ALC-Executive Subcommittee

Thank you being here called the legs like council executive so committed to order and we will have the current members that are here in speaker shepherd would be joining us by phone and. Members first up we have mister andrea's road roads if you come out and present. For education. If you greg will introduce you say often your title for the record please thank you chair my name is androis roads on the chief legal council for the parliament of education greg rogers that see if I would primary education who recognized present thank you chair before you are emergency rules governing payments under the education freedom account program these rules are not dealt into eligibility or into any other part of the program this is simply to have a mechanism in place to process payments or we are going were reviewing public comments making changes to the rules in anticipation of the second round of public comment and am available for questions go to your word now you recognize thank you is chair so. I'm not ask you a couple of questions but the first one's kind of unrelated to this particular rule but back near the summer you got sent in front of us on a rule for school safety and it was on the fifty million dollars and how you are dispersing it and you can make a comment that you had statched to authority to go ahead and send those payments out come to find out you didn't and road expired and marched energy and spending money since that point but you were supposed to bring its rule this fall there was gonna be a permanent rule so you can explain that we haven't seen that is that correct so the rule was to be allowed in october it should be in your december agenda for a rules so following that this rule is under one point zero zero here on pages aren't number but you can find it you know what's that says continuation of payments so. This is second one of these rules correct so we had a full set of rules for promo like emergency rules for the program to begin it this is simply for payment processing and it's a standalone emergency understand that so where is the permanent rules that should cause that was in august right or prior to that was at the beginning of all correct that's yet august september october november so where were certain at four months a hundred and twenty days so those are expiring so where's the public permanent rules that it will take their place so the permanent rules went through public comment we received a lot of public comments we have been reviewing the public comments making changes or finalizing that language currently so that we can put it out on a second run a public on it and then this has been approved not only as an emergency room but as a permanent rule by the staple of education so we will be bringing about to open public comment on the permanent pro- payment processing while we're getting the full rules fully probably some money issues at our process got I like things to follow the process to set up and it seems like we're doing all this and emergency rule which means we don't get a public comment which means we said here and we do it here it's a legislature and folks ask a few questions and then you get to go on and have your hundred and twenty twenty day rule. And and I understand you told me you had department rules in the process you're getting through the comment I just don't want to see the continuation of of emergency rules without public input and and I don't want to see a rule come back ninety days from now and you're probably getting another merged rule but you changed a little bit so you could do that because the rules don't allow you to have to say. So let's just make sure we're following the process we're doing a stuff right and we're putting it in a permanent rule and we're doing it with that public commit in mind and and this will have a permanent rule that is going to be like a second round of public comments so the full rules are going to include this language but there is a separate standalone payment processing rule a permanent rule that is going to go through public comment this next month so we will be getting public on it from from members of the public on this specific language they could want you. The. Seeing no other questions. Without objection that proposed emergency rule of reviewed and approved and the review and approval shall be an effective upon adjournment of. The alc meeting proud in november seventeenth twenty twenty three bad thank you gentlemen for being thanking. Next we have uh presentation for commerce adc and the program. They will come up please you bet and only mag give issue. Name and tatter for the record. Thank you mr chair tucker brackens department commerce. The. Done how we stay broadband director work will thank be in here and you'd recognize presentation thank you mr chair i'll start and just kind of talk about the process and why we have this emergency role before you today if we want to get into the weeds of them rules itself that in the technical aspects all the further state broadband director over here I think there's been some concern about why were promulgating an emergency role at this point when we're still waiting on the the feds the nti to sign off on our broadband plan and the short answer is the nti asked us to have a rule in place by the time we submit all of our documents to them on december twenty seventh there was no time to promote a permanent rule before december twenty seventh but have been assured by the n t I a that will be able to tweak that rule when we promulgate the permanent rule based on public feedback we're receiving under the initial proposal documents and those are the documents that the feds are requiring so I think we probably did a poor job of communicating that on the front earned and making sure everyone was aware of the game plan but this rules to is to check that box and satisfy the the feds and be able to submit that by december twenty seventh so just wanted to address that count of the process first. The. That's all I have on and and i'm happy to elaborate if there's any questions but go to your water recognition thank you mister the anybody as well and take this circle at any moment here I appreciate the fact that you you listened yesterday from ebd and your own in the fact that you had poor communication because I think one thing members have heard last night and it's more than from the isps as that they weren't aware there was a there was a merchant rule common they they won't prepared for that I think it's important that that communication needs to be that you are doing this to ensure the one point five billion dollars comes to arkansas I also think it's important that you take the time this morning to clear up and in the air that if there's problems with this emergency room and how it's effective or how it can be implemented that you are willing to change that in the permanent rule under good face now what what that would mean under good faith and I see philip in a back of the room and i'm glad he's here today it's good faith with me that you don't break anything that has to be right for the feds fill it and it will make sure that the isps understand that those strings are there in order for us to to have that money to be able to implement these projects the other part they want you to address is the bead funds are not eligible to be used for any areas already subject to a federal funded project does those purple zones about member right on that map. I want to know from you all the all feel comfortable that you've identified those areas properly throughout the state and I want you to be on the record today and in say in that um n and n that those would seem to be an obvious priority to avoid and wasting times and resources unnecessarily challenge as we go forward so if you don't mind take take a minute address those days and anything I need to repeat i'll a glad to repeat it hopefully maybe I can remember it but I think it's important that you take this moment publicly to let isps know how here's while we're here here's what we're going to do here's what we feel comfortable and he's already federally funded areas and and it what we're going to do going forward with the permanent rule and how in good faith how you're going to negotiate with them to to make sure that permanent rule doesn't impede on any of our isps throughout state then keep us from being able to serve the folks that we're trying to serve and that's our constitution I think I can take the first question or to and then all the freedom on the map question but