BOARD OF DIRECTORS MEETING AGENDA 10:30 a.m. DoubleTree … · Recommendation: Engage Mike Harrington, Bickmore, to perform an actuarial study of settlements and benefits of Compromise

* Reference materials enclosed with staff report.

BOARD OF DIRECTORS MEETING

AGENDA

Tuesday, November 6, 2018 10:30 a.m.

DoubleTree by Hilton 2001 Point West Way

Sacramento, CA 95815 (916) 929-8855

In compliance with the Americans with Disabilities Act, if you need a disability-related modification or accommodation to participate in this meeting, please contact Yahaira Martinez at (916) 290-4619 or (916) 244-1199 (fax). Requests must be made as early as possible, and at least one full business day before the start of the meeting. Documents and materials relating to an open session agenda item that are provided to the LAWCX Board of Directors less than 72 hours prior to a regular meeting will be available for public inspection at 1750 Creekside Oaks Dr., Suite 200, Sacramento, CA 95833.

Page 1. CALL TO ORDER

2. INTRODUCTIONS 3. APPROVAL OF AGENDA AS POSTED (OR AMENDED) 4. PUBLIC COMMENTS – This time is reserved for members of the public to

address the Board relative to matters of the Local Agency Workers’ Compensation Excess Joint Powers Authority not on the agenda. No action may be taken on non-agenda items unless authorized by law. Comments will be limited to five minutes per person and twenty minutes in total.

5. CONSENT CALENDAR If a Board member would like to discuss any item listed, it may be pulled from the

Consent Calendar. 4 A. Minutes from the June 5, 2018, Board of Directors Meeting 14 B. Treasurer’s Report dated September 30, 2018 55 C. Warrant Listing: June 1, 2018 - October 31, 2018 58 D. Risk Control Update 67 E. CSAC EIA’s 2018/19 Excess Workers’ Compensation Program Premium

and Fees 68 F. 2017/18 Compliance Survey Results Recommendation: Approval of the Consent Calendar.

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LAWCX Board of Directors Agenda Meeting of November 6, 2018

Page 2


6. CLOSED SESSION A. Pursuant to Government Code Section 54956.95(a), the Board of Directors

will recess to closed session to discuss the following claim for payment of workers’ compensation liability incurred by a local district member of the joint powers agency.

• Fletcher Raynor vs. City of Ridgecrest/PARSAC B. Pursuant to Government Code Section 54956.95(a), the Board of Directors

will report in open session any reportable action taken in closed session.

7. ACTION/DISCUSSION ITEMS

72 A. Annual Investment Policy Review Recommendation: Approve the Investment Policy as revised.

88 B. Investment Report as of September 30, 2018 Recommendation: Review and file.

131

C. Resolution Regarding All Bank Accounts, Credit Cards, and Authorized Signatures

Recommendation: Approve Resolution 2-2018 Regarding All Bank Accounts, Credit Cards, and Authorized Signatures

135 D. Draft Actuarial Report with 2019/20 Funding Rates and Discussion of Confidence Level and Discount Rate

Recommendation: Receive and review the draft actuarial report and approve establishing rates for the 2019/20 program year at the 80% confidence level and discounted at 2.5%.

242 E. Draft Audited Financial Statements for Fiscal Year Ended June 30, 2018 Recommendation: Review and approve the draft audited financial statements and direct staff to work with the auditor to finalize the document.

278 F. Review of Target Equity Policy, Dividends and Assessments, and Unaudited Financial Statements as of June 30, 2018

Recommendation: Provide direction to staff regarding equity targets, dividends and assessments.

299

G. Compromise and Release Settlements Discussion Recommendation: Engage Mike Harrington, Bickmore, to perform an actuarial study of settlements and benefits of Compromise and Releases and extend authority to the President to sign a Letter of Engagement.

300 H. Update on Assembly Bill 1749 – Off-Duty Peace Officers Recommendation: Review and file.

304

I. Workers’ Compensation Claims Auditing Services Recommendation: Review and approve the Agreement for Workers’ Compensation Claims Audit Services with Farley Consulting Services effective July 1, 2019, and authorize the Executive Director to execute the contract.

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LAWCX Board of Directors Agenda Meeting of November 6, 2018

Page 3


314 J. Resolution Establishing Local Claims Procedure Regulations for the

Authority Recommendation: Approve proposed Resolution 1-2018 establishing local claims procedure regulations for the Authority.

317 K. Discussion of Options for Strategic Planning Recommendation: Provide direction to staff.

8. CLOSING COMMENTS This time is reserved for comments by Board members and/or staff and to identify

matters for future Board business. A. Board B. Staff 9. ADJOURNMENT

NOTICES:

The next regularly scheduled Executive Committee meeting will be held Tuesday,

February 5, 2019, 10:30 a.m., at the Bickmore office located at: 1750 Creekside Oaks Drive, Suite 200, Sacramento, California 95833.

The next regularly scheduled Board of Directors meeting will be held Tuesday, June 4, 2019, 10:30 a.m., at TBD.

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LOCAL AGENCY WORKERS’ COMPENSATION EXCESS JOINT POWERS AUTHORITY

1750 CREEKSIDE OAKS DRIVE, SUITE 200 SACRAMENTO, CA 95833

BOARD OF DIRECTORS MEETING

June 5, 2018 A meeting of the Board of Directors of the Local Agency Workers’ Compensation Excess Joint Powers Authority (LAWCX) was held at the Four Points by Sheraton, 4900 Duckhorn Drive, Sacramento, California. BOARD MEMBERS PRESENT: Rosa Kindred-Winzer, President, City of Merced

Janet Hamilton, Vice President, City of Livermore Scott Ellerbrock, Treasurer/Past-President, PERMA

Rob Kramer, ABAG (arrived at 10:46 a.m., left at 12:31 p.m.) Garrett Toy, BCJPIA Erick Cheung, CCCTA Lori Shively, City of Clovis Kevin Powell, City of Coronado Jace Schwarm, City of Encinitas Glen Weeks, FASIS LeeAnn McPhillips, City of Gilroy Lisa Velasco, Town of Los Gatos

Sandy Abe, City of Newark Joanne Rennie, PARSAC David Rawe, City of Roseville Emily Hung, City of San Leandro Mellissa Guerrero, City of Santa Maria Jessie Bishop, City of Santee Jessica Bowes, City of Vacaville Sarah Brannick, City of Vallejo Andy Cox, VCJPA

ALTERNATES PRESENT: Janis Holt, CHWCA Paul Melikian, CSJVRMA Shonna Haltermann, City of Clovis Jas Sidhu, City of Livermore John Fukasawa, City of Lodi Humberto Arista, MCLAIA Yana Taran, City of San Leandro Marcus Beverly, SCORE Joanne Rennie, City of South Lake Tahoe Kristen Vaughan, City of Vacaville Wes Maffei, VCJPA

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LAWCX Board of Directors Meeting Minutes June 5, 2018 Page 2 BOARD MEMBERS ABSENT: Lucretia Akil, City of Alameda Kim Imboden, City of Benicia

Jim Shields, CHWCA Wendy Silva, CSJVRMA Beverly Jensen, City of Lodi Deneen Proctor, City of Merced Michael Urquides, MCLAIA Dat Nguyen, City of Morgan Hill Steve Baker, SCORE Ember Buckman, City of South Lake Tahoe Scott Corey, City of Suisun City Delores Gascon, City of Vista

ALTERNATES ABSENT: Janet Kern, City of Alameda Lori Elefant, BCJPIA Lisa Rettig, CCCTA Emad Gewaily, City of Coronado Howard Wood, FASIS Michael Horta, City of Gilroy Laurel Prevetti, Town of Los Gatos Michelle Katsuyoshi, City of Morgan Hill Kin Ong, PARSAC, City of Placentia Jennifer Miller, City of Pleasanton Michael Canton, PERMA Hedy Dehghan, City of San Leandro Katrina Garcia, City of Santa Maria Erica Hardy, City of Santee Isabel Casteran, City of Vista

OTHERS PRESENT: Jim Elledge, Executive Director / Finance Manager Terrie Norris, Risk Control Manager Tammy Vitali, Claims Manager Katie Achterberg, Recording Secretary Pat Fitzgerald, Legal Counsel, Bartkiewicz, Kronick & Shanahan Jennifer Jobe, FASIS Jaesa McCulligan, BCJPIA Chrissy Mack, VCJPA/CSJVRMA Jeanette Workman, CSJVRMA Mike Simmons, Alliant Insurance Services (left at 11:27 a.m.) Gina Dean, CSAC EIA (left at 11:27 a.m.) Maili Madsen, City of Vallejo Bonnie Kolesar, City of Vallejo (left at 12:31 p.m.)

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LAWCX Board of Directors Meeting Minutes June 5, 2018 Page 3 1. CALL TO ORDER

The meeting was called to order at 10:33 a.m. by President Rosa Kindred-Winzer.

2. INTRODUCTIONS

Introductions took place of those present. A majority of the members were present, constituting a quorum.

3. PUBLIC COMMENTS

None.

4. APPROVAL OF AGENDA AS POSTED (OR AMENDED) President Kindred-Winzer presented the Agenda for the June 5, 2018, LAWCX Board of

Directors Meeting. Scott Ellerbrock, PERMA, moved to approve the agenda as posted, which was seconded by LeeAnn McPhillips, City of Gilroy, and the motion passed unanimously.

5. CONSENT CALENDAR

President Kindred-Winzer presented the Consent Calendar for review. There being no amendments, a motion was requested. Joanne Rennie, PARSAC, moved to approve Consent Calendar items 5A-K, which was seconded by LeeAnn McPhillips, City of Gilroy, and the motion passed unanimously. The Consent Calendar consisted of the following: A. Minutes from the November 7, 2017, Board of Directors Meeting B. Board of Directors Meeting Schedule for Fiscal Year 2018/19 C. Treasurer’s Report dated March 31, 2018 D. Warrant Listing: April – May 2018 E. Financial Statements as of December 31, 2017 F. Memorandum of Coverage 2018/19 Program Year G. Carve Out Program for City of Madera Police Officers Association H. Carve Out Program for City of Ripon I. Report Regarding Claims Audits Conducted Program Year 2017/18 J. Risk Control Services Update Fiscal Year 2017/18 K. Results of Member Survey for Vendor Services

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LAWCX Board of Directors Meeting Minutes June 5, 2018 Page 4 6. ACTION/DISCUSSION ITEMS

A. Excess Insurance Renewal for the 2018/19 Program Year

Mr. Jim Elledge, Executive Director, reported to the Board of an effort to explore possible excess insurance markets outside of LAWCX’s existing relationship with CSAC-EIA (EIA). Given that fifteen years had passed since the LAWCX excess coverage had been formally marketed, and that a periodic review of the market was common and prudent, staff worked with an insurance brokerage firm, JLT Re, to perform an analysis of the LAWCX program which indicated competitive pricing could be available in the excess insurance marketplace. Staff and JLT Re presented to the Executive Committee who directed staff to execute a broker of record letter with JLT Re to market to select carriers for the 2018/19 program year, and to obtain a renewal quote from EIA. Mr. Elledge noted, in March, JLT Re made submissions to the three markets: Arch Insurance Company (ARCH), Midwest Employers Casualty (Midwest), and Safety National Casualty Corporation (Safety National). All three firms declined, with the following reasons cited:

Market Approached Outcome Reason Arch Insurance Company Declined • Complexity of membership

structure • Multiple TPAs

Midwest Employers Casualty Corporation

Declined • Unable to offer statutory limits

Safety National Casualty Corporation

Declined • CSAC-EIA relationship • Employee concentrations • Firefighter exposure

Mr. Elledge noted staff will be reviewing LAWCX’s renewal survey and consider collecting the data requested by underwriters that was not readily available. This will be done to assist with future marketing attempts. Mr. Elledge noted the potential for another marketing effort in three to five years. Mr. Elledge noted EIA provided a renewal proposal at both the current $5 million retention as well as optional $4 million retention, with the difference in premium being $194,000. Mr. Elledge noted while there would be a slight savings to insure the layer as well as a related reduction in risk, staff recommended remaining at a $5 million self-insured retention and continuing to self-insure that layer. Reducing the retention to $4 million would result in participation in the shared layer with other EIA members and in a layer that would share in assessments, if any were levied. Mr. Elledge indicated EIA provides numerous services to the membership. Ms. Gina Dean with EIA was present to review some of the services offered in the next agenda item.

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LAWCX Board of Directors Meeting Minutes June 5, 2018 Page 5

Scott Ellerbrock, PERMA, moved to approve to renew coverage for the 2018/19 Program Year with CSAC EIA at a $5 million retention, which was seconded by Jace Schwarm, City of Encinita, and the motion passed unanimously. B. Review of CSAC EIA Services Offerings

Ms. Gina Dean, CSAC EIA, was in attendance to review services offered by EIA to the LAWCX membership. Ms. Dean noted EIA has many services that complement those offered through LAWCX’s contract with Bickmore, and are available to LAWCX members at no additional cost or at a pre-negotiated discounted rate. Ms. Dean highlighted the following resources and training services provided:

• Online Toolbox – this includes essential job functions, which includes 45 classifications;

• Background checks – services through Plexus Global; • DMV Employer Pull Notices (EPN) – allows members to monitor employee

driving records using A-check, which is a DMV approved EPN; • Learning Management System (LMS) – Target Solutions allows access to web-

based training; • Webinars – available on EIA TV, which is 24/7 access to hundreds of training

programs; • Critical Incident Management Services (counseling services) – through

partnership with MHN members have access to services for employees following an unexpected work-related death of a co-worker or other traumatic incidents; and

• Labor Law Employment Practices Services – contract with Eyres Law Group, LLP to provide free access to consultation services which include coaching and advice, interactive process manual and monthly webcasts.

Ms. Dean noted EIA’s website is a great source for further information on services provided as well as contact information for EIA staff.

No action was requested, as this item was for information only.

C. Risk Control Plan for 2018/19 Ms. Terrie Norris, Risk Control Manager, reminded the Board of the services provided during the 2017/18 program year. Much of the focus for the last two years has been Police Exposure Initiative, Wellness Program Implementation Tools and the Return-to-Work Program. Ms. Norris presented the following as the proposed Risk Control Plan for 2018/19:

1. Job Analysis Template Expansion – 20 additional essential job function analysis templates will be added to the library.

2. Educational Webinars – Provide two webinars designed to assist members with use of job analysis templates and to promote the adoption of a Structured Return-to-Work program.

3. Educational Videos – Provide two videos using new technology designed to be more engaging than the standard webinar. The videos will be customized to

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facilitate the implementation of a Structure Return-to-Work Program, as well as, the use and understanding of the job analysis templates.

4. LAWCX Membership Benefit Presentations – Risk Control staff will continue to be available to present LAWCX benefits to member organizations, either in person or via technology, such as a webinar or web meeting. The goal is to give LAWCX members support in understanding, disseminating, and utilizing the tools and resources available to them as members of LAWCX.

5. Bickmore Risk Control Web-based Resources – A list of service providers, such as those who provide wellness exercise and fitness programs and implementation services, to be posted on the LAWCX website.

6. Unlimited Telephone and Email consultation. 7. Additional Consultation Services for Purchase – Ms. Norris informed the Board

of additional services offered by Bickmore in the areas of ergonomic and job hazard assessments. Mr. James Szymanski, ASP, Risk Control Analyst with Bickmore, is a movement science specialist with 17 years of experience in Occupational Safety and Health specializing in injury prevention and rehabilitation and in industrial and office ergonomics. Mr. Szymanski has performed job hazard analysis and ergonomic assessments within many office settings, and is an excellent trainer that relates to both those that are just beginning to learn about ergonomics, assessing job functions, and developing Structured Return-to-Work programs to those that have more advanced knowledge. These services are available to members for additional fees based on the scope of the work requested.

Ms. Norris noted the Executive Committee reviewed and approved the 2018/19 Plan at the April meeting.

Janet Hamilton, City of Livermore, moved to approve the 2018/19 LAWCX Risk Control Plan, which was seconded by Paul Malikian, CSJVRMA, and the motion passed unanimously. D. Risk Control Reimbursement Program Update

Ms. Norris noted in June 2017, the Board approved funding for the risk control reimbursement program at an annual amount of $40,000, with a maximum reimbursement of $2,000 per direct member, until funds are exhausted. As of April 2018 the membership has used a little over $7,500 of the funds. Ms. Norris reminded the Board funds may be used to obtain risk control related services from Bickmore or other service providers. Members who wish to utilize Bickmore services may obtain a quote by contacting Ms. Norris. The deadline to submit for reimbursement under the 2017/18 Program Year Plan is July 15, 2018. The Board inquired as to whether unused funds could be allocated to members who have used all $2,000 allowed per member. Staff indicated the current plan does not allow for multiple reimbursements.


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E. Proposed Operating Budget for the 2018/19 Program Year

Mr. Elledge reviewed the operating budget for LAWCX, noting the actuarially determined funding rates from member’s SIR to $2 million increased approximately 5% over the prior year for both safety and non-safety classifications. The rate for the $2 million to $5 million layer increased approximately 12% and 8% for safety and non-safety classifications, respectively. The increases were due in part to the reduction in the discount rate, from 2.75% to 2.50%. The latest indication of excess insurance costs from EIA was $2,546,000, a 14% increase over the prior year. The increase in excess insurance is driven by a 5% increase in LAWCX’s estimated payroll, and a 5% increase in the EIA rate. Mr. Elledge noted the EIA Board of Directors will approve the final contributions on June 1, 2018, and staff anticipates only a slight change to the estimate contained in this budget. The final approved EIA contribution will be incorporated into the budget prior to billing members. The estimated cost to operate LAWCX and provide risk management services to members is $879,000, a 2% increase over the prior year’s budget. Mr. Elledge noted actual 2016/17 fiscal year payroll was used to determine member contributions and increased 5% over the prior year, with a 4% increase in safety payroll and 6% for non-safety payroll. Experience Modification Factors (Ex-mod’s) did not drastically change over the prior year for individual members.

Jace Schwarm, City of Encinitas, moved to approve the Proposed 2018/19 Program Year Budget, which was seconded by Paul Malikian, CSJVRMA, and the motion passed unanimously.

F. Financial Statement as of March 31, 2018

Mr. Elledge reviewed the financial statements as of March 31, 2018, noting assets increased approximately $5.4 million from the prior year; liabilities increased by $2.1 million; and net position increased $3.3 million. Investment income is negative for the nine months due to unrealized market value losses as of March 31, 2018. The unrealized losses were driven by rising interest rate conditions. The portfolio produced income of $886,000 which was offset by the market value adjustment of $1.1 million. Claims expense increased compared to budget due to the reduction of interest rate assumption and temporary increases made to the ultimate loss estimates for certain program years. Excess insurance expense is higher than budgeted for the prior year due to payroll audit adjustments. Mr. Elledge noted the payroll audit adjustments from EIA are paid when billed and staff has begun adjusting projected payroll figures to minimize future audit adjustments.

No action was requested, as this item was for review only.

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G. Claims Trend Analysis Report

Ms. Tammy Vitali, Workers’ Compensation Program Manager, reviewed a claims trend analysis report with various statistics on the losses within the LAWCX coverage layers. Ms. Vitali noted per LAWCX’s Governing Documents, excess claims are to be reported to LAWCX when a claim exceeds or is expected to exceed 50% of the member’s retention; as well as when 1 of the 10 events included in the Memorandum of Coverage occurs. Claims are monitored closely by the Claims Manager to ensure they are being moved toward resolution and handled within LAWCX’s guidelines. Ms. Vitali stated due to the loss development in all pools and a goal previously included in a Strategic Plan, staff reviewed losses to determine if there was a specific cause or type of claim that was a key factor for increases noted by the Actuary and Finance Manager. Ms. Vitali provided the Board with various charts comparing claim statistics from December 31, 2016 to March 31, 2018. The analysis indicated the majority of claims are filed by safety officers, and the majority of the claims are settled; however, there are claims that remain open for all program years. Ms. Vitali indicated this item will be brought back to the Board in June 2019 for review.

No action was requested, as this item was for review only. H. Consider Approval of Resolution Adopting $250,000 Pool Deficit Curing and

Assessment Plan and Approving Related Assessments

Mr. Elledge presented the final draft of the proposed Deficit Curing and Assessment Plan (Plan) which was presented in draft form to the Board at the November 2017 meeting. The Board was reminded of the Plan’s objective to restore funding in older deficit program years to a reasonable level and transfer surplus from positive program years to offset deficit program years. Since the November 2017 Board meeting, staff continued to work on the Plan and presented a final proposed version to the Executive Committee at their April 25, 2018, meeting. The Executive Committee reviewed the Plan presented and recommended approval by the Board of Directors. Mr. Elledge reviewed the Plan Elements with the Board, including the following key elements:

• Program Years included in Plan – 1993 through 2008; • Confidence level funding target – 80% confidence level; • Valuation date – June 30, 2017; • Surplus transfer – surplus in any of the subject program years that exceeds 80%

confidence level can be transferred to deficit years, on a member by member basis;

• Assessment amount – assessment will be set at the amount of the net deficit; • Assessment duration – 10 years; • Issuance date of assessment installment invoices – July 1st; • Date of first installment invoice – July 1, 2019; • Invoice due date – August 15th (delinquent after 90 days);

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• Prepayment of assessment – 10% discount, if entire assessment amount paid (no discount for partial pre-payment or accelerated payments after August 15, 2019);

• Late payment penalty – $500 for any installment not received within 90 days of the stated due date;

• Period of review – Plan will be reviewed internally annually but not adjusted for 3 years; and

• Detailed Plan calculations by member and list of frequently asked questions were included in Plan document.

Mr. Elledge noted a resolution has been drafted for the Board to formally adopt the Plan and the key elements. Ms. Kindred-Winzer noted invoices will be sent out starting July 2019 for the 2019/20 Program Year. Several members inquired about paying the full discounted assessment amount amount prior to June 30, 2018, to which Mr. Elledge indicated it was permitted.

Joanne Rennie, PARSAC, moved to approve Resolution No. 2-2017 A compensation Excess Joint Powers Authority Adopting $250,000 Pool Deficit Curing and Assessment Plan and Approving Related Assessments, which was seconded by Jace Schwarm, City of Encinitas, and the motion passed unanimously.

I. Conflict of Interest Code – Biennial Review

Mr. Elledge noted The Political Reform Act requires each local government agency to review its Conflict of Interest Code on even-numbered years in order to determine whether amendments to their Code are necessary. Pursuant to this requirement, LAWCX staff and Legal Counsel reviewed the existing Code and determined that no changes were warranted.


J. Election of Executive Committee Officer and Members

Ms. Kindred-Winzer noted the Nominating Committee met in April to present nominations for election of one officer and two member at large positions on the Executive Committee. Ms. Kindred-Winzer noted additional nominations would be taken from the floor for consideration. No nominations were presented from the floor. Mr. Elledge discussed the positions that are expiring at the end of this current program year. Staff sent out a notice to solicit interest and the Nominating Committee was formed by President Kindred-Winzer which met in April 2018, to review potential candidates. Prior to the Committee meeting the incumbents expressed their interest in to continuing serve on the Executive Committee. Therefore, the Nominating Committee presented the Board with the recommended slate of Janet Hamilton as Vice-President and Garrett Toy and Lori Shively as the at-large members.

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LeeAnn McPhillips, City of Gilroy, moved to elect Ms. Janet Hamilton, City of Livermore, as Vice President, and Mr. Garrett Toy, BCJPIA, and Ms. Lori Shivley, City of Clovis as a members of the Executive Committee, which was seconded by Paul Malikian, CSJVRMA, and the motion passed unanimously.

K. Location for Future Board of Directors Meetings

Mr. Elledge noted at the April 2018 Executive Committee meeting, the Committee inquired as to whether members were satisfied with the current location for Board Meetings, and whether alternatives should be explored. Staff and the Executive Committee discussed the following criteria for choosing locations:

• Accessibility to the airport; • Meeting space size; and • Expense of rental space and catering.

The Board expressed interest in staff seeking alternative locations for Board meetings. Ms. Joanne Rennie, PARSAC, offered the PARSAC office as a possible venue for LAWCX Board meetings. The Board also suggested exploring the feasibility of conducting one meeting outside of the Sacramento area. Staff indicated they would solicit options for possible locations and present them to the Executive Committee for review at a future meeting. No action was requested, as this item was for discussion only.

7. CLOSING COMMENTS

The next Board meeting is November 6, 2018, with the time and location to be announced at a later date. The next scheduled Executive Committee meeting is October 9, 2018, at the Bickmore Office, should anyone from the Board like to attend.

8. ADJOURNMENT

At 12:39 p.m., the meeting was adjourned by general consensus.

Katie Achterberg Katie Achterberg, Recording Secretary

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State of California

Pooled Money Investment Account

Market Valuation

9/30/2018Carrying Cost Plus

Description Accrued Interest Purch. Amortized Cost Fair Value Accrued Interest

1* United States Treasury: Bills 16,170,833,546.22$ 16,296,335,127.01$ 16,285,062,500.00$ NA Notes 27,467,752,638.26$ 27,461,025,460.04$ 27,325,385,500.00$ 89,821,892.00$

1* Federal Agency: SBA 780,001,209.85$ 780,001,209.85$ 771,570,823.84$ 1,469,354.69$ MBS-REMICs 27,050,783.12$ 27,050,783.12$ 27,393,077.56$ 126,471.34$ Debentures 2,397,593,922.31$ 2,397,424,286.90$ 2,382,272,150.00$ 7,989,582.70$ Debentures FR -$ -$ -$ -$ Debentures CL 200,000,000.00$ 200,000,000.00$ 196,871,500.00$ -$ Discount Notes 11,141,336,347.31$ 11,204,143,319.80$ 11,197,252,500.00$ NA

1* Supranational Debentures 489,118,743.08$ 489,118,743.08$ 486,290,300.00$ 1,903,918.00$ 1* Supranational Debentures FR 100,344,087.56$ 100,344,087.56$ 100,706,084.34$ 542,330.04$

2* CDs and YCDs FR 525,000,000.00$ 525,000,000.00$ 525,000,000.00$ 2,309,472.31$ 2* Bank Notes 1,000,000,000.00$ 1,000,000,000.00$ 999,336,863.17$ 7,979,666.68$ 2* CDs and YCDs 15,300,000,000.00$ 15,300,000,000.00$ 15,293,041,253.62$ 87,416,041.66$ 2* Commercial Paper 6,396,625,430.50$ 6,422,115,291.71$ 6,421,592,005.55$ NA

1* Corporate: Bonds FR -$ -$ -$ -$ Bonds -$ -$ -$ -$

1* Repurchase Agreements -$ -$ -$ -$ 1* Reverse Repurchase -$ -$ -$ -$

Time Deposits 5,022,740,000.00$ 5,022,740,000.00$ 5,022,740,000.00$ NAAB 55 & GF Loans 790,994,000.00$ 790,994,000.00$ 790,994,000.00$ NA

TOTAL 87,809,390,708.21$ 88,016,292,309.07$ 87,825,508,558.08$ 199,558,729.42$

Fair Value Including Accrued Interest 88,025,067,287.50$

* Governmental Accounting Standards Board (GASB) Statement #72

Repurchase Agreements, Time Deposits, AB 55 & General Fund loans, andReverse Repurchase agreements are carried at portfolio book value (carrying cost).

The value of each participating dollar equals the fair value divided by the amortized cost (0.997832404).As an example: if an agency has an account balance of $20,000,000.00, then the agency would report itsparticipation in the LAIF valued at $19,956,648.08 or $20,000,000.00 x 0.997832404.

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10/18/2018 LAIF Regular Monthly Statement

https://laifms.treasurer.ca.gov/RegularStatement.aspx 1/1

Local Agency Investment Fund P.O. Box 942809 Sacramento, CA 94209-0001 (916) 653-3001

www.treasurer.ca.gov/pmia-laif/laif.asp

October 18, 2018

LOCAL AGENCY WORKERS COMPENSATION EXCESS JOINT POWERS AUTHORITY ACCOUNTING MANAGER 1750 CREEKSIDE OAKS DRIVE SUITE 200 SACRAMENTO, CA 95833

PMIA Average Monthly Yields

Account Number:40-33-011

Tran Type Definitions September 2018 Statement

Effective

DateTransaction

DateTranType

ConfirmNumber Authorized Caller Amount

9/26/2018 9/25/2018 RW 1584502 JIM ELLEDGE -10,500,000.009/28/2018 9/27/2018 RW 1584731 JIM ELLEDGE -70,000.00

Account Summary

Total Deposit: 0.00 Beginning Balance: 29,587,644.40

Total Withdrawal: -10,570,000.00 Ending Balance: 19,017,644.40

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http://www.treasurer.ca.gov/pmia-laif/laif.asp

http://www.treasurer.ca.gov/pmia-laif/historical/avg_mn_ylds.asp

https://laifms.treasurer.ca.gov/Transaction%20Types%20Regular.htm

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Fair Value Factor for the quarter ending 9/30/2018 0.997832404

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Fair Value as of September 30, 2018 18,976,421.83

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September 24,2018




Tran Type Definitions August 2018 Statement

Effective

DateTransaction

DateTranType


8/20/2018 8/20/2018 RD 1582178 JIM ELLEDGE 13,310,000.00

Account Summary

Total Deposit: 13,310,000.00 Beginning Balance: 16,277,644.40

Total Withdrawal: 0.00 Ending Balance: 29,587,644.40

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Fair Value Factor for the quarter ending 6/30/2018 0.998126869 Fair Value as of August 31, 2018 29,532,222.86

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September 24,2018




Tran Type Definitions July 2018 Statement

Effective

DateTransaction

DateTranType


7/3/2018 7/3/2018 RW 1574153 JIM ELLEDGE -2,770,000.007/13/2018 7/12/2018 QRD 1578377 SYSTEM 92,973.27

Account Summary

Total Deposit: 92,973.27 Beginning Balance: 18,954,671.13

Total Withdrawal: -2,770,000.00 Ending Balance: 16,277,644.40

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mguo

Typewritten Text

Fair Value Factor for the quarter ending 6/30/2018 0.998126869 Fair Value as of July 31, 2018 16,247,154.24

mguo

Typewritten Text

For the Month Ending September 30, 2018Managed Account Detail of Securities Held

LOCAL AGENCY WORKERS' COMPENSATION EXCESS FUND - c/o BICKMORE RISK SERVICES - 568-00 - (12510945)

Dated Date/Coupon/Maturity CUSIP Rating Rating Date Date Cost at Cost Interest Cost Value

Security Type/Description S&P Moody's Original YTM Accrued Amortized MarketTrade Settle

Par

U.S. Treasury Bond / Note

US TREASURY NOTES

DTD 09/30/2014 1.750% 09/30/2019

594,609.60 600,767.32 28.85 601,453.13 11/03/1711/01/17AaaAA+ 600,000.00 912828F39 1.62

US TREASURY N/B

DTD 11/15/2016 1.000% 11/15/2019

662,422.73 671,331.52 2,549.59 668,118.16 10/02/1709/29/17AaaAA+ 675,000.00 912828U32 1.49

US TREASURY NOTES

DTD 03/31/2015 1.375% 03/31/2020

83,273.48 85,436.24 3.21 86,082.42 06/27/1606/22/16AaaAA+ 85,000.00 912828J84 1.03

US TREASURY NOTES

DTD 03/31/2015 1.375% 03/31/2020

687,740.98 705,219.77 26.52 709,979.77 06/28/1606/23/16AaaAA+ 702,000.00 912828J84 1.07

US TREASURY NOTES

DTD 04/30/2015 1.375% 04/30/2020

684,824.00 701,401.24 4,027.85 703,691.41 02/03/1602/01/16AaaAA+ 700,000.00 912828K58 1.25

US TREASURY NOTES

DTD 05/31/2013 1.375% 05/31/2020

205,168.32 209,363.16 970.39 208,318.36 12/04/1512/02/15AaaAA+ 210,000.00 912828VF4 1.56

US TREASURY NOTES

DTD 11/30/2015 1.625% 11/30/2020

974,492.00 996,538.76 5,461.07 995,117.19 11/03/1711/01/17AaaAA+ 1,000,000.00 912828M98 1.79

US TREASURY NOTES

DTD 02/28/2014 2.000% 02/28/2021

367,485.38 382,571.23 642.27 388,652.34 10/05/1610/03/16AaaAA+ 375,000.00 912828B90 1.15

US TREASURY NOTES

DTD 05/02/2016 1.375% 04/30/2021

534,534.38 548,218.42 3,193.51 544,030.08 02/03/1702/01/17AaaAA+ 555,000.00 912828Q78 1.86

US TREASURY NOTES

DTD 05/31/2016 1.375% 05/31/2021

427,964.96 440,302.14 2,056.30 438,185.94 07/05/1707/03/17AaaAA+ 445,000.00 912828R77 1.78

US TREASURY N/B

DTD 07/31/2014 2.250% 07/31/2021

1,140,061.92 1,175,139.24 4,397.28 1,184,650.00 11/23/1611/22/16AaaAA+ 1,160,000.00 912828WY2 1.78

US TREASURY NOTES

DTD 09/02/2014 2.000% 08/31/2021

204,864.87 210,463.82 359.67 210,738.28 12/05/1612/01/16AaaAA+ 210,000.00 912828D72 1.92

US TREASURY NOTES

DTD 10/31/2016 1.250% 10/31/2021

152,293.76 157,593.33 836.96 156,718.75 08/03/1708/01/17AaaAA+ 160,000.00 912828T67 1.75

US TREASURY NOTES

DTD 10/31/2016 1.250% 10/31/2021

266,514.08 276,035.28 1,464.67 274,596.88 08/04/1708/03/17AaaAA+ 280,000.00 912828T67 1.72

Account 568-00 Page 7

19





Par


US TREASURY NOTES

DTD 10/31/2016 1.250% 10/31/2021

2,236,814.60 2,290,849.09 12,292.80 2,262,609.38 03/16/1703/14/17AaaAA+ 2,350,000.00 912828T67 2.10

US TREASURY NOTES

DTD 01/03/2017 2.000% 12/31/2021

2,017,207.10 2,093,360.49 10,487.77 2,100,208.01 06/28/1706/26/17AaaAA+ 2,075,000.00 912828U81 1.72

US TREASURY NOTES

DTD 02/02/2015 1.500% 01/31/2022

1,844,280.98 1,906,587.17 4,877.45 1,898,260.55 07/07/1707/05/17AaaAA+ 1,930,000.00 912828H86 1.88

US TREASURY NOTES

DTD 03/31/2017 1.875% 03/31/2022

844,990.13 875,241.89 45.07 875,307.62 10/02/1709/29/17AaaAA+ 875,000.00 912828W89 1.87

US TREASURY NOTES

DTD 05/01/2017 1.875% 04/30/2022

767,081.99 799,599.84 6,237.94 800,931.45 08/31/1708/30/17AaaAA+ 795,000.00 912828X47 1.71

US TREASURY NOTES

DTD 06/30/2017 1.750% 06/30/2022

805,382.76 840,469.29 3,714.95 840,590.63 09/05/1709/01/17AaaAA+ 840,000.00 912828XW5 1.73

US TREASURY NOTES

DTD 07/31/2017 1.875% 07/31/2022

1,423,979.04 1,461,456.92 4,675.27 1,458,031.25 01/04/1801/02/18AaaAA+ 1,480,000.00 9128282P4 2.22

US TREASURY NOTES

DTD 09/30/2015 1.750% 09/30/2022

296,231.66 298,470.77 14.90 297,612.11 06/08/1806/07/18AaaAA+ 310,000.00 912828L57 2.74

US TREASURY NOTES

DTD 09/30/2015 1.750% 09/30/2022

334,455.10 347,389.23 16.83 346,773.44 10/05/1710/04/17AaaAA+ 350,000.00 912828L57 1.94

US TREASURY NOTES

DTD 09/30/2015 1.750% 09/30/2022

602,019.18 621,854.57 30.29 620,230.08 11/30/1711/29/17AaaAA+ 630,000.00 912828L57 2.09

US TREASURY NOTES

DTD 09/30/2015 1.750% 09/30/2022

969,919.79 977,332.93 48.80 974,479.30 06/06/1806/04/18AaaAA+ 1,015,000.00 912828L57 2.74

US TREASURY NOTES

DTD 10/02/2017 1.875% 09/30/2022

2,578,437.72 2,617,067.33 138.31 2,609,169.73 04/04/1804/02/18AaaAA+ 2,685,000.00 9128282W9 2.54

US TREASURY NOTES

DTD 12/31/2015 2.125% 12/31/2022

628,900.35 630,829.00 3,490.66 630,144.53 08/03/1808/01/18AaaAA+ 650,000.00 912828N30 2.87

US TREASURY NOTES

DTD 12/31/2015 2.125% 12/31/2022

1,669,004.78 1,680,199.73 9,263.67 1,679,516.60 09/06/1809/04/18AaaAA+ 1,725,000.00 912828N30 2.78


20





Par


US TREASURY N/B

DTD 03/31/2016 1.500% 03/31/2023

1,357,735.01 1,365,188.01 59.55 1,358,300.00 05/02/1805/01/18AaaAA+ 1,445,000.00 912828Q29 2.82

81,412.40 25,362,690.65 25,966,277.73 2.06 25,922,497.39 26,312,000.00 Security Type Sub-Total

Supra-National Agency Bond / Note

INTER-AMERICAN DEVEL BK NOTE

DTD 04/12/2017 1.625% 05/12/2020

960,824.34 978,766.94 6,148.82 977,677.40 04/12/1704/05/17AaaAAA 980,000.00 4581X0CX4 1.70

INTL BANK OF RECON AND DEV GLOBAL

NOTES

DTD 08/29/2017 1.625% 09/04/2020

297,819.69 304,958.56 371.72 304,935.95 08/29/1708/22/17AaaAAA 305,000.00 459058GA5 1.63

INTL BANK OF RECONSTRUCTION AND DEV

NOTE

DTD 09/19/2017 1.561% 09/12/2020

954,258.34 978,449.84 807.38 977,648.00 09/19/1709/12/17AaaAAA 980,000.00 45905UP32 1.64

INTER-AMERICAN DEVELOPMENT BANK

DTD 11/08/2013 2.125% 11/09/2020

644,274.38 659,188.31 5,490.17 661,071.26 10/10/1710/02/17AaaAAA 655,000.00 4581X0CD8 1.81

INTERNATIONAL FINANCE CORPORATION

NOTE

DTD 03/16/2018 2.635% 03/09/2021

718,446.00 724,550.05 1,167.45 724,456.25 03/16/1803/09/18AaaAAA 725,000.00 45950VLQ7 2.66


NOTE

DTD 04/19/2018 2.625% 04/19/2021

733,277.10 738,608.08 8,741.25 738,372.00 04/19/1804/12/18AaaAAA 740,000.00 4581X0DB1 2.70

INTL BANK OF RECONSTRUCTION AND DEV

NOTE

DTD 07/25/2018 2.750% 07/23/2021

1,043,517.30 1,047,687.85 5,293.75 1,047,543.00 07/25/1807/18/18AaaAAA 1,050,000.00 459058GH0 2.83

INTER-AMERICAN DEVEL BANK

DTD 09/14/2017 1.750% 09/14/2022

690,082.55 697,281.01 599.13 693,288.50 02/23/1802/21/18AaaAAA 725,000.00 4581X0CZ9 2.78


NOTE

DTD 01/18/2018 2.500% 01/18/2023

327,346.26 329,596.64 1,698.26 329,214.55 06/06/1806/04/18AaaAAA 335,000.00 4581X0DA3 2.90


21





Par


Municipal Bond / Note

CA ST TXBL GO BONDS

DTD 04/25/2018 2.800% 04/01/2021

697,676.00 700,017.33 8,493.33 700,028.00 04/25/1804/18/18Aa3AA- 700,000.00 13063DGA0 2.80

8,493.33 697,676.00 700,017.33 2.80 700,028.00 700,000.00 Security Type Sub-Total

Federal Agency Collateralized Mortgage Obligation

FANNIE MAE SERIES 2015-M13 ASQ2

DTD 10/01/2015 1.646% 09/01/2019

113,115.65 113,698.42 155.75 114,684.64 10/30/1510/07/15AaaAA+ 113,547.59 3136AQDQ0 1.08

FNA 2018-M5 A2

DTD 04/01/2018 3.560% 09/25/2021

471,738.38 475,606.62 1,386.41 476,625.72 04/30/1804/11/18AaaAA+ 467,330.06 3136B1XP4 2.27

FHLMC MULTIFAMILY STRUCTURED P POOL

DTD 12/01/2015 3.090% 08/25/2022

558,147.46 564,178.71 1,442.00 564,768.75 04/09/1804/04/18AaaAA+ 560,000.00 3137BM6P6 2.61


Federal Agency Bond / Note

FHLB NOTES

DTD 11/17/2016 1.375% 11/15/2019

271,054.30 274,975.97 1,428.47 274,936.75 11/17/1611/16/16AaaAA+ 275,000.00 3130AA3R7 1.38

FHLB NOTES

DTD 02/09/2018 2.125% 02/11/2020

669,354.98 674,156.36 1,992.19 673,764.75 02/09/1802/08/18AaaAA+ 675,000.00 3130ADN32 2.22

FHLB NOTES

DTD 09/08/2017 1.375% 09/28/2020

179,791.33 184,609.58 21.20 184,406.15 09/08/1709/07/17AaaAA+ 185,000.00 3130ACE26 1.48

FANNIE MAE NOTES

DTD 04/13/2018 2.500% 04/13/2021

450,372.65 454,424.19 5,308.33 454,322.05 04/13/1804/12/18AaaAA+ 455,000.00 3135G0U27 2.55


Corporate Note

GENERAL ELECTRIC CAPITAL CORP NOTES

DTD 08/07/2009 6.000% 08/07/2019

866,896.49 875,210.31 7,605.00 993,779.15 04/15/1504/10/15A2A 845,000.00 36962G4D3 1.74


22





Par

Corporate Note

BURLINGTON NRTH CORP

DTD 09/24/2009 4.700% 10/01/2019

325,735.04 330,206.06 7,520.00 353,248.00 06/08/1606/03/16A3A+ 320,000.00 12189TBC7 1.48

CITIGROUP INC (CALLABLE) CORP NOTE

DTD 01/10/2017 2.450% 01/10/2020

644,325.50 649,887.23 3,583.13 649,740.00 01/10/1701/04/17Baa1BBB+ 650,000.00 172967LF6 2.46

APPLE INC BONDS

DTD 02/09/2015 1.550% 02/07/2020

196,655.00 199,279.34 447.78 197,440.00 02/25/1502/20/15Aa1AA+ 200,000.00 037833AX8 1.82

AMERICAN EXPRESS CREDIT (CALLABLE)

NOTE

DTD 03/03/2017 2.200% 03/03/2020

593,280.00 599,699.06 1,026.67 599,376.00 03/03/1702/28/17A2A- 600,000.00 0258M0EE5 2.24

WALT DISNEY COMPANY CORP NOTES

DTD 03/06/2017 1.950% 03/04/2020

197,279.80 199,974.83 292.50 199,948.00 03/06/1703/01/17A2A+ 200,000.00 25468PDP8 1.96

TOYOTA MOTOR CREDIT CORP

DTD 04/17/2017 1.950% 04/17/2020

654,957.17 664,840.30 5,907.42 664,694.10 04/17/1704/11/17Aa3AA- 665,000.00 89236TDU6 1.97

UNILEVER CAPITAL CORP BONDS

DTD 05/05/2017 1.800% 05/05/2020

98,075.60 99,828.23 730.00 99,681.00 05/05/1705/02/17A1A+ 100,000.00 904764AV9 1.91

GENERAL DYNAMICS CORP

DTD 05/11/2018 2.875% 05/11/2020

418,985.28 418,795.75 4,695.83 418,513.20 05/11/1805/08/18A2A+ 420,000.00 369550BA5 3.06

HOME DEPOT INC CORP NOTES

DTD 06/05/2017 1.800% 06/05/2020

319,804.88 324,893.35 1,885.00 324,811.50 06/05/1705/24/17A2A 325,000.00 437076BQ4 1.82

CATERPILLAR FINL SERVICE NOTE

DTD 09/07/2017 1.850% 09/04/2020

478,119.46 489,732.34 679.88 489,588.40 09/07/1709/05/17A3A 490,000.00 14913Q2A6 1.88

GENERAL ELECTRIC CAPITAL CORP CORP

NOTE

DTD 09/16/2010 4.375% 09/16/2020

664,062.10 686,277.48 1,184.90 723,352.50 09/09/1609/06/16A2A 650,000.00 36962G4R2 1.47

AMERICAN HONDA FINANCE CB

DTD 09/24/2015 2.450% 09/24/2020

879,667.10 892,965.54 423.99 895,340.00 02/03/1702/01/17A2A+ 890,000.00 02665WAZ4 2.28

PACCAR FINANCIAL CORP NOTES

DTD 11/13/2017 2.050% 11/13/2020

175,759.20 179,988.47 1,414.50 179,983.80 11/13/1711/06/17A1A+ 180,000.00 69371RN85 2.05


23





Par

Corporate Note

JOHN DEERE CAPITAL CORP NOTES

DTD 01/08/2018 2.350% 01/08/2021

117,881.88 119,952.41 650.17 119,937.60 01/08/1801/03/18A2A 120,000.00 24422ETZ2 2.37

IBM CREDIT CORP NOTE

DTD 09/08/2017 1.800% 01/20/2021

635,532.09 654,060.04 2,325.25 653,644.15 09/08/1709/05/17A1A+ 655,000.00 44932HAB9 1.86

PACCAR FINANCIAL CORP NOTES

DTD 02/27/2018 2.800% 03/01/2021

346,363.15 349,861.87 816.67 349,828.50 02/27/1802/22/18A1A+ 350,000.00 69371RN93 2.82


DTD 03/13/2018 2.875% 03/12/2021

208,352.34 209,882.41 318.65 209,857.20 03/13/1803/08/18A2A 210,000.00 24422EUD9 2.90

CATERPILLAR FINANCIAL SERVICES CORP

NOTE

DTD 03/15/2018 2.900% 03/15/2021

238,299.84 239,893.10 309.33 239,870.40 03/15/1803/12/18A3A 240,000.00 14913Q2G3 2.92

NATIONAL RURAL UTIL COOP

DTD 02/26/2018 2.900% 03/15/2021

297,912.00 299,732.83 386.67 299,667.00 02/26/1802/21/18A2A 300,000.00 63743HER9 2.94

NATIONAL RURAL UTIL COOP

DTD 02/26/2018 2.900% 03/15/2021

397,216.00 398,572.65 515.56 398,308.00 04/19/1804/12/18A2A 400,000.00 63743HER9 3.05

UNILEVER CAPITAL CORP NOTES

DTD 03/22/2018 2.750% 03/22/2021

594,218.40 597,451.60 412.50 596,934.00 03/22/1803/19/18A1A+ 600,000.00 904764AZ0 2.93

UNITED PARCEL SERVICE CORPORATE

BOND

DTD 11/14/2017 2.050% 04/01/2021

511,228.20 524,377.17 5,381.25 524,170.50 11/14/1711/09/17A1A+ 525,000.00 911312BP0 2.10

PEPSICO INC CORP (CALLABLE) NOTE

DTD 10/10/2017 2.000% 04/15/2021

408,785.16 419,938.31 3,873.33 419,916.00 10/10/1710/05/17A1A+ 420,000.00 713448DX3 2.01

HERSHEY COMPANY CORP NOTES

DTD 05/10/2018 3.100% 05/15/2021

299,885.70 299,819.52 3,642.50 299,793.00 05/10/1805/03/18A1A 300,000.00 427866BA5 3.12

CHARLES SCHWAB CORP NOTES

DTD 05/22/2018 3.250% 05/21/2021

400,049.60 399,989.20 4,658.33 399,988.00 05/22/1805/17/18A2A 400,000.00 808513AW5 3.25

MORGAN STANLEY CORP NOTES

DTD 07/28/2011 5.500% 07/28/2021

1,294,765.65 1,321,030.50 11,838.75 1,366,726.80 03/29/1703/27/17A3BBB+ 1,230,000.00 61747WAL3 2.76


24





Par

Corporate Note

JP MORGAN CHASE & CO (CALLABLE)

NOTES

DTD 08/08/2016 2.295% 08/15/2021

354,885.85 365,027.18 1,070.36 365,036.50 10/03/1709/29/17A3A- 365,000.00 46623EKG3 2.29


DTD 01/06/2017 2.650% 01/06/2022

387,034.43 393,798.99 2,471.49 393,258.05 03/15/1703/10/17A2A 395,000.00 24422ETL3 2.75

BANK OF AMERICA CORP CORP NOTES

DTD 01/24/2012 5.700% 01/24/2022

305,314.23 312,454.67 3,023.38 322,397.70 06/22/1706/19/17A3A- 285,000.00 06051GEM7 2.64

BANK OF AMERICA CORP CORP NOTES

DTD 01/24/2012 5.700% 01/24/2022

449,936.76 463,030.73 4,455.50 476,154.00 09/07/1709/01/17A3A- 420,000.00 06051GEM7 2.46

BANK OF NY MELLON CORP (CALLABLE)

NOTES

DTD 02/07/2017 2.600% 02/07/2022

1,248,247.04 1,280,405.96 4,992.00 1,280,588.80 02/10/1702/07/17A1A 1,280,000.00 06406RAA5 2.59

BB&T CORP (CALLABLE) NOTES

DTD 03/21/2017 2.750% 04/01/2022

964,726.73 990,285.80 13,543.75 992,436.75 04/06/1704/03/17A2A- 985,000.00 05531FAX1 2.59

GOLDMAN SACHS GROUP INC (CALLABLE)

NOTE

DTD 01/26/2017 3.000% 04/26/2022

347,805.57 358,436.95 4,585.42 359,703.75 10/03/1709/29/17A3BBB+ 355,000.00 38141GWC4 2.69

COMCAST CORPORATION CORP NOTES

DTD 07/02/2012 3.125% 07/15/2022

647,049.61 676,952.67 4,321.18 682,896.45 09/01/1708/29/17A3A- 655,000.00 20030NBD2 2.20

TOYOTA MOTOR CREDIT CORP

DTD 09/08/2017 2.150% 09/08/2022

624,656.47 654,384.03 899.72 654,227.10 09/12/1709/08/17Aa3AA- 655,000.00 89236TEC5 2.18


Certificate of Deposit

SUMITOMO MITSUI BANK NY CD

DTD 05/04/2017 2.050% 05/03/2019

1,246,797.50 1,250,000.00 10,748.26 1,250,000.00 05/04/1705/03/17P-1A-1 1,250,000.00 86563YVN0 2.05

SKANDINAV ENSKILDA BANKEN NY CD

DTD 08/04/2017 1.840% 08/02/2019

1,316,414.00 1,324,783.51 4,063.33 1,324,483.25 08/04/1708/03/17P-1A-1 1,325,000.00 83050FXT3 1.85


25





Par


MUFG BANK LTD/NY CERT DEPOS

DTD 09/27/2017 2.070% 09/25/2019

649,621.80 655,000.00 225.98 655,000.00 09/27/1709/25/17P-1A-1 655,000.00 06539RGM3 2.07

CREDIT SUISSE NEW YORK CERT DEPOS

DTD 02/08/2018 2.670% 02/07/2020

724,677.38 725,000.00 12,528.60 725,000.00 02/08/1802/07/18A1A 725,000.00 22549LFR1 2.67

NORDEA BANK AB NY CD

DTD 02/22/2018 2.720% 02/20/2020

995,869.00 1,000,000.00 3,097.78 1,000,000.00 02/22/1802/20/18Aa3AA- 1,000,000.00 65590ASN7 2.72

UBS AG STAMFORD CT LT CD

DTD 03/06/2018 2.900% 03/02/2020

1,273,040.38 1,270,000.00 2,762.25 1,270,000.00 03/06/1803/02/18Aa2A+ 1,270,000.00 90275DHG8 2.93

CREDIT AGRICOLE CIB NY FLT CERT DEPOS

DTD 04/10/2018 2.801% 04/10/2020

701,344.00 700,000.00 4,521.21 700,000.00 04/10/1804/06/18A1A 700,000.00 22532XHT8 2.85

CANADIAN IMP BK COMM NY FLT CERT

DEPOS

DTD 04/10/2018 2.731% 04/10/2020

701,768.90 700,000.00 4,408.24 700,000.00 04/10/1804/06/18Aa2A+ 700,000.00 13606BVF0 2.78

BANK OF NOVA SCOTIA HOUSTON CD

DTD 06/07/2018 3.080% 06/05/2020

1,004,829.00 999,678.33 9,753.33 999,620.00 06/07/1806/05/18Aa2A+ 1,000,000.00 06417GU22 3.10

