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R-86-890 - 7/10/1986WHEREAS, the City of Round Rock has entered into an agreement with the Texas Municipal League to provide City insurance; and WHEREAS, the Texas Municipal League wishes to form a joint self - insurance pool to be named the Texas Municipal League Joint Self- Insurance Fund; and WHEREAS, the purpose of the fund would be to provide coverages against risks which areinherent in operating a political subdivision; and WHEREAS, the City of Round Rock wishes to enter into said agreement with the Texas Municipal League, Now Therefore BE IT RESOLVED BY THE COUNCIL OF THE CITY OF ROUND ROCK, TEXAS That the Mayor is hereby authorized and directed on behalf of the City Round Rock, Texas to enter into an agreement with the Texas Municipal League Joint Self- Insurance Fund, a copy of which is attached hereto and incorporated herein for all purposes. RESOLVED this 10th day of July, 1986. ATTEST: J N E LAND, City Secretary RESOLUTION NO. MO? MIKE ROBINSON, Mayor City of Round Rock, Texas a ;i June 5, 1986 FUND MEMBER COMMUNICATION TM L RISK & INSURANCE MANAGEMENT SERVICES TO: Members, TML Joint Self- Insurance Fund FROM: Katie Horan, Contract Coordinator 1 SUBJECT: Interlocal Agreements Enclosed you will find the Liability /Property Interlocal Agreement and Decla- rations of Coverage for the current Fund year. Please take the time to familiarize yourself with these documents, as they form the substance of your "policy ". If you have any questions at all, please let us hear from you. Interlocal Agreement The Interlocal Agreement is now a continuous contract between the Member and the Fund; a Member enters into the agreement with the Fund once and that agreement remains in force until the Member voluntarily withdraws (with 60 day written notice) or the Member is cancelled for non - payment of premium. All Fund Members, regardless of when they initially joined the Fund, are re- quired to sign, execute and return one copy of this Interlocal Agreement and any addenda. Please retain one copy for your permanent records and return one copy to the TMI, office in the enclosed postage paid envelope. Declarations of Coverage The Declarations of Coverage outline the coverages, limits, deductibles, ef- fective dates and contributions for each Fund Member as of 10/1/85. Whenever there is a change in coverages elected, limits, or deductibles you will receive a new set of Declarations. Changes made after 10/1/85 will be re- flected in amended Declarations to be sent shortly. Declarations do not have to be signed and returned. Payment of the next month's premium signifies your acceptance of the terms and conditions of the Declarations. Bylaws The most recently updated Fund Bylaws are enclosed for your permanent records. Notice of Claims Ordinance Members joining the Fund 10/1/85 or later are required to adopt a notice of claims ordinance; a sample ordinance is included. If such an ordinance has already been adopted, please forward a copy of that ordinance with the Inter- local Agreement. Fund members joining prior to 10/1/85 and who have such an ordinance in effect need not comply. 211 EAST SEVENTH, SUITE 1020 • AUSTN, TEXAS 78701.3283 • 612a 478 -6601 TEXAS MUNICIPAL' LEAGUE t o )8 JOINT SELF - INSURANCE FUND 211 East Seventh Street, Suite 1020, Austin, Texas 78701 -3283 INTERLOCAL AGREEMENT This contract and Interlocal Agreement is entered into by and between political subdivisions of this state (hereinafter referred to as "Fund Members ") to form a joint self- insurance pool to be named the Texas Municipal League Joint Self - Insurance Fund (hereinafter referred to as the "Fund ") for the purpose of providing coverages against risks which are inherent in operating a political subdivision. WITNESSETH: The undersigned Fund Member, in accordance with the Interlocal Cooperation Act, Article 4413(32c), T.R.C.S. and the interpretation thereof by the Attorney General of the State of Texas (Opinion #MW -347, May 29, 1981), and in consideration of other Fund Members executing like agreements, does hereby agree to become one of the Fund Members of this self - insured pool. The conditions of membership agreed upon by and between the parties are as follows: 1. Definition of terms used in this Interlocal Agreement. a. BOARD. Refers to the Board of Trustees of the Texas Municipal League Workers' Compensation Joint Insurance Fund and the Texas Municipal League Joint Self- Insurance Fund. b. FUND YEAR. October 1 though September 30. c. MANUAL RATES. Basic rates applicable to each liability classification promulgated by the State Board of Insurance or by the Board of Trustees. d. TML