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HomeMy WebLinkAboutAgenda - 06-17-2003-8vORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: June 17, 2003 Action Agenda Item No. SUBJECT: Resolutions Adopting North Carolina Risk Management Pool Revised Interlocal Agreements DEPARTMENT: Purchasing and Central PUBLIC HEARING: (Y /N) No Services ATTACHMENT(S): Interlocal Agreements for: 1. Property and Liability Coverage 2. Worker's Comp Coverage INFORMATION CONTACT: Pam Jones, (919) 245 -2652 TELEPHONE NUMBERS: Hillsborough 732 -8181 Chapel Hill 968 -4501 Durham 688 -7331 Mebane 336- 227 -2031 PURPOSE: To consider approving the revised interlocal agreements for Property and Liability insurance coverage and Worker's Compensation insurance coverage through the North Carolina Association of County Commissioners. BACKGROUND: Orange County has participated in the County Commissioner Risk Management Pools since at least 1985. The County began participating in the Pool first with Worker's Comp coverage and then followed in 1988 with Property and Liability coverage. Participation in Pools has allowed the County to experience a greater degree of stability in available coverage as well as a greater predictability of premium amounts. The events of September 11, 2001 have caused significant changes in the commercial insurance environment. However, the Board of Trustees of the Risk Management Pool has successfully maintained adequate reinsurance levels and competitive contribution rates for its members. Although the County's worker's comp premiums have escalated substantially over the past two years, the pool discounts have lessened the impact over what would have been the case with traditional providers. The Pool provides not only a stable insurance environment for counties, but it also plays a significant role in counties' ability to obtain risk control services. Many counties, small and large alike, do not employ a full time risk manager. The Risk Control Consultants available to Orange County and other counties through the Pool provide access to trainers and materials to help keep counties abreast of changing regulations and risk management practices industry-wide. The quality of information and training provided helps to avoid conflict with regulatory agencies 2 governing safety practices, but more importantly, helps counties to ensure a safe workplace for employees and the public. The Board of Trustees for the three Risk Management Pools have examined and revised the documents upon which Orange County participation is based, including Bylaws and Coverage Agreements, as well as the Interlocal Agreements adopted by members of each pool. The Interlocal Agreements have not been revised since the pools were organized. The changes to the Interlocal Agreements are largely cosmetic. They have been reorganized to make their formats consistent with each other. Provisions that should be (and /or are already) included in coverage agreements that are revised annually have been removed from the Interlocal Agreements. A few provisions that duplicated language in the Bylaws have been removed from the Interlocal Agreements. The Association is requesting that each member of the pool re -adopt a resolution providing for participation in the Interlocal Agreement that forms each Pool. To that end, resolutions for the Property and Liability Pool and the Workers' Compensation Pool are attached for the Board's approval. As the Board is aware, the County also participates in a third pool, the Health Insurance Trust for group health. The revised interlocal agreement for that coverage will be presented for Board consideration closer to the January 1, 2004 renewal date. FINANCIAL IMPACT: No financial impact is associated with the adoption of the attached resolutions. RECOMMENDATION(S): The Manager recommends that the Board: 1. Approve the following resolutions a. Interlocal Agreement for a Group Self- Insurance Fund for Liability and Property Risk Sharing or Group Purchase of Coverage; and b. Interlocal Agreement for a Group Self- Insurance Fund for Workers' Compensation Risk Sharing or Group Purchase of Coverage; and 2. Authorize the Chair to sign on behalf of the Board; and 3. Confirm authorization of the Purchasing and Central Services Director to execute documents related to renewal of coverages each year. INTERLOCAL AGREEMENT FOR GROUP SELF - INSURANCE FUND FOR LIABILITY AND PROPERTY RISK SHARING OR GROUP PURCHASE OF COVERAGE This Agreement is made and eiatered into bit, and. between all the parties who are now or may. hereafter become