yeah that's exactly right we are committed to and have cleared with the end and tia that after receiving all the public comment we can on on the two volumes of the initial proposal documents that federal document that's out there that is going to inform the final draft that we submit with ntia and our rule permanent rule that we promote after this will reflect those changes again we have to operate inside the balance that the nti is given us but promoting this emergency rule today does not cancel out or notify this public comment so we're receiving those are still going to be taken into account and our rule is going to mirror whatever we submit to the feds come december um I think that was that that might be your second question I can't remember what your first question was but that's first in second and you negotiate with those guys and good faith to make sure that's what you can do you will do yes and the second question was the beat funds are not eligible to be used in those federally funding areas and how do you feel. And do you feel comfortable about the maps that you have in place today. Thanks representative no you know one of the most critical pieces right of us of the beat program moving forward arkansas is that we do not find locations that have already been subject to an award so there are not only the state grants that we have done through our office there's several other federal programs outside of our office that have a word of grants and arkansas you look at the whole state since twenty twenty our office and other federal programs has already been over a billion dollars a grand awards in arkansas to about three hundred and thirty thousand locations across the state you take those away we think there's about a hundred and ninety or so thousand homes businesses in arkansas that still need to get bill to or upgraded for the first time based on the funding that will have through the programs who have taken great care to account for all prior funding our locations and we feel very comfortable that we're going to be in a good position. Thank you mister let the other members have questions if they have to follow up the maps you're talking about the maps we talked about previous months. Were those maps. When can we see him. So it's part of the speed process when things we have to do before we go probably in the summertime to one another grant round using our dollars when the critical important piece and it relates to a prior funding is in quarter one as we were rejected today there's no timetable from ntia and when they will approve our process plan or were projecting it as a january february march procedure and it's part of that we're putting on a map including those hundred ninety thousand locations homes business that we think I started to get built you are upgraded. And it's going to be a statewide process of statewide map that involves in its local government we worked hard to create our county committees across the state non profits and also internet service providers will all have an opportunity in the general public as well to see this map state wide is going to show all the locations again we think are eligible and it's going to allow for a challenge process right so if there are communities in certain counties across the state that fills though the map is not correct on the return to get it as cracks we can upfront there is a process as part of the rule that we're doing today and a part of the regular rule that'll be promotated but allow for a challenge process we can try to get this map as correct as possible from the grassrooms level and so it's coming we think quarter one is don't run that process in advance of running that process we're going to institute uh educational trainings for those folks who are eligible to participate in challenge process or folks are trained up ready to go over when we hit the button on day one. And I have no i've told you this in the past we've had some first nail change item let me just say again our represent ten rural counties. And that hundred and ninety thousand people most of the people that I represent her in that ninety thousand people we don't want to be left out in so far we we don't have anything to see we know I mean they can put her hand zone and and at what the concern is do you have any concern that the. Uh. Follow up rule. Might not be accepted by the federal governme. I have no concern about that. Yeah. I don't english you are recognized thank you very much so. I don't have a rep thirties rules near their really are important making sure that we're in compliance with what we have to do I would have a request though that from the cochairs is that in the very near future next month or january that we have folks from the broadband office come and give us a full presentation on exactly what's taking place what the process there's what buying one buy him to is what the digital economy plan is and how we're going about doing that as I think that in this small room there a few people who understand it know it not it's a bit of meetings but the general group of folks in the legislature has no idea what this all means and it's a really big deal so that is my request as a legislator is that alc have an opportunity for you all to make a full presentation at one of our meetings thank you. Thank you center we would look forward to that represent codes are due regular thank mischair is it correct the states are preempted from regulating broadband rates. The. There is a p repeat that for me please I said is it correct that states are preempted from regulating broadband rates I see that there are some briefings here or the state is going to be setting rate for the low cost option at scoring some rates for the application process in the state is the state allowed to do that and does that need to be a change in the final rule yeah so as a general. As you're all know we're the for instance the architects are robin offset of the authority as a regulating body to go and do that this is a requirement from the federal government as part of this programs the program is optional so we would say that we are not read setting in that in no provider is forced to participate in this program it's holy optional so we'll see that but the requirements of a low cost plan option in some affordability metrics are requirements from the federal government as a part of this program as well so ill match it up with what the federal government is warning to do is at what you're saying correct okay thank you thank you mister. Replaced order I think the request and english made I mean I think we can discuss that and get a decision to you guys but we're pretty full for january december already as far as the council agenda we were just talking once our sister before this meeting started about what december's already looking like in for some reason december always ends up being a catastrophe or is the best word I know to use for it but we will look at that we we do think it's important as the chairs of council that that information is shared to the membership I just don't know what that's going to look like on a calendar so we'll we'll keep you guys in contact with with the bureau staff and what will get that handle. You're more a question. If not with. Is reading better here we've got time me better here to speak to this issue and this would be opportunity you could do that. Rage hand stand up here now. The. If not hopefully information has been helpful today without objection to proposed emergency rule is reviewed and approved and the review and approval shall be affective upon adjournment of ALC meeting proddy no member seventeenth twenty twenty three thank you gentlemen for being here today. Thank you miss your chair and committee. Thank you. Members except we have educational facilities property insurance study and presenters going to be our insurance commission and mister mccline and then we've got to the group with. Matters adams and lay coming out by wheel at the insurance commissioner first. Thank you commission from being here please give you official name and alan clean insurance commissioner and do see that i'm here under the educational facilities study I believe you're consultant for the ones actually presenting the study today happy to hear the answer any questions you have point eight appropriate time but i'm also happy to sit down let them do their presentation start with you and okay german what allow your approach last last month and. The executive last month we we talked about the wind school district it was brought to our