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HomeMy WebLinkAboutOrd 2908 05/08/1979 r.\ ORDINANCE NO. 2908 AN ORDINANCE AUTHORIZING MEMEBERSHIP IN THE INTERGOVERNMENTAL RISK MANAGEMENT AGENCY. WHEREAS, Section 10 of Article VII of the Illinois Constitutìon of 1970 authorizes units of local government to contract or otherwise associate among themselves in any manner not prohibited by law or by ordinance; and, WHEREAS, Chapter 127, Section 741, et seq., Illinois Revised Statutes 1977, entitled the "Intergovernmental I Cooperation Act," authorizes units of local government to exercise any power or powers, privileges or authority which may be exercised by the unit of local government individually to be exercised and enjoyed jointly with any other local governments or body in the State; and, WHEREAS, the Intergovernmental Cooperation Act in Section 746 in futherance of the privisions contained within Article VII, Section 10 of the Constitution authorizes an intergovernmental contract which among other undertakings allows public agencies to jointly self insure and authorizes each public agency member of the contract to utilize its funds to protect, wholly or partially, any public agency member of the contract aga~nst liability or loss in the designated insurable area; and, WHEREAS, units of local government within Illinois have found it increasingly difficult to purchase insurance from commercial sources and where such insurance is available, the cost of such coverage often exceeds the ability of the units of local government to pay for such insurance; and, WHEREAS, local public entities and public employees - 1 - ~ as defined in Chapter 85, Section 1-101, et seq., Illinois Revised Statutes 1977, known as the "Governmental and Governmental Employees Tort Immun~ty Act" are granted substantial defenses and immunities against wrongful or negligent acts; and, WHEREAS, Chapter 85, Section 9-103, Illinois Revised Statutes 1977, provides that to the extent that a local public entity purchases commercial insurance it waives within the limits of said policy the defenses and immunities provided for by said Local Governmental and Governmental Employees Tort Immunity Act; and, WHEREAS, to the extent that the payment of any claim or judgment would be made directly from municipal revenues held within a mutual risk management pool, the units of local government united by way of joint passage of this Ordinance desire to reestablish for themselves and their officers and employees the full range of defenses and immunities granted in Chapter 85; and, WHEREAS, a large number of local governmental entities have undertaken a series of studies to determin~ the feasibility of entering into an Intergovernmental Risk Management Pool and have concluded that the creation of such a Pool is financially and administratively feasible; and~ WHEREAS, the corporate authorities of a number of units of local government have determined that they wish to create an Intergovernmental Risk Management Agency and a combined Contract and By-Laws for such agency has been drafted; and, WHEREAS, th~ stated purposes, organizational structure and procedural structure contained within that Contract and - 2 - r',\ By-Laws represent positions shared by this public body; and, WHEREAS, the corporate authorities of this public body find that it is in the hest interest of its citizens that it become a member of the Intergovernmental Risk Management Agency, NOW, THEREFORE, BE IT ORDAINED BY THE PRESIDENT AND BOARD OF TRUSTEES OF THE VILLAGE OF MOUNT PROSPECT, COOK COUNTY, ILLINOIS, as follows: SECTION ONE: That the President and Clerk of the Village of Mount Prospect are hereby authorized to execute on behalf of the Village of Mount Prospect The Contract and By-Laws of the Intergovernmental Risk Management Agency. A copy of the Contract and By-Laws is appended to and made a part of this Ordinance as Appendix 1. SECTION TWO: The powers of the Agency, unless The Contract and By-Laws be. amended, shall be limited to those contained ~ithin Appendix 1. SECTION THREE: The commencement of the operations of the Agency and the obligation of the Village of Mount Prospect to fully participate in such operations shall be effectuated in accordance with Article IV of the Contract and By~Laws. SECTION FOUR: Except to the extent of the limited financial contributions to the; Agency set forth in Appendix 1. the Village of Mount Prospect by its entry as a member of the Agency shall not beheld responsible in any way for claims due to the property losses of or claims in tort or contract made against any other member of the Agency. SECTION FIVE: This Ordinance shall be in full force - 3 - . and effect from and after its passage, approval and publication in pamphlet form as provided by law. AYES: 5 NAYS: 1 ABSENT: 1 PASSED this 8th day of May 1979. ~ #.J:~ Villa e President ATTEST: ~e ~e~ .- - 4 - . ' . Page No. 13 15 18 24 25 27 29 30 31 32 33 35 .+ !,' CONTRACT AND BY-LAWS INTERGOVERN~ŒNTAL RISK MANAGEMENT AGENCY 1 1 ARTICLE I. 3 5 ARTICLE II. 6 7 ARTICLE III. ARTICLE IV. 8 ARTICLE V. ARTICLE VI. ARTICLE VII. I N D E X Definitions and Purpose: Definitions. Purpose. "" Power and Duties. Participa tion.' Commencement of Agency and Term. Board of Directors Board of Directors Meetings. Agency Officers ARTICLE VIII. Finances and Risk Management Pooi. ARTICLE IX. ARTICLE X. ARTICLE XI. ARTICLE XII. Scope of Loss Protection. Excess Insurance. Obligations of Members. Liability of Board of Directors or Officers. ARTICLE XIII. Additional Insurance. ARTICLE XIV. ARTICLE XV. ARTICLE XVI. Optional Defense by Municipality. Contractual Obligation. Expulsion of Members. ARTICLE XVII. Termination of the Agency. r'\ . 