MUNICIPAL LIABILITY SELF - INSURANCE PLAN. The document that sets forth in exact detail the coverages provided. e. ADJUSTMENTS. Refers to any offsets to manual premium that may result from the Member's election of deductibles, loss experience, or Fund Modifier which reflects the savings to the Fund Member by entering into this Agreement. f. TML MUNICIPAL PROPERTY SELF - INSURANCE PLAN. The document that sets forth in exact detail the coverages provided. g. PREMIUM AND CONTRIBUTION. Used interchangeably in some parts of this Interlocal Agreement. Any reference at any time in this Interlocal Agreement to an insurance term not ordinarily a part of self - insurance shall be deemed for convenience only and is not construed as being contrary to the self - insurance concept except where the context clearly indicates no other possible interpretation such as but not limited to the reference to "reinsurance." h. SERVICE CONTRACTOR. Johnson & Higgins of Texas, Inc. i. REIMBURSABLE DEDUCTIBLE. As repects the TML Municipal Liability Self- Insurance Plan, the amount paid by the Fund that was chosen by this Fund Member to be applicable to the first monies paid by the Fund to effect judgment or settlement of any claim or suit. The Fund Member, upon notification of the action taken, shall promtly reimburse the Fund for all or such part of the deductible amount as has been paid by the Fund. Further, however, the Fund's obligation to pay damages shall be subject to the Limits of Liability stated in this Interlocal Agreement less the stated deductible amount. j. FUND MODIFIER. A percentage figure that is applied to the standard rates by the Fund to reflect the savings to the Fund Member by entering into the Interlocal Agreement. k. AGREEMENT PERIOD. The continous period since the Fund Member first became a Member of this Fund excluding, however, any period or periods of time therein that the member did not participate as a member of the Fund. 2. In consideration of the execution of this Agreement by and between the Member and the Fund and of the contributions of the Member, the insurance elected by the Member is afforded according to the terms of the TML Municipal Liability Self- Insurance Plan and the TML Municipal Property Self- Insurance Plan. The affirma- tive declaration of contributions and limits of liability in the Agreement Declarations determines the applicabil- ity of the Self- Insurance Plans. Each Fund Member agrees to adopt and accept the coverages, provisions, terms, conditions, exclusions and limitations as further provided for in the TML Self- Insurance Plan or as specifically modified by the Fund Member's Agreement Declarations. This Interlocal Agreement shall be construed to incorporate the TML Municipal Liability Self- Insurance Plan and /or the TML Municipal Property Self- Insurance Plan, Interlocal Agreement Declarations and any addenda to this Interlocal Agreement whether or not physically attached hereto. 3. It is understood that by participating in this self - insurance pool to cover liability exposure, the Fund Member does not intend to waive any of the immunities that its officers or its employees now possess. The Fund Member recognizes the Texas Tort Claims Act and its limitations to certain governmental functions as well as its monetary limitations and that by executing this agreement does not agree to expand those limitations. The Fund Member, upon the execution of this agreement, shall supply the Fund with a current copy of its charter provisions or ordinance that sets out its requirement as to the number of days in which a third party liability claim must be asserted against R. If the Fund Member does not have such an ordinance provision that establishes a set number of days or if it has an ordinance provision which provides for less than 60 days notice and for good cause shown up to six months notice the Fund Member agrees to adopt an ordinance providing for such notice reasonably describing the damage or injury claimed and the time, manner and place of the incident from which it arose. The notice requirement shall not be changed by the Fund Member without first giving the Fund 30 days written notice. Violation of this provision may, at the Fund's discretion, void this Interlocal Agreement. 