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HomeMy WebLinkAboutResolution 97-041 membership agreement for arizona municipal workers' compenation poolMARANA RESOLUTION NO. 97-41 A RESOLUTION OF TIlE MAYOR AND COUNCIL OF THE TOWN OF MARANA, ARIZONA, AUTHORIZING THE TOWN TO ENTER INTO A MEMBERSHIP AGP-g. RMENT WITH THE ARIZONA MUNICIPAL WORKERS' COMPENSATION POOL (AMWCP) FOR THE PUKPOSE OF PROVIDING WORKERS' COMPENSATION INSURANCE COVEPAGE FOR TOWN EMPLOYEES. WHEREAS, Arizona law requires that workers' compensation insurance coverage be provided to all employees within the state of Arizona, and it is in the best interests of the Town of Mararia that all of its employees have workers' compensation insurance coverage; and ~, A. KS. §11-952.01 allows municipalifiea to enter into a workers' compensation pool for the joint purchasing of insurance, and further outlines the guidelines and regulations for implementing a workers' compensation pool; and WHEREAS, the Arizona Municipal Workers' Compensation Pool (AMWCP) is a reputable orga~i~6on which is in the business of providing comprehensive workers' compensation insurance coverage in compliance with the requ'trements set forth in A.R_S. §11-952.01; and WHEREAS, it is in the best interests of the Town of Marana to replace its current workers' compensation insurance plan with the plan offered by AMWCP, the terms of which are more specifically described in the Membership Agreement attached hereto as Exhibit A. NOW THEREFORE, BE IT RESOLVED by the Mayor and Coundl of the Town of Marana, Arizona, authorizing the Town of Marana to enter into the Membership Agreement with the Arizona Municipal Workers' Compensation Pool, attached hereto as Exhibit A. BE IT FURTHI~ RESOLVED that the Town Manager is hereby authorized to execute all documents necessary for the implementation of the AMWCP insurance plan, BE 1T FURTHER RESOLVED that Southwest Risk, Inc. is hereby authorized to execute the Industrial Commission of Arizona (ICA) Application to notify the ICA of the Town's intention to join the AMWCP insurance plan. PASSED AND ADOPTED by the Mayor and Council of the Town of Marana, Arizona, this 3rd day of June, 1997, APPROVED AS TO FORM: ~ Daniel I Hochuli Town Attorney Page I of I EXHIBIT A MEMBERSHIP AGREE~FENT ARIZONA MUNICIPAL WORKERS' COMPENSATION POOL .Partie.s. The parties to this Agreemere (the ~AgreementD are the Arizona Municipal Workers' Compensation Pool, an Arizona nonprofit corporation (the "Pool') and (the "Member'), a public agency of the State of Arizona. Recitals. This Agreement is based upon certain understandings and in furtherance of certain objectives: WItEREAS, A.R.S. § 11-952.01 permits two or more public agencies (as der'reed in A.R.S. § 11-951) (i) to enter into contracts or agreements to provide for the payment of worker's compensation claims made against any member of the Pool on a cooperative or contract basis; or (ii) to jointly form a nonprofit corporation to carry out the provisions of A.R.S. § 11-952.01 on behalf of the public agency members of the nonprofit corporation directly or by contract with a private party; and WHEREAS, the Pool is administered by an administrator (the "Administrator") designated by the Board of Trustees of the Pool (the 'Board'); and 2.3 WHEREAS, the Member desires to enter into an agreement to provide for the payment of worker's compensation elaim.~ made against other cities, towns or other public agencies of the State of Arizona that are members of the Pool and to provide for the payment of such claims. NOW, TI:IEREFORE, the Pool and Member agree as follows: Coverage. The Pool shall provide such coverages to the employees of the Member as required for a self-insured employer pursuant to A.R.S. § 23-961, as may be amended. The procedure for making claims against the Pool, the means and procedures for defending against such claims, the persons or entities m be indemnified by such Pool, the limitations and exclusions on coverage, and various other matters necessary or appropriate to the functioning of the Pool are more particularly described in the Coverage Agreement attached hereto as Appendix A, and incorporated by this reference (the 'Coverage Agreement') and the Indemnity Agreement attached hereto as Appendix B, and incorporated by this reference ('Indemnity Agreement'). The terms of this Agreement, the Coverage Agreement and the Indemnity Agreement may be amended by a vote of at least two-thirds of the number of Board members then serving on the Board at a duly called meeting of the Board at which a quorum is present. Any amendment to this Agreement, the Coverage Agreement or the Indemnity Agreement shall become effective upon a date designated by the Board ~ first giving the Member at least ninety (90) days' prior written notice of such amendment. 