attention about a school board sociation that that was an anonymously in calls there because they were using public adjusting I think is the words and I don't have any notes in front of me so i'm doing this completely from memory so if I mess up that you're welcome to correct me and I think you and I had talked after that meeting. I think it's important that a committee understand what happened with that claim how that claim was brought to your attention and what what was the the meeting tattoos behind why that term public adjusting kept being brought up it in an it she talked about a lawyer was hired and the fact that the certain lawyer was hired it caused the premiums to go up in the claim adjustments to go up so if you don't mind if you just kind of give us some background and yes you're right we will go to to roberts lay in and matters after this but we want to make sure we close out last month before we move forward sure and just to save that muggle invite randy rather than to come up as well yeah that's fine anybody for your department is needed more than i've got lawyers I mean II think I can address the question if you depend on how deep you further you want to get I saw you brought half the department where yeah you know it's you know I have got a great team's also what what what happened here but the uhm is as we've well they'll get into later with the presentation yet they are too different public school programs google association and then randy runs the actually smaller program of public school similar model the wind school district was part of the school board association property plan so it was on our claim where but. The. So the school board association was running handling that very expensive to the extensive claim and the. Yeah. The wind school superintendent had asked for some I guess consultation want to know if there's somebody who could could could he could bounce things off a bit other than his representatives at school board association so somebody in his corner I think is what he's expressed to the folks I talked to him and I said you know it and then actually held a held meeting with them and I went up there just a facilitate that and him be a part of it ten and yet there was plenty of coverage for the wind claim and I think the schoolboard association people communicated that to them and I told them I thought they were in good hands with with the school board association but following the meeting he still expressed that he wanted somebody that that that they can retain some former fashion to to consult with them and so that's when they and they got a law firm involved to help them I guess the best way to say it and above believe the testimony of the remarks last week had a public ingestor so they public adjusters aren't legal and arkansas are consoles one of four states it doesn't allow public congestion which really is this somebody negotiating settlement of a claim on behalf of a policy holder that's not an attorney if you're an attorney it's fine public adjusters consider the unauthorized practice of law in anybody who success the specs are going on. Can file a complaint with the supreme court committee on professional conduct and and report that who could be I don't really have any more authority over it than anybody else can did did that happen at win was a did that happen from the school more association you know up to they follow complaint with the supreme court that they thought there was public adjusting taken place to my knowledge it would be architect supreme court to my knowledge they they didn't could when they mentioned it to me at a reference they reference the letter from the law firm that was representing them so that really into the discussion as far as we were concerned it was a law firm and that's perfectly legal and there is really nothing no further action that we really needed to take on that and that's what I would have communicated to them so so yeah that it's like some public adjusting is fairly popular across the country arkansas happens to join three other states it just never has its legislature never has enacted that so I don't really have any authority as insurance commissioner over there is somebody mentions it to me in her case it's nothing she said to a three times that she reported to the insurance commissioner that they had public adjusters what was reported was going to have a law firm who had a staff of people representing them went to wind school support ended a his request and didn't see anything out of line about that. Thank you mister members. Any questions from memory. Okay thank you for being here should. No members we have presentation only. Facilities. Welcome german hopefully alcohol share between two max feel free to pull them they'll make closer to you they there's some cord there if you need whole smaller court out of the day as please give it sure name title who you with for the record and you're recognized to present. Robertle president matters items only insurance. Kyle morgan public energies and matters only insurance clint lambert matters on the generally. Again thanks for being here you're recognized percent ok thank you good morning so for today what we want to do is just give you an update as to where we are in the process that we laid out the last time that we were here last time that we were here we talked about the fact that we would need to gather all of the day to interview program managers get our day to organized start the data now since there'd be other steps beyond that in we are currently in the organization of the data that we received it's a it's a tremendous amount of information to get through we did receive all of the data finally and we received a good bit of it very quickly from both program managers but finally got a live at thursday of last week so we're still getting through some of the organization piece of it in really working on the data analysis and for the data analysis peace of theirs were focused on in a really mapping the concentrations of risk so we can understand and have a visual representation of what it is ensure would look at in terms of what their losses might be or what risk might be to them if they were going to be a providing an insurance uh cover loss analysis we haven't really gotten into and we are working on weather modeling that will include convective storms it will also include earthquake and flight so that's really an update as to where we are in the steps in the process that we're working on at the moment so. The slide represents a quick a review of the two programs that exist part of the the contract included higher ed so we've included that information. Just quick run across it shows the number of buildings you can see if you look at the building call on the right there's over twenty thousand buildings or analyzing they are the number of locations for each and the total insured values are approaching forty billion. So any questions on the slide. So this is there's a lot of information on the slide and i'm not going to read all this to everyone in the room we think that both programs were very well put together and have very good coverage very broad when we look at the general marketplace uh these programs provide very good coverage of note. The deductible structure and is in line but we would see in the general market and the self insured retentions for each very. Uh but pretty consistent between the three the higher ed has a higher attention but the insured value there is much higher. The. The the calm to the right when we look at the the total insured value in the premium that breaks down just the average rate that is paid between all three of the programs and we're looking further under this presentation we're going to go into the valuations of these properties so one of the things that the insurers are going to look at is is that thirty eight. An accurate number of thirty eight billion or do we need to make adjustments to that as we do our study the second set of data points here are the right history between the three programs if you go into the right you can see that it was at six and a half cents four and a half since farmer have since very good rates over time as you moved to the left that page you get to the current rates you can see over the last couple of years the the dramatic increase in rates in we have a wanted data points over while that is uhm we're not going to go into that here but that just gives you a representation of the rate change every year's. The last data point on this page is for the staffing between and the