Members of this Joint Agency and join in a group fund for risk sharing and/or group purchase of coverage, which Agency is acting by and through its Board of Trustees as provided herein.. ARTICLE 1. PURPOSE 1. To carry out the desire of certain counties of the State of North Carolina to create and become the North Carolina Counties Liability and Property Joint Risk Management Agency d.b.a. NCACC Liability and Property Pool, hereafter called the Pool, and to enable these counties to pool the retention of their risks, liabilities and/or payments, or for the group purchase of coverage, pursuant to the provisions of North Carolina General Statutes 153A- 92(d), 153A- 445(a)(1) and 16OA -460 through 160A -464. 2. To create a Board of Trustees to direct ` the affairs of the Pool and to describe the responsibilities of the Board. 3. To provide for the discharge,'from the assets of the Pool, and/or from funds collected from self- funded members, and through excess or other insurance purchased by the Pool, of any. a) insurance premiums, b) property losses incurred by any member of the Pool, and c) any lawful liability claims against any member of the Pool which awards have been sustained by final judgment where suit shall have been filed or by the rules of the Pool if settlement is made before suit is filed. 4. To provide for payment by members of the Pool of contributions based upon appropriate classifications, rates, experience modifications, or other methodologies, out of a portion of which the Pool will establish and maintain a fund for the payment of covered claims, losses. and the administrative costs of operating the Pool. ARTICLE IL EFFECTIVE DATE AND DURATION Any member who formally applies for membership in this Pool and is accepted by the Board of Trustees shall thereupon become a party to this Agreement and be bound by all of the terms and conditions thereof, and such application shall constitute a part of this Agreement. The Agreement shall remain in force until terminated by the Board of Trustees. Interlocal Agreement Page 1 of 5 Amended December 12, 2002 ARTICLE IIh COVERAGE Terms; conditions and limits of liability, exclusions, coverage agreements, assistance and cooperation of members, subrogation and other terms and conditions of membership shall be governed by the Coverage Document approved by the Board of Trustees from time to time. ARTICLE IV. BOARD OF TRUSTEES 1. The counties that are signatories hereto do hereby establish the North Carolina Counties Liability and Property Joint Risk Management Agency d.b.a. NCACC Liability and Property Pool, hereafter referred to as the "Pool." The Pool shall be governed by a Board of Trustees composed of seven (7) elected officials or employees of units of local governments who are members of the Pool and who shall be appointed by the President' of the North Carolina Association of County Commissioners, hereafter referred to as "Association. Terms of Trustees shall be for three calendar years beginning January 1 of the first year and ending December 1 at the end of the third year. A member of the Board of Trustees shall continue to hold office until his successor is selected. Any vacancy shall be filled for the unexpired portion of the term by appointment by the President .of the Association. A member of the Board of Trustees who ceases to be an elected official or employee of county government, or whose county ceases to be a member of the Pod shall be deemed to vacate his seat on the Board. 2. The Board of Trustees annually shall select a Chair and Vice -Chair from among its membership to preside for the ensuing year. The Executive Director of the Association shall serve as Secretary to the Board, unless a Trustee is selected as Secretary by the Board. A majority of the membership of the Board shall constitute a quorum thereof and any question may be decided by a majority vote. 3. The Board of Trustees: a) Shall have general control and supervision over the affairs of the Pool; b) 1s authorized to establish, operate and enforce administrative rules, regulations and bylaws as between the individual members of the Pool and the Pool; c) Shall establish terms and conditions of coverage within the Pool, including underwriting. criteria and exclusions of coverage; d) Shall ensure that all claims are adjudicated promptly; e) Shall take all necessary precautions to safeguard the assets of the Pool; f) Shall maintain minutes of its meeting which minutes shall delineate the areas of authority delegated by the Board of Trustees to the administrator and to .the Service