WESTPAC BANKING CORP NY CD

DTD 08/07/2017 2.050% 08/03/2020

1,187,703.43 1,205,000.00 3,705.38 1,205,000.00 08/07/1708/03/17Aa3AA- 1,205,000.00 96121T4A3 2.05

SWEDBANK (NEW YORK) CERT DEPOS

DTD 11/17/2017 2.270% 11/16/2020

1,284,217.89 1,310,000.00 11,399.18 1,310,000.00 11/17/1711/16/17Aa2AA- 1,310,000.00 87019U6D6 2.30

ROYAL BANK OF CANADA NY CD

DTD 06/08/2018 3.240% 06/07/2021

1,005,384.00 1,000,000.00 10,170.00 1,000,000.00 06/08/1806/07/18Aa2AA- 1,000,000.00 78012UEE1 3.24


Asset-Backed Security / Collateralized Mortgage Obligation

CARMAX ABS 2017-1 A2

DTD 01/31/2017 1.540% 02/15/2020

57,958.48 57,995.04 39.69 57,995.02 01/31/1701/25/17AaaNR 57,995.04 14314JAB6 1.60

NISSAN ABS 2015-B A3

DTD 07/22/2015 1.340% 03/15/2020

118,710.54 118,970.54 70.86 118,963.51 07/22/1507/15/15AaaNR 118,972.97 65475WAD0 1.34


26





Par


TOYOTA ABS 2016-B A3

DTD 05/11/2016 1.300% 04/15/2020

78,999.50 79,344.78 45.84 79,342.09 05/11/1605/02/16AaaAAA 79,346.15 89231UAD9 1.30

JOHN DEERE ABS 2016-B A3

DTD 07/27/2016 1.250% 06/15/2020

59,316.29 59,615.15 33.12 59,612.20 07/27/1607/19/16AaaNR 59,616.95 47788NAC2 1.25

NISSAN ABS 2016-B A3

DTD 04/27/2016 1.320% 01/15/2021

97,963.07 98,727.82 57.92 98,719.03 04/27/1604/18/16AaaNR 98,734.35 65478VAD9 1.33

CITIBANK ABS 2017-A2 A2

DTD 01/26/2017 1.740% 01/19/2021

304,328.97 305,000.00 1,090.88 304,941.59 01/26/1701/19/17AaaAAA 305,000.00 17305EGA7 1.75

FORD ABS 2017-A A3

DTD 01/25/2017 1.670% 06/15/2021

436,035.12 439,999.14 326.58 439,998.37 01/25/1701/18/17AaaNR 440,000.00 34531EAD8 1.67

CCCIT 2017-A9 A9

DTD 10/02/2017 1.800% 09/20/2021

396,073.48 399,977.40 220.00 399,970.20 10/02/1709/25/17NRAAA 400,000.00 17305EGH2 1.80

HAROT 2018-1 A3

DTD 02/28/2018 2.640% 02/15/2022

625,548.04 629,929.99 739.20 629,918.54 02/28/1802/22/18AaaAAA 630,000.00 43814UAC3 2.65

ALLYA 2017-5 A3

DTD 11/22/2017 1.990% 03/15/2022

498,175.73 504,968.34 446.64 504,960.81 11/22/1711/14/17AaaAAA 505,000.00 02007YAC8 1.99

FORDO 2017-C A3

DTD 11/21/2017 2.010% 03/15/2022

645,779.96 654,904.51 585.13 654,881.90 11/21/1711/14/17NRAAA 655,000.00 34532AAD5 2.02

JDOT 2018-A A3

DTD 02/28/2018 2.660% 04/15/2022

168,753.15 169,989.46 200.98 169,987.78 02/28/1802/21/18AaaNR 170,000.00 47788CAC6 2.66

NAROT 2018-A A3

DTD 02/28/2018 2.650% 05/15/2022

377,461.52 379,962.35 447.56 379,956.57 02/28/1802/21/18AaaAAA 380,000.00 65478DAD9 2.66

HART 2018-A A3

DTD 04/18/2018 2.790% 07/15/2022

233,696.85 234,968.24 291.40 234,964.61 04/18/1804/10/18AaaAAA 235,000.00 44891KAD7 2.80

AMXCA 2018-1 A

DTD 03/21/2018 2.670% 10/17/2022

607,576.59 609,937.07 723.87 609,929.18 03/21/1803/14/18AaaNR 610,000.00 02582JHQ6 2.68

TOYOTA ABS 2018-C A3

DTD 08/22/2018 3.020% 12/15/2022

349,197.49 349,939.18 469.78 349,937.74 08/22/1808/14/18AaaAAA 350,000.00 89231AAD3 3.03


27





Par


ALLYA 2018-3 A3

DTD 06/27/2018 3.000% 01/15/2023

723,668.68 724,953.35 966.67 724,950.41 06/27/1806/19/18AaaAAA 725,000.00 02007JAC1 3.09

CCCIT 2018-A1 A1

DTD 01/31/2018 2.490% 01/20/2023

887,559.93 890,219.79 4,419.75 890,050.78 08/23/1808/21/18AaaNR 900,000.00 17305EGK5 2.97

GMCAR 2018-3 A3

DTD 07/18/2018 3.020% 05/16/2023

229,560.10 229,948.51 289.42 229,946.36 07/18/1807/11/18NRAAA 230,000.00 36255JAD6 3.03

CARMAX AUTO OWNER TRUST

DTD 07/25/2018 3.130% 06/15/2023

179,997.73 179,976.36 250.40 179,975.47 07/25/1807/18/18NRAAA 180,000.00 14313FAD1 3.36


73,187,543.11 73,273,182.42 2.29 332,945.60 73,066,737.93 71,905,565.18 Managed Account Sub-Total

Money Market Mutual Fund

CAMP Pool 13,302,094.63 13,302,094.63 0.00 13,302,094.63 NRAAAm 13,302,094.63

13,302,094.63 13,302,094.63 0.00 13,302,094.63 13,302,094.63 Money Market Sub-Total

$86,489,637.74 $86,575,277.05 $332,945.60 $86,368,832.56 $85,207,659.81 2.29%

$85,540,605.41

$332,945.60

Total Investments

Accrued Interest

Securities Sub-Total


28

For the Month Ending September 30, 2018Managed Account Security Transactions & Interest


Transaction Type

Trade CUSIPSecurity DescriptionSettle Par Proceeds

Principal Accrued

Interest Total Cost

Realized G/L Realized G/L Sale

Amort Cost Method

BUY

09/06/18 US TREASURY NOTES

DTD 12/31/2015 2.125% 12/31/2022

912828N30 (1,679,516.60) (6,773.44) (1,686,290.04) 1,725,000.00 09/04/18

(6,773.44) (1,686,290.04)(1,679,516.60) 1,725,000.00 Transaction Type Sub-Total

INTEREST

09/01/18 PACCAR FINANCIAL CORP NOTES

DTD 02/27/2018 2.800% 03/01/2021

69371RN93 0.00 5,008.89 5,008.89 350,000.00 09/01/18

09/25/18 FANNIE MAE SERIES 2015-M13 ASQ2

DTD 10/01/2015 1.646% 09/01/2019

3136AQDQ0 0.00 181.01 181.01 131,964.62 09/01/18

09/25/18 FNA 2018-M5 A2

DTD 04/01/2018 3.560% 09/25/2021

3136B1XP4 0.00 1,452.31 1,452.31 480,856.56 09/01/18

09/25/18 FHLMC MULTIFAMILY STRUCTURED P

POOL

DTD 12/01/2015 3.090% 08/25/2022

3137BM6P6 0.00 1,442.00 1,442.00 560,000.00 09/01/18

09/03/18 AMERICAN EXPRESS CREDIT

(CALLABLE) NOTE

DTD 03/03/2017 2.200% 03/03/2020

0258M0EE5 0.00 6,600.00 6,600.00 600,000.00 09/03/18

09/04/18 WALT DISNEY COMPANY CORP NOTES

DTD 03/06/2017 1.950% 03/04/2020

25468PDP8 0.00 1,950.00 1,950.00 200,000.00 09/04/18

09/04/18 INTL BANK OF RECON AND DEV

GLOBAL NOTES

DTD 08/29/2017 1.625% 09/04/2020

459058GA5 0.00 2,479.65 2,479.65 305,000.00 09/04/18

09/04/18 UBS AG STAMFORD CT LT CD

DTD 03/06/2018 2.900% 03/02/2020

90275DHG8 0.00 18,619.61 18,619.61 1,270,000.00 09/04/18

09/04/18 CATERPILLAR FINL SERVICE NOTE

DTD 09/07/2017 1.850% 09/04/2020

14913Q2A6 0.00 4,532.50 4,532.50 490,000.00 09/04/18

09/08/18 TOYOTA MOTOR CREDIT CORP

DTD 09/08/2017 2.150% 09/08/2022

89236TEC5 0.00 7,041.25 7,041.25 655,000.00 09/08/18

09/09/18 INTERNATIONAL FINANCE

CORPORATION NOTE

DTD 03/16/2018 2.635% 03/09/2021

45950VLQ7 0.00 9,178.50 9,178.50 725,000.00 09/09/18

09/12/18 INTL BANK OF RECONSTRUCTION AND

DEV NOTE

DTD 09/19/2017 1.561% 09/12/2020

45905UP32 0.00 7,653.80 7,653.80 980,000.00 09/12/18


29



Transaction Type


Principal Accrued

Interest Total Cost


Amort Cost Method

INTEREST

09/12/18 JOHN DEERE CAPITAL CORP NOTES

DTD 03/13/2018 2.875% 03/12/2021

24422EUD9 0.00 3,001.98 3,001.98 210,000.00 09/12/18

09/14/18 INTER-AMERICAN DEVEL BANK

DTD 09/14/2017 1.750% 09/14/2022

4581X0CZ9 0.00 6,343.75 6,343.75 725,000.00 09/14/18

09/15/18 CARMAX ABS 2017-1 A2

DTD 01/31/2017 1.540% 02/15/2020

14314JAB6 0.00 129.33 129.33 100,778.74 09/15/18

09/15/18 FORD ABS 2017-A A3

DTD 01/25/2017 1.670% 06/15/2021

34531EAD8 0.00 612.33 612.33 440,000.00 09/15/18

09/15/18 NATIONAL RURAL UTIL COOP

DTD 02/26/2018 2.900% 03/15/2021

63743HER9 0.00 6,412.22 6,412.22 400,000.00 09/15/18

09/15/18 NAROT 2018-A A3

DTD 02/28/2018 2.650% 05/15/2022

65478DAD9 0.00 839.17 839.17 380,000.00 09/15/18

09/15/18 JOHN DEERE ABS 2016-B A3

DTD 07/27/2016 1.250% 06/15/2020

47788NAC2 0.00 67.95 67.95 65,228.88 09/15/18

09/15/18 HART 2018-A A3

DTD 04/18/2018 2.790% 07/15/2022

44891KAD7 0.00 546.38 546.38 235,000.00 09/15/18

09/15/18 ALLYA 2018-3 A3

DTD 06/27/2018 3.000% 01/15/2023

02007JAC1 0.00 1,812.50 1,812.50 725,000.00 09/15/18

09/15/18 CATERPILLAR FINANCIAL SERVICES

CORP NOTE

DTD 03/15/2018 2.900% 03/15/2021

14913Q2G3 0.00 3,480.00 3,480.00 240,000.00 09/15/18

09/15/18 NATIONAL RURAL UTIL COOP

DTD 02/26/2018 2.900% 03/15/2021

63743HER9 0.00 4,809.17 4,809.17 300,000.00 09/15/18

09/15/18 HAROT 2018-1 A3

DTD 02/28/2018 2.640% 02/15/2022

43814UAC3 0.00 1,386.00 1,386.00 630,000.00 09/15/18

09/15/18 JDOT 2018-A A3

DTD 02/28/2018 2.660% 04/15/2022

47788CAC6 0.00 376.83 376.83 170,000.00 09/15/18

09/15/18 NISSAN ABS 2016-B A3

DTD 04/27/2016 1.320% 01/15/2021

65478VAD9 0.00 117.90 117.90 107,183.18 09/15/18

09/15/18 FORDO 2017-C A3

DTD 11/21/2017 2.010% 03/15/2022

34532AAD5 0.00 1,097.13 1,097.13 655,000.00 09/15/18

09/15/18 NISSAN ABS 2015-B A3

DTD 07/22/2015 1.340% 03/15/2020

65475WAD0 0.00 163.85 163.85 146,734.54 09/15/18


30



Transaction Type


Principal Accrued

Interest Total Cost


Amort Cost Method

INTEREST

09/15/18 ALLYA 2017-5 A3

DTD 11/22/2017 1.990% 03/15/2022

02007YAC8 0.00 837.46 837.46 505,000.00 09/15/18

09/15/18 CARMAX AUTO OWNER TRUST

DTD 07/25/2018 3.130% 06/15/2023

14313FAD1 0.00 469.50 469.50 180,000.00 09/15/18

09/15/18 TOYOTA ABS 2018-C A3

DTD 08/22/2018 3.020% 12/15/2022

89231AAD3 0.00 675.31 675.31 350,000.00 09/15/18

09/15/18 TOYOTA ABS 2016-B A3

DTD 05/11/2016 1.300% 04/15/2020

89231UAD9 0.00 98.03 98.03 90,493.54 09/15/18

09/15/18 AMXCA 2018-1 A

DTD 03/21/2018 2.670% 10/17/2022

02582JHQ6 0.00 1,357.25 1,357.25 610,000.00 09/15/18

09/16/18 GENERAL ELECTRIC CAPITAL CORP

CORP NOTE

DTD 09/16/2010 4.375% 09/16/2020

36962G4R2 0.00 14,218.75 14,218.75 650,000.00 09/16/18

09/16/18 GMCAR 2018-3 A3

DTD 07/18/2018 3.020% 05/16/2023

36255JAD6 0.00 578.83 578.83 230,000.00 09/16/18

09/20/18 CCCIT 2017-A9 A9

DTD 10/02/2017 1.800% 09/20/2021

17305EGH2 0.00 3,600.00 3,600.00 400,000.00 09/20/18

09/22/18 UNILEVER CAPITAL CORP NOTES

DTD 03/22/2018 2.750% 03/22/2021

904764AZ0 0.00 8,250.00 8,250.00 600,000.00 09/22/18

09/24/18 AMERICAN HONDA FINANCE CB

DTD 09/24/2015 2.450% 09/24/2020

02665WAZ4 0.00 10,902.50 10,902.50 890,000.00 09/24/18

09/25/18 MUFG BANK LTD/NY CERT DEPOS

DTD 09/27/2017 2.070% 09/25/2019

06539RGM3 0.00 13,671.49 13,671.49 655,000.00 09/25/18

09/28/18 FHLB NOTES

DTD 09/08/2017 1.375% 09/28/2020

3130ACE26 0.00 1,271.88 1,271.88 185,000.00 09/28/18


DTD 03/31/2015 1.375% 03/31/2020

912828J84 0.00 4,826.25 4,826.25 702,000.00 09/30/18


DTD 09/30/2015 1.750% 09/30/2022

912828L57 0.00 2,712.50 2,712.50 310,000.00 09/30/18


DTD 03/31/2017 1.875% 03/31/2022

912828W89 0.00 8,203.13 8,203.13 875,000.00 09/30/18


DTD 03/31/2015 1.375% 03/31/2020

912828J84 0.00 584.38 584.38 85,000.00 09/30/18


31



Transaction Type


Principal Accrued

Interest Total Cost


Amort Cost Method

INTEREST


DTD 09/30/2015 1.750% 09/30/2022

912828L57 0.00 5,512.50 5,512.50 630,000.00 09/30/18

09/30/18 US TREASURY N/B

DTD 03/31/2016 1.500% 03/31/2023

912828Q29 0.00 10,837.50 10,837.50 1,445,000.00 09/30/18


DTD 10/02/2017 1.875% 09/30/2022

9128282W9 0.00 25,171.88 25,171.88 2,685,000.00 09/30/18


DTD 09/30/2014 1.750% 09/30/2019

912828F39 0.00 5,250.00 5,250.00 600,000.00 09/30/18


DTD 09/30/2015 1.750% 09/30/2022

912828L57 0.00 8,881.25 8,881.25 1,015,000.00 09/30/18


DTD 09/30/2015 1.750% 09/30/2022

912828L57 0.00 3,062.50 3,062.50 350,000.00 09/30/18

228,308.90 228,308.90 0.00 26,320,240.06 Transaction Type Sub-Total

PAYDOWNS


DTD 10/01/2015 1.646% 09/01/2019

3136AQDQ0 18,417.04 0.00 18,417.04 (184.43) 0.00 18,417.04 09/01/18

09/25/18 FNA 2018-M5 A2

DTD 04/01/2018 3.560% 09/25/2021

3136B1XP4 13,526.50 0.00 13,526.50 (269.06) 0.00 13,526.50 09/01/18

09/15/18 CARMAX ABS 2017-1 A2

DTD 01/31/2017 1.540% 02/15/2020

14314JAB6 42,783.72 0.00 42,783.72 0.02 0.00 42,783.72 09/15/18


DTD 07/27/2016 1.250% 06/15/2020

47788NAC2 5,611.93 0.00 5,611.93 0.45 0.00 5,611.93 09/15/18

09/15/18 TOYOTA ABS 2016-B A3

DTD 05/11/2016 1.300% 04/15/2020

89231UAD9 11,147.40 0.00 11,147.40 0.57 0.00 11,147.40 09/15/18

09/15/18 NISSAN ABS 2015-B A3

DTD 07/22/2015 1.340% 03/15/2020

65475WAD0 27,761.57 0.00 27,761.57 2.21 0.00 27,761.57 09/15/18

09/15/18 NISSAN ABS 2016-B A3

DTD 04/27/2016 1.320% 01/15/2021

65478VAD9 8,448.83 0.00 8,448.83 1.31 0.00 8,448.83 09/15/18

0.00 0.00 (448.93) 127,696.99 127,696.99 127,696.99 Transaction Type Sub-Total

SELL


32



Transaction Type


Principal Accrued

Interest Total Cost


Amort Cost Method

SELL

09/06/18 WAL-MART STORES INC CORP NOTE

DTD 10/20/2017 1.900% 12/15/2020

931142EA7 622,357.15 2,714.63 625,071.78 (11,722.10) (11,968.50) FIFO 635,000.00 09/04/18

09/06/18 SVENSKA HANDELSBANKEN NY CD

DTD 01/12/2017 1.890% 01/10/2019

86958JHB8 978,410.72 2,984.10 981,394.82 (1,589.28) (1,589.28) FIFO 980,000.00 09/05/18

5,698.73 (13,557.78)(13,311.38) 1,606,466.60 1,600,767.87 1,615,000.00 Transaction Type Sub-Total

48,948.26 227,234.19 276,182.45 (13,760.31) (13,557.78)Managed Account Sub-Total

Total Security Transactions ($13,760.31)$276,182.45 $227,234.19 $48,948.26 ($13,557.78)


33

For the Month Ending August 31, 2018Managed Account Security Transactions & Interest


Transaction Type


Principal Accrued

Interest Total Cost


Amort Cost Method

BUY


DTD 12/31/2015 2.125% 12/31/2022

912828N30 (630,144.53) (1,276.15) (631,420.68) 650,000.00 08/01/18

08/22/18 TOYOTA ABS 2018-C A3

DTD 08/22/2018 3.020% 12/15/2022

89231AAD3 (349,937.74) 0.00 (349,937.74) 350,000.00 08/14/18

08/23/18 CCCIT 2018-A1 A1

DTD 01/31/2018 2.490% 01/20/2023

17305EGK5 (890,050.78) (2,054.25) (892,105.03) 900,000.00 08/21/18

(3,330.40) (1,873,463.45)(1,870,133.05) 1,900,000.00 Transaction Type Sub-Total

INTEREST


POOL

DTD 12/01/2015 3.090% 08/25/2022

3137BM6P6 0.00 1,442.00 1,442.00 560,000.00 08/01/18


DTD 10/01/2015 1.646% 09/01/2019

3136AQDQ0 0.00 265.96 265.96 193,895.12 08/01/18

08/25/18 FNA 2018-M5 A2

DTD 04/01/2018 3.560% 09/25/2021

3136B1XP4 0.00 1,518.58 1,518.58 495,000.00 08/01/18

08/02/18 SKANDINAV ENSKILDA BANKEN NY CD

DTD 08/04/2017 1.840% 08/02/2019

83050FXT3 0.00 12,257.72 12,257.72 1,325,000.00 08/02/18

08/05/18 FHLB GLOBAL NOTE

DTD 08/04/2016 0.875% 08/05/2019

3130A8Y72 0.00 437.50 437.50 100,000.00 08/05/18

08/07/18 WESTPAC BANKING CORP NY CD

DTD 08/07/2017 2.050% 08/03/2020

96121T4A3 0.00 12,351.25 12,351.25 1,205,000.00 08/07/18

08/07/18 GENERAL ELECTRIC CAPITAL CORP

NOTES

DTD 08/07/2009 6.000% 08/07/2019

36962G4D3 0.00 25,350.00 25,350.00 845,000.00 08/07/18

08/07/18 BANK OF NY MELLON CORP (CALLABLE)

NOTES

DTD 02/07/2017 2.600% 02/07/2022

06406RAA5 0.00 16,640.00 16,640.00 1,280,000.00 08/07/18

08/09/18 APPLE INC BONDS

DTD 02/09/2015 1.550% 02/07/2020

037833AX8 0.00 1,550.00 1,550.00 200,000.00 08/09/18

08/11/18 FHLB NOTES

DTD 02/09/2018 2.125% 02/11/2020

3130ADN32 0.00 7,251.56 7,251.56 675,000.00 08/11/18

08/15/18 CARMAX ABS 2017-1 A2

DTD 01/31/2017 1.540% 02/15/2020

14314JAB6 0.00 183.34 183.34 142,858.61 08/15/18


34



Transaction Type


Principal Accrued

Interest Total Cost


Amort Cost Method

INTEREST

08/15/18 ALLYA 2017-5 A3

DTD 11/22/2017 1.990% 03/15/2022

02007YAC8 0.00 837.46 837.46 505,000.00 08/15/18

08/15/18 BERKSHIRE HATHAWAY INC

CORPORATE NOTES

DTD 08/15/2016 1.300% 08/15/2019

084664CK5 0.00 1,820.00 1,820.00 280,000.00 08/15/18

08/15/18 JP MORGAN CHASE & CO (CALLABLE)

NOTES

DTD 08/08/2016 2.295% 08/15/2021

46623EKG3 0.00 4,188.38 4,188.38 365,000.00 08/15/18


DTD 07/27/2016 1.250% 06/15/2020

47788NAC2 0.00 75.22 75.22 72,211.88 08/15/18

08/15/18 ALLYA 2018-3 A3

DTD 06/27/2018 3.000% 01/15/2023

02007JAC1 0.00 1,812.50 1,812.50 725,000.00 08/15/18

08/15/18 NISSAN ABS 2015-B A3

DTD 07/22/2015 1.340% 03/15/2020

65475WAD0 0.00 195.43 195.43 175,008.72 08/15/18

08/15/18 NISSAN ABS 2016-B A3

DTD 04/27/2016 1.320% 01/15/2021

65478VAD9 0.00 127.04 127.04 115,494.04 08/15/18

08/15/18 JDOT 2018-A A3

DTD 02/28/2018 2.660% 04/15/2022

47788CAC6 0.00 376.83 376.83 170,000.00 08/15/18


DTD 07/25/2018 3.130% 06/15/2023

14313FAD1 0.00 313.00 313.00 180,000.00 08/15/18

08/15/18 NAROT 2018-A A3

DTD 02/28/2018 2.650% 05/15/2022

65478DAD9 0.00 839.17 839.17 380,000.00 08/15/18

08/15/18 TOYOTA ABS 2016-B A3

DTD 05/11/2016 1.300% 04/15/2020

89231UAD9 0.00 110.20 110.20 101,718.48 08/15/18

08/15/18 FORD ABS 2017-A A3

DTD 01/25/2017 1.670% 06/15/2021

34531EAD8 0.00 612.33 612.33 440,000.00 08/15/18

08/15/18 FORDO 2017-C A3

DTD 11/21/2017 2.010% 03/15/2022

34532AAD5 0.00 1,097.13 1,097.13 655,000.00 08/15/18

08/15/18 HAROT 2018-1 A3

DTD 02/28/2018 2.640% 02/15/2022

43814UAC3 0.00 1,386.00 1,386.00 630,000.00 08/15/18

08/15/18 AMXCA 2018-1 A

DTD 03/21/2018 2.670% 10/17/2022

02582JHQ6 0.00 1,357.25 1,357.25 610,000.00 08/15/18

08/15/18 HART 2018-A A3

DTD 04/18/2018 2.790% 07/15/2022

44891KAD7 0.00 546.38 546.38 235,000.00 08/15/18


35

mguo

Typewritten Text



Transaction Type


Principal Accrued

Interest Total Cost


Amort Cost Method

INTEREST

08/16/18 GMCAR 2018-3 A3

DTD 07/18/2018 3.020% 05/16/2023

36255JAD6 0.00 540.24 540.24 230,000.00 08/16/18

08/20/18 NORDEA BANK AB NY CD

DTD 02/22/2018 2.720% 02/20/2020

65590ASN7 0.00 13,448.89 13,448.89 1,000,000.00 08/20/18


DTD 09/02/2014 2.000% 08/31/2021

912828D72 0.00 2,100.00 2,100.00 210,000.00 08/31/18


DTD 02/28/2014 2.000% 02/28/2021

912828B90 0.00 3,750.00 3,750.00 375,000.00 08/31/18


MATURITY

08/03/18 BNP PARIBAS NY BRANCH COMM PAPER

DTD 11/06/2017 0.000% 08/03/2018

09659CH35 400,000.00 0.00 400,000.00 5,070.00 0.00 400,000.00 08/03/18

0.00 0.00 5,070.00 400,000.00 400,000.00 400,000.00 Transaction Type Sub-Total

PAYDOWNS


DTD 10/01/2015 1.646% 09/01/2019

3136AQDQ0 61,930.50 0.00 61,930.50 (620.16) 0.00 61,930.50 08/01/18

08/25/18 FNA 2018-M5 A2

DTD 04/01/2018 3.560% 09/25/2021

3136B1XP4 14,143.44 0.00 14,143.44 (281.33) 0.00 14,143.44 08/01/18

08/15/18 TOYOTA ABS 2016-B A3

DTD 05/11/2016 1.300% 04/15/2020

89231UAD9 11,224.94 0.00 11,224.94 0.57 0.00 11,224.94 08/15/18

08/15/18 NISSAN ABS 2016-B A3

DTD 04/27/2016 1.320% 01/15/2021

65478VAD9 8,310.86 0.00 8,310.86 1.29 0.00 8,310.86 08/15/18


DTD 07/27/2016 1.250% 06/15/2020

47788NAC2 6,983.00 0.00 6,983.00 0.56 0.00 6,983.00 08/15/18

08/15/18 CARMAX ABS 2017-1 A2

DTD 01/31/2017 1.540% 02/15/2020

14314JAB6 42,079.86 0.00 42,079.86 0.01 0.00 42,079.86 08/15/18

08/15/18 NISSAN ABS 2015-B A3

DTD 07/22/2015 1.340% 03/15/2020

65475WAD0 28,274.18 0.00 28,274.18 2.25 0.00 28,274.18 08/15/18



36



Transaction Type


Principal Accrued

Interest Total Cost


Amort Cost Method

SELL


GLOBAL NOTES

DTD 08/29/2017 1.625% 09/04/2020

459058GA5 342,615.00 2,576.76 345,191.76 (7,311.50) (7,334.47) FIFO 350,000.00 08/15/18

08/23/18 BERKSHIRE HATHAWAY INC

CORPORATE NOTES

DTD 08/15/2016 1.300% 08/15/2019

084664CK5 276,659.60 80.89 276,740.49 (3,068.80) (3,250.69) FIFO 280,000.00 08/21/18

08/23/18 WAL-MART STORES INC CORP NOTE

DTD 10/20/2017 1.900% 12/15/2020

931142EA7 269,610.00 986.94 270,596.94 (4,991.25) (5,099.09) FIFO 275,000.00 08/21/18

08/23/18 FHLB GLOBAL NOTE

DTD 08/04/2016 0.875% 08/05/2019

3130A8Y72 98,544.00 43.75 98,587.75 (1,264.00) (1,394.68) FIFO 100,000.00 08/22/18

3,688.34 (17,078.93)(16,635.55) 991,116.94 987,428.60 1,005,000.00 Transaction Type Sub-Total

(309,757.67) 115,139.30 (194,618.37) (12,462.36) (17,078.93)Managed Account Sub-Total

Total Security Transactions ($12,462.36)($194,618.37)$115,139.30 ($309,757.67) ($17,078.93)


37

For the Month Ending July 31, 2018Managed Account Security Transactions & Interest


Transaction Type


Principal Accrued

Interest Total Cost


Amort Cost Method

BUY

07/18/18 GMCAR 2018-3 A3

DTD 07/18/2018 3.020% 05/16/2023

36255JAD6 (229,946.36) 0.00 (229,946.36) 230,000.00 07/11/18

07/25/18 INTL BANK OF RECONSTRUCTION AND

DEV NOTE

DTD 07/25/2018 2.750% 07/23/2021

459058GH0 (1,047,543.00) 0.00 (1,047,543.00) 1,050,000.00 07/18/18


DTD 07/25/2018 3.350% 06/15/2023

14313FAD1 (179,975.47) 0.00 (179,975.47) 180,000.00 07/18/18

0.00 (1,457,464.83)(1,457,464.83) 1,460,000.00 Transaction Type Sub-Total

INTEREST

07/25/18 FNA 2018-M5 A2

DTD 04/01/2018 3.560% 09/25/2021

3136B1XP4 0.00 1,468.50 1,468.50 495,000.00 07/01/18


POOL

DTD 12/01/2015 3.090% 08/25/2022

3137BM6P6 0.00 1,442.00 1,442.00 560,000.00 07/01/18


DTD 10/01/2015 1.646% 09/01/2019

3136AQDQ0 0.00 287.52 287.52 196,547.15 07/01/18


DTD 01/06/2017 2.650% 01/06/2022

24422ETL3 0.00 5,233.75 5,233.75 395,000.00 07/06/18


DTD 01/08/2018 2.350% 01/08/2021

24422ETZ2 0.00 1,410.00 1,410.00 120,000.00 07/08/18

07/10/18 CREDIT AGRICOLE CIB NY FLT CERT

DEPOS

DTD 04/10/2018 2.801% 04/10/2020

22532XHT8 0.00 4,967.64 4,967.64 700,000.00 07/10/18

07/10/18 CANADIAN IMP BK COMM NY FLT CERT

DEPOS

DTD 04/10/2018 2.731% 04/10/2020

13606BVF0 0.00 4,843.78 4,843.78 700,000.00 07/10/18

07/10/18 CITIGROUP INC (CALLABLE) CORP

NOTE

DTD 01/10/2017 2.450% 01/10/2020

172967LF6 0.00 7,962.50 7,962.50 650,000.00 07/10/18

07/10/18 SVENSKA HANDELSBANKEN NY LT CD

DTD 01/12/2017 1.890% 01/10/2019

86958JHB8 0.00 9,312.45 9,312.45 980,000.00 07/10/18

07/15/18 FORD ABS 2017-A A3

DTD 01/25/2017 1.670% 06/15/2021

34531EAD8 0.00 612.33 612.33 440,000.00 07/15/18


38



Transaction Type


Principal Accrued

Interest Total Cost


Amort Cost Method

INTEREST

07/15/18 NAROT 2018-A A3

DTD 02/28/2018 2.650% 05/15/2022

65478DAD9 0.00 839.17 839.17 380,000.00 07/15/18

07/15/18 HART 2018-A A3

DTD 04/18/2018 2.790% 07/15/2022

44891KAD7 0.00 546.38 546.38 235,000.00 07/15/18

07/15/18 JDOT 2018-A A3

DTD 02/28/2018 2.660% 04/15/2022

47788CAC6 0.00 376.83 376.83 170,000.00 07/15/18

07/15/18 COMCAST CORPORATION CORP NOTES

DTD 07/02/2012 3.125% 07/15/2022

20030NBD2 0.00 10,234.38 10,234.38 655,000.00 07/15/18

07/15/18 FORDO 2017-C A3

DTD 11/21/2017 2.010% 03/15/2022

34532AAD5 0.00 1,097.13 1,097.13 655,000.00 07/15/18

07/15/18 NISSAN ABS 2015-B A3

DTD 07/22/2015 1.340% 03/15/2020

65475WAD0 0.00 227.33 227.33 203,583.32 07/15/18

07/15/18 NISSAN ABS 2016-B A3

DTD 04/27/2016 1.320% 01/15/2021

65478VAD9 0.00 136.29 136.29 123,899.75 07/15/18

07/15/18 HAROT 2018-1 A3

DTD 02/28/2018 2.640% 02/15/2022

43814UAC3 0.00 1,386.00 1,386.00 630,000.00 07/15/18


DTD 07/27/2016 1.250% 06/15/2020

47788NAC2 0.00 81.38 81.38 78,123.04 07/15/18

07/15/18 ALLYA 2017-5 A3

DTD 11/22/2017 1.990% 03/15/2022

02007YAC8 0.00 837.46 837.46 505,000.00 07/15/18

07/15/18 ALLYA 2018-3 A3

DTD 06/27/2018 3.000% 01/15/2023

02007JAC1 0.00 1,087.50 1,087.50 725,000.00 07/15/18

07/15/18 AMXCA 2018-1 A

DTD 03/21/2018 2.670% 10/17/2022

02582JHQ6 0.00 1,357.25 1,357.25 610,000.00 07/15/18

07/15/18 CARMAX ABS 2017-1 A2

DTD 01/31/2017 1.540% 02/15/2020

14314JAB6 0.00 238.26 238.26 185,656.69 07/15/18

07/15/18 TOYOTA ABS 2016-B A3

DTD 05/11/2016 1.300% 04/15/2020

89231UAD9 0.00 122.41 122.41 112,997.26 07/15/18

07/17/18 CITIBANK ABS 2017-A2 A2

DTD 01/26/2017 1.740% 01/19/2021

17305EGA7 0.00 2,653.50 2,653.50 305,000.00 07/17/18

07/18/18 INTER-AMERICAN DEVELOPMENT BANK

NOTE

DTD 01/18/2018 2.500% 01/18/2023

4581X0DA3 0.00 4,187.50 4,187.50 335,000.00 07/18/18


39



Transaction Type


Principal Accrued

Interest Total Cost


Amort Cost Method

INTEREST

07/20/18 IBM CREDIT CORP NOTE

DTD 09/08/2017 1.800% 01/20/2021

44932HAB9 0.00 5,895.00 5,895.00 655,000.00 07/20/18

07/24/18 BANK OF AMERICA CORP CORP NOTES

DTD 01/24/2012 5.700% 01/24/2022

06051GEM7 0.00 11,970.00 11,970.00 420,000.00 07/24/18

07/24/18 BANK OF AMERICA CORP CORP NOTES

DTD 01/24/2012 5.700% 01/24/2022

06051GEM7 0.00 8,122.50 8,122.50 285,000.00 07/24/18

07/28/18 MORGAN STANLEY CORP NOTES

DTD 07/28/2011 5.500% 07/28/2021

61747WAL3 0.00 33,825.00 33,825.00 1,230,000.00 07/28/18

07/31/18 US TREASURY N/B

DTD 07/31/2014 2.250% 07/31/2021

912828WY2 0.00 13,050.00 13,050.00 1,160,000.00 07/31/18


DTD 02/02/2015 1.500% 01/31/2022

912828H86 0.00 14,475.00 14,475.00 1,930,000.00 07/31/18


DTD 07/31/2017 1.875% 07/31/2022

9128282P4 0.00 13,875.00 13,875.00 1,480,000.00 07/31/18


PAYDOWNS


DTD 10/01/2015 1.646% 09/01/2019

3136AQDQ0 2,652.03 0.00 2,652.03 (26.56) 0.00 2,652.03 07/01/18


DTD 07/27/2016 1.250% 06/15/2020

47788NAC2 5,911.16 0.00 5,911.16 0.47 0.00 5,911.16 07/15/18

07/15/18 TOYOTA ABS 2016-B A3

DTD 05/11/2016 1.300% 04/15/2020

89231UAD9 11,278.78 0.00 11,278.78 0.58 0.00 11,278.78 07/15/18

07/15/18 NISSAN ABS 2016-B A3

DTD 04/27/2016 1.320% 01/15/2021

65478VAD9 8,405.71 0.00 8,405.71 1.30 0.00 8,405.71 07/15/18

07/15/18 NISSAN ABS 2015-B A3

DTD 07/22/2015 1.340% 03/15/2020

65475WAD0 28,574.60 0.00 28,574.60 2.27 0.00 28,574.60 07/15/18

07/15/18 CARMAX ABS 2017-1 A2

DTD 01/31/2017 1.540% 02/15/2020

14314JAB6 42,798.08 0.00 42,798.08 0.01 0.00 42,798.08 07/15/18


SELL


40



Transaction Type


Principal Accrued

Interest Total Cost


Amort Cost Method

SELL

07/13/18 BNP PARIBAS NY BRANCH COMM PAPER

DTD 11/06/2017 0.000% 08/03/2018

09659CH35 399,540.33 0.00 399,540.33 4,610.33 (65.34) FIFO 400,000.00 07/12/18


GLOBAL NOTES

DTD 10/27/2016 1.125% 11/27/2019

459058FS7 401,939.40 743.79 402,683.19 (4,698.05) (6,057.73) FIFO 410,000.00 07/18/18


DTD 09/02/2014 2.000% 08/31/2021

912828D72 636,466.80 5,192.93 641,659.73 (15,818.36) (15,057.85) FIFO 650,000.00 07/18/18

5,936.72 (21,180.92)(15,906.08) 1,443,883.25 1,437,946.53 1,460,000.00 Transaction Type Sub-Total

80,102.06 170,098.46 250,200.52 (15,928.01) (21,180.92)Managed Account Sub-Total

Total Security Transactions ($15,928.01)$250,200.52 $170,098.46 $80,102.06 ($21,180.92)


41

For the Month Ending September 30, 2018Account Statement

LOCAL AGENCY WORKERS' COMPENSATION EXCESS FUND - c/o BICKMORE RISK SERVICES - 568-00

Total Settlement Dollar AmountShare or Trade

Shares OwnedDate Transaction Description of TransactionUnit PriceDate

CAMP Pool

103,967.91 Opening Balance

09/04/18 09/04/18 Purchase - Interest 0258M0EE5 1.00 6,600.00 110,567.91

09/04/18 09/04/18 Purchase - Interest 14913Q2A6 1.00 4,532.50 115,100.41

09/04/18 09/04/18 Purchase - Interest 25468PDP8 1.00 1,950.00 117,050.41

09/04/18 09/04/18 Purchase - Interest 459058GA5 1.00 2,479.65 119,530.06

09/04/18 09/04/18 Purchase - Interest 69371RN93 1.00 5,008.89 124,538.95

09/04/18 09/04/18 Purchase - Interest 90275DHG8 1.00 18,415.00 142,953.95

09/06/18 09/06/18 Purchase - Principal 86958JHB8 1.00 978,410.72 1,121,364.67

09/06/18 09/06/18 Purchase - Interest 86958JHB8 1.00 2,984.10 1,124,348.77

09/06/18 09/06/18 Purchase - Principal 931142EA7 1.00 622,357.15 1,746,705.92

09/06/18 09/06/18 Purchase - Interest 931142EA7 1.00 2,714.63 1,749,420.55

09/06/18 09/06/18 Redemption - Principal 912828N30 1.00 (1,679,516.60) 69,903.95

09/06/18 09/06/18 Redemption - Interest 912828N30 1.00 (6,773.44) 63,130.51

09/10/18 09/10/18 Purchase - Interest 89236TEC5 1.00 7,041.25 70,171.76

09/10/18 09/10/18 Purchase - Interest 45950VLQ7 1.00 9,178.50 79,350.26

09/12/18 09/12/18 Purchase - Interest 24422EUD9 1.00 3,001.98 82,352.24

09/12/18 09/12/18 Purchase - Interest 45905UP32 1.00 7,653.80 90,006.04

09/14/18 09/14/18 Purchase - Interest 4581X0CZ9 1.00 6,343.75 96,349.79

09/17/18 09/17/18 Purchase - Interest 14913Q2G3 1.00 3,480.00 99,829.79

09/17/18 09/17/18 Purchase - Interest 36962G4R2 1.00 14,218.75 114,048.54

09/17/18 09/17/18 Purchase - Interest 63743HER9 1.00 4,809.17 118,857.71

09/17/18 09/17/18 Purchase - Interest 63743HER9 1.00 6,412.22 125,269.93


42





CAMP Pool

09/17/18 09/17/18 Purchase - Interest 34532AAD5 1.00 1,097.13 126,367.06

09/17/18 09/17/18 Purchase - Interest 02007JAC1 1.00 1,812.50 128,179.56

09/17/18 09/17/18 Purchase - Interest 02007YAC8 1.00 837.46 129,017.02

09/17/18 09/17/18 Purchase - Interest 02582JHQ6 1.00 1,357.25 130,374.27

09/17/18 09/17/18 Purchase - Interest 14313FAD1 1.00 469.50 130,843.77

09/17/18 09/17/18 Purchase - Interest 14314JAB6 1.00 129.33 130,973.10

09/17/18 09/17/18 Purchase - Interest 34531EAD8 1.00 612.33 131,585.43

09/17/18 09/17/18 Purchase - Interest 43814UAC3 1.00 1,386.00 132,971.43

09/17/18 09/17/18 Purchase - Interest 44891KAD7 1.00 546.38 133,517.81

09/17/18 09/17/18 Purchase - Interest 47788CAC6 1.00 376.83 133,894.64

09/17/18 09/17/18 Purchase - Interest 47788NAC2 1.00 67.95 133,962.59

09/17/18 09/17/18 Purchase - Interest 65475WAD0 1.00 163.85 134,126.44

09/17/18 09/17/18 Purchase - Interest 65478DAD9 1.00 839.17 134,965.61

09/17/18 09/17/18 Purchase - Interest 65478VAD9 1.00 117.90 135,083.51

09/17/18 09/17/18 Purchase - Interest 89231AAD3 1.00 675.31 135,758.82

09/17/18 09/17/18 Purchase - Interest 89231UAD9 1.00 98.03 135,856.85

09/17/18 09/17/18 Purchase - Interest 36255JAD6 1.00 578.83 136,435.68

09/17/18 09/17/18 Purchase - Principal 14314JAB6 1.00 42,783.72 179,219.40

09/17/18 09/17/18 Purchase - Principal 47788NAC2 1.00 5,611.93 184,831.33

09/17/18 09/17/18 Purchase - Principal 65475WAD0 1.00 27,761.57 212,592.90

09/17/18 09/17/18 Purchase - Principal 65478VAD9 1.00 8,448.83 221,041.73

09/17/18 09/17/18 Purchase - Principal 89231UAD9 1.00 11,147.40 232,189.13


43





CAMP Pool

09/19/18 09/19/18 Purchase - Correction to Interest 90275DHG8 from 9/4/18 1.00 18,619.61 250,808.74

09/19/18 09/19/18 Redemption - Reversal of Interest 90275DHG8 from 9/4/18 1.00 (18,415.00) 232,393.74

09/20/18 09/20/18 Purchase - Interest 17305EGH2 1.00 3,600.00 235,993.74

09/24/18 09/24/18 Purchase - Interest 02665WAZ4 1.00 10,902.50 246,896.24

09/24/18 09/24/18 Purchase - Interest 904764AZ0 1.00 8,250.00 255,146.24

09/25/18 09/25/18 Purchase - Interest 06539RGM3 1.00 13,671.49 268,817.73

09/25/18 09/25/18 Purchase - Interest 3136AQDQ0 1.00 181.01 268,998.74

09/25/18 09/25/18 Purchase - Interest 3136B1XP4 1.00 1,426.54 270,425.28

09/25/18 09/25/18 Purchase - Interest 3137BM6P6 1.00 1,442.00 271,867.28

09/25/18 09/25/18 Purchase - Correction to Interest 3136B1XP4 1.00 1,452.31 273,319.59

09/25/18 09/25/18 Purchase - Principal 3136AQDQ0 1.00 18,417.04 291,736.63

09/25/18 09/25/18 Purchase - Principal 3136B1XP4 1.00 13,526.50 305,263.13

09/25/18 09/25/18 Redemption - Reversal of 3136B1XP4 1.00 (1,426.54) 303,836.59

09/26/18 09/26/18 IP Fees August 2018 1.00 (5,410.85) 298,425.74

09/26/18 09/26/18 U.S. Bank Fees July 2018 1.00 (286.66) 298,139.08

09/28/18 09/28/18 Purchase - Incoming Wires 1.00 13,000,000.00 13,298,139.08

09/28/18 09/28/18 Purchase - Interest 3130ACE26 1.00 1,271.88 13,299,410.96

09/28/18 10/01/18 Accrual Income Div Reinvestment - Distributions 1.00 2,683.67 13,302,094.63


44





13,302,094.63

13,302,094.63

13,302,094.63

1,472,679.58

4,598.93

0.00

(30,103,316.23)

43,217,478.15

187,932.71

2,683.67

13,302,094.63

0.00

(1,711,829.09)

14,909,955.81

103,967.91

Monthly Distribution Yield

Average Monthly Balance

Closing Balance

Fiscal YTDMonth of

Cash Dividends and Income

Closing Balance

Check Disbursements

Redemptions (Excl. Checks)

Purchases

Opening Balance

Closing Balance

September January-September

2.14%


45

For the Month Ending August 31, 2018Account Statement




CAMP Pool


08/02/18 08/02/18 Purchase - Interest 83050FXT3 1.00 12,257.72 316,169.66

08/03/18 08/03/18 Purchase - Principal 09659CH35 1.00 400,000.00 716,169.66

08/03/18 08/03/18 Redemption - Principal 912828N30 1.00 (630,144.53) 86,025.13

08/03/18 08/03/18 Redemption - Interest 912828N30 1.00 (1,276.15) 84,748.98

08/06/18 08/06/18 Purchase - Interest 3130A8Y72 1.00 437.50 85,186.48

08/07/18 08/07/18 Purchase - Interest 06406RAA5 1.00 16,640.00 101,826.48

08/07/18 08/07/18 Purchase - Interest 36962G4D3 1.00 25,350.00 127,176.48

08/07/18 08/07/18 Purchase - Interest 96121T4A3 1.00 12,351.25 139,527.73

08/09/18 08/09/18 Purchase - Interest 037833AX8 1.00 1,550.00 141,077.73

08/13/18 08/13/18 Purchase - Interest 3130ADN32 1.00 7,251.56 148,329.29

08/15/18 08/15/18 Purchase - Interest 084664CK5 1.00 1,820.00 150,149.29

08/15/18 08/15/18 Purchase - Interest 46623EKG3 1.00 4,188.38 154,337.67




08/15/18 08/15/18 Purchase - Interest 14313FAD1 1.00 335.00 158,679.88







46





CAMP Pool












08/16/18 08/16/18 Purchase - Interest 36255JAD6 1.00 540.24 261,642.03

08/16/18 08/16/18 Purchase -Correction to Interest 14313FAD1 from 8/15/18 1.00 313.00 261,955.03

08/16/18 08/16/18 Redemption - Reversal of Interest 14313FAD1 from 8/15/18 1.00 (335.00) 261,620.03

08/17/18 08/17/18 Purchase - Interest 459058GA5 1.00 2,576.76 264,196.79

08/17/18 08/17/18 Purchase - Principal 459058GA5 1.00 342,615.00 606,811.79

08/20/18 08/20/18 Purchase - Interest 65590ASN7 1.00 13,448.89 620,260.68

08/22/18 08/22/18 Redemption - Principal 89231AAD3 1.00 (349,937.74) 270,322.94

08/23/18 08/23/18 Purchase - Interest 3130A8Y72 1.00 43.75 270,366.69

08/23/18 08/23/18 Purchase - Principal 3130A8Y72 1.00 98,544.00 368,910.69

08/23/18 08/23/18 Purchase - Interest 084664CK5 1.00 80.89 368,991.58

08/23/18 08/23/18 Purchase - Principal 084664CK5 1.00 276,659.60 645,651.18


47





CAMP Pool

08/23/18 08/23/18 Purchase - Interest 931142EA7 1.00 986.94 646,638.12

08/23/18 08/23/18 Purchase - Principal 931142EA7 1.00 269,610.00 916,248.12

08/23/18 08/23/18 Redemption - Principal 17305EGK5 1.00 (890,050.78) 26,197.34

08/23/18 08/23/18 Redemption - Interest 17305EGK5 1.00 (2,054.25) 24,143.09

08/24/18 08/24/18 IP Fees July 2018 1.00 (5,400.04) 18,743.05

08/24/18 08/24/18 U.S. Bank Fees June 2018 1.00 (304.64) 18,438.41




08/27/18 08/27/18 Purchase - Correction to Interest 3136B1XP4 1.00 1,518.58 23,133.45

08/27/18 08/27/18 Purchase - Principal 3136AQDQ0 1.00 61,930.50 85,063.95

08/27/18 08/27/18 Purchase - Principal 3136B1XP4 1.00 14,143.44 99,207.39

08/27/18 08/27/18 Redemption - Reversal of Interest 3136B1XP4 1.00 (1,468.50) 97,738.89

08/31/18 08/31/18 Purchase - Interest 912828B90 1.00 3,750.00 101,488.89

08/31/18 08/31/18 Purchase - Interest 912828D72 1.00 2,100.00 103,588.89

08/31/18 09/04/18 Accrual Income Div Reinvestment - Distributions 1.00 379.02 103,967.91


48





103,967.91

103,967.91

103,967.91

210,578.17

1,915.26

0.00

(28,391,487.14)

28,307,522.34

187,932.71

379.02

103,967.91

0.00

(1,880,971.63)

1,681,027.60

303,911.94



Closing Balance

Fiscal YTDMonth of


Closing Balance

Check Disbursements


Purchases

Opening Balance

Closing Balance

August January-August

2.12%


49

For the Month Ending July 31, 2018Account Statement




CAMP Pool


07/02/18 07/02/18 Purchase - Interest 912828U81 1.00 20,750.00 51,446.36

07/02/18 07/02/18 Purchase - Interest 912828XW5 1.00 7,350.00 58,796.36

07/06/18 07/06/18 Purchase - Interest 24422ETL3 1.00 5,233.75 64,030.11

07/09/18 07/09/18 Purchase - Interest 24422ETZ2 1.00 1,410.00 65,440.11

07/10/18 07/10/18 Purchase - Interest 13606BVF0 1.00 4,843.78 70,283.89

07/10/18 07/10/18 Purchase - Interest 172967LF6 1.00 7,962.50 78,246.39

07/10/18 07/10/18 Purchase - Interest 22532XHT8 1.00 4,967.64 83,214.03

07/10/18 07/10/18 Purchase - Interest 86958JHB8 1.00 9,312.45 92,526.48

07/13/18 07/13/18 Purchase - Principal 09659CH35 1.00 399,540.33 492,066.81

07/16/18 07/16/18 Purchase - Interest 20030NBD2 1.00 10,234.38 502,301.19













50





CAMP Pool









07/17/18 07/17/18 Purchase - Interest 17305EGA7 1.00 2,653.50 610,868.74

07/18/18 07/18/18 Purchase - Interest 4581X0DA3 1.00 4,187.50 615,056.24

07/18/18 07/18/18 Redemption - Principal 36255JAD6 1.00 (229,946.36) 385,109.88

07/20/18 07/20/18 Purchase - Interest 44932HAB9 1.00 5,895.00 391,004.88

07/24/18 07/24/18 Purchase - Interest 06051GEM7 1.00 8,122.50 399,127.38

07/24/18 07/24/18 Purchase - Interest 06051GEM7 1.00 11,970.00 411,097.38





07/25/18 07/25/18 Purchase - Principal 459058FS7 1.00 401,939.40 816,504.40

07/25/18 07/25/18 Purchase - Interest 459058FS7 1.00 743.79 817,248.19

07/25/18 07/25/18 Purchase - Interest 912828D72 1.00 5,192.93 822,441.12

07/25/18 07/25/18 Purchase - Principal 912828D72 1.00 636,466.80 1,458,907.92


51





CAMP Pool

07/25/18 07/25/18 Purchase - Correction to Principal 3136AQDQ0 1.00 2,652.03 1,461,559.95

