComp Years

182




3/31/2012

CLAIM

STATUSDESCRIPTION

LOSS


Carmichael Water District 99-1569 pulled on chain on back of dumpster

and right wrist popped.

106,837Closed

Elsinore Valley Municipal Water District 99-1112 strained back while adding additional

suction piping to floating intake

barge.

116,258Open

Newhall County Water District 99-1639 alleges cumulative stress and strain

of employment

146,277Closed

Orange County Water District 99-1430 strained back while digging out a

sprinkler.

113,924Closed

San Diego County Water Authority 99-1408 strained back while opening barbed

wire gate

210,674Open

South Coast Water District 99-1423 stuck an underground power line

while digging with a pneumatic clay

spade to create a clearance around a

water line.

1,623,100Closed

South Coast Water District 99-1682 while working to repair a service

break, digging to expose the water

main with a hand shovel. felt a pull in

his back and became increasingly

more painful.

134,542Closed

2,451,6131998-1999 TOTALS


Merced Irrigation District 00-2265 twisted back while pushing concrete. 780,075Open

Palo Verde Irrigation District 00-2205 cumulative trauma 165,800Closed

Reclamation District #108 00-2543 lumbar strain caused when putting

pads on crane.

161,288Closed

Soquel Creek Water District 00-2373 alleged cumulative trauma 243,428Closed

Trabuco Canyon Water District 00-1939 lifting a jack hammer out of a ditch, 4

1/2 feet deep, to ground level.

173,449Closed

1,524,0401999-2000 TOTALS

3PAGECalComp Years

183




3/31/2012

CLAIM

STATUSDESCRIPTION

LOSS


Consolidated Irrigation District 01-2685 motor vehicle accident 753,028Open

Fallbrook Public Utility District 01-2866 lifted oxygen tank off of mount of

welding truck and felt pain in his

back, right hip, and leg.

113,922Open

Montecito Water District 01-3443 ct 126,439Closed

Montecito Water District 01-3286 lumbar strain caused when moving

pipes.

197,172Closed

Otay Water District 01-3324 tingling sensation in right arm and

wrist caused when operating a

payment processing machine.

110,305Closed

Otay Water District 01-3444 hand and thumb pain caused from

heavy typing and keying.

530,944Open

Otay Water District 01-2957 lumbar strain caused when

responding to an alarm at the

treatment plant when he stepped off

the catwalk and turned towards an

engine located off the catwalk.

363,172Open

Palmdale Water District 01-2821 using district bathroom and black

widow spider bit him on the left arm

1,339,509Open

Rancho California Water District 01-3309 pain in lower back and left leg

caused when digging, driving,

moving, that occurred over a three

month period.

122,748Closed

Scotts Valley Water District 01-3398 limited motion and pain to right

shoulder area, the rotator cup that

occurred when shoveling in the

reclaim tank ditch.

179,677Open

Soquel Creek Water District 01-2811 alleged cumulative trauma 104,505Closed

Tehama-Colusa Canal Authority 01-2978 pain in the groin area caused when

moving hydro crane pushing block

(hook) to secure it in place for

transport.

120,984Closed

Trabuco Canyon Water District 01-3393 neck, back, and lumbar strain that

occurred when on a service call in a

district owned vehicle he was

rear-ended.

199,573Closed

4,261,9772000-2001 TOTALS

4PAGECalComp Years

184




3/31/2012

CLAIM

STATUSDESCRIPTION

LOSS


Amador Water Agency 02-3817 deep cut on top of left foot caused

when using a gas powered weed

eater to cut tall grass he hit a rock

that was hidden by the tall grass.

the cutting blade broke off and struck

him on the top of his foot.

102,526Closed

Central Basin Municipal Water District 02-3893 standing on ladder stepped down and

experienced pain.

167,186Open

Coastside County Water District 02-4308 twisted left knee when shoveling

rock.