4. The term of this Agreement and the self- insurance provided to the Fund Member shall be continuous commencing 12:01 a.m. on the date designated in this Agreement until terminated as provided below. Although the self- insurance provided for in this Agreement shall be continuous until terminated, the limit of liability of the Fund under the coverages that the Fund Member elects shall be limited during any Fund Year to the amount stated in the Agreement Declarations for that Fund Year. This Agreement may be terminated by either party giving to the other sixty (60) days prior written notice of intent to terminate except the Fund Member may terminate this Agreement and its coverages thereunder without giving the sixty (60) days notice if the reason is because of a change by the Fund in the Fund Member's contribution, coverage, or other change in the limits of liability, terms, conditions, exclusions and limitations provided for in the Texas Municipal League Self- Insurance Plan provided that no termination by the Member shall be effective prior to the date that written notice of termination is actually received in the offices of the Texas Municipal League Joint Self- Insurance Fund and provided further that the Fund Member agrees to and shall pay the applicable premium and contribution for those coverages it is terminating until the date the notice of termination is actually received by the Fund. The Fund shall provide the Member with an Agreement Declaration and any addenda that determines the applicability of the Texas Municipal League Self- Insurance Plans annually by November 1, or as required due to changes requested by the Member or required by the Fund. Such Declarations shall include, but not be limited to, the coverage period which shall be the applicable Fund Year, limits, deductibles, contributions, special provisions and limitations. It is the intention of the parties that the Member's insurance coverages under this Agreement shall remain in full force and effect from Fund Year to Fund Year, subject to the limits of liability that the Fund can provide each Fund Year and the terms, conditions and limitations that the Fund may require to protect its solvency and to comply with reinsurance requirements, until notice of termination is given as herein provided. Realizing that the Fund Member needs the earliest possible information concerning the Fund coverages, limits and exclu- sions and the Member's contribution that will be required for any new Fund Year, the Fund will endeavor to provide this information as soon as possible before the beginning of each new Fund Year. The parties recognize, however, that conditions in the reinsurance industry are such that the Fund may not be able to provide this information to the Member before the beginning of a Fund Year for various reasons including the failure of the Member to timely submit the appropriate exposure summary or delays on the part of reinsurers in getting information to the Fund and so, to protect the Member from gaps in its coverage and to protect the solvency of the Fund, the parties agree as follows: If for any reason the Fund has not been able to provide the Member with information concerning available coverages for a new Fund Year or advise the Member of the amount of its contribution for the new Fund Year by the beginning of the Fund Year, the Fund shall nevertheless continue the Member's coverages at the same limits of liability (if still available and if not then at the highest limit of liability available for the new Fund Year) so that the Member shall at all times remain insured as herein provided and the Member's initial contributions for the new Fund Year shall be determined by a "tentative contribution" as determined by the Board with the Member's actual annual contribution to be credited by the amount paid in accordance with the tentative contribution and adjusted during the Fund Year. In the event the Member's annual contribution has not been determined at the beginning of a Fund Year due to the Member not having timely provided the exposure summary required in Section 5, then the tentative contribution shall be calculated as follows: The Member's prior Fund Year's exposure base shall be increased by twenty -five percent (25%) and the resulting exposure base shall be applied to the rates applicable to the new Fund Year and the Member shall make its contribution payments based upon this rate with its annual contributions adjusted thereafter to reflect the correct annual contribution. In the event the Member does not wish to have its coverages extended or renewed at the end of any Fund Year, the burden shall be upon the Member to give written notice to the Fund as provided hereinabove and the Member agrees to pay as hereinabove stated all contributions or prorata contributions until the date such written notice is received in the offices of the Fund or the date of termination of this Agreement, whichever is later. 