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Making fun safe is no stroll in the park.
Betsy Kutska is so successful in the endeavor, though, that she makes the job seem, well, fun.
As executive director of the Park District Risk Management Agency in Wheaton, Ill., Ms. Kutska helps ensure people's safety and welfare while they use Illinois public recreational facilities.
"We have reduced catastrophic things that can happen to the public," Ms. Kutska said. "That's what we're here for."
Many recreational activities carry an inherent risk, and it would be easy just to ban certain activities, Ms. Kutska said. However, PDRMA doesn't operate that way.
"It's our job to help agencies do what they want to do, as safely as possible," she said. For some of the pool's 121 members, this includes dangerous activities, such as operating swimming pools and water parks and offering bungee jumping and rock climbing.
Ms. Kutska also has made PDRMA a very successful venture financially.
For example, for the 1996-1997 fiscal year, PDRMA member operating expenditures increased almost 7% to $293 million, and payrolls increased more than 7% to $162 million, but total member contributions decreased by $113,660, or 1.5%.
The pool recently declared a $1.4 million dividend that will be credited to members against their 1997-1998 contributions. In 1993 the pool declared a $1 million dividend, which was returned to members in cash.
PDRMA has assets of $31.4 million and a surplus of $17.5 million.
"I couldn't use enough superlatives to describe the job she's done for us," said Jane Hodgkinson, chairwoman of PDRMA and executive director of the Western DuPage Special Recreation Assn. in Glen Ellyn, Ill.
Ms. Kutska has "moved us from not understanding what insurance is to the point where we're all relatively well-educated about our need to work and cooperate with each other to improve our liability risks."
Ms. Kutska "has a real ability to put together people of similar interests in order to get a project together and see it through," said Steve Rauwolf, vice chairman of PDRMA and the business manager of the Glenview Park District.
Many of Ms. Kutska's recent accomplishments reflect these talents.
For example, Ms. Kutska was instrumental in the formation of an excess liability insurance purchasing group for five government risk pools (BI, Feb. 3). The National Public Entity Excess Program, or NAPEX, is a multi-year facility offering members up to $21 million in limits, including an optional $10 million excess of $10 million layer, as of Jan. 1.
PDRMA's participation in NAPEX will raise the pool's general liability and automobile liability limits to $21 million each from $6 million each-including a $1 million retention-while cutting premium costs by 11%.
Ms. Kutska also has mobilized public entities in Illinois to become more active in the area of tort laws.
For example, as chairwoman of the Illinois Governmental Assn. of Pools since January 1996, Ms. Kutska has led the group's efforts to develop case law in Illinois that supports governmental immunity. Ms. Kutska coordinates a legal task force that examines lawsuits against public entities in Illinois, decides which ones to support and assigns appropriate attorneys to write amicus curiae briefs for the cases.
"By working together, we're able to look at a particular case, assign attorneys who are expert in the issues to write the amicus brief and make sure that the amicus complements the defendant's case-not parrots it," Ms. Kutska explained.
In 1996 these efforts contributed to two significant Illinois Supreme Court decisions that uphold governmental immunity for public entities in the state, Barnett vs. Zion Park District and Bucheleres vs. Chicago Park District.
Ms. Kutska "knows more about the law relating to parks and recreation than 90% of the lawyers who practice in this area," commented Steve Kleinman, general counsel for the pool. "It's like having another attorney in the office."
Ms. Kutska also has led IGAP's effort to identify provisions in the state tort laws relating to government immunity that need clarification. The group recently introduced legislation to clarify these provisions.
Among self-insurance pools, PDRMA is recognized as exemplary.
PDRMA in March 1995 was awarded the Public Risk Management Assn. pooling section's certificate of recognition. This award, valid for two years, recognizes pools that have conducted an extensive operational audit that evaluates their pooling operations against PRIMA's advisory standards for public entity risk pools.
These accomplishments and a host of others earned Ms. Kutska a place on the 1997 Business Insurance Risk Management Honor Roll, representing self-insurance pools.
Since PDRMA began operations Jan. 1, 1984, it has grown from 25 to 121 members and has become a full-service insurance pool offering property, casualty and workers compensation coverage and a host of specialized insurance coverages. The pool now has 19 staff members and provides a wide range of services, including in-house claims administration and an employee benefits self-insurance pool.
Ms. Kutska, who joined the pool in October 1986 as its first executive director and full-time employee, has been the architect and director of this growth and expansion.
Over the years, membership has increased largely by word of mouth.
"We do not market," Ms. Kutska said. "But since our profession in Illinois is so tight- knit, most organizations know about our program and our pool."