8/21/78 , CONTRACT AND BY-LAWS INTERGOVERNMENTAL RISK MANAGEMENT AGENCY ARTICLE I. Definitions and Purpose. DEFINITIONS: As used in this agreement, the following terms shall have the meaning hereinafter set out: MEMBERS - The units of local, government which initially or later enter into the intergovernmental contract established by this intergovernmental agreement. AGENCY - The Intergovernmental Risk Management Agency established pursuant to the Constìtution and the Statutes of this State by this intergovernmental agreement. JOINT RISK MANAGEMENT POOL - A fund of public monies established by the Intergovernmental Risk Management Agency to jointly self-insure certain risks within an agreed scope and to purchase catastrophe, excess and aggregate stop loss insurance. RISK MANAGEMENT - A program attempting to reduce or limit casualty losses to municipal properties and injuries to - persons or property caused by the operations of units of local government. Where claims arise the risk manager and other employees and officers of the AGENCY will process such claims, investigate their validity, settle or defend against such claims within the financial limits of the (: ~ { risk management agreement, tabulate such claims, costs and losses and carry out other assigned duties. SELF-INSURANCE - The decision by a unit of local government not to purchase insurance coverage for risks below certain high limits¡ to seek all immunities provided by Illinois law for a non-insured unit of local government¡ to rely upon its financial capabilities to pay any losses which occur and in the case of third-party claims are held valid and not barred by available immunities and to purchase some insurance to protect against catastrophic or aggregate losses. JOINT SELF INSURANCE - A self-insurance program in which units of local government agree to contribute annual and where required supplementary payments to support a risk management program and a joint risk management pool. POOL CONTRIBUTION FACTOR - A fractional number which when multiplied by the revenue of a MEMBER of the AGENCY, (as revenues are defined in Article XI), shall produce the required annual paYment to the AGENCY. The Pool Contribution Factor shall be determined annually by the Board of Directors. CATASTROPHE EXCESS INSURANCE - Insurance purchased by the AGENCY from an insurance company approved by the Department of Insurance to write such coverage in Illinois providing certain coverage for losses over a pre-set amount up to a pre-set maximum amount of coverage. -2- ,i I, ~ ~ AGGREGATE STOP LOSS INSURANCE - Insurance purchased by the ~GENCY from an insurance company approved by the Department of Insurance to write such coverage in Illinois providing certain coverage up to a contracted amount for otherwise uninsured losses to be borne by the Joint Risk Management Pool, which in anyone year aggregate to a pre-set maximum amount of coverage. PURPOSE: The Intergovernmental Risk Management Agency is a cooperative agency voluntarily established by contracting units of local govern- ments as defined in the Illinois Constitution of 1970 pursuant to Article VII, Section 10 of the 1970 Constitution of the State of . Illinois and Chapter 127, Section 746 of the Illinois Revised Statutes for the purpose of seeking the prevention or lessening of casualty losses to municipal properties and injuries to persons or property which might result in claims being made against such units. It is the intent of the MEMBERS of this AGENCY to create an entity which will administer a joint risk management pool and utilize such funds contributed by the !{EMBERS to defend and protect, in accordance with these By-Laws, any MEt1BER of the AGENCY against stated liability or loss. Such By-Laws shall constitute the substance of a contract among the !{EMBERS. All funds contained within the Risk Management Pool are funds directly derived from its MEMBERS who are local governments within the State of Illinois. It is the intent of the parties in entering into this agreement that, to the fullest extent possible, the scope of risk -3- < ~ management undertaken by them through a joint municipal self-insurance program using governmental£unds shall not waive, Dn behalf of any local public entity or public employees as- defined in the Local Governmental and Governmental Employees Tort Immunity Act, any defenses or immunities therein provided. Specifically, the MEMBERS of this AGENCY intend to effect no waiver of immunities through their contri- bution of public funds retained within the Risk Management Pool and not used to purchase excess or stop loss insurance policies. Such contributions being reserves to protect against uninsured risks in accordance with Chapter 127, Section 746, are not intended to consti- tute the issuance of a policy for insuranc~ coverage, (by an insurance company authorized by the Department of Insurance to w~ite such coverage in Illinois), as provided in Chapter 85, Section 9-103 of the Illinois Revised Statutes. -4- .- ~ ARTICLE II. Powers and puties. The powers of the AGENCY to perform and accomplish the purposes set forth above shall, within the budgetary limits and procedures set forth in these By-Laws, be the following: (a) To employ agents, employees and independent contractors, (b) To lease real property and to purchase or lease equipment, . machinery, or personal property necessary for the carrying out of the purpose of the AGENCY, (c) To carry out educational and other programs relating to risk reductions, . (d) To cause the creation of, see to the collection of funds for, and administer a risk management pool, j I I ! , ' ! ! (e) To purchase excess insurance and stop loss insurance to supplement the r~sk management pool, (f)' To establish in the manner set forth in Article V(f) reasonable and necessary loss reduction and prevention - - procedures which shall be followed by' the l'ŒMBERS, , - - - - - ' , (g) To provide risk management services including the defense of and settlement of claims, (h) Solely within the budgetary limits established by the MEMBERS to carry out such other activities as are necessarily implied or required to carry out the purposes of the AGENCY specified in,Article I or the specific powers enumerated in Article II. 'f ~. Ii'. , -5- ""', ARTICLE III. Participation. The initial membership of the AGENCY shall be limited to those units of local government the names of which are set forth in Appendix A appended to and madè a part of these By-Laws. New MEMBERS shall be admitted only by a two-thirds (2/3) vote of the entire membership of the Board of Directors and subject to the payment of such sums and under such conditions as the Board shall in each case, or from time-to-time establish. -6- - A , ' ARTICLE IV. Commencement of Agency and Term. All initial MEMBERS of the AGENCY and any new MEMBERS admitted, except for the expulsion provisions of Article XVI, shall remain MEMBERS of the AGENCY for a period of at least five (5) years after the AGENCY shall have commenced its operations. In the event that by November 1, 1978, there has been deposited within the Risk Manage- ment Pool as a first year's payment the sum of at least $1,000,000 and the initial rate or rates does not exceed the rate or rates set out in Article XIII(d) of this agreement, the AGENCY shall commence its