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					                                    MINUTES
                              REGULAR MEETING OF
                 CALIFORNIA FAIR SERVICES AUTHORITY
                               BOARD OF DIRECTORS
                                        April 1, 2003
                         1776 Tribute Road, Suite 200, Sacramento

Rebecca Weathers, Board Member                     Donna Bardaro,
  Siskiyou Golden Fair (10th DAA)                    California Fair Services Authority
Ed Scofield, Board Member                          Charlie Mitchell,
  Nevada County Fair (17th DAA)                      California Fair Services Authority
Forrest White, Board Member                        Tom Allen,
  San Joaquin County Fair (2nd DAA)                  California Fair Services Authority
Kelley Ferreira, Board Member                      Sue Leavitt,
  San Benito County Fair (33rd DAA)                  California Fair Services Authority
George Gomes, Public Board Member                  Melissa Thurber,
  California Farm Bureau                             California Fair Services Authority
Bruce Lim, Appointed Board Member                  David Debernardi,
  Division of Fairs and Expositions                  Gilbert Associates
Donna Horner,                                      Chuck Hahn,
  California Fair Services Authority                 Assemblyman Cogdill’s Office
Rick Wood,                                         Morgan Crinklaw,
  California Fair Services Authority                 Assemblyman Cogdill’s Office
                                                   Kirk Trost, Legal Counsel to CFSA
                                                     Hyde, Miller, Owen & Trost

I.     CALL TO ORDER

       A regular meeting of the California Fair Services Authority (CFSA) Board of Directors
was convened, pursuant to the meeting notice, at 8:13 a.m. in the conference room at 1776
Tribute Road, Suite 200, on Tuesday, April 1, 2003.


II.    APPROVAL OF MINUTES

       Moved by Director Gomes and seconded by Director White to adopt Resolution Number
03–03 approving the minutes of the regular meeting of February 5, 2003, as presented to the
Board of Directors. Motion passed unanimously. Director Ferreira was not present for the vote.

III.   2002 ACTUARIAL REPORTS FOR GENERAL LIABILITY, WORKERS’
Minutes of Regular Meeting
Page 2
April 1, 2003

       COMPENSATION, AND SPECIAL EVENTS LIABILITY

       Rick Wood, CFSA’s Assistant Director Finance, gave an overview of the 2002 Actuarial
Reports for General Liability, Workers’ Compensation and Special Events Liability conducted by
Bickmore Risk Services. The Actuarial Reports were based on data evaluated as of December
31, 2002. The purpose of the actuarial review is to provide a guide to the Board of Directors to
determine reasonable funding levels for its self–insurance programs according to the funding
policy CFSA has adopted to comply with Governmental Accounting Standards Board Statements
#10 and #30. The specific objectives of the study are to estimate CFSA’s liability for
outstanding claims as of December 31, 2002, project ultimate loss costs for 2003 and 2004, and
provide funding guidelines to meet these liabilities and future costs.

       Moved by Director White and seconded by Director Scofield to adopt Resolution
Number 03–04 accepting, as presented, the 2002 Actuarial Reports for General Liability,
Workers’ Compensation, and Special Events Liability from Bickmore Risk Services dated
February 12, 2003. Motion passed unanimously.


IV.    2002 AUDIT REPORT

        David Debernardi, CPA, with Gilbert Associates, Inc., presented the 2002 Audit Report
to the Board providing information on the audited financial statements and all programs under
the control of CFSA’s Board of Directors. Mr. Debernardi pointed out that the Audit was
conducted in accordance with professional standards and that the financial statements and the
related disclosures have been fairly stated. In addition to generally accepted auditing standards,
the 2002 Audit was conducted in accordance with generally accepted government auditing
standards enabling CFSA to maintain eligibility with the California Association of Joint Powers
Authorities (―CAJPA‖) and apply for accreditation with excellence.

       Moved by Director Ferreira and seconded by Director Lim to adopt Resolution Number
03–05 accepting, as presented, the 2002 Audit Report from Gilbert Accountancy Corporation,
dated February 24, 2003. Motion passed unanimously.


V.     2003 GENERAL LIABILITY RATE

        Rick Wood reported that the while CFSA’s Risk Pools have been somewhat insulated
from some of the commercial market woes, CFSA has been unable to escape unscathed. CFSA’s
commercial market placement of excess general liability insurance increased by 83% or $254,000
in one year. The workers’ compensation excess went from $24,000 annually to $95,000 annually
representing a 396% increase. Couple the increased cost of excess coverage with the higher
Minutes of Regular Meeting
Page 3
April 1, 2003

costs of claims, especially in the workers’ compensation area, even risk sharing pools can’t
escape raising members’ rates.