number of districts between the different programs uh the schoolboard association runs very lane and they have a very high district account uhm the absent program in the higher adashstrict they share between the two so it's not seventeen seventeen institute move seventeen based on the information we're going to present we feel like that staff is justified based on the work that they do uhm what we're going to recommend to some standardization around all that and how that structured in that there's more to come on that the dishes gives a visual representation of what the programs are doing how their structured and similar rate change. The. Also want to point out it is our understanding that in the school board association the appraisal process is kind of an informal process. Compared to what we saw with arkansas insurance department not that that's necessarily bad thing I think that what shannon had laid out for us when we talked to her was something that you would say that was pretty standard which was just an annual inflationary increase so I don't think that there was anything necessarily wrong with the way that they did it but in contrasting all of the practices that are in place in processes you're in place across the programs we're going to look at who we think is doing things the best way moving forward and and recommend that that's the way that the program works going forward so having said that initial observations that we have I think standards evaluation I just touched on that different a little bit really haven't gotten to detailed into the allocation of premiums but again you want to have consistent standards a car across everything that you do and part of what we're going to do in the study is really determined what we think the right standards need to be and make a recommendation that that fits you know and covers all of the schools the resources differ greatly you've got one program that runs really lane. I got to be honest with you for what the arkansas insurance department's doing i'm not sure that they're pretty lean to there's a lot of a lot of work in the appraisal process there were any robinson in his team do you and we got to experience some of that we're gonna be looking for potential valuation issues anywhere that we see that we have properties that are under valued we're going to be looking for that as we go through our process we do think that potentially there are going to be some valuation issues that are there the better the appraisal process the better the valuations are going to be the insurance industry relies upon accurate valuations in order to write in charge for their coverage so it's really really important that we get that information correct going forward if there's improvements to be done there current risk concentration mapping requested just wasn't available which is fine we're gonna do around anyway. Um. So car you got some thoughts on the appraisal you want so I was invited to go along with the radios team from the insurance apartment on appraisal trip valuation trip to a huntful school district up in northwest arkansas and. As you see I believe you'll have these printed the one on the left with the picture on it that's an example what evaluation report looks like from the insurance department for higher naps it and the other one is the school word associations. And those kind of speaks to the standardization back to that this speaks to the standardization of omen you know like they say they say the same information you know but they're not not quite in the same form. And it's a little bit more information in the insurance department and we're. Like what we see there but husband school district who we walked around first melt the administration in the walk around every room every building their measure and out everything with lasers you know shooting everything drawn sketching it out they ask a lot of questions about the contents I feel like that's like you know we think about property values you think the building a lot of the stuff is what's inside the building and how they gets replaced and for example he's you know. They're not just walking up to the superintendent saying like hey how much stuff do you all have in this building on campus their walking up to the shop teacher and ask them how many welded how many welder machines do I have how much does it cost like for each one how many hammers do you have like they are really into the weeds. Crossing out things on old bay waste of reports of date values and then shepherd math in. Yeah i'd walk away from that I can confill more confident the job that they do. Cure the next sliders. Whether modeling and so just real quick if you look at we've got to break out here on the different types of tornadic activity this does not include straight line when so does not clue hail so it's not comprehensive of a convective storm study however it does give you an idea and there are some observations to be made so since two thousand and eight there have been eighty f to storms in the state there have been. Fourteen f three on one and four f fours not including what we're aware of that's happened in twenty twenty three the data for twenty three twenty twenty three is not finalized in available from the national weather service but you can go ahead and add a couple to these that were they were all aware of. Um one of the things of note when you look at this and the reason that the modeling is an important from our perspective. Um. Considerable damage we will have construction types that we're going to look at in our study that can wistand you know nft type storm so we really need to look at what the construction types of all the properties are how much of this if we're looking at some type of state insurance trust where we're going to be recommending some self insurance we're going to have to look at you know how how much of this. Do we need to lay off to an insurance company and how much of it can we retain so the construction type in the damage that can come from each construction type is going to be really really important. When you look at these three maps. He noticed that one of the things it's pretty consistent about all of them is that they start from the southwest and they moved to the northeast and they pretty much go in a straight line that's the way that's that the the way that they work so is you overlay the mapping and no one knows where these storms can go no one can predict where they're going to go in the future but what you can do and will show you on the next page on the let clean talk about his conversations with the national weather service for just a second but what you will see on the next slide in issue overlay on the wrist concentrations you can really see what an insurance company is going to look at intermining in this particular district in this location was the maximum amount that we can pay out in addition. The initial my initial take on it when we saw that we had seven hundred million on the school board association in five hundred million on base hire ad and on the absent program you know wondered are these limits high enough. You know one of the things that this is going to tell us is are they is there enough insurance here I think it was mentioned with the when tornado hey there's plenty of insurance you have plenty of coverage. As we go through this we're going to be able to to really look at it in sea is there enough is there enough coverage there if we had a catastrophic of that like when the initial take on it is I think the limits look look pretty good out of the gate but will know more when we come back in here a month from now you will talk about the national weather service yeah so I reached out to the national weather service in little rock actually have an office here and they have anyone can see it if you type in national weather sort of service tornado uh database they actually have a really good database that they've created and it sparked something with me to reach out them and ask if they would help us with this project I think talking to the meteorologist there and understanding historical information and overlaying it with our concentration information which were about to show at least parts of it is going to be imperative for us to understand historically like robert said we no one can predict where these storms are going to happen but we can start developing probable law scenarios that will help underwriters in the future make determination on coverage or or how much coverage and how much they're willing to take on so that's pending