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HomeMy WebLinkAboutOrd 4871 07/01/1997 ORDINANCE NO. 4871 AN ORDINANCE AUTHORIZING THE APPROVAL AND EXECUTION OF AN EXTENSION TO THE HIGH-LEVEL EXCESS LIABILITY POOL CONTRACT AND BY-LAWS DOCUMENT WHEREAS, in the 1980's, governmental bodies had difficulty purchasing excess insurance policies which offered reasonably broad coverages or were only able to purchase such insurance at rapidly increasing costs; and WHEREAS, many governments had some prior experience with the use of intergovernmental self- insurance pools to replace or augment conventional insurance; and WHEREAS, a number of municipalities engaged in a project to develop the contract and by-laws and coverage document for a governmental self-insurance pool to protect against high-level risks; and WHEREAS, that intergovernmental self-insurance pool, the High-Level Excess Liability Pool ("HELP"), will conclude its first fixed term on April 30, 1998; and WHEREAS, the existing Members of that Pool have caused the preparation of a new intergovern- mental agreement which will extend the term of the HELP Pool, pursuant to this new contract, for an additional term of ten (10) years; and WHEREAS, Illinois State law permits governmental bodies to enter into intergovernmental agreements to provide joint self-insurance for periods of up to twelve (12) years; NOW, THEREFORE, BE IT ORDAINED BY THE PRESIDENT AND BOARD OF TRUSTEES OF THE VILLAGE OF MOUNT PROSPECT, COOK COUNTY, ILLINOIS: SECTION ONE: That the Village President and Village Clerk are hereby authorized to execute on behalf of this municipality and to cause this community to become bound by the Contract and By- Laws which would cause the commencement of the High-Level Excess Liability Pool for a second term of ten (10) years commencing on May 1, 1998. SECTION TWO: For theterm ofthe intergovernmentalagreement, the execution ofwhich ishereby authorized, this munlcipaiity shall be subject to that contract, including such amendments to that contract as shall be approved in accordance with its terms. SECTION THREE: All actions taken by the Board of Directors of the High-Level Excess Liability Pool up to the date of this Ordinance, are hereby approved and ratified, and is hereby found to be a valid act of that intergovernmental agency. SECTION FOUR: The obligation of this municipality to become bound by the Contract and By- Laws document, extending the term of the HELP Agency (which is attached hereto as Appendix 1) shall only take effect upon the approval of that Contract and By-Laws document by ail existing Members of the Agency, which actions must be taken by July 1, 1997. SECTION FIVE: This ordinance shall take effect upon its passage and approval and it may, at the discretion of the Village Clerk, be published in pamphlet form. YES: Clowes, Corcoran, Hoefert, Lohrstorfer, Nocchi, Wilks NAYS: None ABSENT: None PASSED and APPROVED this 1st day of duly ,1997. ATTEST: Carol A. Fields, Village Clerk APPENDIX 1 FIRST EXTENSION OF THE CONTRACT AND BY-LAWS HIGH-LEVEL EXCESS LIABILITY POOL INDEX Paqe No. 1 ARTICLE I. Definitions and Purpose. 6 ARTICLE II. Powers. 8 ARTICLE III. Participation and Term. 9 ARTICLE IV. Commencement of the Agency. 11 ARTICLE V. Board of Directors. 22 ARTICLE VI. Board of Directors Meetings. 24 ARTICLE VII. Finances and Risk Management Pool. 35 ARTICLE VIII. Scope and Amount of Loss Protection. 39 ARTICLE IX. Obligations of Members. 44 ARTICLE X. Liability of Board of Directors or Officers. 45 ARTICLE XI. Additional Coverage. 46 ARTICLE XII. Optional Defense by Member. 49 ARTICLE XIII. Contractual Obligation. 51 ARTICLE XIV. Host Member. 52 ARTICLE XV. Expulsion of Members. 55 ARTICLE XVI. Termination of the Agency. HELP - 3/21/97 CONTRACT AND BY-LAWS OF THE HIGH-LEVEL EXCESS LIABILITY POOL ARTICLE I. Definitions and Purpose. DEFINITIONS: As used in this agreement, the following terms shall have the meaning hereinafter set out: AGENCY - The High-Level Excess Liability Pool (H.E.L.P.) established pursuant tO the Constitution and the statutes of this State by this intergovernmental agreement. ANNUAL PAYMENT The minimum amount a MEMBER shall be obligated to pay to the AGENCY during a fiscal year. CLAIMS ADMINISTRATOR - A person or group of persons who either as employees or independent contractors are employed to administer the claims made against the MEMBERS. CONVENTIONAL INSURANCE Insurance coverage which may from time to time be purchased by or through the AGENCY from an insurance company approved by the Department of Insurance to write such coverage in Illinois for risks which the MEMBERS determine will not be covered or be entirely covered by the JOINT RISK MANAGEMENT POOL; CONVENTIONAL INSURANCE shall also include excess insurance and reinsurance. DEBT INSTRUMENTS - Bonds, letters of credit, loan agreements, or other documents by which funds are borrowed by the AGENCY HELP - 3/21/97 : RISK MANAGEMENT A program attempting to reduce or limit injuries to persons or property caused by the operations of MEMBERS. SUPPLEMENTARY PAYMENTS - Payments which may be called for, in accordance with the Contract and By-Laws, by