07/25/18 07/25/18 Purchase - Principal 3136AQDQ0 1.00 2,652.04 1,464,211.99

07/25/18 07/25/18 Redemption - Principal 14313FAD1 1.00 (179,975.47) 1,284,236.52

07/25/18 07/25/18 Redemption - Principal 459058GH0 1.00 (1,047,543.00) 236,693.52

07/25/18 07/25/18 Redemption - Reversal of Interest 3136AQDQ0 1.00 (269.60) 236,423.92

07/25/18 07/25/18 Redemption - Reversal of Principal 3136AQDQ0 1.00 (2,652.04) 233,771.88

07/27/18 07/27/18 IP Fees June 2018 1.00 (5,228.16) 228,543.72

07/27/18 07/27/18 U.S. Bank Fees May 2018 1.00 (316.99) 228,226.73

07/30/18 07/30/18 Purchase - Interest 61747WAL3 1.00 33,825.00 262,051.73

07/31/18 07/31/18 Purchase - Interest 9128282P4 1.00 13,875.00 275,926.73

07/31/18 07/31/18 Purchase - Interest 912828H86 1.00 14,475.00 290,401.73

07/31/18 07/31/18 Purchase - Interest 912828WY2 1.00 13,050.00 303,451.73

07/31/18 08/01/18 Accrual Income Div Reinvestment - Distributions 1.00 460.21 303,911.94


52





303,911.94

303,911.94

303,911.94

256,767.75

1,536.24

0.00

(26,510,515.51)

26,626,494.74

187,932.71

460.21

303,911.94

0.00

(1,465,931.62)

1,739,147.20

30,696.36



Closing Balance

Fiscal YTDMonth of


Closing Balance

Check Disbursements


Purchases

Opening Balance

Closing Balance

July January-July

2.11%


53

0%

1%

2%

3%

2018201720162015201420132012201120102009

Local Agency Workers' Compensation Excess JPAComparison of Effective Yields on Investments

LAIF - Apportionment Rate CAMP - Monthly Distribution Yield CAMP - Yield to Maturity at Cost

54

System: 10/29/2018 9:22:11 AM Local Agency Workers' Compensa Page: 1User Date: 10/29/2018 VENDOR CHECK REGISTER REPORT User ID: cxiong Payables Management

Ranges: From: To: From: To: Check Number First Last Check Date 6/1/2018 10/31/2018 Vendor ID First Last Checkbook ID First Last Vendor Name First Last

Sorted By: Check Number

* Voided Checks

Check Number Vendor ID Vendor Check Name Check Date Checkbook ID Audit Trail Code Amount --------------------------------------------------------------------------------------------------------------------------------- 7267 CL105 City of Clovis 6/1/2018 GENERAL PMCHK00000361 $2,116.69 7268 CL105 City of Clovis 6/1/2018 GENERAL PMCHK00000361 $325.84 7269 RI105 City of Rialto 6/1/2018 GENERAL PMCHK00000361 $3,774.90 7270 RO105 City of Roseville 6/1/2018 GENERAL PMCHK00000361 $1,807.73 7271 RO105 City of Roseville 6/1/2018 GENERAL PMCHK00000361 $70.00 7272 AL120 Alliant Insurance Services, In 6/13/2018 GENERAL PMCHK00000363 $1,200.00 7273 CA105 California Association of Join 6/13/2018 GENERAL PMCHK00000363 $450.00 7274 CL105 City of Clovis 6/13/2018 GENERAL PMCHK00000363 $36.89 7275 CL105 City of Clovis 6/13/2018 GENERAL PMCHK00000363 $416.13 7276 EL110 Scott Ellerbrock 6/13/2018 GENERAL PMCHK00000363 $631.54 7277 LO110 Town of Los Gatos 6/13/2018 GENERAL PMCHK00000363 $57,307.49 7278 ME105 City of Merced 6/13/2018 GENERAL PMCHK00000363 $491.63 7279 PO100 Kevin Powell 6/13/2018 GENERAL PMCHK00000363 $381.04 7280 BA105 Bartkiewicz, Kronick and Shana 7/2/2018 GENERAL PMCHK00000365 $737.50 7281 CL105 City of Clovis 7/2/2018 GENERAL PMCHK00000365 $5,068.79 7282 CL105 City of Clovis 7/2/2018 GENERAL PMCHK00000365 $2,000.00 7283 MB105 MBASIA 7/2/2018 GENERAL PMCHK00000365 $975.32 7284 CS110 CSJVRMA 7/2/2018 GENERAL PMCHK00000365 $2,000.00 7285 EN105 City of Encinitas 7/2/2018 GENERAL PMCHK00000365 $199.96 7286 LI105 City of Livermore 7/2/2018 GENERAL PMCHK00000365 $2,000.00 7287 SA107 City of Santee 7/2/2018 GENERAL PMCHK00000365 $1,430.69 7288 SA110 City of Santa Maria 7/2/2018 GENERAL PMCHK00000365 $1,889.73 7289 CL105 City of Clovis 7/16/2018 GENERAL PMCHK00000367 $4,125.76 7290 CL105 City of Clovis 7/16/2018 GENERAL PMCHK00000367 $276.23 7291 CL105 City of Clovis 7/16/2018 GENERAL PMCHK00000367 $562.32 7292 RO105 City of Roseville 7/16/2018 GENERAL PMCHK00000367 $14,739.20 7293 RO105 City of Roseville 7/16/2018 GENERAL PMCHK00000367 $122.17 7294 BA105 Bartkiewicz, Kronick and Shana 8/1/2018 GENERAL PMCHK00000369 $1,079.70 7295 CE100 Central San Joaquin Valley Ris 8/1/2018 GENERAL PMCHK00000369 $34.29 7296 MO105 City of Morgan Hill 8/1/2018 GENERAL PMCHK00000369 $16,476.76 7297 RO105 City of Roseville 8/1/2018 GENERAL PMCHK00000369 $260.94 7298 RO105 City of Roseville 8/1/2018 GENERAL PMCHK00000369 $706.23 7299 SC110 Jace Schwarm 8/1/2018 GENERAL PMCHK00000369 $25.00 7300 VA110 City of Vallejo 8/1/2018 GENERAL PMCHK00000369 $10,804.62 7301 PE105 PERMA 8/1/2018 GENERAL PMCHK00000369 $2,000.00 7302 CA120 California Bank & Trust 8/7/2018 GENERAL PMCHK00000370 $4,453.10 7303 CL105 City of Clovis 8/15/2018 GENERAL PMCHK00000372 $8,009.84 7304 CL105 City of Clovis 8/15/2018 GENERAL PMCHK00000372 $8.50 7305 LO110 Town of Los Gatos 8/15/2018 GENERAL PMCHK00000372 $61,618.74 7306 ME105 City of Merced 8/15/2018 GENERAL PMCHK00000372 $290.00 7307 ME105 City of Merced 8/15/2018 GENERAL PMCHK00000372 $330.00 7308 RO105 City of Roseville 8/15/2018 GENERAL PMCHK00000372 $13,508.83 7309 BI115 Jessie Bishop 9/4/2018 GENERAL PMCHK00000374 $370.96 7310 CL105 City of Clovis 9/4/2018 GENERAL PMCHK00000374 $1,107.84 7311 LO110 Town of Los Gatos 9/4/2018 GENERAL PMCHK00000374 $44,466.57 7312 PA120 City of Pacific Grove 9/4/2018 GENERAL PMCHK00000374 $4,290.05 7313 PL105 City of Placentia 9/4/2018 GENERAL PMCHK00000374 $133,475.29 7314 AL120 Alliant Insurance Services, In 9/17/2018 GENERAL PMCHK00000375 $8,426.15 7315 CL105 City of Clovis 9/17/2018 GENERAL PMCHK00000375 $1,840.83 7316 LO110 Town of Los Gatos 9/17/2018 GENERAL PMCHK00000375 $189,855.82 7317 RO105 City of Roseville 9/17/2018 GENERAL PMCHK00000375 $1,809.08 7318 BA105 Bartkiewicz, Kronick and Shana 10/1/2018 GENERAL PMCHK00000378 $1,402.50 7319 ME105 City of Merced 10/1/2018 GENERAL PMCHK00000378 $17,472.00 7320 ME105 City of Merced 10/1/2018 GENERAL PMCHK00000378 $305.01 7321 VA110 City of Vallejo 10/1/2018 GENERAL PMCHK00000378 $280.00 7322 CL105 City of Clovis 10/15/2018 GENERAL PMCHK00000379 $1,185.71 7323 CL105 City of Clovis 10/15/2018 GENERAL PMCHK00000379 $3,272.23 7324 CL105 City of Clovis 10/15/2018 GENERAL PMCHK00000379 $195.42

55


* Voided Checks

Check Number Vendor ID Vendor Check Name Check Date Checkbook ID Audit Trail Code Amount --------------------------------------------------------------------------------------------------------------------------------- 7325 CL105 City of Clovis 10/15/2018 GENERAL PMCHK00000379 $656.04* 7326 LO115 Lori Shively 10/15/2018 GENERAL PMCHK00000379 $190.46 7327 MO105 City of Morgan Hill 10/15/2018 GENERAL PMCHK00000379 $43,140.59 7328 RO105 City of Roseville 10/15/2018 GENERAL PMCHK00000379 $12,633.60 7329 RO105 City of Roseville 10/15/2018 GENERAL PMCHK00000379 $2,102.88 7330 RO105 City of Roseville 10/15/2018 GENERAL PMCHK00000379 $299.00 7331 LO115 Lori Shively 10/16/2018 GENERAL PMCHK00000381 $194.02 EFT000061 AL105 City of Alameda 6/1/2018 GENERAL PMCHK00000360 $5,787.82 EFT000062 CS110 CSJVRMA 6/1/2018 GENERAL PMCHK00000360 $73,962.00 EFT000063 LO105 City of Lodi 6/1/2018 GENERAL PMCHK00000360 $60.00 EFT000064 PE105 PERMA 6/1/2018 GENERAL PMCHK00000360 $40,650.84 EFT000065 SA107 City of Santee 6/1/2018 GENERAL PMCHK00000360 $19,709.22 EFT000066 SC115 SCORE 6/1/2018 GENERAL PMCHK00000360 $367.71 EFT000068 AL105 City of Alameda 6/13/2018 GENERAL PMCHK00000362 $17,490.51 EFT000069 BI105 Bickmore 6/13/2018 GENERAL PMCHK00000362 $173,423.25 EFT000070 CS110 CSJVRMA 6/13/2018 GENERAL PMCHK00000362 $83.54 EFT000071 FA105 FASIS 6/13/2018 GENERAL PMCHK00000362 $25,936.22 EFT000072 GI105 City of Gilroy 6/13/2018 GENERAL PMCHK00000362 $2,000.00 EFT000073 NE105 City of Newark 6/13/2018 GENERAL PMCHK00000362 $166.13 EFT000074 SC115 SCORE 6/13/2018 GENERAL PMCHK00000362 $2,000.00 EFT000075 UN105 City of Union City 6/13/2018 GENERAL PMCHK00000362 $1,948.66 EFT000076 VA105 City of Vacaville 6/13/2018 GENERAL PMCHK00000362 $2,000.00 EFT000077 VE105 VCJPA 6/13/2018 GENERAL PMCHK00000362 $2,000.00 EFT000079 AL105 City of Alameda 7/2/2018 GENERAL PMCHK00000364 $8,194.25 EFT000080 BI105 Bickmore 7/2/2018 GENERAL PMCHK00000364 $1,980.00 EFT000081 CS105 CSAC Excess Insurance Authorit 7/2/2018 GENERAL PMCHK00000364 $2,529,715.00 EFT000082 EB105 East Bay Regional Park Distric 7/2/2018 GENERAL PMCHK00000364 $1,769.94 EFT000083 FA105 FASIS 7/2/2018 GENERAL PMCHK00000364 $438.91 EFT000084 FR105 City of Fremont 7/2/2018 GENERAL PMCHK00000364 $1,115.65 EFT000085 LO105 City of Lodi 7/2/2018 GENERAL PMCHK00000364 $12,682.36 EFT000086 NE105 City of Newark 7/2/2018 GENERAL PMCHK00000364 $29,492.08 EFT000087 PA115 PARSAC 7/2/2018 GENERAL PMCHK00000364 $12,687.82 EFT000088 PE105 PERMA 7/2/2018 GENERAL PMCHK00000364 $117,077.29 EFT000089 SC115 SCORE 7/2/2018 GENERAL PMCHK00000364 $8,449.97 EFT000090 VI105 City of Vista 7/2/2018 GENERAL PMCHK00000364 $3,390.67 EFT000091 CS110 CSJVRMA 7/2/2018 GENERAL PMCHK00000364 $24,618.51 EFT000092 LI105 City of Livermore 7/2/2018 GENERAL PMCHK00000364 $9,284.29 EFT000094 AL105 City of Alameda 7/16/2018 GENERAL PMCHK00000366 $2,696.97 EFT000095 BA106 Bay Cities JPIA 7/16/2018 GENERAL PMCHK00000366 $1,500.00 EFT000096 CO106 City of Coronado 7/16/2018 GENERAL PMCHK00000366 $1,999.58 EFT000097 CS110 CSJVRMA 7/16/2018 GENERAL PMCHK00000366 $228,165.54 EFT000098 FA105 FASIS 7/16/2018 GENERAL PMCHK00000366 $27,634.98 EFT000099 FA115 Farley Consulting Services, LL 7/16/2018 GENERAL PMCHK00000366 $17,200.00 EFT000100 LI105 City of Livermore 7/16/2018 GENERAL PMCHK00000366 $1,063.27 EFT000101 PA105 City of Palm Springs 7/16/2018 GENERAL PMCHK00000366 $3,006.10 EFT000102 PA115 PARSAC 7/16/2018 GENERAL PMCHK00000366 $2,721.15 EFT000103 PE105 PERMA 7/16/2018 GENERAL PMCHK00000366 $92,130.66 EFT000104 SA110 City of Santa Maria 7/16/2018 GENERAL PMCHK00000366 $2,350.31 EFT000105 SC115 SCORE 7/16/2018 GENERAL PMCHK00000366 $4,774.74 EFT000106 UN105 City of Union City 7/16/2018 GENERAL PMCHK00000366 $103,369.11 EFT000107 VA105 City of Vacaville 7/16/2018 GENERAL PMCHK00000366 $85,507.60 EFT000108 VE105 VCJPA 7/16/2018 GENERAL PMCHK00000366 $19,128.63 EFT000109 PA115 PARSAC 7/16/2018 GENERAL PMCHK00000366 $1,091.09 EFT000111 AL105 City of Alameda 8/1/2018 GENERAL PMCHK00000368 $16,543.73 EFT000112 AL115 City of Albany 8/1/2018 GENERAL PMCHK00000368 $96.62 EFT000113 BA106 Bay Cities JPIA 8/1/2018 GENERAL PMCHK00000368 $11,627.99 EFT000114 BI105 Bickmore 8/1/2018 GENERAL PMCHK00000368 $2,680.00 EFT000115 CH105 CHWCA 8/1/2018 GENERAL PMCHK00000368 $808.40 EFT000116 EB105 East Bay Regional Park Distric 8/1/2018 GENERAL PMCHK00000368 $23,258.49 EFT000117 FA105 FASIS 8/1/2018 GENERAL PMCHK00000368 $35,702.02 EFT000118 LO105 City of Lodi 8/1/2018 GENERAL PMCHK00000368 $29,885.42 EFT000119 MC116 MCLAIA 8/1/2018 GENERAL PMCHK00000368 $18,132.32 EFT000120 PE105 PERMA 8/1/2018 GENERAL PMCHK00000368 $59,056.37 EFT000121 PI105 City of Piedmont 8/1/2018 GENERAL PMCHK00000368 $2,846.41 EFT000122 SA106 City of San Leandro 8/1/2018 GENERAL PMCHK00000368 $140,809.83

56


* Voided Checks

Check Number Vendor ID Vendor Check Name Check Date Checkbook ID Audit Trail Code Amount --------------------------------------------------------------------------------------------------------------------------------- EFT000123 SC115 SCORE 8/1/2018 GENERAL PMCHK00000368 $392.85 EFT000124 SO116 City of South Lake Tahoe 8/1/2018 GENERAL PMCHK00000368 $6,488.71 EFT000125 VA105 City of Vacaville 8/1/2018 GENERAL PMCHK00000368 $1,417.80 EFT000126 VE105 VCJPA 8/1/2018 GENERAL PMCHK00000368 $107.68 EFT000128 AL105 City of Alameda 8/15/2018 GENERAL PMCHK00000371 $6,391.80 EFT000129 BA106 Bay Cities JPIA 8/15/2018 GENERAL PMCHK00000371 $106.16 EFT000130 CS110 CSJVRMA 8/15/2018 GENERAL PMCHK00000371 $29,539.31 EFT000131 EM110 City of Emeryville 8/15/2018 GENERAL PMCHK00000371 $1,708.75 EFT000132 NE105 City of Newark 8/15/2018 GENERAL PMCHK00000371 $3,439.34 EFT000133 PA115 PARSAC 8/15/2018 GENERAL PMCHK00000371 $10.05 EFT000134 SA106 City of San Leandro 8/15/2018 GENERAL PMCHK00000371 $53,631.62 EFT000135 SA107 City of Santee 8/15/2018 GENERAL PMCHK00000371 $3,892.25 EFT000136 SD105 Special District Risk Manageme 8/15/2018 GENERAL PMCHK00000371 $1,213.24 EFT000137 SU117 City of Suisun City 8/15/2018 GENERAL PMCHK00000371 $3,652.25 EFT000139 AL105 City of Alameda 9/4/2018 GENERAL PMCHK00000373 $13,881.06 EFT000140 BI105 Bickmore 9/4/2018 GENERAL PMCHK00000373 $173,423.25 EFT000141 BR105 City of Brisbane 9/4/2018 GENERAL PMCHK00000373 $217.98 EFT000142 CS110 CSJVRMA 9/4/2018 GENERAL PMCHK00000373 $85,774.76 EFT000143 EM110 City of Emeryville 9/4/2018 GENERAL PMCHK00000373 $79.25 EFT000144 LO105 City of Lodi 9/4/2018 GENERAL PMCHK00000373 $5,270.84 EFT000145 PA115 PARSAC 9/4/2018 GENERAL PMCHK00000373 $44,431.88 EFT000146 PE105 PERMA 9/4/2018 GENERAL PMCHK00000373 $17,526.93 EFT000147 SA110 City of Santa Maria 9/4/2018 GENERAL PMCHK00000373 $7,072.11 EFT000148 SC115 SCORE 9/4/2018 GENERAL PMCHK00000373 $66.00 EFT000149 SO116 City of South Lake Tahoe 9/4/2018 GENERAL PMCHK00000373 $4,909.59 EFT000151 AB105 Association of Bay Area Gov. 9/17/2018 GENERAL PMCHK00000376 $9,305.41 EFT000152 AL105 City of Alameda 9/17/2018 GENERAL PMCHK00000376 $5,283.78 EFT000153 CS110 CSJVRMA 9/17/2018 GENERAL PMCHK00000376 $92,904.15 EFT000154 FR105 City of Fremont 9/17/2018 GENERAL PMCHK00000376 $6,748.52 EFT000155 MC116 MCLAIA 9/17/2018 GENERAL PMCHK00000376 $2,920.42 EFT000156 NE105 City of Newark 9/17/2018 GENERAL PMCHK00000376 $178.33 EFT000157 PA105 City of Palm Springs 9/17/2018 GENERAL PMCHK00000376 $12,689.51 EFT000158 PA115 PARSAC 9/17/2018 GENERAL PMCHK00000376 $8,454.57 EFT000159 PE105 PERMA 9/17/2018 GENERAL PMCHK00000376 $33,288.83 EFT000160 SC115 SCORE 9/17/2018 GENERAL PMCHK00000376 $1,453.87 EFT000161 SO116 City of South Lake Tahoe 9/17/2018 GENERAL PMCHK00000376 $13,911.04 EFT000162 UN105 City of Union City 9/17/2018 GENERAL PMCHK00000376 $1,939.29 EFT000163 VE105 VCJPA 9/17/2018 GENERAL PMCHK00000376 $720.64 EFT000165 AL105 City of Alameda 10/1/2018 GENERAL PMCHK00000377 $8,826.31 EFT000166 CH105 CHWCA 10/1/2018 GENERAL PMCHK00000377 $272,862.11 EFT000167 LI105 City of Livermore 10/1/2018 GENERAL PMCHK00000377 $4,358.49 EFT000168 PA115 PARSAC 10/1/2018 GENERAL PMCHK00000377 $3,638.27 EFT000169 SC115 SCORE 10/1/2018 GENERAL PMCHK00000377 $5,358.23 EFT000171 AL105 City of Alameda 10/15/2018 GENERAL PMCHK00000380 $6,767.41 EFT000172 CH105 CHWCA 10/15/2018 GENERAL PMCHK00000380 $644.98 EFT000173 CS110 CSJVRMA 10/15/2018 GENERAL PMCHK00000380 $114,711.89 EFT000174 EB105 East Bay Regional Park Distric 10/15/2018 GENERAL PMCHK00000380 $5,388.08 EFT000175 FA115 Farley Consulting Services, LL 10/15/2018 GENERAL PMCHK00000380 $17,200.00 EFT000176 LO105 City of Lodi 10/15/2018 GENERAL PMCHK00000380 $157,090.64 EFT000177 SC115 SCORE 10/15/2018 GENERAL PMCHK00000380 $1,779.67 EFT000178 VA105 City of Vacaville 10/15/2018 GENERAL PMCHK00000380 $1,581.08* EFT000179 VI105 City of Vista 10/15/2018 GENERAL PMCHK00000380 $301.29 EFT000181 VI105 City of Vista 10/16/2018 GENERAL PMCHK00000382 $310.29 -------------------- Total Checks: 176 Total Amount of Checks: $6,012,756.93 ====================

57

LAWCX

Board of Directors Meeting November 6, 2018 Subject: Risk Control Program Update

Recommendation: Receive and file.

Discussion: At its June 5, 2018 meeting, the Board of Directors approved the proposed 2018/19 Risk Control Services plan. That plan included the following services:

• Job Analysis Template Expansion • Provide Educational Webinars • Provide Educational Videos • LAWCX Membership Benefit Presentations • Bickmore Risk Control Web-based Resources • Unlimited Telephone and Email Consultation • Additional Consultation Services for Purchase • Risk Control Reimbursement Program

Job Analysis Template/Educational Webinars/Education Videos/Structured Return to Work The Job Analysis template expansion, the educational webinars, and the educational videos are all designed to support the implementation of a Structured Return to Work Program. Jim Szymanski and Terrie Norris are developing the Structured Return to Work Program components. These components will help our members mitigate their workers’ compensation costs through the adoption and implementation of a structured early return to work program for injured or ill employees. These components tie into the work completed in prior years. Members interested in obtaining assistance for the development, or support, of their Structured Return to Work Program should contact Terrie Norris at [email protected] or at 916-290-4655. LAWCX Membership Benefit Presentations Risk Control staff is available to present LAWCX benefits to member organizations, either in person or via technology, such as a webinar or web meeting. The goal is to give LAWCX members support in understanding, disseminating, and utilizing the tools and resources available to them as members of LAWCX. Examples of currently available tools include: • The Return To Work Program Template • Wellness Program Tools • The Job Analysis Library and Template • CSAC-EIA Online Resources • Bickmore Online Risk Control Resources

58

mailto:[email protected]

Risk Control Program Update Page 2 of 6 November 6, 2018

The City of Gilroy used this benefit to introduce its Safety Committee to the resources of the CSAC-EIA and the Bickmore Risk Control Resources websites. Members who are interested in having a presentation should contact Terrie Norris at [email protected] or at (916) 290-4655. Bickmore Risk Control Web-based Resources The Bickmore Risk Control Resources website has been updated and now features a “Health and Wellness” emphasis page. The content in the new Health and Wellness section of our website will focus on employee wellness. We see a growing body of work focusing on a tripartite approach to organizational wellbeing. This approach connects employee work-place safety, employee workplace health, and employee wellness. Safety focuses on eliminating unsafe conditions and behaviors in the workplace. Workplace health aims to eliminate exposure to conditions or behaviors that can lead to work-related illnesses. And finally, employee wellness encourages lifestyle choices that can improve safety and health at work and at home. Taking a tripartite approach results in the reduction of workplace injuries and illnesses and benefits employee health that ultimately improves productivity and reduces operational costs. The bottom line is it improves an organization’s wellbeing. This part of the Bickmore Risk Control Resources web site offers information that may be applied by the organization to promote employee health and wellness, as well as, information for employees to apply to improve their personal wellbeing. The Health and Wellness Communication regarding Wellness Program Start-Up Tips, which will be posted on the Publications page and linked to the Health and Wellness page is included in the report attachments. Be sure to visit this website often as it contents are continually being added too. Finding the right medical services provider and ensuring your organization’s needs can be met for pre-placement and return to work physicals starts with a screening interview process with questions based on expected performance standards. The "Finding The Right Medical Services Provider" document has been linked to the Health and Wellness webpage and provides you with a list of interview questions developed to assist you in identifying the right medical

59



services provider whether you are looking for pre-placement physicals, return to work physicals, or work-related injury/illness medical care. This document has been included in the attachments of this report. To make it easier to introduce users to the Bickmore Risk Control Resources website, we’ve recorded a webinar that provides a virtual tour of the site’s features. Once you’ve registered to access the website there is no waiting, you can immediately access its resources. Here are the instructions for registering:

1. Click the Register link at the top of the webpage (riskcontrol.bickmore.net).

2. Select your Entity Name from the drop-down list. 3. Group Name will default to the pool of which your entity is a member. 4. Enter your first name and last name. 5. Then enter a username of your choice. You will use this each time you

login. 6. Enter a password (must be a minimum of 8 characters, one of which must

be a symbol) 7. Enter your work email address. 8. Click on the Register button (you will receive a confirmation email

containing your logon credentials). 9. Your username will now appear at the top of the webpage and the default

view is the front page. The website tutorial webinar is located on the Webinar page in the Training Materials section. You can find it under Featured Webinars.

60


Risk Control Reimbursement Program At the June 2018 Board of Directors’ meeting we reported the usage for the

2017/18 Risk Control Reimbursement Program to be $7,559.31. We encouraged members to take advantage of this benefit by July 30, 3018. We are pleased to report that the members listened and did submit additional reimbursement requests before the deadline for a yearend total of $32.379.31. The table below lists the reimbursements for the 2017/18 program year.

Member Description Vendor Check Date Amount

BCJPIA ACP Training Hazard Management Services

7/16/2018 $1,500.00

Clovis Wellness Program Pinnacle Training Systems

7/2/2018 $2,000.00

Coronado Ergonomic Evaluation/Training

PARMA, IPMA-HR, Amazon, Ergo-Ise-It

7/16/2018 $1,999.58

CSJVRMA Traffic Control Workshop

Safety Training Zone

7/2/2018 $2,000.00

Encinitas Worklift T Premium Sit/Stand Desks

ARC Ergonomics

3/1/2018 $2,000.00

Gilroy Professional Safety Training

Du-All Safety, LLC

6/13/2018 $2,000.00

Livermore Safety Consulting O'Connell Consulting

7/2/2018 $2,000.00

Newark Ergonomic Evaluation Bickmore 12/15/2017 $660.00

Newark Ergonomic Evaluation Bickmore 7/2/2018 $1,320.00

PARSAC Ergonomic Evaluation Bickmore 2/1/2018 $1,320.00

PARSAC Cal-OSHA Citation Consultation

Bickmore 7/2/2018 $660.00


Bickmore 8/1/2018 $20.00

61


Member Description Vendor Check Date Amount

PERMA Safety Equipment Cintas, Staples, Dunn Edwards, Galls, Eisenhower Occupational Health, Desert Business Interiors,

8/1/2018 $2,000.00

San Leandro Workplace Safety Training

Du-All Safety, LLC

11/1/2017 $2,000.00

Santa Maria Sit to Stand Desks Ergo Comfort West

7/2/2018 $1,889.73

Santee Safety Equipment and Materials

DiscountSafetyGear

12/4/2017 $569.31

Santee PARMA Conference PARMA 7/2/2018 $1,430.69

SCORE Verbal Judo - Tactical Communications Skills

DKF Solutions Group, LLC

6/13/2018 $2,000.00

Vacaville Ergonomics Training VSI Risk Management & Ergonomics

6/13/2018 $2,000.00

Vallejo Ergonomic Evaluation Bickmore 10/3/2017 $660.00

Vallejo 2017 Fall CAJPA Conference

CAJPA 5/1/2018 $350.00

VCJPA Leadership Training 34th Street Consulting

6/13/2018 $2,000.00

Total Used $32,379.31

62


In June 2018, the Board approved funding for the risk control reimbursement

program at an annual amount of $40,000. The maximum reimbursement continues to be $2,000 per direct member, until funds are exhausted. As of September 17, 2018, members have used $2,660 of the Risk Control Reimbursement fund.

Member Cities Description Vendor Check Date Amount

Newark Ergonomic Design Consultation for New City Hall

Bickmore 8/1/2018 $660.00


Bickmore 8/1/2018

$2,000.00

Total $2,660.00 Funds may be used to obtain risk control related services from Bickmore or other service providers. Members that wish to utilize Bickmore’s services may obtain a quote by contacting Ms. Terrie Norris at [email protected]. The deadline to submit reimbursement requests for approved 2018/19 risk control expenses is July 30, 2019, for expenses incurred through June 30, 2019. If you have any questions, please contact Terrie Norris at (916) 290-4655 or at [email protected].

Attachments: Health & Wellness Communication – Wellness Program Start-up Tips Finding The Right Medical Services Provider

Prepared by: Terrie S. Norris, Risk Control Manager

63



Wellness Program –

Start-Up Ideas H

ea

lth a

nd

We

llne

ss

http://riskcontrol.bickmore.net 800.541.4591

Getting Started Establishing a Wellness Program can be challenging, but it is not impossible. This communication contains some ideas to help you get started. Find a Champion – Find someone in with authority and/or employee influence in your organization that believes health, fitness, and wellness is a necessary part of everyday life. Your champion can help sell your ideas to management and employees alike. Form a Wellness Committee – Form a committee of personnel interested in having a Wellness Program. This group can help formulate what the Wellness Program will offer, help promote the program, and help carry out the ideas developed by the committee. No two wellness programs are alike. To achieve success it’s important that the employees who will use and support the Wellness Program have a part in it’s designed. Start Small – Beta-test your Wellness Program ideas within a single department before rolling it out to the whole entity. The beta-test can help identify and overcome stumbling blocks without souring the entire entity on the idea of a Wellness Program. Finding success in one department can help convince employees in other departments to support the Wellness Program. It’s often easier to gain interest in the police and/or fire departments as they need to stay fit for their jobs.

Setting Up An Exercise Component – Setting up a successful exercise component to your Wellness Program takes advanced planning. Determine how much space you will need for an exercise program. Will you need equipment, such as yoga mats? Who will lead the exercise? How will you pay for exercise leaders if the exercise program is conducted on premises? When will they occur? These are all good questions for the wellness committee to answer. Require employees to sign a waiver for any physical activities they do on their own time using City facilities, i.e. walking club, rock climbing excursion offered by the Rec Department. The waiver and the program description should make it clear that these are voluntary non-work-related activities and are not covered by workers’ compensation. Ensure your City attorney reviews the waiver language before putting it to use.

Lunch and Learn Sessions – Set up Lunch and Learn sessions to provide information on health and wellness topics, while providing a networking opportunity for your employees. Healthy cooking demos are a fun way to share information and spark interest in healthier eating.

Potential Lunch and Learn Activities – • Cooking Demos • Walking Teams • Retirement Planning – Life Begins When

You Retire – Be Ready For It • Stress Management Training • Yoga Demos • Weight Lifting for Women Lecture

64

Finding The Right Medical Services Provider To Meet Your Needs for Pre-Placement, Fitness for Duty, and Return to Work Medical Examinations,

and Work-Related Injury/Illness Treatment Finding the right medical services provider and ensuring your organization’s needs can be met starts with a screening interview process with questions based on expected performance standards. The following list of interview questions was developed to assist you to identify the right medical services provider whether you are looking for pre-placement physicals, return to work physicals, or work-related injury/illness medical care. We recommend that you rate each medical services provider on a scale of 1-5 (1 being the least, and 5 being the best) so that you can compare your impressions when interviewing multiple providers. We also recommend you highlight those issues that are most important to your organization to help you ensure the appropriate attention is given to those issues during the interview process. The blank lines at the end are provided for any additional questions you want to include.

Interview Questions 1 2 3 4 5 1. Can you schedule appointments for physicals to occur within 7 days of the call for an

appointment?

2. Do you have a back-up provider if you are not able to meet our appointment scheduling needs? 3. Do you provide weekend and afterhours services (6 p.m. to 6 a.m.)? 4. How quickly can you provide us with a report? 5. Do you provide an internet portal so we can access immediate status reports? 6. Do you utilize State of California DWC AD Form 10133.36 to report physical capabilities? 7. Do you have multiple facilities to accommodate the geographic range of our employees and

applicants?

8. Do you have the necessary testing equipment at your facilities so that our employees and applicants will not need to go to multiple locations for additional examinations and/or tests?

9. Do you provide DOT compliant alcohol screening/drug testing? 10. How do you maintain compliance with DOT alcohol screening/drug testing requirements? 11. Can you conduct certified audiometric testing to determine hearing loss ranges? 12. Do you use state of the art testing equipment and methods? 13. Can you provide us with a primary contact person for the resolution of any issues that may

arise?

14. Can you provide us with a detailed list of the cost of your services? 15. Do you provide monthly itemized service reports? 16. Can you provide a library of essential job function profiles that we can use and modify to our

work environment?

17. 18. 19. 20. Continued on page 2

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Finding The Right Medical Services Provider To Meet Your Needs for Pre-Placement, Fitness for Duty, and Return to Work Medical Examinations,

and Work-Related Injury/Illness Treatment 21. Which of the following services can you provide?

a. Preplacement Medical Examinations b. Fitness-For-Duty and Return-To-Work Evaluations c. Bloodborne Pathogens Exposure Testing d. Immunizations

i. Hepatitis A ii. Hepatitis B

iii. Flu iv. Tetanus v. Diphtheria

e. Periodic Cal-OSHA required Medical Evaluations and Surveillance

The remaining questions are ones based on experiencing the provider. You may want to ask these questions of others who have used the provider and/or your own employees:

Customer Service Questions 1 2 3 4 5 22. Provider demonstrates respect for employee/applicant by beginning the exam within 30

minutes of the scheduled appointment?

23. Provider responds to your scheduler in a friendly and courteous manner? 24. Provider treats the employee/applicant in a friendly and courteous manner? 25. Provider appears to make medical determination on facts and does not favor one party over

the other?

Questions for Your Organization to Answer:

Customer Service Questions 1 2 3 4 5 26. Does the provider have a facility within a reasonable distance from your office? 27. Do you believe the provider’s services are reasonable priced compared to other providers in

your area?

66

LAWCX

Board of Directors November 6, 2018 Subject: CSAC EIA’s 2018/19 Excess Workers’ Compensation Program

Premium and Fees

Recommendation: Review and file.

Discussion: LAWCX’s excess workers’ compensation coverage is obtained through CSAC Excess Insurance Authority (EIA), and as a result LAWCX does not have a broker of record. The contribution paid to EIA includes various components as defined below, and Alliant representatives serve as facilitators between LAWCX and EIA on various matters since they serve as EIA’s brokers.

The chart displays EIA fees and premiums for the past five years. The EIA administration fee was 10.9% of the total contribution for both 2018 and 2019.

CSAC EIA Fees and Premium

Administration fee: This fee includes the costs for administrative costs, staff administration expense, actuarial services, loss prevention subsidies, and risk management subsidies. It is allocated based on each member’s percentage of total pool and reinsurance premium. Broker fee: This fee is paid to Alliant for its services to EIA.

Public Entity fee: EIA charged non-county agencies a fee of half percent of total premium. This fee was discontinued beginning with the 2017/18 program year.

Attachments: None Prepared by: Jim Elledge, Executive Director

Program Year End

EIA Admin Fee Broker Fee

Public Entity Admin Fee Total Fees

Deposit Premium

Total Contribution

2019 186,562 89,683 - 276,245 2,253,403 2,529,648 2018 163,100 82,400 - 245,500 1,996,971 2,242,471 2017 146,074 78,542 8,924 233,540 1,784,733 2,018,273 2016 130,793 69,540 7,421 207,754 1,484,666 1,692,420 2015 116,440 65,269 6,712 188,421 1,342,293 1,530,714 2014 111,800 65,125 6,688 183,613 1,337,506 1,521,119

67

2 years Minimum

Experience

State Certified

Cert. Training Received

1 ABAG York Yes Yes Yes Yes Yes 2017: 8/16, 9/21, 10/13, 11/15, 11/16, 12/6 and 2018: 1/25, 2/21, 4/13,

6/22

Yes 11/27/17 6/20/18 Yes

2 BCJPIA ICS Yes Yes Yes Yes Yes 2017: 7/25, 9/20 and 2018: 1/10, 3/8, 5/14,

6/14

Yes Monthly Monthly Yes

3 CHWCA ICS Yes Yes Yes Yes Yes 2017: 7/25, 9/20 and 2018: 1/10, 3/8, 5/9,

5/14, 6/13

Yes 9/20/17 2/19/18 Yes

4 CCCTA CorVel Yes Yes Yes Yes Yes 2017: 8/24, 10/13, 11/2 and 2018: 1/24, 4/19,

4/27, 5/16

Yes 1/17/18 4/24/18 Yes

5 CSJVRMA AIMS Yes Yes Yes Yes Yes 2017: 7/20, 8/23, 9/27, 10/18, 11/28, 12/21 and 2018: 2/28, 3/5, 4/18,

5/2, 6/12


6 City of Alameda York Yes Yes Yes Yes Yes 2017: 7/19, 9/7, 10/18, 10/26 and 2018: 4/11, 5/1, 5/3, 5/4, 5/5, 5/6,

5/12

Yes 10/24/17 4/24/18 Yes

7 City of Benicia ICS Yes Yes Yes Yes Yes 2017: 7/25, 9/20 and 2018: 4/19, 5/9, 5/14,

6/14

Yes 8/8/17 4/5/18 Yes

8 City of Clovis AIMS Yes Yes Yes Yes Yes 2017: 8/21, 8/23, 8/24, 9/27, 10/4, 10/18, 11/28, 11/30, 12/21 and 2018:

2/6, 2/21

Yes 12/13/17 4/25/18 Yes

9 City of Coronado Keenan Yes Yes Yes Yes Yes 2017: 10/5, 11/9, 11/15, 11/29, 12/19 and 2018: 2/14, 3/21, 3/22, 3/29,

4/2, 5/8, 5/16, 6/20

Yes 8/23/17 1/23/18 Yes

10 City of Encinitas AdminSure Yes Yes Yes Yes Yes 2017: 7/18, 8/29, 9/7, 10/3, 10/19, 10/25,

11/29 and 2018: 1/16,

Yes 1/5/18 6/27/18 Yes

Performance Standard Utilized

Member TPA

Designates non-compliance

Authorized representative

meeting

Date of 1st

meeting

Date of 2nd

meeting

Examiner InformationAuthorized

Reserve worksheet

Reserves Evaluated

Fiscal Year 2017/18 Training Dates

68

2 years Minimum

Experience

State Certified



Member TPA



meeting

Date of 1st

meeting

Date of 2nd

meeting


Reserve worksheet

Reserves Evaluated


11 City of Gilroy ICS Yes Yes Yes Yes Yes 2017: 8/1, 9/7, 10/12, 10/19, 11/13, 11/16 and 2018: 1/10, 2/14, 3/8,

4/19, 5/8

Yes 10/31/17 4/11/18 Yes

12 City of Livermore ICS Yes Yes Yes Yes Yes 2017: 7/24, 7/25, 9/21, 9/1, 10/4, 10/19, 11/13 and 2018: 1/23, 3/22, 4/19, 4/18, 6/7, 6/13

Yes 8/14/17 2/15/18 Yes

13 City of Lodi York Yes Yes Yes Yes Yes 2017: 7/19, 11/15 and 2018: 1/11, 3/21, 3/7

Yes 1/26/18 5/15/18 Yes

14 City of Merced Tristar Yes Yes Yes Yes Yes 2017: 7/12, 8/21 Yes 8/24/17 2/15/18 Yes15 City of Morgan Hill ICS Yes Yes Yes Yes Yes 2017: 7/25, 11/13 and

2018: 4/19, 5/9, 5/31, 6/7, 6/14, 6/21

Yes 8/15/17 3/28/18 Yes

16 City of Newark York Yes Yes Yes Yes Yes 2017: 7/19, 7/20, 10/18, 11/15, 12/7 and 2018:

3/7

Yes 9/25/17 3/28/18 Yes

17 City of Placentia AdminSure Yes Yes Yes Yes Yes 2017: 7/18, 8/29, 9/7, 9/21, 10/3, 10/19, 10/25,

11/14 and 2018: 1/4, 1/16, 2/21, 3/28, 4/11, 4/25, 5/10, 5/17, 6/5,

6/12

Yes Weekly Weekly Yes

18 City of Pleasanton ICS Yes Yes Yes Yes Yes 2017: 7/25, 9/20 and 2018: 1/24, 4/11, 4/19,

5/8, 5/19, 6/14

Yes 8/23/17 2/8/18 Yes

19 City of Roseville Tristar Yes Yes Yes Yes Yes 2017: 7/13, 7/25, 9/6, 9/19 10/13, 12/5 and 2018: 3/8, 4/24, 6/5

Yes 9/27/17 4/18/18 Yes

20 City of San Leandro Intercare Yes Yes Yes Yes Yes 2017: 7/11, 7/26, 8/8, 8/9, 8/29, 9/12, 9/26,

10/3, 10/19, 12/13 and 2018: 1/18, 1/26

Yes 7/18/17 10/10/17 Yes

21 City of Santa Maria AdminSure Yes Yes Yes Yes Yes 2018: 4/11, 5/10, 6/5 Yes 10/6/17 4/6/18 Yes

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2 years Minimum

Experience

State Certified



Member TPA



meeting

Date of 1st

meeting

Date of 2nd

meeting


Reserve worksheet

Reserves Evaluated


22 City of Santee Tristar Yes Yes Yes Yes Yes 2017: 8/9, 9/1, 9/26, 10/18 and 2018: 1/11, 4/5, 4/17, 5/2, 6/13,

6/20, 6/21

Yes 9/21/17 5/24/18 Yes

23 City of South Lake Tahoe Sedgwick Yes Yes Yes Yes Yes 2017: 8/1, 9/7, 10/26, 11/7, 11/29 and 2018:

2/21, 3/28, 6/13

Yes 1/16/18 5/23/18 Yes

24 City of Suisun City Athens Yes Yes Yes Yes Yes 2017: 7/11, 7/19, 8/31, 10/26, 12/20, and 2018:

2/7, 4/24

Yes 9/28/17 2/27/18 Yes

25 City of Vacaville ICS Yes Yes Yes Yes Yes 2017: 7/25, 9/20 and 2018: 4/19, 5/9, 5/14,

6/14

Yes 12/12/17 6/22/18 Yes

26 City of Vallejo York Yes Yes Yes Yes Yes 2017: 7/19, 7/20, 8/29, 10/18, 11/15, 12/7 and

2018: 3/7, 3/21

Yes 1/23/18 4/24/18 Yes

27 City of Vista AdminSure Yes Yes Yes Yes Yes 7/18/17 Yes 2/20/18 6/12/18 Yes28 FASIS Athens Yes Yes Yes Yes Yes 2017: 7/10, 7/11, 7/19,

8/31, 12/20 and 218: 2/7, 4/24, 5/15, 6/12

Yes 12/5/17 6/12/18 Yes

29 MCLAIA AIMS Yes Yes Yes Yes Yes 2017: 8/23, 9/27, 12/21, and 2018: 5/2, 5/15, 6/20

Yes 11/17/17 4/6/18 Yes

30 PARSAC LWP Yes Yes Yes Yes Yes 2017: 7, 8/10, 10/18, 11/1, 11/8 and 2018: 1/26, 2/9, 2/23, 3/21,

5/16, 6/26

Yes 7/31/17 3/22/18 Yes

AdminSure Yes Yes Yes Yes Yes 2017: 7/18, 8/23, 10/3, 10/19, 11/14 and 2018:

1/4, 2/21, 3/28, 4/5, 4/25

Yes 10/17/17 3/14/18 Yes

CorVel Yes Yes Yes Yes Yes 2017: 8/30, 11/7, 11/16, 11/28 and 2018: 1/10, 1/24, 3/21, 4/19, 6/4,

6/19

Yes 10/24/17 3/22/18 Yes

York Yes Yes Yes Yes Yes 2017: 7/19, 9/18, 11/1, 12/5 and 2018: 2/13, 3/2,

3/28, 4/18, 5/8, 5/13

Yes 10/17/17 3/14/18 Yes

PERMA31

70

2 years Minimum

Experience

State Certified



Member TPA



meeting

Date of 1st

meeting

Date of 2nd

meeting


Reserve worksheet

Reserves Evaluated


32 SCORE York Yes Yes Yes Yes Yes 2017: 8/22, 9/21, 9/27, 10/16, 11/16, 12/4 and

2018: 5/29, 6/6

Yes 10/20/17 3/27/18 Yes

33 Town of Los Gatos ICS Yes Yes Yes Yes Yes 2017: 7/25, 11/13 and 2018: 4/19, 5/9, 5/31,

6/7, 6/14, 6/21

Yes 8/10/17 3/30/18 Yes

34 VCJPA AIMS Yes Yes Yes Yes Yes 2017: 7/6, 7/19, 8/10, 8/22, 8/30, 9/14, 9/19, 11/28, 12/14 and 2018: 3/27, 4/10, 4/16, 6/7,

6/13


71

LAWCX

Board of Directors Meeting November 6, 2018 Subject: Annual Investment Policy Review

Recommendation: Approve the Investment Policy as revised. Discussion: Staff and representatives from PFM Asset Management LLC (PFM) have performed

the annual review of the attached Investment Policy (Policy) of the Authority. Changes are being recommended by PFM and staff to reflect current best practices, and to allow for LAWCX to continue expanding the allowable allocation in certain sectors. The more substantive changes are listed below and are described in detail in the attached memorandum from PFM:

1. Increasing the maximum allowable allocation into Supranational Debt from 15%

to 30%, which is the maximum allowed by the Government Code; 2. Remove the limitation of holding no more than 5% per issuer in the

supranational category; 3. Increasing the maximum allowable allocation into Asset Backed Securities from

10% to 20%, which is the maximum allowed by the Government Code; and 4. Allow CAMP to be rated “AAA” by any nationally recognized statistical ratings

organization. The policy currently limits the rating to that issued by Standard & Poor’s.

The Executive Committee has reviewed the revisions to the Policy and is recommending approval of the Policy as presented. An edited version of the proposed Policy is attached and will be reviewed by PFM at the meeting.

Attachments: PFM Memorandum Regarding Annual Review of LAWCX Investment Policy Proposed Investment Policy (with revisions noted)

Prepared by: Jim Elledge, Executive Director

72

Memorandum

To: Jim Elledge, CPA, Director, Bickmore Local Agency Workers’ Compensation Excess Joint Powers Authority

From: Lesley Murphy, Senior Managing Consultant PFM Asset Management LLC

Re: Annual Investment Policy Review

We have completed our annual review of the Investment Policy (the “Policy”) for the Local Agency

Workers’ Compensation Excess Joint Powers Authority (the “Authority”). The Policy is in compliance

with the sections of the California Government Code (the “Code”) that govern the investment of public

funds, and there have been no recent changes to the Code that would require the Authority to update

its Policy. Our suggested changes are designed to increase diversification and flexibility by bringing

the Policy into closer alignment with certain sector allocation limits as established by Code. We have

provided a marked-up version of this Policy for your review, and we have summarized our changes

below.

8.0 Authorized and Suitable Investments

Subsection 9. United States dollar denominated senior unsecured unsubordinated obligations issued

or unconditionally guaranteed by the International Bank for Reconstruction and Development (IBRD),

International Finance Corporation (IFC), or Inter-American Development Bank (IADB) (collectively

referred to as “governmental instrumentalities” or “supranationals”).

As we have mentioned in prior memos, the Authority’s Policy currently restricts the maximum

allocation to these supranational obligations to a level below California Government Code (Code)

restrictions. Last year, the Authority approved our recommendation to increase the maximum

allocation to this sector from 10% to 15%, which, we noted, was still below the Code maximum

allocation. We are now recommending that the Authority further increase the maximum allocation to

this sector from 15% to the 30% maximum allocation established by Code. Further, we recommend

deleting the 5% per issuer limitation on this category. This is consistent with the treatment of other

government obligations (like U.S. Treasury and federal agency/GSE obligations), which are not

subject to a 5% per issuer limitation.

We have recently seen value in the supranational sector, and we expect that we will continue to do

so. Since 2008, debt issuance by the traditional federal agencies and government-sponsored

enterprises (like FNMA and FHLMC) has decreased dramatically, causing public sector investors

73

to seek high-quality government alternatives, like supranationals. By increasing the maximum

allocation to this sector from 15% to 30%, the Authority will allow for greater investment flexibility

and the opportunity to take advantage of opportunities to invest in this sector as they arise.

Subsection 10. Mortgage passthrough securities, collateralized mortgage obligations, mortgage-

backed or other pay-through bonds, equipment lease-backed certificates, consumer receivable

passthrough certificates, or consumer receivable-backed bonds (collectively referred to as “asset-

backed securities” or “ABS”).

Similar to our recommendation above, we note that the Authority’s Policy currently restricts the

maximum allocation to ABS to a level below Code restrictions. Last year, the Authority approved our

recommendation to increase the maximum allocation to this sector from 5% to 10%, which, we noted,

was still below the Code maximum allocation. We are now recommending that the Authority further

increase the maximum allocation to this sector from 10% to the 20% maximum allocation established

by Code.

We continue to recommend that the Policy remain more restrictive than Code with regards to credit

ratings. Code requires ABS to be rated in a category of “AA” or its equivalent or better by an NRSRO

(Nationally Recognized Statistical Ratings Organization), but we recommend that the Policy maintain

a minimum credit rating of “AAA” or its equivalent.

In today’s market environment, where many other high-quality, non-government instruments, like

corporate notes, offer very little incremental value over government securities, the ABS sector offers

better relative value and continued strong performance. By increasing the maximum allocation from

10% to 20%, the Authority will allow for greater investment flexibility and the opportunity to take

advantage of opportunities to invest in this sector as they arise.

Subsection 12. California Asset Management Program (CAMP).

We recommend that the Policy stipulate that CAMP must be rated “AAAm” or its equivalent by an

NRSRO. This change would not alter the requirement that CAMP be rated in the highest rating

category by an NRSRO. Rather, similar to the credit rating criteria for all other investment sectors,

this change would allow for a “AAA” equivalent rating by any of the NRSROs. As it is currently written,

the Policy requires the “AAA” equivalent rating by Standard & Poor’s specifically.

2

74

11.0 Diversification

Consistent with our recommendation under section 8.9 above, we recommend that the Authority add

obligations of the International Bank for Reconstruction and Development (IBRD), the International

Finance Corporation (IFC), and the Inter-American Development Bank (IADB) (collectively referred to

as “governmental instrumentalities” or “supranationals”) to the listing of security types that are exempt

from the 5% per non-government issuer limitation.

Glossary: We recommended one minor update to the glossary section of the Policy.

We are looking forward to further discussing our recommendations with you. Please feel free to

contact us at your convenience.