I had a conversation with the chief media also in charge yesterday and we're hoping for a meeting next week before thanksgiving. In addition to that that's really going to be the guide to tell us you know what how big does the trust need to be where do the insurance companies need to attach so it's really going to god us and making a recommendation on the structure and the size of the trust. So if you move to the wrist concentration mapping we get three different districts here we got one in northwest arkansas we got one in central are one in southeast arkansas you know looking at the historical weather data uhm you know different parts of the state have different challenges and in terms of weather but what's interesting about it is if you look at rogers and you can see the largest concentration is right out a hundred and thirty nine million that particular district has seven hundred and ninety million dollars of total insured values assuming that the praisals that are there accurate and all of that just working off of the data that we have so what's interesting if you look at the the largest concentration at one thirty nine and you work on the premise that these storms move typically from the southeast to the northwest as you move from the southeast to the northwest and rogers you pick up another hundred and eighty million if you had three of those locations all he had at the same time so you have potentially as an insurance company three hundred and forty million dollars exposed so for example when I said is a five hundred million dollars limit enough money is a seven hundred million dollar limit enough money or if you look at seven hundred and ninety million dollars you might say absolutely not you know you're you're short but if you start to really do the mapping and understand the concentrations you realize you know it it probably is for this rogers location and that's why we picked one of the larger districts to look at hot springs. Hot springs is a really interesting area because of the fact that there are six districts and hotsprangs so this is just the hot spring school district and will have some some more information about a district by like that when we come back but in a hot spring says a hundred and basically a hundred and eighteen million in the largest concentration again drawing that line from the southwest to the northeast and you pick up about another forty million dollars there and the district itself has two hundred and sixty one million total dermat. Is pretty typical of a small district where you have you know a single campus going to be somewhere you know under a hundred seventy five million you know and down so that gives you a general idea of what we're doing for each individual district so this is going to take us some time to map all of these out and to do the weather modeling for these so we anticipate on this to be a thirty to forty five day process for us to get through every single bit of this but we are we're decent ways into it right now. Yeah. On the risk concentration mapping I just thought this was another. Interesting observation if you look at it on a spreadsheet and you see seven hundred and ninety you know seven hundred and ninety one million dollars you would say it from his insurance company standpoint you might look at it and say you know rogers we've got you know a huge amount exposed there and granted in a hail storm or something like that it is but from a catastrophic standpoint a tornado standpoint realistically you know that's what you're looking at for a total loss scenario so but then you get in a school like like side. And here's like side also and hot springs you've got two hundred million dollars at one location. And. I mentioned to you that you would have to have a storm move from you know move northeast on you and it would have to line up in hit three you know three locations in rogers to get that three hundred and forty million dollars if you're an insurance company you might work at the location like lake side as a scary or location than something like rogers now throwing out where they're located in the state and all of that but you know the likelihood of that lining up in hitting threes maybe not as likely hitting that one location that has two hundred million dollars so there's gonna be some challenges in looking at each one of these but I do think it's it's interesting to look at the area like hot springs that has these you know like hamilton's another big big big number so are weather modeling in our mapping is where we are really really focused in the study right now so our next immediate actions were just going to continue to gather any necessary data that that we need I am very appreciative to both program managers for them working to get the information together I think they've they've tried to be his response of is that can. We will continue to analyze the data were continuing to map it and analyze it for you know accuracy in terms of valuation and then we're going to be working with the national weather service on the model and so that's what we're really focused on right now and what we will be doing over the next thirty forty five days i'm ready to take any questions anyone may have. In your realization where where the modeling we got future meanings but in the appraisal in valuation reports it's currently being done. Are they do they have detail in there for aging. Equipment such as each back systems other equipment expensive equipment is is that I was looking on the detail she didn't see that is either one of those programs. Do that kind of analysis now did you see. Not that I was not think of saying from the interactions good question and one that we would need to come up in in tell us that i'd like to know if the go board association should run on chair randy robinson and with the absolute program insurance department station state risk manager in our program if you look on the valuation sheet on the left home about hvac systems we do put in our appraisal notes what type of system we have whether it's just through the wall he pump or whether it's a true uh hot water cold water system and because that's part of the valuation you may have a building type that may have a have a warm child system as the standard but they only have a heat pump outside and so we have to take that value out and then put the put the lower value back in to get the building valued where it needed to be so one moment. When this will hear this one here would be a warm tale that we see HVAC system so we do in fact look at the hvac type and and then and it take that on our present notes for the for the absolute program yesterday and i'm on a so the gentleman here in a minute. For assistance on the last leg if it's a life. Well what what you'll do is for valuation on we only value what we see we don't we don't take we don't take into consideration aging no. It is the other general like to come up i'll bring up another. So there are you up I get you give you name who you with. Put you back again. Part of me and bill berge and with catents insurance the risk consultant that works with aspa and managing their risk management property program shannon moore and tony proto dup apologize for not being here today they are both out of state in different directions so they asked me to come in the answer to short answer under a SBA they're doing the same thing a compliment these gentlemen there asking a lot of the right questions are getting an enormous amount of information somewhere that may need to be clarified there is a formal process of of evaluation that is going on under the asba program to answer your question we're doing the same thing from the standpoint of noting that your age and construction of roof the type of vessels I have under both programs there is what is called the baller and machinery equipment breakdown coverage in a lot of cases of that you know arkansas law does require every. It drills down there even every hot water heater in arkansas has to be inspected annually so those insurance companies were there whoever's providing that coverage under ABA there is actually CNA insurance company they are physically inspecting that mechanical equipment which includes hvac and includes you know hot water heaters etc both policies are replacement basis so if you have a lightning strike that hits. A air conditioner or something like that or if you have a arking or whatever those are valued at laws adjustment on a replacement car spaces. You don't have a neighbor replacement calls that would mention my question I think is