the Board of Directors from time-to-time if the amount of the annual payment is insufficient to fund the AGENCY. PURPOSE: The AGENCY is a cooperative agency voluntarily established by contracting units of local governments and similar governmental entities as defined in the Illinois Constitution of 1970 pursuant to Article VII, Section 10 of the 1970 Constitution of the State of Illinois, 5 ILCS 220/6 and 745 ILCS 10/1-101, et seq., for the purpose of seeking the prevention or lessening of liability claims for injuries to persons or property or claims for errors and omissions made against the MEMBERS and other parties included within the scope of coverage of the AGENCY. It is the intent of the MEMBERS of the AGENCY to create an entity which will administer a Joint Risk Management Pool and utilize such funds contributed by the MEMBERS to defend and protect, in accordance with these By-Laws, any MEMBER of the AGENCY and other parties against stated liability. Such By-Laws shall constitute the substance of a contract among the MEMBERS. 3 HELP - 3/21/97 basis, even if the claim is filed at some time after the expiration of the term of the AGENCY, but during the period of coverage, the MEMBERS state and acknowledge their continuing contractual obligations arising out of occurrences which take place during the term of this contract. In creating an excess self-insurance pool, the MEMBERS of this AGENCY are entering into a type of intergovernmental contract which has not previously existed in Illinois. In forming such an AGENCY, the MEMBERS state and acknowledge that the AGENCY has no responsibility for the payment of claims from the Joint Risk Management Pool for amounts less than the level at which the scope of coverage of this AGENCY shall from time to time commence or higher than the level of the self-insured retention of the AGENCY. The scope of coverage to be provided by the AGENCY is excess coverage to commence only after the MEMBER or some other party on behalf of the MEMBER has fully paid the amount of its self-insured retention. At the commencement of the term of the AGENCY, the amount of that retention is $1,000,000, per occurrence. The AGENCY, always subject to any limit on aggregate payments, shall not be obligated to expend any funds or pay any claim until the MEMBER, or some party on behalf of the MEMBER, has paid $1,000,000, including costs of defense, for each occurrence against which a claim is made against the assets of the AGENCY. 5 (g) TO provide risk management services, and, where required, the investigation, defense, litigation, or settlement of claims, (h) To admit and expel MEMBERS as provided herein, (i) 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. 7 HELP - 3/21/97 I ARTICLE IV. Commencement and Term of the Agency. The First Extension of the Contract and By-Laws of the AGENCY calling for its continuing existence shall be in full fDrce and effect on May 1, 1998, if by July 1, 1997, all of the MEMBERS whose names appear upon Appendix A, attached to and made part of this contract, have, through an ordinance or resolution, of their corporate authorities, authorized the execution of this First Extension. Evidence that such actions have been taken shall be transmitted to: Daniel Wiersma Secretary, HELP Pool City of Wheaton 303 West Wesley Street Wheaton, Illinois 60187 who shall inform the MEMBERS if the action necessary to cause the adoption of this First Extension have taken place prior to the date by which such action must be taken. In the event that all MEMBERS execute the First Extension, they shall be permitted to merge funds from the prior term of the AGENCY subject to any limitation in the amount of coverage for MEMBERS which have had claims paid by the AGENCY. Such limitation, however, shall not.'limit the aggregate payment to the MEMBERS during the First Extension to less than Five Million Dollars ($5,000,000.00}. The utilization of funds for the payment of claims arising from the First Extension of the AGENCY shall not, however, diminish the obligations of the MEMBERS of the HELP - 3/21/97 ARTICLE V. Board of Directors. (a) There is hereby established a Board of Directors of the AGENCY. Each MEMBER shall appoint one (1) person to represent that body on the Board of Directors along with another person to serve as an alternate representative when the initial representative is unable to carry out that representative's duties. The representative and alternate shall be appointed in the same manner as other appointive officers are selected when no specific method for such office is established by statute. Once such appointments are made known to the AGENCY the persons appointed shall remain in office until the AGENCY receives evidence of the appointment of other persons. The AGENCY shall be the judge of the proper appointment of representatives and alternates to the Board of Directors and shall utilize in case of dispute general principles of Illinois law. The representative and alternate selected need not be elected officials o~ the MEMBER. It is anticipated, but not required, that persons chosen to serve on the Board will have responsibilities within their MEMBER