3.1 Term and Renewal. This Agreement shall have a one (1) year term comme. nging on July 1, 1997 (the "Effective Date") and shall be automatically renewed unless terminated pursuant to Section 3.2, Section 3.3 or Section 6 of this Agreement; provided, however, that (i) under no circumstances shall this Agreement be effective unless and until approval of the Pool by ~ Industrial Commission is obtained putshunt to A.R.S. § 11-952.01 and (ii) termination during the initial thirty-six 06) months after the Effective Date shall be governed by Section 3.2 of this Agreement. 3.2 Initial Term. Except as provided in Sections 4 and 6 of tiffs Agreement, this Agreement may not be terminated by either party during the initial thirty-six (36) months after the Effective Date without f~t giving written notice twelve (12) months prior to the anniversary of the Effective Date. 3.3 Termination Without Cause. Except as provided in Sections 3.2 or 4 of this Agreement, this Agreement may be terminated by the Pool or the Member by written notice of termination given at least ninety (90) days prior to the anniversary of the Effective Date of the Member's Coverage Agreement (the "Coverage Agreement Effective Date"). The Board may in its sole and absolute discretion, and only in the event of extra-ordinary circumstances demonstrated by the Member, grant the Member a thirty (30) day extension of coverage under the Coverage Agreement on such renewal terms and conditions that are submitted to the Member by the Administrator for the next succeeding renewal year, pro rated by the Administrator for the thirty O0) day extension period. Any extension granted pursuant to this Section 3.3 shall not change the Effective Date. 3.3 4 5 6 3.4 Distribution of Assets On Termination. In the event the Member shall terminate this Agreement for any reason, or in the event the Pool sha~l terminate this Agreement as a result of the breach of any of the terms of this Agreement by the Member, the Member shall thereupon forfeit any and all rights to the return of any surplus, unearned contributions, or other legally permitted distributions from the Pool. 3.5 Effect of Termination. Notwithstanding the termination of this Agreement, following the date of termination, the Member shall (i) cooperate fully with the Administrator in determining the caused losses and the settlement of claims; (ii) provide the Adm'mist~'ator such statistical and loss experience data as may be necessary for the Administrator to carry out its duties; and (iii) cooperate and assist the Administrator and any clairn~ adjuster or legal counsel retained by the Pool. Termination of the Pool. Notwithstanding any other provision hereof, the Pool may be terminated at such time as the Board determines Coy a vote of at least two-thirds of the number of Board members then serving on the Board at a duly called meeting of the Board at which a quorum is present) that the number of members of the Pool or the size of the Pool is too small to indemnify adequately against the risks specified in the Coverage Agreement. Any termination pursuant to thi~ Section 4 shall not be effective until the Board shall have given each member of the Pool at least twelve (12) months' written notice. Upon termination of the Pool, and after making adequate provision for all pending and anticipated claims, the assets of the Pool shall be liquidated, a final accounting shall be made, and the assets thereafter remaining in the Pool shall be distributed among the then-existing members of the Pool in proportion to the cotttributious made to the Pool by each of the then existing members during the preceding one hundred and twenty (120) months. Membership Fee. The Coverage Agreement shall set forth the Member's Membership Fee for the curlent calendar year of this Agreement. The Membership Fee shall be based on sound underwriting criteria as recommended by the Pool's actuary and the Administrator. The Member agrees to furnish the Pool all available information requested by the Pool's actuary or the Administrator to enable the actuary or the Administrator to determine the exposure and loss experience of the Member. The Member shall pay its total Membership Fee to the Pool in cash within thirty (30) days after the anniversary of the Effective Date, or no later than such later date as may be permitted by the Board pursuant to a payment plan established by the Board. Suspension. In the event the Member fails to pay its Membership Fee as required hereunder, or fails to comply with any of the other terms of this Agreement, 3 7 the Board may, if such failure is not cured after thirty (30) days' wriuen notice, suspend the Member's coverage under the Coverage Agreement for a period of up to ninety (90) days without further notice or action. The written notice shall inform the Member that the suspension may be made permanent effective ninety (90) days after the date of the notice. During such suspension period, the Board shall either (i) determine that the suspension shall be made permanent, in which case this Agreement shall be deemed terminated effective ninety (90) days after the date of notice of suspension, or (ii) determine the circumstances, if any, under which the Member's participation in the Pool and coverage under the Coverage Agreement may be restored. Should