3

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(LAWCX)

INVESTMENT POLICY (Revisions Effective November 67, 20187)

TABLE OF CONTENTS

Page Number

1.0 POLICY STATEMENT 2 2.0 SCOPE OF POLICY 2 3.0 PRUDENCE 2 4.0 OBJECTIVES 2 5.0 DELEGATION OF AUTHORITY 3 5.1 INVESTMENT PROCEDURES 3 6.0 ETHICS AND CONFLICT OF INTEREST 3 7.0 AUTHORIZED FINANCIAL DEALERS AND INSTITUTIONS 4 8.0 AUTHORIZED AND SUITABLE INVESTMENTS 4 9.0 INVESTMENT POOLS 6 10.0 SAFEKEEPING AND CUSTODY 7 11.0 DIVERSIFICATION 7 12.0 MAXIMUM MATURITIES 7 13.0 INTERNAL CONTROLS 7 14.0 PERFORMANCE STANDARDS 87 14.1 MARKET-AVERAGE RATE OF RETURN (BENCHMARK) 8 15.0 REPORTING 8 16.0 INVESTMENT POLICY ADOPTION 8

GLOSSARY 9

76

LAWCX Investment Policy Revised November 67, 20187 Page 2 1.0 POLICY STATEMENT

The policy of the Local Agency Workers’ Compensation Excess Joint Powers Authority (the “Authority”) shall be to invest all funds under the Authority’s control in a manner that complies with all laws of the State of California;, including all applicable Government Code Sections including but not limited to Government Code Section 53601 and the policies of the Authority.

2.0 SCOPE OF POLICY

This Investment Policy (the “Policy”) sets forth guidance for all financial assets and investment activities under the direction and control of the Authority. All financial assets and investment activities of the Authority are accounted for in one fund.

3.0 PRUDENCE

All persons authorized to make investment decisions on behalf of the Authority are trustees and therefore fiduciaries subject to the prudent investor standard: “When investing, reinvesting, purchasing, acquiring, exchanging, selling, or managing public funds, a trustee shall act with care, skill, prudence, and diligence under the circumstances then prevailing, including, but not limited to, the general economic conditions and the anticipated needs of the agency, that a prudent person acting in a like capacity and familiarity with those matters would use in the conduct of funds of a like character and with like aims, to safeguard the principal and maintain the liquidity needs of the agency.” Investment officers acting in accordance with written procedures and the Investment Policy and exercising due diligence shall be relieved of personal responsibility for an individual security’s credit risk or market price changes, provided deviations from expectations are reported in a timely fashion and appropriate action is taken to control adverse developments.

4.0 OBJECTIVES

The primary objectives, in priority order, of the Authority’s investment activities shall be:

A. Safety: The primary objective of this Policy is to protect, preserve, and maintain cash and investments of the Authority. Preservation of capital is the primary objective of the Authority. Every investment transaction shall strive to avoid capital losses arising from securities default and/or broker/dealer default. To attain this objective, the portfolio will be diversified to avoid incurring unreasonable and avoidable risk regarding specific security types or individual financial institutions.

B. Liquidity: An adequate percentage of the portfolio will be maintained in liquid short-term securities

which can be converted to cash as necessary to meet disbursement requirements. The liquidity requirements will be determined from time to time from projected cash flow reports. Investments will be made in securities with active secondary or resale markets. Securities with low market risk will be emphasized.

C. Return: Within the constraints of safety and liquidity, the highest and best return will be sought.

The maximization of return will not transcend the objectives of capital preservation and the maintenance of adequate liquidity.

D. Public Trust: All participants in the investment process shall act as custodians of the public trust.

Investment officials shall recognize that the investment portfolio is subject to public review and evaluation. The overall program shall be designed and managed with a degree of professionalism

77

LAWCX Investment Policy Revised November 67, 20187 Page 3

that is worthy of the public trust. In a diversified portfolio, it must be recognized that occasional measured losses are inevitable and must be considered within the context of the overall investment objectives.

5.0 DELEGATION OF AUTHORITY

Authority to manage the Authority’s investment program is derived from the Bylaws. Management responsibility for the investment program is hereby delegated to the Treasurer who shall assume full responsibility for transactions until the delegation of authority is revoked. Subject to review, the Executive Committee may renew the delegation of authority each year. The Treasurer may delegate the day-to-day placement of investments to an investment advisor, via written agreement with the Authority (as stated in Section 5.1, Investment Procedures). The Treasurer shall establish a system of written internal controls to regulate the Authority’s investment activities, including the activities of the Authority and any subordinate officials acting on behalf of the Authority.

The delegated investment advisors, acting in accordance with written procedures and the Investment Policy and exercising due diligence, shall be relieved of personal responsibility for an individual security’s credit risk or market price changes, provided deviations from expectations are reported in a timely fashion and appropriate action is taken to control adverse developments.

5.1 INVESTMENT PROCEDURES

The Treasurer may delegate the day-to-day placement of investments to an investment advisor, via written agreement with the Authority. The investment advisor shall make all investment decisions and transactions in strict accordance with state law and this Investment Policy. The Treasurer or Executive Director shall have the authority to transfer any amount of funds for investment.

6.0 ETHICS AND CONFLICT OF INTEREST

Officers and employees involved in the investment process shall refrain from personal business activities that could conflict with proper execution of the investment program, or which could impair their ability to make impartial investment decisions. Employees and investment officials shall disclose to the Board of Directors any large personal financial/investment positions that could be related to the performance of the Authority’s portfolio. When the Authority utilizes the services of an independent registered investment advisor under the Investment Advisers Act of 1940, the Authority will require the advisor to immediately notify the Authority if at any time during the term of the agreement it is not so registered or if its registration is suspended. The advisor also agrees to perform its duties and responsibilities under the investment advisory agreement with reasonable care. The advisor shall promptly notify the Authority in writing of any complaints or disciplinary actions filed against it, or any investment professional employed by it, who has performed any service with respect to the Authority's account in the 24 preceding months, by the United States, the New York Stock Exchange, the American Stock Exchange, the Financial Industry Regulatory Authority, any Attorney General or any regulatory agency or authority of any state of the United States, any department or agency or authority of the Government of the United States, or any governmental agency or authority regulating securities of any country in which the advisor is doing business.

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7.0 AUTHORIZED FINANCIAL DEALERS AND INSTITUTIONS

The Authority shall require the investment advisor to maintain a list of financial institutions authorized to provide investment services in the State of California. These may include “primary” dealers or regional dealers that qualify under Securities & Exchange Commission Rule 15C3-1 (uniform net capital rule). No public deposit shall be made except in a qualified public depository as established. The Treasurer shall continue to monitor the credit characteristics and financial history of the financial institutions throughout the period in which Authority funds are deposited or invested. An investment grade commercial rating or bank watch may be used to accomplish this objective. When engaging the services of an investment advisor, it is recognized that the investment advisor will establish and maintain its own criteria for selecting broker/dealers and financial institutions.

8.0 AUTHORIZED AND SUITABLE INVESTMENTS

Sections 53600 et. seq. of the California Government Code provide basic investment limits and guidelines for government entities. Within the investments permitted by the Government Code, the Authority seeks to further restrict eligible investments as provided below. In the event an apparent discrepancy is found between this Policy and the Government Code, the more restrictive parameters shall take precedence. Individuals authorized to make investment decisions shall invest Authority moneys as directed by this Policy and only in the investments specifically authorized in this section. The following sections define each approved investment type.

1. U.S. Treasury and other government obligations for which the full faith and credit of the UnitedStates are pledged for the payment of principal and interest.

There are no limits on the dollar amount or percentage that the Authority may invest in U.S.Treasuries.

2. Federal agency or United States government-sponsored enterprise obligations, participations, orother instruments, including those issued by or fully guaranteed as to principal and interest byfederal agencies or United States government-sponsored enterprises.

There are no limits on the dollar amount or percentage that the Authority may invest in U.S. Agencyor government-sponsored enterprise obligations.

3. Obligations issued by (1) the State of California or any local agency within the state, includingbonds payable solely out of the revenues from a revenue-producing property owned, controlled, oroperated by the state or local agency, or by a department, board, agency, or authority of the stateor local agency or (2) any of the other 49 states in addition to California, including bonds payablesolely out of the revenues from a revenue-producing property owned, controlled, or operated by astate or by a department, board, agency, or authority of any of the other 49 states, in addition toCalifornia. Obligations permitted under this subdivision shall be rated in a rating category of “A” orits equivalent or higher by a Nationally Recognized Statistical Rating Organization (“NRSRO”).Purchases of the obligations described in this subdivision may not exceed 5 years in maturity or 20percent of the Authority’s portfolio. No more than 5 percent may be invested in any one issuer.Bonds issued to address unfunded pension liabilities, known as “Pension Obligation Bonds,” arenot permitted.

4. Negotiable certificates of deposit or deposit notes issued by a nationally or state-charted bank, asavings association or a federal association, a state or federal credit union, or by a federally-licensed or state-licensed branch of a foreign bank. Eligible investments shall be rated in a rating

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category of “A” for long-term, “A-1” for short-term, their equivalents, or better by an NRSRO.

Purchases or negotiable certificates of deposit may not exceed five years in maturity or 30 percent of the Authority’s investment portfolio. No more than 5 percent may be invested in any one issuer.

5. Banker's acceptances otherwise known as bills of exchange or time drafts that are drawn on andaccepted by a commercial bank, the short-term paper of which is rated “A-1” or higher, or theequivalent, by an NRSRO.

Purchases of banker's acceptances may not exceed 180 days maturity or 40 percent of theAuthority's investment portfolio. No more than 5 percent may be invested in any one issuer.

6. Commercial paper rated in the highest ranking or of the highest letter and number rating, asprovided by an NRSRO. The entity that issues the commercial paper must meet all of the followingconditions in either paragraph a or paragraph b:

a. The issuing corporation must be organized and operating within the United States, having totalassets in excess of $500 million, and has debt other than commercial paper, if any, that is ratedin a rating category of "A" or its equivalent or higher by an NRSRO.

b. The issuing corporation must be organized within the United States as a special purposecorporation, trust, or limited liability company, have program-wide credit enhancementsincluding, but not limited to, over collateralization, letters of credit, or surety bond, and havecommercial paper that is rated “A-1” or its equivalent or better by an NRSRO.

Purchases of eligible commercial paper may not exceed 270 days maturity and may not exceed 25 percent of the Authority's investment portfolio. Purchases shall not exceed 10 percent of the outstanding paper of the issuing corporation. No more than 5 percent may be invested in any one issuer.

7. Repurchase Agreements are subject to the following collateral restrictions: Only U.S. Treasurysecurities or Federal Agency securities, as described in 8.1 and 8.2 will be acceptable collateral.All securities underlying repurchase agreements must be delivered to the Authority's custodianbank versus payment or be handled under a tri-party repurchase agreement. The Authority or itstrustee shall have a perfected first security interest under the Uniform Commercial Code in allsecurities subject to repurchase agreement. The market value of securities that underlie arepurchase agreement shall be valued at 102% or greater of the funds borrowed against thosesecurities, and the value shall be reviewed on a regular basis and adjusted no less than weekly.Market value of underlying collateral must be reviewed regularly or each time there is a substitutionof collateral.

The Authority may enter into repurchase agreements only with primary dealers in U.S. Governmentsecurities who are eligible to transact business with, and who report to, the Federal Reserve Bankof New York. If a repurchase agreement is purchased, a Master Repurchase Agreement will besigned and maintained with the bank or dealer. Reverse repurchase agreements are not permitted.

Purchases or repurchase agreements may not exceed one year in maturity and no more than 5percent may be invested in any one issuer.

8. Medium-term corporate notes defined as all corporate and depository institution debt securities witha maximum remaining maturity of five years or less issued by corporations organized and operating

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within the United States or by depository institutions licensed by the U.S. or any state and operating within the U.S. shall be permitted. Medium-term corporate notes shall be rated in a rating category of “A” or its equivalent or better by an NRSRO.

Purchases or medium term corporate notes may not exceed five years in maturity or 30 percent of the Authority’s investment portfolio. No more than 5 percent may be invested in any one issuer.

9. United States dollar denominated senior unsecured unsubordinated obligations issued orunconditionally guaranteed by the International Bank for Reconstruction and Development (IBRD),International Finance Corporation (IFC), or Inter-American Development Bank (IADB), (alsocollectively referred to as “government instrumentalities”), with a maximum remaining maturity offive years or less, and eligible for purchase and sale within the United States. Investments underthis subdivision shall be rated in a rating category of "AA” or its equivalent or better by at least oneNRSRO.

Purchases of the obligations authorized by this subdivision may not exceed 3015 percent of theAuthority’s investment portfolio. No more than 5 percent may be invested in any one issuer.

10. Mortgage passthrough securities, collateralized mortgage obligations, mortgage-backed or otherpay-through bonds, equipment lease-backed certificates, consumer receivable passthroughcertificates, or consumer receivable-backed bonds of a maximum of five years' maturity. Securitieseligible for investment under this subdivision shall be issued by an issuer having a "AAA" rating orits equivalent for the issuer's debt as provided and rated in a rating category of "AAA" or itsequivalent by an NRSRO. Purchase of securities authorized by this subdivision may not exceed210 percent of the Authority's investment portfolio. No more than 5 percent may be invested in anyone issuer.

11. Local Agency Investment Fund (LAIF) - There is no limit on the dollar amount or percentage thatthe Authority may invest in LAIF, subject to the statutory deposit limit imposed by LAIF.

12. California Asset Management Program (CAMP) – A California common law trust establishedpursuant to Title 1, Division 7, Chapter 5 of the Government Code of the State of California. CAMPmust be rated “AAAm” or its equivalent by an NRSRO to be eligible for investment ofAuthorityDistrict funds. There are no limits on the dollar amount or percentage that the Authoritymay invest in CAMP.

Credit criteria listed in this section refers to the credit of the issuing organization at the time the security is purchased. When engaging the services of an investment advisor, in the event of a downgrade to a rating category lower than the minimum requirement, the investment advisor shall contact the Treasurer to notify of the downgrade and advise a course of action.

9.0 INVESTMENT POOLS

Participation in LAIF and the CAMP Cash Reserve Portfolio (described in sections 8.11 and 8.12 above) are subject to continuing review of their respective annual reports as well as application of additional criteria developed by the Association of Public Treasurers’ of the United States and Canada (APT US&C.) Note that such pools may invest in instruments not specified in the Authority’s Policy. Such investments do not exclude such pools from the Authority’s list of allowable investments provided each pool’s investment policy restricts investments to securities as set forth in the California Government Code, and Pool management provides reporting that allows the Treasurer to adequately judge the risk inherent in the portfolio. Such reporting shall be available on a quarterly basis.

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10.0 SAFEKEEPING AND CUSTODY

All Authority investments shall have the Authority as depositor and registered owner and shall be kept in the custody of the Authority or the trust department of its designated third party institution for safekeeping. When the Authority investments are in safekeeping of third parties, the Authority shall have on file from its designated third party, a written statement that the Authority has a satisfactory title or interest in all securities held in the trust department. The trust department shall be required to send the Authority a monthly statement designating securities are being kept, the monthly income there from, and their current value. The Authority shall have access to buy and sell securities, if held for safekeeping, independent of any broker. All security transactions, excluding FDIC-insured deposits, but including collateralized repurchase agreements shall be executed using the delivery vs. payment procedure.

11.0 DIVERSIFICATION

The Authority will diversify its investments to avoid incurring unreasonable risk regarding specific security types or individual financial institutions. Excluding U.S. Treasury obligations, federal agency obligations, obligations of the International Bank for Reconstruction and Development (IBRD), the International Finance Corporation (IFC), the Inter-American Development Bank (IADB), CAMP, and LAIF, no more than 5 percent of the portfolio may be invested in any one institution. The maximum percentages/amounts are determined at time of purchase and amount refers to market value.

The Authority recognizes that investment risks can result from issuer defaults, market price changes or various technical complications leading to temporary illiquidity. Portfolio diversification is employed as a way to control risk. Investment advisors are expected to display prudence in the selection of securities as a way to minimize default risk. No individual investment transaction shall be undertaken which jeopardizes the total capital position of the overall portfolio. As needed, the Treasurer and Investment Advisors shall periodically meet with the Executive Committee to establish guidelines and strategies to control credit risk, market risk, and liquidity.

12.0 MAXIMUM MATURITIES

To the extent possible, the Authority will attempt to match its investments with anticipated cash flow requirements. The maximum terms listed in Section 8.0, Authorized and Suitable Investments, shall be used. Under no circumstances shall any investment be made with a legal, final maturity of more than five years unless a longer maturity is expressly authorized by the Board of Directors and within the prescribed time frame for the approval (no less than three months prior to the investment per Government Code Section 53601).

13.0 INTERNAL CONTROLS

The Treasurer shall promulgate a system of internal controls to prevent losses of public funds arising from fraud, error, misrepresentations of third parties, unanticipated changes in financial markets, or imprudent actions by employees and officers of the Authority. The most important controls are: control of collusion; separation of duties; separation of transaction authority from accounting and bookkeeping; custodial safekeeping; delegation of authority; limitations regarding securities losses and remedial action; written confirmation of telephone transactions; minimizing the number of authorized investment officials; and documentation of transactions and strategies. An annual review of controls shall be made by the Authority’s independent financial auditor.

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14.0 PERFORMANCE STANDARDS

The Authority’s portfolio shall be structured to achieve a market-average rate of return through various economic cycles, commensurate with the investment risk constraints and the cash flow needs. The benchmark for “market-average rate of return” shall be the rate of return of an appropriate market-based index.

14.1 MARKET-AVERAGE RATE OF RETURN (BENCHMARK)

The Authority’s investment strategy is active. Given this strategy, the basis used by the Treasurer to determine whether a “market-average rate of return” is being achieved shall be to compare the total return performance of the Authority’s investment portfolio to the total return performance of an appropriate market-based index, which will serve as the performance benchmark. The performance benchmark shall be determined by the Board of Directors. Currently, the performance benchmark for the Authority’s actively managed investment portfolio is the Bank of America Merrill Lynch 1-5 Year U.S. Treasury Index.

15.0 REPORTING

The Authority’s Treasurer shall submit an investment report to the Board of Directors semi-annually and shall submit an investment report to the Executive Committee at each scheduled meeting. The reports shall include the following information for each individual investment:

• Type of investment instrument (i.e., Treasury Bill, medium-term note) • Issuer name (i.e., General Electric Credit Corp.) • Yield to maturity at cost • Purchase date (trade and settlement date) • Maturity date • Purchase price • Par value • Coupon rate • Credit rating of each security • Amortized cost • Current market value for securities with maturity greater than 12 months • Overall portfolio yield based on cost • Monthly lists of investment transactions

Annually, the investment advisor shall provide a report to the Board of Directors that includes comments on the fixed-income markets and economic conditions, discussions regarding restrictions on percentage of investment by categories, possible changes in the portfolio structure going forward and thoughts on investment strategies. 16.0 INVESTMENT POLICY ADOPTION

The objectives and the performance of the portfolio will be reviewed annually by the Treasurer, who will submit to the Board of Directors recommendations for changes, if any, to the Investment Policy. Any modifications made thereto must be approved by the Board of Directors.

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GLOSSARY AGENCIES: Federal agency securities and/or Government-sponsored enterprises. ASKED: The price at which securities are offered. ASSET-BACKED SECURITIES (“ABS”): An asset-backed security (ABS) is a security whose income payments and hence value is derived from and collateralized (or "backed") by a specified pool of underlying assets which are receivables. Pooling the assets into financial instruments allows them to be sold to general investors, a process called securitization, and allows the risk of investing in the underlying assets to be diversified because each security will represent a fraction of the total value of the diverse pool of underlying assets. The pools of underlying assets can comprise common payments credit cards, auto loans, mortgage loans, and other types of assets. Interest and principal is paid to investors from borrowers who are paying down their debt. BANKERS’ ACCEPTANCE: A draft or bill or exchange accepted by a bank or trust company. The accepting institution guarantees payment of the bill, as well as the issuer. BENCHMARK: A comparative base for measuring the performance or risk tolerance of the investment portfolio. A benchmark should represent a close correlation to the level of risk and the average duration of the portfolio’s investments. BID: The price offered by a buyer of securities. (When you are selling securities, you ask for a bid). See the definition for “Offer”. BROKER: An individual who brings buyers and sellers together for a commission. CERTIFICATE OF DEPOSIT (CD): A time deposit with a specific maturity evidenced by a Certificate. Large-denomination CDs are typically negotiable. COLLATERAL: Securities, evidenced of deposit or other property, which a borrower pledges to secure repayment of a loan. Also refers to securities pledged by a bank to secure deposits of public monies. COMMERCIAL PAPER: Short term, unsecured, promissory note issued by a corporation to raise working capital. COUPON: (1) The annual rate of interest that a bond’s issuer promises to pay the bondholder on the bond’s face value. (2) A certificate attached to a bond evidencing interest due on a payment date. DELIVERY VERSUS PAYMENT: There are two methods of delivery of securities: delivery versus payment and delivery versus receipt. Delivery versus payment is delivery of securities with an exchange of money for the securities. Delivery versus receipt is delivery of securities with an exchange of a signed receipt for the securities. DERIVATIVES: (1) Financial instruments whose return profile is linked to, or derived from, the movement of one or more underlying index or security, and may include a leveraging factor, or (2) financial contracts based upon notional amounts whose value is derived from an underlying index or security (interest rates, foreign exchange rates, equities or commodities). DISCOUNT: The difference between the cost price of a security and its maturity when quoted at lower than

84


face value. A security selling below original offering price shortly after sale is also considered to be at a discount. DIVERSIFICATION: Dividing investment funds among a variety of securities offering independent returns. FEDERAL DEPOSIT INSURANCE CORPORATION (FDIC): A federal agency that insures bank deposits. FEDERAL HOME LOAN BANKS (FHLB): Government sponsored wholesale banks (currently 12 regional banks), which lend funds to provide correspondent banking services to member commercial banks, thrift institutions, credit unions and insurance companies. The mission of the FHLBs is to liquefy the housing-related assets of its members who must purchase stock in their district bank. FEDERAL NATIONAL MORTGAGE ASSOCIATION (FNMA): FNMA (or “Fannie Mae”), like GNMA was chartered under the Federal National Mortgage Association Act in 1938. FNMA is a federal corporation working under the auspices of the Department of Housing and Urban Development (HUD). It is the largest single provider of residential mortgage funds in the United States. Fannie Mae, as the corporation is called, is a private stockholder-owned corporation. The corporation’s purchases include a variety of adjustable mortgages and second loans, in addition to fixed-rate mortgages. FNMA’s securities are also highly liquid and are widely accepted. FNMA assumes and guarantees that all security holders will receive timely payment of principal and interest. FEDERAL RESERVE SYSTEM: The central bank of the United States created by Congress and consisting of a seven member Board of Governors in Washington, D.C., 12 regional banks and about 5,700 commercial banks that are members of the system. GOVERNMENT INSTRUMENTALITIES: Formed by two or more central governments with the purpose of promoting economic development for the member countries. These government instrumentalities (also referred to as “supranationals”) finance their activities by issuing debt. Similar to the government bonds, the bonds issued by these institutions are considered direct obligations of the issuing nations and have a high credit rating. Effective January 1, 2015, Assembly Bill 1933 added bonds issued by the International Bank for Reconstruction and Development, the International Finance Corporation, and the Inter-American Development Bank to the permitted investments listing in the California Government Code (please see section 8.9 of this Policy for more information). GOVERNMENT NATIONAL MORTGAGE ASSOCIATION (GNMA or Ginnie Mae): Securities influencing the volume of bank credit guaranteed by GNMA and issued by mortgage bankers, commercial banks, savings and loan associations, and other institutions. Security holder is protected by full faith and credit of the U.S. Government. Ginnie Mae securities are backed by the FHA, VA or FmHA mortgages. LIQUIDITY: A liquid asset is one that can be converted easily and rapidly into cash without a substantial loss of value. In the money market, a security is said to be liquid if the spread between bid and asked prices is narrow and reasonable size can be done at those quotes. MARKET-AVERAGE RATE OF RETURN: The Authority’s portfolio shall be structured to achieve a “market-average rate of return” through various economic cycles, commensurate with the investment risk constraints and cash flow needs. The Treasurer will compare the total return performance of the Authority’s portfolio to its selected benchmark to determine whether a “market-average rate of return” is achieved. MARKET VALUE: The price at which a security is trading and could presumably be purchased or sold. MATURITY: The date upon which the principal or stated value of an investment becomes due and payable.

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MEDIUM-TERM CORPORATE NOTES: Debt obligations issued by corporations and banks, usually in the form of unsecured promissory notes. These are negotiable instruments that can be bought and sold in a large and active secondary market. For the purposes of California Government Code, the term “Medium Term” refers to a maximum remaining maturity of five years or less. They can be issued with fixed- or floating-rate coupons, and with or without early call features, although the vast majority are fixed-rate and non-callable. Corporate notes have greater risk than Treasuries or Agencies because they rely on the ability of the issuer to make payment of principal and interest. MONEY MARKET: The market in which short-term debt instruments (bills, commercial paper, bankers’ acceptances, etc.) are issued and traded. NATIONALLY RECOGNIZED STATISTICAL RATINGS ORGANIZATION (“NRSRO”): A credit rating agency that issues credit ratings that the U.S. Securities and Exchange Commission (the “SEC”) permits other financial firms to use for regulatory purposes. Credit rating agencies provide assessments of an investment's risk. The issuers of investments, especially debt securities, pay credit rating agencies to provide them with ratings. A credit rating agency must apply to the SEC for registration as an NRSRO, and the SEC’s Office of Credit Ratings administers the SEC’s rules relating to NRSROs, including monitoring the activities of the NRSROs and conducting examinations of NRSROs to assess and promote compliance with statutory requirements. As of September 2018December 2016, there were ten NRSROs. Of these ten, the three most prominent are Fitch, Inc., Moody’s Investors Service, Inc., and Standard & Poor’s Ratings Services. NEGOTIABLE CERTIFICATES OF DEPOSIT: Large-denomination CDs issued at face value and typically pay interest at maturity, if maturing in less than 12 months. CDs that mature beyond this range pay interest semi-annually. Negotiable CDs are issued by U.S. banks (domestic CDs), U.S. branches of foreign banks (Yankee CDs), and thrifts. There is an active secondary market for negotiable domestic and Yankee CDs. However, the negotiable thrift CD secondary market is limited. Yields on CDs exceed those on U.S. treasuries and agencies of similar maturities. This higher yield compensates the investor for accepting the risk of reduced liquidity and the risk that the issuing bank might fail. California State law does not require the collateralization of negotiable CDs. OFFER: The price asked by a seller of securities. (When you are buying securities, you ask for an offer). See definitions for “Asked” and “Bid”. PORTFOLIO: Collection of securities held by an investor. PRIMARY DEALER: A group of government securities dealers who submit daily reports of market activity and positions and monthly financial statements to the Federal Reserve Bank of New York and are subject to its informal oversight. Primary dealers include broker-dealers, banks, and a few unregulated firms registered with the Securities and Exchange Commission (SEC). PRUDENT INVESTOR STANDARD: An investment standard. The “prudent investor standard” is established in California Government Code 53600.3, and it is also a Government Finance Officers’ (GFOA) best practice to include this standard in the Investment Policy of a public agency. As described in Section 3.0 of this Policy, this standard adds a level of professional responsibility to those individuals to whom investment authority is delegated. Further, it provides those individuals operating in accordance with its mandates a certain level of legal protection. REPURCHASE AGREEMENT (repo): A holder of securities sells these securities to an investor with an

86


agreement to repurchase them at a fixed price on a fixed date. The security “buyer” in effect lends the “seller” money for the period of the agreement, and the terms of the agreement are structured to compensate the buyer for this. Dealers use repo extensively to finance their positions. Exception: When the Federal Government is said to be doing repo, it is lending money, thereby increasing bank reserves. SAFEKEEPING: A service to customers rendered by banks for a fee whereby securities and valuables of all types and descriptions are held in the bank’s vaults for protection. SECURITIES & EXCHANGE COMMISSION (SEC): Agency created by Congress to protect investors in securities transactions by administering securities legislation. STRUCTURED NOTES: Notes issued by Government Sponsored Enterprises (FHLB, FNMA, etc.) and Corporations, which have embedded options (e.g., call features, step-up coupons, floating-rate coupons, and derivative-based returns) into their debt structure. Their market performance is impacted by the fluctuation of interest rates, the volatility of the embedded options, and shifts in the shape of the yield curve. TREASURY BILLS: A non-interest bearing discount security issued by the U.S. Treasury to finance the national debt. Most bills are issued to mature in three months, six months, or one year. TREASURY BONDS: Long-term coupon-bearing U.S. Treasury securities issued as direct obligations of the U.S. Government and having initial maturities from two to ten years. TREASURY NOTES: Medium-term coupon-bearing U.S. Treasury securities issued as direct obligations of the U.S. Government and having initial maturities from two to ten years. YIELD: The rate of annual income return on an investment, expressed as a percentage. (1) Income yield is obtained by dividing the current dollar income by the current market price for the security. (2) Net yield or yield to maturity is the current income yield minus any premium above par or plus any discount from par in purchase price, with the adjustment spread over the period from the date of purchase to the date of maturity of the bond.

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LAWCX

Board of Directors Meeting November 6, 2018 Subject: Investment Report as of September 30, 2018

Recommendation: Review and file. Discussion: Ms. Lesley Murphy of PFM Asset Management (PFM) LLC will be present at the

meeting to review LAWCX’s portfolio and provide an update on market conditions.

Attachments: Investment Performance Review for the Quarter Ended September 30, 2018


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Client Management Team

Lesley Murphy, Senior Managing Consultant

Allison Kaune, Senior Managing Consultant

50 California St, Suite 2300

San Francisco, CA 94111

415-982-5544

PFM Asset Management LLC

One Keystone Plaza, Suite 300

Harrisburg, PA 17101-2044

717-232-2723

Investment Performance Review For the Quarter Ended September 30, 2018

LOCAL AGENCY WORKERS’ COMPENSATION EXCESS

89

Market Update

90

Source: Bloomberg, most recent data available as of 10/5/2018. SAAR is seasonally adjusted annualized rate.



For the Quarter Ended September 30, 2018

Market Update

Economic Summary

2.9%

-2%

0%

2%

4%

6%

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

2013 2014 2015 2016 2017 2018

U.S. Real GDP(QoQ, SAAR)

Rolling 4-QuarterAverage

4.2

%

40

60

80

100

120

140

160

Sep-13 Sep-14 Sep-15 Sep-16 Sep-17 Sep-18

Consumer Confidence

Highest since 2000

7.2%

5.9%

5.0% 5.0%4.2%

3.7%

3%

4%

5%

6%

7%

8%

9%

Sep-13 Sep-14 Sep-15 Sep-16 Sep-17 Sep-18

Unemployment Rate

Lowest since 1969

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

Aug '13 Aug '14 Aug '15 Aug '16 Aug '17 Aug '18

Inflation Measures(YoY)

Core CPICore PCEFed's Long-Term Inflation Target

191

Source: Bloomberg, as of 9/30/2018.




1.75%

2.00%

2.25%

2.50%

2.75%

3.00%

Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18

Yie

ld

2-Year U.S. Treasury

Market Update

The third quarter of 2018 marked the tenth straight quarterly increase in the 2-year U.S. Treasury yield as the domestic economy remained strong and the Federal Reserve continued on its path of quantitative tightening, raising the federal funds’ target rate by 25 basis points (0.25%) for the third time this year at its September meeting.

The 2-year Treasury increased by 29 basis points to 2.82% in the third quarter.

Treasury Yields Continue to Increase

2.82%

1.89%

2.53%

2.27%

292

Source: Bloomberg, as of 9/30/2018.




Market Update

U.S. Treasury Yield Curve

3Q2018

9/30/182Q2018

6/30/18QoQ

Change

3Q2017

9/30/17

3 month 2.20% 1.91% +0.29% 1.05%

6 month 2.36% 2.10% +0.26% 1.19%

1 year 2.56% 2.31% +0.25% 1.29%

2 year 2.82% 2.53% +0.29% 1.49%

3 year 2.88% 2.62% +0.26% 1.62%

5 year 2.95% 2.74% +0.21% 1.94%

10 Year 3.06% 2.86% +0.20% 2.33% 1.00%

1.25%

1.50%

1.75%

2.00%

2.25%

2.50%

2.75%

3.00%

3.25%

3M 6M 1Y 2Y 3Y 5Y 10Y

Yie

ld

Maturity

September 30, 2018June 30, 2018September 30, 2017

Treasury yields for all maturities continued to increase during the third quarter.

The overall shape of the yield curve has flattened as short-term yields, which are closely tied to changes in the federal funds’ target rate, have increased at a faster pace than longer-term yields, which are more closely tied to longer-term growth and inflation expectations.

393

Source: ICE BofA ML Indices. MBS and ABS indices are 0-5 year, based on weighted average life. As of 9/30/2018. PFM Asset

Management LLC



0.05%

0.26%

0.66%

0.11%

0.55%

-0.20%

0.28%0.16%

-0.71%

0.86%

-1.00%

-0.75%

-0.50%

-0.25%

0.00%

0.25%

0.50%

0.75%

1.00%

U.S

. Tre

asur

y

Age

ncy

Cor

p (A

-AA

A)

MB

S

AB

S (A

AA

)

U.S

. Tre

asur

y

Age

ncy

Cor

p (A

-AA

A)

MB

S

AB

S (A

AA

)

Market Update

Non-government sectors continue to outperform U.S. Treasury obligations. For the quarter ended September 30, 2018, the Authority’s managed portfolio had a 21% allocation to corporate notes, which helped to boost the portfolio’s performance relative to its benchmark.

Sector Returns

1-5 Year Indices2018 Q3

1-5 Year Indices2018 YTD

494

Source (left): Wall Street Journal; Deutsche Bank. Source (right): Conference Board.




Market Update

Different Indicators Give Differing Views

Where Are We in the Economic Cycle?

Supports the continuing solid growth in the economy

Suggests no recession in the near-term

The Conference Board’s Leading Economic Index

Continues to Rise

595




0%

1%

2%

3%

4%

5%

Fed Participants’ Assessments of ‘Appropriate’ Monetary PolicySeptember 2018

Sept-18 FOMC Projections

Sept-18 Median

Fed Funds Futures

Market Update

FOMC “Dot Plot”

2018 2019 2020 Longer Term

Fed expects 1 more rate hike in 2018 & maintained future

projections

History of Recent

Fed Rate Hikes

Sep ’18 2.00 – 2.25%

Jun ’18 1.75 – 2.00%

Mar ’18 1.50 - 1.75%

Dec ’17 1.25 - 1.50%

Jun ’17 1.00 - 1.25%

Mar ’17 0.75 - 1.00%

Dec ’16 0.50 - 0.75%

Dec ’15 0.25 - 0.50%

Source: Federal Reserve and Bloomberg. Individual dots represent each Fed members’ judgment of the midpoint of the appropriate target range for the federal funds' rate at each year-end. Fed funds futures as of 9/26/2018.

696

Investment Performance Review

97




Portfolio Recap

As interest rates have continued to increase in recent quarters, we have maintained a short, defensive duration positioning for the Authority’s portfolio relative to the benchmark. This has provided a hedge against the negative impacts of rising interest rates. As of September 30, 2018, the duration of the Authority’s portfolio was 2.36 years, 92% of the benchmark’s duration.

Solid economic fundamentals and sustained investor demand enabled most investment-grade sectors to deliver strong returns relative to U.S. Treasuries during the third quarter. Wide diversification in the Authority’s portfolio, coupled with active trading, enabled the portfolio to outperform its benchmark.

‒ Because federal agency yield spreads remained extremely narrow, we decreased the portfolio’s allocation to the sector in recent quarters, seeking other, higher-yielding investment options, like supranationals. In mid-July, we sold a 3-year U.S. Treasury obligation and reinvested the proceeds in a similar-maturity International Bank of Reconstruction and Development (World Bank) issue at a yield of 2.83%, picking up 13 basis points (0.13%) in incremental yield.

‒ In light of the Board’s decision to increase the portfolio’s maximum allowable allocation to asset-backed

securities (ABS) last year, we have been able to add to the portfolio’s ABS holdings. In our view, the ABS sector is a high-quality diversifier to corporate allocations, providing incremental income, with a high degree of downside protection, given the sector’s strong structural protections and AAA ratings. This sector has delivered strong excess returns over U.S. Treasuries over the past quarter and year-to-date periods. As of quarter-end, the Authority’s managed portfolio had an 8% allocation to the ABS sector, a 5% increase over last year.

Portfolio Recap

Note: For details on these and all other transactions, please see the “Managed Account Security Transactions & Interest” section of your month-end statement.

798




Outlook

In light of continued economic growth, inflation near the Federal Reserve’s (the “Fed”) 2% target, and strong labor market conditions, the Fed appears poised to raise rates further. In this gradually increasing interest rate environment, we plan to keep the portfolio’s duration slightly short of the benchmark’s duration.

Broad diversification across all permissible investment-grade sectors and active portfolio trading remain key components of our portfolio strategy for the Authority’s portfolio.

‒ Federal agency securities remain expensive, as most maturities offer less than five basis points of incremental yield relative to U.S. Treasuries. We will continue to reduce agency exposure where spreads are tight, seeking better relative value in other sectors. However, we are currently exploring callable structures, which may add value.

‒ Issuance in the supranational sector is very light this time of year. We expect to add to the portfolio’s allocation to supranationals in the first quarter of next year, when seasonal issuance typical surges.

‒ Over the past several quarters, we have maintained a constructive view on corporate sectors. However, while diversification away from U.S. Treasury securities has added significant value recently, we are now growing slightly more cautious on non-government sectors due to narrow credit spreads and potential headwinds. Our preference continues to favor financials and select industrial issuers with stronger balance sheets and fair valuations, which we think can better withstand the current phase of the credit cycle.

‒ In conjunction with our slightly defensive credit posture, asset-backed securities (ABS) offer attractive incremental income compared to government security alternatives. Further, where allocations to the corporate sector are trimmed, we may seek to reinvest a portion of those assets in AAA-rated ABS.

As always, while we continue to seek opportunities to enhance portfolio earnings, our priority remains to maintain the safety and the liquidity of the Authority’s investments.

Investment Outlook and Strategy

899




Portfolio Compliance

The portfolio is in compliance with the Authority’s Investment Policy and California Government Code

Sector Allocation and Compliance

4.2

%

As of 9/30/2018. Detail may not add to total due to rounding.

Security Type Market Value% of

Portfolio

% Change

vs. 6/30/18

Permitted by

Policy

In

Compliance

U.S. Treasury $25,362,691 24.3% -2% 100%

Federal Agency $1,570,573 1.5% - 100%

Federal Agency CMOs $1,143,001 1.1% - 100%

Municipal Obligations $697,676 0.7% - 100%

Supranationals $6,369,846 6.1% -1% 15%

Negotiable CDs $12,091,667 11.6% -3% 30%

Corporate Notes $17,593,749 16.9% -4% 30%

Asset-Backed Securities $7,076,361 6.8% - 10%

Securities Sub-Total $71,905,565 69.0%

Accrued Interest $332,946

Securities Total $72,238,511

CAMP Pool - Portfolio $13,302,095 12.8% 13% 100%

LAIF $18,976,422 18.2% -3% $65 million

Total Investments $104,517,027 100.0%

9100




Investment Activity

Summary of Investment Activity

October 1, 2017 – September 30, 2018

Net Activity

+686,718

+1,678,942

+4,406,464

+3,460,723

(145,176)

(5,230,992)

+585,251

(4,193,311)

+700,028

(15,000,000)(10,000,000) (5,000,000) 0 5,000,000 10,000,000 15,000,000

Municipal Obligations

Commercial Paper

Federal Agency/CMO

Federal Agency/GSE

Negotiable CDs

Supranationals

Asset-Backed Securities

Corporate Notes

US Treasuries

Sales/Maturities Purchases

10101

LOCAL AGENCY WORKERS' COMPENSATION EXCESS


Portfolio Snapshot

Portfolio Statistics

As of September 30, 2018

$86,489,638

$85,540,605

$71,905,565

$332,946

-

Accrued Interest:

Cash:

Par Value:

Total Market Value:

Security Market Value:

CAMP $13,302,095

$86,368,833

2.95%

2.29%

AAAverage Credit: *

Yield at Cost:

Amortized Cost:

Yield at Market:

Effective Duration: 2.36 Years

Duration to Worst: 2.40 Years

Average Maturity: 2.70 Years

Credit Quality (S&P Ratings)

8.6%

A

3.9%

A-

8.9%

A+

3.8%

A-1

7.6%

AA-

33.2%

AA+

12.9%

AAA

15.6%

AAAm

2.7%

BBB+***2.9%

Not Rated**

0%

4%

8%

12%

16%

20%

24%

0 - 1 Year 1 - 2 Years 2 - 3 Years 3 - 4 Years 4 - 5 Years > 5 Years

21.2% 21.2% 21.4%22.5%

13.8%

0.0%

Maturity Distribution

Sector Allocation

8.3%

Asset-Backed

14.2%

Certificate

of Deposit

20.7%

Corporate

1.3%

Federal

Agency/CMO

1.8%

Federal

Agency/GSE

15.6%

Mny Mkt

Fund / Pool

0.8%

Municipal

7.5%

Supra-Sov /

Supra-Natl

Agency

29.8%

U.S.

Treasury


*An average of each security’s credit rating assigned a numeric value and adjusted for its relative weighting in the portfolio.** The "Not Rated" category comprises asset-backed securities rated in the category of Aaa by Moody's.*** The "BBB+" category comprises securities rated in the category of A or better by Moody's and/or Fitch.

11102



Portfolio Performance

Portfolio Performance* (Total Return)

Effective

DurationPortfolio/Benchmark

Annualized Return

10 Year1 Year 3 Year 5 YearSince Inception

(03/31/04) **

Current

Quarter

2.36 0.37% 2.12%-0.09% 0.78% 1.06% 2.62%LOCAL AGENCY WORKERS' COMPENSATION EXCESS*

Local Agency Workers' Compensation Excess Custom Index** 2.57 0.05% 1.58%-0.58% 0.29% 0.73% 2.30%

Difference 0.49% 0.32% 0.49% 0.33% 0.54% 0.32%

-1.0%

-0.5%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

Current Quarter 1 Year 3 Year 5 Year 10 Year Since Inception

0.37%

-0.09%

0.78%

1.06%

2.12%

2.62%

0.05%

-0.58%

0.29%

0.73%

1.58%

2.30%

To

tal R

etu

rn

LOCAL AGENCY WORKERS' COMPENSATION EXCESS* Local Agency Workers' Compensation Excess Custom Index**


* Portfolio performance is gross of fees unless otherwise indicated.** Local Agency Workers' Compensation Excess Custom Index is the ICE Bank of America (BofA ML) 1-3 year U.S. Treasury Index from inception through September 30, 2007 and the ICE BofA ML 1-5 year U.S. Treasury Index thereafter.

12103



Portfolio Performance

Portfolio Earnings

Quarter-Ended September 30, 2018

Market Value Basis Accrual (Amortized Cost) Basis

Net Purchases/Sales

Change in Value

Interest Earned

$71,910,176.70

$13,452,105.62

($154,622.51)

$423,092.99

$268,470.48

$85,207,659.81

$72,977,927.81

$13,452,105.62

($61,200.87)

$423,092.99

$361,892.12

$86,368,832.56

Portfolio Earnings

Beginning Value (06/30/2018)

Ending Value (09/30/2018)

PFM Asset Management LLC13104



Portfolio Composition

Sector Allocation

September 30, 2018 June 30, 2018 March 31, 2018 December 31, 2017

% of TotalMV ($MM)Sector % of Total% of Total% of Total MV ($MM)MV ($MM)MV ($MM)

U.S. Treasury 25.4 29.8% 23.8 33.0% 25.3 35.2% 28.0 38.7%

Corporate 17.6 20.7% 18.8 26.1% 18.3 25.5% 18.4 25.4%

Mny Mkt Fund / Pool 13.3 15.6% 0.0 0.0% 0.2 0.3% 0.2 0.3%

Certificate of Deposit 12.1 14.2% 13.1 18.2% 12.9 18.0% 11.0 15.3%

Asset-Backed 7.1 8.3% 5.7 8.0% 5.1 7.1% 3.6 5.0%

Supra-Sov / Supra-Natl Agency 6.4 7.5% 6.1 8.5% 5.0 7.0% 3.6 5.0%

Federal Agency/GSE 1.6 1.8% 1.7 2.3% 2.7 3.8% 4.2 5.8%

Federal Agency/CMO 1.1 1.3% 1.3 1.8% 0.2 0.3% 0.4 0.6%

Municipal 0.7 0.8% 0.7 1.0% 0.0 0.0% 0.0 0.0%

Commercial Paper 0.0 0.0% 0.8 1.1% 2.0 2.8% 2.8 3.9%

$85.2 100.0% $71.9 100.0% $71.8 100.0% $72.1 100.0%Total

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

September 2018 June 2018 March 2018 December 2017

Commercial Paper Municipal

Federal Agency/CMO Federal Agency/GSE

Supra-Sov / Supra-Natl

AgencyAsset-Backed

Certif icate of Deposit Mny Mkt Fund / Pool

Corporate U.S. Treasury


Detail may not add to total due to rounding.

14105




Maturity Distribution


>5

Years

4-5

Years

3-4

Years

2-3

Years

1-2

Years

0-1

YearsYield

at MarketPortfolio/Benchmark

Average

Maturity

2.95% 21.2% 21.2% 21.4% 22.5% 13.8% 0.0%2.70 yrsLOCAL AGENCY WORKERS' COMPENSATION EXCESS

Local Agency Workers' Compensation Excess Custom Index* 2.86% 1.7% 32.1% 26.6% 20.0% 19.6% 0.0%2.77 yrs

0%

5%

10%

15%

20%

25%

30%

35%

0-1 Years 1-2 Years 2-3 Years 3-4 Years 4-5 Years > 5 Years

21.2% 21.2% 21.4%22.5%

13.8%

0.0%1.7%

32.1%

26.6%

20.0% 19.6%

0.0%

LOCAL AGENCY WORKERS' COMPENSATION EXCESS Local Agency Workers' Compensation Excess Custom Index*


*Local Agency Workers' Compensation Excess Custom Index is the ICE Bank of America (BofA ML) 1-3 year U.S. Treasury Index from inception through September 30, 2007 and the ICE BofA ML 1-5 year U.S. Treasury Index thereafter.

