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BTR2010-001 - 2010-08-23BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS: Section 1. That the Declaration of Trust, attached hereto as Exhibit "A is hereby terminated, effective September 30, 2010. Section 2. Upon payment of all Trust obligations, any remaining Trust funds shall be transferred to the City of Pearland, and shall be used in the same manner as authorized by the Trust. ATTEST: A RESOLUTION OF THE CITY OF PEARLAND EMPLOYEE BENEFITS TRUST "TRUST"), TERMINATING A PREVIOUSLY APPROVED DECLARATION OF TRUST. PASSED, APPROVED, AND ADOPTED this 23 day of August, A.D., 2010. APPROVED AS TO FORM: DARRIN M. COKER CITY ATTORNEY RESOLUTION NO. BTR2010 1 cm1 TOM REID MAYOR Exhibit "A" Resolution No. BTR2O10 -1 Exhibit Resolution No. R2007•129 07 -0062 DECLARATION OF TRUST 1. The City of Pearland "City as settlor, designates the members of the City of Pearland City Council' to be Trustees and declares that the City holds in trust the funds described in Schedule A attached hereto and incorporated herein by reference, which is the property of the City, and all substitutions and additions to such funds, for the purpose of providing life, disability, sick, accident, and other health benefits to the City's officers, employees, and qualified retirees and their dependents. II, PURPOSE This is a nonprofit trust created for the purpose of providing City officers, employees, and qualified retirees and their dependents with life, disability, sickness, accident, and other health benefits either directly or through the purchase of insurance and to perform operations in furtherance thereof. Trustees. IV. TRUSTEES: COMPOSITION, OFFICERS, COMPENSATION, AND MEETINGS 1)ocki ration „I In I' I 111. DURATION The Trust shall continue until terminated by operation of law or by majority vote of the COMPOSITION. The Trustees are the members of the City of Pearland City Council, and the term of each Trustee is coternporaneous with his or her term of office as a Member of the I The senior is the entity establishing the trust and may also be a Chapter 172 Pool, a county. a hospital district, or a county or municipal hospital. The trustees will govern the operations of the trust and may also be the Trustees of a Chapter 172 Pool, members of a County Commissioners Court, or members of the Board o €Directors of a hospital district or of a municipal or county hospital. City Council. Whenever a Trustee ceases to be a member of the City of Pearlancl City Council, the person succeeding him or her in office will serve as a successor Trustee of the Trust. OFFICERS. The Mayor shall serve as Chairman and shall preside at meetings of the Trustees and shall have all such other powers as are conferred herein or by majority vote of the Trustees. The Mayor Pro Tem shall serve as Vice Chairman and shall preside at meetings of the Trustees whenever the Chairman is absent. The Secretary shall rotate, coinciding with the City ofPearlancl's Fiscal Year, between the District Council members, skipping the Mayor Pro Tern District, beginning with Position 1. The Secretary will oversee the preparation of meeting agendas, giving notice of meetings to the Trustees, and the minutes of the meetings of the Trustees. COMPENSATION. The Trustees shall be reimbursed for all reasonable and necessary expenses incurred by them in the performance of their duties and will otherwise receive no compensation for their service as Trustees. MEETINGS. A meeting of the Trustees may be called by the Chairman or on written request to the Chainnan by two or more Trustees. Trustees shall have at least three days written notice of any meeting. For purposes of this section, electronic mail notice is written notice. V. RIGHTS, POWERS, AND DUTIES OF TRUSTEES; QUORUM AND VOTING RIGHTS. POWERS, AND DUTIES. In addition to all other powers and duties conferred on them by this Trust document and imposed or authorized by law, the Trustees shall have the following powers and duties: 1. The Trustees shall carry out all of the duties necessary for the proper operation and administration of the Trust on behalf of the covered persons and shall have all t)cdaranon Tnist- _page, 1).:eE,irati. ricofTrust •1'tigc:3 the powers necessary and desirable for the effective administration of the affairs of the Trust. 2. The Trustees have the general power to make and enter into all contracts, leases, and agreements necessary or convenient to carry out any of the powers granted by this Trust document or by law or to effectuate the purpose of the Trust. All such contracts, leases, and agreements or any other legal documents herein authorized shall be approved by the Trustees and signed by the Chairman on behalf of the Trust. The Trustees may also designate another Trustee to sign such documents. 