143,487Closed

Consolidated Irrigation District 02-4325 head, back, and ribs were injured

when employee was driving a district

vehicle, he was in an auto accident.

189,419Closed

Desert Water Agency 02-4031 pain and numbness which began in

his back right side caused when he

was standing up from a stooped

position he experienced the pain.

188,112Closed

Elsinore Valley Municipal Water District 02-4233 while reading meters, twisted right

knee

112,461Closed

Humboldt Community Services District 02-3702 injury to ankles when prepping an

area on the roof for painting he

reached at an odd angle, became

unsteady and fell. his feet became

tangled in the ladder steps.

209,961Closed

Municipal Water District of Orange County 02-4311 sprained right arm and side of neck

caused while using the computer and

the phone.

234,525Closed

Orange County Water District 02-4126 superfacial lacerations to back,

shoulders, neck and arms caused

when closing a rolling gate.

114,336Open

Quartz Hill Water District 03-5027 continuous trauma 141,706Closed

Riverview Water District 02-4161 low back, right lower extremities,

(leg, ankle, feet) pains that occurred

during the course of his job.

175,543Closed

Santa Ynez River WCD Improvement District No. 1 02-3590 lumbar, right hip, and neck area were

injured when employee was preparing

to install a water service and meter

when another employee was

spraying the area with water for dust

control the employee was shutting

down the hose which diverted

towards claimant.

284,736Closed

2,063,9982001-2002 TOTALS

5PAGECalComp Years

185




3/31/2012

CLAIM

STATUSDESCRIPTION

LOSS


East Contra Costa Irrigation District 03-4916 employee suffers pain in both knees

as a result of repetitive activities.

195,141Open

East Contra Costa Irrigation District 03-4759 lumbar, thoracic, and cervical back

injuries caused when lifting debris on

two occassions during day 11/19/02.

125,694Open

Helix Water District 03-4850 left shoulder strain caused when

throwing debris into dump truck

beds.

101,396Open

Merced Irrigation District 03-4725 massive head trauma caused when

changing oil filter on gradall. the

hood was open. he grabbed the

hood to stabilize himself and the

hood closed causing him to fall.

196,509Closed

Newhall County Water District 03-5131 employee strained lumbar in the

course of either shoveling or pulling a

hose out of mud.

354,567Closed

Padre Dam Municipal Water District 03-4640 pain in right side of body, arm, leg

and foot caused when shoveling dirt.

126,669Closed

Rancho California Water District 03-4792 lower back pain experienced while

bending over to read meter

123,862Closed

Rancho California Water District 03-4981 while lifting cement meter lids

repeatedly, employee started to feel

lower back pain.

114,188Closed

Reclamation District #108 03-5255 employee suffered shoulder strain as

a result of lifting 20 lb chemical

bottles.

145,924Closed

San Gabriel County Water District 03-4714 tore, damaged tissue in left knee

caused when shoveling and squatting

to put in a water service.

117,273Closed

Yolo County Flood Control & Water Conservation District03-5191 employee suffered a lumbar strain

after slipping while stepping from

board walk to cement. employee did

not fall but twisted his back.

117,783Closed

1,719,0062002-2003 TOTALS

6PAGECalComp Years

186




3/31/2012

CLAIM

STATUSDESCRIPTION

LOSS


Calaveras County Water District 04-5911 employee injured his right wrist and

elbow when he slipped and fell on

some ice while performing an

inspection.

165,883Closed

Calleguas Municipal Water District 04-5357 employee suffers from whiplash as a

result of being rear-ended while

stopped at a traffic light in a district

vehicle.

122,904Open

Castaic Lake Water Agency 04-6041 employee injured his right knee when

he stepped over a drain pipe and

slipped.

155,062Closed

Helix Water District 04-5715 employee has swollen knees due to

repeated climbing lake terrain

298,882Open

Orange County Water District 04-5761 strain to neck and middle back when

employee got off dozer

139,677Open

Otay Water District 04-5559 employee experienced pain and

swelling in both hands and her

fingers as a result of keyboarding.