15106




Issuer Distribution


Market Value ($) % of PortfolioIssuer

UNITED STATES TREASURY 25,362,691 29.8%

CAMP POOL 13,302,095 15.6%

INTER-AMERICAN DEVELOPMENT BANK 3,355,805 4.0%

INTL BANK OF RECONSTRUCTION AND DEV 2,295,595 2.7%

CITIGROUP INC 2,232,288 2.6%

TOYOTA MOTOR CORP 1,707,811 2.0%

GENERAL ELECTRIC CO 1,530,959 1.8%

SKANDINAVISKA ENSKILDA BANKEN AB 1,316,414 1.5%

MORGAN STANLEY 1,294,766 1.5%

SWEDBANK AB 1,284,218 1.5%

UBS AG 1,273,040 1.5%

THE BANK OF NEW YORK MELLON CORPORATION 1,248,247 1.5%

SUMITOMO MITSUI FINANCIAL GROUP INC 1,246,798 1.5%

ALLY AUTO RECEIVABLES TRUST 1,221,844 1.4%

AMERICAN EXPRESS CO 1,200,857 1.4%

WESTPAC BANKING CORP 1,187,703 1.4%

FEDERAL HOME LOAN BANKS 1,120,201 1.3%

FORD CREDIT AUTO OWNER TRUST 1,081,815 1.3%

To

p 5

= 5

4.7

%

To

p 1

0 =

63.0

%




Market Value ($) % of Portfolio


Issuer

FANNIE MAE 1,035,227 1.2%

ROYAL BANK OF CANADA 1,005,384 1.2%

BANK OF NOVA SCOTIA 1,004,829 1.2%

NORDEA BANK AB 995,869 1.2%

BB&T CORPORATION 964,727 1.1%

AMERICAN HONDA FINANCE 879,667 1.0%

BANK OF AMERICA CO 755,251 0.9%

CREDIT SUISSE GROUP 724,677 0.9%

INTERNATIONAL FINANCE CORPORATION 718,446 0.8%

CATERPILLAR INC 716,419 0.8%

DEERE & COMPANY 713,269 0.8%

CANADIAN IMPERIAL BANK OF COMMERCE 701,769 0.8%

CREDIT AGRICOLE SA 701,344 0.8%

CALIFORNIA ST 697,676 0.8%

NATIONAL RURAL UTILITIES CO FINANCE CORP 695,128 0.8%

UNILEVER PLC 692,294 0.8%

MITSUBISHI UFJ FINANCIAL GROUP INC 649,622 0.8%

COMCAST CORP 647,050 0.8%

IBM CORP 635,532 0.8%

HONDA AUTO RECEIVABLES 625,548 0.7%

NISSAN AUTO RECEIVABLES 594,135 0.7%




Market Value ($) % of Portfolio

LOCAL AGENCY WORKERS COMPENSATION EXCESS

Issuer

FREDDIE MAC 558,147 0.7%

PACCAR FINANCIAL CORP 522,122 0.6%

UNITED PARCEL SERVICE INC 511,228 0.6%

GENERAL DYNAMICS CORP 418,985 0.5%

PEPSICO INC 408,785 0.5%

CHARLES SCHWAB 400,050 0.5%

JP MORGAN CHASE & CO 354,886 0.4%

GOLDMAN SACHS GROUP INC 347,806 0.4%

BURLINGTON NORTHERN SANTA FE 325,735 0.4%

HOME DEPOT INC 319,805 0.4%

HERSHEY COMPANY 299,886 0.4%

CARMAX AUTO OWNER TRUST 237,956 0.3%

HYUNDAI AUTO RECEIVABLES 233,697 0.3%

GM FINANCIAL SECURITIZED TERM 229,560 0.3%

JOHN DEERE OWNER TRUST 228,069 0.3%

THE WALT DISNEY CORPORATION 197,280 0.2%

APPLE INC 196,655 0.2%

85,207,660 100.0%Grand Total:




Portfolio Activity

Quarterly Portfolio Transactions

Trade

Date

Settle

Date

Maturity

DatePar ($) CUSIP Security Description

Transact

Amt ($)

Yield

at Market

Realized

G/L (BV)Coupon

BUY

7/11/18 7/18/18 230,000 36255JAD6 GMCAR 2018-3 A3 5/16/23 229,946.36 3.03%3.02%

7/18/18 7/25/18 180,000 14313FAD1 CARMAX AUTO OWNER TRUST 6/15/23 179,975.47 3.36%3.13%

7/18/18 7/25/18 1,050,000 459058GH0 INTL BANK OF RECONSTRUCTION AND DEV NOTE 7/23/21 1,047,543.00 2.83%2.75%

8/1/18 8/3/18 650,000 912828N30 US TREASURY NOTES 12/31/22 631,420.68 2.87%2.12%

8/14/18 8/22/18 350,000 89231AAD3 TOYOTA ABS 2018-C A3 12/15/22 349,937.74 3.03%3.02%

8/21/18 8/23/18 900,000 17305EGK5 CCCIT 2018-A1 A1 1/20/23 892,105.03 2.97%2.49%

9/4/18 9/6/18 1,725,000 912828N30 US TREASURY NOTES 12/31/22 1,686,290.04 2.78%2.12%

5,085,000 5,017,218.32Total BUY

INTEREST

7/1/18 7/25/18 495,000 3136B1XP4 FNA 2018-M5 A2 9/25/21 1,468.50 3.56%

7/1/18 7/25/18 560,000 3137BM6P6 FHLMC MULTIFAMILY STRUCTURED P POOL 8/25/22 1,442.00 3.09%

7/1/18 7/25/18 196,547 3136AQDQ0 FANNIE MAE SERIES 2015-M13 ASQ2 9/1/19 287.52 1.64%

7/6/18 7/6/18 395,000 24422ETL3 JOHN DEERE CAPITAL CORP NOTES 1/6/22 5,233.75 2.65%

7/8/18 7/8/18 120,000 24422ETZ2 JOHN DEERE CAPITAL CORP NOTES 1/8/21 1,410.00 2.35%

7/10/18 7/10/18 700,000 13606BVF0 CANADIAN IMP BK COMM NY FLT CERT DEPOS 4/10/20 4,843.78 2.73%

7/10/18 7/10/18 650,000 172967LF6 CITIGROUP INC (CALLABLE) CORP NOTE 1/10/20 7,962.50 2.45%

7/10/18 7/10/18 700,000 22532XHT8 CREDIT AGRICOLE CIB NY FLT CERT DEPOS 4/10/20 4,967.64 2.80%

7/10/18 7/10/18 980,000 86958JHB8 SVENSKA HANDELSBANKEN NY CD 1/10/19 9,312.45 1.89%

7/15/18 7/15/18 123,900 65478VAD9 NISSAN ABS 2016-B A3 1/15/21 136.29 1.32%

7/15/18 7/15/18 725,000 02007JAC1 ALLYA 2018-3 A3 1/15/23 1,087.50 3.00%

7/15/18 7/15/18 610,000 02582JHQ6 AMXCA 2018-1 A 10/17/22 1,357.25 2.67%

7/15/18 7/15/18 235,000 44891KAD7 HART 2018-A A3 7/15/22 546.38 2.79%

7/15/18 7/15/18 170,000 47788CAC6 JDOT 2018-A A3 4/15/22 376.83 2.66%




Portfolio Activity

Trade

Date

Settle

Date

Maturity


Transact

Amt ($)

Yield

at Market

Realized

G/L (BV)Coupon

7/15/18 7/15/18 112,997 89231UAD9 TOYOTA ABS 2016-B A3 4/15/20 122.41 1.30%

7/15/18 7/15/18 185,657 14314JAB6 CARMAX ABS 2017-1 A2 2/15/20 238.26 1.54%

7/15/18 7/15/18 505,000 02007YAC8 ALLYA 2017-5 A3 3/15/22 837.46 1.99%

7/15/18 7/15/18 630,000 43814UAC3 HAROT 2018-1 A3 2/15/22 1,386.00 2.64%

7/15/18 7/15/18 78,123 47788NAC2 JOHN DEERE ABS 2016-B A3 6/15/20 81.38 1.25%

7/15/18 7/15/18 440,000 34531EAD8 FORD ABS 2017-A A3 6/15/21 612.33 1.67%

7/15/18 7/15/18 380,000 65478DAD9 NAROT 2018-A A3 5/15/22 839.17 2.65%

7/15/18 7/15/18 203,583 65475WAD0 NISSAN ABS 2015-B A3 3/15/20 227.33 1.34%

7/15/18 7/15/18 655,000 20030NBD2 COMCAST CORPORATION CORP NOTES 7/15/22 10,234.38 3.12%

7/15/18 7/15/18 655,000 34532AAD5 FORDO 2017-C A3 3/15/22 1,097.13 2.01%

7/17/18 7/17/18 305,000 17305EGA7 CITIBANK ABS 2017-A2 A2 1/19/21 2,653.50 1.74%

7/18/18 7/18/18 335,000 4581X0DA3 INTER-AMERICAN DEVELOPMENT BANK NOTE 1/18/23 4,187.50 2.50%

7/20/18 7/20/18 655,000 44932HAB9 IBM CREDIT CORP NOTE 1/20/21 5,895.00 1.80%

7/24/18 7/24/18 420,000 06051GEM7 BANK OF AMERICA CORP CORP NOTES 1/24/22 11,970.00 5.70%

7/24/18 7/24/18 285,000 06051GEM7 BANK OF AMERICA CORP CORP NOTES 1/24/22 8,122.50 5.70%

7/28/18 7/28/18 1,230,000 61747WAL3 MORGAN STANLEY CORP NOTES 7/28/21 33,825.00 5.50%

7/31/18 7/31/18 1,930,000 912828H86 US TREASURY NOTES 1/31/22 14,475.00 1.50%

7/31/18 7/31/18 1,160,000 912828WY2 US TREASURY N/B 7/31/21 13,050.00 2.25%

7/31/18 7/31/18 1,480,000 9128282P4 US TREASURY NOTES 7/31/22 13,875.00 1.87%

8/1/18 8/25/18 495,000 3136B1XP4 FNA 2018-M5 A2 9/25/21 1,518.58 3.56%



8/2/18 8/2/18 1,325,000 83050FXT3 SKANDINAV ENSKILDA BANKEN NY CD 8/2/19 12,257.72 1.84%

8/5/18 8/5/18 100,000 3130A8Y72 FHLB GLOBAL NOTE 8/5/19 437.50 0.87%

8/7/18 8/7/18 845,000 36962G4D3 GENERAL ELECTRIC CAPITAL CORP NOTES 8/7/19 25,350.00 6.00%

8/7/18 8/7/18 1,205,000 96121T4A3 WESTPAC BANKING CORP NY CD 8/3/20 12,351.25 2.05%

8/7/18 8/7/18 1,280,000 06406RAA5 BANK OF NY MELLON CORP (CALLABLE) NOTES 2/7/22 16,640.00 2.60%

8/9/18 8/9/18 200,000 037833AX8 APPLE INC BONDS 2/7/20 1,550.00 1.55%

8/11/18 8/11/18 675,000 3130ADN32 FHLB NOTES 2/11/20 7,251.56 2.12%

8/15/18 8/15/18 630,000 43814UAC3 HAROT 2018-1 A3 2/15/22 1,386.00 2.64%




Portfolio Activity

Trade

Date

Settle

Date

Maturity


Transact

Amt ($)

Yield

at Market

Realized

G/L (BV)Coupon

8/15/18 8/15/18 655,000 34532AAD5 FORDO 2017-C A3 3/15/22 1,097.13 2.01%

8/15/18 8/15/18 725,000 02007JAC1 ALLYA 2018-3 A3 1/15/23 1,812.50 3.00%

8/15/18 8/15/18 175,009 65475WAD0 NISSAN ABS 2015-B A3 3/15/20 195.43 1.34%

8/15/18 8/15/18 115,494 65478VAD9 NISSAN ABS 2016-B A3 1/15/21 127.04 1.32%

8/15/18 8/15/18 101,718 89231UAD9 TOYOTA ABS 2016-B A3 4/15/20 110.20 1.30%

8/15/18 8/15/18 142,859 14314JAB6 CARMAX ABS 2017-1 A2 2/15/20 183.34 1.54%

8/15/18 8/15/18 440,000 34531EAD8 FORD ABS 2017-A A3 6/15/21 612.33 1.67%

8/15/18 8/15/18 380,000 65478DAD9 NAROT 2018-A A3 5/15/22 839.17 2.65%

8/15/18 8/15/18 280,000 084664CK5 BERKSHIRE HATHAWAY INC CORPORATE NOTES 8/15/19 1,820.00 1.30%

8/15/18 8/15/18 365,000 46623EKG3 JP MORGAN CHASE & CO (CALLABLE) NOTES 8/15/21 4,188.38 2.29%


8/15/18 8/15/18 505,000 02007YAC8 ALLYA 2017-5 A3 3/15/22 837.46 1.99%

8/15/18 8/15/18 180,000 14313FAD1 CARMAX AUTO OWNER TRUST 6/15/23 313.00 3.13%

8/15/18 8/15/18 610,000 02582JHQ6 AMXCA 2018-1 A 10/17/22 1,357.25 2.67%

8/15/18 8/15/18 235,000 44891KAD7 HART 2018-A A3 7/15/22 546.38 2.79%

8/15/18 8/15/18 170,000 47788CAC6 JDOT 2018-A A3 4/15/22 376.83 2.66%

8/16/18 8/16/18 230,000 36255JAD6 GMCAR 2018-3 A3 5/16/23 540.24 3.02%

8/20/18 8/20/18 1,000,000 65590ASN7 NORDEA BANK AB NY CD 2/20/20 13,448.89 2.72%

8/31/18 8/31/18 375,000 912828B90 US TREASURY NOTES 2/28/21 3,750.00 2.00%

8/31/18 8/31/18 210,000 912828D72 US TREASURY NOTES 8/31/21 2,100.00 2.00%

9/1/18 9/1/18 350,000 69371RN93 PACCAR FINANCIAL CORP NOTES 3/1/21 5,008.89 2.80%

9/1/18 9/25/18 480,857 3136B1XP4 FNA 2018-M5 A2 9/25/21 1,452.31 3.56%



9/3/18 9/3/18 600,000 0258M0EE5 AMERICAN EXPRESS CREDIT (CALLABLE) NOTE 3/3/20 6,600.00 2.20%

9/4/18 9/4/18 305,000 459058GA5 INTL BANK OF RECON AND DEV GLOBAL NOTES 9/4/20 2,479.65 1.62%

9/4/18 9/4/18 200,000 25468PDP8 WALT DISNEY COMPANY CORP NOTES 3/4/20 1,950.00 1.95%

9/4/18 9/4/18 490,000 14913Q2A6 CATERPILLAR FINL SERVICE NOTE 9/4/20 4,532.50 1.85%

9/4/18 9/4/18 1,270,000 90275DHG8 UBS AG STAMFORD CT LT CD 3/2/20 18,619.61 2.90%

9/8/18 9/8/18 655,000 89236TEC5 TOYOTA MOTOR CREDIT CORP 9/8/22 7,041.25 2.15%




Portfolio Activity

Trade

Date

Settle

Date

Maturity


Transact

Amt ($)

Yield

at Market

Realized

G/L (BV)Coupon

9/9/18 9/9/18 725,000 45950VLQ7 INTERNATIONAL FINANCE CORPORATION NOTE 3/9/21 9,178.50 2.63%

9/12/18 9/12/18 980,000 45905UP32 INTL BANK OF RECONSTRUCTION AND DEV NOTE 9/12/20 7,653.80 1.56%

9/12/18 9/12/18 210,000 24422EUD9 JOHN DEERE CAPITAL CORP NOTES 3/12/21 3,001.98 2.87%

9/14/18 9/14/18 725,000 4581X0CZ9 INTER-AMERICAN DEVEL BANK 9/14/22 6,343.75 1.75%

9/15/18 9/15/18 655,000 34532AAD5 FORDO 2017-C A3 3/15/22 1,097.13 2.01%

9/15/18 9/15/18 146,735 65475WAD0 NISSAN ABS 2015-B A3 3/15/20 163.85 1.34%

9/15/18 9/15/18 235,000 44891KAD7 HART 2018-A A3 7/15/22 546.38 2.79%


9/15/18 9/15/18 630,000 43814UAC3 HAROT 2018-1 A3 2/15/22 1,386.00 2.64%

9/15/18 9/15/18 170,000 47788CAC6 JDOT 2018-A A3 4/15/22 376.83 2.66%

9/15/18 9/15/18 725,000 02007JAC1 ALLYA 2018-3 A3 1/15/23 1,812.50 3.00%

9/15/18 9/15/18 180,000 14313FAD1 CARMAX AUTO OWNER TRUST 6/15/23 469.50 3.13%

9/15/18 9/15/18 350,000 89231AAD3 TOYOTA ABS 2018-C A3 12/15/22 675.31 3.02%

9/15/18 9/15/18 90,494 89231UAD9 TOYOTA ABS 2016-B A3 4/15/20 98.03 1.30%

9/15/18 9/15/18 100,779 14314JAB6 CARMAX ABS 2017-1 A2 2/15/20 129.33 1.54%

9/15/18 9/15/18 440,000 34531EAD8 FORD ABS 2017-A A3 6/15/21 612.33 1.67%

9/15/18 9/15/18 505,000 02007YAC8 ALLYA 2017-5 A3 3/15/22 837.46 1.99%

9/15/18 9/15/18 610,000 02582JHQ6 AMXCA 2018-1 A 10/17/22 1,357.25 2.67%

9/15/18 9/15/18 240,000 14913Q2G3 CATERPILLAR FINANCIAL SERVICES CORP NOTE 3/15/21 3,480.00 2.90%

9/15/18 9/15/18 300,000 63743HER9 NATIONAL RURAL UTIL COOP 3/15/21 4,809.17 2.90%

9/15/18 9/15/18 107,183 65478VAD9 NISSAN ABS 2016-B A3 1/15/21 117.90 1.32%

9/15/18 9/15/18 380,000 65478DAD9 NAROT 2018-A A3 5/15/22 839.17 2.65%

9/15/18 9/15/18 400,000 63743HER9 NATIONAL RURAL UTIL COOP 3/15/21 6,412.22 2.90%

9/16/18 9/16/18 230,000 36255JAD6 GMCAR 2018-3 A3 5/16/23 578.83 3.02%

9/16/18 9/16/18 650,000 36962G4R2 GENERAL ELECTRIC CAPITAL CORP CORP NOTE 9/16/20 14,218.75 4.37%

9/20/18 9/20/18 400,000 17305EGH2 CCCIT 2017-A9 A9 9/20/21 3,600.00 1.80%

9/22/18 9/22/18 600,000 904764AZ0 UNILEVER CAPITAL CORP NOTES 3/22/21 8,250.00 2.75%

9/24/18 9/24/18 890,000 02665WAZ4 AMERICAN HONDA FINANCE CB 9/24/20 10,902.50 2.45%

9/25/18 9/25/18 655,000 06539RGM3 MUFG BANK LTD/NY CERT DEPOS 9/25/19 13,671.49 2.07%

9/28/18 9/28/18 185,000 3130ACE26 FHLB NOTES 9/28/20 1,271.88 1.37%




Portfolio Activity

Trade

Date

Settle

Date

Maturity


Transact

Amt ($)

Yield

at Market

Realized

G/L (BV)Coupon

9/30/18 9/30/18 1,445,000 912828Q29 US TREASURY N/B 3/31/23 10,837.50 1.50%

9/30/18 9/30/18 85,000 912828J84 US TREASURY NOTES 3/31/20 584.38 1.37%

9/30/18 9/30/18 1,015,000 912828L57 US TREASURY NOTES 9/30/22 8,881.25 1.75%

9/30/18 9/30/18 350,000 912828L57 US TREASURY NOTES 9/30/22 3,062.50 1.75%

9/30/18 9/30/18 600,000 912828F39 US TREASURY NOTES 9/30/19 5,250.00 1.75%

9/30/18 9/30/18 702,000 912828J84 US TREASURY NOTES 3/31/20 4,826.25 1.37%

9/30/18 9/30/18 2,685,000 9128282W9 US TREASURY NOTES 9/30/22 25,171.88 1.87%


9/30/18 9/30/18 875,000 912828W89 US TREASURY NOTES 3/31/22 8,203.13 1.87%


59,102,234 507,252.00Total INTEREST

MATURITY

8/3/18 8/3/18 400,000 09659CH35 BNP PARIBAS NY BRANCH COMM PAPER 8/3/18 400,000.00 0.00 0.00%

400,000 400,000.00 0.00Total MATURITY

PAYDOWNS

7/1/18 7/25/18 2,652 3136AQDQ0 FANNIE MAE SERIES 2015-M13 ASQ2 9/1/19 2,652.03 0.00 1.64%

7/15/18 7/15/18 5,911 47788NAC2 JOHN DEERE ABS 2016-B A3 6/15/20 5,911.16 0.00 1.25%

7/15/18 7/15/18 42,798 14314JAB6 CARMAX ABS 2017-1 A2 2/15/20 42,798.08 0.00 1.54%

7/15/18 7/15/18 28,575 65475WAD0 NISSAN ABS 2015-B A3 3/15/20 28,574.60 0.00 1.34%

7/15/18 7/15/18 8,406 65478VAD9 NISSAN ABS 2016-B A3 1/15/21 8,405.71 0.00 1.32%

7/15/18 7/15/18 11,279 89231UAD9 TOYOTA ABS 2016-B A3 4/15/20 11,278.78 0.00 1.30%


8/1/18 8/25/18 14,143 3136B1XP4 FNA 2018-M5 A2 9/25/21 14,143.44 0.00 3.56%

8/15/18 8/15/18 42,080 14314JAB6 CARMAX ABS 2017-1 A2 2/15/20 42,079.86 0.00 1.54%




Portfolio Activity

Trade

Date

Settle

Date

Maturity


Transact

Amt ($)

Yield

at Market

Realized

G/L (BV)Coupon

8/15/18 8/15/18 28,274 65475WAD0 NISSAN ABS 2015-B A3 3/15/20 28,274.18 0.00 1.34%

8/15/18 8/15/18 8,311 65478VAD9 NISSAN ABS 2016-B A3 1/15/21 8,310.86 0.00 1.32%


8/15/18 8/15/18 11,225 89231UAD9 TOYOTA ABS 2016-B A3 4/15/20 11,224.94 0.00 1.30%

9/1/18 9/25/18 13,527 3136B1XP4 FNA 2018-M5 A2 9/25/21 13,526.50 0.00 3.56%


9/15/18 9/15/18 42,784 14314JAB6 CARMAX ABS 2017-1 A2 2/15/20 42,783.72 0.00 1.54%

9/15/18 9/15/18 27,762 65475WAD0 NISSAN ABS 2015-B A3 3/15/20 27,761.57 0.00 1.34%

9/15/18 9/15/18 8,449 65478VAD9 NISSAN ABS 2016-B A3 1/15/21 8,448.83 0.00 1.32%


9/15/18 9/15/18 11,147 89231UAD9 TOYOTA ABS 2016-B A3 4/15/20 11,147.40 0.00 1.30%

400,264 400,264.13 0.00Total PAYDOWNS

SELL

7/12/18 7/13/18 400,000 09659CH35 BNP PARIBAS NY BRANCH COMM PAPER 8/3/18 399,540.33 1.97% (65.34)0.00%

7/18/18 7/25/18 650,000 912828D72 US TREASURY NOTES 8/31/21 641,659.73 2.70% (15,057.85)2.00%

7/18/18 7/25/18 410,000 459058FS7 INTL BANK OF RECON AND DEV GLOBAL NOTES 11/27/19 402,683.19 2.63% (6,057.73)1.12%

8/15/18 8/17/18 350,000 459058GA5 INTL BANK OF RECON AND DEV GLOBAL NOTES 9/4/20 345,191.76 2.69% (7,334.47)1.62%

8/21/18 8/23/18 280,000 084664CK5 BERKSHIRE HATHAWAY INC CORPORATE NOTES 8/15/19 276,740.49 2.54% (3,250.69)1.30%

8/21/18 8/23/18 275,000 931142EA7 WAL-MART STORES INC CORP NOTE 12/15/20 270,596.94 2.78% (5,099.09)1.90%

8/22/18 8/23/18 100,000 3130A8Y72 FHLB GLOBAL NOTE 8/5/19 98,587.75 2.43% (1,394.68)0.87%

9/4/18 9/6/18 635,000 931142EA7 WAL-MART STORES INC CORP NOTE 12/15/20 625,071.78 2.81% (11,968.50)1.90%

9/5/18 9/6/18 980,000 86958JHB8 SVENSKA HANDELSBANKEN NY CD 1/10/19 981,394.82 2.00% (1,589.28)1.89%

4,080,000 4,041,466.79 -51,817.63Total SELL


Portfolio Holdings

116



Portfolio Holdings

Managed Account Detail of Securities Held

Original

Cost

Settle

Date

Trade

Date

Moody's

Rating

S&P

Rating

Accrued

Interest

Amortized

Cost

Market

Value

YTM

at Cost

Security Type/Description

CUSIP ParDated Date/Coupon/Maturity


AA+ Aaa 11/1/2017 11/3/2017 601,453.13 28.85 600,767.32 594,609.601.62US TREASURY NOTES

DTD 09/30/2014 1.750% 09/30/2019

912828F39 600,000.00

AA+ Aaa 9/29/2017 10/2/2017 668,118.16 2,549.59 671,331.52 662,422.731.49US TREASURY N/B

DTD 11/15/2016 1.000% 11/15/2019

912828U32 675,000.00


DTD 03/31/2015 1.375% 03/31/2020

912828J84 85,000.00


DTD 03/31/2015 1.375% 03/31/2020

912828J84 702,000.00

AA+ Aaa 2/1/2016 2/3/2016 703,691.41 4,027.85 701,401.24 684,824.001.25US TREASURY NOTES

DTD 04/30/2015 1.375% 04/30/2020

912828K58 700,000.00


DTD 05/31/2013 1.375% 05/31/2020

912828VF4 210,000.00


DTD 11/30/2015 1.625% 11/30/2020

912828M98 1,000,000.00


DTD 02/28/2014 2.000% 02/28/2021

912828B90 375,000.00


DTD 05/02/2016 1.375% 04/30/2021

912828Q78 555,000.00


DTD 05/31/2016 1.375% 05/31/2021

912828R77 445,000.00

AA+ Aaa 11/22/2016 11/23/2016 1,184,650.00 4,397.28 1,175,139.24 1,140,061.921.78US TREASURY N/B

DTD 07/31/2014 2.250% 07/31/2021

912828WY2 1,160,000.00


DTD 09/02/2014 2.000% 08/31/2021

912828D72 210,000.00


DTD 10/31/2016 1.250% 10/31/2021

912828T67 280,000.00


DTD 10/31/2016 1.250% 10/31/2021

912828T67 160,000.00

AA+ Aaa 3/14/2017 3/16/2017 2,262,609.38 12,292.80 2,290,849.09 2,236,814.602.10US TREASURY NOTES

DTD 10/31/2016 1.250% 10/31/2021

912828T67 2,350,000.00




Portfolio Holdings


Original

Cost

Settle

Date

Trade

Date

Moody's

Rating

S&P

Rating

Accrued

Interest

Amortized

Cost

Market

Value

YTM

at Cost





DTD 01/03/2017 2.000% 12/31/2021

912828U81 2,075,000.00


DTD 02/02/2015 1.500% 01/31/2022

912828H86 1,930,000.00


DTD 03/31/2017 1.875% 03/31/2022

912828W89 875,000.00


DTD 05/01/2017 1.875% 04/30/2022

912828X47 795,000.00


DTD 06/30/2017 1.750% 06/30/2022

912828XW5 840,000.00


DTD 07/31/2017 1.875% 07/31/2022

9128282P4 1,480,000.00


DTD 09/30/2015 1.750% 09/30/2022

912828L57 350,000.00


DTD 09/30/2015 1.750% 09/30/2022

912828L57 1,015,000.00


DTD 09/30/2015 1.750% 09/30/2022

912828L57 310,000.00

AA+ Aaa 4/2/2018 4/4/2018 2,609,169.73 138.31 2,617,067.33 2,578,437.722.54US TREASURY NOTES

DTD 10/02/2017 1.875% 09/30/2022

9128282W9 2,685,000.00


DTD 09/30/2015 1.750% 09/30/2022

912828L57 630,000.00


DTD 12/31/2015 2.125% 12/31/2022

912828N30 650,000.00


DTD 12/31/2015 2.125% 12/31/2022

912828N30 1,725,000.00

AA+ Aaa 5/1/2018 5/2/2018 1,358,300.00 59.55 1,365,188.01 1,357,735.012.82US TREASURY N/B

DTD 03/31/2016 1.500% 03/31/2023

912828Q29 1,445,000.00

2.06 25,362,690.65 25,966,277.73 81,412.40 26,312,000.00 25,922,497.39Security Type Sub-Total




Portfolio Holdings


Original

Cost

Settle

Date

Trade

Date

Moody's

Rating

S&P

Rating

Accrued

Interest

Amortized

Cost

Market

Value

YTM

at Cost



Supra-National Agency Bond / Note

AAA Aaa 4/5/2017 4/12/2017 977,677.40 6,148.82 978,766.94 960,824.341.70INTER-AMERICAN DEVEL BK NOTE

DTD 04/12/2017 1.625% 05/12/2020

4581X0CX4 980,000.00

AAA Aaa 8/22/2017 8/29/2017 304,935.95 371.72 304,958.56 297,819.691.63INTL BANK OF RECON AND DEV

GLOBAL NOTES

DTD 08/29/2017 1.625% 09/04/2020

459058GA5 305,000.00

AAA Aaa 9/12/2017 9/19/2017 977,648.00 807.38 978,449.84 954,258.341.64INTL BANK OF RECONSTRUCTION

AND DEV NOTE

DTD 09/19/2017 1.561% 09/12/2020

45905UP32 980,000.00

AAA Aaa 10/2/2017 10/10/2017 661,071.26 5,490.17 659,188.31 644,274.381.81INTER-AMERICAN DEVELOPMENT

BANK

DTD 11/08/2013 2.125% 11/09/2020

4581X0CD8 655,000.00

AAA Aaa 3/9/2018 3/16/2018 724,456.25 1,167.45 724,550.05 718,446.002.66INTERNATIONAL FINANCE

CORPORATION NOTE

DTD 03/16/2018 2.635% 03/09/2021

45950VLQ7 725,000.00


BANK NOTE

DTD 04/19/2018 2.625% 04/19/2021

4581X0DB1 740,000.00

AAA Aaa 7/18/2018 7/25/2018 1,047,543.00 5,293.75 1,047,687.85 1,043,517.302.83INTL BANK OF RECONSTRUCTION

AND DEV NOTE

DTD 07/25/2018 2.750% 07/23/2021

459058GH0 1,050,000.00

AAA Aaa 2/21/2018 2/23/2018 693,288.50 599.13 697,281.01 690,082.552.78INTER-AMERICAN DEVEL BANK

DTD 09/14/2017 1.750% 09/14/2022

4581X0CZ9 725,000.00


BANK NOTE

DTD 01/18/2018 2.500% 01/18/2023

4581X0DA3 335,000.00


Municipal Bond / Note

AA- Aa3 4/18/2018 4/25/2018 700,028.00 8,493.33 700,017.33 697,676.002.80CA ST TXBL GO BONDS

DTD 04/25/2018 2.800% 04/01/2021

13063DGA0 700,000.00




Portfolio Holdings


Original

Cost

Settle

Date

Trade

Date

Moody's

Rating

S&P

Rating

Accrued

Interest

Amortized

Cost

Market

Value

YTM

at Cost



2.80 697,676.00 700,017.33 8,493.33 700,000.00 700,028.00Security Type Sub-Total

Federal Agency Collateralized Mortgage Obligation

AA+ Aaa 10/7/2015 10/30/2015 114,684.64 155.75 113,698.42 113,115.651.08FANNIE MAE SERIES 2015-M13 ASQ2

DTD 10/01/2015 1.646% 09/01/2019

3136AQDQ0 113,547.59

AA+ Aaa 4/11/2018 4/30/2018 476,625.72 1,386.41 475,606.62 471,738.382.27FNA 2018-M5 A2

DTD 04/01/2018 3.560% 09/25/2021

3136B1XP4 467,330.06

AA+ Aaa 4/4/2018 4/9/2018 564,768.75 1,442.00 564,178.71 558,147.462.61FHLMC MULTIFAMILY STRUCTURED P

POOL

DTD 12/01/2015 3.090% 08/25/2022

3137BM6P6 560,000.00


Federal Agency Bond / Note

AA+ Aaa 11/16/2016 11/17/2016 274,936.75 1,428.47 274,975.97 271,054.301.38FHLB NOTES

DTD 11/17/2016 1.375% 11/15/2019

3130AA3R7 275,000.00

AA+ Aaa 2/8/2018 2/9/2018 673,764.75 1,992.19 674,156.36 669,354.982.22FHLB NOTES

DTD 02/09/2018 2.125% 02/11/2020

3130ADN32 675,000.00

AA+ Aaa 9/7/2017 9/8/2017 184,406.15 21.20 184,609.58 179,791.331.48FHLB NOTES

DTD 09/08/2017 1.375% 09/28/2020

3130ACE26 185,000.00

AA+ Aaa 4/12/2018 4/13/2018 454,322.05 5,308.33 454,424.19 450,372.652.55FANNIE MAE NOTES

DTD 04/13/2018 2.500% 04/13/2021

3135G0U27 455,000.00


Corporate Note

A A2 4/10/2015 4/15/2015 993,779.15 7,605.00 875,210.31 866,896.491.74GENERAL ELECTRIC CAPITAL CORP

NOTES

DTD 08/07/2009 6.000% 08/07/2019

36962G4D3 845,000.00

A+ A3 6/3/2016 6/8/2016 353,248.00 7,520.00 330,206.06 325,735.041.48BURLINGTON NRTH CORP

DTD 09/24/2009 4.700% 10/01/2019

12189TBC7 320,000.00




Portfolio Holdings


Original

Cost

Settle

Date

Trade

Date

Moody's

Rating

S&P

Rating

Accrued

Interest

Amortized

Cost

Market

Value

YTM

at Cost



Corporate Note

BBB+ Baa1 1/4/2017 1/10/2017 649,740.00 3,583.13 649,887.23 644,325.502.46CITIGROUP INC (CALLABLE) CORP

NOTE

DTD 01/10/2017 2.450% 01/10/2020

172967LF6 650,000.00

AA+ Aa1 2/20/2015 2/25/2015 197,440.00 447.78 199,279.34 196,655.001.82APPLE INC BONDS

DTD 02/09/2015 1.550% 02/07/2020

037833AX8 200,000.00

A- A2 2/28/2017 3/3/2017 599,376.00 1,026.67 599,699.06 593,280.002.24AMERICAN EXPRESS CREDIT

(CALLABLE) NOTE

DTD 03/03/2017 2.200% 03/03/2020

0258M0EE5 600,000.00

A+ A2 3/1/2017 3/6/2017 199,948.00 292.50 199,974.83 197,279.801.96WALT DISNEY COMPANY CORP

NOTES

DTD 03/06/2017 1.950% 03/04/2020

25468PDP8 200,000.00

AA- Aa3 4/11/2017 4/17/2017 664,694.10 5,907.42 664,840.30 654,957.171.97TOYOTA MOTOR CREDIT CORP

DTD 04/17/2017 1.950% 04/17/2020

89236TDU6 665,000.00

A+ A1 5/2/2017 5/5/2017 99,681.00 730.00 99,828.23 98,075.601.91UNILEVER CAPITAL CORP BONDS

DTD 05/05/2017 1.800% 05/05/2020

904764AV9 100,000.00

A+ A2 5/8/2018 5/11/2018 418,513.20 4,695.83 418,795.75 418,985.283.06GENERAL DYNAMICS CORP

DTD 05/11/2018 2.875% 05/11/2020

369550BA5 420,000.00

A A2 5/24/2017 6/5/2017 324,811.50 1,885.00 324,893.35 319,804.881.82HOME DEPOT INC CORP NOTES

DTD 06/05/2017 1.800% 06/05/2020

437076BQ4 325,000.00

A A3 9/5/2017 9/7/2017 489,588.40 679.88 489,732.34 478,119.461.88CATERPILLAR FINL SERVICE NOTE

DTD 09/07/2017 1.850% 09/04/2020

14913Q2A6 490,000.00

A A2 9/6/2016 9/9/2016 723,352.50 1,184.90 686,277.48 664,062.101.47GENERAL ELECTRIC CAPITAL CORP

CORP NOTE

DTD 09/16/2010 4.375% 09/16/2020

36962G4R2 650,000.00

A+ A2 2/1/2017 2/3/2017 895,340.00 423.99 892,965.54 879,667.102.28AMERICAN HONDA FINANCE CB

DTD 09/24/2015 2.450% 09/24/2020

02665WAZ4 890,000.00

A+ A1 11/6/2017 11/13/2017 179,983.80 1,414.50 179,988.47 175,759.202.05PACCAR FINANCIAL CORP NOTES

DTD 11/13/2017 2.050% 11/13/2020

69371RN85 180,000.00

A A2 1/3/2018 1/8/2018 119,937.60 650.17 119,952.41 117,881.882.37JOHN DEERE CAPITAL CORP NOTES

DTD 01/08/2018 2.350% 01/08/2021

24422ETZ2 120,000.00




Portfolio Holdings


Original

Cost

Settle

Date

Trade

Date

Moody's

Rating

S&P

Rating

Accrued

Interest

Amortized

Cost

Market

Value

YTM

at Cost



Corporate Note

A+ A1 9/5/2017 9/8/2017 653,644.15 2,325.25 654,060.04 635,532.091.86IBM CREDIT CORP NOTE

DTD 09/08/2017 1.800% 01/20/2021

44932HAB9 655,000.00

A+ A1 2/22/2018 2/27/2018 349,828.50 816.67 349,861.87 346,363.152.82PACCAR FINANCIAL CORP NOTES

DTD 02/27/2018 2.800% 03/01/2021

69371RN93 350,000.00

A A2 3/8/2018 3/13/2018 209,857.20 318.65 209,882.41 208,352.342.90JOHN DEERE CAPITAL CORP NOTES

DTD 03/13/2018 2.875% 03/12/2021

24422EUD9 210,000.00

A A2 4/12/2018 4/19/2018 398,308.00 515.56 398,572.65 397,216.003.05NATIONAL RURAL UTIL COOP

DTD 02/26/2018 2.900% 03/15/2021

63743HER9 400,000.00

A A3 3/12/2018 3/15/2018 239,870.40 309.33 239,893.10 238,299.842.92CATERPILLAR FINANCIAL SERVICES

CORP NOTE

DTD 03/15/2018 2.900% 03/15/2021

14913Q2G3 240,000.00

A A2 2/21/2018 2/26/2018 299,667.00 386.67 299,732.83 297,912.002.94NATIONAL RURAL UTIL COOP

DTD 02/26/2018 2.900% 03/15/2021

63743HER9 300,000.00

A+ A1 3/19/2018 3/22/2018 596,934.00 412.50 597,451.60 594,218.402.93UNILEVER CAPITAL CORP NOTES

DTD 03/22/2018 2.750% 03/22/2021

904764AZ0 600,000.00

A+ A1 11/9/2017 11/14/2017 524,170.50 5,381.25 524,377.17 511,228.202.10UNITED PARCEL SERVICE

CORPORATE BOND

DTD 11/14/2017 2.050% 04/01/2021

911312BP0 525,000.00

A+ A1 10/5/2017 10/10/2017 419,916.00 3,873.33 419,938.31 408,785.162.01PEPSICO INC CORP (CALLABLE)

NOTE

DTD 10/10/2017 2.000% 04/15/2021

713448DX3 420,000.00

A A1 5/3/2018 5/10/2018 299,793.00 3,642.50 299,819.52 299,885.703.12HERSHEY COMPANY CORP NOTES

DTD 05/10/2018 3.100% 05/15/2021

427866BA5 300,000.00

A A2 5/17/2018 5/22/2018 399,988.00 4,658.33 399,989.20 400,049.603.25CHARLES SCHWAB CORP NOTES

DTD 05/22/2018 3.250% 05/21/2021

808513AW5 400,000.00

BBB+ A3 3/27/2017 3/29/2017 1,366,726.80 11,838.75 1,321,030.50 1,294,765.652.76MORGAN STANLEY CORP NOTES

DTD 07/28/2011 5.500% 07/28/2021

61747WAL3 1,230,000.00

A- A3 9/29/2017 10/3/2017 365,036.50 1,070.36 365,027.18 354,885.852.29JP MORGAN CHASE & CO (CALLABLE)

NOTES

DTD 08/08/2016 2.295% 08/15/2021

46623EKG3 365,000.00




Portfolio Holdings


Original

Cost

Settle

Date

Trade

Date

Moody's

Rating

S&P

Rating

Accrued

Interest

Amortized

Cost

Market

Value

YTM

at Cost



Corporate Note

A A2 3/10/2017 3/15/2017 393,258.05 2,471.49 393,798.99 387,034.432.75JOHN DEERE CAPITAL CORP NOTES

DTD 01/06/2017 2.650% 01/06/2022

24422ETL3 395,000.00

A- A3 9/1/2017 9/7/2017 476,154.00 4,455.50 463,030.73 449,936.762.46BANK OF AMERICA CORP CORP

NOTES

DTD 01/24/2012 5.700% 01/24/2022

06051GEM7 420,000.00

A- A3 6/19/2017 6/22/2017 322,397.70 3,023.38 312,454.67 305,314.232.64BANK OF AMERICA CORP CORP

NOTES

DTD 01/24/2012 5.700% 01/24/2022

06051GEM7 285,000.00

A A1 2/7/2017 2/10/2017 1,280,588.80 4,992.00 1,280,405.96 1,248,247.042.59BANK OF NY MELLON CORP

(CALLABLE) NOTES

DTD 02/07/2017 2.600% 02/07/2022

06406RAA5 1,280,000.00

A- A2 4/3/2017 4/6/2017 992,436.75 13,543.75 990,285.80 964,726.732.59BB&T CORP (CALLABLE) NOTES

DTD 03/21/2017 2.750% 04/01/2022

05531FAX1 985,000.00

BBB+ A3 9/29/2017 10/3/2017 359,703.75 4,585.42 358,436.95 347,805.572.69GOLDMAN SACHS GROUP INC

(CALLABLE) NOTE

DTD 01/26/2017 3.000% 04/26/2022

38141GWC4 355,000.00

A- A3 8/29/2017 9/1/2017 682,896.45 4,321.18 676,952.67 647,049.612.20COMCAST CORPORATION CORP

NOTES

DTD 07/02/2012 3.125% 07/15/2022

20030NBD2 655,000.00

AA- Aa3 9/8/2017 9/12/2017 654,227.10 899.72 654,384.03 624,656.472.18TOYOTA MOTOR CREDIT CORP

DTD 09/08/2017 2.150% 09/08/2022

89236TEC5 655,000.00



A-1 P-1 5/3/2017 5/4/2017 1,250,000.00 10,748.26 1,250,000.00 1,246,797.502.05SUMITOMO MITSUI BANK NY CD

DTD 05/04/2017 2.050% 05/03/2019

86563YVN0 1,250,000.00

A-1 P-1 8/3/2017 8/4/2017 1,324,483.25 4,063.33 1,324,783.51 1,316,414.001.85SKANDINAV ENSKILDA BANKEN NY

CD

DTD 08/04/2017 1.840% 08/02/2019

83050FXT3 1,325,000.00

A-1 P-1 9/25/2017 9/27/2017 655,000.00 225.98 655,000.00 649,621.802.07MUFG BANK LTD/NY CERT DEPOS

DTD 09/27/2017 2.070% 09/25/2019

06539RGM3 655,000.00




Portfolio Holdings


Original

Cost

Settle

Date

Trade

Date

Moody's

Rating

S&P

Rating

Accrued

Interest

Amortized

Cost

Market

Value

YTM

at Cost




A A1 2/7/2018 2/8/2018 725,000.00 12,528.60 725,000.00 724,677.382.67CREDIT SUISSE NEW YORK CERT

DEPOS

DTD 02/08/2018 2.670% 02/07/2020

22549LFR1 725,000.00

AA- Aa3 2/20/2018 2/22/2018 1,000,000.00 3,097.78 1,000,000.00 995,869.002.72NORDEA BANK AB NY CD

DTD 02/22/2018 2.720% 02/20/2020

65590ASN7 1,000,000.00

A+ Aa2 3/2/2018 3/6/2018 1,270,000.00 2,762.25 1,270,000.00 1,273,040.382.93UBS AG STAMFORD CT LT CD

DTD 03/06/2018 2.900% 03/02/2020

90275DHG8 1,270,000.00

A+ Aa2 4/6/2018 4/10/2018 700,000.00 4,408.24 700,000.00 701,768.902.78CANADIAN IMP BK COMM NY FLT

CERT DEPOS

DTD 04/10/2018 2.731% 04/10/2020

13606BVF0 700,000.00

A A1 4/6/2018 4/10/2018 700,000.00 4,521.21 700,000.00 701,344.002.85CREDIT AGRICOLE CIB NY FLT CERT

DEPOS

DTD 04/10/2018 2.801% 04/10/2020

22532XHT8 700,000.00

A+ Aa2 6/5/2018 6/7/2018 999,620.00 9,753.33 999,678.33 1,004,829.003.10BANK OF NOVA SCOTIA HOUSTON CD

DTD 06/07/2018 3.080% 06/05/2020

06417GU22 1,000,000.00

AA- Aa3 8/3/2017 8/7/2017 1,205,000.00 3,705.38 1,205,000.00 1,187,703.432.05WESTPAC BANKING CORP NY CD

DTD 08/07/2017 2.050% 08/03/2020

96121T4A3 1,205,000.00

AA- Aa2 11/16/2017 11/17/2017 1,310,000.00 11,399.18 1,310,000.00 1,284,217.892.30SWEDBANK (NEW YORK) CERT

DEPOS

DTD 11/17/2017 2.270% 11/16/2020

87019U6D6 1,310,000.00

AA- Aa2 6/7/2018 6/8/2018 1,000,000.00 10,170.00 1,000,000.00 1,005,384.003.24ROYAL BANK OF CANADA NY CD

DTD 06/08/2018 3.240% 06/07/2021

78012UEE1 1,000,000.00



NR Aaa 1/25/2017 1/31/2017 57,995.02 39.69 57,995.04 57,958.481.60CARMAX ABS 2017-1 A2

DTD 01/31/2017 1.540% 02/15/2020

14314JAB6 57,995.04

NR Aaa 7/15/2015 7/22/2015 118,963.51 70.86 118,970.54 118,710.541.34NISSAN ABS 2015-B A3

DTD 07/22/2015 1.340% 03/15/2020

65475WAD0 118,972.97




Portfolio Holdings


Original

Cost

Settle

Date

Trade

Date

Moody's

Rating

S&P

Rating

Accrued

Interest

Amortized

Cost

Market

Value

YTM

at Cost




AAA Aaa 5/2/2016 5/11/2016 79,342.09 45.84 79,344.78 78,999.501.30TOYOTA ABS 2016-B A3

DTD 05/11/2016 1.300% 04/15/2020

89231UAD9 79,346.15

NR Aaa 7/19/2016 7/27/2016 59,612.20 33.12 59,615.15 59,316.291.25JOHN DEERE ABS 2016-B A3

DTD 07/27/2016 1.250% 06/15/2020

47788NAC2 59,616.95

NR Aaa 4/18/2016 4/27/2016 98,719.03 57.92 98,727.82 97,963.071.33NISSAN ABS 2016-B A3

DTD 04/27/2016 1.320% 01/15/2021

65478VAD9 98,734.35

AAA Aaa 1/19/2017 1/26/2017 304,941.59 1,090.88 305,000.00 304,328.971.75CITIBANK ABS 2017-A2 A2

DTD 01/26/2017 1.740% 01/19/2021

17305EGA7 305,000.00

NR Aaa 1/18/2017 1/25/2017 439,998.37 326.58 439,999.14 436,035.121.67FORD ABS 2017-A A3

DTD 01/25/2017 1.670% 06/15/2021

34531EAD8 440,000.00

AAA NR 9/25/2017 10/2/2017 399,970.20 220.00 399,977.40 396,073.481.80CCCIT 2017-A9 A9

DTD 10/02/2017 1.800% 09/20/2021

17305EGH2 400,000.00

AAA Aaa 2/22/2018 2/28/2018 629,918.54 739.20 629,929.99 625,548.042.65HAROT 2018-1 A3

DTD 02/28/2018 2.640% 02/15/2022

43814UAC3 630,000.00

AAA Aaa 11/14/2017 11/22/2017 504,960.81 446.64 504,968.34 498,175.731.99ALLYA 2017-5 A3

DTD 11/22/2017 1.990% 03/15/2022

02007YAC8 505,000.00

AAA NR 11/14/2017 11/21/2017 654,881.90 585.13 654,904.51 645,779.962.02FORDO 2017-C A3

DTD 11/21/2017 2.010% 03/15/2022

34532AAD5 655,000.00

NR Aaa 2/21/2018 2/28/2018 169,987.78 200.98 169,989.46 168,753.152.66JDOT 2018-A A3

DTD 02/28/2018 2.660% 04/15/2022

47788CAC6 170,000.00

AAA Aaa 2/21/2018 2/28/2018 379,956.57 447.56 379,962.35 377,461.522.66NAROT 2018-A A3

DTD 02/28/2018 2.650% 05/15/2022

65478DAD9 380,000.00

AAA Aaa 4/10/2018 4/18/2018 234,964.61 291.40 234,968.24 233,696.852.80HART 2018-A A3

DTD 04/18/2018 2.790% 07/15/2022

44891KAD7 235,000.00

NR Aaa 3/14/2018 3/21/2018 609,929.18 723.87 609,937.07 607,576.592.68AMXCA 2018-1 A

DTD 03/21/2018 2.670% 10/17/2022

02582JHQ6 610,000.00

AAA Aaa 8/14/2018 8/22/2018 349,937.74 469.78 349,939.18 349,197.493.03TOYOTA ABS 2018-C A3

DTD 08/22/2018 3.020% 12/15/2022

89231AAD3 350,000.00

AAA Aaa 6/19/2018 6/27/2018 724,950.41 966.67 724,953.35 723,668.683.09ALLYA 2018-3 A3

DTD 06/27/2018 3.000% 01/15/2023

02007JAC1 725,000.00




Portfolio Holdings


Original

Cost

Settle

Date

Trade

Date

Moody's

Rating

S&P

Rating

Accrued

Interest

Amortized

Cost

Market

Value

YTM

at Cost




NR Aaa 8/21/2018 8/23/2018 890,050.78 4,419.75 890,219.79 887,559.932.97CCCIT 2018-A1 A1

DTD 01/31/2018 2.490% 01/20/2023

17305EGK5 900,000.00

AAA NR 7/11/2018 7/18/2018 229,946.36 289.42 229,948.51 229,560.103.03GMCAR 2018-3 A3

DTD 07/18/2018 3.020% 05/16/2023

36255JAD6 230,000.00

AAA NR 7/18/2018 7/25/2018 179,975.47 250.40 179,976.36 179,997.733.36CARMAX AUTO OWNER TRUST

DTD 07/25/2018 3.130% 06/15/2023

14313FAD1 180,000.00


73,273,182.42 73,187,543.11 332,945.60 73,066,737.93 71,905,565.18 2.29 Managed Account Sub Total

Money Market Mutual Fund

AAAm NR 13,302,094.63 0.00 13,302,094.63 13,302,094.63CAMP Pool 13,302,094.63

13,302,094.63 13,302,094.63 0.00 13,302,094.63 13,302,094.63Money Market Sub Total

$332,945.60 $86,368,832.56 $85,207,659.81 Securities Sub-Total

Accrued Interest $332,945.60

Total Investments $85,540,605.41

2.29%$86,489,637.74 $86,575,277.05

Bolded items are forward settling trades.


Appendix

127



Appendix

IMPORTANT DISCLOSURES

This material is based on information obtained from sources generally believed to be reliable and available to the public; however, PFM Asset Management LLC cannot guarantee its

accuracy, completeness or suitability. This material is for general information purposes only and is not intended to provide specific advice or a specific recommendation. All statements as

to what will or may happen under certain circumstances are based on assumptions, some, but not all of which, are noted in the presentation. Assumptions may or may not be proven

correct as actual events occur, and results may depend on events outside of your or our control. Changes in assumptions may have a material effect on results. Past performance does

not necessarily reflect and is not a guaranty of future results.The information contained in this presentation is not an offer to purchase or sell any securities.

Dime

Ã Market values that include accrued interest are derived from closing bid prices as of the last business day of the month as supplied by Interactive Data, Bloomberg, or Telerate.

Where prices are not available from generally recognized sources, the securities are priced using a yield based matrix system to arrive at an estimated market value.

Ã In accordance with generally accepted accounting principles, information is presented on a trade date basis; forward settling purchases are included in the monthly balances, and

forward settling sales are excluded.

Ã Performance is presented in accordance with the CFA Institute ’s Global Investment Performance Standards (GIPS). Unless otherwise noted, performance is shown gross of fees.

Quarterly returns are presented on an unannualized basis. Returns for periods greater than one year are presented on an annualized basis. Past performance is not indicative of

future returns.

Ã Bank of America/Merrill Lynch Indices provided by Bloomberg Financial Markets.

Ã Money market fund/cash balances are included in performance and duration computations.

Ã Standard & Poorʼs is the source of the credit ratings. Distribution of credit rating is exclusive of money market fund/LGIP holdings.

Ã Callable securities in the portfolio are included in the maturity distribution analysis to their stated maturity date, although, they may be called prior to maturity.

Ã MBS maturities are represented by expected average life.




Appendix

GLOSSARY

Ã ACCRUED INTEREST: Interest that is due on a bond or other fixed-income security since the last interest payment was made.

Ã AGENCIES: Federal agency securities and/or Government-sponsored enterprises.

Ã AMORTIZED COST: The original cost of the principal of the security is adjusted for the amount of the periodic reduction of any discount or premium from the purchase date until

the date of the report. Discount or premium with respect to short-term securities (those with less than one year to maturity at time of issuance) is amortized on a straight-line

basis. Such discount or premium with respect to longer-term securities is amortized using the constant yield basis.

Ã BANKERS’ ACCEPTANCE: A draft or bill or exchange accepted by a bank or trust company. The accepting institution guarantees payment of the bill as well as the insurer.

Ã COMMERCIAL PAPER: An unsecured obligation issued by a corporation or bank to finance its short-term credit needs, such as accounts receivable and inventory.

Ã CONTRIBUTION TO DURATION: Represents each sector or maturity range ’s relative contribution to the overall duration of the portfolio measured as a percentage weighting. Since

duration is a key measure of interest rate sensitivity, the contribution to duration measures the relative amount or contribution of that sector or maturity range to the total rate

sensitivity of the portfolio.

Ã DURATION TO WORST: A measure of the sensitivity of a security ’s price to a change in interest rates, stated in years, computed from cash flows to the maturity date or to the put

date, whichever results in the highest yield to the investor.

Ã EFFECTIVE DURATION: A measure of the sensitivity of a security’s price to a change in interest rates, stated in years.

Ã EFFECTIVE YIELD: The total yield an investor receives in relation to the nominal yield or coupon of a bond. Effective yield takes into account the power of compounding on

investment returns, while nominal yield does not.

Ã FDIC: Federal Deposit Insurance Corporation. A federal agency that insures bank deposits to a specified amount.

Ã INTEREST RATE: Interest per year divided by principal amount and expressed as a percentage.

Ã MARKET VALUE: The value that would be received or paid for an investment in an orderly transaction between market participants at the measurement date.

Ã MATURITY: The date upon which the principal or stated value of an investment becomes due and payable.

Ã NEGOTIABLE CERTIFICATES OF DEPOSIT: A CD with a very large denomination, usually $1 million or more, that can be traded in secondary markets.

Ã PAR VALUE: The nominal dollar face amount of a security.




Appendix

GLOSSARY

Ã PASS-THROUGH SECURITY: A security representing pooled debt obligations that passes income from debtors to its shareholders. The most common type is the

mortgage-backed security.

Ã REPURCHASE AGREEMENTS: A holder of securities sells these securities to an investor with an agreement to repurchase them at a fixed price on a fixed date.

Ã SETTLE DATE: The date on which the transaction is settled and monies/securities are exchanged. If the settle date of the transaction (i.e., coupon payments and maturity

proceeds) occurs on a non-business day, the funds are exchanged on the next business day.

Ã TRADE DATE: The date on which the transaction occurred; however, the final consummation of the security transaction and payment has not yet taken place.

Ã UNSETTLED TRADE: A trade which has been executed; however, the final consummation of the security transaction and payment has not yet taken place.

Ã U.S. TREASURY: The department of the U.S. government that issues Treasury securities.

Ã YIELD: The rate of return based on the current market value, the annual interest receipts, maturity value, and the time period remaining until maturity, stated as a percentage on

an annualized basis.

Ã YTM AT COST: The yield to maturity at cost is the expected rate of return based on the original cost, the annual interest receipts, maturity value, and the time period from

purchase date to maturity, stated as a percentage on an annualized basis.

Ã YTM AT MARKET: The yield to maturity at market is the rate of return based on the current market value, the annual interest receipts, maturity value, and the time period

remaining until maturity, stated as a percentage on an annualized basis.


LAWCX

Board of Directors Meeting November 6, 2018 Subject: Resolution Regarding All Bank Accounts, Credit Cards and Authorized

Signatures

Recommendation: Approve Resolution 2-2018 Regarding All Bank Accounts, Credit Cards, and Authorized Signatures.

Discussion: Staff is proposing to replace existing Board resolution 4-2011 covering bank accounts and authorized signers with a resolution that conforms with recent changes to the methods of disbursement and current banking practices. Resolution 2-2018 is attached and shows the modifications made to the existing resolution. The following is a summary of the changes being recommended:

1. Cancel the existing resolution No. 4-2011; 2. Change name of Manager-Secretary to Executive Director to match titles

contained in the Bylaws; 3. Add electronic funds transfer (EFT) as an approved method of disbursement; 4. Remove telephone transfers as an approved method of disbursement as these no

longer supported by financial institutions; 5. Remove the provision for a Petty Cash Account. This account was closed several

years ago; 6. Permit the President to designate the Treasurer and/or Executive Director to

request wire transfers; 7. Authorize the Executive Director to maintain a credit card for LAWCX with a

maximum limit of $10,000. The credit card is routinely used to secure meeting space and related expenses.