community for some management duties relating to the AGENCY. The Board of Directors shall select from among the representatives a Chairman, Vice Chairman, Secretary and Treasurer. In the fiscal year of the AGENCY, commencing tl HELP - 3/21/97 such other functions as are assigned from time to time by the Chairman or the Board of Directors. The Treasurer shall have charge and custody of and be responsible for all funds and securities of the AGENCY; receive and give all receipts for moneys due and payable to the AGENCY from any source whatsoever; deposit all such moneys in the name of the AGENCY in such banks, savings and loan associations or other depositories as shall be selected by the Board of Directors; invest the funds of the AGENCY as are not immediately required in such investments as the Board of Directors shall specifically or generally select from time to time; and maintain the financial books and records of the AGENCY. Provided, however, that all investments of AGENCY funds shall be made only in the manner permitted to an Illinois home rule community, or to a governmental self-insurance pool. The Treasurer shall, in general, perform all the duties incident to the office of Treasurer and such other duties as from time to time may be assigned by him by the Board of Directors. The Secretary shall keep the official records of the AGENCY. The Secretary shall see to the keeping of the minutes of meetings of the AGENCY and shall retain past financial records of the AGENCY. The Secretary shall see 13 contractors employed by the AGENCY. Among other items it shall have the responsibility for (1) Hiring of AGENCY officers, agents, employees and independent contractors; (2) Setting of compensation for all persons, firms and corporations employed by the AGENCY; (3) Setting of fidelity bonding requirements for officers, employees or other persons; (4) Approval of amendments to the By-Laws; (5) Approval of the acceptance of new MEMBERS and expulsion of MEMBERS; (6) Approval and amendment of the annual budget of the AGENCY; (7) Establishment and amendment of the scope and amount of pooled self- insurance coverage offered by the AGENCY; (8) Resolution of disputes over the scope of pooled self-insurance coverage provided by the AGENCY; (9) Approval of educational and other programs relating to risk reduction; (10) Approval of reasonable and necessary loss reduction and prevention procedures which shall be followed by all MEMBERS; (11) Purchase of conventional insurance; (12) Authorization to a host MEMBER to issue debt instruments when all other contractual prerequisites for such issuance have been effected; (13); Approval of annual and supplementary payments to the Risk Management Pool for each MEMBER; (14) Approval of rules and regulations regarding the payout of funds from the Risk 15 RELP - 3/21/97 event that a vacancy occurs in the representative or alternate representative selected by the Corporate Authorities of a MEMBER, that body shall appoint a successor. The failure of a MEMBER to select a representative or the failure of that person to participate shall not affect the responsibilities or duties of a MEMBER under this Contract. (e) The Board of Directors shall have the power to establish both standing and ad hoc committees. The committees of the AGENCY may, among other titles and functions, include: Finance, Risk Management, Claims Review and Membership and Revehue. The Chairman of the Board may also establish ad hoc committees which do not conflict with those established by the Board. Unless the Board of Directors shall establish some other procedure, the selection of members of the Board of Directors who shall serve on such committees and chair them shall reside with the Chairman of the Board of Directors, but such decisions shall be confirmed by the Board. The Chairman may make interim appointments to fill vacancies which occur between Board meetings. The Board of Directors may assign to a committee the authority to authorize the expenditure of funds for administrative expenses, but the settlement of claims or suits to be paid from the joint risk management pool 17 HELP - 3/21/77 least equal to the greater than majority percentage within the proposed rule. (ii) The approval of the payment of the settlement of claims from the joint risk management pool shall require the concurrence of a majority of the entire membership of the Board of Directors. By such a vote, the Board of Directors may also establish procedures whereby, in cases where a rapid decision on the terms of a prospective settlement must be made, a committee or person may approve settlements in an amount higher than that previously authorized by the Board, subject to limitations established by the Board. (iii) The admission of a new MEMBER and the expulsion of a MEMBER shall require at least the concurrence of two-thirds (2/3) of the entire membership of the Board of Directors. (iv) The purchase of any form of conventional insurance shall require at least the concurrence of two- thirds (2/3) of the entire membership of the Board of Directors. (v) Any amendment of these By-Laws except as provided in Subsection (vi) below, shall require at least the concurrence of two-thirds (2/3) of the entire membership of the Board of Directors. 