operations on January 1, 1979. If $1,000,000 has not been received by November 1, 1978, then the AGENCY shall commenCe its operations sixty (60) days after 'the date when at least that amount has been deposited provided that the initial rate or ,rates are as aforesaid. For the purpose of this Article, "revenue" shall be as is defined in Article VIII. Any municipality listed in Appendix A which has not deposited its funds by the date of the initial commencement of the AGENCY may join the AGENCY during a single second subscription period between April 25th through May 15, 1979. Such municipality may become a MEMBER by paying the proportionate amount of the first year's pay- ment and any other sums due. Any such municipality which does not become an initial MEMBER of the AGENCY nor joins the AGENCY during the - - single second subscription period may be admitted only in the manner established for the admission of new MEMBERS. Initial payments shall be deposited in an escrow or trust account maintained under the auspices of the Northwest Municipal Conference and shall be returned in full with interest to the MEMBERS if the requested amount is not received by May 30, 1979. , J: -7- ,-~ ~ ARTICLE V. Board of Directors. (a) There is hereby established a Board of Directors of the AGENCY. Each MEMBER unit of local government shall by majority vote of its corporate authorities elect one (1) person to represent that body on the Board of Directors for a term of one (1) year. The HEMBER may also select an alternate representativ~ to serve when the ,initial representa- tive is unable to carry out his duties. The person and alternate selected need not be an elected official of the HEMBER. At its first meeting of each fiscal year, the Board of Directors shall elect one (1) of its MEMBERS to serve as Chairman of the Board until the conclusion of the fiscal year. No person may serve as Chairman of the Board of Directors for more than two (2) consecutive full one-year terms. The Board of Directors may from time-to-time establish other officers of the Board and may elect a.MEMBER of the Board to serve in any of such offices. The Board may fill any vacancies which may occur in such offices until the end of the term. (b) The Board of Directors shall determine tþe general policy of the AGENCY which policy shall be followed by all AGENCY officer~, agents, employees and, independent contractors employed by the AGENCY. It shall have the responsibility for (1) Hiring of AGENCY officers, agents, non-clerical employees and independent contractors, (2) Setting of compensation for all persons, firms and corporations employed by the AGENCY, ,! ~: -8- "...." , J (3) Setting of fidelity bonding requirements for employees or other persons, (4) Approval of amendments to the By-Laws, (5) Approval of the acceptance of new MEMBERS, (6) Approval of the annual budget of the AGENCY, (7) Approval of educational and other programs relating to risk reduction, (8) Approval of reasonable and necessary loss reduction and preven~ion procedures which shall be followed by all ~ÆMBERS, (9) Approval of annual and supplementary payments to the Risk Management Pool for each ~..EMBER. The Board of Directors shall establish such rbles and regulations regarding the payout of funds from the Risk Management Pool as shall from time-to-time se~n apprópriate. (c) Each MEMBER shall be entitled to one (1) vote on the Board of Directors. Such vote may be cast only by the designated representative of the MEMBER or in his absence by an alternate selected by the MEMBER in the same ma~ner as specif~ed for the selection of the principal representa- tiv~. No proxy votes or absentee votes shall be permitted. Voting shall be conducted by roll call vote. (d) The repr~sentative selected by the MÐffiER shall serve for a one-(l) year term commencing On May 1st of each ygar and until his successor has been selected, provided, however, that the first such representative shall serve from the date of first appointment until May 1st. The representative chosen by the MEMBER may be removed by the majority vote of -q- ~, the corporate authorities of the MEMBER during the period of this term. In the event that a vacancy occurs in the representative or alternate reprêsentative selected by the corporate authorities of a MEHBER, that body shall appoint a successor. The failure of a MEMBER to select a representa- tive or his failure to participate shall not affect the responsibilities or duties of a MEMBER under this contract. (e) The Board of Directors may establish rules governing its own conduct and procedure not inconsistent with the By-Laws. (f) A quorum shall consist of a majority of the MEMBERS of the Board of Directors. Except as provided in subsection (g), herein, or elsewhere in these By-Laws, a simp1e majority of a quorum shall be sufficient to pass upon all matters. (g) A greater vote than a majority of a quorum shall be required to approve the following matters: (ì) Such matters as the Board of Directors shall establish within its rules as requiring for passage a vote greater than a majority of a quorum, provided, however; that such a rule can only be established by a greater than a majority vote at least equal to the greater than majority percentage within the proposed rule. -10- 1""\ (ii) The admission of a new MEHBER and the expulsion of a ~ŒMBER shall require the two-thirds (2/3) vote of the entire member- ship of the Board of Directors, (iii) Any amendment of these By-Laws except as provided in Subsection (iv) below, shall require the two-thirds (2/3) vote of the entire membership of the Board of Directors, (iv) The amendment of these By-Laws to cause the termination of this agreement sooner than five (5) years after its commencement, a reduction or ,elimination in the scope of loss protection set out in Article IX to be furnished by the self insurance pool derived from payments from the MEMBERS or the amendment of these By-Laws to cause a modification of more or less than 25% as the high or low range of the pool contribution factor, as defined within Article VIII(d), shall require the recommendation of a majority vote of the Board of Directors plus the approval of such amendment by two-thirds (2/3) vote of the MEMBERS evidenced by resolutions of the respective corporate authorities. (h) No one serving on the Board of Directors shall receive any salary or other payment from the Agency and any salary, compensation, payment or expenses for such representative, <' ~~' -11- r'\ shall be paid by each ~illMBER separate from this contract. -12- , ¡ r'\ ART I CLE VI. Board of Directors Meetings. (a) Regular meetings of the Board of Directors shall be held at least four (4) times a year. The dates of regular meetings of the Board shall be established at the beginning of each fiscal year. Any item of business may be considered at a regular meeting. The first meeting shall be held within thirty (30) days after this AGENCY shall commence its operations in the manner previously set forth. At least two (2) meetings must be held during the first half of the fiscal year and at least two (2) meetings must be held during the second half of the fiscal year. Special meetings of the Board of Directors may be called by its Chairman, or by any three Directors. Ten (10) days written notice of regular or special meetings shall be given to the official representatives of each MEMBER government and an agenda specifying the subject of any special meeting shall accompany such notice. Business conducted at special meetings shall be limited to those items specified in the agenda. (b) The time, date and location of regular and special meetings of the Board of Directors shall be determined by the Chairman of the Board of Directors or by the convening authority. (c) To the extent not contrary to these By-Laws, and except as modified by the Board of Directors, Roberts Rules of Order, latest edition, shall govern all meetings of the -13- . ,I . -- 1"\ Board of Directors. Minutes of all regular and special meetings of the Board of Directors shall be sent to all members of the Board of Directors' and to the chief executive officer of each ~œMBER. -14- ARTICLE VII. Agency Officers. (a) Officers of the AGENCY shall consist'of a Risk Manager, a Treasurer and such other offices as are established from time-to-time by the Board of Directors. All officers shall be appointed by the Board of Directors. (b) The Risk Manager shall be the principál executive officer of the AGENCY and shall in general supervise and control the day-to-day operations of the AGENCY and shall carry out the policy of the AGENCY as established by the Board of Directors. \ 'I\.,. Among his duties shall be the following: 1. He may sign, with such other person authorized by the Board of Trustees, any instruments which the Board of Directors have authorized to be execu- ted and, in gene~al shall perform all duties incident to the office of Risk Manager and such other duties as may be prescribed by the Board of Directors from time-to-time. 2. The Risk Manager shall prepare a proposed annual budget and proposed annual Risk Management Pool payment and, where required, supplementary payments to the Risk Management Pool and shall submit such proposals to the Board of Directors. 3. The Risk Manager shall, where necessary, make recommendations regarding policy decisions, the creation of other AGENCY officers and the employment of agents and independent contractors. At each regular meeting of the Board of Directo'rs and at such bther times ashe shall be required to do so, he shall present a full report of his activities and the fiscal condition of the AGENCY~ 4. The Risk Manager shall report monthly to all MEMBERS on all claims filed and payouts made. ' -15- 5. The Risk Manå§èrsI1âll, within the con- straints of the approved or amended budget, employ all secretarial, clerical and other similar help and expend funds for administra- tive expenses. (c) In the absence of the Risk Manager, or in the event of his inability or refusal to act,-the Chairman of the Board of Directors may perform the duties of the Risk Manager and, when so acting, shall have all of the powers of and be subject to all of the restrictions 'upon the Risk Manager. (d) The AGENCY shall purchase a blanket fidelity bond in an amount not less than $500,000 to assure the fidelity of all" offi,cers, directors, and employees of the AGENCY. Additional , , fidelity and similar coverages may be procured py the AGENCY from time-to-time. (e) The Treasurer shall: Have çharge and custody of and be responsible fpr all funds and securities of the AGENCY¡ '"reCeive and give all receipts for moneys due- arid payable to the AGENCY from any source, whatsoever¡ deposit all such moneys in the of the AGENCY in such banks, savings loan associations .or "other depositories shall.beselected by the Bo~rd of Directors¡ and, invest the funds of the AGENCY as are' not ,immediately required in such securities as the Boarâ6f Directors shall specifically or generaÌly select from time-to-time. Provided, however, that all investments of AGENCY funds shall be made only in those securities which may be purchased by Illinois rule communities under the provisions Illinois R~vised Statutes. , perform éill the duties.in~ident office of Treasurer and such other as from time-to-time may be ô,ssigned ..to him by the Risk Manager or the Board of Directors. J ~ r" . -16- ".'~_...,--,...., -- / (f) The Board may select a financial institution to carry out some or all of the functions which would otherwise be assigned to a Treasurer and may select a risk management company or agent to carry out sòme or all of the functions which would otherwise be assigned to a risk manager. . -17- +, ;, ': ARTICLE VIII. Finances and Risk Management Pool. (a) The fiscal year of the AGENCY shall commence on May 1st and end on April 30th of each year~ (b) The Board of Directors shall approve a preliminary budget for the administration of the AGENCY by December 15th of each year. Copies of all preliminary and final budgets shall be promptly mailed to each member of the Board of Directors and to the Chief Executive Officer of each MEMBER. The Board of Directors shall by May 1 of each year adopt a final budget and determine the amount of the annual payment to be made by each MEMBER. (c) Each MEMBER of the AGENCY shall make annual payments to the Risk Management Pool based upon the revenues of the MEMBER. "Revenue" shall be defined as the total income of the MEMBER from the following sources: 1. Taxation of all kinds, 2. License and franchise revenues, 3. Fines, 4. The sale of sewer, water or other utility services and other, payments received in the provision of such utility services, 5. Permit fees and service charges, 6. Annual income received through special assess- ments or special service taxing district projects, -18- . . ~, { '. , ' 7. "~\ \..i~ ',c'l " All funds received which are expected to continue to be received in generally silnilar or greater amounts for at least a three (3) year