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HomeMy WebLinkAbout1987-1692005L NO AN ORDINANCE AUTHORIZING THE MAYOR TO EXECUTE AN AGREEMENT BETWEEN THE CITY OF DENTON AND THE TEXAS POLITICAL SUBDIVISIONS EXPENDITUREOOFENSATION FUNDS, AND JOINTINSURANCE RANN EFFECTIVE FUND, HORIZING THE DATE THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS SECTION I. That the Mayor is authorized to execute an agreemen a ween the City of Denton and the Texas Political Subdivisions Workers' Compensation Joint Insurance Fund for the purpose of providing the statutory benefits prescribed by art and ch Workers' r the ms onditionsc ntainedin Compensation said agreementwhich uiseattachedrhereto and made a part hereof SECTION II That the City Council hereby authorizes the expen ture or funds in the manner and amount as specified in the agreement SECTION III That this ordinance shall become effective imme lately upon its passage and approval Q PASSED AND APPROVED this the e' _ day of 1987 ATTEST APPROVED AS TO LEGAL FORM DEBRA ADAMI DRAYOVITCH, CITY ATTORNEY BY /'w TEXAS POLITICAL JSUBDI I SIONS WORKER FUNDS' COMPENSATION NT (Flexible Cost Plus/Cash Flow Plan For Large Political Subdivisions) INTEPLOCAL AGREEMENT This Contract and Interlocal Agreement entered into by and between the Texas Political Subdivisions Workers Compensation Joint Insurance (hereinafterFund subdivisiooftherState eoftTexas 11(hereinafterFun") and hreferred itoeasp cal "Fund Member") for the purpose of providing the statutory benefits prescribed by Article 8309h of the Texas Workers' Compensation Act for employees of political subdivisions WITNESSETH The undersigned Fund Member in consideration of the adoption of a TexasoStatutes,�stoance as provideauthorized in Article 4orkerso' Compensation8benefitsratnasminimumted cost and in further consideration of other political subdivisions executing similar interlocal agreements does hereby agree to become a self -insured workers' compensation employer by becoming one of the members of the Fund The conditions of membership agreed upon by and between the parties are as follows 1. Definition of terns used in this Interlocal Agreement a Polit"Board" - refers to ical Subdivisions eWooard of Trustees of the exas Workers' Compensation Joint Insurance Fund b "Pemiuinr some parts rnd o pats ofthisbInterlocalre used Agreementter"heably Premium" is used to identify the rating formulas established by the State Board of Insurance, which are used as quidelines to establish Fund Members' cash contributions to the Fund Any reference at any time in this Interlocal Agreement to an insurance term not ordinarily a part of self-insurance shall be deemed for convenience only and is not to be construed as being contrary to the self-insurance concept except where the context clearly indicates no other possible interpretation such as but not limited to the reference to "reinsurance" d. "Servicing "Manual Ratesntrather'basicexas Fmployers' workers' cInsurance Association compensation rates applicable to each classification of employees promulgated by the State Board of Insurance e "Manual Premium the manual rate tofn'hpremium eachclssificationrcodto the e by applying is the payroll in anythat modifiersiorcation discountstss are applied "Exp difier" - hat actor ts f. FundeMember'soindividualtlossfexperiencehandfisce based on the State Board of Insurance experience rating plan g Standard Premium or Contribution" - the amount that is determined by applying the experience modifier of the Fund Member to the Fund Member's manual premium. While this ,,CostpPlus"mplanure doesnder the not reflectdpaymentssorered charges made, it does serve as a desirable benchmark and allows the Fund Member to compare its results with other entities of comparable size. h. "Fund Year" - October 1 through September 30 2. This Contract shall commence at 12 01 a m on the date shown as effective date" found on the signatory page of this contract, and shall remain in full force and effect until terminated as hereinafter provided. This Contract may be terminated by mutual consent or by sixty (60) days prior written notice by certified mail of such termination by either party. 3. Annually, each Fund Member FundI itsestimated shall tpayrollFund for eachPremium Worksheet form supplied bythe classification of employees The rates established by the State Board of Insurance shall be applied to arrive at a manual premium If the Fund Member has established, through experience, a modifier, then the experience modification of that Fund Member shall be used to arrive at the standard premium In the absence of an earned experience modification for the Fund Member, the manual rate as established by the State Board of Insurance will be used as a guide to produce a manual, as well as a standard, contribution The newly enrolling Fund Member who has not previously been a u derrthisof this "Costund or the Fund Plus" plant agrees ber who has not to pay the Fund, oniorsly beforerthe d inception date of this Interlocal Agreement, an initial deposit of one (1) month's estimated paid losses plus 1/12 of the administrative service charge, catastrophic excess of loss excess insurance/reinsurance charge, safetyaengineeringfchargee(ifsapplicable)/asisetrance forthcinrge, and Exhhe loss Exhibit p attached hereto On or before the beginning of the second month after theminceptionan date alfpthis Inasrdeterminedeabove the OnFordbeforertherees ake beinningthirdnception equalet fthethis actualInterlocal paid losses of the first month times (x) the loss conversion factor as set forth in Exhibit A, for claims administration services plus 1/12 of the annual administrative service charge, catastrophic excess of loss excess insurance/reinsurance charge, aggregate excess of loss excess insurance/ reinsurance charge, and safety engineering charge (if applicable). On or before the beginning of the fourth month of this Interlocal Agreement, a similar payment based upon the actual paid losses of the second month shall be paid