Contractor(s); Interlocal. Agreement Page 2 of 5 Amended December 12, 2002 - 5 g) Shall have responsibility to determine whether applicants for membership shall be admitted to the Pool and whether existing members shall be suspended or expelled, subject to the following limitations: _(1) Only units of local goverment as defined by N.C.G.S. 160A- 460(2), and institutions ,�or agencies in the State of North Carolina shall be eligible for membership; and (2) A member may be suspended or expelled` only after receiving sufficient notice pursuant to the Participation Agreement or any policies, rules and regulations _promulgated by the Board of Trustees; h) Shall approve and monitor all loss control programs; 1) Shall execute agreement(s) designating Service Contractors) for the Pool and shall agree upon the terms of fees to be paid to the Service Contractor(s) and shall have sole responsibility to assess the performance of the Service Contractor(s), to review, . negotiate and give final approval to any agreement(s) between the Pool and any Service Contractor(s), and to have final selection of any Service Contractor(s); j) Shall have authority to negotiate, execute and monitor any other contracts and agreements necessary to effectuate this Interlocal Agreement; and k) Shall bear sole responsibility for any dispositions out of the Pool by way of dividends or distributions, if any, of accumulated reserves to the members of the Pool; and 1) Shall contract for and purchase excess or other insurance as deemed necessary to safeguard the assets of the Pool. ARTICLE V. DESIGNATION DUTIES OF ADMINISTRATOR: DUTIES OF SERVICE CONTRACTOR( 1. The Association is hereby designated as the Administrator of the Pool unless and until otherwise designated by the Board of Trustees. The Administrator shall supervise all other Service Contractor(s). The Association shall deposit to the account of the Pool at any bank or banks designated by the Board of Trustees, all contributions as collected, and such monies shall be disbursed by the Administrator as provided by the policies, rules, regulations and bylaws of the Board of Trustees, and the service agreement(s) with the Service Contractor(s). 2. The Service Contractor(s), under the supervision of the Board of Trustees and the Association, shall be generally responsible for claims and general administration and loss control on behalf of the members. The Service Contractor(s) shall assist the Board of Trustees in determining all contributions due the Fund, prepare for payment all approved items of expense and claims, and give a monthly accounting of all monies and claims so handled. The responsibilities and duties of the Service Contractor(s) shall be more particularly defined and described in the service agreement(s) executed with the Service Contractors). 3. For performing the servicing functions of the Pool, the Administrator and Service Contractor(s) shall each receive a fee, which shall be negotiated with and approved by the Board of interiocal Agreement Page 3 of 5 Amended December 12, 2002 Trustees. The Administrator and the Service Contractor(s) and the Board of Trustees may renegotiate such fees from time to time as mutually agreed upon. ARTICLE VI. CONTRI130ONS AND AUDITS 1. The Board of Trustees shall determine contributions to the-Pool by individual members. The Board of Trustees shall have the discretion to modify the contributions as may be necessary to maintain the soundness of the Pool. The Board of Trustees is authorized to determine the method and timing of payment of contributions to the Pool and.the method and timing of the distribution of any Fund Balance, with due regard for the interests of the members and the financial security of the Fund. 2. A certified public accounting firm shall audit the Pool annually. The Board of Trustees shall obtain an appropriate actuarial evaluation of the loss and loss. adjustment expense reserves of the Pool including an. estimate of losses and loss adjustment expenses incurred but not reported (IBNR). 