Insite Online - NOVEMBER/DECEMBER 2009
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HAI Group Newsletter Changing Name, Format

Once again, November is a season of change.

Looking to increase InSite readership, members of the Housing Authority Insurance Group Communications staff undertook a fact-finding mission. They quickly learned that a printed newsletter better suits the needs of on-the-go housing professionals.

Ask and ye shall receive.

In April 2010, HAI Group will unveil a publication titled “Under One Roof” to deliver industry and company news to members. Under One Roof will be mailed quarterly to all Board and Committee members and HAI Group members and policyholders choosing to receive it.

For those committed to going green, Under One Roof can be emailed and also will be available as a PDF on our Web site, www.housingcenter.com.

With Under One Roof concentrating on news, electronic “InSite on HAI Group” bulletins will contain Member Spotlights, photo galleries, risk control features, safety tips and recalls, and other useful information. It will be emailed and available in our Newsroom on the Web site.

In January, just as we did with the Annual Meeting Notice and Board and Committee ballots, HAI Group will send a companywide email. Members and policyholders can opt for printed or electronic versions of Under One Roof. An opt-in for the electronic InSite on HAI Group will be made available at that time as well.

In closing, we thank those who faithfully read InSite Online. In advance, we appreciate your participation in the opt-in program and your readership of Under One Roof. Most of all, we ask that you continue to provide story ideas, photos, and feedback in person, via email, or by U.S. Mail.

Wrapping Up…

This is the last edition of InSite to which I will contribute as your Chairman. Based on all the indicators, it comes as another good year for HAI Group draws to a close.

We don’t have the actuarial information yet, but the year-end numbers look strong. The 2009 Audit is underway and the up-front work during October went well. The Board is working closely with management to assure that the 2010 Budget and Work Plan reflects the shared vision and strategic plan we agreed upon. The coming year will bring significant growth and additional complexity, but we are well-prepared for the challenges and there is good reason to be optimistic.

It strikes me – as I indulge in a bit of nostalgia – that we have never had to deal with much bad news. We even spent an entire Annual Report trying to decide why. No matter what the reason or reasons, the fact remains that HAI Group has had an extremely solid run for more than 22 years. The one constant has been change and that has never been truer than it is now. The road ahead looks different than the road behind, not in terms of how we do business, but in terms of what our business is. Service, loyalty, common goals, and building and maintaining relationships must remain part of HAI Group’s character as the products, customers, and challenges take on different looks in the future.

If history is any indication, HAI Group will continue to thrive and achieve its mission of delivering service and long-term value to the membership. It has always been the people who have made it work. The people I have had the pleasure to work with the last two years, both on staff and on the board, are the best, overall, that I have seen in my 20 years of participation. Thank you for the opportunity to be a part of this.

Falek Captures NAHRO Award

Leo Durocher was wrong: Nice guys do finish first.

Stephen Falek is one of the nice guys. One conversation with the Milwaukee Housing Authority veteran illustrates his decency and commitment to residents of public housing. So when Falek, a member of the Housing Authority Insurance Group Board of Directors, was awarded the National Association of Housing and Redevelopment Officials’ M. Justin Herman Award at its national conference in Washington, D.C. on Oct. 3, there was no shortage of smiling faces.

“He is a man of conviction and puts his heart in everything he does,” HAI Group Board Chairman Barry Romano said. “Steve’s the kind of person who makes things happen. HAI Group is fortunate to have him on our Board.”

The M. Justin Herman Award is given to a housing industry leader who has made “outstanding contributions to the quality of life through service in the field of housing or community development.” The award was created in 1975 to honor M. Justin Herman, a long-time San Francisco housing official.

To qualify, a candidate must demonstrate “outstanding contribution to the nation's effort to provide a decent home and a suitable living environment for every American family.”

According to HAI Group Vice President of Marketing and Agency Operations Ed Malaspina, Falek has that covered.

“What most impresses me about Steve is his devotion to his residents and staff,” Malaspina said. “Whether it’s taking phone calls during off hours or sharing how things are going for his residents in our uncertain economy, he consistently exhibits a rare level of commitment. HAI Group is lucky to have a guy like Steve on its side, as is the City of Milwaukee.”