each?and every tmonth thereafter,ubased o the Funwith eupon nt oactual nthly payments be paid paid losses The Fund Member who has previously been a member of this Fund prior to the inception date of this Interlocal Agreement and has operated under this "Cost Plus" plan agrees to pay the Fund for those services described in this Agreement and at the charges listed in Exhibit A attached hereto Each month's billing will include 1/12 of the annual charge for administrative services, safety engineering, catastrophic excess of loss excess insurance/reinsurance, and aggregate excess of loss excess insurance/reinsurance as set forth in Exhibit A attached hereto Also included in this billing will be an amount equal to the actual paid losses of the Fund Member times (x) the loss conversion factor as set forth in Exhibit A as the claims administration charge The actual paid losses of the Fund Member are those losses paid by the Fund on behalf of the Fund Member in the month which is two months prior to the billing month These payments are due at the beginning of the month, that is, for example, the December billing is due at the Servicing Contractor's office on December 1. It is further agreed that those charges (administrative services, catastrophic excess of loss excess insurance/reinsurance, aggregate excess of loss excess insurance/reinsurance, and safety engineering) that are based on standard contribution will be adjustable at the end of each Fund Year, based on audited standard premium which is calculated usine actual payrolls, manual rates, and experience modifiers. At the end of each Fund Year there will be submitted by the Fund Member actual payrolls as reflected on the books of the Fund Member The Fund reserves the right to audit the payroll records of any Fund Member It is further agreed that the Fund Member will maintain a loss deposit with osit e osit will be adjustaFund ble months to two leperiodicallytoeaccurately stimated areflect realisticid losses and s monthly loss payments After termination of this Agreement, the Fund will continue to handle claims with an accident date occurring durino the term of this Agreement until such claims are disposed of After termination of this Agreement, the Fund Member will pay the Fund each and every month, until all claims handled by the Fund are disposed of, only the monthly claims administration charge calculated as described above, and the monthly reimbursement of actual claims losses paid on behalf of the Fund Member as determined above In the event that the Fund Member fails or refuses to make the payments of charges as herein provided, the Fund reserves the right to terminate such Fund Member by giving ten (10) days written notice by certified mail and to collect any and all payments that are earned pro rata for the period preceding contract termination 4. The Fund has obtained specific excess of loss excess insurance/ reinsubehalfrofcits nFund gPlembers. The excessregate excess of sinsurance/reinsurance excess insurance/reinsuranceprotection is, however, optional with the Fund Member. If the Fund Member elects this protection, its election shall be indicated on Exhibit A 3 5. The Fund has contracted with the Servicing Contractor to supply safety engineering services to the Fund Member to assist them in following a plan of loss control that may result in reduced losses The Servicing Contractor shall provide all of the services as provided in the service contract entered into by and between the Servicing Contractor and the Fund or as may be modified for the individual Fund Member The Fund Member agrees that it will cooperate in instituting any and all reasonable safety regulations that may be recommended for the purpose of eliminating or minimizing hazards that would contribute to workers' compensation losses. In the event that the recommendations submitted by the Servicing Contractor on behalf of the Fund seem unreasonable, the Fund Member has a right to appeal to the Board of Trustees The Board shall hear the objections of the Fund Member at its next regularly scheduled meeting and its decision will be final and binding on all parties The safety engineering services provided are, however, optional with the Fund Member If the Fund Member elects this service, its election shall be indicated on Exhibit A 6. The Fund Member agrees that it will appoint a workers' compensation coordinator of department head rank, and that the Fund and its Servicing Contractor shall not be required to contact any other individual except this one person Any notice to or any agreements with the workers' compensation coordinator shall be binding upon the Fund Member. The Fund Member reserves the right to change the coordinator from time to time but when doing so agrees to give written notice to the Fund 7 The Fund, through the Servicing Contractor employed by the Fund, agrees to handle any and all claims after notice of injury has been given, to prepare all required Industrial Accident Board forms, and provide a defense The Fund Member hereby appoints the Servicing Contractor as its agent to act in all matters pertaining to processing and handling of workers' compensation claims and shall cooperate fully in supplying any information needed or helpful in such defense They shall carry on all negotiations with the injured employee and his attorney at the prehearing conference and negotiate within authority previously granted by the Fund If a personal appearance by a representative or a co - employee is necessary, the expense of this appearance will be paid by the Fund Member. The Servicing Contractor will retain and supervise legal counsel on behalf of and at the expense of the Fund necessary for the prosecution of any litigation All decisions on individual cases shall be made by the Fund through the Servicing Contractor, which includes the decision to appeal or not to appeal an Industrial Accident Board's final ruling and decision. However, any Fund Member shall have the right in any case involving one of