3. The Pool and any agency having jurisdiction by law shall each be permitted to examine and audit the members' payroll records, general ledger, disbursements, vouchers, contracts, tax reports, and all other books, documents and records of any and every kind at any reasonable time during the Contract period and any extension thereof and within three years after termination of the Contract, as far as th ey show or tend to show or verify the amount of remuneration or other contribution basis, or relate to the subject matter of this Contract. ARTICLE VII. OWNERSHIP OF REAL PROPERTY In the event of dissolution of the Pool, the ownership and disposition of real property shall be determined by the Board of Trustees. ARTICLE VIII. CANCELLATION Cancellation and refunds of contributions shall be governed by the Participation Agreement. ARTICLE IX. AMENDMENT OF THE AGREEMENT The Board of Trustees is authorized to make any changes or amendments to this Agreement that would not fundamentally alter the contemplated Agreement. This Agreement may be amended by action of its members in the following manner. Any amendment shall be proposed by the Hoard of Trustees and` submitted in writing to each of the members. A proposed Amendment shall be adopted. if approved by a simple majority vote of the members. Interlocal Agreement. Page 4 of 5 Amended December 12, 2002 RESOLUTION TO ADOPT THE INTERLOCAL AGREEMENT AND TO JOIN THE NORTH CAROLINA COUNITES LIABILITY AND. PROPERTY JOINT RISK MANAGEMENT AGENCY/ WHEREAS, desires to protect (county or local agency) against liability claims and property losses and to provide for payment of claims or losses for which the county may be liable; WHEREAS, the North Carolina Counties _ Liability and Property Joint Risk Management.Agency.d.b.a. NCACC Liability and Property Pool; hereafter called the Pool, has been established pursuant to G.S. §153A -445 (a)(1) and G.S. §160 -A-460 through §160A -464; and WHEREAS, it is desirable for to join (county or local agency) the Pool to provide a method of risk sharing and/or group purchase of coverage; NOW, THEREFORE, BE IT RESOLVED that the Board of Commissioners of hereby adopts the interlocal agreement entitled "Interlocal Agreement for a Group Self- Insurance Fund for Liability and Property Risk Sharing or. Group Purchase of Coverage" and thereby joins and agrees to participate In the NCACC 1-lability & Property Pool which has been formed to create a group fund to pay and service the liability claims and property losses of the counties and other local agencies joining the Pool BE IT FURTHER RESOLVED that is (county official) authorized to execute the application to join the NCACC Liability a Property Pool This the day of , 20`. Attest: Clerk Chair County Board of Commissioners f - Ct INTERLOCAL AGREEMENT FOR A GROUP SELF- INSURANCE FUND FOR WORKERS' COMPENSATION RISK SHARING OR GROUP PURCHASE OF COVERAGE This Agreement is made and entered into t* and between all the parties who are now or may hereafter become Members of this Joint Agency and join in a group fund for risk sharing and/or group purchase of coverage, which Agency is acting by and through its Board of Trustees as provided herein. ARTICLE L PURPOSE 1." To carry out the desire of certain counties of the State of North Carolina to create and become . the North Carolina Workers' Compensation Joint Risk Management, Agency d.b.a. NCACC Workers' Compensation Pool, hereafter called the Pool, and to enable these counties to pool the retention of their risks, liabilities and/or payments, or for the group purchase of coverage, - pursuant to the provisions of North Carolina General Statutes 153A- 92(d), 153A- 445(a)(1) and 16OA -460 through 160A -464. 2. To create a Board of Trustees to direct the affairs of the Pool and to describe the responsibilities of the Board. 3. To provide for the discharge, from the assets of the Pool, and/or from funds collected from self- funded members, and through excess or other insurance purchased by the Pool, of any a) insurance premiums, and b) any lawful workers' compensation claims against any member of the Pool, which awards have been sustained by final judgment where suit shall have been filed , or by the rules of the Pool if settlement is made before suit Is filed. 4. To provide for payment by members of the Pool of contributions based upon appropriate classifications, rates, experience modifications, or other methodologies, out of a portion of which the Pool will establish and maintain a fund for the payment of covered claims, losses and the administrative costs of operating the pool. ARTICLE II. EFFECTIVE DATE AND DURATION Any member who formally applies for membership in this Pool and is accepted by the Board of Trustees shall thereupon become a party to this Agreement and be bound by all of the terms and conditions thereof, and such application shall constitute a part of this Agreement. The Agreement shall remain in force until terminated by the Board of Trustees. interlocal Agreement Page 1 of 5 Amended December 12, 2002 , .. - I O ARTICLE tll. COVERAGE Terms, conditions and limits of H6114Y, exclusions, coverage