Ms. Kutska noted that in 1988 she projected that membership would grow to and plateau at about 120. At this level, "we're very comfortable," she said. "Most of our new members now result from staff from our current members moving to a new agency."
As of the end of February, the pool's 121 members represented 102 park districts, 17 special recreation districts and related associations and two forest preserve districts. Special recreation districts and associations are cooperative governmental agencies such as park districts that provide recreational activities for disabled people. In Illinois, unlike in many other states, park districts and forest preserves are separate governmental units, not departments of local public entities.
PDRMA members own an aggregate of about $1.09 billion in property, including recreation centers, gymnasiums, water parks, recycling centers, theaters and fire departments. PDRMA members own 60 golf courses, 121 swimming pools, 62 water slides, 19 outdoor ice arenas, 1,015 playgrounds, 126 preschools, 66 restaurants and banquet facilities, 45 museums, eight petting zoos, two full-size zoos and an airport.
Members own and operate 1,833 motor vehicles, including cars, trucks, vans and Zambonis.
As of the end of March, pool members employed a total of 29,673 workers, including park police, mounted rangers, firefighters, lifeguards, teachers, recreational specialists, maintenance personnel, cooks, landscapers, animal handlers and drivers. The payroll for these workers is approximately $175 million this year.
Despite the variety and unpredictability of the risks faced by PDRMA members, the pool's loss ratios are quite low.
For example, last year the claim to member contribution ratio for workers compensation claims was 42%. The pool's property loss ratio was 34%, while the loss ratio for general liability was 11%. The loss ratio for employment practices liability was 12%.
The low loss ratios can be attributed primarily to the pool's comprehensive loss control program.
When an agency joins the pool, its existing loss control measures are compared with the pool's loss control guidelines. New members are given two years to implement the pool's guidelines before they are subject to a loss control review.
Prospective pool members must employ at least one full-time management staff person and have had a 60% or lower loss ratio for the previous five years. Members must commit to attending training sessions and board meetings. The membership term is five years.
PDRMA staff visit members at least three times a year to conduct a loss control review. The review, which identifies physical hazards and unsafe behaviors, documents the loss prevention practices of each member. Members receive points based on how well they implement the guidelines.
Each PDRMA member must achieve and maintain at least an 80% rating on the loss control review, or the agency will be placed on probation.
Members that score 85% or more on the review are eligible for cash awards of from $500 to $1,500. Last year 94% of PDRMA's members received cash awards for high scores on their annual loss control reviews; a total of $148,000 was awarded to these members.
Members that receive a 95% score on the loss control review and have a good loss history can be accredited, which exempts the member from review for two years and awards $1,500 annually until the next review period. In 1996, 65% of the pool's members were accredited.
PDRMA in 1995 received 1,296 claims, about 5% more than it received the previous year. PDRMA's financial year runs from May 1 through April 30.
Workers comp claims accounted for the greatest portion of the claims-65%. Some 18% of the claims were general liability claims, 7% were auto liability claims, less than 1% were public officials liability and employment practices liability claims, and 9% were property claims.
Loss payments totaled more than $2 million last year.
More than half-57%-of the pool's loss payments in 1995 went toward workers comp claims. "More payments go out of here for workers comp than anything else, but that's the nature of it," Ms. Kutska commented. "We don't see it as an overwhelming problem because of our attention to training."
The most common workers comp claim is for back injuries, followed closely by knee injuries. "A lot of our people do a lot of heavy and physical work," Ms. Kutska noted. Hand injuries also are quite common among park maintenance staff such as custodians, construction workers and landscapers, she added.
PDRMA uses rehabilitation programs, return-to-work programs and a medical bill cost containment company to keep workers comp costs under control.
Property losses accounted for the next greatest portion of loss payments-21%.
"We've had significant flooding problems in our area," Ms. Kutska explained. Last summer, for example, pool members sustained significant flood damage, she said. The damage affected a wide range of property insured by the pool, such as golf courses, community centers, bicycle paths and landscaping.
One of the largest property losses the pool has paid was from a fire in 1992. A maintenance facility, filled with maintenance vehicles and equipment, burned to the ground, Ms. Kutska said. The fire led to a loss of more than $1 million.
Employment practices liability and public officials liability together accounted for just 3% of loss payments last year.
Automobile liability accounted for 11% of loss payments in 1995 and general liability accounted for 8% of loss payments.
The most common general liability claims the pool receives stem from unsupervised recreational activities, such as sledding and playing on playgrounds, according to Ms. Kutska. But, the most serious general liability claims the pool receives stem from water-related activities, Ms. Kutska noted (see related story, page 118).
However, because of effective loss prevention and loss control programs and governmental immunities granted to public entities under tort reforms passed in 1986 in Illinois, no single claim has pierced the pool's self-insured retention in the past 10 years. During this period, the pool's self-insured retention was $3 million per occurrence.
