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HomeMy WebLinkAbout1987-2262125L AN ORDINANCE AUTHORIZING THE MAYOR TO EXECUTE AN AGREEMENT WITH EMPLOYEE RESOURCES ADMINISTRATION CORPORATION FOR ADMINISTRATIVE SERVICES RELATIVE TO THE CITY'S PROPOSED FLEXIBLE BENEFITS PLAN, AUTHORIZING THE EXPENDITURE OF FUNDS THEREFOR, AND PROVIDING AN EFFECTIVE DATE THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS SECTION I That the Mayor is hereby authorized to execute the contract with Employee Resources Administration Corporation, a copy of which is attached hereto and incorporated herein SECTION II That the City Council hereby authorizes the expenditure of funds in the manner and amount as specified in the agreement SECTION III That the City Council hereby authorizes the City Manager to execute the City of Denton Cafeteria Plan in substantially the form as affected in exhibit B attached hereto upon receipt of confirmation from Deloitte Haskins & Sells that the Plan complies with all applicable federal laws SECTION IV That this ordinance shall become effective immediately upon its passage and approval PASSED AND APPROVED this the ej day of�r 1987 RAY S r ENS MAYOR ATTEST Lo— njy, /i =M — JE IFE W LTERS, CITY SECRETARY APP OVED AS TO LEGAL FORM DEBRA ADAMI DRAYOVITCH, CITY ATTORNEY THE STATE OF TEXAS S AGREEMENT BETWEEN THE CITY OF DENTON AND EMPLOYEE RESOURCES ADMINISTRATION CORPORATION COUNTY OF DENTON S This agreement, executed the 1st day of January, 1988, is between the City of Denton and Employee Resource Administration Corporation, (the Claims Administrator), a Texas Corporation WITNESSETH SECTION I The Plan 1 1 The City of Denton will adopt a cafeteria plan of benefits under Section 125 of the tax code (the "Plan") providing means by which eligible employees of the City of Denton can secure the benefits set forth in the plan 1 2 The administrator of the Plan (as defined by the Employee Retirement Income Security Act of 1974) is the City of Denton 1 3 The name of the Plan is the City of Denton 1 4 The effective date of the Plan is January 1, 1988 1 5 The Administrator hereby appoints a Claims Administrator, an independent third party administrator, who will perform certain functions for the operation of the plan SECTION II The Claims Administrator 2 1 The Claims Administrator, within the scope of its professional ability and its employment under this agreement, shall provide certain services for and shall assist the City of Denton and the Plan Administrator in the administration of the Plan as it may be requested and authorized from time to time Such services shall include, but not necessarily be limited to the following a Completion of reports and payment of claims from the Plan to the participants b Provide periodic reports summarizing Plan expenditures c Provide necessary data required for regulatory disclosure information compliance Page 2 d Provide claim review, examination, and benefit payments, in acco dance with the Plan Document e Maintain the Plan checking account, and all the necessary records for the Plan (if required) f Communicate the Plan to the City of Denton employees in accordance with the Claims Administrator proposal submitted on July 15, 1987 g Provide information for form 5500 preparation h Prepare anti -discrimination report as required by law 2 2 The Claims Administrator is authorized to do all things it deems necessary to carry out the terms and purposes of this Agreement, including the execution of documents in the name of the Plan 2 3 The Claims Administrator shall design and provide all necessary forms for the implementation, administration, and operation of the Plan SECTION III The City of Denton 3 1 The City of Denton shall assist the Claims Administrator in any reasonable manner as to provide the services as set forth by the Plan Such assistance shall include, but not be limited to the following a The City of Denton shall provide the Claims Administrator with a complete list of all employees who are eligible for benefits of the Plan Thereafter, the City of Denton shall promptly notify the Claims Administrator of any and all changes in employment for purpose of determining eligibility for the Plan Notification shall include termination, lay off, change in classification, change in dependent status, or any other change that may affect the eligibility of any employee of the City of Denton 3 2 The City of Denton shall provide the necessary funds to pay the Plan expenses The City of Denton shall transfer all funds necessary to the proper account in order that proper distribution by the Claims Administrator may be carried out a The City of Denton shall collect the contributions made by the participants of the plan, in the manner it may deem appropriate, and shall transfer the money so collected to the Plan on a monthly or more frequent basis b To the extent of its liabilities, the City of Denton hereby agrees to make all necessary contributions to meet the obligations incurred by the Plan for its eligible participants and eligible dependents where applicable The Plan liabilities shall include premiums, claims costs, and administration costs as billed by the Claims Administrator Page 3 3 3 The City of Denton shall assist in the enrollment of the employees into the Plan, and shall maintain a supply of forms, enrollment cards or other documents, ana shall distribute or make available such documents to the employees 3 4 The City of Denton hereby agrees to cooperate with the Claims Administrator with regard to the proper settlement of claims and Plan obligations, and transmit any inquires pertaining to the Plan to the Claims Administrator SECTION IV Procedure for Application and Payment of Benefits from the Plan 4 1 Any eligible participant or participant's eligible dependent(s) may make application for benefits from the Plan by completing the claim form prescribed by the Claims Administrator The applicant shall fully and truthfully complete such application for benefits and the applicant shall supply such pertinent information from personal or professional sources as may be required by the Claims Administrator 4 2 The Claims Administrator shall accept any application for benefits made in the appropriate manner, and shall determine eligibility of such application in accordance with the Plan Document If the Claims Administrator determines that the applicant is entitled to receive payment of benefits from the Plan, the Claims Administrator shall determine the amount payable by the Plan, and arrange for the payment of such amount If the Claims Administrator determines that the applicant is not eligible for benefits from the Plan or any portion thereof is denied or reduced, the