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R82-09 02-22-82 RESOLUTION NO. R82-9 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS, AUTHORIZING THE CITY MANAGER TO EXECUTE AN AGREEMENT BY AND BETWEEN THE CITY OF PEARLAND AND THE TEXAS MUNICIPAL LEAGUE MUNICIPAL LIABILITY JOINT SELF-INSURANCE FUND. BE IT RESOLVED by the City Council of the City of Pear- land, Texas, that the City Manager be, and he is hereby authorized to execute for and in behalf of the City, an Interlocal Agreement by and between the City of Pearland and the Texas Municipal League Municipal Liability Joint Self-Insurance Fund. PASSED and APPROVED this ~ day of~_~jj~__-- , A. D., 1982. By--CITY OF PEARLAND~~y~ Mayor ATTEST: --~1 t y SecretaJ . pe4 , w�" �' • MUNICIPAL LIABILITY JOINT SELF-INSURANCE FUND • 1020 Southwest Tower, Austin, Texas 78701 INTERLOCAL AGREEMENT This Contract and Interlocal Agreement is entered into by and between political subdivisions of this estate (hereinafter referred to as "Liability Fund Members") to form a joint self-insurance pool to be named the Texas Municipal League Municipal Liability Joint Self-Insurance Fund (hereinafter referred to as the"Liability Fund"or "Fund")for the purpose of providing coverages against risks which are inherent in-operating a political subdivision including, but not limited to, general and automobile liability coverage, public officials' errors and omissions, personal injury, owned or leased aircraft liability and hangarkeepers' liability. T. WITNESSETH: The undersigned Liability Fund Member, in accordance with the Interlocal Cooperation Act;Article 441.3( 2c), T.R.C.S.,and the interpretation thereof by the Attorney General of the Statelof Texas(Opinion#MW-347, Ma 29, 1981), and in consideration of other Liability Fund Members executing like agreements, does hereby agr a to become one of the Liability Fund Members of this self-insured pool.The conditions of membership agreed upcjn by • and between the parties are as follows: 1. Definition of terms used in this Interlocal Agreement. 'a. Allocated Claims Expense—those customary claims expenses such as but not limited to contracted legal . services, court costs, expert analysis and/or witnesses not directly provided and borne by the Servicing Contractor, and which will be borne by the Liability Fund and charged to the claims file. • b. Board—refers to the Board of Trustees of the Texas Municipal League Workers' Compensation Joint Insurance Fund and the Texas Municipal League Municipal Liability Joint Self-Insurance Fund: - c. Experience Modifier—refers to the factor applied to the manual rates that reflects the political subdivi- sion's loss experience, which is based on the State Board of Insurance promulgated insurance plan. d. Fund Modifier-75%that is applied to the standard rates by the Fund to reflect the savings to the Liability Fund Member by entering into the Interlocal Agreement. • • e. Fund Year—October 1 through September 30. ` I f. Limits of Liability—refers to that Limit of Liability designated in. this Interlocal Agreement and which applies on a combined single limit of liability basis to the combined loss and allocated claims expense incurred from a single occurrence or wrongful act or direct loss under any one af-a combination of(Parts, Divisions or Coverages as further defined by the TML Municipal Liability Self-Insurance Plan. It is f 6 rther agreed that the legal obligation of the Liability Fund to pay damages which arise out of the completed operations and products hazards,advertising injury,operation of non-owned aircraft,operation of Health care facilities,personal injury,public officials'errors and omissions,owned or leased aircraft liability,and hangarkeepers'liability coverage shall not exceed the amount specified in the Limits of Liability section of the Interlocal Agreement regardless of the number of claims made for injury,wrongful acts,or direct loss or damage during a Fund year. For the purpose of determining the limit of the Liability Fund's liability,all injury, wrongful acts, direct loss or damage arising out of continuous or repeated exposure to the same general conditions shall be considered as arising out of one occurrence.Further,regardless of the number of claims made and suits brought against any or all persons or organizations for whom cover lge is afforded for this Fund member,the total limits of liability of the Liability Fund for damages resulting from any one occurrence shall not exceed the amount specified in this Interlocal Agreement. g. Manual Rates—the basic rates applicable to each classification'promulgated by the State Boa d of Insurance. h. Part I—general and automobile liability coverage as further defined in the TML Municipal Liability Self-Insurance Plan. i. Part II—Public Officials' Errors and Omissions, Personal Injury coverage, Owned or Lease• d Ai(craft Liability and Hangarkeepers' Liability as further defined in the TML Municipal Liability Self-Insurance Plan. // j. Premium and Contribution—are used interchangeably home parts of this Interlocal Agree ent. "Premium"is used to identify the rating formulas estab 1slied by the State Board of Insurance,which are Used as guidelines to establish Liability Fund Members'cash contributions to the Fund.