any other question for this general okay rips in more. So looking at these two examples given to a spot of consultants you look at the lake came with an example which I think is the agency you're here representing today there's no actual dollar figures on this form that shows the value of that school and obliviously count in school it was done eight ten of two thousand twelve in the last day to review was eight three of two thousand twenty three so where in the evaluation do you guys actually list the value of that particular building and i'm not sure if this is the whole district or if it's just a building II could ask robert and him to clarify that but you're setting there so if you if you don't mind call can you give him that phone yes staff give it to you look at the phone from the insurance commission just to be fair you'll see under the building appraisal section they actually list out all the values they go through the square footage whether it's heated their square footage port or walk away so can you just can't want me through that f in our let me step back and again this was something that I was going to do the sidebar after the meeting but. The way that arkansas school board association handles their evaluation process and if you looked at their earlier slides you see the number of buildings and and again i'd have to ask them with their actually using the united states they're using the buildings. Under the state and ranican may be clarified they are still sometimes but the football complex which will include bleachers band stands are the asba because the numbers are so high they are listing each individual item so there'll be a adam listed for blachers are being listed and for football field press box concession stay and so their numbers go up now how that's managed is. Every school district is on a three year rotation. There's a contracted firm you would be for me with a firm it's the same firm that does. Appraisals and reassessments for like thirty eight counties in the state of arkansas so that's they are contracted firm they are visiting each proper each school district on a three year rotation and any new school district and is added is is still within ninety days. They're confirming buildings confirming square footage getting the data as far as roof type construction h different type. Mechanical equipment. That is actually put into an access database where all of that is just captured so they're measuring the square foot put in all that end so then that that it comes back into asba asba staff member will actually take the data that is relevant and then calculate the replacement cost value and then that's put in into the access database then what is also then done is with the amount of construction that has been going on with school facilities we cannot look how does that compare to what's the cost of building a new school district or a new high school new elementary school and the football field so then there is some adjustment that is made up or down based on current cost of construction and then that is the value that goes into the system and then that's the buyer that ends up on the statement of values that we present to the insurance care to look in this form ninety one twenty nine it goes through the year the thing was built the campus if you look over to october seats the hospital but there's no value on this form of what that ask what was where if there's actually not even a place that I found them you make incorrectly real quick where it actually listed to square footage where there's heated narrow or not so that I think that's the question that i'm asking if you look at the two forms warns very very detailed one goes through all the amounts goes through the square furniture what's inside and outside one does not so i'm not disagreeing what you're saying but i've seen your testimony don't match up what we have in front of there's just you know can you can you give us that explanation of why they wasn't given to the consultants to match what you're saying they actually do. You know again. I haven't been in the consulting process of maybe asking the right questions or are you know what down is available that's just something that i'll have to defer to the conversation between and I can hold the question the next month and maybe shannon them yeah she'll be back and can can and and respond but it just seems like a lot of information missing from one point the accident you know you you made them for two were here to represent them today some asking you for that information very the thing about the information as far as the value that you know what happens in range program and what would actually happen is that value is transferred to a statement of values they're statement of values is also so there's probably a a lot of. Detail that. Similarly is going along with a asba is this may be not recorded on the form now one of the things that you run into as an insurance agent and. Emission you can actually confirm this is that if you have this documentation in your actually running those numbers. Then in an adjustment of a claim you're handing those numbers and in some way years establishing a benchmark that that facility is going to be adjusted at. So. In one thirty years is night hand that valuation over to the adjuster are the insurance company let them come in and do their evaluation in some cases it might be higher some cases it may be lower but at the education and the advocacy of claims as you step in if you feel that the valuation is not correct then based on your dad and the information you have you argue and advocate for the district on a rate so it's sometimes. You know how do you want to play your hand and it's a part of the management of the the programs. As far as the underwriting data having creditable underwriting data and credit to valuations very similar process marshalls with best gad is what. Being used l and in the back in a background of both programs there's a lot of calculations that those own in their promotion of those values in the program so both both programs are using at so. Thank you. So interpreting regular just so i'm sorry sir at this question is for you yes sorry so when you said access you're talking about just that microsoft access database yes what you're talking about where the information is so it's it's pretty easy to produce reports and and and data out of that so to in a follow up to represent a board laws is that something that we could ask for a production of a report that would have the square footages have the valuations in the from me maybe it would be important to me to see what that adjustment looks like if we're going up for going down is there any kind of bridge sell in the access database that says here's what actada or whoever it is that it does those valuations they come up with a million dollars we're going to insure it for a million one because we've got new data of a recently completed similar school or we decided we're going to insure it for nine hundred do you have that. Granular level of data that could be easily produced because usually if the data is in you can produce a report in in microsoft access and and and and get the information that representative world law was talking about. Absolutely I mean basically from an access that database all you've got to do is ask for certain fields and there's an enormous amount of data that's being captured by asba so you have to do this query the report and ask for what you're looking for now why is given to underwriting underwriters and insurance companies and it's something you haven't seen today is basically a statement of values in that statement of audience that has addresses buildings locations it's going to have square footage it's going to have the valuation is going to have the typical instruction the age of the the construction there's just what the car construction occurred to see in protection it's gonna note if that building sprinkler if it's not so there is a summary sheet that's already in our being provided under for both programs that they have in hand they just not you know in their presentation just not to that point yet and presenting that but yes it anything that you know we've captured which we capture enormous amount of data and have since two thousand seven two thousand six on the program when we started building that database but you just have to know it you asked the right question that it will be produced okay so you're your commitment is that any kind of data we need as we move forward it may take a time or two to get