period including funds from other governmental units at the Local, State or Federal levels. The revenues for the initial payment in thousands shall be as follows: Barrington 3,248 Hanover Park 4,478 Palatine 5,674 Bloomingdale 1,947 Hillside 2,681 Park Forest 5,253 Buffalo Grove 4,135 Lombard 7,681 Rolling Mds. 5,251 Downers Grove 10,149 Mt. Prospect 10,812 ,Roselle 2,818 Elmhurst 12,061 Niles 8,3'94 Skokie 14,59-8 Glendale Hts. 3,726 Northfield 1,964 West Chicago 2,291 Glen Ellyn 6,097 Oak Brook 4,216 Westmont 3,641 Provided, however; that any MEMBER which has a municipal / Library Board under the Local Library Act of Chapter 81 of the Illinois Revised Statutes, shall elect whether to have the AGENCY extend its coverage to that entity for all matters except card catalog replacement. If the MEMBER elects to' provide such coverage, the "revenue" relating to the Library Board shall be included within the "revenue" of the MEMBÉR for the purpose of determining the amount of the annual pay-' ments. The MEMBER in writing of ¡ I ¡ I I j ! ¡ I I ¡ ¡ i ..i determination regarding this matter at least thirty (30) days before the start of each fiscal year and at least thirty (30) days before the comrnèncement of the ÀGENCY in the first year of operation. The amount of revenues for the initial payment as set out above ofMEfJII3ER.Swith ~ibrary Boards shall be adjusted depending upon the decision of the MEMBER as to whether or not to extend coverage to that entity. The Board of Directors shall in subsequent years after reviewing the audit submitted from each MEMBER establish . a tentative computation of the revenue of each MEMBER. -19- Written notice of this tentative revenue determination shall be sent to each MEMBER. If a MEMBER wishes to contest the determination of revenue amounts it may request a hearing before the Board. The decision by the Board after such a hearing shall be final unless the Board shall be found by a court to have committed a gross abuse of discretion. A decision by the Board that a Local, State or Federally funded program is expected to continue ,for at least a three-year period shall, unless reconsidered, be final. (d) The initial payment to the Pool shall be in the amount of $1.74 per $100 of "revenue" received by each MEMBER. Provided, however, that MEMBERS contributing $1.74 per $100 of revenue, not less than ten (iO) days prior to the actual commencement date of the AGENCY, may be required to make an additional payment bringing the initial payment up to a sum of not to exceed $1.91 per $100 of revenue. This provision is intended to deal with the possible slight increase in the cost of excess and stop loss insurance which may come about if less than all of the study group participants become MEMBERS of the AGENCY. In the event that the costs to commence the AGENCY shall exceed $1.91 as aforesaid, the AGENCY will not commence operations unless this Agreement is readopted by enough municipalities a~ would be necessary to initialli cause the AGENCY'S commencement. -20- (e) Calls for supplementary payments may be made by the Board of Directors, providing, however, that such additional sums may be called for in a total amount attributable to one year of no more than the regûlar annual payment for that year. Calls for supplementary payments attributable to the first year of the AGENCY'S operations may not exceed a total payment rate of an additional sum of $1.74 per $100 of revenue including the possible call increasing the initial rate of $1.74 to $1.91 per $100 of revenue. The forwarding of such annual and supplementary payments within a time specified in notices to the tŒMBERS giving them not less than forty-five (45) days to make such payments, shall be of the essence of this contract. Supplementary payment shall only be required by the Board of Directors in a situation in which there is a reasonable concern that the sum remaining from the annual payment will not be sufficient to meet the responsibilities of the AGENCY established in these By-Laws. MEHBERS shall be responsible for supplementary paYments during the entire life of the AGENCY and any later period when claims or expenses need be paid which are attributable to the year of membership when the event out of which the expense or claim occurred. (f) In subsequent years, the Board of Directors may require the annual or supplementary payments to be made on a monthly or quarterly basis. The amount of such annual and any supplementary payments required shall be based upon the pool contribution factor established annually multiplied by the revenues of the municipality. The pool , J, contribution factor shall be a fractional number Which when multiplied by the revenues of all MEMBERS shall be sufficient to annually produce a-sum of money within the Risk Management Pool adequate in amount to fund the administrative expenses of the AGENCY and to create adequate reserves for the scope of risk management set out in Article IX, including the purchase of catastrophic excess and stop loss insurance. ,Provided, however, that the Board of Directors shall, in subsequent years, establish a pool contribution factor lower or higher than the average factor for those MEMBERS with above average.or below average loss or claim records. The amount above or below the average Risk,Në:3.nagement Pool annual payment per $100.00 of revenue shall not. vary more than 25% above or below the aver,age. , ,.. tatement Of' revenues prepared by" a Certified Public Accountant. - ' to the AGENCY its annual audited \ - -, , .... 0' '- "'.. -, ' "', -, -, " Management Pool payments shall be based upon the muni- statement of the MEMBER for the last fiscal year. In the event that for some reason no such current audit is available, the Board of.. Directors shall estimate the revenues of the l~MBER based upon the best figures then available. The decision,of the In the event that the Board has made such an estimate, adjustments shall be carried out between -22- the estimated amount of revenues and the actual amount of revenues, when such figures are available, such that ~ŒMBERS shall be required to make additional payments or shall receive a credit upon payments to be paid in subsequent years. (f) In the event that the Board of Directors should find that the amount in the Risk Management Pool on hand shall be sufficient so that a periodic payment by the MEMBERS to the Pool can be dispensed with or reduced, such surplus funds shall remain within the Pool and be credited towards future Pool anhual