Attachments: Resolution 2-2018 Regarding All Bank Accounts, Credit Cards, and Authorized Signatures (with revisions shown)


131

RESOLUTION NO. 2-20184-2011

RESOLUTION OF THE BOARD OF DIRECTORS OF THE LOCAL AGENCY WORKERS’ COMPENSATION EXCESS

JOINT POWERS AUTHORITY (LAWCX) REGARDING ALL BANK ACCOUNTS, CREDIT CARDS, AND AUTHORIZED

SIGNATURES

WHEREAS, LAWCX must maintain various bank accounts in order to operate and manage the fiscal affairs of the Authority; and WHEREAS, LAWCX has established bank accounts for the deposit and disbursement of funds; and WHEREAS, to protect and control the cash assets and fiscal integrity of the various bank accounts, signatory authority has been specifically granted to particular officers through minute action. NOW, THEREFORE, BE IT RESOLVED: Resolution No. 4-2011 All Bank Accounts and Authorized Signatures is herewith cancelled. The Board of Directors of LAWCX currently holding positions listed on this Resolution are authorized to sign/pay checks, make withdrawals, originate wire transfers or telephone transfers, authorize electronic fund transfer (EFT), establish investment management and custodial services, online services, perform cash management activities and subscribe to any additional banking product or service associated with the accounts. General Account (requires two signatures): 1. ManagerExecutive Director-Secretary of LAWCX 2. President of LAWCX 3. Vice President of LAWCX 4. Treasurer of LAWCX Provided, however, that (a) for checks/EFT payable to the LAWCX administrator, the check/EFT shall not be signed/approved by a signer employed by the administrator, and (b) for checks/EFT payable to a member agency or an underlying member agency of a JPA, the check/EFT shall not be signed/approved by a signer who is employed by the payee agency. Petty Cash Account (requires one signature): 1. Manager-Secretary of LAWCX 2. President of LAWCX

132

LAWCX Resolution No. 2-20184-2011 Page 2 3. Vice President of LAWCX 4. Treasurer of LAWCX 5. Additional persons as designated by the Manager-Secretary of LAWCX The Petty Cash Account is primarily used for meeting expenses and to reimburse for Board member travel expenses. This account maintains a maximum balance of $2,000 and is replenished as needed with a warrant drawn on the General Account to bring the balance up to $2,000. The Manager-SecretaryPresident acting alone is hereby authorized, in connection with wire transfers out of our accounts at California Bank & Trust (or other custodial or investment accounts bank, as authorized by the Board of Directors), to designate persons who may request wire transfers and to execute and deliver such agreements, documents, and other instruments and to perform such other acts, relating to wire transfers as the President shall approve. However, the Manager-SecretaryPresident can only designate one or more of the following individuals: 1. President of LAWCX 2. Vice President of LAWCX 31. Treasurer of LAWCX 2. Executive Director of LAWCX Credit Card The LAWCX Board of Directors also authorizes the establishment of Business Credit Card with the following limit:

1. Executive Director ($10,000) This Resolution was adopted by the Board of Directors at a regular meeting of the Board held on November 68, 20181, in Sacramento, California, by the following vote: Weighted Votes in Favor Weighted Votes Against Weighted Votes Abstaining Weighted Votes Absent PRESIDENT

Formatted: Font: Bold

Formatted: List Paragraph, Numbered + Level:1 + Numbering Style: 1, 2, 3, … + Start at: 1 +Alignment: Left + Aligned at: 0.75" + Indentat: 1"

Formatted: Font: 11.5 pt

133

LAWCX Resolution No. 2-20184-2011 Page 3 MANAGER-SECRETARYEXECUTIVE DIRECTOR

134

LAWCX

Board of Directors Meeting November 6, 2018 Subject: Draft Actuarial Report with 2019/20 Funding Rates and Discussion of

Confidence Level and Discount Rate

Recommendation: Receive and review the draft actuarial report and approve establishing rates for the 2019/20 program year at the 80% confidence level and discounted at 2.5%.

Discussion: LAWCX’s actuary, Mike Harrington from Bickmore, has prepared a draft actuarial study for LAWCX’s workers’ compensation program with funding rates for the 2019/20 program year, and ultimate loss estimates for all years since LAWCX’s inception. Mr. Harrington will be present at the meeting to review the results of his analysis and answer questions from the Board. The following is a summary of the primary findings.

Ultimate Loss Estimates:

The ultimate loss estimates represent the total expected cost of claims for each program year, and are used in the financial statements to determine the incurred but not reported liability. Each year, the actuary re-estimates the ultimate losses, and changes to those estimates either create additions or reductions to claims expenses, which create corresponding increases or decreases to LAWCX’s equity.

The following table shows a comparison of the current and prior estimates of

ultimate loss for the $150,000 Pool, $250,000 Pool, and the Mid-Layer Pool. The estimates were stable in the $150,000 pool and there were reductions in the Mid-Layer Pool. The $250,000 pool, however, saw an overall increase of $2.8 million which was driven by increases in the incurred value of claims in the 2006/07 and 2014/15 program years.

135

Draft Actuarial Report with 2019/20 Funding Rates and Discussion of Confidence Level and Discount Rate

Page 2 of 4 November 6, 2018

Table 1 Comparison of Ultimate Loss Estimates

Recommended Rates: Annually, LAWCX selects the rates to be used to determine contributions for the

coming program year. This decision includes selecting a confidence level and interest rate assumption used to determine the rates.

Discount Rate for Net Present Value Adjustment: LAWCX determines its annual contributions using an actuarially determined rate

that is discounted to net present value (NPV). The NPV adjustment reflects the investment earnings expected to be earned on the contributions while they are held and invested in the portfolio managed by Public Financial Management. As an excess pool, claims payments do not begin until the cumulative payments on individual claims exceed the member’s self-insured retentions, which can take many years to occur. The average duration of LAWCX’s liabilities is approximately nine years which means on average LAWCX retains, and can invest, the contributions collected to pay losses for at least that length of time. The long term nature of the payments provides opportunity to use a longer term time horizon when selecting an appropriate discount rate assumption as opposed to a primary pool which begins to pay on claims immediately.

Program Year

Ended Prior Study Current Study Increase/(Decrease) Prior Study

Current Study

Increase/(Decrease) Prior Study

Current Study

Increase/(Decrease)

1993 796,000 901,000 105,000 -- -- -- -- -- --1994 929,000 943,000 14,000 -- -- -- -- -- --1995 2,388,000 2,430,000 42,000 -- -- -- -- -- --1996 1,867,000 1,820,000 (47,000) -- -- -- -- -- --1997 2,636,000 2,707,000 71,000 -- -- -- -- -- --1998 1,547,000 1,831,000 284,000 -- -- -- -- -- --1999 3,970,000 4,180,000 210,000 197,000 198,000 1,000 -- -- --2000 1,481,000 1,417,000 (64,000) 231,000 154,000 (77,000) -- -- --2001 1,934,000 1,870,000 (64,000) 224,000 215,000 (9,000) -- -- --2002 4,754,000 4,560,000 (194,000) 482,000 457,000 (25,000) -- -- --2003 6,154,000 6,124,000 (30,000) 212,000 208,000 (4,000) -- -- --2004 9,512,000 10,144,000 632,000 135,000 108,000 (27,000) -- -- --2005 7,091,000 7,047,000 (44,000) 206,000 199,000 (7,000) -- -- --2006 6,226,000 6,218,000 (8,000) 113,000 107,000 (6,000) -- -- --2007 5,789,000 6,594,000 805,000 218,000 240,000 22,000 197,000 176,000 (21,000) 2008 6,668,000 6,438,000 (230,000) 277,000 338,000 61,000 280,000 262,000 (18,000) 2009 5,183,000 4,892,000 (291,000) 175,000 163,000 (12,000) 344,000 327,000 (17,000) 2010 8,968,000 9,339,000 371,000 311,000 305,000 (6,000) 1,231,000 924,000 (307,000) 2011 6,044,000 5,932,000 (112,000) 199,000 191,000 (8,000) 1,682,000 1,662,000 (20,000) 2012 6,166,000 5,883,000 (283,000) 178,000 166,000 (12,000) 525,000 512,000 (13,000) 2013 7,128,000 7,347,000 219,000 202,000 288,000 86,000 589,000 551,000 (38,000) 2014 7,725,000 7,849,000 124,000 -- -- -- 6,754,000 6,688,000 (66,000) 2015 8,416,000 10,012,000 1,596,000 -- -- -- 931,000 843,000 (88,000) 2016 9,788,000 9,558,000 (230,000) -- -- -- 1,179,000 1,017,000 (162,000) 2017 9,924,000 9,819,000 (105,000) -- -- -- 1,361,000 1,259,000 (102,000) 2018 11,303,749 11,361,000 57,251 -- -- -- 1,459,251 1,502,000 42,749

144,387,749 147,216,000 2,828,251 3,360,000 3,337,000 (23,000) 16,532,251 15,723,000 (809,251)

$250,000 Pool $150,000 Pool $2-5M Mid-Layer Pool

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The following chart presents the discount rate assumption used over the past ten years. As shown in the chart, the rate has steadily declined in order to more closely match the actual yield on the portfolio.

Chart 1

Discount Rate History

In accordance with Resolution No. 2-2009, the Executive Director, Actuary, and Investment Advisor met to review the reasonableness of LAWCX’s current discount rate assumption. It was noted during the discussion that the current yield on LAWCX’s portfolio is approximately 2.2%, and has the potential to increase over the next 3-5 years if the Federal Reserve follows through on anticipated increases to the federal funds rate during this time. Since the current yield is approaching the current discount rate of 2.5%, staff is recommending no change to the discount rate used for the 2019/20 program year funding rates, and outstanding liabilities as of June 30, 2019.

Confidence Level Selection: LAWCX has funded the self-insured layer from the member retained limits to

$2.0 million at the 80% confidence level over the past ten years. Establishing the rates at an 80% confidence level provides for a risk margin in the event the ultimate claims develop higher than the expected level. Staff recommends setting rates for the 2019/20 program year at the 80% confidence level, discounted at 2.5%.

Contributions for the mid-layer of coverage from $2.0 million to $5.0 million were

set at the expected confidence level for the 2015/16 fiscal year, and then increased to the 80% confidence level for 2016/17 and thereafter. The mid-layer pool continues to maintain a deficit of $3.4 million at June 30, 2018. Therefore, staff recommends setting the rates for the mid-layer pool for the 2019/20 fiscal year at the 80% confidence level, discounted at 2.5% to continue building the equity in that pool.

5.00% 5.00% 5.00%4.50%

3.50%3.00% 3.00% 3.00%

2.75%2.50%

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019Program Year Ended

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Table 5 presents the 2019/20 recommended rates as compared to the prior year.

Table 5

Recommended 2019/20 Rates 80% Confidence Level, 2.50% NPV

The Executive Committee reviewed the report at their meeting on October 9, 2018,

and recommends the Board establish funding rates for the 2019/20 program year at the 80% confidence level, discounted using a 2.5% interest rate.

Attachments: Draft Actuarial Report with 2019/20 Funding Rates dated October 30, 2018


Self-Insured Retention>>> 250,000$ 350,000$ 500,000$ 750,000$ 1,000,000$ $2-5M Layer2019/20 Recommended (80%CL/2.50% Disc.)

1.894 1.257 0.746 0.437 0.238 0.129

2018/19 (80%CL/2.50% Disc.)

1.84 1.211 0.709 0.41 0.222 0.119

Change 3% 4% 5% 7% 7% 8%

Self-Insured Retention>>> 250,000$ 350,000$ 500,000$ 750,000$ 1,000,000$ $2-5M Layer2019/20 Recommended (80%CL/2.50% Disc.)

1.001 0.665 0.394 0.231 0.126 0.068

2018/19 (80%CL/2.50% Disc.)

0.971 0.639 0.375 0.216 0.118 0.062

Change 3% 4% 5% 7% 7% 10%

SAFETY

NON-SAFETY

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Actuarial Review of the Funding Requirements for the Excess Workers' Compensation Program

Outstanding Liabilities as of June 30, 201Forecast for Program Years 201 -

Presented toLAWCX

, 201

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1750 Creekside Oaks Drive, Suite 200, Sacramento, CA 95833 • 800.541.4591 • f. 855.242.8919 • www.bickmore.net

Tuesday, October 30, 2018

Jim Elledge Executive Director Local Agency Workers’ Compensation Excess Joint Powers Authority c/o Bickmore 1750 Creekside Oaks Drive, Suite 200 Sacramento, CA 95833

Re: Actuarial Review of the Funding Requirements for the Excess Workers’ Compensation Program

Dear Mr. Elledge: As you requested, we have completed our actuarial review of the funding requirements for the Local Agency Workers’ Compensation Excess Joint Powers Authority’s (LAWCX, the Authority) excess workers’ compensation program. Based on this analysis, we have also generated updated estimates of the program’s outstanding liability. Our conclusions are documented in the text and exhibits that follow. At the undiscounted expected level, we estimate the program’s liability for outstanding loss and allocated loss adjustment expenses (ALAE) was approximately $105,055,000 as of June 30, 2018. The Authority has chosen to record its liability with recognition of investment income at 2.50% per year. Discounted for anticipated investment income, we estimate that the program’s liability for outstanding loss and ALAE was $81,334,000 as of that date. Further, LAWCX’s outstanding liability is comprised of two separately funded pools. The first pool is for the layer from $150,000 to $250,000 per occurrence (the $150K pool) and is funded by those members with $150,000 self-insured retentions. The second pool is for the layer above $250,000 per occurrence (the $250K pool) and is funded by all members.

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Our conclusions regarding the Pool’s liability for unpaid loss and allocated loss adjustment expenses (ALAE) at June 30, 2018, are summarized in the table below.

Discounted Outstanding Liability at the Expected Level As of June 30, 2018

Program $150K-$250K $250K & Above TotalYear Pool Pool

1992-93 $0 $167,000 $167,000 1993-94 0 35,000 35,000 1994-95 0 399,000 399,000 1995-96 0 410,000 410,000 1996-97 0 412,000 412,000 1997-98 0 308,000 308,000 1998-99 2,000 769,000 771,000 1999-00 2,000 238,000 240,000 2000-01 12,000 233,000 245,000 2001-02 61,000 866,000 927,000 2002-03 45,000 1,635,000 1,680,000 2003-04 76,000 2,933,000 3,009,000 2004-05 119,000 2,970,000 3,089,000 2005-06 83,000 1,917,000 2,000,000 2006-07 31,000 3,477,000 3,508,000 2007-08 175,000 3,452,000 3,627,000 2008-09 63,000 2,219,000 2,282,000 2009-10 98,000 3,391,000 3,489,000 2010-11 111,000 4,856,000 4,967,000 2011-12 53,000 3,635,000 3,688,000 2012-13 144,000 5,295,000 5,439,000 2013-14 0 6,727,000 6,727,000 2014-15 0 7,804,000 7,804,000 2015-16 0 8,074,000 8,074,000 2016-17 0 8,441,000 8,441,000 2017-18 0 9,596,000 9,596,000

All Years $1,076,000 $80,258,000 $81,334,000

Note that the $150K pool has no outstanding liability associated with the 1997-98 and prior program years, as this pool was formed on July 1, 1998. According to the accounting regulations of the Governmental Accounting Standards Board, unallocated loss adjustment expenses (ULAE) associated with the claims should be recognized as part of the program's claims liability. ULAE is the additional cost to administer all claims to final settlement, which may be years into the future (e.g. claims adjusters’ salaries, taxes, etc.). We estimate the outstanding ULAE as of June 30, 2018 to be $1,635,000.

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We present funding recommendations for claims incurred during program year 2019-20 at several confidence levels in the table below. Our recommendations are displayed as rates per $100 of payroll by layer of loss. The recommended funding includes anticipated investment income at 2.50% per year.

Funding Guidelines for Discounted Claims Incurred in 2019-20

Confidence Level Expected 70% 80% 90%

$150K-$250K $0.698 $0.846 $1.081 $1.472 $250K-$350K 0.290 0.352 0.449 0.612 $350K-$500K 0.233 0.283 0.361 0.492 $500K-$750K 0.141 0.171 0.218 0.297 $750K-$1M 0.090 0.110 0.141 0.191 $1M-$2M 0.109 0.131 0.168 0.229 $2M-$3M 0.034 0.042 0.053 0.072 $3M-$5M 0.025 0.030 0.038 0.052

We understand that the Authority is considering funding the $150K and $250K pools at the 80% confidence level in order to maintain rate stability. Furthermore, LAWCX’s members are charged separate rates for safety versus non-safety employees. Below, we display rates per $100 of payroll for each of the pools at the discounted 80% confidence level broken down by safety versus non-safety employees:

Funding Guidelines at the Discounted 80% Confidence Level

Pool Safety Non-Safety$150K-$250K $1.532 $0.810 $250K-$350K 0.637 0.336 $350K-$500K 0.511 0.271 $500K-$750K 0.309 0.163 $750K-$1M 0.199 0.105 $1M-$2M 0.238 0.126 $2M-$3M 0.075 0.040 $3M-$5M 0.054 0.028

The funding guidelines above do not include any provision for reinsurance premiums, claims administration fees, and other administrative costs associated with the LAWCX program.The analysis which made it possible for us to draw our conclusions is based on the data provided to us. We have accepted all of this information without audit. The loss projections in this report reflect the estimated impact of benefit legislation contained in AB749, AB227, SB228, SB899, SB863 and recent WCAB court decisions based upon information provided by the WCIRB.

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The ultimate impact on loss costs of legislated benefit adjustments are generally difficult to forecast in advance because the changes typically take place over a period of several years following enactment. Furthermore, actuarially derived benefit level evaluations often underestimate actual future cost levels. The shortfalls result from a variety of circumstances, including: increases in utilization levels, unanticipated changes in administrative procedures, and cost shifting among benefit categories. Thus, actual cost increases could differ, perhaps substantially, from the WCIRB’s estimates. All actuarial estimates of workers’ compensation claims costs are subject to uncertainty because of the complexity of the process that determines the costs. This is especially true of excess workers’ compensation claims costs. For this reason, sound management practices suggest that actual funding should be in excess of expected claim activity. We generally recommend funding at the 80% to 90% confidence levels for excess workers’ compensation programs, after recognition of investment income. The first section of the attached report outlines the scope of our study, its background, and our conclusions, recommendations, detailed funding recommendations, assumptions, and approach to the project. The entire report has been developed for the internal use of LAWCX, its auditors, and the representatives of its members. It is not intended for general circulation. We appreciate the opportunity to prepare this review for LAWCX. Please feel free to call Derek Burkhalter at (916) 244-1167 or Mike Harrington at (916) 244-1162 with any questions you may have concerning this report.

Sincerely,

Bickmore

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Derek Burkhalter, ACAS, MAAA Manager, Property and Casualty Insurance Services, BickmoreAssociate, Casualty Actuarial Society Member, American Academy of Actuaries

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Mike Harrington, FCAS, MAAA President, Actuarial Consulting Practice, Bickmore Fellow, Casualty Actuarial Society Member, American Academy of Actuaries

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5

TABLE OF CONTENTS

I. BACKGROUND 6

II. CONCLUSIONS AND RECOMMENDATIONS 7

A. LIABILITY FOR OUTSTANDING CLAIMS AS OF JUNE 30, 2018 7

B. FUNDING RATES FOR 2019-20 CLAIMS 12

C. FUNDING GUIDELINES 14

D. COMPARISON WITH PREVIOUS RESULTS 15

E. OVERALL ANALYTICAL APPROACH 21

F. DATA ISSUES 22

III. ASSUMPTIONS AND LIMITATIONS 23

IV. GLOSSARY OF ACTUARIAL TERMS 25

V. EXHIBITS 27

VI. APPENDICES 49

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I. BACKGROUND

The Local Agency Workers’ Compensation Excess Joint Powers Authority (LAWCX, the Authority) began operations on July 1, 1992. Its purpose is to provide excess workers’ compensation coverage and to purchase commercial excess insurance on a group basis for California public agencies. For the 1992-93 through 1998-99 program years, there were two pools covering occurrences between $250,000 and $500,000 - a $250K pool and a $350K pool. Members of the $250K pool also participate in the $350K pool. The Authority created a third pool on July 1, 1998 to cover losses in the layer from $150,000 to $250,000 (the $150K pool). Members of the $150K pool also participated in the $250K and $350K pools. Since July 1, 2013, however, there are no members participating in the $150K pool. For the 1992-93 through 1998-99 program years, the Authority purchased commercial excess insurance to cover loss from $500,000 to statutory limits for workers’ compensation and to $5 million for employer’s liability. As of July 1, 1999, the Authority decreased its self-insured retention to $350,000 per occurrence. Therefore, the $250K and above pool covers the layer $250,000 to $350,000 for program years 1999-00 and 2000-01. For the 2001-02, 2002-03 and 2003-04 program years, the Authority increased its self-insured retention to $500,000, $1,000,000, and $2,000,000, respectively. Beginning with the 2006-07 program year, the Authority increased its self-insured retention to $5,000,000. The purpose of this study is to provide a guide to the Authority in evaluating the adequacy of its established funding for each pool and in determining its contribution level for the 2019-20 fiscal year.

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II. CONCLUSIONS AND RECOMMENDATIONS

A. LIABILITY FOR OUTSTANDING CLAIMS AS OF JUNE 30, 2018

At the undiscounted expected level, we project the program’s liability for outstanding loss and allocated loss adjustment expenses (ALAE) to be approximately $105,055,000 as of June 30, 2018. The Authority has chosen to record its liability with recognition of investment income at 2.50% per year. Discounted for anticipated investment income, we project the program’s liability for outstanding loss and ALAE was $81,334,000 as of that date.

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LAWCX’s outstanding liability is comprised of two separately funded pools. The first pool is for the layer from $150,000 to $250,000 per occurrence (the $150K pool) and is funded by those members with $150,000 self-insured retentions. The second pool is for the layer above $250,000 per occurrence (the $250K pool) and is funded by all members. Our results by year are shown in the table below.

Discounted Outstanding Liability at the Expected LevelAs of June 30, 2018

Program $150K-$250K $250K & Above TotalYear Pool Pool

1992-1993 $0 $167,000 $167,000 1993-1994 0 35,000 35,000 1994-1995 0 399,000 399,000 1995-1996 0 410,000 410,000 1996-1997 0 412,000 412,000 1997-1998 0 308,000 308,000 1998-1999 2,000 769,000 771,000 1999-2000 2,000 238,000 240,000 2000-2001 12,000 233,000 245,000 2001-2002 61,000 866,000 927,000 2002-2003 45,000 1,635,000 1,680,000 2003-2004 76,000 2,933,000 3,009,000 2004-2005 119,000 2,970,000 3,089,000 2005-2006 83,000 1,917,000 2,000,000 2006-2007 31,000 3,477,000 3,508,000 2007-2008 175,000 3,452,000 3,627,000 2008-2009 63,000 2,219,000 2,282,000 2009-2010 98,000 3,391,000 3,489,000 2010-2011 111,000 4,856,000 4,967,000 2011-2012 53,000 3,635,000 3,688,000 2012-2013 144,000 5,295,000 5,439,000 2013-2014 0 6,727,000 6,727,000 2014-2015 0 7,804,000 7,804,000 2015-2016 0 8,074,000 8,074,000 2016-2017 0 8,441,000 8,441,000 2017-2018 0 9,596,000 9,596,000

All Years $1,076,000 $80,258,000 $81,334,000

Note that the $150K pool was formed on July 1, 1998 and therefore has no outstanding liability associated with the 1997-98 and prior program years.

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The following tables display our estimates of each of the pools’ discounted outstanding liabilities at various confidence levels.

Discounted Outstanding Liability as of June 30, 2018 $150K Pool

Program Year Expected 70% 80% 90%

1998-99 $2,000 $2,000 $3,000 $4,000 1999-00 2,000 3,000 4,000 6,000 2000-01 12,000 15,000 21,000 31,000 2001-02 61,000 78,000 107,000 156,000 2002-03 45,000 57,000 79,000 114,000 2003-04 76,000 96,000 135,000 200,000 2004-05 119,000 151,000 203,000 292,000 2005-06 83,000 105,000 147,000 216,000 2006-07 31,000 39,000 54,000 77,000 2007-08 175,000 219,000 290,000 409,000 2008-09 63,000 81,000 111,000 160,000 2009-10 98,000 124,000 170,000 246,000 2010-11 111,000 141,000 191,000 275,000 2011-12 53,000 72,000 98,000 150,000 2012-13 144,000 181,000 242,000 344,000 2013-14 0 0 0 0 2014-15 0 0 0 0 2015-16 0 0 0 0 2016-17 0 0 0 0 2017-18 0 0 0 0

Sum of Years $1,076,000 $1,364,000 $1,855,000 $2,680,000 Pooled Years $1,076,000 $1,305,000 $1,668,000 $2,274,000

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Discounted Outstanding Liability as of June 30, 2018 $250K & Above Pool

Program Year Expected 70% 80% 90%

1992-93 $167,000 $213,000 $294,000 $432,000 1993-94 35,000 44,000 59,000 85,000 1994-95 399,000 496,000 654,000 920,000 1995-96 410,000 509,000 670,000 941,000 1996-97 412,000 512,000 674,000 947,000 1997-98 308,000 385,000 513,000 729,000 1998-99 769,000 944,000 1,222,000 1,688,000 1999-00 238,000 299,000 404,000 581,000 2000-01 233,000 290,000 380,000 532,000 2001-02 866,000 1,053,000 1,349,000 1,842,000 2002-03 1,635,000 1,988,000 2,544,000 3,476,000 2003-04 2,933,000 3,554,000 4,540,000 6,185,000 2004-05 2,970,000 3,600,000 4,598,000 6,264,000 2005-06 1,917,000 2,331,000 2,989,000 4,087,000 2006-07 3,477,000 4,211,000 5,372,000 7,313,000 2007-08 3,452,000 4,180,000 5,333,000 7,259,000 2008-09 2,219,000 2,696,000 3,450,000 4,710,000 2009-10 3,391,000 4,106,000 5,239,000 7,134,000 2010-11 4,856,000 5,871,000 7,478,000 10,163,000 2011-12 3,635,000 4,402,000 5,612,000 7,637,000 2012-13 5,295,000 6,401,000 8,148,000 11,066,000 2013-14 6,727,000 8,126,000 10,332,000 14,025,000 2014-15 7,804,000 9,427,000 11,979,000 16,256,000 2015-16 8,074,000 9,754,000 12,394,000 16,811,000 2016-17 8,441,000 10,189,000 12,949,000 17,567,000 2017-18 9,596,000 11,582,000 14,710,000 19,950,000

Sum of Years $80,258,000 $97,163,000 $123,886,000 $168,600,000 Pooled Year $80,258,000 $95,588,000 $114,047,000 $143,984,000

The pooled year amounts are less than the sum of the individual years because the margin for higher confidence levels are not as high for all years combined as for each year individually. This illustrates one of the financial advantages of pooling. According to the accounting regulations of the Governmental Accounting Standards Board, unallocated loss adjustment expenses (ULAE) associated with the claims should be recognized as part of the program's claims liability. ULAE is the additional cost to administer all claims to final settlement, which may be years into the future (e.g. claims adjusters’ salaries, taxes, etc.). We estimate the outstanding ULAE as of June 30, 2018, to be $1,635,000.

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The estimated liability for unpaid loss and LAE in this report assumes a 2.50% discount rate. We provide factors to use for various interest assumptions in the following table. For example, the estimated liability for unpaid loss and LAE using a 1.50% interest assumption at the expected confidence level as of June 30, 2018 is the discounted loss and LAE amount of $81,334,000 times the 1.097 factor.

Interest Rate Assumption

Factor for June 30, 2018

Estimate

1.50% 1.097 1.75% 1.074 2.00% 1.046 2.25% 1.024 2.50% 1.000 2.75% 0.976 3.00% 0.956 3.25% 0.938 3.50% 0.915

Our funding guidelines for the program’s outstanding liabilities do not include any provision for reinsurance premiums and other administrative costs associated with the LAWCX program.

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B. FUNDING RATES FOR 2019-20 CLAIMS

We present funding recommendations for claims incurred during program year 2019-20 at several confidence levels in the table below. Our recommendations are displayed as rates per $100 of payroll by layer of loss. The recommended funding includes anticipated investment income at 2.50% per year.

Funding Guidelines for Discounted Claims Incurred in 2019-20

Confidence Level Expected 70% 80% 90%

$150K-$250K $0.698 $0.846 $1.081 $1.472 $250K-$350K 0.290 0.352 0.449 0.612 $350K-$500K 0.233 0.283 0.361 0.492 $500K-$750K 0.141 0.171 0.218 0.297 $750K-$1M 0.090 0.110 0.141 0.191 $1M-$2M 0.109 0.131 0.168 0.229 $2M-$3M 0.034 0.042 0.053 0.072 $3M-$5M 0.025 0.030 0.038 0.052

We understand that the Authority is considering funding the $150K and $250K pools at the 80% confidence level in order to maintain rate stability. Further, LAWCX’s members are charged separate rates for safety versus non-safety employees. Below, we display rates per $100 of payroll for each of the pools at the discounted 80% confidence level broken down by safety versus non-safety employees:

Funding Guidelines at the Discounted 80% Confidence Level

Pool Safety Non-Safety

$150K-$250K $1.532 $0.810 $250K-$350K 0.637 0.336 $350K-$500K 0.511 0.271 $500K-$750K 0.309 0.163 $750K-$1M 0.199 0.105 $1M-$2M 0.238 0.126 $2M-$3M 0.075 0.040 $3M-$5M 0.054 0.028

The funding guidelines above do not include any provision for reinsurance premiums, claims administration fees, and other administrative costs associated with the LAWCX program.

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The recommended funding in this report assumes a 2.50% discount rate. In the following table, we provide factors to use for various interest assumptions. For example, the recommended 2019-20 funding using a 1.50% interest assumption at the expected confidence level is the discounted recommended funding rate times the 1.116 factor.

Interest Rate Assumption

Factor for 2019-20 Estimate

1.50% 1.116 1.75% 1.085 2.00% 1.055 2.25% 1.027 2.50% 1.000 2.75% 0.974 3.00% 0.950 3.25% 0.926 3.50% 0.904

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C. FUNDING GUIDELINES

LAWCX has historically measured the adequacy of its funding using confidence levels that reflect the potential variability of actual loss experience around the current actuarial best estimates and measure the probability that actual losses will be within given levels of funding. Because membership has varied somewhat from year to year, each pool year was historically evaluated on its own. We generally recommend funding of excess workers’ compensation programs to the 85% confidence level, with a recommended range of the 80% to 90% confidence levels. We generally consider funding to the 75% confidence level to be marginally acceptable, and to the 95% confidence level to be conservative. However, these should only be considered general guidelines, as we also strongly believe that the confidence level to which any future year is funded should be evaluated in light of the relative certainty of the underlying assumptions, the other budgetary constraints of those contributing to the program, and the relative risk it is believed appropriate to assume at a particular point in time. This means formulating both short-term and long-term funding goals, which may be the same in some years and different in others. We understand that the Authority has historically recorded its claim liabilities on its financial statements at the discounted expected confidence level. In addition, the Board is considering funding each new year at the 80% confidence level.

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D. COMPARISON WITH PREVIOUS RESULTS

The most recent report for the Authority was dated September 28, 2017. At that time, we estimated ultimate losses through 2017-18 to be $164,280,000. Our current estimate as of June 30, 2018, is $166,276,000 reflecting an increase in our assessment of the Authority's ultimate losses from the prior report. The following table displays a comparison of these estimates of the program’s undiscounted ultimate:

Comparison of the Current Review tothe Prior Report

Undiscounted Ultimate Losses

Change in Percent Estimates Change

Program Prior Current Prior Prior Year Report Review Report Report

1992-93 $796,000 $901,000 $105,000 13% 1993-94 929,000 943,000 14,000 2% 1994-95 2,388,000 2,430,000 42,000 2% 1995-96 1,867,000 1,820,000 (47,000) -3% 1996-97 2,636,000 2,707,000 71,000 3% 1997-98 1,547,000 1,831,000 284,000 18% 1998-99 4,167,000 4,378,000 211,000 5% 1999-00 1,712,000 1,571,000 (141,000) -8% 2000-01 2,158,000 2,085,000 (73,000) -3% 2001-02 5,236,000 5,017,000 (219,000) -4% 2002-03 6,366,000 6,332,000 (34,000) -1% 2003-04 9,647,000 10,252,000 605,000 6% 2004-05 7,297,000 7,246,000 (51,000) -1% 2005-06 6,339,000 6,325,000 (14,000) 0% 2006-07 6,204,000 7,010,000 806,000 13% 2007-08 7,225,000 7,038,000 (187,000) -3% 2008-09 5,702,000 5,382,000 (320,000) -6% 2009-10 10,510,000 10,568,000 58,000 1% 2010-11 7,925,000 7,785,000 (140,000) -2% 2011-12 6,869,000 6,561,000 (308,000) -4% 2012-13 7,919,000 8,186,000 267,000 3% 2013-14 14,479,000 14,537,000 58,000 0% 2014-15 9,347,000 10,855,000 1,508,000 16% 2015-16 10,967,000 10,575,000 (392,000) -4% 2016-17 11,285,000 11,078,000 (207,000) -2% 2017-18 12,763,000 12,863,000 100,000 1%

All Years $164,280,000 $166,276,000 $1,996,000 1%

As you can see, our estimates of the program’s ultimate losses are higher than those presented in our prior report. Much of the variations are due to claims experience; other variations are the result of updated trend and loss development assumptions.

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The following table displays a comparison of expected and actual incurred loss development since the prior study. The actual incurred loss development has been greater than expected in aggregate since the June 30, 2017 evaluation date of the prior report. Based on the assumptions in the prior report, it was expected that incurred losses would increase by $7,085,000 between July 1, 2017, and June 30, 2018. Actual development was $8,399,000; or $1,314,000 more than expected.

Expected Incurred vs. Actual Incurred Loss and ALAE Between 7/1/17 to 6/30/18

ProgramYear

ExpectedIncurred between 7/1/16 to 6/30/17

ActualIncurred between 7/1/16 to 6/30/17

Actual minus Expected

Development

PriorProjected UltimateLosses

Current Projected UltimateLosses

Change in Projected UltimateLosses

1992-1993 $1,000 $105,000 $104,000 $796,000 $901,000 $105,000 1993-1994 0 15,000 15,000 929,000 943,000 14,000 1994-1995 5,000 46,000 41,000 2,388,000 2,430,000 42,000 1995-1996 5,000 (42,000) (47,000) 1,867,000 1,820,000 (47,000)1996-1997 8,000 79,000 71,000 2,636,000 2,707,000 71,000 1997-1998 2,000 283,000 281,000 1,547,000 1,831,000 284,000 1998-1999 5,000 209,000 204,000 4,167,000 4,378,000 211,000 1999-2000 4,000 (147,000) (151,000) 1,712,000 1,571,000 (141,000)2000-2001 24,000 (49,000) (73,000) 2,158,000 2,085,000 (73,000)2001-2002 53,000 (172,000) (225,000) 5,236,000 5,017,000 (219,000)2002-2003 103,000 151,000 48,000 6,366,000 6,332,000 (34,000)2003-2004 95,000 928,000 833,000 9,647,000 10,252,000 605,000 2004-2005 99,000 85,000 (14,000) 7,297,000 7,246,000 (51,000)2005-2006 108,000 127,000 19,000 6,339,000 6,325,000 (14,000)2006-2007 234,000 1,223,000 989,000 6,204,000 7,010,000 806,000 2007-2008 250,000 29,000 (221,000) 7,225,000 7,038,000 (187,000)2008-2009 354,000 (238,000) (592,000) 5,702,000 5,382,000 (320,000)2009-2010 413,000 13,000 (400,000) 10,510,000 10,568,000 58,000 2010-2011 407,000 219,000 (188,000) 7,925,000 7,785,000 (140,000)2011-2012 434,000 69,000 (365,000) 6,869,000 6,561,000 (308,000)2012-2013 526,000 1,100,000 574,000 7,919,000 8,186,000 267,000 2013-2014 300,000 2,000 (298,000) 14,479,000 14,537,000 58,000 2014-2015 810,000 2,470,000 1,660,000 9,347,000 10,855,000 1,508,000 2015-2016 1,066,000 775,000 (291,000) 10,967,000 10,575,000 (392,000)2016-2017 1,134,000 530,000 (604,000) 11,285,000 11,078,000 (207,000)2017-2018 645,000 589,000 (56,000) 12,763,000 12,863,000 100,000

All Years $7,085,000 $8,399,000 $1,314,000 $164,280,000 $166,276,000 $1,996,000

Our estimates of the change in projected ultimate losses generally correlate with the actual minus expected development.

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The table below displays our estimates of the program’s ultimate losses and ALAE by program year for the $150k-$250k, $250k-$2M and the $2M-$5M layers at the Expected Level.

Estimated Ultimate Losses by Layer Expected Level

Program $150K-$250K $250K-$2M $2M -$5M Year Layer Layer Layer Total

1992-1993 $0 $901,000 $0 $901,0001993-1994 0 943,000 0 943,0001994-1995 0 2,430,000 0 2,430,0001995-1996 0 1,820,000 0 1,820,0001996-1997 0 2,707,000 0 2,707,0001997-1998 0 1,831,000 0 1,831,0001998-1999 198,000 4,180,000 0 4,378,0001999-2000 154,000 1,417,000 0 1,571,0002000-2001 215,000 1,870,000 0 2,085,0002001-2002 457,000 4,560,000 0 5,017,0002002-2003 208,000 6,124,000 0 6,332,0002003-2004 108,000 10,144,000 0 10,252,0002004-2005 199,000 7,047,000 0 7,246,0002005-2006 107,000 6,218,000 0 6,325,0002006-2007 240,000 6,594,000 176,000 7,010,0002007-2008 338,000 6,438,000 262,000 7,038,0002008-2009 163,000 4,892,000 327,000 5,382,0002009-2010 305,000 9,339,000 924,000 10,568,0002010-2011 191,000 5,932,000 1,662,000 7,785,0002011-2012 166,000 5,883,000 512,000 6,561,0002012-2013 288,000 7,347,000 551,000 8,186,0002013-2014 0 7,849,000 6,688,000 14,537,0002014-2015 0 10,012,000 843,000 10,855,0002015-2016 0 9,558,000 1,017,000 10,575,0002016-2017 0 9,819,000 1,259,000 11,078,0002017-2018 0 11,361,000 1,502,000 12,863,000

All Years $3,337,000 $147,216,000 $15,723,000 $166,276,000

2018 2019 $0 $12,446,174 $1,705,826 $14,152,000

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The table below displays our estimates of the program’s ultimate losses and ALAE by program year for the $150k-$250k, $250k-$2M and the $2M-$5M layers at the 80% Confidence Level.

Estimated Ultimate Losses by Layer 80% Confidence Level


1992-1993 $0 $1,032,000 $0 $1,032,0001993-1994 0 970,000 0 970,0001994-1995 0 2,747,000 0 2,747,0001995-1996 0 2,147,000 0 2,147,0001996-1997 0 3,038,000 0 3,038,0001997-1998 0 2,091,000 0 2,091,0001998-1999 199,000 4,741,000 0 4,940,0001999-2000 156,000 1,626,000 0 1,782,0002000-2001 225,000 2,055,000 0 2,280,0002001-2002 500,000 5,168,000 0 5,668,0002002-2003 240,000 7,276,000 0 7,516,0002003-2004 161,000 12,195,000 0 12,356,0002004-2005 283,000 9,132,000 0 9,415,0002005-2006 167,000 7,598,000 0 7,766,0002006-2007 262,000 8,929,000 272,000 9,463,0002007-2008 461,000 8,715,000 405,000 9,581,0002008-2009 208,000 6,296,000 509,000 7,014,0002009-2010 373,000 11,496,000 1,142,000 13,011,0002010-2011 268,000 9,049,000 1,908,000 11,226,0002011-2012 203,000 8,151,000 792,000 9,146,0002012-2013 388,000 10,734,000 849,000 11,970,0002013-2014 0 12,128,000 7,057,000 19,186,0002014-2015 0 14,951,000 1,295,000 16,245,0002015-2016 0 14,617,000 1,561,000 16,178,0002016-2017 0 15,072,000 1,933,000 17,005,0002017-2018 0 17,416,000 2,303,000 19,719,000

All Years $4,094,000 $199,370,000 $20,026,000 $223,492,000

2018 2019 $0 $19,079,985 $2,615,031 $21,695,016

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The table below displays our estimates of the program’s ultimate losses and ALAE by program year for the $150k-$250k, $250k-$2M and the $2M-$5M layers at the 90% Confidence Level.

Estimated Ultimate Losses by Layer 90% Confidence Level


1992-1993 $0 $1,169,000 $0 $1,169,0001993-1994 0 999,000 0 999,0001994-1995 0 3,077,000 0 3,077,0001995-1996 0 2,488,000 0 2,488,0001996-1997 0 3,383,000 0 3,383,0001997-1998 0 2,367,000 0 2,367,0001998-1999 200,000 5,319,000 0 5,520,0001999-2000 158,000 1,849,000 0 2,007,0002000-2001 234,000 2,247,000 0 2,481,0002001-2002 544,000 5,792,000 0 6,336,0002002-2003 272,000 8,457,000 0 8,729,0002003-2004 215,000 14,302,000 0 14,517,0002004-2005 368,000 11,271,000 0 11,639,0002005-2006 229,000 9,016,000 0 9,245,0002006-2007 284,000 11,323,000 371,000 11,978,0002007-2008 587,000 11,047,000 552,000 12,185,0002008-2009 255,000 7,736,000 696,000 8,686,0002009-2010 443,000 13,704,000 1,365,000 15,512,0002010-2011 347,000 12,242,000 2,160,000 14,749,0002011-2012 241,000 10,473,000 1,078,000 11,793,0002012-2013 490,000 14,196,000 1,153,000 15,839,0002013-2014 0 16,511,000 7,436,000 23,947,0002014-2015 0 20,000,000 1,757,000 21,757,0002015-2016 0 19,799,000 2,118,000 21,917,0002016-2017 0 20,443,000 2,621,000 23,064,0002017-2018 0 23,620,000 3,123,000 26,742,000

All Years $4,867,000 $252,830,000 $24,430,000 $282,126,000

2018 2019 $0 $25,875,596 $3,546,412 $29,422,008

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The following table displays a comparison of the Authority’s selected funding rates from this study and the prior selected rates for 2019-20.

Comparison with Prior Review Selected Discounted Funding Rates at 80% Confidence Level

Pool

PriorSafety

2018-19

Current Safety

2019-20 Change

PriorNon-Safety

2018-19

Current Non-Safety

2019-20 Change $250K to $350K 0.630 0.637 1.1% 0.333 0.336 0.9%$350K to $500K 0.502 0.511 1.8% 0.265 0.271 2.3%$500K to $750K 0.299 0.309 3.3% 0.158 0.163 3.2%$750K to $1M 0.188 0.199 5.9% 0.099 0.105 6.1%$1M to $2M 0.223 0.238 6.7% 0.118 0.126 6.8%$2M to $3M 0.069 0.075 8.7% 0.036 0.040 11.1%$3M to $5M 0.048 0.054 12.5% 0.025 0.028 12.0%

$250K to $2M 1.840 1.894 2.9% 0.971 1.001 3.1%

$350K to $2M 1.211 1.258 3.9% 0.639 0.665 4.1%

$500K to $2M 0.709 0.747 5.4% 0.375 0.393 4.8%

$750K to $2M 0.410 0.437 6.6% 0.216 0.231 6.9%

$1M to $2M 0.222 0.239 7.7% 0.118 0.125 5.9%

$2M to $5M 0.119 0.129 8.4% 0.062 0.068 9.7%Note: Rates may not sum due to rounding.

On average, selected rates for the $250K-$2M layer have increased between 2.9% and 7.7% for Safety and between 3.1% and 6.9% for Non-Safety, at the discounted 80% confidence level. The rates for the $2M-$5m layer have increased 8.4% for Safety and 9.7% for Non-Safety. Prior and current discounting is based on a discount rate of 2.50%.

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E. OVERALL ANALYTICAL APPROACH

The approach we have taken in developing this analysis is firmly grounded in the Authority’s loss and exposure data. Our approach to the problem of estimating the program’s ultimate pooled loss costs is a multi-step process. First, we estimated the ultimate loss cost for the first $100,000 and $1 million of each occurrence for all of the currently participating members since each one joined the program, and then estimated the relationship of these costs to the cost of the limits for which the Authority is responsible. Second, we estimated the cost of the $100,000 to $1 million layer directly. We then constructed a mathematical equation for the distribution of the Authority's losses by size by trending and developing the Authority’s individual claims from the 1992-93 through 2017-18 program years. Next, using the loss distribution, the $100,000 to $1 million ultimate loss rate, and our selected loss development patterns, we then estimated the ultimate losses of the excess layers for which the Authority is responsible.

The following actuarial techniques were applied to LAWCX’s loss data to estimate the ultimate cost of claims in the $0 - $100,000, $0 - $1 million and $100,000 - $1 million layers:

Incurred Loss Development Paid Loss Development Exposure Development Based on Incurred Losses Exposure Development Based on Paid Losses Frequency Times Severity

Actuarial judgment was used to select among the ultimate losses indicated by the above methods.

The following actuarial techniques were applied to LAWCX’s loss data to estimate the ultimate losses in the program’s actual pooled layers:

Incurred Loss Development Paid Loss Development Exposure Development Based on Incurred Losses Exposure Development Based on Paid Losses

Again, actuarial judgment was used to select among the ultimate losses indicated by the above methods, with heavy emphasis applied to the two methods based on incurred losses.

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F. DATA ISSUES

We received updated loss data for the current members of the Authority evaluated as of June 30, 2018. Overall, the data utilized in preparing this report appears to be accurate as of the date of the current evaluation and consistent with that provided for prior review.We also received actual and projected payroll information for 2017-18 and 2018-19, respectively.

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III. ASSUMPTIONS AND LIMITATIONS

Any quantitative analysis is developed within a very specific framework of assumptions about conditions in the outside world, and actuarial analysis is no exception. We believe that it is important to review the assumptions we have made in developing the estimates presented in this report. By doing so, we hope you will gain additional perspective on the nature of the uncertainties involved in maintaining a self-insurance program. Our assumptions, and some observations about them, are as follows:

Our analysis is based on loss experience, exposure data, and other general and specific information you have provided to us. We have accepted all of this information without audit and relied on its accuracy in preparing our estimates for this report. As always, the accuracy and relevance of our conclusions and recommendations are highly dependent on the accuracy and relevance of the underlying data.

We have assumed that the future development of incurred and paid losses can be reasonably predicted on the basis of the development of such losses in the recent past. We have also assumed that the historical development patterns for a large group of California public entities with a self-insured excess workers' compensation program in the aggregate form a reasonable basis of comparison to the patterns from the Authority’s data.

We have assumed that there is a continuing relationship between past and future loss costs and between loss costs and payroll. These assumptions can be tenuous in a changing legal and social environment such as we face today.

It is not possible to predict future claims costs precisely. Most of the cost of workers’ compensation claims arises from a small number of incidents involving serious injury. Thus, changes in the circumstances surrounding these claims can have large effects on total costs. Therefore, the actual costs of the covered workers’ compensation claims could differ significantly from our estimates.

We cannot predict and have not attempted to predict the impact of future law changes and court rulings on claims costs. This is one major reason why we believe our funding recommendations are reasonable now, but should not be extrapolated into the future.

Per the Authority’s request, we have assumed that assets held for investment will generate an annual return of 2.50%.

We estimate that the costs associated with workers’ compensation claims in the $0 to $100,000 per occurrence layer are increasing 3.0% annually after changes in exposure and that the average frequency of claims is decreasing at 1.0% per year.

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We estimate that the costs associated with workers’ compensation claims in the $100,000 to $1 million per occurrence layer are increasing at 4.0% per year after adjusting for changes in exposure and that the average frequency of claims is increasing at 4.0% per year.

The claims costs we have estimated include indemnity payments and allocated loss adjustment expenses. We have not provided estimates for claims adjustment expenses not allocated to particular cases, reinsurance premiums, and Authority administrative expenses.

We have assumed that all reinsurance coverage purchased by the Authority will prove to be valid and fully collectible.

Our funding recommendations do not include provision for catastrophic events not in the program's history, such as earthquakes, flooding, fire or mass civil disorder.

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IV. GLOSSARY OF ACTUARIAL TERMS

Accident Year - Year during which the accidents that generate a group of claims occurs, regardless of when the claims are reported, payments are made, or reserves are established.

Allocated Loss Adjustment Expenses (ALAE) - Expense incurred in settling claims that can be directly attributed to specific individual claims (e.g., legal fees, investigative fees, court charges, etc.)

Benefit Level Factor - Factor used to adjust historical losses to the current level of Liability benefits.

Case Reserve - The amount left to be paid on a claim, as estimated by the claims administrator.

Claim Count Development Factor - A factor that is applied to the number of claims reported in a particular accident period in order to estimate the number of claims that will ultimately be reported.

Claim Frequency - Number of claims per $1 million payroll.

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

Discount Factor - A factor to adjust estimated loss costs to reflect anticipated investment income from assets held prior to actual claim payout.

Expected Losses - The best estimate of the full, ultimate value of loss costs.

Incurred but not Reported (IBNR) Losses - Losses for which the accident has occurred but the claim has not yet been reported. This is the ultimate value of losses, less any amount that has been set up as reported losses by the claims adjuster. It includes both amounts for claims incurred but not yet received by the administrator and loss development on already reported claims.

Loss Development Factor - A factor applied to losses for a particular accident period to reflect the fact that reported and paid losses do not reflect final values until all claims are settled (see Section IV).

Loss Rate - Ultimate losses per $100 payroll.

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Non-Claims Related Expenses – Program expenses not directly associated with claims settlement and administration, such as excess insurance, safety program expenses, and general overhead. These exclude expenses associated with loss settlements (Indemnity/Medical, BI/PD), legal expenses associated with individual claims (ALAE), and claims administration (ULAE).

Outstanding Losses - Losses that have been incurred but not paid. This is the ultimate value of losses less any amount that has been paid.

Paid Losses - Losses actually paid on all reported claims.

Program Losses - Losses, including ALAE, limited to the SIR for each occurrence.

Reported Losses - The total expected value of losses as estimated by the claims administrator. This is the sum of paid losses and case reserves.

Self-Insured Retention (SIR) - The level at which an excess insurance policy is triggered to begin payments on a claim. Financially, this is similar to an insurance deductible.

Severity - Average claim cost.

Ultimate Losses - The value of claim costs at the time when all claims have been settled. This amount must be estimated until all claims are actually settled.

Unallocated Loss Adjustment Expenses (ULAE) – Claim settlement expenses that cannot be directly attributed to individual claims (e.g., claims adjusters' salaries, taxes, etc.)

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LAWCX

Board of Directors Meeting November 6, 2018 Subject: Draft Audited Financial Statements for Fiscal Year Ended June 30, 2018

Recommendation: Review and approve the draft audited financial statements and direct staff to work with the auditor to finalize the document.

Discussion: Sampson, Sampson, and Patterson LLP conducted an audit of the financial statements

of LAWCX as of and for the fiscal year ended June 30, 2018. The draft audited financial statements and other required reports are attached. Mr. Bill Patterson, Sampson, Sampson, and Patterson LLP, will be in attendance to present the reports and to answer questions of the Board.