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." k. Reimbursable Deductible—the amount paid by the Fund that was chosen by this Liability Fund Member to be applicable to the first monies paid by the Fund to effect judgment or settlement of any claim orsuit.The Liability Fund Member, upon notification of the action taken, shall promptly reimburse the Liability Fund for all or such part of the deductible amount as has been paid by the Liability Fund. Further, howeverl,the Liability Fund's obligation to pay damages shall be subject to the Limits of Liability stated in this Interlocal Agreement less the stated deductible amount. I. Servicing Contractor—Employers CasualtyCompany. P Y• m.Standard Rates—rate that is determined by applying the experience modifier of each individual Liability Fund Member to the manual rates. n. TML Municipal Liability Self-Insurance Plan—the document that sets forth in exact detail the coverages provided under Part I and Part II. 2. Each Liability Fund Member agrees to adopt and accept the coverages, p g provisions, terms, conditions, exclusions and limitations as further provided for in the TML Municipal Liability Self-Insurance Plan and/or as specifically modified by the Fund Member's Interlocal Agreement. This Interlocal Agreement shall be construed to incorporate the TML Municipal Liability Self-Insurance Plan as if physically attached hereto. 3. It is understood that by participating in this self-insurance pool to cover liability exposure,the LiabilityFhnd Member does not intend to waive any of the immunities that its officers or its employees now possess.ithe Liability 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 Liability Fund Member, upon the execution of this agreement, shall supply the Fund . 3 I 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 it. If the Liability 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 more than 60 days notice, the Liability Fund Member agrees to adopt an ordinance providing for no more than 60 days notice reasonably describing the damage or injury claimed and theitime, manner and place of the incident from which it arose. The notice requirement shall not be changed by the Liability 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 Contract shall be for a term commencing 12:01 a.m.January 1,1982 unless a subsequent date is designated elsewhere in this agreement, and terminating 12:01 a.m. October 1, 1984; unless the sane is sooner terminated by 60 days written notice of intent to terminate by either party unless otherwise specified under the terms and agreements of this Contract or by the Bylaws of the Fund.The Fund will have the right to terminate this agreement only for non-compliance with paragraphs 31, 5, 7 and 10. 5. Commensurate with the execution of this agreement and annually thereafter,the Liability Fund Memberishall complete the application form. Misstatements made on the application form shall be grounds for cancellation. The rates established by the State Board of Insurance shall be applied where practicable to arrive at a manual premium. If the Liability Fund Member has established, through experience, a modifier, then the experience modification shall be used,where applicable,to arrive at the standard premium to be paid by the Liability Fund Member. In the absence of an earned experience modification for the Liability Fund Member, the manual rate as established by the State Board of Insurance in effect at the beginning of each Fund Year will be used as a guide to produce a manual, as well as a standard, contribution. For those coverages for which State Board of Insurance rates are not promulgated or for rates that are filed forrapplroval by the issuing insurance carrier,rates shall be developed by the Fund.The Fund modifier of 75%shall then be applied to the standard premium to produce the annual contribution that the Liability Fund Member shall pay to the Fund.The Liability 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,provided that if the payable annual contribution shall be less than$5,000,it shall be payable in equal quarterly installments,in advance,commencingi at the beginning of this agreement, with subsequent installments due the first of each quarter thereafter. In addition,the Liability Fund Member agrees to pay all reimbursable deductibles upon receipt of statement At the end of each and every Fund Year,there shall be submitted by the Liability Fund Member the actual data . shown on the application form as reflected by the books and records of the Liability Fund Member.The Fund reserves the right to audit the records of any Liability Fund Member. In the event that the Liability Fund Member fails or refuses to make the payments including accrued interest as herein provided,the Liability Fund reserves the right to terminate such Liability Fund Member by giving 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 Liability Fund Member agrees to pay attorneys' fees and costs incurred in such suit. 6. The Fund shall maintain in force at all times Catastrophe Excess of Loss Reinsurance—with respect to Part I, four million seven hundred thousand dollars (S4,700,000.00), and with respect to Part II, seven hundred thousand dollars(S700.000.00)each excess of the Fund's Self-Insured Retention of three hundred thousand dollars ($300.000.00) each occurrence and aggregate. The Fund shall maintain in force at all times Aggregate Excess of Loss Reinsurance to protect the fina Incial - integrity of the Fund—specifically to indemnify the Fund for any amount by which the Fund's aggregate incurred expenses and losses reduced by amounts recovered or recoverable under Catastrophe Excess of Loss Reinsurance exceed 105%of the Fund's aggregate standard premium reduced by premium cost ceded for Catastrophe Excess of Loss Reinsurance,and reduced by Fund discounts and deductible credits during the aggregate period ending October 1, 1984, subject to a maximum limit of five million dollars (S5,000,000.00). The Fund shall not have responsibility for amounts that exceed those above described in Catastrophe Excess of Loss and Aggregate Excess of Loss Reinsurance. 