Claims Administrator shall notify the applicant and the City of Denton as to the reasons for denial, or reduction of such claim The Claims Administrator may compromise or adjust any claim, application or application previously denied, or reduced in whole or part, as the Claims Administrator feels may be in the best interests of the Plan If the Claims Administrator adjusts any such claim, he shall provide written notice to the City's Personnel Director within 5 working days of such adjustment The Claims Administrator shall be responsible for the initial review of all disputed claims SECTION V Compliance With ERISA and Indemnification of City 5 1 The City of Denton and the Claims Administrator agree to comply in all respects, individually and collectively, with the Employee Retirement Income Security Act of 1975 (ERISA) and amendments thereto, and with all federal and/or other regulations pertaining thereto, as they relate to the plan Page 4 Claims Administrator agrees to indemnify and hold the City of Denton harmless from any and all loss, damage and expense, including court costs and attorney's fees, resulting from and arising out of claims, demands, or lawsuits brought against the Claims Administrator for any negligent act or omission in administering the Plan Further, the Claims Administrator agrees to indemnify the City of Denton and hold the City of Denton harmless against any and all loss, damage and expense resulting from or arising out of dishonest, fraudulent, or criminal acts of the Claims Administrator's officers and/or employees, acting alone or in collusion with others SECTION VI 6 1 The initial set-up fee, for the first year only, will be $1,000, payable upon completion of open enrollment In addition, a fee of $4 50 per employee for supplies and $17 50 per employee for communication materials shall be paid upon completion of open enrollment Said will be based upon the number of employees that are eligible to participate in the Plan The Claims Administrator shall be entitled to a fee for its services to the Plan and under this agreement, which shall be determined by the number of employees enrolled by the City of Denton at the beginning of each month That fee shall be an annual charge of $12 00 per employee In addition, a fee of $3 00 shall be charged for each participant per month 6 2 The fee agreed upon hereof shall be reviewed with any plan changes and/or at least on an annual basis by both the City of Denton and the Claims Administrator to determine the adequacy of such fees The fees provided for herein may be adjusted by written amendment to the agreement approved by both parties SECTION VII Termination of Agreement for Claims Administrator 7 1 This agreement may be terminated at any time by either party by providing ninety days written notice to the other party Upon notification of termination by either party, the Claims Administrator shall continue to process all claims incurred up to the date of termination, and shall, not later than sixty days after the date of termination, prepare and deliver to the City of Denton a final and complete accounting and report of the Plan's financial activities 7 2 Should either party fail to perform in accordance with the provisions of this Agreement, the other party may treat such failure as a default of this Agreement and give the defaulting party thirty (30) days' written notice to cure such default In the event such default is not cured within said time frame, the party giving such notice may terminate this Agreement Page 5 SECTION VIII Miscellaneous Provisions 8 1 In the event of resignation or inability to serve by the Claims administrator, the City of Denton may appoint a successor Any successor, upon appointment, shall succeed to and be invested with all powers conferred on the Claims Administrator 8 2 If during the operation of the Plan, the federal government, the state government, or any political sub -division or instrumentality shall assess any tax against the Plan, and the Claims Administrator is required to pay such tax, the Claims Administrator shall immediately notify the City of Denton and the City of Denton shall promptly provide the funds necessary to remit such taxes to the proper authority 8 3 This agreement may be amended by the City of Denton and the Claims Administrator at any time by mutual written consent of said parties 8 4 In the event that the City of Denton shall fail to make any required contributions to the Plan, the Claims Administrator shall have the right to terminate this agreement upon fifteen days written notice to the City of Denton 8 5 In the event of termination of this agreement resulting from the default of the City of Denton, as provided above, the Claims Administrator shall charge, and the City of Denton shall pay to the Claims Administrator all fees, commitments, and obligations incurred by the claims Administrator through such date of termination 8 6 The Claims Administrator hereby is designated the agent for service of legal process on behalf of the Plan at its principal office 8 7 Claims Administrator agrees that it shall be in compliance with all laws, statutes, and other governmental provisions prevailing during the term of this Agreement 8 8 It 1s agreed that Claims Administrator shall maintain and make available for inspection, audit and/or reproduction by an authorized representative of the City or any other governmental agency, books, documents, and other evidence pertinent to the costs and expenses of this contract This includes, to the extent such detail will properly reflect, all costs, direct and indirect costs of labor, material, equipment, supplies, and services and all other costs and expenses of whatever nature for which reimbursement is claimed under provisions of this Agreement Page 6 SECTION IX Effective Date and Term 9 1 This agreement shall become effective on January 1, 1988, provided that the City of Denton has adopted the Cafeteria Plan described in Section 1 1 If the City of Denton has not adopted the plan on or before January 1, 1988, this agreement shall become effective upon the date of adoption 9 2 This agreement shall be in effect for a period of one (1) year from the effective date as outlined in Section 9 1 9 3 This agreement may, however, be extended for up to two (2) additional one year periods, upon written approval from the City Manager IN WITNESS WHEREOF, the City of.Dentory and the Claims Ad i istrator have executed this agreement at V 94,� ,this day o Q 19J31 CITY OF DENTON, TEXAS ATTEST APPROVED AS TO LEGAL FORM DEBRA ADAMI DRAYOVITCH, CITY ATTORNEY THE CLAIMS ADMINISTRATOR EMPLOYEE RESOURCE ADMINISTRATION CORPORATION BY i JE ,` RE D 4397P 120387 1140