3. The Trustees shall use the Trust's funds to accomplish the purpose of the Trust, as described in Paragraph II herein, and to operate and administer the Trust solely in the interest of the covered City officers, employees, and qualified retirees and dependents thereof and for the exclusive purpose of providing benefits to such persons and defraying the reasonable expenses of administration of the Trust. To this end, the Trustees may purchase life, disability, or accident and health insurance to provide coverage for participating City officers, employees, and qualified retirees and their dependents. The Trustees may also adopt a health benefits plan that covers eligible City officers, employees, and qualified retirees, and their dependents. 4. The Trustees may accept contributions to the Trust funds from any source including contributions from covered persons receiving benefits from the Trust. 5. The Trustees shall be authorized to contract with any qualified organization io perform any of the functions necessary for providing life, disability, sick, accident, and other health benefits, including but not limited to excess loss 1 or'In1si -Pa 4 insurance, stop loss insurance, claims administration, administrative services, and any other services that the Trustees shall deem expedient for the proper operation of the Trust. When required by law or desired by the Trustees, the Trustees may seek sealed competitive bids or sealed competitive proposals with respect to contracts required to carry out the operations of the Trust and to effect the purpose of the Trust. 6. The Trustees shall arrange for the investing of the funds of the Trust so as to keep the same invested according to law and at the best interest rates obtainable for the benefit of the covered persons. The Trustees may hire money managers and shall adopt an investment policy for its own use and that of its agents in making investments. The Trustees shall select a depository for the Trust's funds and provide for the proper security of any and all investments. The Trustees shall designate signatories for the Trust's depository accounts. 7. The Trustees may purchase out of the Trust funds insurance for the Trustees and arty other fiduciaries appointed by the Trustees and For the Trust itself to cover liability or losses occurring by reason of the act or omission of any one or more of the Trustees or any other fiduciary appointed by there. Any insurance purchased by the Trustees must give the insurer recourse against the Trustees or other fiduciaries concerned for breach of any fiduciary obligation or fiduciary duty owed to the Trust. 8. The Trustees shall arrange for proper accounting and reporting procedures for the Trust's funds and shall also provide for an annual audit of the Trust's financial affairs by a certified public accountant. )ees.:9tir_atk n ial' Irtisi- I a c 9. The Trustees may retain legal counsel to represent the Trust and the Trustees in all legal proceedings as well as to advise the Trust and the Trustees on all natters pertaining to the operation and administration of the Trust. 10. The Trustees have the authority to terminate the Trust at any time. 11. Upon termination of the Trust, the Trustees shall provide for the payment of Trust obligations, debts, losses, and other liabilities and shall provide for the disposition of the remaining Trust funds in accordance with Paragraph IX herein. 12. The Trustees shall have the power to acquire, by purchase or otherwise, retain invest, reinvest, and manage, temporarily or pennanently, any interest (including an undivided interest) in any realty or personalty; to alter, improve, repair, replace, abandon, and demolish assets; to sell, exchange, encumber, lease for any period, or otherwise dispose of any asset of the Trust, publicly or privately, with or without notice, wholly or partly for cash or credit, without appraisal, and to give options for those purposes; to abandon, compromise, contest, and arbitrate claims; to hold title in the naive of a nominee; to adopt policies and regulations for the efficient operation of the Trust; to determine all natters of trust accounting as established by controlling law or customary practices; to set up and maintain reasonable reserves for taxes,.assessments, insurance premiums, repairs, improvements, depreciation, depletion, amortization, obsolescence, general maintenance of buildings or other property, and any other purpose; to employ agents, accountants, brokers, attorneys- in-fact, attorneys -at -law, tax specialists, realtors, investment counsel, and other assistants and advisers; and to delegate powers and duties to other persons, partnerships, corporations, and financial or business organizations. CgUORLIM AND VOTING. A majority of the Trustees shall constitute a quorum for the transaction of business at any meeting of the Trustees and the vote of a majority of the Trustees present shall be required for approval of any action at such meeting. The vote of such majority of the Trustees at such meeting shall constitute action of the Trustees as a group. 