5. Commensurate with the execution of this Agreement and annually thereafter, the Fund Member shall com- plete the appropriate exposure summary and deliver it or cause it to be delivered to the Fund or, if so instructed, to the.service.contractor, no later than September 1 of each year and new annual contributions shall be calculated using manual rates times exposure, less any adjustments. Intentional or reckless misstate- ments on the exposure summary shall be grounds for cancellation. Rates and formulas established by the Board of Trustees shall be used to determine the Fund Member's contribution for the new Fund Year. In the event the Fund Member does not provide the exposure summary information timely, then the tentative premium provided for in Part 4 above shall be applicable until such time as the Fund Member's contribution can be determined, at which time the Member's annual contribution shall be adjusted accordingly. The Fund Member agrees to pay the annual contribution to the Fund in equal monthly installments, in advance, commencing at the beginning of this Agreement with subsequent installments due the first of each month thereafter. If the payable annual contribution shall be less than $5,000.00, it shall be payable in equal quarterly installments, in advance, commencing at the beginning of this Agreement or at the beginning of each new Fund Year, with subsequent installments due the first of each quarter thereafter. In the event this Agreement is terminated as herein provided, the Fund shall promptly repay to the Fund Member any unearned annual contribution prorated as of the date of termination and the Fund Member agrees to promptly pay the Fund any unpaid annual contribution prorated as of the date of actual termination. In addition, the Fund Member agrees during the term of this Agreement to promptly pay all reimbursable deductibles upon receipt of statement. At the end of each and every Fund Year, there shall be submitted by the Fund Member the actual data shown on the exposure summary as reflected by the books and records of the Fund Member. The Fund reserves the right to audit the records of any Fund Member and adjust contributions accordingly. In the event that the Fund Member fails or refuses to make the payments including accrued interest as herein provided the Fund reserves the right to terminate such Fund Member by giving them ten (10) days written notice and to collect any and all amounts that are earned pro rata for the period preceding contract termination. If the amounts owed, including reimbursable deductibles, have to be collected by suit, the Fund Member agrees to pay attorneys' fees and costs incurred in such suit. - 6. The Fund shall maintain adequate protection from catastrophic losses to protect its financial integrity. Aggre- gate protection shall also be maintained to insure that the Member shall at no time be assessed. The Member's contributions shall be limited to that amount as calculated under this agreement. 7. Subject to the provisions of the foregoing paragraph, it is agreed the Board shall have the right to adjust the financial protection outlined above and /or amend coverages as it deems necessary to maintain the fiscal soundness of the Fund at the beginning of or during any Fund Year. 8. The Fund has contracted with the Servicing Contractor to supply loss control services to the Fund Members to assist them in following a plan of loss control that may result in reduced losses. The Servicing Contractor shall provide all of the services as provided in the service contract entered into by and between the Servicing Contractor and the Fund on behalf of the Fund Member. The Fund Member agrees that it will cooperate in instituting any and all reasonable loss control recommendations. In the event that the recommendations submitted by the Servicing Contractor on behalf of the Fund seem unreasonable, the Fund Member has a right to appeal to the Board of Trustees. The Board shall hear the objections of the Fund Member at its next regularly scheduled meeting and its decisions will be final and binding on all parties. 9. The Fund Member agrees that it will appoint a coordinator of department head rank, and that the Fund and its Servicing Contractor shall not be required to contact any other individual except this one person. Any notice to or any agreements with the coordinator shall be binding upon the Fund Member. The Fund Member reserves the right to change the coordinator from time to time by giving written notice to the Fund and to the Servicing Contractor. 