        Rick explained that the 2003 budget adopted by the Board last fall was on target for the
General Liability Program as compared to the 2002 Actuarial Study. However, with the 83%
increase in the excess general liability insurance it will be necessary to increase the General
Liability rate. Staff is recommending the base fee for the General Liability Program be increased
by six (6) percent.

     Moved by Director White and seconded by Director Ferreira to adopt Resolution
Number 03–06 approving the 2003 General Liability rate.

       WHEREAS, the CFSA General Liability Program’s annual costs of reinsurance have
increased by $254,000 or 83% resulting in a need to increase the base fee by six (6) percent; and

        WHEREAS, the 2003 general liability fee continues to use the formula developed in
1999 to eliminate the class loss fee, increase the base fee, and impose a modification ratio based
on an individual fair’s loss history;

     NOW THEREFORE BE IT RESOLVED BY THE CALIFORNIA FAIR
SERVICES AUTHORITY:

        That the total projected liability fees for 2003 be assessed at one million eight hundred
ninety thousand five hundred twenty two dollars ($1,895,522.00). Motion passed unanimously.


VI.    2003 WORKERS’ COMPENSATION RATE

        The Workers’ Compensation Program sustained an estimated $1.3 million in losses in
2002, creating a need to increase the Workers’ Compensation base rate from 4.95% to 5.25%,
which represents a six (6) percent increase over the previous year and three (3) percent higher
than budgeted for last fall. This adjustment assesses the fees at a projected break even level for
the 2003 Workers’ Compensation budget. Staff has also proposed revising the current
modification ratio formula to further reward those fairs with lower than the industry average
claims loss and assess more to fairs with a higher claims loss average than the industry.

       Moved by Director Scofield and seconded by Director Lim to adopt Resolution Number
03–07 approving the 2003 Workers’ Compensation rate.

        WHEREAS, CFSA’s Workers’ Compensation Program is experiencing higher claims
costs; and
Minutes of Regular Meeting
Page 4
April 1, 2003

      WHEREAS, the Program’s annual costs of reinsurance have increased 396% from
$24,000 to $95,000; and

        WHEREAS, recent legislative changes in workers’ compensation benefits have resulted
in a significant increase in claims costs; and

       WHEREAS, due to these increased costs CFSA must increase the 2003 base rate and
must revise the loss modification ratio formula to account for high loss frequency and severity;
and

        WHEREAS, the prior year’s fees will continue to be adjusted to actual payroll at the
time of the annual assessments;

     NOW THEREFORE BE IT RESOLVED BY THE CALIFORNIA FAIR
SERVICES AUTHORITY:

        1.     That the workers’ compensation base rate for 2003 is increased to 5.25% of
payroll and volunteer wages, reserving for losses at the expected level.

       2.      That the 2003 workers’ compensation fee assessment formula to determine the
loss modification ratio for the five (5) year period 1997–2001 is as follows: a) the first two (2)
claims exceeding $25,000 will be capped at $25,000; b) the third claim exceeding $25,000 will
be capped at $35,000; c) the forth claim exceeding $25,000 will be capped at $50,000; and, d)
every claim thereafter that exceeds $25,000 will be capped at a maximum of $75,000. Motion
passed unanimously.


VII.   AUTHORIZATION FOR SONOMA COUNTY FAIR TO PARTICIPATE IN THE
       WORKERS’ COMPENSATION AND GENERAL LIABILITY RISK SHARING
       POOLS

        Charlie Mitchell, CFSA Risk Manager reported that the Sonoma County Fair has
expressed an interest in joining CFSA for the purpose of participating in the Workers’
Compensation Risk Sharing Program. After several discussions with the fair, staff provided the
fair with materials describing requirements for participation in the Workers’ Compensation and
General Liability Risk Sharing Programs. The Safety team conducted a safety survey and written
program review of the Sonoma County Fair and gave the fair high ratings, as well as
recommending their participation in the risk pools from a safety perspective. Staff is
recommending that the Board adopt a resolution authorizing the Sonoma County Fair to
participate in both CFSA’s Workers’ Compensation and General Liability Risk Sharing
Programs upon action by their County Board of Supervisors and the Sonoma County Fair’s
Minutes of Regular Meeting
Page 5
April 1, 2003

Board of Directors.