1)eda atiutt cri 1':I�!e (i VI. BENEFICIARIES The beneficiaries of the Trust are the City officers, employees, and qualified retirees and their dependents who are covered by a life, disability, sick, accident, or other health benefits plan purchased or adopted by the Trust (also called "covered persons" herein). Beneficiaries may make contributions to the Trust for use by the Trustees in fulfilling the purposes of the Trust. No beneficiary shall have any claim against the funds or any other property of the Trust. The rights and interests of the beneficiaries are limited to the insurance or health benefits specified in any policy purchased or plan adopted by the Trustees. VII. TRUST FUNDS The Trust funds consist of the funds described in Schedule A hereto as provided by the Settlor to institute this Trust, future contributions by the Settlor, beneficiary contributions, investment income, and arty other money or property which shall come into the hands of the Trustees in connection with the administration of the Trust. The Trustees may use the Trust's funds as follows: 1. to pay all expenses which the Trustees consider necessary in establishing the Trust and in administering the Trust and all reasonable expenses incurred by the Trustees in the performance of their duties; 2. to pay premiums on any insurance policies purchased by the Trust: {s1 I rust 3. to make authorized investments; 4. to pay claims under any health benefits plan adopted by the Trustees; 5. to pay for all necessary professional services, property, and equipment required for the proper operation of the Trust; 6. to pay all legal obligations of the Trust; and 7. to pay any judg Went entered against the Trust or to compromise and settle litigation in which the Trust is a party. VIII. LIABILITY OF TRUSTEES AND OFFICERS The Trustees shall use ordinary care and reasonable diligence in the exercise of their powers and the performance of their duties hereunder; and they or any former Trustee shall not be liable for any mistake of judgment or other action made, taken or omitted by them in good faith, nor for any action taken due to good faith reliance on third parties or for actions omitted by any agent, employee or independent contractor selected with reasonable care; nor for loss incun through investment of the Trust funds or failure to invest. No Trustee or former Trustee shall be liable for any action taken or omitted by any other Trustee. No Trustee or former Trustee shall be required to give a bond or other security to guarantee the faithful performance of his or her duties hereunder. To the fullest extent permitted by law; (a) the Trustee shall be held harmless and the Trust shall indemnify each Trustee or former Trustee who was, is, or is threatened to be made a party to any threatened, pending, or completed action, suit, or proceeding "Proceeding any appeal therein, or any inquiry or investigation preliminary thereto, by reason of the fact that the Trustee is or was a Trustee; (b) the Trust shall pay or reimburse a Trustee for expenses incurred (i) in advance of the final disposition of a Proceeding to which such Trustee was, is or is threatened to be made a party, and (ii) in connection with such Trustee's appearance as a witness or other participation in any Proceeding. Dcdaral. uoI' --Page S Ix. AMENDMENT, REVOCATION AND TERMINATION This Declaration of Trust and the Trust created herein shall terminate when and if required by operation of law. The Trustees shall have the power to amend, modify, terminate or revoke, in whole or in part, this Declaration of Trust and the Trust created herein by majority vote at a duly called meeting at which a quorum is present. Notwithstanding the foregoing, the Trustees shall have no power to amend Paragraph 11 of this Declaration of Trust. Beneficiaries of the Trust shall have no right to amend this Declaration of Trust, and their approval shall not be a condition or requirement for an authorized amendment by the Trustees. Upon termination of the Trust, the Trustees shall pay all obligations, debts, losses, and other liabilities of the Trust. Thereafter, the Trustees shall first use the remaining trust funds to pay covered claims of persons covered under the City's health benefits plan that may be in effect at the tune of termination of the Trust and, then, either apply any remaining balance of the funds for the benefit of those covered persons in such manner as the Trustees determine shall best carry out to purposes of this Trust or pay such balance over to such covered persons on a per capita basis. Notwithstanding the foregoing, the Trustees, upon termination of the Trust and payment of all Trust obligations may, by vote of a majority of the Trustees, transfer the remaining funds or any portion thereof to the trustees of any trust or trusts established for a substantially similar purpose to be applied for uses substantially similar to those set forth in Paragraph 11 herein. 