Due to his efforts with the Housing Authority Insurance Legislative Affairs Committee, which is currently lobbying for changes to the Liability Risk Retention Act, all public housing residents may owe Falek a debt of gratitude.

“Steve has been a strong and steady leader of the HAI Legislative Affairs Committee,” HAI Group Vice President of Legislative Affairs Brian Braley said. “He has been an engaged and effective grassroots leader within his own state of Wisconsin on housing issues via its state housing association and his cultivation of its Congressional delegation.”

Never Underestimate the Value of Giving

View a video from our interview with Juan Lopez

Each year, Housing Authority Insurance, Inc. conducts a Resident Scholarship Program for member PHAs. Successful public housing applicants snare a $2,500 scholarship and people in all sectors of the company enjoy good feelings.

It’s human nature, however, to wonder if one’s generosity is appreciated and doing any good?

For Juan Lopez, a student at Hartford’s Capital Community College, the answer is a resounding “Yes!!”

Lopez was an average student in high school, a shy kid who flew under the radar. There wasn’t a ton of money in the household so he planned to enter the workforce upon graduation.

“I didn’t know if I was going to receive financial aid,” Lopez says. “I didn’t know what I was doing with my life.”

Lopez’ post-high school life went into a tailspin. He lost his job delivering auto parts. He dislocated his knee. He found himself spending all day in bed, watching TV and staring into space.

Then one day, the mailman delivered an envelope filled with salvation.

“I pretty much had forgotten I signed up for the scholarship,” Lopez says. “One day, unable to do much because of a cast almost covering my leg, my mother brought me a letter and I said, ‘What is this?’

“When it said I had received the scholarship, I said, “You know what, this is it. This is my time to do what I have to do.”

A little generosity from HAI went a long way. In fact, for Lopez, it was transformational.

“The scholarship came along and that was sort of the turning point in my life,” he says. “It was a smack to my face saying, ‘Get back in school! Do something with your life!!’”

He heeded the call. Lopez is a Dean’s list student whose transcript is filled with more A’s and B’s than “Mary Had A Little Lamb.” More importantly, he’s a campus leader. The faculty and staff know and respect him. He’s the President of the Student Senate.

Basically, Lopez is the Mayor of 950 Main Street.

“I work hard, go to class, do what I have to do, and do my best to get my A’s and B’s,” Lopez says. “I never thought I would have the GPA I have right now.”

As for the future, Lopez’ plan is to work in a school system mentoring students. He’s not concerned about where or what grade. He wants to make sure kids and young adults keep searching for options.

“Kids need a mentor to guide them in the right direction,” he says. “A lot of people feel like they don’t have anyone they can turn to.”

In fact, he already has a prepared sermon for his future mentees, a message he honed on the long journey from auto-parts delivery boy to well-rounded student.

“Strive for success, don’t let anyone hold you back, reach for the top, do what you have to do to be a successful student and person. Life gives you challenges to overcome, don’t let them overcome you,” Lopez says.

For those who need more than words to be motivated, Lopez offers himself and the Resident Scholarship Program as evidence that challenges can be overcome.

“I could be out there on the streets right now, not doing what I’m doing now and not having a life,” he says. “I could have a job with no goals to pursue a higher education. Receiving that scholarship, at that time, it was meant to happen.”

Legislative Affairs

Green is the Color of Public Housing

The implementation of green projects and creation of green jobs have become avenues for increased funding for public housing authorities. Several pieces of legislation introduced by the 111th Congress set aside funds for public housing authorities to engage in green improvements, including renewable energy improvements. More information from HUD on green project design can be found at HUD’s Web site.

Greener Public Housing Legislation

HAI’s legislation-tracking tool, the Legislative Action Center, provides up-to-date information on current public-housing-related bills, key votes, and tools to make your voice heard at the local or national level. Members can access the Center via the Legislative Affairs homepage. Once logged in, users may find out about the latest legislation impacting public housing, send a letter to their Congressperson, or sign up to receive info-alerts on pending bills. This tool allows PHAs to influence Congress without spending a dime.