103,790Closed

Reclamation District #108 04-6231 burns to hands, arms face while

trying to start pump

175,676Open

San Diego County Water Authority 04-5924 injured left hand and fingers - while

inspecting area employee made

contact with blade of rotary fan. the

fan guard had been removed.

120,189Closed

Stockton-East Water District 04-5977 landed on buttocks when slipped and

fell while pulling on a rope

156,050Open

1,438,1122003-2004 TOTALS


Consolidated Irrigation District 05-6396 shoulder and back pain after travel to

read wells

117,153Closed

Elsinore Valley Municipal Water District 05-7207 asthma from cloud of sand blasting

materials

401,552Closed

Helix Water District 05-7142 right knee strain while standing on a

ladder

159,500Open

Palmdale Water District 05-7240 left ankle, left shoulder, left arm, right

knee and back strain after hose

struck employee

155,190Open

Quartz Hill Water District 05-6897 dirt/rock in both ears while bending

over pipe when loose piece of dirt fell

on his head

358,413Closed

San Luis & Delta-Mendota Water Authority 05-6707 strain to left shoulder, neck and

spine after pouring concrete

145,864Open

Sweetwater Authority 05-7255 right knee strain from climbing down

ladder

144,675Closed

Yolo County Flood Control & Water Conservation District06-7427 strained middle and lower back when

fell walking downhill.

289,275Open

1,771,6222004-2005 TOTALS

7PAGECalComp Years

187




3/31/2012

CLAIM

STATUSDESCRIPTION

LOSS


Orange County Water District 06-8222 death, possibly due to heart attack

while sitting in truck.

191,451Closed

Orange County Water District 07-8605 back injury from repetitive sitting on

bulldozer and heavy equipment

320,852Closed

South Sutter Water District 06-7447 back strain & spasms from using

weed eater

222,810Open

Tahoe City Public Utility District 07-8553 strained lower back and tailbone from

prolonged sitting at computer.

195,974Open

Valley County Water District 06-7635 strained thoracic and lumbar back

regions while painting office walls.

419,161Open

1,350,2472005-2006 TOTALS


Walnut Valley Water District 09-0210 strained wrist performing job duties. 163,184Open

163,1842006-2007 TOTALS


Clear Creek Community Services District 08-9328 strained right shoulder moving broken

concrete pieces by hand.

279,429Open

El Dorado Irrigation District 08-0028 strained neck when climbing a ladder

to exit vault.

177,878Open

Mammoth Community Water District 08-9423 abrasions on right hip and lower back

when hit with backhoe.

184,476Open

Merced Irrigation District 08-9395 strained lower back when stepped in

sewer cleanout that was uncovered.

110,799Open

Merced Irrigation District 08-9761 strained lower middle back while

moving kelly bar with anchors and

anchor rod attached.

132,201Open

Rancho California Water District 08-9830 strained lower back when bent down

to pick up meter box lid.

351,997Open

Sweetwater Authority 08-9373 strained lower back while mixing

cement in wheelbarrow.

160,528Open

Western Municipal Water District 09-0600 contracted valley fever while

performing normal duties.

371,693Open

Yolo County Flood Control & Water Conservation District08-9474 broke right leg above ankle when fell

off ladder while painting.

331,846Open

2,100,8452007-2008 TOTALS

8PAGECalComp Years

188




3/31/2012

CLAIM

STATUSDESCRIPTION

LOSS


Consolidated Irrigation District 09-0674 strained neck and right shoulder

when grader stopped suddenly after

running over stump.

256,670Open

Crescenta Valley Water District 09-0782 strained lower back and ankle when

lost balance and fell while inspecting

work at reservoir.

230,806Open

Crescenta Valley Water District 09-0606 strained lower back and right sciatica

while shoveling.

126,496Open

East Contra Costa Irrigation District 09-0819 strained right bicep while opening

inline valve.