the rap report to get all the data but we can get that right and and then how often do you just as follow up as out you you beat me to the punch on the statement of values of our our company when we skips provide schedules of value sometimes the insurance company agrees with it sometimes they have their own database analysis and they say this is not right uh and sometimes it's because they just fly over the the sat with a drone and they come up with the difference where footage sometimes it's because they're square for it is price is. Ah different hours but in and and working through with with the carriers what do you see more after than that do they do they have any adjustments to the take your valuations or what do you see there. We have. On numerous occasions you know. Amazon scout at degressive event. Part of the asba program is under written out of lloyds. Earlier conversation before this committee is every year we go sit down with lloyds and we meet with like twenty underwriters and in two and a half days. They're provided the statement of values they review those because we share that beforehand and we explain the process and what we go through and a value waiting and and they love the detail that we provide that we actually drill down to you know the blachers and the and that they've never questioned our valuation we bought and we vast that question are you comfortable with our valuations and you know on the excess later we had one underwriter this year asked us about how in a required of us about how we were coming up with that once we explained it they were totally comfortable with evaluations that were reusing. On that. Okay thank you not seeing any more questions appreciate your test money I can uh do you will come up and you have other gravel off the coach air for just minute do anything else you wonder. Address. I will answer any questions about that or that as it program that we have I think answered it pretty well although i'd I do agree with what bill said they were in reference to the hvasis systems we we are have heartford steamboil are on our program and they do provide those boiler or pressure pressure vessel inspections annually so that it is where those inspections are done are appraisers are not that it's not there for tay they are just looking for value not for degradation at this point you know now when I get on the roofs they may start asking about roof tights and may look at that but but here again we come out hvc and those systems that we leave that up to harvesting boiler and we also provide the statement of values and there was a statement of values in the last months presentation from absolute we we did provide that although our our slides didn't make the show but we did get the slides handed out after the community meeting. Great coach or law europe and it does not really not whether mapping but you brought it up so more among capitalism is something i've said to the consultant is something I said the day we hired a consultant so I would keep saying until some finally believes that I guess. I'm really concerned about the age in the deferred maintenance of the roofs and the air connection systems and how they claim those when there is a weather van a mile down the road or even a weather event at that area and I think that's what when we look at the past claims data which will come in to come in might your see a lot of roofs being claimed blood air conditioner units being claimed from lightning strikes a and one thing i'd like to see in the new policy or in the new set up of this is that we put some protections in there for the administration of. Deferred maintenance so a roofed it's over fifteen years old and and I and i'm not a construction gun i'm not roof or so out I don't know what roof age should be an over they tell you at home at last thirty years but it never knows but if you say it's fifteen anything over fifteen years you pay half or you pay a quarter there's gotta be a way to incentivise the schools to replace their roofs when the risk need to be replaced instead of claiming on insurance claim when they get a straight line we in event or they get a hill of that are so on I know a homeowner if you claim it and you don't replace it they keep a record of that and you you don't get to claim that thing again until you get it replaced so there's got to be a way of doing that here but i'm not saying schools are doing that example but i'm saying they're learned leaving that roof there until they have an event and that's a bad thing. The. In rainy down look at that when you're saying school ways a brand new school to your agency and you go out do you look at the roof to see how old it is a devalue that roof at that point or is it valued is what it would be to replace it currently we do get a look on the roof we look at the room so we don't get an age of the roof however in a meeting last week on the school program in a meeting that I had this morning on our state program and I sent an email out earlier today that there will be i've got three different policy provisions that I want to update that basically limits some of the cover in one of those was that we would do actual crash value on roofs and less than agency the way i'm going to worry this is we're going to do actual cash value on roofs unless the agency or school can provide proof that they have replaced that roof structure within the last fifteen years and so that's what we're gonna send to the underwriters this year along with some other limited cover you're taking my motive right out of mouth I think that's exactly what we're we're asking for some type of stipulation there that they keep their deferred maintenance plan working because. School way over here may not ever have a weather via the next twenty years of their roof maybe twenty years old and then they signed up where you last month and then next thing you know they had a hill storm where they're getting a new roof and they should replace the roof five years ago that makes sense yesterday thank you looking at that but right now we have no we have no women in the policy so the policy is the policy will and that's what we're doing yesterday and I mean the whole objective of this is to write those limits to make these policies more affordable so if we're not breaking our school systems in our hurry and property value insurance and make sure they can use that for other or the purposes in fact and I don't know about asba's program but I know that on the on our state in our school program when we do meet with underwriters and we too do meet with underwriters when we meet with them one of our one of our selling points is that we do provide some even though it's it's a manuscript policy meaning that we don't go out to the insurance company we don't use their form we provide them with with the form of cover and we do have a limits and sublimits for the cover so that when we have certain advance it doesn't trigger a for five hundred million dollars loss that that certain event and I can't get enough to up my head but like we'll order its in law and its laws currently limited if five million so an ordinance in law claim would not trigger a for five hundred million dollar current only trigger five million in cover and that's another one the limits that i'm looking at going to to reduce is because a lot of times we have a replacement cost policy i'd like to replace what they had and limit that ornaments in law to a smaller amount because we're getting into a lot of ornaments in law cover right now that maybe that should have been replaced two or three years ago in the law came to effect but that's just just to be fair to school board association everything to add to that discussion. You would you have to come to the mike sorry. The. Every year they'll be good to stay where you. If you were get third. Okay bill virginia and I would just did over the remarks that randy indicated you know the industry is is adapting a little bit as mister lee made in his presentation there's a lot of new products a lot of new thought process coming along in addition to limiting roofs to actual cash value there is also a cosmetic damage exclusion from a standpoint that you could have a hill storm and you've got metal roots it doesn't damage the integrity of the roof it still performs like it should but it doesn't look the same so you know that's some of the other stuff that you would look at and again the sublimits in the policy or their not to expose the total limit but to put the schools back now the only thing that I would caution sometimes on the