The largest claim the pool has paid stemmed from an automobile accident in 1985. After the driver of a van transporting disabled people ran a red light and broadsided a car, the pool paid about $1 million in medical bills, auto damage and liability payments.
The largest claim the pool has paid recently was a $212,500 settlement to a girl who fell from a high rope obstacle course and broke her back.
The girl, who is expected to recover fully from her injury, was not clipped to a safety rope as she should have been while traversing an obstacle course 20 feet above the ground. Instead of being clipped to a safety rope, the girl was clipped to an unsecured rope.
"It was just human error," Ms. Kutska explained. "They made a mistake."
Now, however, the ropes are color coded so it is readily apparent which ropes are safety ropes, Ms. Kutska noted.
Ms. Kutska pointed out that in a case like this, where there is clear liability, the pool will negotiate a settlement with a claimant. "We will attempt to negotiate cases in which there was clear or highly probable liability," she said. "If we screw up, we pay."
However, the pool does fight frivolous lawsuits.
"We will vigorously defend any lawsuit that's frivolous or for which demands are excessive," Ms. Kutska stated.
If a person files a claim against a pool member that seems to be frivolous, "we try to be as proactive as possible in providing them the case law on a particular point" so the claimant "knows what they're in for prior to taking on a case."
PDRMA has developed relationships with defense attorneys around the state who have expertise in different areas, Mr. Kleinman noted.
When possible, the pool tries to use local attorneys to defend a case because they know the community, Ms. Kutska added.
Illinois tort laws afford park districts immunity from liability in some instances.
For example, park districts can be held liable for claims that result from the condition of recreational property or the conduct of recreational activity only if the entity was engaged in willful or wanton conduct.
And, park districts have absolute immunity from liability for claims alleging a failure to supervise a recreational activity or the use of any public property.
Illinois has placed no limits on damage awards against local public entities.
PDRMA tries to prevent claims through ongoing risk management education.
For example, each fall and spring the pool holds a one-day risk management institute that offers a variety of courses. More than 420 people representing 95% of the pool's members attended a recent institute, which offered courses in workplace violence, preventing back injuries, handling Illinois Department of Labor safety inspections, insurance requirements for construction projects, preventing sled hill accidents and sexual harassment.
PDRMA also offers defensive driver training courses, playground inspection workshops, lifeguard instructor training programs, medical first aid instructor training, a personnel law institute and an annual claims workshop.
As executive director of the pool, Ms. Kutska is responsible for managing all of PDRMA's operations.
Ms. Kutska prepares and administers the pool's annual budget, which totaled $9.9 million in 1995. Some 81% of the revenue was generated by member contributions, 17% was investment income and 2% was other miscellaneous income.
Expenses totaled $5.1 million last year. Losses and allocated loss adjustment expenses represented 42% of PDRMA's total 1995 expenses. Administration accounted for 25% of expenses, while insurance and reinsurance premiums accounted for 23% of expenses. Unallocated loss adjustment expenses, contractual services and depreciation accounted for the remainder of the pool's expenses.
Ms. Kutska also oversees management of the pool's approximately $30 million investment portfolio.
Ms. Kutska serves as the main liaison between PDRMA and its 121-member board of directors. She advises the board on policy matters and insurance coverage and reports to the board on all pertinent subjects. She also serves as secretary to the board.
Ms. Kutska and her staff produce several written pieces, including:
A comprehensive annual financial report that for six consecutive years has won a certificate of achievement for excellence in financial reporting from the Government Finance Officers Assn. of the United States and Canada.
An annual report that is distributed to members and prospective members.
Quarterly financial reports.
An eight-page quarterly newsletter, the PDRMA Pulse, that includes sections on safety, training, claims and information services. The newsletter also includes a sheet with 10 multiple choice questions that cover the material in the newsletter. Members can complete the questionnaire, fax it back to PDRMA and receive credits toward gifts based on how well they completed the test.
To assist her with these duties, Ms. Kutska has a staff of 19: five in the loss control department, four in the claims department, three in the finance department, two in the benefits department, two in the administration department, two in the legal department and one information services manager.
Ms. Kutska hires, trains and supervises all of PDRMA's staff members and maintains the organization's personnel policies and records.
Ms. Kutska believes strongly in continuing education. She encourages her staff to pursue professional designations and certifications, attend seminars and stay current with risk management issues. Many of PDRMA's staff have designations or certificates related to risk management: there are four who hold the Associate in Risk Management designation, one Associate in Loss Control Management, one Chartered Property & Casualty Underwriter and one Associate in Automation Management. Several staff members are pursuing these and other related designations.