        Moved by Director Scofield and seconded by Director White to adopt Resolution
Number 03–08 authorizing the Sonoma County Fair to participate in the California Fair Services
Authority Workers’ Compensation and General Liability Risk Sharing Pools upon: 1) appropriate
action by the County Board of Supervisors to join CFSA on behalf of Sonoma County Fair, or 2)
appropriate action by the Sonoma County Fair to join the Liability pool only. Further that the
CFSA Executive Director is authorized and approved to execute the Agreement Between CFSA
and Sonoma County Fair. Motion passed unanimously.


VIII. RODEO LIABILITY LIMITS

       Chuck Hahn, and Morgan Crinklaw, representing Assemblyman Dave Cogdill’s office
appeared before the Board in opposition to the $3 million liability limits for rodeo events when
the event was being promoted by a non–profit community organization.

         Charlie Mitchell updated the Board on previous inquiries by Assemblyman Dave
Cogdill’s office concerning insurance requirements for rodeos held on fairgrounds. The
Assemblyman’s staff wanted to know who sets the insurance limits for rodeo events, and what
authority the decision making body has to set insurance limits for fairs. During the initial contact
with CFSA, it was learned that Assemblyman Cogdill had introduced Assembly Bill 1422 related
to limiting the minimum amount of commercial general liability insurance required from users of
fair facilities. This bill was introduced as a result of a constituent complaint regarding why
general liability insurance with a $ 3 million limit is needed to cover a rodeo held on a fair
ground. Mr. Cogdill’s constituent felt that the cost to purchase the required coverage was too
high and that the limits should be lower if the rodeo was going to be put on by a non–profit
community organization.

       CFSA staff responded in writing to Morgan Crinklaw, Legislative Assistant to
Assemblyman Cogdill, giving a brief explanation of who and what CFSA is and the process
followed by CFSA in setting minimum liability insurance limits for rodeo events. In addition, a
packet of written material on CFSA and rodeo insurance requirements was provided to the
Assemblyman’s staff.

         CFSA staff’s recommendation to the Board was that there be no change in the current
minimum liability insurance limits for rodeo events. The additional exposure to the Liability
Pool from lowering the minimum liability limit to $2 million for rodeo events conducted by any
non–profit community organization far out weighs the small additional cost for the higher limit
of $3 million. Staff also recommended that the Board oppose any legislation setting forth any
liability insurance requirements for users of fair facilities.
Minutes of Regular Meeting
Page 6
April 1, 2003


       The Board took no action on this item and the current rodeo limits were left intact.


IX.    APPROVAL OF GENERAL LIABILITY OPERATING MEMORANDUM #03–01

       Donna Bardaro, CFSA’s Executive Director, presented the proposed General Liability
Operating Memorandum #03–01 to the Memorandum Stating the Terms and Conditions of the
General Liability Risk Sharing Program. The changes included a Non–Compliance Policy and
Modifications to Indemnity Language.

         Modifications to Indemnity Language— The Board of Directors issued General Liability
Operating Memorandum #02–01, effective April 1, 2002, which followed a similar Operating
Memo issued in 2001, and addresses 1) minimum liability limits for specified fair contractors
and facility users and, 2) insurance certificates and required additional insured language.
Compliance with these ―risk transfers‖ requirements by participating fairs is extremely important
in keeping CFSA claims costs and liability rates down. When a fair consistently obtains
insurance certificates documenting the correct limit of liability and additional insured language
from fair contractors and facility users, CFSA is able to appropriately tender claims filed against
the fair to the contractor’s insurance carrier. When a fair does not comply with these
requirements, the CFSA pool may be required to absorb some or all of the liability stemming
from a fair contractor’s operations. Similarly, when a fair consistently obtains review and
approval of any modification to standard indemnity language in fair contracts, there is an increase
in the number of claims which may appropriately be tendered.

        Non–Compliance Policy— In 2001, the Board of Directors considered a policy setting
froth consequences to a participating fair where CFSA could not tender a liability claim due to
non–compliance with Operating Memoranda requirements. After input from the Risk Advisory
Committee and further discussion, the Board decided to give the fairs additional time to attend
CFSA training sessions and to become more familiar with the requirements.