A current highlight of the Legislative Action Center is a bulletin titled “More Funds for Greening Public Housing: Senate Version of Cap and Trade Bill Will Set Aside Funds for Public Housing S. 1733.” The bill, introduced by Senator Kerry (D-MA), Senator Boxer (D-CA), and Senator Kirk (D-MA) on Sept. 30, establishes a cap and trade system to reduce carbon emissions in the U.S. over the next several years. The bill sets emission targets, which are lowered each year, and sells permits that allow firms to emit carbon. Some proceeds from these carbon emission permits would be allocated to public housing authorities for green improvements. The bill allows states to set aside additional dollars obtained from the sale of carbon permits for green development in public housing.

The House version of S. 1733, H.R. 2454, was passed in June. This version of the bill designates one percent of carbon permit proceeds to public housing greening projects, estimated to be about $65 million.

CLPHA Energy Symposium

CLPHA’s “Energy and Greening Symposium” held in October brought together stakeholders to explore greening practices in public housing and sought additional funds to increase the scale and scope of green improvements. One outcome of this Symposium was agreement on the necessity of PHA-resident cooperation for real savings to be achieved. Because technology alone cannot produce the desired savings, “split incentives” that motivate both PHAs and their residents were discussed. Such cooperation between PHA and resident groups would broaden support for funding green improvement and renovation in public housing. It might also allow additional leeway in allocating dollars saved for public housing authorities.

Risk Corner

Group Viewing Has its Benefits

Housing Authority Insurance Group promotes staff-related training to its members. From a risk control perspective, ongoing staff training is a loss prevention technique that minimizes loss exposure. Training can reduce loss frequency and severity by increasing staff members’ awareness, ensuring rules and regulations are known, promoting recognition of unsafe conditions, and by reminding staff of proper actions to take during an emergency. Viewing programs in a group setting is an effective way to train staff members.

The Stark Metropolitan Housing Authority (SMHA) in Ohio holds annual group training for its staff. The program “Safety First” is an example of cost-effective training with a small time commitment. The process has yielded big results for the authority.

The Safety First training takes place each October. The seminar lasts four days, training 30 to 35 employees daily. The content each day is the same and staff members are rotated to ensure that the authority can carry on its day-to-day operations. This year’s training focused on workers’ compensation exposures. The topics discussed included lifting safety, blood-borne pathogen, driving safety, fire extinguishers, hazard communication, sexual harassment awareness, workplace stress reduction, and workplace anger reduction.

The low cost training consisted of free programs available on Housing Authority Insurance Group’s HTVN training Web site - http://htvn.maplelearn.com/index.html. In addition to HTVN programming the SMHA also used information from OSHA and a local work health and safety facility.

Viewer numbers have increased when the group viewing process is utilized. For example, housing authorities in Buffalo, New York, Baltimore, Maryland, Milwaukee, Wisconsin, and Long Branch, New Jersey have viewed programming in group settings. The feedback from these sessions has been positive. According to Annette Smith, the Director of Administration at the Stark Metropolitan Authority, “this was the first year I was able to utilize (HTVN.) Based on the results, I anticipate continuing (HTVN usage) in the future and additional trainings for maintenance and supervisory staff.”

The Safety First training has yielded big results. In the five years the SMHA has been presenting the Safety First training they have seen positive changes in their property insurance loss ratio. In the fourteen years prior to the Safety First training, the authority had a loss ratio of 110%. Since the training began, this ratio has dropped to 37%. The lower loss ratio equates to less money paid out in claims expenses and a lower premium for the SMHA. During this five-year time period, the authority’s property premium payments has dropped by a third.