10. The Fund, through the Servicing Contractor employed by the Fund, agrees to handle and provide a defense for any and all. claims covered under this agreement after prompt notice has been given. The Fund Member hereby appoints the Servicing Contractor as its agent to act in all matters pertaining to processing and handling of liability claims covered under this agreement and shall cooperate fully in supplying any informa- tion needed or helpful in such defense. The Servicing Contractor shall carry on all negotiations with the claimant and his attorney and negotiate within authority previously granted by the Fund. If a personal appearance by the Fund Member or an employee is necessary, the expense of this appearance will not be the responsibility of the Fund. The Servicing Contractor will retain and supervise legal counsel for the prosecution and defense of any litigation. All decisions on individual cases shall be made by the Fund through the Servicing Contractor, which includes the decision to appeal or not to appeal. However, any Fund Member shall have the right in any case to consult with the Fund on any decision made by the Servicing Contractor. The Board shall hear the objections of the Fund Member at its next regularly scheduled meeting and its decision will be final and binding on all parties. Any suit brought or defended by the Servicing Contractor and the Fund shall be brought or defended only in the name of the Fund Member and /or its officers or employees. There shall be supplied periodically to each Fund Member a computer printout involving a statement of claims. As resneris 11, The Fund Member acknowledges that it has received a copy of the Bylaws of the Fund and agrees to abide by the Bylaws and any amendments thereto. The Fund Member specifically acknowledges that it is a member in good standing of the TML Workers' Compensation Joint Insurance Fund and will remain a participant in that Fund during the term of this Interlocal Agreement. 12. The Fund agrees that all Fund transactions will be annually audited by a nationally recognized certified public accounting firm. 13. If legally required, the Fund shall file the necessary tax forms with the Internal Revenue Service. 14. As the administrators of the Self - Insurance Fund, the Board shall primarily and constantly keep foremost in their deliberations and decisions in operating the Fund that each of the participating Fund Members is a "self - insured." At least annually, the Board shall carefully review, study and consider the actual claims or loss experience (including reserves for future claims payments) of each of the Fund Members, the pro rata saving to the Fund resulting from overall loss experience attributed to each Fund Member, and the pro rata portion of the cost of all catastrophic loss protection and aggregate stop loss protection allocated to each Fund Member as well as the pro rata allocation, as determined by the Board of the other and necessary administrative expenses of the Fund, in order to reasonably determine the actual pro rata cost, expense and loss experience of each Fund Member in order to maintain as nearly as possible an equitable and reasonable self- insurance administration of the Fund as applied to each Fund Member. The Fund shall maintain case reserves and supplemental reserves computed in accordance with standard actuarial principals, taking into account historical and other data, designed to measure claims development and claims incurred but not yet reported, so that funds will be available to meet these claims as they become due. The Fund shall also establish and maintain a reserve for Return of Contributions to insure further fiscal integrity of the Fund in the event of a potential adverse loss development. COORDINATOR FOR FUND MEMBER (to be completed by city) Name DAVID KAu Title ASSISTA(1T PoikNcz �IRFcTo Mailing Address 2.14 E MR1t ST Street Address (if different from above) City kow.th Roc K. Zip ` U T 64 Phone 5\ 2 -255 — 3 tP 12. Cit "RN )fl the TML Municipal Liability Self- Insurance Plan, the Fund shall have priority in enforcing its subrogation claims as against claims of Fund Members except as to claims of the Texas Municipal League Workers' Compensation Joint Insurance Fund, which shall take preference. Data 1-1D -O NVll�i{�f A Effective Date of this Agreement / l / f / y �� Contract No. ( 91 I TEXAS MUNICIPAL LEAGUE JOINT SELF-INSURANCE FUND By Y w� By - Signature of Authorized City Official Signature of Authorized Fund 0 icial Title Title Date - f f - DATE: July 8, 1986 SUBJECT: Council Agenda, July 10, 1986 ITEM: 9C - Consider a resolution authorizing the Mayor to execute an interlocal agreement with the Texas Municipal League to become one of the fund members of the self insured pool. This document formalizes by contract the City's insurance agreement with the Texas Municipal League self insurance pool.