        Now that two years have passed, CFSA staff brought the non–compliance issue back to
the Risk Advisory Committee at a meeting held March 13, 2003. The committee reviewed a
draft version of Section 2 of the proposed Operating Memo #03–01. Section 2 is based on the
prior industry consensus for a graduated approach to non–compliance, first involving guidance
from CFSA and then involving higher levels of consequences where there is a reoccurring failure
to comply.

        Response from the Risk Advisory Committee was mostly favorable and several of the
participants commented that the policy appeared reasonable. There was consensus of staff and
the Committee that there should be a financial consequence to a fair for a second offense
Minutes of Regular Meeting
Page 7
April 1, 2003

occurring within five years. Staff also believes that the Board should have flexibility on the
consequences where a third offense occurs within a five year period, depending on the particular
facts and circumstances. Staff has recommended that CFSA’s approval of indemnity
modifications be made a formal operating requirement along with the minimum liability limits
and additional insured language.
        Moved by Director Scofield and seconded by Director Ferreira to adopt Resolution
Number 03–09 approving CFSA General Liability Operating Memorandum #03–01.

        WHEREAS, the Memorandum Stating the Terms and Conditions of the General
Liability Risk Sharing Program Administered by the California Fair Services Authority adopted
effective January 1, 2000, (―MOC‖) provides a mechanism for the CFSA Board of Directors to
issue Operating Memoranda; and

        WHEREAS, the MOC defines Operating Memoranda as memoranda issued by the Board
establishing policies and procedures for participating fair operations which affect risks of liability
administered by CFSA; and

        WHEREAS, compliance with risk transfer requirements by participating fairs affects
risks of liability and is extremely important in keeping CFSA’s claims costs and liability rates
down; and

        WHEREAS, when a fair consistently obtains CFSA’s review and approval of any
modification to standard indemnity language in fair contacts, there is an increase in the number
of claims which may be appropriately tendered; and

       WHEREAS, CFSA’s staff recommends adoption of Section 1 of the proposed Operating
Memorandum #03–01 which requires fairs to obtain CFSA approval of any modification to
standard indemnity language; and

       WHEREAS, in 2001 the CFSA Board considered the implementation of a non–
compliance policy setting forth consequences when a fair fails to comply with Operating
Memoranda requirements; and

        WHEREAS, in 2001 the CFSA Board decided to give the fairs additional time to attend
training sessions prior to implementing a non–compliance policy; and

      WHEREAS, now that two (2) years have past, CFSA staff recommends adoption of the
non–compliance policy found in Section 2 of the proposed Operating Memorandum #03–01;

       WHEREAS, Section 2 is based on industry consensus for a graduated approach to non–
compliance, first involving guidance from CFSA and then involving higher levels of
consequences where there is a reoccurring failure to comply;
Minutes of Regular Meeting
Page 8
April 1, 2003


     NOW THEREFORE BE IT RESOLVED BY THE CALIFORNIA FAIR
SERVICES AUTHORITY THAT:

      The General Liability Program Operating Memorandum #03–01 is hereby adopted.
Motion passed unanimously.
X.    REVISIONS TO POOLED PROPERTY PROTECTION PROGRAM MOC
      LIMITING PROTECTIONS FOR TERRORISM AND MOLD

        Charlie Mitchell reported that Driver Alliant Insurance Services renewed the commercial
excess property insurance coverage for CFSA effective January 1, 2003. The new lead
commercial property insurance coverage policy with Westchester Surplus Lines Insurance
Company included two new exclusions. The first new exclusion eliminates coverage for any loss
occurring from an act of terrorism where previously losses arising from terrorism were covered
up to a limit of $5 million for each occurrence.      The second new exclusion eliminates
coverage for any loss resulting from or in any manner related to Fungal Pathogens or Bacteria
whether or not there is another cause of loss which may have contributed concurrently or in any
sequence to a loss. Previously there was limited coverage if the mold was caused by a covered
peril. Charlie emphasized that the insurance industry has taken the position that mold/fungus is
an uninsurable risk by excluding coverage in most liability and property policies.