the Member be permanently snspended and this Agreement terminated, the Member shall forfeit all rights to any distribution of surplus, unearned contributions or other distributions from or assets of the Pool. Assessment. The Member shall be subject to assessment pursuant to A.R.S. § 11-952.01(M), as may be amended, and the terms of such statute are incorporated by reference. The amount of such assessment may not exceed the amount of the Member's annual Membership Fee to the Pool for the year in which the assessment is made or (if the Member has withdrawn from the Pool) for the last year that the Member was a member of the Pool. The amount of each assessment and a description of the manner of calculating the same slmll be provided to the Member in writing (the 'Assessment Notice'), and the Member shall pay such assessment pursuant to the terms and conditions of the Assessment Notice. The Member shall remain liable for assessments for liabilities of the Pool incurred during the Member's period of membership in the Pool, notwithstanding the Member's withdrawal from participation in the Pool or the termination of this Agreement. Inspection and Audit. The Administrator or any other designee of the Pool shall be permitted, but shall not be obligated, to inspect the Member's properties and operations at any time. Neither the Administrator's right nor any such designee's right to make inspections nor the making thereof shall constitute an undertaking on behalf of or for the benefit of the Member or others to determine or warrant that such properties or operations are safe or are in compliance with any law or rule. 8.1 The Administrator or any other designee of the Pool may examine and audit the Member's financial and administrative records that relate to the subject matter of this Agreement at any time during the period of this Agreement is in effect and within five (5) years after the termination of this Agreement. 8.2 The Pool shall be audited annually at the expense of the Pool by a certified public accountant, find a copy of the report shall be submitted to the Board, the Member, and the Arizona Department of Insurance. The Board shall obtain an appropriate actuarial evaluation of the claim reserves of the Pool including, an 4 9 10 11¸ 12 estimate of the incurred but not reported claims and shall maintain claim reserves equal to known incurred losses and an estimate of incurred but not reported claims, as determined by the Board. Loss Control. The Member shall maintain a program of loss control in substantial conformance with the Loss Control Program Standards for Members, a copy of which is attached hereto as Appendix C and incorporated by this reference (the 'Loss Control Standards'). The Member acknowledges, understands and agrees (i) that the Loss Control Standards are simply recommendations concerning the minimum standards that should be adopted by each member of the Pool, (ii) that to be effective, a loss control program must be tailored to the specific requirements of each member of the Pool, (iii) that the Pool makes no representation or warranty that the Loss Control Standards are sufficient or adequate to meet the specific requirements of the Member, and (iv) that it is the Member's sole responsOility to modify the Loss Control Standards to meet the specific requirements of the Member. Subrogation. In the event a recovery is obtained against a third party pursuant to the right of subrogation set forth in the Coverage Agreement, such recovery shall fast be applied to the costs of recovery, and the balance, if any, shall be apportioned between the Pool and the Member in proportion to their respective losses from the occurrence giving rise to such recovery. Conformity with Law. In the event any term or provision of this Agreement shall be in conflict with the laws and statutes of the State of Arizona as they now exist or are bereaRer amended, this Agreement shall be automatically deemed amended to conform to such laws and statutes. Authorized Representatives: Prompt Reply. The Pool and the Member shall each designate a representative authorized to act on each of the respective parties' behalf in all matters pertaining to this Agreement. For the Pool: Lon Meyer Southwest Risk Services, Inc. 11801 North Tatum Boulevard, Suite 223 Phoenix, Arizona 85028 (602) 996-8810 For the Member: Name Title Address City State Zip Code Telephone Such representatives and/or addresses may be changed by either party from time to time by written notice to the other. The Member (through its Authorized Representative ILLted above) shall reply promptly to all correspondence or inquiries from the Pool. 13 Authorizing Action. This Agreement shall become effective only upon: (a) the execution of this Agreement by an authorized officer of the Pool, Co) the execution of this Agreement by an authorized representative of the Member, and (c) the delivery to the Pool of a fully executed Agreement and a certified copy of a resolution adopted by the governing board of the Member approving the execution of this Agreement. 