19 HELP - 3/21/97 -" compensation, payment or expenses for such representative, shall be paid by each MEMBER separate from this Contract. Provided, however, that the Chairman of the Board, Vice Chairman, Treasurer and Secretary and such other Board officers as are given by the Board of Directors a right to reimbursement may submit to the Board of Directors for its approval claims for reimbursement of expenses incurred in the pursuit of their positions as officers of the AGENCY. The reimbursement for such expenses shall include amounts advanced on behalf of the AGENCY~either by the officer himself or by a MEMBER of the AGENCY. A host MEMBER may be compensated for agreeing to issue or issuing a debt instrument, be reimbursed for expenses or be granted credits for sums otherwise due the AGENCY. 21 HELP - 3/21/97 ~ (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 Board of Directors. (d) Minutes of all regular and special meetings of the Board of Directors shall be sent to all Members and alternate members of the Board of Directors within twenty (20) days after each meeting. The Board shall subsequently vote on the approval of the minutes. 23 ~HELP - 3/21/97 relieve the MEMBERS of the obligation to make annual or supplementary payments to the AGENCY so long as such budgets are finally adopted, and the MEMBERS are given at least thirty (30) days after the passage of the final budget or the determination of amounts due in which to make payments to the AGENCY. Where the proceeds of a debt instrument have been received, the obligation of MEMBERS to repay that debt shall not be dependent upon the approval of a budget. Budgets may be amended at any time by majority vote of the Board of Directors. (c) Calls for supplementary payments shall be made by the Board of Directors. Supplementary payments shall be called for where required in order that the scope and amount of coverage of the AGENCY can be provided to all MEMBERS. The Board shall, where necessary, make calls for supplementary payments from MEMBERS, including expelled MEMBERS, claims which occurred during the time of their membership. Provided, that in any year in which the scope of coverage is provided on a "claims made" basis, supplementary payments may only be used to pay and administer claims made during the subject year or such later period as assumed by the AGENCY or specified in a conventional insurance policy purchased by the AGENCY. The forwarding of annual and supplementary payments within a time specified in notices to the MEMBERS giving 25 HELP - 3/21/97 for annual payments made in any subsequent fiscal years for which figures are then available. (d) Each MEMBER shall have prepared and submit to the AGENCY an annual audited statement of all revenues prepared by a certified public accountant on a G.A.A.P. basis. For the purpose of computing amounts due for participation in the AGENCY, revenues shall be classified by fund type as follows: General Fund: Included: taxation of all types; real estate, sales, utility, income tax etc. 2). license and permit fees 3). intergovernmental revenue 4). fines and forfeitures 5). interest earnings 6). fees charges or service 7). franchise revenues Excluded: 1). refunds 2). interfund transfers 3). installment contract proceeds 4). income from joint ventures 27 HELP - 3/21/97 I Enterprise Funds Included: 1). all sales 2). license and permit fees 3). service charges 4). interest earnings 5). taxation 6). grant funds Excluded: 1). interfund transfers 2). revenues collected while acting as an agent for another governmental body where amounts collected are passed through 3). bond proceeds 4). installment contract proceeds 5). income from joint ventures Internal Service Funds - Excluded Trust and Aqenc¥ funds - Excluded General Exclusion All revenues associated with a specifically excluded risk or activity will not be included for the calculation of premiums. Revenues shall be computed using the figures shown in the annual audit statement of the MEMBER for the last fiscal year available on the date at which the audits are due. In the event a current audited financial statement is not available, or, if available, does not present revenues in the manner required, the Board of Directors shall estimate the revenues of the MEMBER based upon the best figures then available. The decision of the Board shall be final. 