agreements, assistance and cooperation of members, subrogation and other terms and conditions of membership shall be governed by the Coverage Document approved by the Board of Trustees from time to time. ARTICLE IV. BOARD OF TRUSTEES 1. The counties that are signatories hereto do hereby. establish the North Carolina Workers' j Compensation Joint Risk Management Agency d.b.a. NCACC Workers' Compensation Pool, hereafter referred to as the "Pool." The Pool shall be governed by a Board of -Trustees composed of seven (7) elected officials or employees of units of local governments who are members of the Pool and who shall be appointed by the President of the North Carolina Association of County Commissioners, hereafter referred to as "Association." Terms of Trustees shall be for three calendar years beginning January 1 of the first year and ending December 1 at the end of the third year. A member of the Board of Trustees shall continue to hold office until his successor is selected. Any vacancy shall be filled for the unexpired portion of the term by appointment by the President of the Association. A member of the Board' of Trustees who ceases to be an elected official or employee of county government, or whose county ceases to be a member of the Pool shall be deemed to vacate. his seat on the Board. 2. The Board of Trustees annually shall select a Chair and Vke-Chair from among its membership to preside for the ensuing year. The Executive Director of the Association shall serve as Secretary to the Board, unless a Trustee is selected as Secretary by the Board. A majority of the membership of the Board shall constitute a quorum thereof and any question may be decided by a majority vote. 3. The Board of Trustees: a) Shall have general control and supervision over the affairs of the Pool; b) Is authorized to establish, operate and enforce administrative rules, regulations and bylaws as between the individual members of the Pool and the Pool; C) Shall establish terms and conditions of coverage within the Pool, including underwriting criteria and exclusions of coverage; d) Shall ensure that all claims are adjudicated promptly; e) Shall take all necessary precautions to safeguard the assets of the Pool; f) Shall maintain minutes of its meeting which minutes shall delineate the areas of authority delegated by the Board of Trustees to the administrator and to the Service Contractor(s); Interlocal Agreement Page 2 of 5 Amended December ,12, 2002 g) Shall have responsibility to determine whether applicants for membership shall be admitted to the Pool and whether existing members shall be suspended or expelled, subject to the following limitations: (1) Only units. -of local government as defined by N.C.G.S. 160A- 460(2), and institutions, s or agencies-in the State of North Carolina shall be eligible for membership; and (2) A member may suspended or expelled only after receiving sufficient notice pursuant to the Participation Agreement or any policies, rules and regulations promulgated by the Board of Trustees; h) Shall approve and monitor all loss control programs; i) Shall execute agreement(s) designating Service Contractor(s) for, the Pool and shall agree upon the terms of fees to. be paid to the Service Contractor(s) and shall have sole responsibility to assess the performance of the Service Contractor(s), to review, negotiate and give final approval to any agreement(s) between the Pool and any Service Contractor(s), and to have final selection of any Service Contractor(s);1 j) Shall have authority to negotiate, execute and monitor any other contracts and agreements necessary to effectuate this lnterlocal Agreement; and k) Shall bear sole responsibility for any dispositions out of the Pool by way of dividends or distributions, if any, of accumulated reserves to the members of the Pool; and i) Shall contract for and purchase excess or other insurance as deemed necessary to safeguard the assets of the Pool. ARTICLE V. DESIGNATION DUTIES OF ADMINISTRATOR: DUTIES OF SERVICE CONTRACTORS) 1. The Association is hereby designated as the Administrator of the Pool unless and until otherwise designated by the Board of Trustees. The Administrator shall supervise all other Service Contractor(s). The Association shall deposit to the account of the Pool at any bank or banks designated by the Board of Trustees, all contributions as collected, and such monies shall be disbursed by the Administrator as provided by the policies, rules, regulations and bylaws of the Board of Trustees,;and the service agreement(s) with the Service Contractor(s). 