        In response to the inclusion of terrorism exclusions in most property policies, CFSA’s
broker developed a separate PEPIP Terrorism Insurance Program to provide supplemental
coverage for property losses resulting from acts of terrorism committed by a foreign person or
U.S. citizen. This program has a deductible of $500,000 per occurrence and offers limits of
$50,000,000 per occurrence in which the limits are shared by all members in the event of a loss.
Staff concluded that the additional cost was too expensive for the limited $50,000,000 shared
coverage offered and they will continue to explore options for terrorism coverage with the
Division of Fairs and Expositions if and when the commercial market expands this protection. In
the interim, staff is proposing to extend protection under CFSA’s Pooled Property Protection
Program to include losses, resulting from terrorism or mold/fungus up to the Program’s self–
insured retention. The Property Pool would cover any losses up to a maximum limit of $500,000
less the fair Pool Loss Deductible amount. There would be no excess commercial insurance
coverage once a loss exceeded $500,000. This protection is similar to the current protection for
flood losses to fairs located in Flood Zone A.

       Moved by Director White and seconded by Director Lim to adopt Resolution Number
03–10 approving revisions to the Memorandum of Coverage for the Pooled Property Protection
Program.

      WHEREAS, the Memorandum of Coverage for the Pooled Property Protection Program
Administered by the California Fair Services Authority (―MOC‖) was adopted effective January
Minutes of Regular Meeting
Page 9
April 1, 2003

1, 2002; and

        WHEREAS, for the 2003 renewal of the Lead Policy Layer under the MOC a terrorism
exclusion and mold/fungus exclusion were added; and
        WHEREAS, CFSA staff recommends that CFSA continue to provide limited coverage
for terrorism and mold/fungus under the Pooled Property Layer up to $500,000 per occurrence
and subject to the Fair Deductible;

     NOW THEREFORE BE IT RESOLVED BY THE CALIFORNIA FAIR
SERVICES AUTHORITY:

       That the Memorandum of Coverage for the Pooled Property Protection Program
Administered by the California Fair Services Authority, Amended and Restated effective January
1, 2003, is approved. Motion passed unanimously.


XI.    INFORMATIONAL ITEMS

       1.      Risk Advisory Committee Report

               Rick Wood reported that the Risk Advisory Committee met on March 13, 2003, in
               Sacramento. Fair attendees included: Bill Blair, 45th DAA; Bob Putney, 15th
               DAA; Michael Wegher, 1–A DAA; Kelley Ferreira, 33rd DAA; Jan Haydn–Myer,
               29th DAA; Trish Sciarani, 27th DAA; Forrest White, 2nd DAA; Bill Dale, 20th
               DAA; Brian May, State Fair; and Ted Holder, Alameda County Fair. The
               Committee functions as a sounding board and/or peer group for issues ultimately
               impacting all member fairs. Through this representative group, staff has the
               benefit of review and discussion from the member fairs’ perspective. The
               Committee discussed CFSA’s 2003 risk pool fees, fair dress code
               recommendations, final review of the rodeo guidelines, a CFSA compliance
               policy, and terrorism and mold/fungus exclusions in CFSA’s property coverage.

       2.      Final Review of the Rodeo Guidelines

               In early 2002, CFSA issued a preliminary bulletin to provide timely information
               to member fairs in response to an increase in claims associated with rodeo
               activities. At that time, staff promised that a task group would be formed of
               industry representatives prior to releasing final recommendations for conducting
               safer rodeo events. In the fall of 2002, and again in January of 2003, roundtables
               were held to allow fairs, rodeo promoters and interested parties the opportunity to
               discuss the issues involved in these activities.
Minutes of Regular Meeting
Page 10
April 1, 2003

             A final draft of the Rodeo Bulletin was submitted to the Risk Advisory
             Committee on March 13, 2003. The general discussion focused primarily on the
             structure of local events— what is the fair’s responsibility, what is the local
             association’s responsibility, and what responsibility does the stock contractor
             hold. Because there are so many variables in the events it is sometimes difficult
             to determine who has operational control of an event and which party has ultimate
             authority over the enforcement of the safe operation of the event. It is CFSA’s
             intention to release the final bulletin to member fairs within the next thirty days.
      3.     Report on Fair Dress Code recommendations

             Christy Layton, CFSA’s legal counsel, reviewed CFSA’s Insurance Alert (dated
             March 20, 2003) regarding fairground dress codes. She explained that the
             purpose of the Alert is to notify CFSA fairs of current law regarding dress codes,
             and to provide risk management recommendations when a fair is reviewing or
             considering a dress code. These recommendations were reviewed with the Risk
             Advisory Committee at its March 13, 2003, meeting. The updated Alert was also
             shared with the Division of Fairs and Expositions and the Attorney General’s
             Office.