Attachments: Draft Report on Audited Financial Statements and Required Supplementary

Information for the Year Ended June 30, 2018, including Report on Internal Controls Letter to the Governing Board Dated November 6, 2018. Prepared by: Jim Elledge, Executive Director

242


REPORT ON AUDITED FINANCIAL STATEMENTS

AND REQUIRED SUPPLEMENTARY INFORMATION

YEAR ENDED JUNE 30, 2018

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CONTENTS

Page FINANCIAL SECTION: Independent auditor’s report 1-2 Management’s discussion and analysis 3-11

Statement of net position 12 Statement of revenues, expenses, and changes in net position 13 Statement of cash flows 14 Notes to financial statements 15-24 REQUIRED SUPPLEMENTARY INFORMATION: Claims development information 25-27 OTHER INDEPENDENT AUDITOR’S REPORT:

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 28-29

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INDEPENDENT AUDITOR’S REPORT

Governing Board Local Agency Workers’ Compensation Excess Joint Powers Authority Sacramento, California Report on the Financial Statements

We have audited the accompanying financial statements of Local Agency Workers’ Compensation Excess Joint Powers Authority (LAWCX) as of and for the year ended June 30, 2018 and the related notes to the financial statements, which collectively comprise LAWCX’s basic financial statements as listed in the table of contents. The prior year comparative information has been derived from the financial statements of LAWCX for the year ended June 30, 2017, and in our report dated October 30, 2017, we expressed an unmodified opinion on those financial statements. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America, the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States and the State Controller’s Minimum Audit Requirements for California Special Districts. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risk of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to LAWCX’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of LAWCX’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

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Local Agency Workers’ Compensation Excess Joint Powers Authority

2

Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of LAWCX as of June 30, 2018, and the changes in financial position and cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America, as well as accounting systems prescribed by the State Controller’s office and state regulations governing special districts. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis and claims development information As listed in the table of contents, be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards, we have also issued our report dated ,

2018 on our consideration of LAWCX’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations and contracts and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering LAWCX’s internal control over financial reporting and compliance. Clovis, California , 2018

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MANAGEMENT’S DISCUSSION AND ANALYSIS

JUNE 30, 2018

3

General Program Highlights LAWCX was formed on July 1, 1992, as a state-wide joint powers authority to self-insure and pool excess workers’ compensation losses. The Program was established exclusively for California self-insured joint powers authorities, individual public entities, and special districts. The LAWCX program provides services necessary and appropriate for the establishment, operation, and maintenance of a joint program of excess workers’ compensation coverage for its member agencies. As of June 30, 2018, LAWCX had 34 members including 23 municipalities, 10 joint powers authorities, and 1 special district. LAWCX offers self-insured retentions ranging from $250,000 to $1,000,000 or a member may attach directly to the purchased excess insurance. LAWCX maintains the following program layers: 1) member self-insured retention to $2.0 million; and 2) $2.0 million to $5.0 million, also referred to as the mid-layer. The funding of both layers is evaluated annually by the Board and contributions are based on actuarially determined rates. LAWCX purchases excess coverage to statutory limits through the California State Association of Counties Excess Insurance Authority (CSAC-EIA). LAWCX was re-accredited with excellence by the California Association of Joint Powers Authorities (CAJPA), effective June 28, 2018, through June 28, 2020. CAJPA’s accreditation status is only granted to JPAs meeting the professional standards established by CAJPA in the areas of governance, finance, claims control, safety and risk control, excess coverage, and risk management. Financial Highlights for the Fiscal Year Ended June 30, 2018

Revenues

$24.7 million Increased $10.3 million, or 71%, over the prior year primarily due to approval of an assessment during the fiscal year which resulted in an assessment contribution of $9.3 million. Member contributions increased $1.0 million, or 7.0%, over the prior year.

Expenses $18.5 million Increased $8.2 million, or 80%, over the prior year mainly due to increases to the ultimate loss estimates of prior accident years.

Assets $102.1 million Increase $15.2 million, or 17%, over the prior year primarily due to the Board approved assessment of $9.3 million and retention of 2017/2018 funding contributions.

Liabilities $82.5 million Increased $8.9 million, or 12%, mainly due to significant change in the actuarial estimates ultimate losses in prior accident years.

Deficit Curing and Assessment Plan The Board of Directors approved a Deficit Curing and Assessment Plan (Plan) during the fiscal year to restore funding in program years experiencing deficits between 1992/1993 and 2007/2008. The Plan was not implemented due to liquidity needs, but rather to collect additional funding in older program years that would not return to a surplus position through favorable claims development alone. The Plan cures these deficit program years through two means: 1) the transfer of eligible surplus from positive to deficit program years; and 2) a long-term assessments against the members participating in the remaining deficit program years. The assessment totaled $9.5 million and will be collected over ten years starting in July, 2019. The assessment contributed to an increase in revenues and net position as of June 30, 2018, as discussed throughout this discussion and analysis.

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JUNE 30, 2018

4

Description of the Basic Financial Statements LAWCX’s financial statements are prepared in conformity with generally accepted accounting principles and include certain amounts based upon reliable estimates and judgments. The financial statements include the Statement of Net Position, Statement of Revenues, Expenses and Changes in Net Position, and the Statement of Cash Flows along with accompanying Notes to Financial Statements. The Statement of Net Position presents information on LAWCX’s assets and liabilities, the difference between the two representing net position, also known as pool equity. The Statement of Revenues, Expenses and Changes in Net Position present information showing total revenues versus total expenses and how LAWCX’s net position changed during the fiscal year. All revenues and expenses are recognized as soon as the underlying event occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will result in the disbursement or collection of cash during future fiscal years (e.g., member assessments collected over time, increase in claim liability, etc.). The Statement of Cash Flows presents the changes in the Authority’s cash and cash equivalents during the fiscal year. This statement is prepared using the direct method of cash flow. The Authority’s routine activities appear in the operating activities while sales and purchases of investments are part of investing activities. The Notes to the Financial Statements provide additional information that is essential to a full understanding of the data provided in the financial statements. The notes describe the nature of LAWCX’s operations and significant accounting policies as well as clarify unique financial information. LAWCX’s accounting system is organized so that each program year, and the $2M to $5M layer can be accounted for and evaluated independently. The assets, liabilities, revenues and expenses are reported on a full-accrual basis. There were no significant accounting changes during the year. Analysis of Overall Financial Position and Results of Operations Assets, Liabilities and Net Position

2018 2017 $ Change % Change

Current Assets $22,992,703 $27,202,279 ($4,209,576) -15%Noncurrent Assets 79,078,315 59,707,763 19,370,552 32%Total Assets 102,071,018 86,910,042 15,160,976 17%

Current Liabilities 7,742,782 7,123,254 619,528 9%Noncurrent Liabilities 74,768,584 66,477,955 8,290,629 12%Total Liabilities 82,511,366 73,601,209 8,910,157 12%

Net Position $19,559,652 $13,308,833 $6,250,819 47%

Condensed Statements of Net Position

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Pool Assets Total assets increased $15.2 million, or 17%, over the prior year due primarily to the Board approved Deficit Curing and Assessment Plan which resulted in an assessment receivable of $9.2 million as of the end of the fiscal year. In addition, investment income received was $1.2 million which was offset by a reduction to the fair market value of investment in the amount of $1.0 million. LAWCX’s investments are managed by PFM Asset Management, LLC (PFM) and held in a custodial account with U.S. Bank. The managed portfolio consists of fixed income securities in accordance with LAWCX’s investment policy and the California Government Code. Cash is held in the California Asset Management Program Trust (CAMP), a joint powers authority managed by PFM. CAMP is similar to a money market account and is used as a pass-through for the purchases and sales of LAWCX’s investments. Cash is also held in the Local Agency Investment Fund (LAIF), an external investment pool managed by the State Treasurer’s Office. The following graph depicts the make-up of LAWCX’s cash and investments at June 30, 2018, and 2017. Federal agency decreased 10% as compared to the prior year mainly due to the depletion of availability resulting in the need to increase investment in other sectors such as supra-national bonds and asset-backed securities.

Cash and Investments As of June 30, 2018 and 2017

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At June 30, 2018, the fair market value of LAWCX’s investment portfolio was $1.0 million less than the cost value due to rising interest rates during the fiscal year. This reduction in value is reflected as a decrease to investment income for the fiscal year ended June 30, 2018. The ability of LAWCX’s excess funds to earn investment income has a direct effect on the program rates, as this income is used to discount future liabilities. When investments fall short of projections, additional funding may be required to meet actuarial estimates. LAWCX takes these interest rate conditions into consideration when developing annual deposit premium contributions. For the fiscal years ended June 30, 2018, and 2017, deposit premiums were calculated using 2.75% and 3% discount rates, respectively, and the unpaid claim liability was discounted to net present value using a 2.5% and 2.75%, respectively. Pool Liabilities Total liabilities increased $8.9 million, or 12%, over the prior year largely due to the introduction of claim liabilities for the new program year in the amount of $9.7 million and a reduction to the unpaid liability for all prior accident year claims of $800,000. The reduction for prior accident year was experienced despite payments on those claims of $6.2 million. The liability was not reduced by the full amount of the payments due to claims development and an increase in the estimated ultimate cost of claims in those accident years, and a reduction to the interest rate used to discount the liabilities to net present value resulted in an increase in the ultimate liability for claims. Net Position The following chart illustrates the historical net positon for LAWCX. The net position increased $7.0 million as compared to the prior year primarily due to the deficit curing and assessment plan and deposit contributions funded in advance but paid over a period of time, offset by claims expended.

Historical Net Position

As of June 30, 2009 through 2018

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Revenues and Expenses

2018 2017 $ Change % Change

Operating Revenues $24,602,004 $14,333,341 $10,268,663 72%Expenses 18,491,032 10,261,718 8,229,314 80%Operating Income 6,110,972 4,071,623 2,039,349 50%

Investment Income 139,847 137,068 2,779 2%Net Non-Operating Income 139,847 137,068 2,779 2%

Changes in Net Position 6,250,819 4,208,691 2,042,128 49%Beginning Net Position 13,308,833 9,100,142 4,208,691 46%Ending Net Position $19,559,652 $13,308,833 $6,250,819 47%

Condensed Statements of Revenues, Expenses, and Changes in Net Position

Revenues Operating revenues consist of deposit contributions and assessment contributions. Deposit contributions were $15.3 million for the current fiscal year, a $1.0 million, or 7.0% increase in over the prior year. The growth in deposit contributions was driven by a combination of increases in: 1) exposures reported by members, 2) funding rates, and 3) excess insurance costs. LAWCX recorded the assessment contributions in the net amount of $9.3 million. The Board approved assessment of $9.5 million was recorded net of an allowance for potential pre-payment discounts of $250,000. Members are offered a 10% discount on their allocated assessment if the amount is paid in full prior to August 15, 2019. Non-operating revenue consists of investment income which increased by $2,800, or 2%, over the prior year. LAWCX earned $1.2 million in investment income during the fiscal year but saw a decrease in the amount of $1.0 million in the fair market value of the portfolio as of June 30, 2018. Expenses The following chart shows a comparison of the distribution of expenses. Claims expense increased $8.2 million, or 80%, from $10.3 million in 2017 to $18.5 million in 2018. The increase is attributable to claims development in prior accident years. Excess insurance and administrative expenses decreased in relation to the total expense as compare to the prior year.

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Expenses Comparison For the Years Ended June 30, 2018 and 2017

Insurance Expense LAWCX purchases excess workers’ compensation coverage in excess of its selected self-insured retention through CSAC-EIA. LAWCX’s retention was $5.0 million for the fiscal years ended June 30, 2018, and 2017. The cost of coverage for the 2017/2018 program year increased approximately $224,000 over the prior year which was driven by increases in member estimated payroll and the rate charged by CSAC-EIA. Additional contributions of $298,000 were paid to CSAC-EIA after payroll audits resulted in additional amounts due for the 2015/2016 and 2016/2017 program years. The chart below depicts LAWCX’s historical excess insurance premiums over the past five fiscal years. The self-insured retention has remained at $5 million during this time.

Excess Insurance Expense History For Program Years Ended June 30, 2014 through 2018

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Provision for Insured Events As discussed earlier in the report, the re-estimated ultimate cost of claims increased for certain accident years. The increases were in the $250,000 pool and primarily seen in the 2004, 2007, and 2015 accident years as claims continue to develop in those years. The $150,000 and Mid-Layer pools saw reductions in the overall ultimate loss estimates of prior accident years. The combined claims development activity can be seen in the chart below which shows the two components of claims expense. The first is the recognition of the estimated current year ultimate loss of $9.7 million, and the second is the increase in estimated costs of prior year claim costs of $5.4 million.

Claims Activity For the Fiscal Years Ended June 30, 2018 and 2017

General Administrative Expenses General administrative expenses were slightly changed over the prior year at $840,000 due to incremental contractual increases.

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Description of Facts or Conditions that are Expected to have a Significant Effect on Financial Position or Results of Operations Workers’ Compensation Statewide California experience indicates that costs started to decrease in 2014, but are most recently showing signs of flattening or even increasing. The WCIRB has filed for rate decreases on five straight occasions between 7/1/2015 and 7/1/2017. However, the preliminary indication for the upcoming 1/1/2018 filing is for a slight increase of 0.5%. The recent decreases are due almost entirely to lower medical costs, which have been affected by a variety of changes associated with SB 863 including the implementation of Resource-Based Relative Value Scale (RBRVS) and Independent Medical Review (IMR). SB 863 also significantly increased permanent disability benefits, and those increases are being implemented as expected. Areas that are more recently causing costs to flatten or even increase a bit are increased claim frequency (particularly cumulative injury claims in Southern California) and signs of increased medical inflation. Investments

The domestic economy continued to expand as U.S. GDP increased at an annual rate of 4.2% in the second quarter of 2018 (according to the second reading), its highest level since 2014. The labor market continued to improve as well, adding an average of 218,000 jobs per month during the first six months of 2018, as the unemployment rate registered at just 4.0% in June. After faltering in early 2018, the domestic stock market has rebounded; as of June 30, 2018, the S&P 500 was in positive territory year-to-date. Prices have also begun to increase, as evidenced by gradual advances in the core Personal Consumption Expenditures (PCE) index, the Federal Reserve’s (the “Fed”) preferred gauge of inflation. After languishing below the Fed’s 2% target for nearly six years, core PCE finally reached 2% year-over-year growth in early 2018. Bolstered by these positive economic indicators, the Federal Open Market Committee has continued on its path of slow, steady rate increases. The Committee has increased the closely-watched federal funds target rate two times so far in 2018 to its current range of 1.75% - 2.00% and has signaled its intentions of an additional one or two rate hikes by year-end. Yields on U.S. Treasury obligations have increased significantly over the past year. However, the increases have been most pronounced on the shorter end of the curve, which is more closely tied to changes in the federal funds target rate. Increases on longer-term yields have been more subdued, as longer-term growth and inflation expectations have waned and foreign demand for longer-term U.S. Treasury bonds has increased. As a result, the yield curve has flattened notably, and the current yield spread (the difference in yields) between 10-year and 2-year U.S. Treasury obligations is at its lowest level since 2007. As of June 30, 2018, the yield on the 2-year U.S. Treasury stood at 2.53%, an increase of 115 basis points (1.15%) over the prior year. By contrast, the yield on the 10-year U.S. Treasury note registered at 2.86% as of June 30, 2018, an increase of just 55 basis points (0.55%) over the prior year.

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As interest rates increased, the impact on LAWCX’s portfolio, and on all fixed-income investments, was two-fold: real income increased significantly while market valuations were challenged at some points during the year. In this current environment, diversification remains a key component of effective portfolio management. As such, LAWCX’s portfolio remains well diversified across the various investment sectors permitted by California Government Code and LAWCX’s Investment Policy. Non-government investment sectors continued to perform well during the past year as investor demand for high-quality non-government obligations, like those in LAWCX’s portfolio, increased. Accordingly, LAWCX’s allocation to high-quality non-government sectors, like corporate notes, negotiable certificates of deposit, asset-backed securities, and commercial paper increased during the year. LAWCX has continued to meet its goals of safety, liquidity, and return through execution of an actively-managed strategy that seeks to identify undervalued securities in order to enhance portfolio earnings while maintaining its foremost focus on safety and liquidity. We anticipate that this strategy of active management will continue to be effective and will deliver favorable results in LAWCX’s portfolio.

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STATEMENT OF NET POSITION

(Prior Year Data for Comparison Purposes Only)

See independent auditor’s report and notes to financial statements. 12

ASSETS

June 30, 2018 2017 Current assets:

Cash and cash equivalents $ 19,030,371 $19,131,854 Investments 3,018,860 7,409,827 Receivables:

Excess insurance 245,961 121,457 Interest 518,803 363,305 Other 500

Prepaid expenses 178,708 175,336 Total Current Assets 22,992,703 27,202,279

Noncurrent Assets:

Investments 68,860,620 58,702,837 Receivables:

Member (net of allowance of $250,000)

9,202,772

Excess insurance 1,014,923 1,004,926 Total Noncurrent Assets 79,078,315 59,707,763

Total Assets $102,071,018 $86,910,042

LIABILITIES AND NET POSITION Liabilities:

Current liabilities: Accounts payable $ 29,782 $ 17,254 Current portion of claims liabilities 7,713,000 7,106,000

Total Current Liabilities 7,742,782 7,123,254

Noncurrent liabilities: Claims liabilities 74,768,584 66,477,955

Total Liabilities 82,511,366 73,601,209 Net Position 19,559,652 13,308,833 Total Liabilities and Net Position $102,071,018 $86,910,042

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STATEMENT OF REVENUES, EXPENSES, AND

CHANGES IN NET POSITION



Years Ended June 30, 2018 2017 OPERATING REVENUES: Deposit premiums

Assessment contributions $15,342,731

9,259,273 $14,332,841

Miscellaneous 500 Total Operating Revenues 24,602,004 14,333,341 OPERATING EXPENSES: Claims 6,212,939 6,926,164 Change in unpaid claims 8,897,629 517,536 Excess insurance 2,540,320 2,018,309 General and administration 840,144 799,709 Total Operating Expenses 18,491,032 10,261,718

Net Operating Income 6,110,972 4,071,623 NON-OPERATING REVENUES:

Investment income 139,847 137,068 CHANGES IN NET POSITION 6,250,819 4,208,691 NET POSITION, BEGINNING OF YEAR 13,308,833 9,100,142 NET POSITION, END OF YEAR $19,559,652 $13,308,833

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STATEMENT OF CASH FLOWS



Years Ended June 30, 2018 2017 CASH FLOWS FROM OPERATING ACTIVITIES: Cash received from members $ 15,399,732 $ 14,332,841 Cash paid for claims (6,347,440) (6,976,139) Cash paid for excess insurance (2,540,320) (2,018,309) Cash paid for general and administration (830,988) (980,845)

Net cash provided by operating activities 5,680,984 4,357,548 CASH FLOWS FROM INVESTING ACTIVITIES:

Investment income 1,434,725 1,042,673 Purchase of investment securities (55,533,637) (55,456,721) Proceeds from sales and maturities of securities 48,316,445 54,354,721 Net cash used by investing activities (5,782,467) (59,327)

Net increase (decrease) in cash and cash equivalents (101,483) 4,298,221 Cash and cash equivalents, beginning of year 19,131,854 14,833,633 Cash and cash equivalents, end of year $ 19,030,371 $ 19,131,854 RECONCILIATION OF NET OPERATING INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES: Net operating income $ 6,110,972 $ 4,071,623 Adjustments to reconcile operating income to net cash provided by operating activities:

Changes in assets and liabilities: Member receivables (9,202,772) Excess insurance receivables (134,501) (49,975) Other receivables 500 (500) Prepaid expenses (3,372) (172,896) Accounts payable 12,528 (8,240) Claims liabilities 8,897,629 517,536

Net cash provided by operating activities $ 5,680,984 $ 4,357,548

SUPPLEMENTAL DISCLOSURES Noncash investing, capital and financing activities

Unrealized loss $ (1,022,673) $ (917,007)

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NOTES TO FINANCIAL STATEMENTS


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NOTE 1 - ORGANIZATION: The Local Agency Workers’ Compensation Excess Joint Powers Authority (LAWCX) is a California Joint Powers Authority and was established by a Joint Powers Agreement on July 1, 1992 in accordance with Title I, Division 7, Chapter 5, Article I, Section 6500 of the California Government Code. LAWCX was established to provide a workers’ compensation excess insurance program to its public agency members through risk sharing and purchased insurance, and to provide a forum for discussion, study, development, and implementation of recommendations of mutual interest regarding programs of excess workers’ compensation coverage. The Authority is governed by a Board of Directors which is comprised of appointed representatives from its member agencies. The Board approves the actuarially determined member contributions necessary to cover each member’s share of expected pooled program losses, program insurance and administrative costs. At the Board's discretion, additional member contributions may be assessed if the original contributions of a particular program year are insufficient to meet existing obligations. Likewise, the Board can return any or all of the program years’ excess assets to the members provided that the reserves of the pooled program as a whole have an actuarially determined confidence level of at least ninety percent after return of such assets. LAWCX offers its members a $250,000, $350,000, $500,000, $750,000 or $1,000,000 retained limit, or a member can attach directly to the excess insurance. LAWCX offered its members a $150,000 retained limit from 1998/1999 to 2012/2013 program years. This option is no longer available. LAWCX members share losses from their retained limit up to $5 million and employer’s liability coverage with limits up to $5 million each occurrence. LAWCX participates in the California State Association of Counties Excess Insurance Authority for excess workers’ compensation coverage in excess of $5 million up to statutory limits. During the 2017/18 program year, thirty-four members participated in the program. Admission/Withdrawal of Members The Board of Directors has the authority to approve new members after review by an Underwriting Committee. Each new member is required to participate in the workers’ compensation excess program for a minimum of three full program years. Members may withdraw from LAWCX by notifying the Board of Directors in writing on or before December 31st preceding the date of withdrawal or within thirty days of any substantial change made to the programs of the Authority, whichever is later. The withdrawal of a member does not terminate that member’s responsibility to pay their share of assessments or other financial obligations incurred during its active membership, nor does the member have any immediate right to excess funds.

Upon dissolution of LAWCX, program year deficits or surpluses are subject to assessment or distributions based on each member’s contribution compared to total contributions for each program year.

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NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: Accounting Method The accompanying financial statements have been prepared on the accrual basis of accounting. Under this method, revenues are recorded when earned and expenses are recorded in the accounting period in which the liability is incurred. Since LAWCX discounts claims liabilities, anticipated investment income is considered in determining if a premium deficiency exists. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of revenues and expenses during the reporting period. Actual results could differ from those estimates. Income Taxes As a governmental agency, LAWCX is exempt from both federal income taxes and California state franchise taxes. Cash Equivalents For purposes of the statement of cash flows, cash equivalents include all highly liquid short-term investments with an original maturity of three months or less. Receivables and Allowance for Prepaid Assessments Receivables at June 30, 2018 consist primarily of member assessments, amounts due from excess insurance, and interest earnings.

As more fully explained in Note 5, members are allowed a 10% reduction in assessments relating to the Deficit Curing and Assessment Plan if paid in full by August 15, 2019. An allowance for prepaid assessments has been established for the portion of the assessments that are estimated to be paid on or before that date. All other year-end receivables are considered to be fully collectible. Excess Insurance LAWCX purchases specific excess insurance from commercial carriers to reduce its exposure to large losses. 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.

The JPA does not report any liabilities that are the responsibility of the excess insurance carrier.

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Classification of Revenues LAWCX has classified its revenue as either operating or non-operating revenue. Certain significant revenue streams relied upon for operations are recorded as non-operating revenues, as defined by GASB Statement 34. Revenues and expense are classified according to the following criteria: Operating revenues: Operating revenues include activities that have the characteristics of exchange transactions, such as insurance premiums, assessments for insured events and administration fees. Non-operating revenues: Non-operating revenues include activities that have the characteristics of non-exchange transactions and other revenue sources described in GASB Statement 34 such as investment earnings. Comparative Data

Selected information regarding the prior year has been included in the accompanying financial statements. This information has been included for comparison purposes only and does not represent a complete presentation in accordance with generally accepted accounting principles. Accordingly, such information should be read in conjunction with the prior year financial statements, from which this data was derived. NOTE 3 - CASH AND INVESTMENTS: Cash and investments held by LAWCX are reflected in the accompanying statement of net position at June 30, 2018 as follows:

Cash and cash equivalents: Cash in bank $ 80,508 CAMP pool 30,696 Local Agency Investment Fund 18,919,167

Total cash and cash equivalents $19,030,371

Investments: Current $ 3,018,860 Non-current 68,860,620

Total investments $71,879,480

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Investments Authorized by the California Government Code and LAWCX’s Investment Policy The table below identifies the investment types that are authorized for LAWCX by the California Government Code and LAWCX’s investment policy. The table also identifies certain provisions of the California Government Code that addresses interest rate risk and concentration of credit risk.

Authorized *Maximum *Maximum Investment Types By Investment *Maximum Percentage Investment

Authorized by State Law Policy Maturity Of Portfolio In One Issuer Local Agency Bonds Yes 5 years 20% 5% U.S. Treasury Obligations Yes 5 years None None U.S. Agency Securities Yes 5 years None None Banker’s Acceptances Yes 180 days 40% 5% Commercial Paper Yes 270 days 25% 10% Negotiable Certificates of Deposit Yes 5 years 30% 5% Repurchase Agreements Yes 1 year None 5% Reverse Repurchase Agreements No N/A N/A N/A Medium-Term Notes Yes 5 years 30% 5% Mutual Funds No N/A N/A N/A Money Market Mutual Funds Yes 5 years None None Mortgage Pass-Through Securities Yes 5 years 10% 5% County Pooled Investment Funds No N/A N/A N/A Local Agency Investment Fund (LAIF) Yes None None None JPA Pools (other investment pools) Yes None None None Supranational Debt Yes 5 years 15% 5% *Based on state law requirements or investment policy requirements, whichever is more restrictive.

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Disclosures Relating to Interest Rate Risk

Interest rate risk is the risk 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. One of the ways that LAWCX manages its exposure to interest rate risk is through the purchase of a combination of shorter term and longer term investments and by timing cash flows from maturities so that a portion of the portfolio is maturing or coming close to maturity evenly over time as necessary to provide the cash flow and liquidity needed for operations.

Information about the sensitivity of the fair values of LAWCX’s investments to market interest rate fluctuations is provided by the following table that shows the distribution of LAWCX’s investments by maturity:

Remaining Maturity (in months) 12 Months 13 to 24 25 to 60

Fair Value Or Less Months Months

Federal Agency Securities $ 2,930,318 $ $ 1,235,643 $ 1,694,675 U.S. Treasury Notes 23,812,616 2,919,500 20,893,116 Supra-National Agency Bond 6,086,946 1,365,250 4,721,696 Commercial Paper 798,431 798,431 Corporate Notes 18,773,822 4,595,033 14,178,789 Certificate of Deposit 13,058,256 2,220,429 7,362,215 3,475,612 Municipal Bonds 698,334 698,334 Asset-Backed Securities 5,720,757 578,238 5,142,519

Total $71,879,480 $3,018,860 $18,055,879 $50,804,741

Investments with Fair Values Highly Sensitive to Interest Rate Fluctuations

LAWCX’s investments that are highly sensitive to interest rate fluctuations (to a greater degree than already indicated in the information provided above) are as follows:

Fair Value at Highly Sensitive Investments Year End

Callable Corporate Notes $4,559,544

These securities are subject to early payment in a period of declining interest rates. The resultant reduction in expected total cash flows affects the fair value of these securities and makes the fair value of these securities highly sensitive to changes in interest rates.

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Disclosures Relating to Credit Risk Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. Presented below is the actual Standard and Poors rating as of year end for each investment type.

Ratings as of Year End Non

Investment Type Total AAA/A-1 AA A Rated BBB

Federal Agency Securities $ 2,930,318 $ $ 2,930,318 $ $ $ U.S. Treasury Notes 23,812,616 23,812,616 Supra-National Agency Bonds 6,086,946 6,086,946 Commercial Paper 798,431 798,431 Corporate Notes 18,773,822 2,641,839 13,840,917 2,291,066 Certificate of Deposit 13,058,256 2,220,429 4,470,337 6,367,490 Municipal Bond 698,334 698,334 Asset-Backed Securities 5,720,757 3,919,719 1,801,038 Total $71,879,480 $13,025,525 $34,553,444 $20,208,407 $1,801,038 $2,291,066 Concentration of Credit Risk The investment policy of LAWCX places limits on the amount that may be invested in any one issuer. The limits are applied at the time the investment decision is made. These limits are summarized as follows:

Limit per Issuer Limit per Asset Class Municipal Bonds 5% 20% Corporate Notes 5% 30% Negotiable Certificates of Deposits 5% 30% Mortgage Pass-through Securities 5% 10%

There were no investments in any one issuer (other than U.S. Treasury securities) that represent 5% or more of total LAWCX investments.

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Custodial Credit Risk Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover its deposits or will not be able to recover collateral securities that are in the possession of an outside party. The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty (e.g., broker-dealer) to a transaction, a government will not be able to recover the value of its investment or collateral securities that are in the possession of another party. The California Government Code and LAWCX’s investment policy do not contain legal or policy requirements that would limit the exposure to custodial credit risk for deposits or investments, other than the following provision for deposits: The California Government Code requires that a financial institution secure deposits made by state or local governmental units by pledging securities in an undivided collateral pool held by a depository regulated under state law (unless so waived by the governmental unit). The market value of the pledged securities in the collateral pool must equal at least 110% of the total amount deposited by the public agencies. California law also allows financial institutions to secure LAWCX's deposits by pledging first trust deed mortgage notes having a value of 150% of the secured public deposits. As of June 30, 2018, none of LAWCX’s deposits with financial institutions were held in uncollateralized accounts. In addition, none of LAWCX’S investments were subject to custodial credit risk as of June 30, 2018. With respect to investments, custodial credit risk generally applies only to direct investments in marketable securities. Custodial credit risk does not apply to a local government’s indirect investment in securities through the use of mutual funds or a government investment pool (such as LAIF).

Managed Investment Pools LAWCX is a voluntary participant in LAIF which is regulated by the California Government Code under the oversight of the Treasurer of the State of California. The fair value of LAWCX’s investment in this pool is reported in the accompanying financial statements at amounts based upon LAWCX’s pro-rata share of the fair value provided by LAIF for the entire LAIF portfolio (in relation to the amortized cost of that portfolio). The balance available for withdrawal is based on the accounting records maintained by LAIF, which are recorded on the amortized cost basis.

As of June 30, 2018, LAWCX’s investment in the California Asset Management Program

(CAMP) pool was $30,696. A board of six trustees who are officials or employees of public agencies has oversight responsibility for CAMP. The value of the pool shares in CAMP, which may be withdrawn, is determined on an amortized cost basis.

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Fair Value Measurements LAWCX categorizes its fair value measurements within the fair value hierarchy established by

generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value of the asset. Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; Level 3 inputs are significant unobservable inputs.

LAWCX has the following recurring fair value measurements as of June 30, 2018: Assets at Fair Value as of June 30, 2018: Level 1 Level 2 Level 3 Total Debt Securities:

Federal Agency Securities $ $ 2,930,318 $ $ 2,930,318 U.S. Treasury Notes 23,812,616 23,812,616 Supra-National Agency Bonds 6,086,946 6,086,946 Corporate Notes 18,773,822 18,773,822 Negotiable Certificates of Deposits 13,058,256 13,058,256 Asset-Backed Securities 5,720,757 5,720,757 Commercial Paper 798,431 798,431 Municipal Bonds 698,334 698,334

Debt securities classified in Level 2 of the fair value hierarchy are valued using a matrix pricing

technique.

NOTE 4 - DEFICIT CURING AND ASSESSMENT PLAN:

In June, 2018, the Board of Directors approved a long-range Deficit and Curing Assessment Plan (the Plan) to address deficits in years that are at least ten years old in the $250,000 pool. The Plan provides for additional member assessments of approximately $9.5 million to be received over a 10 year period. Members are allowed a 10% reduction in their portion of the assessment if paid in full by August 15, 2019. An allowance of $250,000 has been established as an estimate of the reduction in assessments that will be received due to member prepayments. The net outstanding balance of assessments receivables relating to the Plan was $9,202,772 at June 30, 2018.

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(Continued)

23

NOTE 5 - UNPAID CLAIMS: LAWCX has established a reserve for unpaid 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 incurred, but not reported claims have been estimated by management based upon an actuarial study performed by LAWCX’s consulting actuary at the expected confidence level and are discounted at 2.50% and 2.75% for 2017/2018 and 2016/2017, respectively. The claims reserves have been estimated by the claims administrators based upon prior experience with similar claims. Because actual costs depend on such factors as inflation, changes in doctrines of legal liability, and damage awards, the process used in computing claim liabilities does not necessarily result in an exact amount. Accordingly, the reserve for claims is recomputed annually to produce current estimates that reflect recent settlements, claim frequency, and other economic and social factors. Adjustments to the reserves are charged to income or expense in the period in which they are made. The face value (undiscounted) amount of the liabilities for unpaid claims at June 30, 2018 and 2017 was $106,724,929 and $98,030,162, respectively.

The following represents changes in the total discounted reserves for unpaid claims of LAWCX during the past two years:

2017/2018 2016/2017 Unpaid claims and claims adjustment expenses at beginning of fiscal year $73,583,955 $73,066,419 Insured claims and claim adjustment expenses:

Provisions for insured events of the current fiscal year 9,722,650 8,284,373 Increase (decrease) in provision for insured events of prior fiscal years 5,387,918 (840,673)

Total incurred claims and claim adjustment expenses 15,110,568 7,443,700 Payments/Recoveries:

Claims and claim adjustment expenses attributable to insured events of the prior fiscal years 6,212,939 6,926,164

Total payments 6,212,939 6,926,164 Total unpaid claims and claim adjustment expenses at end of fiscal year $82,481,584 $73,583,955 The components of the unpaid claims and claim adjustment expenses as of June 30, 2018 and 2017 were as follows:

Reserves $36,461,386 $33,858,211 Claims incurred but not reported 44,900,697 38,746,835 Liability for unallocated loss adjustment expense 1,119,501 978,909 Total claims liability $82,481,584 $73,583,955

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267




(Continued)

24

NOTE 6 - GENERAL AND ADMINISTRATIVE EXPENSES: The following is a list of the general and administrative expenses incurred for the year ended June 30, 2018.

Administrative fees $605,605 Travel and conference 11,955 Financial audit 9,000 Actuary fee 10,600 Claims audit 68,800 Insurance 9,400 Risk control 68,289 Legal services 9,984 Other 46,511

Total $840,144

NOTE 7 - UNALLOCATED LOSS ADJUSTMENT EXPENSES: Unallocated claims adjustment expenses are costs related to the settlement and processing of claims but are not traceable to a specific claim. LAWCX’s actuary has estimated the accrual based on past experience. The amount of the estimated liability at June 30, 2018 and 2017 was $1,119,501 and $978,909, respectively. NOTE 8 - JOINT VENTURE: LAWCX participates in the California State Association of Counties Excess Insurance Authority (CSAC-EIA) for excess workers’ compensation coverage. The relationship between LAWCX and CSAC-EIA is such that CSAC-EIA is not a component unit of LAWCX for financial reporting purposes.

CSAC-EIA arranges for and provides excess workers’ compensation coverage for its members. Deductibles vary by member and coverage is provided up to statutory limits. CSAC-EIA is governed by a Board of Directors comprised of one representative from each of the fifty-five County members and seven elected representatives from the other public entities. The Board controls the operations of the joint powers authority, including selection of management and approval of operating budgets, independent of any influence by the member agencies by their representation on the Board. Each member agency pays a premium commensurate with the level of coverage requested and shares surplus and deficits proportionate to their participation in the joint powers authority.

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268




(Continued)

25

Condensed financial information for CSAC-EIA for the year ended June 30, 2017 (the most recent year available) is as follows:

Total assets and deferred outflows of resources $792,900,586 Total liabilities and deferred inflows of resources $652,379,324 Net Position 140,521,262 $792,900,586 Revenues $771,964,936 Expenses 769,116,291 Changes in Net Position $ 2,848,645

NOTE 9 - NET POSITION: In March, 2006, the Board approved increasing its SIR from $2 million to $5 million creating a $3 million excess of $2 million self-insured equity pool to cover all future program years effective July 1, 2006. At June 30, 2018, the net position of the $2 million to $5 million pool was $(3,402,527).

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269

REQUIRED SUPPLEMENTARY INFORMATION

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270


CLAIMS DEVELOPMENT INFORMATION

JUNE 30, 2018

26

The following table illustrates how the Authority’s earned revenue (net of reinsurance) and investment income compare to related costs of loss (net of loss assumed by reinsurers) and other expenses assumed by the Program since inception. The rows of the table are defined as follows:

(1) This line shows the total of each fiscal year’s gross earned premiums and reported investment revenue amounts of premiums ceded and reported premiums (net of reinsurance) and reported investment revenue.

(2) This line shows each fiscal year’s other operating costs of the Programs including

overhead and loss adjustment expenses not allocable to individual claims.

(3) This line shows the Program’s gross incurred losses and allocated loss adjustment expense, losses assumed by reinsurers, and net incurred losses and loss adjustment expense (both paid and accrued) as originally reported at the end of the year in which the event that triggered coverage occurred (called program year).

(4) This section of rows shows the cumulative net amounts paid as of the end of successive

years for each program year.

(5) This line shows the latest reestimated amount of losses assumed by reinsurers for each program year.

(6) This section of rows shows how each program year’s net amount of losses increased or

decreased as of the end of successive years. (This annual reestimation results from new information received on known losses, reevaluation of existing information on known losses, and emergence of new losses not previously known.)

(7) This line compares the latest reestimated net incurred losses amount to the amount

originally established (line 3) and shows whether this latest estimate of losses is greater or less than originally thought. As data for individual accident years mature, the correlation between original estimates and reestimated amounts is commonly used to evaluate the accuracy of net incurred losses currently recognized in less mature program years. The columns of the table show data for successive program years.

DRAFT 10/30/18

271


CLAIMS DEVELOPMENT INFORMATION

JUNE 30, 2018

27

2008/2009 2009/2010 2010/2011 2011/2012 2012/2013 2013/2014 2014/2015 2015/2016 2016/2017 2017/2018 1. Required contribution and

investment revenue:

Earned $12,975,293 $ 8,793,978 $ 9,023,182 $ 8,680,858 $ 9,006,418 $10,116,858 $11,532,098 $12,880,716 $13,162,683 $13,805,597 Ceded (1,548,470) (1,396,320) (1,330,065) (1,383,391) (1,290,162) (1,472,014) (1,659,993) (1,811,561) (2,196,950) (2,242,538) Net earned 11,426,823 7,395,658 7,693,117 7,297,467 7,716,256 8,644,844 9,872,105 11,069,155 10,965,733 11,563,059

2. Unallocated expenses 712,889 778,525 721,567 707,233 712,678 771,280 802,119 800,714 799,709 840,144 3. Estimated claims and expenses,

end of program year:

Incurred 4,400,933 4,213,899 4,417,147 4,547,576 4,376,951 6,493,963 6,421,062 7,619,223 7,296,287 8,585,356 Ceded Net incurred 4,400,933 4,213,899 4,417,147 4,547,576 4,376,951 6,493,963 6,421,062 7,619,223 7,296,287 8,585,356

4. Net paid (cumulative) as of:

End of program year One year later 67,318 363,709 1,937,658 78,769 34,739 Two years later 154,369 568,663 46,554 129,950 3,223,408 221,663 102,303 Three years later 563,481 927,936 86,732 1,399,708 854,271 3,738,119 798,128 Four years later 696,696 2,268,042 959,245 1,557,675 1,809,542 4,295,035 Five years later 882,775 3,821,997 1,118,892 1,806,770 1,177,801 Six years later 1,819,823 4,425,931 1,219,235 1,826,462 Seven years later 2,017,271 5,267,028 1,389,854 Eight years later 2,252,741 6,050,194 Nine years later 2,452,743

5. Reestimated ceded claims and

expenses 6. Reestimated net incurred claims

and expenses: End of program year 4,400,933 4,213,899 4,417,147 4,547,576 4,376,951 6,493,963 6,421,062 7,619,223 7,296,287 8,585,356 One year later 3,959,887 4,323,912 4,420,345 4,216,630 4,535,444 6,890,124 7,020,139 7,205,495 7,581,314 Two years later 3,471,912 4,661,165 4,707,129 4,376,635 4,997,763 5,985,592 6,389,155 7,490,481 Three years later 3,834,034 5,316,156 5,641,814 5,684,059 5,022,969 6,783,861 8,044,666 Four years later 3,668,851 8,039,795 6,280,155 5,575,350 5,882,505 7,093,812 Five years later 3,847,371 9,275,378 5,433,122 5,305,547 6,256,267 Six years later 4,800,220 9,170,564 5,088,037 5,160,419 Seven years later 4,917,320 8,364,885 5,136,693 Eight years later 4,656,851 8,895,110 Nine years later 4,507,387

7. Increase (decrease) in estimated net incurred claims and expenses from end of program year $ 106,454 $ 4,681,211 $ 719,546 $ 612,843 $ 1,879,316 $ 599,849 $ 1,623,604 $ (128,742) $ 285,027 $

DRAFT 10/30/18

272

OTHER INDEPENDENT AUDITOR’S REPORT

DRAFT 10/30/18

273

28

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 Board of Directors Local Agency Workers’ Compensation Excess Joint Powers Authority Sacramento, California

We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of Local Agency Workers’ Compensation Excess Joint Powers Authority (LAWCX) as of and for the year ended June 30, 2018, and the related notes to the financial statements, which collectively comprise LAWCX’s basic financial statements, and have issued our report thereon dated , 2018.

Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered LAWCX’s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of LAWCX’s internal control. Accordingly, we do not express an opinion on the effectiveness of LAWCX’s internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of LAWCX’s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or, significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.

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274

Local Agency Workers’ Compensation Excess Joint Powers Authority

29

Compliance and Other Matters

As part of obtaining reasonable assurance about whether LAWCX’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations and contracts, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.

Purpose of this Report

The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of LAWCX’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering LAWCX’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

Clovis, California , 2018

DRAFT 10/30/18

275

November 6, 2018

To the Governing Board Local Agency Workers’ Compensation Excess Joint Powers Authority Sacramento, California We have audited the financial statements of Local Agency Workers’ Compensation Excess Joint Powers Authority (LAWCX) for the year ended June 30, 2018. Professional standards require that we provide you with information about our responsibilities under generally accepted auditing standards and Government Auditing Standards, as well as certain information related to the planned scope and timing of our audit. We have communicated such information in our letter to you dated October 10, 2018. Professional standards also require that we communicate to you the following information related to our audit. Significant Audit Matters Qualitative Aspects of Accounting Practices Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by LAWCX are described in Note 2 to the financial statements. No new accounting policies were adopted and the application of existing policies was not changed during the year ended June 30, 2018. We noted no transactions entered into by LAWCX during the year for which there is a lack of authoritative guidance or consensus. All significant transactions have been recognized in the financial statements in the proper period. Accounting estimates are an integral part of the financial statements prepared by management and are based on management’s knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected. The most sensitive estimate affecting LAWCX’s financial statements was the provision for unpaid claims. Management’s estimate of the provision for unpaid claims is based on estimates of the ultimate cost of claims that have been reported but not settled and of claims that have been incurred but not reported. We evaluated the key factors and assumptions used to develop the provision for unpaid claims in determining that it is reasonable in relation to the financial statements taken as a whole. The financial statements are neutral, consistent, and clear. Difficulties Encountered in Performing the Audit We encountered no significant difficulties in dealing with management in performing and completing our audit. Corrected and Uncorrected Misstatements Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that are clearly trivial, and communicate them to the appropriate level of management. There were no misstatements detected as a result of audit procedures performed.

276

Local Agency Workers’ Compensation Excess Joint Powers Authority November 6, 2018

Disagreements with Management For purposes of this letter, a disagreement with management is a financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial statements or the auditor’s report. We are pleased to report that no such disagreements arose during the course of our audit. Management Representations We have requested certain representations from management that are included in the management representation letter dated November 6, 2018. Management Consultations with Other Independent Accountants In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a “second opinion” on certain situations. If a consultation involves application of an accounting principle to LAWCX's financial statements or a determination of the type of auditor’s opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants. Other Audit Findings or Issues We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to retention as LAWCX’s auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention. Other Matters We applied certain limited procedures to the management’s discussion and analysis and claims development information, which are required supplementary information (RSI) that supplements the basic financial statements. Our procedures consisted of inquiries of management regarding the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We did not audit the RSI and do not express an opinion or provide any assurance on the RSI. Restriction on Use This information is intended solely for the information and use of the Board of Directors and Management of LAWCX and is not intended to be and should not be used by anyone other than these specified parties. Very truly yours, Sampson, Sampson & Patterson, LLP

277

LAWCX

Board of Directors Meeting November 6, 2018 Subject: Review of Target Equity Policy, Dividends and Assessments, and

Unaudited Financial Statements as of June 30, 2018

Recommendation: Provide direction to staff regarding equity targets, dividends and assessments.

Discussion: A Target Equity Policy (Policy) was adopted by the LAWCX Board of Directors

in November 2006 to monitor the financial condition of LAWCX, and to assist in the decision whether to increase, decrease, or stabilize equity. The Policy relies on three ratios that are designed to measure LAWCX’s equity to industry standard benchmarks. LAWCX’s equity as a whole has not met the benchmarks over the past several fiscal years as the estimates of ultimate loss on prior program years has increased, and several claims have pierced the mid-layer pool covering losses from $2.0 million to $5.0 million. The Board of Directors has taken action to build equity in LAWCX by resuming funding in the mid-layer pool in 2016 and approving a deficit curing and assessment plan that included a $9.5 million assessment to be collected over ten years. These two actions have improved the equity position in both the $250,000 and mid-layer pools, and LAWCX is closer to meeting the three equity ratios.

The attached report sets forth the following items related to the review of net

assets:

1. Equity position in each of the three pools as of June 30, 2018; 2. The approximate confidence level at which each pool is funded; 3. The status of dividends and assessments for each pool; 4. The results of the three ratios contained in LAWCX’s net assets policy for

LAWCX as a whole and the $250,000 pool; and 5. The targets established by each of those benchmarks.

Staff has also prepared the unaudited financial statements as of and for the fiscal year ended June 30, 2018, which reflect the recently completed actuarial estimates of unpaid claims and the deficit curing plan adjustments. The attached financial report presents the following items related to the financial statements:

1) Comparison of assets, liabilities, and net position to the prior year with observations;

2) Comparison of revenue and expense to the board adopted budget and the prior year with observations; and

3) Results of the three key financial ratios.

Staff will review these materials with the Board.

278

Review of Target Equity Policy, Dividends and Assessments, and Unaudited Financial Statements as of June 30, 2018 Page 2 of 2 November 6, 2018

Attachments: Review of Target Equity, Dividends and Assessments Unaudited Financial Report as of June 30, 2018 Prepared by: Jim Elledge, Executive Director

279

Review of Target Equity, Dividends, and Review of Target Equity, Dividends, and Review of Target Equity, Dividends, and Review of Target Equity, Dividends, and

AssessmentsAssessmentsAssessmentsAssessments

Local Agency Workers’ Compensation Excess JPA

Board of Directors Meeting

November 6, 2018

280

Target Equity, Dividends, and Assessments

• LAWCX’s Net Asset Policy states the criteria for dividends and assessments to be based on:

• Equity position of the program as a whole;

• Equity positon of program years to be adjusted; and

• The three key surplus ratios.

• With this information the Board of Directors will determine whether to increase, decrease, or stabilize equity.

2

281


Equity as of 6/30

2018 2017

$150k Pool $566,480 $598,000

$250k Pool 22,395,715 16,700,000

Mid-Layer Pool (3,402,527) (4,000,000)

TOTAL $19,559,370 $13,300,000

3

282


Confidence Level Funding as of 6/30/18

$150k Pool Approximately 80%

$250k Pool Between 70% and 80%

Mid-Layer Pool Deficit

TOTAL Between 70% and 80%

4

283


Status of Dividends and Assessments

Dividends Assessments

$150k Pool Not eligible None.

$250k Pool Not eligible Deficit Curing Plan Implemented.

$9.5 million assessment approved.

Mid-Layer Pool Not eligible None. Funding approximately $1.2 million

annually through budget

5

284


Total All Pools

Ratio of Net Contribution to Surplus

6

2.00

1.15

0.71

0.43 0.30 0.26 0.25 0.27

0.43

0.96

1.27

0.93

0.65

-

0.50

1.00

1.50

2.00

2.50

Max 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

285


Total All Pools

Ratio of Unpaid Claim Liability to Surplus

7

3.00 3.42

2.37

1.57 1.25 1.21

1.52 1.69

3.00

6.50

8.03

5.53

4.22

-

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

9.00

Max 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

286


Total All Pools

Ratio of Surplus to Self-Insured Retention

8

5.00

1.58

2.60

4.01

5.29

5.88 5.51 5.62

3.98

2.13 1.92

2.80

4.12

-

1.00

2.00

3.00

4.00

5.00

6.00

7.00

Min 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

287


Equity Targets

9

7,495,679

12,339,423

19,025,912

25,148,497

27,942,156 26,150,032 26,692,767

18,882,805

10,125,322 9,100,149

13,308,386

19,559,668

-

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

30,000,000

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Net Contribution to Net Positon Target Outstanding Reserves to Net Position Target SIR to Net Position Actual Net Position

288

Page 1 of 3

LOCAL AGENCY WORKERS’

COMPENSATION EXCESS JPA

FINANCIAL REPORT

JUNE 2018 (UNAUDITED)

SECTION ONE: FINANCIAL STATEMENTS

June 2018 June 2017 Change Over Prior Year

ASSETS 102,071,036 86,910,054

15,160,982

LIABILITIES 82,511,366 73,601,209

8,910,161

NET POSITION 19,559,670

13,308,849

6,250,821

� Collection of 2017/18 program year contributions generated growth in assets for the portion retained to cover

2017/18 losses as they come due over time.

� A Board approved deficit curing and assessment plan resulted in an increase to assets of $9.2 million in the form of

an assessment receivable.

� Claim payments were less as compared to the prior year with $6.2 million paid during the fiscal year and $6.9 million

in the prior year. Other outflows were comparable to that of the previous year.

� Investment portfolio market value declined by $1.0 million since June 2017 due to rising interest rates.

� The liability for unpaid claims increased over the prior year due to an increase in the ultimate loss estimates of $2.0

million, which was seen primarily in the $250,000 pool. The liability also increased after a Board approved change to

the interest rate assumption used to discount the liabilities to net present value from 2.75% to 2.50%. The interest

rate change resulted in an increase to the liability of approximately $2.5 million.

� Net Positon increased $6.3 million since June 2017 with a $600,000 increase in the Mid Layer Pool and a $5.7 million

increase in the $150,000 and $250,000 pools.

June 2018 Budget June 2017

CONTRIBUTIONS 15,342,732

15,342,732

14,333,341

ASSESSMENT 9,259,273 -- --

INVESTMENT INCOME 139,847 --

137,071

CLAIM EXPENSE 15,110,568 7,901,936

7,444,156

EXCESS INSURANCE 2,540,320

2,242,472

2,018,309

OPERATING EXPENSE 840,143

860,160

799,710

NET INCOME 6,250,821 4,338,164

4,208,237

� Earned contributions are equal to budget and higher than the prior year due to higher exposures reported by

members, increased confidence level funding for the mid-layer, and higher cost of excess insurance.

� The assessment contribution was approved by the Board in June 2018 and therefore recognized as revenue at that

time.

289

Page 2 of 3

� The investment portfolio produced income of approximately $1.2 million which was offset by a $1.0 million market

value adjustment.

� Claims expense increased as compared to budget due to increased estimates of ultimate loss and the reduction to

the interest rate assumption discussed above.

� Excess insurance expense is higher than budget and the prior year due to payroll audit adjustments from CSAC-EIA.

� Operating expenses are on budget and slightly more as compared to last year due to contractual increases and

members utilized the Risk Control Reimbursement Program.