payments. (g) The Board of Directors shall provide to the tŒMBERS an . annual audit of the financial affairs of the AGENCY to be made by a certified public accountant at the end of each fiscal year in accordance with generally accepted auditing principals. ,The annual report shall be delivered to the Chief Executive Officer of each MEMBER. (h) The Board of Directors shall be provided at least quarterly, a report from all agent~ and independent contractors including attorneys with regard to the status of their work for the AGENCY, problems encountered during the performance of their duties and recommendations for improvements in the performance of the AGENCY including their efforts on the AGENCY'S behalf. -23- ~---- "', 1""""<, ARTICLE IX. Scope of Loss Protection. The AGENCY, as set out in Appendix B, will provide loss protec- tion all in excess of a deductible One Thousand Dollars ($1,000.00) per occurrence to be paid by each MEMBER. The AGENCY, solely within the financial obligation of its MEMBERS, assumed in this contract and under such criteria for the payment of purported claims as may be established or followed, will be required to pay up to Two Hundred Fifty Thousand Dollars ($250,000.00) per occurrence for loss or injury within the scope of its self-insurance coverage. The AGENCY will alsò purchase catastrophe excess insurance over the amount of its $250,000.00 obligation and will purchase aggregate stop loss insurance. The initial scope of protection to, be furnished by the AGENCY shall be substantially as is established in Appendix B attached to and made a part of this contract. -24- n ARTICLE X. Excess Insurance. The AGENCY will purchase excess insurance from a company approved by the Department of Insurance to write such coverage in Illinois. The amount of such excess insurance shall be initially as follows: Property Exposures: A limit of $10,000,000.00 per occurrence in, excess of the AGENCY'S deductible of $250,00a.oo per occurrence. Vehicle Exposures: A limit of $4,750,000.00 in excess of the AGENCY'S deductible of $250,000.00 per occurrence. General Liability Exposures: A limit of $4,750,OaO.00 in excess of the AGENCY'S dèductible of $250,000.00 per occurrence. Workmen's Compensation Exposures: . A limit of $4,750,000.00 in excess of the AGENCY'S deductible of $250,000.00 excess~f the $2,000,000.00 aggregate. will insurance such that in the event that the AGENCY should in any single year expend a maximum aggregate sum ". set from time-to-time by the Board of Directors for the payment of ~ , . ' claims, the stop loss protection would payaddi tional Claims about, thát amount to certain maximum annual amount~, The. Board, of Directors , ' shall determine..the commencement level of the aggregate stop loss protection and its limit based upon the current assets and risk history of the AGENCY. -25- The sequence of the obligations of the MEMBER, the AGENCY and the excess insurer for a claim resulting in liability within the scope of the self insurance, catastrophe, excess insurance and stop loss insurance to be provided is as follows: The first One Thousand Dollars ($1,000.00) of any valid claim shall be paid by the MEMBER. The next payment will come from the AGENCY in accordance with the scope of loss protection set forth in ARTICLE IX. The next level of responsibility shall be that assumed by the excess insurer. In the event that a series of losses should exceed the amount of coverage provided by the Risk Management Pool, the excess insurance and the stop loss coverage for anyone year, then the payment of such uncovered valid loss shall be the obliga- tion of the individual MEMBER or MEMBERS against whom the claim was made and perfected by judgment or settlement. -26- .1 ~, ~" ARTICLE XI. Obligations of Members. The obligations of MEMBERS of the AGENCY shall be as follows: -(a) To appropriate for, where necessary to levy for and to promptly pay all annual and supplementary or other payments to the Risk !-1anagement Pool at such times and in such amounts as shall be established by the Board of Directors within the scope of this agreement. Any delinquent payments shall be paid with a penalty which shall be equivalent to the prime rate of interest on the date of delinquençy or the highest interest rate allowed by statute to be paid by an Illinois non-home rule municipality whichever is greater. (b) To select a person to serve on the Board of Directors and to select an alternate re~resentative. (c) To allow the AGENCY reasonable access to all facilities of the 14EMBBRänd ,all records including but not limited to - , financial records' which relate to the purpose or powers of the AGENCY. , , (d) To allow attorneys employed by the AGENCY to represent the -' , , " , ' 1'1EMßER inil1vestigation, settlement discussions and levels o:f:,litigation arising out of any claim made against the MEMBER within the scope of loss protection furnished by the AGENCY. (e) To furnish full ,cooperation with the AGENCY1S attorneys, any agent, employee, AGENCY relating to the purpose and powers of'the AGENCY. -27- . (f) To follow in its operations all Ìoss reduction and prevention procedures established by the AGENCY within its purpose and powers. (g) To furnish to the AGENCY an audit prepared by a Certified Public Accountant Qf all revenues received by the MEMBER for any fiscal year of the ~æMBER for which figures are requested by the AGENCY. (h) To report to the AGENCY as promptly' as possible all incidents \vhich could result in the AGENCY being required to consider a claim for casualty losses to municipal property or injuries to persons or property within the scope of loss protection undertaken by ~he AGENCY. -28- ~; n ARTICLE XII. Liability of Board of Directors or Officers. The members of the Board of Directors or officers of the AGENCY should use ordinary care and reasonable diligence in the exercise of their power and in the performance of their duties hereunder; they 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 or omitted by any agent, employee or independent contractor selected with reasonable care; nor for loss incurred through investment of AGENCY 'funds,or failure to invest. No Director shall be liable for any action taken or omitted by any other Director. No Director shall be required to give a bond or other security to guarantee the faithful performance of their duties hereunder. The Risk Management Pool shall be used to defend and hold harmless any Director or officer for actions taken by the Board or performed by the Director within the scope of his authority for the AGENCY. The AGENCY may purchase insurance providing similar coverage for such Directors or officers. -29- ;' .j ~: ;- r"\ ARTICLE XIII. Additional Insurance. The AGENCY through the distribution of the minutes of the Board of Directors or through other means shall inform all MEMBERS of the scope and amount of excess or stop loss insurance in force from time-to-time. Membership in the AGENCY shall not preclude any ~Œ~ffiER from purchasing any insurance coverage above those amounts purchased' by the AGENCY. The AGENCY shall make its facilities available to advise MEMBERS of the types of additional or different coverages available to units of local government. / -30- 1""'"\ ARTICLE XIV. Optional Defense By Municipality. The Board of Directors will promulgate rules and procedures to allow ME!