      4.     Board’s representative to the Revenue Protection Program Claims
             Committee

             Donna Bardaro, CFSA’s Executive Director, reported that John Root, general
             manager of the San Mateo County Exposition Center, announced his resignation
             and retirement from the facility management industry, effective May 3, 2003.
             John has been the Board’s representative to the Revenue Protection Program
             Claims Committee since January, 1999. With his pending departure on the
             horizon, the Board will need to consider whether 1) to ask John to stay on as the
             Board’s representative, 2) appoint a member of the Authority’s current Board of
             Directors to serve in this capacity, or 3) discuss the specifics of nominating and
             appointing a fair industry representative to serve as the representative of the Board
             of Directors.

      5.     Staff Reports

             Administrative Services — Management has hired a new Computer Services
             staff member in an effort to better meet the needs of CFSA’s clients and to make
             the department more recognizable as one of CFSA’s ―core competencies.‖ The
             Computer staff will be setting new goals including more frequent customer
             contact.

                    2002 Annual Report Preparation for the 2002 annual report is well under
Minutes of Regular Meeting
Page 11
April 1, 2003

                    way and staff expects to meet the May deadline for distribution to member
                    fairs. The annual report theme is ―CFSA Delivers.‖ Staff wanted a theme
                    that was positive and strong, one that actively conveyed CFSA’s more
                    intangible benefits such as flexibility, stability, safety and peace of mind.
                    CFSA Delivers even picks up the first two words of the mission statement.
                    CFSA Web Site The Web site continues to be updated regularly with
                    news alerts on the home page and with the posting of each new fyi
                    newsletter. Staff recently added the Stakeholder’s Survey (from the 2001
                    annual report), which may now be completed and submitted online.
             Finance — Financial statements as of January 31, 2003, were presented along
             with the Balance Sheet reflecting the adjustment made December 31, 2002, to
             reduce the General Liability and Workers’ Compensation confidence margins
             from 90% to 80%, which equals $871,000. The remainder of the 2002 Actuarial
             adjustment of $416,508 was taken from the Adverse Development Fund. The
             combination of these actions still leaves the Pools actuarially sound, however,
             continued reductions would not be fiscally responsible which is why staff is
             proposing modest fee increases for 2003.

             Risk Management — CFSA staff is continuing to work with the broker to
             complete the final stages of the January 1, 2003, renewal. The reinsurance
             coverage for the Special Events Program has not been completed. CFSA’s current
             carrier has granted short term coverage extensions while replacement coverage is
             obtained. Staff will also be working with the broker to renew the workers’
             compensation policy that expires on July 1, 2003.

             The Pooled Property Protection Program had four covered losses in 2002 and
             there have been no reported losses for 2003. Staff has received damage estimates
             for two Nevada County Fair losses, the Plumas–Sierra County Fair loss will be
             closed within the next few weeks, and the Alameda County Fair has submitted an
             initial claim for a partial payment.

             Staff continues to process contracts received from District Agricultural
             Associations as well as other CFSA member fairs. As of the end of February
             2003, staff has reviewed 145 contracts. CFSA continues to focus its efforts on
             getting all member fairs in the Liability Program to submit their contracts for
             insurance certificate review and approval. As part of this effort, staff will be
             participating in the two Nuts and Bolts Training sessions scheduled in April.
                    Special Events Claims activity in the Special Events Program includes
                    six (6) open claims with total reserves of $91,994 as of February 28, 2003.
                    This compares to seven (7) open claims and $95,700 as of December 31,
                    2002. For 2003, one (1) new claim has been received and three (3) claims
Minutes of Regular Meeting
Page 12
April 1, 2003

                    were closed. Currently, there are four (4) litigated claims. The Program’s
                    ten (10) year average is 24 claims per year and $130,400 in total losses.
                    The loss history of the Program continues to be very good.
                    Revenues for the Special Events Program for 2002 totaled $524,999 which
                    was 115% of the budgeted revenue of $455,000. This revenue increase is
                    due to an increased number of covered events and the additional use of the
                    Program by two new fairs. The Special Events Program continues to see
                    increased usage by all fairs in 2003.
                    General Liability Claims activity in the General Liability Program
                    includes 71 open claims with reserves of $1,670,095 as of February 28,
                    2003. Sixteen (16) of these claims are litigated. As of the end of
                    December, 2002 CFSA had 107 open claims with reserves of $1,782,761.
                    Thus far in 2003, CFSA has received only seven (7) new/reopened claims
                    while 47 claims have been closed. Staff is currently tracking six (6)
                    claims that have been tendered to other insurance companies and 24 loss
                    reports have been reported to date.