In addition to lower loss ratios and premium costs, the SMHA has gained recognition from local health and safety agencies. The Bureau of Workers’ Compensation has consistently awarded SMHA the Group Safety Award since 2004. This award is given for lowering both claim frequency and severity by more than 25%. They have also received the Excellence in Safety Award by the Local Safety Council. Mrs. Smith attributes these gains and awards to trainings like Safety First and the authority’s continued commitment to a Safety Committee (instituted in 2005.) According to Mrs. Smith, “Through the support of our Executive Director, management staff, the staff of HAI Group, as well as excellent resources like HTVN, our agency has been able to lessen our exposure to risk in all areas.”

As a reminder, your authority can get credit for training through the new Risk Control Program Premium Credit (RCPPC) application. The Risk Control Work Plan ceases 12/31/2009. The new RCPPC application begins January of 2010. To learn more about online programs please visit the HTVN Web site at http://htvn.maplelearn.com/index.html.

If you need assistance in creating an HTVN account or utilizing the group viewing process, please contact Stan Gornicz at either sgornicz@housingcenter.com or 800 873-0242 ext. 455. To learn more about the RCPPC application visit www.housingcenter.com or contact your Risk Control Associate.

Protecting Assets through Preventive Maintenance

Imagine this – it’s early on a Tuesday morning. The previous night, the year’s first significant winter storm blanketed the area with 10 to 14 inches of snow. Maintenance workers arrive bright and early to begin snow removal when it is discovered that your largest piece of snow removal equipment is not working.

The snow still needs to be removed, so you have no option but to call in a backup contractor. Not only has your PHA taken a financial hit, but it potentially puts residents and employees at risk because the snow was not removed in a timely manner. You say to yourself, “If only I had taken the time earlier in the year to do the scheduled preventive maintenance outlined by the manufacturer, this may never have happened.”

The importance of preventive maintenance cannot be overlooked: Let’s look at what preventive maintenance is all about.

What is preventive maintenance (PM)? It is a process developed to keep a building and its equipment in good condition. This includes checking heater filters and drive belts for wear, inspecting roof flashing, greasing, and bearings, and painting window trim. It also requires things like lubrication, cleaning, adjusting, and replacing minor parts so equipment does not break down at a critical time or a building is not allowed to deteriorate.

Preventive maintenance is not a term used specifically for one piece of machinery or building. Rather, it is a term encompassing the overall maintenance program used to ensure everything is kept in good condition. Preventive maintenance saves your buildings, equipment, vehicles or anything requiring maintenance from depreciation and breakdown.

The benefits of preventive maintenance are many:

• The first benefit is that it increases the efficiency and dependability of equipment by mitigating wear and tear through ensuring it’s clean and lubricated
• It helps detect potential machine/part failures early
• It provides time to schedule full repairs instead of performing partial ones
• You will avoid unexpected equipment failures that cost you time and money
• It helps reduce maintenance and repair costs by eliminating emergency repair services
• It ensures the safety of residents and employees through the operation of equipment in a safe and responsible manner.

The Economics of Preventive Maintenance

Business decisions are made according to anticipated return on investment (ROI). A study done by Koo and Van Hoy in 2000 titled “Determining the Economic Value of Preventive Maintenance” shows that PM programs have ROI’s between 10% for fire detection systems to 2300% for centrifugal pumps. Many maintenance tasks housing authorities perform, such as repairing parking lots and roofs and servicing boilers and condensers, have ROI’s averaging 800%. This makes preventive maintenance one of the most lucrative investment opportunities an organization can make. A dollar saved through preventive maintenance is as good as a dollar earned from any other housing authority business activity.

Setting Up Your Preventive Maintenance Program

Determining an authority’s goals, making a thorough equipment inventory, setting up a PM schedule or calendar, and developing a system of recordkeeping are the basics of creating a program. To create a good PM program, it is necessary to know the specific maintenance requirements for each type of equipment included in the program. The correct PM schedule varies depending on the piece of equipment, the frequency of use, and the nature of work it performs. There may be machines requiring monthly service, while others need to be maintained once a year. It is suggested you follow the suggested manufacturer’s maintenance schedule for all equipment. For small authorities, the schedule may work well with a paper system. Larger authorities may prefer to keep schedules and maintenance records in a computerized maintenance management system (CMMS).