-1BERS the reasonable opportunity in liability cases or claims to prevent the AGENCY from settling such cases or claims in a manner contrary to the wishes of the MEMBER. Such rules and procedures may, among other matters, include the following items: (1) An amount of the settlement at which the MEMBER may exercise this privilege, (2) The notice of settlement, if any, and the time and manner within which the decision of the MEMBER to object to the settlement shall be transmitted to the AGENCY, (3) Who shall bear costs of the defense of the claim or case which occur after the MEMBER has prevented the settlement from taking place. The rules and procedures shall provide that where the MEMBER has exercised its privilege to prevent the settlement of the case or claim, it shall be responsible for any later judgment or settlement which disposes of the case above the amount of the settlement which had previously been reached between the claimant and the AGENCY. -31- .J ( ~ ARTICLE XV. Contractual Obligation. This document shall constitute a contract among those units of local government which become MEMBERS of the AGENCY. The obligations and responsibilities of the MEMBERS set forth herein including the obligation to take no action inconsistent with these By-Laws as originally written or validly amended shall remain a continuing obligation and responsibility' of the MEMBER. The terms of this contract may be enforced in a court of law either by the AGENCY itself or by any of its MEMBERS. The consideration for the duties herewith imposed upon the MEMBERS to take certain actions and to refrain from certain other actions shall be based upon the mutual promises and agreements of the MEMBERS set forth herein. This contract and By-Laws may be executed in duplicate originals and its passage by units of local government shall be evidenced by a certified copy of an ordinance passed by a majority of the corporate authorities then in office. Provided, however, that except to the extent of the limited financial contributions to the AGENCY agreed to herein or such additional obligations as may come about through amendments to these By~Laws no MEMBER agrees or 'contracts herein to be held responsible for any claims in tort or contract made against any other MEMBER. The contracting parties intend in the creation of the AGENCY to establish an organization for joint risk management only within the scope herein set out and have not herein created as between MEMBER and MEMBER any relationship of surety, indemnification or responsibility for the debts of or claims against any MEMBER. -32- " ~, ;-y.- ~ ARTICLE XVI. Expulsion of Members. By the vote of two-thirds (2/3) of the entire membership of the Board of Directors, any tŒMBER may be expelled. Such expulsion, which shall take effect at the beginning of the next fiscal year, may be carried out for one or more of the following reasons: (a) Failure to make any payments due to the AGENCY, (b) Failure to undertake or continue loss reduction and prevention procedures adopted by the AGENCY, (c) Failure to allow the AGENCY reasonable access to all facilities of the lillMBER and all records which relate to the purpose or powers of the AGENCY, (d) Failure to furnish full cooperation with the AGENCY'S attorneys, claims adjusters, the Risk Manager and any agent, employee, officer or independent contractor of the AGENCY relating to the purpose and powers of the AGENCY, (e) Failure to carry out any obligation of a MEMBER which impairs the ability of the AGENCY, to carry out its purpose or powers. No MEMBER may be expelled except after notice from the AGE~CY of the alleged failure along with a reasonable opportunity of not less than , thirty (30) days to cure the alleged failure. The ~MBER may reqcest a hearing before the Board before any decision is made as to whether the expulsion shall take place. The Board shall set the date for a -33- . ~ r'\ hearing which shall not be less than fifteen (15) days after the expiration of the time to cure has passed. A decision by the , Board to expel a MEMBER after notice and hearing and a failure to cure the allèged defect shall be final unless the Board shall be found by a Court to have committed a gross abuse of discretion. After expulsion, the former MEMBER shall continue to be fully obligated for its portion of any claim against the assets of the Risk Management Pool which was created during the term of its membership along with any other unfulfilled obligation as if it was still a MEMBER of the AGENCY. ,I ¡ ¡ ¡ I ì ! ! ¡ I ! I, [ -34- ~_.. ..__..._,..~ -"""-'.." c"'" , - _:"'::-..""-"c":'-':'::':'7:-_::::::_~':"'::.........,..-:",:,..:--,: ....,..,:::::"-~:::_:',:'....'c..,:,d,":,;:;~:""'-::":",~:",-,,,,,-,""""" ~ ARTICLE XVII. Termination of the Agency. If at the conclusion of the fifth year the AGENCY is not . continued by the entry of some or all then current MEMBERS into a new contract and By-Laws agreement, all withdrawing MEMBERS shall remain fully obligated for their portion of any claim against the assets of the Risk Management Pool which was created during the term of the membership of the withdrawing MEMBERS along with any other fulfilled obligation, including but not limited to calls for supple- mentary payments for years of their membership which may be called for in subsequent years. In the event that the AGENCY is not continued beyond its initial five-year term, the Board of Trustees shall continue to meet on such a schedule as shall be necessary to carry out the winding up of the affairs of the AGENCY. If the AGENCY shall continue in operation, the withdrawing MEMBERS shall continue to hold membership on the Board of Trustees but they shall only vote on matters affecting their limited continuing interest in the AGENCY. Those MEMBERS continuing to participate in the existence of the AGENCY at the end of the five year term shall determine whether any funds of the AGENCY should be distributed to withdrawing MEMBERS. May 8 , 19 79 DATED: - .