118,458Open

El Dorado Irrigation District 09-0159 strained right knee, cut right elbow

when fell when climbing onto

backhoe trailer when missed handle.

100,985Open

Elsinore Valley Municipal Water District 09-0877 strained bilateral arms, elbow and

wrists from doing repetitive computer

and lab work.

198,000Open

Laguna Beach County Water District 09-0655 legs, neck and back when fell 20 ft

off fence when bricks gave way,

landing on hood of truck, while

climbing over dist fence to enter

parking lot because driver forgot

remote for gate.

341,706Open

Merced Irrigation District 09-0673 strained right shoulder while pulling

boards out of the weirs to send water

downstream.

255,784Open

Mesa Consolidated Water District 09-0324 strained lower back and right shin

when he stepped on a curb and fell

while digging a hole.

171,960Open

Patterson Irrigation District 10-1016 injured right hip and back, cause

unknown.

125,186Open

Ramona Municipal Water District 09-0822 strained left shoulder and neck while

tying backhoe to trailer when binder

came loose jerking the arm back.

150,975Closed

Sweetwater Authority 09-0752 ct to bilateral hands, wrists, elbows,

upper extremities, neck due to

repetitive work activities.

100,717Open

Western Municipal Water District 09-0582 back and neck injuries when veh

hydroplaned, he lost control and

struck ov.

170,815Open

Yolo County Flood Control & Water Conservation District09-0577 strained right clavicle and right

shoulder while pushing up on trip

switch to open dam gate.

100,541Open

2,449,0992008-2009 TOTALS

9PAGECalComp Years

189




3/31/2012

CLAIM

STATUSDESCRIPTION

LOSS


East Contra Costa Irrigation District 10-1730 injured rt elbow, left hip, back,

shoulder and had difficulty breathing

when fell while walking down stairs

carrying a moss hook.

211,753Open

Elsinore Valley Municipal Water District 10-1407 strained neck and shoulder when

backing dist truck when left rear tire

left pavement and truck slide down

slope then rolled.

140,615Open

Helix Water District 10-1428 strained right wrist after one week of

breaking off concrete and cleaning

welds.

105,879Open

Helix Water District 10-1697 bilateral knees and back from

repetitive walking, climbing ladders,

kneeling and squatting.

151,000Open

Merced Irrigation District 10-1274 strained right knee when slipped

getting out of work boat.

113,627Open

Orange County Water District 10-1396 bruised left hip and left shoulder

when slipped and fell while reading

water gauge in the rain.

136,986Open

San Luis Water District 10-1273 injured chest, back and right thigh

when dump truck overturned because

the load shifted.

128,906Open

South Coast Water District 10-1647 strained left shoulder from jetting with

large heavy storm drain nozzle.

170,000Open

1,158,7672009-2010 TOTALS


Beaumont-Cherry Valley Water District 11-0848 struck and killed by motor vehicle

while marking water line in street.

265,000Open

Central Coast Water Authority 11-0149 injured left leg and left hip when

working in vault, lost balance and fell

outside of vault.

147,558Open

Glenn-Colusa Irrigation District 11-0654 strained neck and back from

repetitive operation of backhoe and

other equipment.

113,084Open

Kern County Water Agency 11-0507 injury to neck, rt upper extremity and

bilateral feet, cause unknown.

232,748Open

Mission Springs Water District 11-0437 strained lower back moving tamper. 134,215Open

South Feather Water and Power Agency 11-0037 ears (hearing), bilateral knees,

pulmonary, cause unknown.

141,131Open

1,033,7342010-2011 TOTALS


Calaveras County Water District 12-0074 injured left hand while driving forklift

when forklift tipped over.

704,558Open

Georgetown Divide Public Utility District 12-0232 injured right side and back when he

stepped off roof and fell 8-10 feet to

ground.