The Preventive Maintenance Team

The most important component of your PM program is the maintenance staff. The staff’s skills, training, and attitude can make or break the PM program. To be successful, staff will need training, tools, and knowledge. Starting a PM program can be difficult because it requires additional work to be completed until the program is up and running. The goal is to make the work of the maintenance department easier.

Inspection Guidelines Are Important

Property managers have various tools at their disposal for implementing an effective risk control program. One widely used tool is the self-inspection process. Self-inspections are done to detect, control, correct, and document hazards before losses occur by uncovering deficiencies that can present losses to people, equipment, buildings and the environment. These inspections are classified as formal and informal.

When a formal inspection is conducted, it should be the only activity being performed. A specified frequency should be determined. A customized check sheet should be used to serve as a reminder of items to inspect. Records should be kept to show what has been inspected. These sheets provide direction and allow for immediate recording of all findings and recommendations.

A separate check sheet could be developed for each area. For instance, a check-sheet for a community room would be different from a check sheet used to inspect a residential unit, a playground, or common areas. All areas should be examined carefully to determine conditions that could lead to accidents and losses. HAI Group has developed specific check sheets. You can request a copy for use in your inspections and modify them to meet your individual needs.

Key personnel such as a maintenance supervisor or asset manager should conduct the inspection. You might employ the service of an outside inspector or consultant for work that requires the services of a specialist or for those tasks that require a licensed individual.

A formal process should be established for follow-up after the inspection is done to ensure all identified hazards are controlled. To accomplish this, your work order process should work in conjunction with the inspection activities. An additional check involves sending a report to a top management person for review and a follow-up to ensure hazards are corrected in a timely fashion.

The other side of the self-inspection is the informal inspection process. These inspections are conducted daily as employees walk the premises. There is no set schedule or time they need to be done. A check sheet is not needed but staff should carry a pen and pad to document hazards discovered. These inspections are just as important as formal inspections in identifying potential safety issues.

Should you need assistance in establishing your inspection program or process or need someone to review your program, contact your HAI Group Risk Control Associate.

Snow Big Deal

With winter right around the corner, it is time to consider your snow removal policy. The arrival of snow brings challenges to residential occupancies. Snow and ice is one of the most common causes of a slip, trip or fall claim. Proper snow and ice removal may reduce the number of claims at your housing entity and a reduction in money spent on these claims. In addition to slip, trip or fall claims, residential occupancies must be conscious of claims arising from property damage caused by snow plows.

Many residential occupants use their own equipment and manpower to clear snow from sidewalks and parking lots. The following information can help guide your snow removal policy. The two most important steps are to have a written snow removal policy and to enforce it. The following tips should be included in this policy.

• All snow removal should be documented and records should be kept for at least three years
• Weather conditions, amount of salt spread, date and time work began and ended, and the employee that performed the work needs to be documented
• When snow is falling, depending on accumulation, the maintenance staff should shovel sidewalks and plow around tenants’ cars in parking lots on a continual basis
• On the day following the end of the snow storm, tenants are required to remove vehicles from the parking areas. There will be a set schedule established ahead of time to allow tenants to make arrangements
• The schedule should be posted in several areas throughout the building and may be announced on the PA system (if available)
• Tenants who fail to cooperate in moving their vehicles when plowing is scheduled will have their vehicle towed at the owner’s expense
• Any snow removal requirements assigned as the tenants’ responsibility should be clearly documented and placed as an addendum in the lease.

By having tenants move their vehicles, you will be able to plow the space between vehicles. Removal of this snow will decrease the chance for claims that would normally arise from the snow between cars melting and refreezing. Having tenants remove vehicles decreases the chance employees damage tenant vehicle with the snow plow.

If you do not want to have tenants move vehicles, you may consider having staff shovel the snow that remains between vehicles. This snow removal process may take more time and manpower, but the entity will save money in the long run by reducing claims.

If there are questions regarding these procedures, or you need a sample snow removal policy, contact Risk Control Associate Elizabeth Rohr at 800-873-0242, ext. 228.