only ordinance of law you've got an older school history this is something that happened at this cabinet school district many years ago when they had a total loss it wasn't a total loss but their school district it was a constructive total meaning some of it could be used some of it had to be replaced but facilities have changed the size of mandatory classrooms. And that disco district did not their classrooms were smaller than what was required by a facilities so basically that school had to tear it down and rebuild to facility addles which was covered or would have been covered under ordinance of law. That district was not covered under either of the programs and there was not any coverage for that and so the district ended up having to pay for that reconstruction or the expanding classroom out of their pocket so that's one reason facilities actually mandates a ornaments of law and. Cut increase cost of construction limit so as I would suggest as as they continue to work through this process that they go to facilities and see what the facilities requirements are from the standpoint of. Those those tax sublimits. Appreciate that thanks just meant that they see who people have purchased for representative and whose your question for a paraney. They'd thank you mister chair radio is looking at it you're appraisal form could you explain the difference between an asset appraisal date and a loss control inspection date yes sir on our asset appraisal that that's when the building was looked out for value uh our loss control program goes out and they will not for. The value of the building but they're looking at the they're doing an inspection to find out what what what can be done to keep that building from burning let's keep it standing and we have that laws control partner they these forms come from our risk management information systems similar to an access to the base but it's a it's a sales force base system and our our loss control program is currently as a testified last month is currently up we worked out on our state program only but the the loss control or lost control date is on both forms because it's a it's a common database for both the mate and the absent program but on the state side we do lost control inspections to to look for space heaters we look for which check their fire extinguishers we want to check their answer systems make sure that they've been inspected all sorts of inspections that we do on lost control are those scheduled are they random are they on the cycle they're on a cycle yes sir we try to get uh similar program we try to get out on on a four year cycle okay in the phone obviously you supply this this data for the consultant. My correct with the yes or the the price building a present port yes sir would this have been the most recent appraisals i'm somewhat mentioned that the praisals are done on three year cycle that's contracted this would have been the most recent for that particular school district which this one two thousand and fifteen okay from cabin yes sir what we've done on. That would have been the latest full inspection on cabinet which is outside of the four year cycle we've had uh some interim we've had some turnover and staff and we've had some training and we've also added the university arkansas system recently so we are behind on our cycle however last last last year I think our school appraisals got a tin of our districts yesterday there was a comment made by someone earlier that. That the department contracts the appraisals out in their own three years there on three year rotation that's for the that's for the school board association hours we do our prices in house we have staff that does when we have seventeen staffers but well currently we have fifteen staff members we have two other positions that are open for but those positions because we have field staff that goes in and does the goals out and does our loss control program and our field appraisal program to measure ever building as was testified earlier can you still help me or so the appraised value that the insured value that that a district may have based upon one of these valuations would somewhat then be based upon the asset appraisal about you correct yes sir so in this case if this district. The last asset appraisals in two thousand fifteen then the insured value that they have based upon that asset appraisal could be. Incredibly different than what the replacement value would be today correct it could be but we do in flight annually wait during our renewal process we also get a standard as inflation factor based on several different you know standards when i'm wondering marsons with one of them would be just you know we we get a different ones and then we inflate our value across the board based on that standard like this past year we inflated seven percent across the board to to catch up for those districts that that we haven't been able to praise for an aspect as the same thing to the inflation factors on the is on the insured value not only appraisal then I plug the replacement value is based on the value that you see on that the value of that report would have would have been increased in the in the database at renewal by seven percent this past year so that's the number that we have and that's just a number of our basis of premium if there comes in in that building is actually going to need if we need more money to rebuild it on a replacement cost contract. It gets rebuilt yesterday many thanks so much favorite a representative evans and like one of our other questions had leave so don't see any more than both you get on for adding to that and i'll go back to mr. Lee and a. I think it helps is legislators as to see the complexity of what you are dealing with not not just the data and and also recognize continue it to be to be fair to be fair to err to both bill and randy I do want to point out number one we did receive a very detailed statement of values from both program managers there extensive. To be quite unswitted i'm not sure that they would fit on that screen so there's a lot of information that's covered in both of these second thing that I want to point out is when we call the school board associations program informal and we called the state of the work and so insurance departments are formal program we're not saying that there's anything necessarily wrong with what the school board association has done in the approach that they've taken they got a staff for four people. You know they have a huge schedule a tremendous amount of properties to oversee and I think that the approach that they've taken would be quite common when you have a large schedule like that and you know to have a third party look at it to attempt to trend it each you know each year I think shannon mentioned they have a four percent trend was the number that she gave us in the conversations at some room I can't remember anyway something along the lines of what rainy was saying they are trending for inflation each year so when I call the arkansas insurance department of formal process they have a staff they have a team of people that work for the state that are there to look at stay property value the state property and provide a detailed report on the state property so that's why we referred to one is formal and one is informal it's not to represent to you that it's not being done by the school board association at all they do have a plan in place that they are working it's just that the reports that we received I think we got the valuations last thursday from the school board association we've had the ones from the arkansas insurance department for a while we randomly picked just we randomly picked it there's nothing in here that is to try to represent one is better than the other we picked to out of the stack of paper you know stacks of paper this high and we looked at him and we said you know we were invited to participate in one process we were told what the other process was were reporting on that so I want to make sure that committee knows that we are truly trying to look at each cracked as it's in place be impartial and make a recommendation this committee of what we believe is in the best interest. Of the state that's it. The. They give her being here today we will see you next month. That thank you center rice not seen the other questions next up we have director guarantees report and recractor guardian reports we have no report I would rebe remains in nobody told rounder but I did hear that it's a geotheyer's birthday so heavy birthday mistake whether you.