29 HELP - 3/21/97 required to be paid, will be based upon the same proportion which the payment of one MEMBER bears to the payment of another MEMBER in the annual payment, except where the Board of Directors should modify that proportion based upon an error in the information reported or an error in computation. In the event that for any reason the proportional payments due from a MEMBER shall be adjusted, the amounts due from other MEMBERS shall likewise be subject to adjustment but the implementation of the adjustment may be delayed until the funds are needed. (g) If all claims known or unknown within the scope of coverage provided by the AGENCY, plus any other amounts owed by the AGENCY during any particular period for which funds of the AGENCY were combined to create the joint risk management pool, have either been paid or provision has been made for such payment, the Board of Directors as then constituted shall distribute any surplus funds to the MEMBERS which constituted the membership of the Pool during that period after first deducting therefrom reasonable administrative and other non-allocated costs incurred by the AGENCY in the processing of the claims in years other than the period for which the claim was made. The distribution among the MEMBERS shall be in the same proportion to the total as their payments during the 31 HELP - 3/21/97 performance of the AGENCY including their efforts on the AGENCY'S behalf. (j) The Board of Directors may apply to the annual and supplementary payments due from a MEMBER a debit or credit computed in a manner determined by the Board of Directors which shall affect the payment due from the MEMBER to the extent that the number and the amount of reserved claims and losses attributable to that MEMBER in no more than three prior years , in amounts of at least $10,000.00, shall compare with the general frequency and amount of similar claims and losses attributable to MEMBERS of the AGENCY in proportion to the level of their payments to the AGENCY in relationship to all payments made to the AGENCY. In developing a debit-credit formula, the AGENCY may also consider the existence and effectiveness of the loss prevention programs put in place by the MEMBERS. Ail adjustments shall not result in a credit of more than 25% nor a debit of more than 25% from the average. The Board of Directors shall approve the debit or credit formulation either directly or in the approval of the adjusted annual payment due from the MEMBERS. Provided, however, that the Board of Directors shall, for each year of the existence of the AGENCY provide a sum in the joint risk management pool which, after the debit or credit adjustment has been made, shall 33 HELP - 3/21/97 ~ ARTICLE VIII. Scope and Amount of Loss Protection. Scope of coverage and the amount of coverage to be provided by the AGENCY shall be determined from time to time by the Board of Directors. The AGENCY may modify both the scope of coverage and the amount of coverage, both upward and downward, provided, however, that any modifications shall only apply prospectively. No indemnification shall be provided by the AGENCY until the MEMBER has expended $1,000,000 in loss payments as a result of the occurrence. Defense costs shall be included toward satisfying both the loss payment by the MEMBER and the coverage provided by the AGENCY. Coverage, other than errors and omissions coverage, is provided by the AGENCY only for those occurrences which occur during the fiscal year for which the MEMBER has made an ~d~NI3AL PAYMENT and all required SUPPLEMENTARY PAYMENTS and for which written notice is given to the AGENCY within ten (10) years subsequent to the date of occurrence. Where an occurrence is continuous and involves more than one such fiscal year, coverage is provided only to the extent of the coverage amounts in effect, as regards the MEMBER, during the fiscal year in which the occurrence began. Errors and omissions coverage is provided by the AGENCY only for those occurrences which take place subsequent to the first day of membership in the AGENCY by the MEMBER and for which written notice is first given to the AGENCY during a fiscal year for which 35 HELP - 3/21/97 until a MEMBER has fulfilled the full responsibility of paying the total amount of the self-insured retention. Nor shall the AGENCY, under any circumstances, be obligated for payments in excess of the maximum per occurrence or aggregate amounts established from time- to-time which are to be paid from the self-insured retention of the AGENCY. Because of the right of each MEMBER to participate in the decisions reached by the AGENCY, and because of the uncertain results which may occur in claims seeking large payments, no claim of a bad faith failure to settle shall be made against the AGENCY in the absence of fraud. MEMBERS may fund the amount of the self-insured retention through reserve funds, conventional insurance, membership in pools, the issuance of judgment funding bonds or other methods. The method by which a MEMBER of the AGENCY fulfills its responsibility to fund the self-insured retention is a matter of no consequence to this AGENCY. This AGENCY intends to offer a scope of coverage which will commence only in excess of the self-insured retention. The extent of intergovernmental cooperation or contractual obligation of the MEMBERS to fund the AGENCY does not extend whatever to any primary coverage or obligations below the amount of the self-insured retention. The MEMBERS of the AGENCY would not have entered into this Contract and By-Laws if any MEMBER understood the obligation of the AGENCY to its MEMBERS to extend in any manner below the level of the self-insured retention or above the level of self-insured retention coverage established. The AGENCY, however, may, from time-to-time, fund a part of its self- insured retention through