14 Prior Acts of Parties. All covenants, promises, agreements, conditions and understandings between the Pool and the Member, and any other acts of the parties undertaken pursuant to A.R.S. § 11-952.01 are superseded by and merge into this Agreement, and this Agreement and any Appendices hereto set forth all covenants, promises, agreements, conditions and understandings between the Pool and the Member as of the Effective Date. There are no covenants, promises, agreements, conditions or understandings either oral or written between the Pool and the Member other than set forth herein and in the Appendices hereto. 15 Liability. The Pool, the Board and the Administrator shall have no obligation to pay or defend claims except from the funds in the Pool, and no liability pursuant to this Agreement and any Append.ix hereto except to disburse funds in the Pool in accordance with the terms of this Agreement. In the event that after collecting all assessments or Membership Fees from the members of the Pool as provided for herein, there are insufficient funds in the Pool to pay the expenses and to discharge the obligations of the 16 17 18 19 20 21 Pool, neither the Pool, the Board nor the Administrator shall have any further obligation to defend or pay claims. 15.1 No member of the Pool has any liability for claims brought by third parties against any other member of the Pool, other than the obligation to contribute certain funds to the Pool as expressly required by this Agreement. The liability for any claim against the municipality shall remain the sole and exclusive liability of the Member. The obligation of the Pool is to indemnify the Member against such liability as required by the Coverage Agreement, and only to the extent there are funds in the Pool for such indemnification. 15.2 The Member is not relieved of its liability incurred during the Member's period of membership in the Pool except through the payment of losses by the Pool (as required by the Coverage Agreement) or by the Member. Invalidity of a Term. The parties agree that in the event any term, covenant or condition herein contained should be held to be invalid or void by a court of compemnt jurisdiction, the invalidity of any term, covenant or condition shall in no way affect any other term, covenant or condition of this Agreement. Proh~ifion Agair[qt Discrimination. In the event that it applies, the parties agree to comply with the Arizona Governor's Executive Order No. 75-5, entitled 'Prohibition of Discrim[nation in State Contracts - Non-Discrimination in Employment by Government Contractors and Subcontractors," and any subsequent similar Executive Order. Governing Law And Venue. This Agreement shall be construed under the laws of the State of Arizona. Any action arising out of this Agreement, whether for the enforcement thereof or otherwise, shall be brought in Maricopa County. Counterparts. This Agreement may be executed in any number of counterparts, all such counterparts shall be deemed to constitute one and the same instrument, and each of such counterparts shall be deemed an original hereoff Conflict of Interest. The parties acknowledge that this Agreement is subject to cancellation pursuant to A.R.S. 38-511, the provisions of which are incorporated herein. In addition to Appendices A, B and C previously referred to herein, the following Appendices are dttached hereto and incorporated by this reference as if set forth in full, and such Appendices are subject to amendment pursuant to each of their respective terms: day of Appendix D - Bylaws of the Pool IN WITNESS WHEREOF, the parties hereto have executed this Agreement this __ ,1997. POOL: ARIZONA MUNICIPAL WORKERS' COMPENSATION POOL, an Arizona nonprofit corporation By: Its: THE MEMBER: By: Its: EXHIBIT B hNI)USTRIAL CO~fi'~flkSSION OF ARIZONA SU'PPI,FA'I~'NTAL INDEMNITY AGlZ~ ~FFMENT FOR WORKERS' CO[~[PE.NSATION POOL CREATED UNDER A.1LS. § 11-952.01(B) Parries: The parties to this Supplemenlxl Indemnity Agreement are the Arizona Municipal Workers' Compensation Pool, an Arizona nonprofit corporation and a workers' compensation organized under the authority of A.R.S. § 11-952.01 (13); and the Member, a public entity of the S~ate of Arizona. The pool was initially formed by twelve (12) Founders (as that te.ma is defined in that certain Intergovemmen~ Agreement, filed a the Office of the Arizona Se~/ary of $~ate, file number 21505, on April 22, 1997). The Founders entered into the initial Indemnky Agreement which required that all new members of the Pool execute a Supplemental Indemnity Agreement that incorporates by reference the terms of the 'initial Indemnity Agreement. This Supplemental Ilademnity Agreement hereby incorporates the 'mkial Indemnity Agreemellt by reference and sets forth below the terms of the 'mkial Indemnity Agreement. The Pool has designated the following ¢tected officials and employees of public entities as its Board of Trustees: William Kautenburger Wallace B. Hudson Ron Jacobson James V. Thompson Delber~ Self Ralph Velez Vito Tedeschi Royce Williams The Board of Trustees has desigmted the following person as the Administrator of the Pool to carry out the policies established by the Board of Trustees: Bruce A. Medvec, President, Southwest R~k Services, Inc. The Board of Trustees has appointed Southwest Risk Services, Inc. as its Service Agent for the Pool and its Members, individually and collectively. The Members of the Pool have ratified and confa'med that appoint,aent. The services, dudes and respons~ilities of the Service Agent are provided for by contract between the Service Agent and the Pool that includes the following provisions: 2. 