1. eclrsc'asi,iss t,r l -1'age 9 X. GOVERNING LAW This Declaration of Trust and the Trust created herein shall be construed and governed by the laws of the State of Texas in force f7•om time to time. XI. MISCELLANEOUS Whenever the context so admits and such treatment is necessary to interpret this Declaration of Trust in accordance with its apparent intent, the use herein of the singular shall include the plural, and vice versa, and the use of the feminine, masculine, or neuter gender shall be deemed to include the other genders. The captions or headings above the various Paragraphs of this Declaration of Trust have been included only to facilitate the location of the subjects covered by each Paragraph but shall not be used in construing this Declaration of Trust. If any clause or provision of this Declaration of Trust proves to be or is adjudged invalid or void for any reason, such invalid or void clause, provision, or portion shall not affect the whole, but the balance of the provisions hereof shall remain operative and shall be carried into effect insofar as is legally possible. EN WITNESS WHEREOF, the undersigned parties have executed this Declaration of Trust, consisting of twelve (12) pages and Schedule A attached hereto, on the dates of their respective acknowledgments below. By joining in the execution of this Declaration of Trust, the Trustees acknowledge receipt of the property described in Schedule A, signify acceptance of the Trust created hereunder, and covenant that the Trust will be executed with all due fidelity. This Truss: is effective as of the last date of signature below. THE STATE OF TEXAS COUNTY OF BRAZORIA 1;c11nrittiolt 1 Mayor Tom Reid, Settlor Wood ow "W ody" Owens, Trustee Helen Beckman, Trustee Ste\ Saboe, Trustee Fell a yle, Tru.tee K- 'in Cole, Trustee This instrument was acknowledged before me on August 13, 2007, by Tom Reid, Mayor of the City of Pearland on behalf of Settlor. tary P lie, State T s rint Name: Young Loring, TivIRC My Commission Expires: 4 Qe 7 2� THE STATE OF TEXAS Declaration ±1I Trusl -Page 1 1 COUNTY OF BRAZORIA This instrument was acknowledged before me on August 13, 2007, by Tom Reid, Trustee. 11µ 1i44N 111 G 1 l int wVlly„ 1'Hl 4 i nRy p L /./1 L -�G a a' ary Pi /lc, tate P Te I int Name: Young Loring, TMRC 71 M hhlNyll111K! THE STATE OF TEXAS COUNTY OF BRAZORIA THE STATE OF TEXAS COUNTY OF BRZORIA This instrument was acknowledged before me on August 13, 2007, by Woodrow "Woody" Owens, \..,,okllSSSIIllN1Y{1r��'� H y P y a G t om s Err n A /...P- %1./ f TT fi OPt L. If �3' ryPu S1teo /ex s c7 T�"p if Name: Young Loring, TMRC ,v, -20g I My Commission Expires: V. it 2fi 29 This instrument was acknowledged before inc on August 13, 2007, by Helen Beckman, Trustee. ary I'u c, tate Ts rint Name: Young Loring, TMRC My Commission Expires: f. id s THE STATE OF TEXAS COUNTY OF BRAZORIA This instrument was acknowledged before me on Augusts 13, 2007, by Steve Saboe, Trustee. THE STATE OF TEXAS COUNTY OF BRAZORIA 0 ,01411 16111 11 080 4, 4. OlifiisLiNt tent was acknowledged before me on August 13, 2007, by Felicia Kyle, Trustee. G fir r c, 4 1 0.2.oaq -01militiotto THE STATE OF TEXAS COUNTY OF BRAZORIA 0 01.51 11 4111111 11 41/47 6 t% G 6 0,9 NY 0 RY t• (i. d r ....0 f i o 'It. c Sei„, 8 20 00 fl onunti1000 0,- Declaration or Trust Page 12 tary I lic, Stat of ,4 exas rant Name: Young Loring, TMRC My Commission Expires: 41 ..„0.‘4 tary I) lic, S a o exas lint Name: Young Loring, TMRC My Commission Expires: 4,-4- ..,2A99 This instillment was acknowledged before me on August 13, 2007, by Kevin Cole, Trustee. 1 1../.4" C, St 're Texas r ant Name: Young Loring, TMRC My Commission Expires: 4/—hr acir9 AGENDA REQUEST BUSINESS OF THE CITY COUNCIL CITY OF PEARLAND, TEXAS AGENDA OF: 8-23-10 ITEM NO.: Resolution No. BTR2010-1 DATE SUBMITTED: 8-18-10 DEPARTMENT OF ORIGIN: HR PREPARED BY: Darrin Coker PRESENTOR: Darrin Coker REVIEWED BY: NA REVIEW DATE: NA SUBJECT: Termination of the Employee Benefits Trust EXHIBITS: Resolution No. BTR2010-1; (Exhibit A to Resolution Declaration of Trust). EXPENDITURE REQUIRED: AMOUNT BUDGETED: AMOUNT AVAILABLE: PROJECT NO.: ACCOUNT NO.: ADDITIONAL APPROPRIATION REQUIRED: ACCOUNT NO.: PROJECT NO.: To be completed by Department: ❑ Finance ® Legal ❑ Ordinance E Resolution EXECUTIVE SUMMARY As discussed in the recent budget workshop, staff is recommending the termination of the current Benefits Trust ("Trust"). As you are aware, the Trust was created for the sole purpose of providing the City with a tax exemption on employee insurance benefits. With the anticipated transition to a partially funded insurance plan, the City will be able to maintain the same benefit without the need for existence of the Trust. The attached Resolution terminates the Trust, effective September 30, 2010, and clarifies that remaining Trust funds shall continue to be used for the purpose of employee insurance purposes. By taking this action, the City Council (not the Trust) will take formal action to adopt the new employee insurance plans during the regular Council meeting.