the purchase of conventional insurance 37 HELP - 3/21/97 ARTICLE IX. Obligations of Members. The obligations of MEMBERS of the AGENCY shall be as follows: (a) To appropriate, budget for, where necessary to levy for and to promptly pay all annual and supplementary or other payments to the AGENCY at such times and in such amounts as shall be established by the Board of Directors within the scope of this agreement. MEMBERS shall also be required to pay their proportional share of the repayment of principal and interest obligations and other costs incurred by a host MEMBER in obligating itself under a debt instrument. The proportional share of 'each MEMBER shall be that proportion its annual payment for that fiscal year bears to the annual payments of the other MEMBERS. Any delinquent payments shall be paid with a penalty which shall be equal to the highest interest rate allowed by statute to be paid by an Illinois home rule municipality or the prime rate then in effect at the First National Bank of Chicago, or, in the event that such bank is no longer in existence, then the prime rate in effect at that bank, with its principal office in Illinois, with the largest .assets, whichever rate is lower. (b) To select a person to serve on the Board of Directors and to select an alternate representative. (c) To allow the AGENCY reasonable access to all facilities of the MEMBER and all records relating to claims and the financial obligations of a MEMBER. 39 HELP - 3/21/97 I (h) To report to the Secretary of the AGENCY and the claims administrator, at the earliest practicable moment, any information of a claim received by the MEMBER and from which the MEMBER could reasonably conclude that coverage from the AGENCY will be sought. In the event that the required information is not submitted to the Secretary and claims administrator within the time periods set forth above, the Board of Directors of the AGENCY, may in whole or in part decline to provide a defense to the MEMBER or to extend the funds of the AGENCY for the payment of losses or damages incurred. In reaching its decision, the Board shall consider whether and to what extent the AGENCY was prejudiced in its ability to investigate, defend or earlier settle the claim due to the failure of the MEMBER to promptly furnish notice of the claim to the Secretary. In the absence of a fraud or a clear abuse of discretion, the decision of the Board of Directors shall be final. Information must be furnished to the AGENCY not only at the time that a claim is made which could reasonably be expected to be within the scope of coverage of the AGENCY, but also updated information must be provided as the nature of the claim becomes more fully known and litigation occurs and proceeds. Information must also be furnished if a claim reasonably thought to be below the level of the amount of coverage provided by the AGENCY should approach or be asserted by the claimant to fall within the amount of coverages. 41 HELP - 3/21/97 (1) To the extent that the coverage provided by the AGENCY should extend to officers or employees of the MEMBER or others, those entities shall be responsible for fulfilling all of the obligations of the MEMBER as it shall apply to that claim. HELP - 3/21/97 ARTICLE XI. Additional Coverage. Membership in the AGENCY shall not preclude any MEMBER 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. 45 HELP - 3/21/97 ~ officer of the MEMBER may notify the claims administrator of the AGENCY that the MEMBER exercises its right to prevent the AGENCY from reaching a settlement at the agreed-upon amount. The claims administrator may require that such information be transmitted in writing. In the event that the case or claim is eventually resolved through a settlement or judgment within the dollar limits of coverage provided by the AGENCY and in an amount less than the amount at which the case could have been previously settled by the AGENCY, then the MEMBER which has undertaken the costs of its defense shall be entitled to its additional actual costs including reasonable attorneys' fees, up to the level at which its costs and the prior allocated costs of the AGENCY, including reasonable attorneys' fees, equal the amount at which the case could have been settled by the AGENCY. To the extent that the case or claim is resolved through settlement or judgment at an amount greater than that at which the case or claim could have been previously settled by the AGENCY and a claim is thereby made within the dollar limits of coverage provided by the AGENCY, the MEMBER shall be obligated for that portion of the settlement or judgment which exceeds the sum of money at which the case could have been earlier settled by the AGENCY including all allocated costs of the AGENCY. If at any time the amount of the allocated costs of the AGENCY devoted to the case shall equal or exceed the amount at which the case could have been settled and the AGENCY is providing a defense, the AGENCY may require periodic supplementary payments from the MEMBER if the MEMBER wishes to have the AGENCY continue to provide the defense. 