130,000Open

834,5582011-2012 TOTALS

30,856,007GRAND TOTAL

10PAGECalComp Years

190

YEAR (7/1) PAID RESERVES TOTALTOTALOPEN CLSD CHG PAYROLL P/R RATIOCHANGE

CLAIMS TO

CLAIM

COST PER* PAID CLAIMS AND CASE RESERVES *

REPORTEDAVERAGE

3/31/2012

NUMBER OF CLAIMSPOLICY

ACWA/JPIA - WORKERS' COMPENSATION PROGRAMCLAIMS STATUS REPORT (CNP'S OMITTED)

FOR MONTH ENDING

1984-1985 886,576 0 886,576 191 0 191 0 21,341,601 4.15 0 4,642

1985-1986 639,886 0 639,886 183 0 183 0 23,268,760 2.74 0 3,497

1986-1987 392,318 0 392,318 145 0 145 0 23,288,852 1.68 0 2,706

1987-1988 467,600 0 467,600 136 0 136 0 24,398,331 1.91 0 3,438

1988-1989 726,203 14,316 740,519 137 1 136 0 29,367,472 2.52 0 5,405

1989-1990 1,253,764 0 1,253,764 191 0 191 0 34,309,438 3.65 0 6,564

1990-1991 832,875 0 832,875 194 0 194 0 45,194,153 1.84 0 4,293

1991-1992 1,378,697 99,276 1,477,973 247 2 245 0 59,299,292 2.49 0 5,984

1992-1993 1,441,209 0 1,441,209 285 0 285 0 66,030,291 2.18 0 5,057

1993-1994 1,033,471 3,517 1,036,988 299 1 298 0 76,643,624 1.35 0 3,468

1994-1995 1,522,500 0 1,522,500 303 0 303 0 89,359,993 1.70 0 5,025

1995-1996 2,159,584 10 2,159,594 327 7 320 0 101,945,052 2.11 0 6,604

1996-1997 3,056,164 14 3,056,178 332 11 321 0 107,527,235 2.84 0 9,205

1997-1998 3,029,753 22 3,029,775 329 19 310 0 119,065,741 2.54 0 9,209

1998-1999 3,683,917 109,285 3,793,202 302 4 298 0 128,322,884 2.95 0 12,560

1999-2000 2,652,507 151,041 2,803,548 280 2 278 0 136,098,329 2.05 0 10,013

2000-2001 5,678,586 472,994 6,151,581 354 9 345 0 177,372,374 3.46 7,000 17,377

2001-2002 3,388,297 141,424 3,529,721 363 7 356 0 192,048,405 1.83 0 9,724

2002-2003 3,863,789 185,540 4,049,329 413 10 403 0 242,003,379 1.67 0 9,805

2003-2004 3,208,231 353,358 3,561,589 464 12 452 0 293,616,158 1.21 15,245 7,676

2004-2005 3,023,909 186,554 3,210,463 420 9 411 0 312,794,884 1.02 32 7,644

2005-2006 2,141,479 586,452 2,727,931 404 10 394 0 323,741,627 0.84 21,300 6,752

2006-2007 1,989,638 140,745 2,130,383 392 11 381 0 334,492,981 0.63 -9,588 5,435

2007-2008 2,554,018 1,092,009 3,646,027 400 27 373 0 383,200,027 0.95 99,757 9,115

2008-2009 3,315,088 1,227,996 4,543,084 420 46 374 0 378,195,701 1.20 67,825 10,817

2009-2010 2,727,231 1,152,747 3,879,978 409 54 355 0 387,417,448 1.00 16,917 9,486

2010-2011 1,914,530 1,919,758 3,834,288 414 70 344 0 397,715,865 0.96 105,140 9,262

2011-2012 843,616 1,433,017 2,276,633 272 114 158 25 409,725,158 0.55 305,551 8,370