3. 4. 5. (Fee for service) (Procedure for collection of funds) ODe~dption of loss control program) (Procedure for cl~n~ proc~ing) (Safety Bond and Exc~s Insurance Coverage) The Members and Pool, in ~making application to the Arizona Industrial Commission for amhodmt~on to setf-imum for workers' compensation under A.R.$. § 26-961 agree to comply with the governing law a~licable to workers' compensation pools and employera subject to the Arizona. Workers' Compemation Act and further agree to comply with the following oond/dom and requiremeres: I. Gt~'ant2r Bond or ~lternate $ean'iti~ The Pool shall post a corpora~ surety bond or alternate securities in the aggregate sum required by A.A.C. R20-5-201 et seq. to secure performance of all obligations imlx~ed by law and the Commission. The Pool agrees to keep the bond or securities po~tecl as long as required by the Cornn~ion. The Pool shall from time to time be entided to receive the interest accruing on any negotiable securkies posted, provided the Pool is not in default in payment of any compomation benefits or t~x axsessments. Excess In~uranee The Pool shall furnish proof of excess insurance in the amount of ten million dollars. Liability of Members Each Member is liable for its own industrial claims or losses incurred during the Member's period of membership in the Pool to the exxent that the claims or losses are not paid by the Pool. A Member's liability for its own claims or losses continues for the life of the claim and continues notwitkstanding the Pool's inability to pay the member's claims or losses. Failure of the Pool to comply with the provisions of the Arizona Workers' Compensation Ac~ relating to the payment and processing of claims shall result in the assignment of the claims to the State Compensation Fund under A.R.$. § 23-966 and shall not relieve a Member of liability for its own losses or claims. Notwithstanding the provisions of A.R.S. § 10-2311(B), Members of a nonprofit corporation organiTed under A.R.S. § 11-952.0105) shall remain liable for the Member's own indusuSal claims or losses incurred during the Member's period of membership in the Pool to the extent that the claim5 or losses are not paid by the Pool. l,iah'~ty of the Pool The Pool shall pay all covered claims for which each Member incu~ liability durix~g each Member's period of membership. The Pool slmll defend, in the name of and on behalf of any member, any suits or other proceedings which may arise or be instituted against a Member for employer's liability under the Arizona Employers' Liability Law (A.R.S. § 23- 801 et mq.) or as a teafit of injury or death covered by the Arizona Workers' Compensation Act (A.R.$. § 23-901 et_~q.) and accompanying rule~ although such suits or other proceedings are wholly groundless, fal~e or fraudulent. The Pool shall pay all legal costs connected with such ~ and proceedings. The Pool shall also pay all jud~oments or awards, all interest due and accruing after enn-y of a judgment and all expenses incurred for investigation, negotiation or defense related to such suits or other proceedings. Addition of New Members A Supplemenial Indemnity Agreement by and between any new Member of the Pool and the Pool si'mil be filed with the application to the Industrial Commission for the admission of new Members to the Pool. The Supplemental Indemnity Agreement shall provide that the new member is bound by the terms of the initial Indemnity Agreement. The Supplemental ladeamity Agreement shall incorporate by reference the initial Indemnity Agreement f~led with the Industrial Commaion, shall be signed by the new Member and an authorized representative of the Pool and shall provide that the new Member and the Pool agree to the conditions of the initial Indemnity A~eement. Renewal Provisions The Pool shall update this Supplemend Indemnity Agreement as required by A.A.C. R20- 5-203(B)(2) to reflect any changes occurring since the last filing approved by the Industrial Commission. 3 Counterparts This Supplemental Indemnity A~m-eement may be executed in any number of counterparts, all such counterparts shall be deemed to constitute one and the same instrument, and each of such counterparts shall ~ deemed an origiml hereof. This Supplemental Indemnity A~eement is hereby executed by the Member and the Pool. SIGNED this day of .19__. ARIZONA MUNICIPAL WORKERS' COMPENSATION POOL Authorized Represenlafi-ve ATTEST Tide ~ OR TOWN OF Authorized Repre~emative Tide