their employees, to consult with the Fund on any decision made by the Servicing Contractor The Board shall hear the objections of the Fund Member at its next regularly scheduled meeting and their decision will be final and binding on all parties Any suit brought or defended by the Servicing Contractor and the Fund shall be in the name of the political subdivision Notwithstanding any provisions of this paragraph, all reports and filings required by the Workers' Compensation Law and the Industrial Accident Board of any employer will be the responsibility of the Fund Member. It is further understood that this agreement does not cover discrimination suits under Article 8307c. There shall be supplied periodically to each Fund Member a computer printout involving a statement of claims, claims status, and activity report cumulative for each Fund Year 8. The Fund Member acknowledges that it has received a copy of the Bylaws of the Fund and agrees to abide by the Bylaws and any amendments thereto. 9. The Fund agrees that all Fund transactions will be annually audited by a nationally recognized, certified public accounting firm 10. The Fund Member agrees to pay any Industrial Accident Board maintenance tax that may be imposed and the Fund agrees to file the necessary tax forms with the Internal Revenue Service 11. Any party hereto paying for the performance of governmental functions or services shall make payments therefor from current revenues available to the paying party. 12. The Fund further agrees to provide a complete range of admini- strative services to include, by way of example, but not of limitation, the following a. Statement of claims printouts rendered monthly and keyed by designated functions or departments b Monthly billing statements for reimbursement of current payments plus contracted fees c Semi-annual printouts of all claims including prior Fund Years indicating current incurred loss valuation d. Maintenance of loss and payroll statistics for determination of the Fund Member's experience modifier 13. The Fund agrees to provide Employers Liability Insurance coverage (commonly called coverage B), in accordance with and to the same extent as, the provisions of Part Two -Employers Liability Insurance of the standard Workers Compensation and Employers Liability Insurance Policy, as approved by the Texas State Board of Insurance, including the Texas Amendatory Endorsement as it is applicable to such Part Two, except as follows a. In Part Two, paragraph A, 2, the state or territory listed is to be Texas b. In Part Two, paragraph G, the limits of liability of this coverage are to be as follows Bodily Injury by Accident $100,000 each accident Bodily Injury by Disease $100,000 each accident Bodily Injury by Disease $500,000 policy limit It is understood that this Employer Liability coverage does not cover discrimination suits under Article 8307c d References to "workers' compensation" in this Interlocal Agreement shall include Employers Liability Coverage unless the context clearly shows otherwise All other provisions of this Interlocal Agreement shall apply to this Employers Liability Coverage unless the context clearly shows otherwise e. The Fund agrees to provide at no additional charge Employers Liability Coverage at the following limits Bodily Injury by Accident $100,000 each accident 000 each accident Bodily Injury by Disease Bodily Injury by Disease $500,000 policy limit If the Fund Member elects higher limits than this, the Fund Member agrees to pay an additional charge for the higher limits at a mutually agreeable rate The higher limits and corresponding charge, if so elected, shall be indicated on Exhibit A 14 No accidental errors or omissions upon the part of either party shalt relieve the other party of its responsibilities under this Agreement, provided such errors or omissions are rectified as soon after discovery as possible. The Fund shall not be held accountable for any increased cost or expense to the Fund Member under any contention that a claim, safety engineering, or an administrative service could have been handled differently except that the fund may be held accountable for any deliberate or willful failure to carry out reasonable instructions of the Fund Member with respect to a specific matter 15 The Fund Member will be solely responsible for future benefits payable and for funding its net reserve The Fund Member agrees to hold the Fund harmless from any and all claims (including attorney fees) that may be asserted against the Fund for the non -payments of any claim due to the failure of the Fund Member to maintain adequate reserves for the payment of claims. EXRIBIT A CITY OF DENTON TPS WORKERS' COMPENSATION JOINT INSURANCE FUND 1 The Fund shall at all times provide for specific excess of loss (catastrophe) reinsurance of the Fund Member excess of $ 200,000 for any one accident or occurrence up to a maximum limit of $ 10,000,000 for any one accident or occurrence 2 It is mutually agreed that the fees payable for services and excess reinsurance under this contract shall be based on the following schedule Claims Administration 7 5% of Paid Losses Administrative Services 3 0% of First $100,000 of Standard Contribution ,1 5% of Next $400,000 of Standard Contribution,0 75% of Standard Contribution over $500,000, Not to Exceed Overall Charge of $25,000 Safety Engineering 1 0% of Standard Contribution Catastrophe Reinsurance 4 3% of Standard Contribution IN WITNESS WHEREOF, the parties have hereunto set their hands by their representatives thereunto duly authorized this day o , Contract Number H0165 10-1-87 Effective Date TEXAS POLITICAL SUBDIVISIONS WOPKERS' COMPENSATION JOINT INSURANCE FUND B U\g and ecretary Dallas, Texas FOR Cit of Denton Fund Member Name BY hors d f c ur Signate b Title Denton , Texas The Workers' Compensation Coordinator for the Fund Member is COORDINATOR NAME Harlan Jefferson FUND MEMBER NAME Citv of Denton ADDRESS 901-B Texas Street CITY Denton, TX ZIP 76 3-0.____ TELEPHONE 817-566-8320