7. The Fund has contracted with the Servicing Contractor to supply safety engineering services to the Liability 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 Liability Fund Member.The Liability Fund Member agrees that it will cooperate in instituting any and all reasonable safety recommendationsi In the event that the recommendations submitted by the Servicing Contractor on behalf of the Fund seem unreason- able, the Liability Fund Member has a right to appeal to the Board of Trustees. The Board shall hear the objections of the Liability Fund Member at its next regularly scheduled meeting and its decisions will be final and binding on all parties. 8. The Liability Fund Member agrees that it will appoint a liability 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 liability coordinator shall be binding upon the Liability Fund Member.The Liability 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. • 9. 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 Liability Fund Member hereby appoints 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 information needed or helpful in such defense.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 Liability Fund Member or an employee is necessary,the expense of this appearance will not be the responsibility of the Fund. When appropriate, on behalf of and at the expense 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 Liability Fund Member shall have the right in any ease to consult with the Fund on any decision made by the Servicing Contractor.The Board shall hear the objections of the Liability Fund Member at its next regularly scheduled meeting and their 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 Liability Fund Member and/or its officers or employees.There shall be supplied periodically to each Liability Fund Member a computer printout involving a statement of claims. The Fund shall have priority in enforcing its subrogation claims as against claims of Liability Fund Members except as to claims of the Texas Municipal League Workers'Compensation Joint Insurance Fund, which shall take preference. 10. The Liability Fund Member acknowledges that it has received a copy of the Bylaws of the Fund and ag lees to abide by the Bylaws and any amendments thereto.The Liability 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. 11. The Fund agrees that all Fund transactions will be annually audited by a nationally recognized, certified public accounting firm. 12. If legally required, the Fund shall file the necessary tax forms with the Internal Revenue Service. 13. 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 Liability 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 Liability Fund Members,the • experience rating modification developed or earned by each of the Liability Fund Members, the pro rata savings to the Fund resulting from overall loss experience attributed to each Liability Fund Member,and the pro rata portion of the cost of all catastrophic loss protection reinsurance and aggregate stop loss reinsurance allocated to each Liability 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 determihe the actual pro rata cost, expense and loss experience of each Liability Fund Member in order to maintain as nearly as possible an equitable and reasonable"self-insurance"administration of the Fund as applied to each Liability Fund Member. �� d • , J f � The undersigned LIABILITY FUND MEMBER adopts those coverages, limits and deductibles below indicated and rejects those so indicated. PARTI PART II Coverage Election Mandatory H Yes 0 No • Accepted Limits of Liability S1,000,000 $1,000,000 Minimum Limit Maximum Limit,if Part I Accepted ❑ Yes R No S5,000,000 Accepted Reimbursable Accepted Deductibles • D No deductible $1,000 Each Occurrence or ❑ 500 Each Occurrence Wrongful Act ❑ 1000 Each Occurrence ❑ 2500 Each Occurrence ❑ 5000 Each Occurrence CITY OF PEA.RLAND r. Dated: Feb . 22 , 1982 L� B�ITY F EM�R ( By. Signature of Autfiosized City Official TO BE COMPLETED BY CITY Effective Date of this Agreement: February 1 , 1982 Liability Coordinator for Fund Member: TO BE COMPLETED BY TML' Name: Buford Parrish TEXAS pit ICIPAL LEAGUE MUNIQIPA LIABI Y JOINT LFCINS ANCE FU D. Title: Administrative Assistant to City Mgr . 44;(4) Mailing Address: P . 0 . Box 1157 ' '� By: Authorized Fund O icial City: PEARLAND Zip: TEXAS 77581 Contract No: Co /2-.( Telephone: ( 7 13) 4 8 5 -2 41 1 J Street Address (If different from above): 2335 N . Texas Avenue , Pearl and , Texas '(A copy of this Interlocal Agreement will be returned for your file.)