             Safety — The Safety Team conducted eight (8) facility inspections, two (2) aerial
             boom lift certifications and safety training, two (2) injury and illness prevention
             program review and training and one (1) race track inspection between February
             1, and March 31, 2003.

             On March 6, 2003, the Safety Team conducted a safety survey and written
             programs review of the Sonoma County Fair. The consensus of the Safety staff
             was the that the condition of the facility and safety programs at the Sonoma
             County Fair make them an ideal candidate for membership in CFSA’s risk pool
             programs.

             Tom Amberson and Tom Allen met with the representatives from the Division of
             Fairs and Expositions, the State Fire Marshall’s Office (―SFM‖), the Califoria
             Construction Authority, and fair managers Forrest White, Stuart Titus, Selma
             Harris, and Tim Fennel to discuss a regulation which has been in effect for a
             number of years. Current code states that any building over five thousand (5000)
             square feet, in which alcohol is served or consumed must be protected by a fire
             sprinkler system. Understanding the financial implications and impracticality of
             immediate mitigation at all district agricultural associations and the State Fair, the
             SMF representatives appeared to be open and willing to work with the fair
             industry to petition for code changes or exceptions to the code. Members of the
             California Fairs’ Alliance and F&E staff will be drafting a formal petition to
             address those changes, along with supporting reasons that health and safety will
             not be compromised.
Minutes of Regular Meeting
Page 13
April 1, 2003


              Workers’ Compensation — As of March 31, 2003, total open claim reserves are
              $2,874,002. There are currently 207 open claims of which 151 are indemnity and
              56 are medical only. Staff has processed 34 new claims for 2003 as compared to
              50 claims this time last year. For the year ending 2002, a total of 283 new claims
              had been processed. The year ended with 206 open files of which 159 were
              indemnity and 37 were medical only. The 2002 Reserves totaled $2,900,394.

              The Department of Industrial Relations released the final draft of regulatory
              changes to Vocational rehabilitation effective January 29, 2003. These
              regulations include procedures for the settlement of prospective vocational
              rehabilitation benefits and make it clear that they apply ONLY to injuries
              occurring after January 1, 2003.
              Many of the new laws which went into effect January 1, 2003, will be heavily
              scrutinized by the legal establishment on both sides. This same scrutiny occurred
              when the new changes in Workers’ Compensation were enacted on January 1,
              1990. There was a period of time after January 1, 1990, when the Workers’
              Compensation community had to deal with four different sets of Workers’
              Compensation laws. Staff will keep the Board informed of all changes which
              effect our members.

       6.     Next Regular Board meeting

              The next regular Board Meeting is scheduled for June 3, 2003, at 10 a.m.


XIII. EXECUTIVE SESSION

        The Board adjourned from regular session at 11:340 a.m. and went into executive session
to discuss liability claims involving Brent Lockett, Donna Gerez, Nicholas Ritter, and Arul
Camacho & Erica Warner. There was also discussion involving existing litigation of Kenneth B.
Shepard, Ronald R. Haven, Shepard and Haven, LLP (Case No. 01AS02368) and Lexington
Insurance Company, a Delaware Corporation; AIG Technical Services, Inc., a Delaware
Corporation; Willis Insurance Services of California, Inc., a California Corporation; Willis
Corroon of Orange County, doing business as Willis Insurance Services of Orange County, Inc.,
a California Corporation, Willis Corroon of Orange County Insurance Services, also known as
Willis Corroon Corporation of Orange County and Willis Corroon Corporation (Case No.
01AS02427).


XIV. REGULAR SESSION
Minutes of Regular Meeting
Page 14
April 1, 2003

       The Board adjourned from executive session at 12:08 p.m. and regular session was
reconvened. The Board took no reportable action on the liability claims involving Brent Lockett,
Donna Gerez, Nicholas Ritter, and Arul Camacho & Erica Warner. The Board took no
reportable action on Case No. 01AS02368 or Case No. 01AS0247.


XV.    ADJOURNMENT

       Moved by Director Ferreira and seconded by Director Scofield to adjourn. The meeting
was adjourned at 12:10 p.m.


                                                                          CHAIR

ATTEST:




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