~.uJ~ Village Clerk -35- ~ APPENDIX A JOINT RISK MANAGEMENT STUDY GROUP Village of Barrington Village of Bloomingdale Village of Buffalo Grove Village of Downers Grove' City of Elmhurst Village of Glendale Heights Village of Glen Ellyn Village of Hanover Park Village of Hillside Village of Lombard Village of Mount Prospect Village of Niles Village of Northfield Village of Oak Brook Village of Palatine Village of Park Forest City of Rolling Meadows Village of Roselle Village of Skokie City of West Chicago Village of Westmont , '~ ~. !..~ï!-JJ::> ~" "r..,.....¡=~ k r---r Li ' ",. ,¡ 1\ ¡J, \.JJ-'.~L.-.\.J, 1_1\ u.. ~ 'APPENDIX B WHAT IS COVERED All Buildings and Contents Workmen's Compensation Comprehensive General Liability 'Civil Rights Liability Public Official LiabiliTY - Errors and Omissions Umbrella Liability Incidental Malpractice LiablIitý Comprehensive Automobile Liabilit}: - including Non-Owned and Hired Automobile . I I ¡ ¡ , I I Automobile Physical Damage . Special Ëvents' i , ! ,I . J ' 3348 ~, T-"""","~,~~"_""""--~,,,,,,"',>r""""~---"- 1) 2) 3) 4) , 5) 6) 7) 8) 9) 10) 11) 12) ,i ~, 3355 r.. I. -'-"";J-' ¡ G,. I ' I '"', ,....:""':)" ,..., ,-,:,\ J , K L., ,-..:...L.........Jï::'r..-.. ~ ,-" APPENDIX B-2 EXTENSIO~S OF LIABILITY COVERAGE \1;: alvei of ç::are, Custody and Control Exclusion. Personal Injury includes libel, slander, false arrest, defamation oi character, inva.sion of privacy, wrongful eviction, discrimination, shock, mental anguish, false imprisonment, detention, humiliation, piracy or infringement of copyright, wron¡?:ful ~, disability, mental injury, malicious prosecution. / j Blanket Contractual Liability - All WritTen Contracts. Insurance extended to include City Employees Errors and Omissions. Insurance extended to include liability of all City Boards. Broad Named Insured covers all employees, Boards and Commissions, and Volunteer Police and Firemen. Automobile Liab1lity has automatic coverage provision for newly acquired vehicles upon acquisition with no notice necessary. . . Automobile and Premises Medical Payments ($5,000 per person). Workmen's Compensation, Employers Liability and Occupations Disease as per state statute. Riot, Civil Commotion, Mob Action or act or omission in connection with the prevention or suppression of these acts is covered. Products Liability. Police and Fire Professional. - 3) 4) 5) 6) 7) , 8) 9) 10) 11) 12) 13) 1342 < ,;, , n :...::.~ I,J=' i 1'"'~'I!..,",-""':='""')kC""'. ,.,,1:--' "v.I..:J-,--,....... ,-r\t.).. -...J APPENDIX B-3 EXTENSION OF PROPERTY COVERAGE . BEYOND NORMAL COVJ:.RAGES 1) All Risk ProperTY coverage will be provided at required limits for each and every loss a. each and every'location. The limit 0: insurance will be set at a level high enough to cover a complete loss at the highest valued location in the City and this limit will then apply to each loss at each location, so you can never run out of insurance. 2) Losses to buildings and contents on a 100% replacement cost basis without depreciation. Neither need to be replaced to recover replacement cost. Replacement is not limited to repairs or re- building at the involved site and with materials of the like kind and quality. Collapse of buildings or parts thereof extended to all risks of loss except normal settling, normal shrinkage, or normal expansion in foundations, walls, floors,or cellings. ' Automatic proteCtion for newly acquired properties including contents and owned builders' risk with no notice necessary,- No coinsurance clause or requirement. No scheduling of properties or values. No calculation of individual location rates. "All Risk" to include flood coverage. Limits to be agreed and an annual aggregate wllI apply. "AU Risk" to include water damage from rising water, back up of sewers, and wind driven raln. Replacement cost extends to any additional cost for rebuilding or repairing to meet oråinance requirements. Cost of demolishing portions of buiJåings which are required to be removed because of damage by an insured hazard is covered. Damëige by surface water, waves, tidal wave or spray from any of the foregoing. Loss by freezing whether buildings are occupied or vacant. , " ~ , '" ' 2. 3. 4. 5. 6. 7. 8. ,. 80.59 APPENDIX B-4 WHAT IS NOT INCLUDED 1. Personally owned Automobiles Þ.~!riJ~ ~ Gt..:.-~~3~=:,~ 6.. CC Property Losses of a Degenerative Nature - (wear and tear, deterioration) War Risk and Nuclear Damage ¡ The first $1, 000 of each loss. Hospital Malpractice Insurance. Seepage Poll ution Employee Benefits '. " Limits of Liablli tv . , Automobile Liability General Liability Public Official Police Professional Property Aggregate Excess Employee Dishonesty Money and Securities Worker's Compensation. Umbrella Liability APPENDIX B-5 PROPOSAL $750, 000 Per Occurrence Exess of $249, 000 5.1. R. Excess of $1,000 Deductible $750,000 Per Occurrence Excess of $249,000 5.I.R. Excess oi $1,000 Deductible $750,000 Each, Claim and Aggregate 249,000 S.I.R. Excess $1,000 Deductible $750, 000 Per Occurrence Excess of $2L;9, 000 Excess of $1, 000 Deductible $10,000,000 Per Occurrence $500, 000 in Excess of $2, 000, 000 Annual Loss Fund $100, 000 Any One Claim $25,000 Each Loss - - $750,000 Per Occurrence Excess of $249,000 5.1. R. Excess of $1, 000 Deductible $4, 000, 000 Per Occurrence Note: Coverages and Limits subject to completion of reinsurance. Flood limited to $1, 500 ~ 000 per occurrence and aggregate. Earthquake, limited to $1,500,000 per occurrence and aggregate. Umbrella Liability limited to Automobile Liability, General Liability and Employer's Liability. '\ 319 . " $10,000,000 $5,000,000 $1,000,000 $500,000 $250,000 $1,000 (DeduCtibl e) 320 , ~, APPENDIX B-6 SPECIFIC (PER OCCURRENCE) COVERAGE 1 I EXCESS PROPER TY UMBRELLA I I . I I I I . - EXCESS , EX CESS LIABILITY W.C. LLOYD'S PACKAGE . """ '. I . . SELF-NSURED RETENTION' ; ¡ , : \ ,.," PROPERTY CASUALTY WORKER'S COMPENSA TION . ~ -. ' - ,.,,~ t n ,--, '-J r-,." I'"' '--IC"" K~I~~~ .~~_L~~~~K~ U :-,. "í, I,' APPENDIX B-7 AGGREGATE (PER YEAR) COVERAGE' ¡ , I ¡ I ! : ¡ ét' t . ¡ $2,500,000 LLOYD'S PACKAGE $2,000,000 , i I ¡ I , I I - I LOSS FUND .<~:-:,: ($250,000 Maximum .' '::""-¡'T; Chargeable PerOc:c:urrence) 337