SECTION TWO: RATIO ANALYSIS

RATIO A: Net Contribution to Net Position

Net

Contribution* Net Position Ratio Target Result

June 2018 12,802,412 / 19,559,670 0.65:1 <2:1

2.00

1.15

0.71

0.43

0.30 0.26 0.25 0.27

0.43

0.96

1.27

0.93

0.65

-

0.50

1.00

1.50

2.00

2.50

Max 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

290

Page 3 of 3

SECTION TWO: RATIO ANALYSIS, CONTINUED

RATIO B: Unpaid Claims to Net Position

Claim

Liability* Net Position Ratio Target Result

June 2018 82,481,584 / 19,559,670 4.22:1 <3:1

RATIO C: Net Position to Self-Insured Retention

Net Position SIR Ratio Target Result

June 2018 19,559,670 / 4,750,000 4.12 >5

3.00 3.42

2.37

1.57 1.25 1.21

1.52 1.69

3.00

6.50

8.03

5.53

4.22

-

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

9.00

Max 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

5.00

1.58

2.60

4.01

5.29

5.88

5.51 5.62

3.98

2.13 1.92

2.80

4.12

-

1.00

2.00

3.00

4.00

5.00

6.00

7.00

Min 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

291

Local Agency Workers' Compensation Excess JPAAs of June 30, 2018

(Unaudited)

Statement of Net Position

150k 250k $2M - $5M CombinedPool Pool Pool Total

AssetsCash and Cash Equivalents $80,508 $80,508Investments 1,657,284 82,810,286 7,652,439 92,120,011Market Valuation (1,290,650) (1,290,650)Accounts Receivable 1,260,884 1,260,884Assessment Receivable 9,202,772 9,202,772Interest Receivable 518,803 518,803Prepaid Expenses 178,708 178,708

Total Assets 1,657,284 92,761,311 7,652,439 102,071,036

LiabilitiesAccounts Payable 29,782 29,782Reserve for Claims 692,257 31,025,621 4,743,508 36,461,386Reserve for IBNR & ULAE 398,547 39,310,193 6,311,458 46,020,198

Total Liabilities 1,090,804 70,365,596 11,054,966 82,511,366

Net Position 566,480 22,395,715 (3,402,527) 19,559,670Total Liabilities and Net Position 1,657,284 92,761,311 7,652,439 102,071,036

Statement of Revenues, Expenses & Changes in Net Position

RevenuesDeposit Premiums 13,807,726 1,535,006 15,342,732Assessment Contributions 9,259,273 9,259,273Interest Income 2,914 126,004 10,929 139,847Total Revenues 2,914 23,193,003 1,545,935 24,741,852

ExpensesClaims Paid 116,131 5,442,692 654,115 6,212,939Inc/(Dec) in Reserves & IBNR (81,873) 8,662,463 317,039 8,897,629Excess Insurance 2,540,320 2,540,320General and Admin Expense 840,143 840,143Total Expenses 34,258 17,485,618 971,154 18,491,031

Net Income/(Loss) (31,344) 5,707,385 574,781 6,250,821

292


(Unaudited)


2013/14 2014/15 2015/16 2016/17 2017/18 $2M - $5M Combined250k Pool 250k Pool 250k Pool 250k Pool 250k Pool Pool Total

AssetsCash and Cash Equivalents $80,508 $80,508Investments 3,578,534 8,255,742 10,166,138 10,166,523 10,004,445 7,652,439 92,120,011Market Valuation (1,290,650) (1,290,650)Accounts Receivable 1,260,884 1,260,884Assessment Receivable 9,202,772Interest Receivable 518,803 518,803Prepaid Expenses 178,708 178,708

Total Assets 3,578,534 8,255,742 10,166,138 10,166,523 10,752,698 7,652,439 102,071,036

LiabilitiesAccounts Payable 29,782 29,782Reserve for Claims 1,288,639 2,601,426 1,206,392 403,780 439,081 4,743,508 36,461,386Reserve for IBNR & ULAE 1,510,138 4,645,112 6,181,786 7,177,534 8,146,275 6,311,458 46,020,198

Total Liabilities 2,798,777 7,246,538 7,388,178 7,581,314 8,615,138 11,054,966 82,511,366

Net Position 779,757 1,009,204 2,777,960 2,585,209 2,137,560 (3,402,527) 19,559,670Total Liabilities and Net Position 3,578,534 8,255,742 10,166,138 10,166,523 10,752,698 7,652,439 102,071,036


RevenuesDeposit Premiums 13,807,726 1,535,006 15,342,732Assessment Contributions 9,259,273Interest Income 6,584 14,067 17,259 18,342 (2,129) 10,929 139,847Total Revenues 6,584 14,067 17,259 18,342 13,805,597 1,545,935 24,741,852

ExpensesClaims Paid 556,916 576,465 67,564 654,115 6,212,939Inc/(Dec) in Reserves & IBNR (246,965) 1,079,046 217,422 285,027 8,585,356 317,039 8,897,629Excess Insurance 119,141 178,641 2,242,538 2,540,320General and Admin Expense 840,143 840,143Total Expenses 309,951 1,655,511 404,127 463,668 11,668,037 971,154 18,491,031

Net Income/(Loss) (303,367) (1,641,444) (386,868) (445,326) 2,137,560 574,781 6,250,821

293


(Unaudited)


2008/09 2009/10 2010/11 2011/12 2012/13150k Pool 250k Pool 150k Pool 250k Pool 150k Pool 250k Pool 150k Pool 250k Pool 150k Pool 250k Pool

AssetsInvestments 94,446 5,547,006 (41,300) 610,240 102,478 5,188,891 9,483 4,641,378 17,339 5,801,604

Total Assets 94,446 5,547,006 (41,300) 610,240 102,478 5,188,891 9,483 4,641,378 17,339 5,801,604

LiabilitiesReserve for Claims 44,096 735,165 90,064 1,181,918 93,819 1,891,479 858,763 106,598 2,247,235Reserve for IBNR & ULAE 20,024 1,255,359 8,858 1,564,076 19,151 1,742,390 53,945 2,421,249 39,178 2,685,455

Total Liabilities 64,120 1,990,524 98,922 2,745,994 112,970 3,633,869 53,945 3,280,012 145,776 4,932,690

Net Position 30,326 3,556,482 (140,222) (2,135,754) (10,492) 1,555,022 (44,462) 1,361,366 (128,437) 868,914Total Liabilities and Net Position 94,446 5,547,006 (41,300) 610,240 102,478 5,188,891 9,483 4,641,378 17,339 5,801,604


RevenuesInterest Income 264 9,338 (69) 1,808 181 8,868 16 7,777 29 9,602Total Revenues 264 9,338 (69) 1,808 181 8,868 16 7,777 29 9,602

ExpensesClaims Paid 62,185 137,817 783,166 23,257 147,362 19,692 2,648 85,611Inc/(Dec) in Reserves & IBNR (56,187) (293,279) (2,201) (250,740) (21,001) (100,962) (7,994) (156,826) 67,435 218,068Total Expenses 5,998 (155,462) (2,201) 532,426 2,256 46,400 (7,994) (137,134) 70,083 303,679

Net Income/(Loss) (5,734) 164,800 2,132 (530,618) (2,075) (37,532) 8,010 144,911 (70,054) (294,077)

294


(Unaudited)



AssetsInvestments 153,023 1,016,619 181,661 4,342,796 261,307 3,155,567 50,446 4,510,033 154,752 5,375,118Assessment Receivable 2,463,242

Total Assets 153,023 3,479,861 181,661 4,342,796 261,307 3,155,567 50,446 4,510,033 154,752 5,375,118

LiabilitiesReserve for Claims 53,253 2,860,781 109,844 2,717,746 1,611,464 3,092,244 140,823 2,711,874Reserve for IBNR & ULAE 23,544 111,839 10,892 292,986 84,483 331,479 31,664 292,864 36,725 579,501

Total Liabilities 76,797 2,972,620 120,736 3,010,732 84,483 1,942,943 31,664 3,385,108 177,548 3,291,375

Net Position 76,226 507,241 60,925 1,332,064 176,824 1,212,624 18,782 1,124,925 (22,796) 2,083,743Total Liabilities and Net Position 153,023 3,479,861 181,661 4,342,796 261,307 3,155,567 50,446 4,510,033 154,752 5,375,118


RevenuesAssessment Contributions 2,491,624Surplus Transfer 548,010 (543,049) (2,149,174) (2,196,217) (1,191,983)Interest Income 257 2,148 307 8,334 437 9,132 85 11,401 277 11,171Total Revenues 257 3,041,782 307 (534,715) 437 (2,140,042) 85 (2,184,816) 277 (1,180,812)

ExpensesClaims Paid 1,469 1,399,798 7,503 194,386 203,030 243,642 15,310 147,067Inc/(Dec) in Reserves & IBNR (19,835) (509,420) (8,249) (110,383) (2,654) (117,363) 17,821 528,127 39,421 (214,398)Total Expenses (18,366) 890,378 (746) 84,003 (2,654) 85,667 17,821 771,769 54,731 (67,331)

Net Income/(Loss) 18,623 2,151,404 1,053 (618,718) 3,091 (2,225,709) (17,736) (2,956,585) (54,454) (1,113,481)

295


(Unaudited)



AssetsInvestments 488,638 726,774 114,286 218,170 123,276 62,865 (69,451) (999,465) 16,902 (1,520,800)Assessment Receivable 127,500 185,520 324,425 2,356,661 3,724,214

Total Assets 488,638 854,274 114,286 403,690 123,276 387,290 (69,451) 1,357,196 16,902 2,203,414

LiabilitiesReserve for Claims 744,489 218,475 9,992 204,871 43,768 827,147 1,544,115Reserve for IBNR & ULAE 1,627 35,813 2,245 22,889 2,222 31,636 18,310 51,068 45,679 113,632

Total Liabilities 1,627 780,302 2,245 241,364 12,214 236,507 62,078 878,215 45,679 1,657,747

Net Position 487,011 73,972 112,041 162,326 111,062 150,783 (131,529) 478,981 (28,777) 545,667Total Liabilities and Net Position 488,638 854,274 114,286 403,690 123,276 387,290 (69,451) 1,357,196 16,902 2,203,414


RevenuesAssessment Contributions 127,500 185,520 324,425 2,356,661 3,752,333Surplus Transfer 981,820 824,029 1,055,681 1,587,312 796,640Interest Income 818 (115) 191 (936) 206 (1,622) (112) (4,262) 27 (3,856)Total Revenues 818 1,109,205 191 1,008,613 206 1,378,484 (112) 3,939,711 27 4,545,117

ExpensesClaims Paid 1,291 202,004 56,673 17,267 2,469 47,209 72,825Inc/(Dec) in Reserves & IBNR (173) 34,464 (60,877) (86,789) (6,638) (55,493) (19,278) (157,854) (1,463) (20,328)Total Expenses 1,118 236,468 (60,877) (30,116) (6,638) (38,226) (16,809) (110,645) (1,463) 52,497

Net Income/(Loss) (300) 872,737 61,068 1,038,729 6,844 1,416,710 16,697 4,050,356 1,490 4,492,620

296


(Unaudited)


1992/93 1993/94 1994/95 1995/96 1996/97 1997/98

AssetsInvestments 129,555 50,521 515,521 625,384 506,532 134,595Assessment Receivable 10,637 10,573

Total Assets 129,555 50,521 515,521 636,021 506,532 145,168

LiabilitiesReserve for Claims 163,117 29,262 382,266 394,506 384,725 284,661Reserve for IBNR & ULAE 6,177 5,999 22,479 20,926 33,640 27,891

Total Liabilities 169,294 35,261 404,745 415,432 418,365 312,552

Net Position (39,739) 15,260 110,776 220,589 88,167 (167,384)Total Liabilities and Net Position 129,555 50,521 515,521 636,021 506,532 145,168


RevenuesAssessment Contributions 10,637 10,573Surplus Transfer (341,314) (393,730) 518,359 430,774 (58,969) 131,811Interest Income 897 749 34 358 958 97Total Revenues (340,417) (392,981) 518,393 441,769 (58,011) 142,481

ExpensesClaims Paid 103,811 4,506 32,641 42,032 20,818 280,390Inc/(Dec) in Reserves & IBNR 5,697 8,801 19,013 (61,684) 50,986 12,940Total Expenses 109,508 13,307 51,654 (19,652) 71,804 293,330

Net Income/(Loss) (449,925) (406,288) 466,739 461,421 (129,815) (150,849)

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Local Agency Workers' Compensation Excess JPA~ General & Administrative Expenses - Actual vs. Budget ~

For the Twelve Months Ended June 30, 2018

Annual Amount %Actual Budget Unused Used

Indirect Expenses:Program Management 605,605 604,169 (1,436) 100.24%Board Meeting 11,955 16,000 4,045 74.72%Executive Committee Meetings 3,225 4,500 1,275 71.67%CAJPA Membership 450 450 0 100.00%Financial Audit 9,000 9,000 0 100.00%Claims Audit 68,800 68,800 0 100.00%Actuarial Study 10,600 12,600 2,000 84.13%Special Studies 0 10,000 10,000 0.00%Website and Branding 7,500 4,000 (3,500) 187.50%Legal Services 9,984 10,000 16 99.84%Accreditation 1,583 1,750 167 90.46%Insurance - Crime Policy 1,200 1,600 400 75.00%Insurance - Other 8,200 9,000 800 91.11%Risk Control Services 68,289 68,289 0 100.00%Risk Control Reimbursement Program 32,379 40,000 7,621 80.95%Contingency 1,372 0 (1,372) 0.00%Total 840,142 860,158 20,016 97.67%

298

LAWCX

Board of Directors Meeting November 6, 2018 Subject: Compromise and Release Settlements Discussion

Recommendation: Engage Mike Harrington, Bickmore, to perform an actuarial study of settlements and benefits of Compromise and Releases and extend authority to the President to sign a Letter of Engagement.

Discussion: LAWCX’s goals include an item to “Develop Comprehensive Finance Plan” that included stress test for modeling of how claim development impacts funding levels, cash flow needs, rates, and to “Raise Awareness of Claims Trends.” While staff continues to inquire about settlements via Compromise and Release to resolve all issues in lieu of settlement via Stipulated Awards, 67% of the claims currently being monitored by the Claims Manager remain open to monitor future medical care. As there are claims that remain open to monitor future medical care from LAWCX’s inception in 1992/93 to date, staff continues to address the issue at each Board meeting.

One of the actions in pursuit of the goals would be to hire an actuary to conduct a special study to review all claims and types of settlements to determine the benefits of settling claims via Compromise and Release. Staff contacted LAWCX’s actuary, Mike Harrington, Bickmore, regarding a special study to address this issue. Mr. Harrington has provided a quote of $13,500 to perform the studies. If the Board approves engaging Mr. Harrington, the cost of the studies will be included in this year’s annual budget for the 2018/19 program year. The special study would be presented to the Executive Committee in April 2019 and to the Board of Directors in June 2019.

Attachments: None

Prepared by: Tammy Vitali, Claims Manager

299

LAWCX

Board of Directors Meeting November 6, 2018 Subject: Update on Assembly Bill 1749 – Off-Duty Peace Officer

Recommendation: Review and file.

Discussion: This bill was in response to the October 2017 shooting in Las Vegas, Nevada. Several off-duty Police Officers in attendance at the concert have filed Workers’ Compensation claims. Many, if not all, of these claims have been denied and are currently in litigation.

Labor Code (LC) 3600.2(a) previously established that whenever any peace officer by reason of engaging in the apprehension or attempted apprehension of law violators or suspected law violators, or protection or preservation of life or property, or the preservation of the peace anywhere in this state, including the local jurisdiction in which he or she is employed, but is not at the time acting under the immediate direction of his or her employer, the peace officer or his or her dependents, as the case may be, shall be accorded by his or her employer all of the same benefits, including the benefits that the peace officer or his or her dependents would have received had that peace officer been acting under the immediate direction of his or her employer. This bill was approved by Governor Brown in September 2018 and amended the LC to state that an employer, at its discretion or in accordance with written policies adopted by resolution of the employer’s governing body, is not precluded from accepting liability for compensation for an injury sustained by a peace officer by reason of engaging in the apprehension or attempted apprehension of law violators or suspected law violators, or protection or preservation of life or property, or the preservation of the peace, outside the state of California, but who was not at the time acting under the immediate direction of his or her employer, including any claims for injuries sustained by peace officers during the October 1, 2017, mass shooting in Las Vegas, Nevada, if the employer determines providing compensation serves its public purposes. The bill, for purposes of worker’s compensation claims filed for injuries sustained during the October 1, 2017, mass shooting in Las Vegas, Nevada, would deem the date of injury as the operative date of these provisions. The bill would provide that acceptance of liability shall not affect the determination of whether or not the peace officer acted within the scope of his or her employment for any other purpose. Staff contacted the excess carrier, California State Association of Counties Excess Insurance Authority (CSAC EIA), to determine if coverage would be provided if a member adopted a resolution addressed in this bill. CSAC EIA advised they have not yet taken an official position, but would be addressing the issue with their Underwriting Committee in December 2018. Staff will discuss this issue with the Executive Committee in February 2019. It is recommended that members postpone

300

Update on Assembly Bill 1749 – Off-Duty Peace Officers Page 2 of 2 November 6, 2018

adopting a resolution to provide coverage until LAWCX and CSAC EIA have taken an official position on this issue.

Attachments: AB 1749 ~ Approved on September 23, 2018 Prepared by: Tammy Vitali, Claims Manager

301

10/29/2018 Bill Text - AB-1749 Workers’ compensation: off-duty peace officer.

https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201720180AB1749 1/2

SHARE THIS: Date Published: 09/24/2018 09:00 PM

AB-1749 Workers’ compensation: off-duty peace officer. (2017-2018)

Assembly Bill No. 1749

CHAPTER 707

An act to amend Section 3600.2 of the Labor Code, relating to workers’ compensation.

[ Approved by Governor September 23, 2018. Filed with Secretary of State September 23, 2018. ]

LEGISLATIVE COUNSEL'S DIGEST AB 1749, Daly. Workers’ compensation: off-duty peace officer.

Existing law establishes a workers’ compensation system, administered by the Administrative Director of theDivision of Workers’ Compensation, to compensate an employee for injuries sustained in the course of his or heremployment. Existing law requires workers’ compensation proceedings to commence within one year of specifieddates and circumstances, including, among others, the date of injury.

Existing law provides that whenever any peace officer, as defined, is injured, dies, or is disabled from performinghis or her duties as a peace officer by reason of engaging in the apprehension or attempted apprehension of lawviolators or suspected law violators, or protection or preservation of life or property, or the preservation of thepeace anywhere in this state, including the local jurisdiction in which he or she is employed, but is not at thetime acting under the immediate direction of his or her employer, the peace officer or his or her dependents, asthe case may be, shall be accorded by his or her employer all of the same benefits, including the benefits thatthe peace officer or his or her dependents would have received had that peace officer been acting under theimmediate direction of his or her employer. Existing law provides that any injury, disability, or death incurredunder the circumstances described in this section shall be deemed to have arisen out of and been sustained inthe course of employment for purposes of workers’ compensation and all other benefits.

This bill would state that an employer, at its discretion or in accordance with specified policies, is not precludedfrom accepting liability for compensation for an injury sustained by a peace officer by reason of engaging in theapprehension or attempted apprehension of law violators or suspected law violators, or protection orpreservation of life or property, or the preservation of the peace, outside the state of California, but who was notat the time acting under the immediate direction of his or her employer, including any claims for injuriessustained by peace officers during the October 1, 2017, mass shooting in Las Vegas, Nevada, if the employerdetermines providing compensation serves its public purposes. The bill, for purposes of worker’s compensationclaims filed for injuries sustained during the October 1, 2017, mass shooting in Las Vegas, Nevada, would deemthe date of injury as the operative date of these provisions. The bill would provide that acceptance of liabilityshall not affect the determination of whether or not the peace officer acted within the scope of his or heremployment for any other purpose.

Vote: majority Appropriation: no Fiscal Committee: no Local Program: no

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10/29/2018 Bill Text - AB-1749 Workers’ compensation: off-duty peace officer.

https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201720180AB1749 2/2

SECTION 1. Section 3600.2 of the Labor Code is amended to read:

3600.2. (a) Whenever any peace officer, as defined in Section 50920 of the Government Code, is injured, dies, oris disabled from performing his or her duties as a peace officer by reason of engaging in the apprehension orattempted apprehension of law violators or suspected law violators, or protection or preservation of life orproperty, or the preservation of the peace, anywhere in this state, including the local jurisdiction in which he orshe is employed, but is not at the time acting under the immediate direction of his or her employer, the peaceofficer or his or her dependents, as the case may be, shall be accorded by the peace officer’s employer all of thesame benefits, including the benefits of this division, that the peace officer or his or her dependents would havereceived had that peace officer been acting under the immediate direction of his or her employer. Any injury,disability, or death incurred under the circumstances described in this section shall be deemed to have arisen outof and been sustained in the course of employment for purposes of workers’ compensation and all other benefits.

(b) Nothing in this section shall be deemed to:

(1) Require the extension of any benefits to a peace officer who at the time of his or her injury, death, ordisability is acting for compensation from one other than the city, county, city and county, judicial district, ortown of his or her primary employment.

(2) Require the extension of any benefits to a peace officer employed by a city, county, city and county, judicialdistrict, or town which by charter, ordinance, or departmental regulation, whether now in force or hereafterenacted or promulgated, expressly prohibits the activity giving rise to the injury, disability, or death.

(3) Enlarge or extend the authority of any peace officer to make an arrest; provided, however, that illegality ofthe arrest shall not affect the extension of benefits by reason of this act if the peace officer reasonably believedthat the arrest was not illegal.

(4) Preclude an employer, at its discretion or in accordance with written policies adopted by resolution of theemployer’s governing body, from accepting liability for compensation under this division for an injury sustainedby a peace officer, as defined in Section 50920 of the Government Code, by reason of engaging in theapprehension or attempted apprehension of law violators or suspected law violators, or protection orpreservation of life or property, or the preservation of the peace, outside the state of California, but who was notat the time acting under the immediate direction of his or her employer, including any claims for injuriessustained by peace officers during the October 1, 2017, mass shooting in Las Vegas, Nevada, if the employerdetermines that providing compensation serves the public purposes of the employer. For claims filed pursuant tothis paragraph by peace officers for injuries sustained during the October 1, 2017, mass shooting in Las Vegas,Nevada, the date of injury for purposes of subdivision (a) of Section 5405 shall be deemed the operative date ofthe act adding this paragraph. Acceptance of liability under this subdivision shall not affect the determination ofwhether or not the peace officer acted within the scope of his or her employment for any other purpose.

303

LAWCX

Board of Directors Meeting November 6, 2018 Subject: Workers’ Compensation Claims Auditing Services

Recommendation: Review and approve the Agreement for Workers’ Compensation Claims Audit Services with Farley Consulting Services (FCS) effective July 1, 2019, and authorize the Executive Director to execute the contract.

Discussion: Workers’ compensations claims audits are conducted of the members’ claims every other year. The general objectives of the workers’ compensation claims audits are:

A. To assess the efficiency and effectiveness of the present claims

administrators; B. To review a sample of open and closed claim files with a total incurred

amount in excess of $75,000 for members of the $150,000 pool, and a total incurred amount of $150,000 for all other members;

C. To evaluate the experience, competence, and staffing levels of such providers;

D. To obtain suggestions for improvement in claims handling, reserving, and reporting; and

E. To ensure that all provisions of the members’ contracts for services are met, including compliance with established performance standards approved by the LAWCX Board of Directors in effect at the time of each claims audit.

The initial contract with FCS began on July 1, 2011, following a Request for Proposal (RFP) for claims auditing services that was issued in January 2011. On April 2, 2015, an RFP was distributed to eight firms. The only proposal received was from FCS. Past President Ellerbrock contacted the firms who did not respond and was advised that responses were not provided mainly due to the time commitment required to meet the contract requirements. Staff was directed at that time to negotiate a contract with FCS. The current Agreement for Workers’ Compensation Claims Audit Services with FCS expires on June 30, 2019. The Executive Committee directed staff at the October 2018 meeting to negotiate a continued contract with FCS. Staff contacted FCS to negotiate terms of a contract through June 30, 2021. FCS advised staff there would be no fee increase since the services would remain the same. The existing contract with LAWCX and FCS has been updated with the applicable dates for a two-year contract.

Attachments: Draft Agreement for Workers’ Compensation Claims Audit Services with FCS

effective July 1, 2019 Prepared by: Tammy Vitali, Claims Manager

304

AGREEMENT FOR WORKERS’ COMPENSATION CLAIMS AUDIT SERVICES

This Agreement is hereby made and entered into by and between the LOCAL AGENCY WORKERS’ COMPENSATION EXCESS JOINT POWERS AUTHORITY (hereinafter LAWCX) and the Independent Contractor, FARLEY CONSULTING SERVICES (hereinafter FCS), set forth in this Agreement according to the following terms, conditions, and provisions contained in this Agreement. Whereas, LAWCX desires to obtain services to audit the claims administration of its excess workers’ compensation program to determine the efficiency, effectiveness, and consistency of claims adjusting services and the accuracy of loss runs; and Whereas, the Independent Contractor, FCS, has the necessary professional skills, expertise, and experience to provide said services and is agreeable to performing such services to LAWCX; Therefore, the parties hereunder agree as follows: 1. IDENTITY OF THE CLIENT The client is identified as follows: Local Agency Workers’ Compensation Excess Joint Powers Authority (LAWCX) Type of Authority: [ ] Municipal Corporation [ ] Special District [X] Joint Powers Authority 1750 Creekside Oaks Drive, Suite 200 Sacramento, CA 95833 Telephone (800) 541-4591 Fax (916) 244-1199 2. IDENTITY OF INDEPENDENT CONTRACTOR The Independent Contractor is identified as follows: Name: Farley Consulting Services (FCS) Type of Entity: [ ] Sole Proprietorship [ ] Partnership [X] Corporation P.O. Box 59282311 Birdie Street Oceanside, CA 920562 Telephone: (760) 435-9272533-3439 Employer Identification Number: 27-2141664

305

LAWCX Workers’ Compensation Claims Audit Contract Page 2 of 9 As of July 1, 20172019

3. INDEPENDENT CONTRACTOR It is understood that FCS, in the performance of the work and services agreed to be performed by FCS, shall act as and be an independent contractor and not an agent, joint venturer, partner, or employee of LAWCX. 4. TERM OF AGREEMENT The term of this Agreement shall be from July 1, 20172019, through June 30, 20192021, subject to Section 17 of this Agreement, entitled “Termination.” 5. AUDIT PURPOSE The general objectives of the workers’ compensation claims audits are:

A. To assess the efficiency and effectiveness of the present claims administrators; B. To review a sample of open and closed claim files with a total incurred amount in excess

of $75,000 for members of the $150,000 pool and a total incurred amount of $150,000 for all other members;

C. To evaluate the experience, competence, and staffing levels of such providers; D. To obtain suggestions for improvement in claims handling, reserving, and reporting; and E. To ensure that all provisions of the members’ contracts for services are met, including

compliance with established performance standards approved by the LAWCX Board of Directors in effect at the time of each claims audit.

6. SCOPE OF THE AUDIT LAWCX desires that FCS perform, and FCS agrees to perform, services specified in detail in this Agreement. Per LAWCX’s Joint Exercise of Powers Agreement, LAWCX shall have an audit of its claims performed at least once every two (2) years. All audits shall be conducted from July 1, 20172019, to June 30, 20192021. Each audit shall include a review of a portion of open and closed indemnity claims having a total incurred loss in excess of $75,000 for members of the $150,000 pool and a total incurred loss in excess of $150,000 for all other members. The total incurred amount should be valued no more than sixty (60) calendar days prior to each audit. LAWCX or its Administrator reserves the right to select additional claims to be audited prior to the fieldwork being completed at the third party administrators (TPA). The audit shall include a comparison of the claims management activities against a standard defined in the report that will reduce subjective measurements as much as possible. The report shall thoroughly address the purposes of the report and areas outlined above. Each claims audit report must address the following areas:

A. Timeliness, adequacy, and accuracy of the claim reserves as facts of a claim change; B. Timeliness and accuracy of payments to injured workers;

306


C. Effectiveness of medical control cost containment efforts; D. Direction and control of claims; E. Timeliness of initial reporting and updated reports to the excess carrier(s); F. Litigation direction and management; G. Documented timely, adequate, and comprehensive supervisory reviews; H. Adequacy of file organization and documentation including a plan of action; I. Examiner and supervisor caseloads; J. Chronological, comprehensive, and accurate computerized file note documentation; K. Effectiveness and thoroughness of the claims investigation techniques, including the

appropriateness of the use of outside investigative services; L. Evaluation of timely recognition and preservation of subrogation rights; M. Evaluation of resolution and closure of claims; N. General performance and competence of the administration services being provided; O. Areas of deficiencies in claims handling procedures and recommendation(s) to improve the

process; P. Efforts and coordination of “early return to work”; Q. Reconciliation of indemnity benefits at time of request for settlement authority and

closure; R. Process and timeliness of adherence to meet critical deadlines (i.e., utilization review

process, payment of claims, denial of claims, subrogation notices, eligibility for vocational rehabilitation services, etc.);

S. Vocational rehabilitation direction and management; T. Effective use of diary system; U. Evaluation of compliance with the California State Audit Unit timelines for furnishing of

DWC Form 1 and filing of form 5020; and V. Comprehensive and timely 3-point contact per contract requirements.

In addition to members’ audits, an audit shall be conducted to ensure the LAWCX Claims Manager timely and accurately approves payments for claims above the members’ retained limit in accordance with the memorandum of coverage, analyzes individual claims to minimize claims costs to LAWCX, and provides initial reporting and updated reports to LAWCX’s excess carriers. This is to be accomplished with a site visit at Bickmore Risk Services in Sacramento or via online review at the end of each applicable two-year period referenced above. 7. THE AUDIT REPORT(S) All reports will be due to LAWCX’s Administrator and the member within thirty (30) calendar days of the completion of all on-site auditing. One (1) electronic copy of the comprehensive report shall be delivered to the offices of LAWCX’s Administrator by that date. One (1) unbound copy and one (1)An electronic copy of the audit report shall also be provided to each member and their TPA by that date. An electronic copy of the report will also be provided to the TPA when the electronic copy is provided to the member. If members are handled by multiple TPAs, a separate report will be produced for each TPA. The report shall include an Executive Summary in addition to the Claims Audit File Review. The Executive Summary is to include the TPA’s organizational chart, overall assessment, findings,

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recommendations, and a weighted overall audit scoring summary. The weighted scoring summary should be emphasized on sections 1, 2, 4, 10, 18, 20, and 22 listed above in the Scope of the Audit. An individual report will be created for each member documenting the particular member’s specific findings. Withdrawn members that still have active claims occurring during the period of LAWCX membership shall receive a condensed report presenting findings in letter format. Current members will receive fully captioned reports. It should be noted the audit reports may become public record and may be utilized by LAWCX members for their own use, including the underlying pooled or self-insured layer. 8. APPEARANCES FCS may be required to attend LAWCX’s regularly scheduled Board of Directors meeting in June 2018 2020 and June 2019 2021 to report on the general state of the audits since the last meeting. FCS shall provide a written report to LAWCX’s Administrator at least four (4) weeks prior to each June Board meeting. 9. COMPENSATION LAWCX shall pay FCS according to the rate and compensation schedule set forth as follows:

Fee for Fiscal Year 20197/202018 $68,800 Fee for Fiscal Year 202018/202119 $68,800

Installments of $17,200 will be billed by FCS on July 1, 20197; October 1, 20197; January 1, 202018; April 1, 202018; July 1, 202018; October 1, 202018; January 1, 202119; and April 30, 202119. FCS shall have the right at any time during the contract to request an increase in fees in the contract price from LAWCX if the number of audits increases due to an increase of the number of LAWCX members.

It is hereby mutually understood by LAWCX and FCS that this Agreement and the fee generated for service stated above is all-inclusive. There will be no additional payments made to FCS for additional services, supplies, etc., other than as set forth in this Agreement. 10. METHOD OF PAYMENT FCS shall furnish to LAWCX an invoice for which payment is requested. Each invoice shall itemize work to be performed or work completed. All such invoices are due and payable upon receipt. FCS shall allow LAWCX up to forty-five (45) calendar days to process payments. 11. REIMBURSEMENT OF EXPENSES LAWCX shall not be liable to FCS for any expenses paid or incurred by FCS in performing services for LAWCX unless otherwise previously agreed upon in writing.

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12. LABOR, EQUIPMENT, TOOLS, MATERIALS, AND SUPPLIES FCS shall supply, at FCS sole expense, all labor, equipment, tools, materials, and/or supplies to accomplish the scope of work to be performed by FCS under this Agreement. 13. FEDERAL, STATE, AND LOCAL TAXES FCS is responsible for paying all required state, local, and federal taxes. As FCS is not an employee of LAWCX, LAWCX will not make, nor obtain on FCS’ behalf, nor will it withhold from FCS’ payment, any required state and/or federal income taxes. This includes but is not limited to: FICA or Social Security; State or federal unemployment insurance contributions or disability insurance contributions; or Any other federal, state, or local taxes FCS is required to pay by law. 14. INDEMNIFICATION FCS agrees to defend any demand, claim, or legal action commenced against LAWCX or its member entities regarding a matter or incident allegedly caused directly or indirectly by wrongful or negligent acts or omissions of FCS officers, employees, agents, or others engaged by FCS; and indemnify LAWCX and its member entities against any liability, loss, cost, or damage, including attorneys fees resulting therefrom. LAWCX agrees to defend any demand, claim, or legal action commenced against FCS regarding a matter or incident allegedly caused directly or indirectly by the wrongful or negligent acts of its officers, employees, agents, or others engaged by LAWCX or its member entities; and indemnify FCS against any liability, loss, cost, or damages including attorney’s fees resulting therefrom. 15. INSURANCE REQUIREMENTS FCS agrees to have and maintain the policies set forth as follows: Employers’ Liability $500,000 per occurrence Comprehensive General Liability & Property Damage $1,000,000 per occurrence Professional Liability $1,000,000 per occurrence All policies, endorsements, certificates, and/or binders shall be subject to approval by LAWCX’s Administrator as to form and content. These requirements are subject to amendment or waiver if so approved in writing by LAWCX’s Administrator. FCS agrees to provide LAWCX with a copy of said policies, certificates, and/or endorsements before work commences under this Agreement. 16. NON-DISCRIMINATION FCS shall not discriminate, in any way, against any person on the basis of age, sex, race, color, creed, or national origin in connection with or related to the performance of this Agreement.

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17. TERMINATION

A. LAWCX shall have the right to terminate this Agreement, without cause, by giving not less than ninety (90) calendar days written notice of termination.

B. If FCS fails to perform any of its obligations under this Agreement, in addition to all other

obligations/remedies provided by law, LAWCX may terminate this Agreement immediately upon written notice.

C. In the event of termination, LAWCX shall pay FCS for services performed and authorized

reimbursable expenses incurred to the date of termination. The parties will attempt to mutually agree on the amount of payment and the amount of work completed at the time of termination. In the absence of agreement, the determination will be made by LAWCX. Said amount will be paid within a reasonable time to FCS.

D. This Agreement shall terminate automatically on the occurrence of the bankruptcy or

insolvency of either party. 18. NON-WAIVER The failure of either party to exercise any of its rights under this Agreement for any breach or violation thereof shall not be deemed to be a waiver of such rights or a waiver of any other term or condition contained herein, or a waiver of any subsequent breach of the same or any other term or condition. The acceptance by LAWCX of the performance of any work or services by FCS shall not be deemed to be a waiver of any term or condition of this Agreement. 19. NO AUTHORITY TO BIND LAWCX FCS has no authority to enter into Contracts or Agreements on behalf of LAWCX. This Agreement does not create a partnership, joint venture, or any other type of business entity between the parties. 20. DECLARATION OF COMPLIANCE WITH LAWS FCS declares that FCS shall comply with all applicable federal, state, and local laws, ordinances, codes, and regulations. 21. HOW NOTICES SHALL BE GIVEN Any notice given in connection with this Agreement shall be given in writing and shall be delivered to the party either by hand, or by certified mail, return receipt requested at the party’s address stated in sections 1 or 2 as applicable. Notice may be initially served by facsimile or email followed by written notice served in the manner described in this paragraph. Any party may change its address stated herein by giving notice of the change in accordance with this paragraph. Notice shall be deemed effective on the date personally delivered or, if mailed, on the date it is received by the other party.

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22. ASSIGNABILITY The parties agree that the expertise and experience of FCS are material considerations for this Agreement. FCS shall not assign, subcontract, or transfer any interest in this Agreement nor the performance of any of FCS obligations hereunder, without the prior written consent of LAWCX’s Administrator, and any attempt by FCS to subcontract, transfer, or assign this Agreement or any rights, duties, or obligations arising hereunder shall be void and of no effect and shall be deemed to be a material breach of this Agreement. 23. VENUE In the event that suit shall be brought by either party to this Agreement, the parties agree that venue shall be exclusively vested in the state court of California, in and for the County of Sacramento, or where otherwise appropriate, exclusively in the United States District Court, Eastern District of California, Sacramento, California. 24. CHOICE OF LAW LAWCX and FCS agree that this contract shall be governed by and in accordance with the laws of the State of California. 25. ENTIRE AGREEMENT This Agreement represents the entire understanding of the parties as to those matters contained herein. This Agreement supersedes any and all prior Agreements, either oral or written, between the parties hereto with respect to the rendering of services to LAWCX by FCS and contains all the covenants and agreements between the parties with respect to those matters covered hereunder. Each party to this Agreement acknowledges that no representations, inducements, promises, understandings, or agreements, oral or written, have been made by any party, or anyone acting on behalf of any party, which are not embodied herein, and that no other agreement, statement, or promise not contained in this Agreement nor any amendment to this Agreement, shall be valid or binding unless in writing and duly executed by all parties hereto. 26. SEVERABILITY If any part or provision of this Agreement shall be held by a court of competent jurisdiction to be invalid, void, or unenforceable, the remaining provisions of this Agreement will nevertheless remain in full force and effect.

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27. PROFESSIONAL ABILITY OF CONSULTANT FCS represents that it is specially trained and experienced, and possesses the skill, ability, knowledge, and certification to competently perform the services provided by this Agreement. LAWCX has relied upon FCS’s training, experience, skill, ability, knowledge, and certification as a material inducement to enter into this Agreement. All services performed by FCS shall be in accordance with applicable legal requirements and meet the standard of care and quality ordinarily to be expected of competent professionals in FCS’s field. 28. CONFLICT OF INTEREST FCS (including principals, associates, and professional employees) represents and acknowledges:

A. It does not now have and shall not acquire any direct or indirect investment, interest in real property, or source of income that would be affected in any manner or degree by the performance of FCS’s services under this agreement; and

B. No person having any such interest shall perform any portion of the Work. The parties agree that FCS is not a designated employee within the meaning of the Political Reform Act and LAWCX’s conflict of interest code because FCS will perform the services independent of the control and direction of LAWCX or of any LAWCX official, other than normal contract monitoring, and FCS possesses no authority with respect to any LAWCX decision beyond the rendition of information, advice, recommendation, or counsel.

29. CONSULTANT RECORDS

A. FCS shall keep and maintain all ledgers, books of account, invoices, vouchers, canceled checks, and other records and documents evidencing or relating to the Work and invoice preparation and support for a minimum period of three (3) years (or for any longer period required by law) from the date of final payment to FCS under this Agreement. LAWCX may inspect and audit such books and records, including source documents, to verify all charges, payments, and reimbursable costs under this Agreement.

B. In accordance with California Government Code section 8546.7, the parties acknowledge that this Agreement, and performance and payments under it, are subject to examination and audit by the State Auditor General for three (3) years following final payment under the Agreement.

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30. OWNERSHIP OF DOCUMENTS Every report, study, spreadsheet, worksheet, plan, blueprint, specification, drawing, map, photograph, computer model, computer disk, magnetic tape, CAD data file, computer software, and any other document or thing prepared by FCS under this Agreement and provided to LAWCX (“Work Product”) shall be the property of LAWCX, and LAWCX shall have the right to use, reuse, reproduce, publish, display, broadcast, and distribute the Work Product and to prepare derivative and additional documents or works based on the Work Product without further compensation to FCS or any other party. FCS may retain a copy of any Work Product and use, reproduce, publish, display, broadcast, and distribute any Work Product and prepare derivative and additional documents or works based on any Work Product; provided, however, that FCS shall not provide any Work Product to any third party without LAWCX’s prior written approval, unless compelled to do so by legal process. If any Work Product is copyrightable, FCS may copyright the same, except that, as to any Work Product that is copyrighted by FCS, LAWCX reserves a royalty-free, nonexclusive and irrevocable license to use, reuse, reproduce, publish, display, broadcast and distribute the Work Product and to prepare derivative and additional documents or works based on the Work Product. If LAWCX reuses or modifies any Work Product for a use or purpose other than that intended by the scope of work under this Agreement, then LAWCX shall hold FCS harmless against all claims, damages, losses and expenses arising from such reuse or modification. For Work Product provided to LAWCX in paper format, upon request by LAWCX, FCS agrees to provide the Work Product to LAWCX in an appropriate usable and editable electronic format (e.g., Word file, Excel spreadsheet, AutoCAD file). APPROVED AS TO FORM: LOCAL AGENCY WORKERS’ COMPENSATION EXCESS JOINT POWERS AUTHORITY: By: ___________________________________ Date: ____________________ Title: __________________________________ FARLEY CONSULTING SERVICES: By: ___________________________________ Date: ____________________ Title: __________________________________

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LAWCX

Board of Directors Meeting November 6, 2018 Subject: Resolution Establishing Local Claims Procedure Regulations for the

Authority

Recommendation: Approve proposed Resolution 1-2018 establishing local claims procedure regulations for the Authority.

Discussion: Under the Government Claims Act, most claims for money or damages against the Authority require the claimant to timely file a claim before proceeding to court. If the claimant misses the claim filing deadline, then it may be precluded from pursuing a lawsuit against the Authority.

Government Code Section 905 of The Government Claims Act contains some significant exceptions, including public employee claims for wages, fees, or expense reimbursement, claims by the state or another local government agency, and, certain tax, assessment, and fee refund actions. Ordinarily, for these claims and the other exceptions, the claimant would not need to satisfy the Government Claims Act claim filing requirements and deadlines. However, Government Code Section 935 authorizes a local public agency to adopt a regulation prescribing a local claim filing procedure and deadlines to apply to Government Claims Act-exempt claims. A recommended claims filing resolution is attached. The local procedure and deadlines generally must be consistent with the Government Claims Act. If a local agency adopts local claims procedure regulations, then claims exempt from the Act would be subject to the local procedures and deadlines. The local claim filing deadline (six months for personal injury and personal property damage claims, and one year for others) typically would be much shorter than the applicable statute of limitations to file a lawsuit. Moreover, a local claims regulation furthers the principal purposes of the Government Claims Act by giving the Authority prompt notice of claims and allowing an opportunity for prompt investigation and, if appropriate, settlement of claims without litigation. Staff recommends that the Board adopt the resolution establishing the local claims procedures.

Attachments: Resolution 1-2018 Establishing Local Claims Procedure Regulations

Prepared by: Tammy Vitali, Claims Manager

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RESOLUTION NO. 1-2018

A RESOLUTION OF THE BOARD OF DIRECTORS OF THE LOCAL AGENCY WORKERS’ COMPENSATION

EXCESS JOINT POWERS AUTHORITY ESTABLISHING LOCAL CLAIMS PROCEDURE REGULATIONS

BE IT RESOLVED by the Board of Directors of the Local Agency Workers’ Compensation Excess Joint Powers Authority (“Authority”) that the following local claims procedure regulations are hereby established:

1) Purpose and Authority. The purpose of this resolution is to establish local claims procedure regulations to govern money claims brought against the Authority that are exempt from state law claims procedures under the Government Claims Act (Government Code § 900 et seq.). This resolution is adopted pursuant to Government Code section 935.

2) Local Claims Procedures. The Authority hereby establishes the following claims

procedure regulations to apply to and govern those claims against the Authority that, pursuant to Government Code section 905, are exempt from the Government Claims Act:

a. All claims for money or damages against the Authority that are exempt from the

Government Claims Act, and that are not governed by any other statute or regulation expressly relating to such claim, shall be presented to the Authority within the time limitations and in the manner set forth in Government Code sections 910 through 915.4.

b. When a claim required by this resolution to be presented within a period of less than

one year after the accrual of the cause of action is not presented within the required time, an application for leave to file a late claim may be made and processed in accordance with Government Code sections 911.4(b), 911.6 to 912.2, and 946.6. A late claim also shall be subject to Government Code section 946.4. (See Government Code § 935(e).)

c. Claims shall be subject to the provisions of Government Code section 945.4 relating to the prohibition of lawsuits until the timely presentation of and action on a claim. No lawsuit for money or damages may be brought against the Authority on a cause of action for which a claim is required to be presented in accordance with this resolution until a written claim has been timely presented to the Authority and has been acted upon by the Authority Board, or has been deemed to have been rejected by the Authority Board, in accordance with the procedures at Government Code sections 910 through 915.4. (See Government Code § 935(b).)

d. Any lawsuit brought against the Authority on a claim subject to this resolution shall

be subject to the provisions of Government Code sections 945.6 (lawsuit filing limitations) and 946 (lawsuit barred after claim allowed in full or part). Any lawsuit

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Resolution 1-2018 Page 2

against the Authority on a claim subject to this resolution must be commenced within the time limitations of Government Code section 945.6. (See Government Code § 935(b).)

PASSED AND ADOPTED by the Board of Directors of the Local Agency Workers’ Compensation Excess Joint Powers Authority on the 6th day of November 2018 by the following vote: Weighted Votes in Favor: Weighed Votes in Opposition: Weighted Votes Abstaining: Weighted Votes Absent:

__________________________ Rosa Kindred-Winzer, President

ATTEST: __________________________ Jim Elledge, Executive Director

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LAWCX

Board of Directors Meeting November 6, 2018 Subject: Discussion of Options for Strategic Planning

Recommendation: Provide direction to staff.

Discussion: LAWCX’s last strategic plan covered the period from 2014 through 2017, and the last formal strategic planning session was held in 2011. Therefore, staff is seeking input from the Board on the timing and structure of a planning session to take place during the 2018/19 fiscal year.

Planning sessions are valuable as they provide opportunities for members to: 1) drive the future of the pool, 2) understand the program in more detail, and 3) become more involved in the organization. Topics can include any or all of the following:

1. Governance 2. Coverage 3. Services 4. Membership growth 5. Financial

Planning sessions are also required for accreditation through the California Association of Joint Powers Authorities (CAJPA). LAWCX’s accreditation will expire on June 28, 2020, and LAWCX will undergo re-accreditation at that time.

The following options were discussed by the Executive Committee and input is sought from the Board as to the preferred option.

1. In-person strategic planning session with full Board of Directors; 2. In-person strategic planning session with the Executive Committee and interested

Board and alternate members; and 3. Internally developed strategic plan by staff and the Executive Committee for

presentation to the Board of Directors in June 2019.

Attachments: Strategic Plan 2014-2017 Prepared by: Jim Elledge, Executive Director

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Strategic Plan 2014 - 2017

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LAWCX 2014 - 2017 Strategic Plan

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MISSION STATEMENT

Our mission is to provide our members with an investment in a stable, long term, collaboratively-managed and adaptable organization to ensure that workers' compensation coverage is available and affordable.

Adopted by the LAWCX Board of Directors at its meeting on November 4, 2014, the Strategic Plan is a management tool to ensure the initiatives of the Authority for the next three years are progressing within the proposed timelines and that staff is accountable for implementing the programs, policies, plans and procedures identified in the Plan goals.

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GOAL ACTION RESPONSIBLE PARTY

TIMELINE STATUS On Target/Revised/ Done

CATEGORY: FINANCIAL

1. Create greater awareness about LAWCX’s financial position.

Create a financial presentation for LAWCX’s Executive Committee members. Include financial information in the member orientation presentations.

Staff February 2015

Done

Done

Financial dashboard included in EC agendas. Target equity presentations expanded. Orientation materials updated with financial sections.

2. Determine appropriate confidence level funding for mid-layer pool ($2M - $5M).

Ask the actuary to include this in the annual study; staff to bring information to Board at November 2014 meeting

Staff November 2014 Done

Done

Funding at 80% confidence level since 2016/17 Completed 2014

3. Determine the appropriate discount rate.

Work with the actuary and investment advisor to review the investment portfolio and the loss payments to determine the appropriate discount rate.

Staff/EC/Board June 2015

Done Resolution established requiring annual review by Executive Director, Actuary, and Investment Advisor.

4. Develop comprehensive financial plan.

Draft plan which includes existing LAWCX policies addressing target equity ratios, dividends and assessments, and discount rate revisions. Include stress test modeling of how claim development, claim frequency, and membership changes impact funded levels, cash flow needs, and rates.

Staff/EC/Board June 2016 Done Deficit Curing and Assessment Plan Approved by Board June 2018

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CATEGORY: COVERAGE AND GOVERNANCE

1. Review all Governance Documents to ensure they are current and appropriately structured.

Review the JPA, Bylaws, Resolutions, policies and procedures.

Staff/EC/Board June 2017 Done Bylaw revisions approved by Board November 2017 Master Program Document Rescinded November 2017

2. Document LAWCX Underwriting Guidelines

Prepare a written document which details LAWCX’s Underwriting Guidelines. Include procedures for evaluating prospective members and current members. This will be necessary to maintain CAJPA Accreditation with Excellence in 2017.

Staff/EC/Board Present recommendations regarding prospective members by 2015 and current members by the end of 2016.

Done Approved by Board November 2017

3. Explore utilizing a web-based technology resource to allow remote attendance at Executive Committee meetings.

Staff explore options and bring information to the Executive Committee.

Staff/Executive Committee

April 2015 Ongoing Used by Executive Committee on 10/15/15 and 2/9/16. Will consider when warranted.

4. Complete implementation of online data collection tool for underwriting and payroll data.

1. Meet with JPA members to discuss challenges and streamlining the process.

2. Work with vendor to integrate payroll collection into the online tool.

3. Develop reports. 4. Provide training at a Board

meeting on the interface.

Staff July 2015 Done Using Ventiv tool for renewal data collection. Payroll integration complete. Alternative web based data collection applications continue to be explored.

5. Monitor service provider contracts and submit Request for Proposals as appropriate.

Claims audits; financial audits. Staff December 2015 Done and ongoing

Renewals brought forward to Executive Committee and Board prior to expiration.

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GOAL ACTION RESPONSIBLE

PARTY TIMELINE STATUS On Target/Revised/ Done

CATEGORY: PROGRAM SERVICES

1. Educate the membership on the advantages of Carve Out programs

Schedule a presentation; prepare agenda items and eBrief articles.

Staff December 2015 Done 1st : 11/4/14 2nd: 6/7/16

Completed 2. Develop risk control measures to

prevent or minimize injuries to public safety officers

1. Survey police chiefs 2. Create police-specific webinars 3. Conduct regional roundtables 4. Provide Cal/OSHA compliance

assistance 5. Develop police web pages

Staff June 2015 Done and ongoing

1. Completed 2. On-going 3. On-going 4. On-going 5. Completed

3. Develop return-to-work best practices.

Review current member practices and standards and develop “best practices” templates for LAWCX members.

Staff June 2015 Done Materials available to members.

4. Job Analysis Library 1. Identify the top 10 positions experiencing injury

2. Contact members to request job analyses documents for those positions

3. Review responses to determine next steps as well as if additional funds need to be allocated to develop a job analyses library

Staff February 2015 Done 1. Completed 2. Completed 3.a. JA drafts completed 3.b JA use guide in

progress

5. Develop a series of roundtables Organize the roundtables as either a webinar or mini-conference after a Board meeting. Topics may include: Co-morbidity factors; Ergonomics; Interactive Process; UC System’s “Work Strong” program; Risk Control Resources; Pool Financials.

Staff November 2015 Ongoing On-going

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CATEGORY: PROGRAM SERVICES, Continued…

6. Raise awareness of claim trends 1. Determine feasibility of licensing a risk management information system (RMIS).

2. Create a trend analysis report showing causation, frequency, and severity of member claims for discussion with the Board.

3. Analyze claim trends and determine if legislative action, training programs, and risk control measures are recommended.

Staff/EC/Board November 2015 December 2016 June 2017

Done and Ongoing

Annually



CATEGORY: MARKETING AND GROWTH

1. Modernize the website design and functionality.

Allocate funds and work with a designer to redesign the website.

Staff/Executive Committee

June 2015 Done Website re-design completed July 2017

2. Regularly communicate Committee action, risk control issues, and legislative action to LAWCX members.

1. Develop schedule for member biennial visits to gain feedback and discuss needs.

2. Prepare orientation packet for Board/Executive Committee members.

3. Distribute periodic eBriefs to membership.

Staff April 2015 September 2015 Ongoing

Ongoing 1. Several visits scheduled for Spring 2016 2. On-going 3. RC Bulletins.

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