47 ~ELP - 3/21/97 ARTICLE XII!. Contractual Obligation. This document shall constitute a contract among those entities 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 each MEMBER. The terms of this Contract may be enforced in a court of law by the AGENCY or 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 is based upon the mutual promises and agreements of the MEMBERS set forth herein. If any dispute arises regarding this Contract, the MEMBERS agree that a court shall interpret the actions and duties of the parties in accordance with the specific standard or burden of proof set out in this Contract and By-Laws. This Contract and By-Laws may be executed in duplicate originals and its passage by entities listed in Appendix. A shall be evidenced by a certified copy of an ordinance or resolution passed by a majority of the members of the governing board then in office. Provided, however, that except to the extent of the financial contributions of 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 iht.end in the creation of the AGENCY to establish an organization for joint risk management only within the 49 HELP - 3/21/97 i ARTICLE XIV. Host Member. Any home rule MEMBER of the AGENCY may voluntarily agree to be a host MEMBER. 51 No MEMBER may be expelled except after written notice from the AGENCY of the alleged failure along with the reasonable opportunity of not less than thirty (30) days to cure the alleged failure. Provided, however, that no opportunity to cure shall be necessary for an expulsion brought in whole or in part because of a poor loss or claim history. The MEMBER may request a hearing before the Board before any decision is made as to whether the expulsion shall take place. The hearing must be requested in writing not later than five (5) days after the time to cure has expired or in case no time to cure is required within 30 days of the notice by the Board of an intent to expel. Times required for notices under this contract shall be measured from the date of mailing or delivery if personally delivered~ The Board shall set the date for a hearing which shall not be less than ten (!0) days after the request for the hearing. If the time to request a hearing has passed and the MEMBER has not requested a hearing or if no hearing is required or if such a hearing has been requested, no later than sixty (60) days after the close of that hearing, the Board shall determine whether the MEMBER will be expelled. A decision by the Board to expel a MEMBER shall be final unless the Board shall be found by a Court to have committed a clear abuse of discretion. The Board of Director~ may establish the date at which the expulsion of the MEMBER shall be effective at any time not less than thirty (30) days after the vote expelling the MEMBER has been made by the Board of Directors. If the motion to expel the MEMBER made by the Board of Directors or a subsequent motion does not state the time at which the expulsion shall take place, such expulsion shall take place thirty (30) days 53 ARTICLE XVI. Termination of the Agency. At the conclusion of the ten (10) year term of this Contract and By-Laws under the First Extension, all MEMBERS shall remain fully obligated for their portion of any claim against the assets of the Joint Risk Management Pool which is within the scope of coverage of the AGENCY along with any other unfulfilled obligation, including but not limited to calls for supplementary payments attributable to the period of their membership which may be called for in subsequent years. The Board of Directors shall continue to meet on such a schedule as shall be necessary to carry out the winding up of the affairs of the AGENCY. Because of the nature of claims filed against governmental bodies, it is contemplated that the Board may be required to meet for some time to conclude all matters relating to the termination of the AGENCY. When all of the affairs of the AGENCY are wound up and all claims and exPenses of the AGENCY are paid, or provision is made for their ~ayment, the members of the Board of Directors shall distribute any funds remaining in ~he joint risk management pool to the MEMBERS in the proportion which those MEMBERS contributed funds to the AGENCY. MEMBERS expelled from the AGENCY shall not be entitled to the return of any funds. At the conclusion of the ten (10) year term of this Contract and By-Laws, if all debt instruments shall have been repaid, MEMBERS of the AGENCY may elect to distribute to the then existing MEMBERS some of the funds contained within the Joint Risk Management Pool. The distribution of those funds, however, shall not affect the obligation of the MEMBERS to make -supplementary payments to the Joint Risk Management Pool in the 55 ELP - 3/21/97 WHEREUPON under the authority granted to me by Ordinance (~cscluLiu,-~-No. ~7/ , passed by the Corporate Authorities on the /~/"' day of '~U~ / , 19 ?y , I do hereby execute and the Clerk does hereby attest to my signature as evidence that the ~/~A~'-- ~ has approved participation in the FIRST EXTENSION OF THE HIGH-LEaL EXCESS LI~ILITY POOL (HELP), in accordance with this Contract and By-Laws in its executed fo~ and as it may subsequently be validly amended. ATTEST: : 57