2. The Service Contractor(s), under the supervision of the Board of Trustees and the Association, shall be generally responsible for claims and general administration and loss control on behalf of the members. The Service Contractor(s) shall assist the Board of Trustees in determining all contributions due the Fund, prepare for payment all approved items of expense and claims, and give a monthly accounting of all monies and claims so handled. The responsibilities and duties of the Service Contractor(s) shall be more particularly defined and described in the service agreement(s) executed with the Service Contractor(s). 3. For performing the servicing functions of the Pool, the Administrator and Service Contractor(s) shall each receive a fee, which shall be negotiated with and approved by the Board of Interlocal Agreement Page 3 of 5 Amended December 12, 2002 Trustees. The Administrator and the Service Contractor(s) and the Board of Trustees may renegotiate such fees from time to time as mutually agreed upon. ARTICLE VL 4 CONTRIBUIJONS AND AUDITS 1. The Board of Trustees shall determine contributions to the Pool by individual members. The Board of Trustees shall have the discretion to modify the contributions as may be necessary to maintain the soundness of the Pool. The Board of Trustees is authorized to determine the method and timing of payment.of contributions to the Pool and the method and timing of the. distribution of any Fund Balance, with due regard for the interests of the members and the financial security of the Fund: 2. A certified public accounting firm shall audit the Pool annually'. The Board of Trustees shall obtain an appropriate actuarial evaluation of the loss and loss adjustment expense reserves of the Pool including an estimate of losses . and loss adjustment expenses incurred but not e reported (IBNR). 3. The Pool and any agency having jurisdiction by law shall each be permitted to examine and audit the members' payroll records, general ledger, disbursements, vouchers, contracts, tax reports, and all other books, documents and records of any and every kind at any reasonable time during the Contract period and any extension thereof and within three years after termination of the Contract, as far as they show or tend to show or verify the amount of remuneration or other contribution basis, or relate to the subject matter of this Contract. ARTICLE VII. OWNERSHIP OF REAL PROPERTY In the event of dissolution of the Pool, the ownership and disposition of rear property shall be determined by the Board of Trustees. - ARTICLE VIII. CANCELLATION Cancellation and refunds of contributions shall be governed by the Participation Agreement. ARTICLE IX. AMENDMENT OF THE AGREEMENT The Board of Trustees is authorized to make any changes or amendments to this Agreement that would not fundamentally alter the contemplated Agreement. This Agreement may be amended by action of its members in the following manner: Any amendment shall be proposed by the Board of Trustees and submitted in writing to each of the members. A proposed Amendment shall be adopted R approved by a simple majority vote of the members. Interiocal Agreement Page 4 of 5, Amended December 12, 2002 RESOLUTION TO ADOPT THE INTERLOCAL AGREEMENT AND TO JOIN THE NORTH CAROLINA ASSOCIATION OF COUNTY COMMISSIONERS .JOINT RISK MANAGEMENT AGENCY WORKER'S COMPENSATION FUND WHEREAS, is required to provide (county or local agency) payment of workers' compensation claims to employees; and .WHEREAS, the North Carolina Workers', Compensation Joint Risk: Management Agency d.b.a. NCACC Workers' Compensation. Pool, hereafter called the Pool, has been established pursuant to G.S. §153A -445 (a)(1) and G.S. §160 -A-460 through §160A -464; and WHEREAS it is desirable for to join (county or local agency) the Pool to provide a method of risk sharing and/or group purchase of coverage; NOW, THEREFORE, BE IT RESOLVED that. the Board of Commissioners of hereby adopts the interlocal agreement entitled "Interiocal - Agreement for a Group Self- Insurance Fund for Workers' Compensation Risk Sharing or Group Purchase of Coverage" and thereby joins and agrees to participate in. the NCACC Workers' Compensation Pool which has been formed to create a group fund to pay and service the workers' compensation claims of the employees of the counties and other local agencies joining the Pool BE IT FURTHER RESOLVED that is (county official) authorized to execute the application to join the NCACC Workers' Compensation Pool. This the day of 20_, Attest: Clerk Chair County Board of Commissioners