59,805,438 426 8,180

8,606

25 9,270,076

69,075,514

629,180

7,469

4,917,785,054

1.93 TOTAL

1Page

19

1

ACWA/JPIA Workers’ Compensation and Property Program Renewals

May 7, 2012

BACKGROUND The JPIA’s Property Program renewed on April 1st. The reinsurance for the Program also renewed on that date. Federal Insurance, a subsidiary of the Chubb Group, was the incumbent reinsurer. The JPIA’s retention for property losses is $50,000. The machinery breakdown, or boiler and machinery, coverage is fully reinsured by Chubb. Chubb has been the carrier for 13 of the last 16 years. The JPIA’s Workers’ Compensation Program will renew on July 1st as will the excess insurance. Safety National is the current carrier for the excess coverage. The JPIA retains the first $2 million of each loss. CURRENT SITUATION: Property Program Chubb had indicated a desire to increase rates on renewal. As a result, staff worked with JPIA’s broker, Bill Malone of WGM & Associates, to obtain alternative proposals. This work began last summer, since a couple of the interested competitors wanted to conduct loss control assessments of about a dozen JPIA members’ facilities to gain a better understanding of the nature and quality of the facilities and operations covered. The renewal proposal from Chubb did indeed reflect a rate increase of about 4%. All other terms were unchanged. They did provide an optional proposal with a $100,000 retention. However, the proposed savings of $165,000 were more than offset by the projected additional retained losses of over $300,000 annually (on average). Liberty Mutual presented the most attractive alternative proposal, with premium savings of nearly $700,000 compared to Chubb’s proposal. However, Liberty Mutual’s proposal required significant increases in deductibles/retentions. These were difficult to analyze as they varied by type and size of equipment involved as well as how they were applied to business income losses versus direct physical damage. In examining this, staff and the Property Committee looked at various loss scenarios and found there were potential single loss retentions of more than $2 million that would have to be borne by either the Program or the affected member. In addition there were some additional costs to the Liberty Mutual proposal in that JPIA would have to hire a third party consulting firm to perform many of the loss control inspections that are currently being provided by Chubb at no additional cost. After reviewing the alternative proposals, the Executive Committee concurred with the recommendation of the Property Committee to accept the Chubb renewal proposal. Although there was a slight increase in the cost of the reinsurance for the Property

192

Prepared by John Gilstrap, Director of Member Services Prepared April 13, 2012

Program, it was felt that the Program’s funding was stable and there was no change in the rates used to calculate members’ premiums. There are currently 259 Property Program members with $4.45 billion in insured values. Workers’ Compensation Safety National offered to renew the excess insurance “as is”, with no change in rates, terms or conditions. Other proposals received by Mr. Malone were not competitive with the current excess pricing. The Workers’ Compensation Program Committee’s recommendations to accept the Safety National proposal and to renew the Program on July 1st with no change in members’ rates were both approved by the Executive Committee. This will be the 5th year in a row that there have been no changes in the Program’s rates, even though the commercial market has been taking some significant rate increases, particularly in the last two years. There are currently 165 members participating in the program with approximately $415 million in payroll. RECOMMENDATION: None. Provided for information only.

193

Prepared by: Peter Kuchinsky II, Risk Management Manager Date Prepared: April 10, 2012

ACWA/JPIA H.R. LaBounty Safety Award Program

May 7, 2012

BACKGROUND The format of the Safety Award Program was given approval by the Executive Committee at its April 13, 1999 meeting. The Program has been actively promoted by the JPIA to encourage safe workplace behavior. This Program is intended to allow employees to be nominated, recognized, and rewarded for proactive safety behavior and action. The Program is ongoing and the Awards are presented at the biannual conferences. Any employee of the members participating in the JPIA’s pooled programs may submit nominations. CURRENT SITUATION This Program is announced periodically in the Risk Control Bulletin and the Perspective. The Program continues to be promoted during risk assessment and training visits by risk management and other JPIA staff. The JPIA has selected nominations that demonstrate proactive safety contributions. The winners of the awards will be announced at the Board meeting. RECOMMENDATION None. For information only.

194