1987-2262125L
No
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 HERSBY 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~ day of~, 1987
ATTEST
DEBRA ADAMI DRAYOVITCH, CITY ATTORNEY
1HE STATE OF TEXAS § AGREEMENT PETI~EEN THE CITY
OF DENTON AND EMPLOYEE
RESOURCES ADMINISTRATION
CORPORATION
COUNTY OF DENTON ~
Thxs agreement, executed the 1st day of January, I988, is between
the City of Denton and Employee Resource Administration
Corporation, (the Claxms ^dmmlstrator), 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 whlch
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 Retire~ent
Income Security Act of 1974) ~s 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 Admnlstrator
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 C~ty o£ 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 Pro¥Ide claim review, examination, and benefit payments, ~n
acco dance with the Plan Document
e b~ntaln the Plan checking account, and all the necessary records
for the Plan (~f reqmred)
f Communicate the Plan to the C~ty of Denton employees ~n accordance
w~th the Claims Administrator proposal submitted on July 1S, 1987
g Prowde Information for form $$00 preparation
h Prepare ant~-d~scrmlnat~on report as required by law
2 2 The Claims Administrator ~s authorized to do all th~ngs ~t deems
necessary to carry out the terms and purposes of th~s Agreement,
Including the execution of documents ~n the name of the Plan
2 3 The Claims Administrator shall design and prowde all necessary forms
for the Implementation, admn~strat~on, and operation of the Plan
SECTION III
The City of Denton
5 1 The City of Denton shall assist the Claims Administrator ~n any
reasonable manner as to prowde the serwces as set forth by the Plan
Such assistance shall Include, but not be lm~ted to the following
a The C~ty of Denton shall prowde the Clams Administrator w~th a
complete hst of all employees who are eligible for benefits of
the Plan Thereafter, the City of Denton shall promptly not~fy
the Claims Administrator of any and all changes ~n employment for
purpose of determining eligibility for the Plan Notification
shall ~nclude termination, lay off, change In classification,
change ~n dependent status, or any other change that may affect
the eligibility of any employee of the C~ty of Denton
3 2 The City of Denton shall prowde 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 d~str~butlon by the Claims
Administrator may be carried out
a The C~ty of Denton shall collect the contr~butlons made by the
participants of the plan, In the manner ~t 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 ~ts hab~lltles, the City of Denton hereby agrees
to make all necessary contributions to meet the obligations
~ncurred by the Plan for ~ts eligible participants and eligible
dependents where applicable The Plan hab~l~t~es shall include
premiums, claims costs, and administration costs as billed by the
Claims Admnlstrator
Page 3
3 3 The City of Denton shall assist in the enrollment of the employees ~nto
the Plan, and shall maintain a supply of forms, enrollment cards or
other documents, ano shall distribute or make available such documents
to the employees
3 ~ 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 ~eneflts 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 amotmt 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 ~nwhole 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 ~he Claims Administrator shall be
responsible for the initial review of all disputed claims
SECTION V
Compliance ~lth ERISA and Indemnification of City
S 1 The City of Denton and the Claims Administrator agree to comply ~n 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
Clams Admn~strator agrees to ~ndemn~fy and hold the C~ty of Denton
harmless from any and all loss, damage and expense, ~nclud~ng court
costs and attorney's fees, resulting from and ar~s~n~ out of clams,
demands~ or lawsmts brought against the Claims Administrator for any
negligent act or omxssxon in administering the Plan
Further, the Claims Administrator agrees to indemnify the C~ty of
Denton and hold the C~ty of ~enton harmless against any and all loss,
damage and expense resulting from or arising out of dishonest,
fraudulent, or crm~nal acts o£ the Clams Administrator's officers
and/or employees~ acting alone or In collusion ~lth others
SECTION VI
6 1 The ~n~t~al set-up fee, for the f~rst year only, ~11 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 pa~d upon completion of open
enrollment Sa~d w~ll be based upon the number of employees that are
eligible to participate xn the Plan
The Clams Administrator shall be entitled to a fee for ~ts serwces to
the Plan and under th~s agreements ~h~ch shall be determned by the
number of employees enrolled by the C~ty of Denton at the begxnn~ng of
each month That fee shall be an annual charge of $12 00 per
a In addition, a fee of $3 00 shall be charged for each
nt per month
6 2 The fee agreed upon hereof shall be reviewed ~th any plan changes
and/or at least on an annual bas~s by both the C~ty of Denton and the
Claims Admn~strator to determine the adequacy of such fees The fees
prowded for herein may be adjusted by ~r~tten amendment to the
agreement approved by both part~es
SECTION ¥II
Termnat~on of A~reement for Claims Admn~strator
7 1 Th~s agreement may be terminated at any t~me by e~ther party by
prowd~ng n~nety days written not~ce to the other party Upon
notification of termmat~on by e~ther party, the Claims Administrator
shall continue to process all claims ~ncurred up to the date of
termnatlon, and shall, not later than s~xty days after the date of
termination, prepare and del~ver to the C~ty of Denton a f~nal and
complete accounting and report of the Plan's financial actlwtles
7 2 Should either party fall to perform ~n accordance w~th the prows~ons
of th~s Agreement, the other party may treat such failure as a default
of th~s Agreement and g~ve the defaulting party thirty (30) days'
WT~tten notice to cure such default In the event such default ~s not
cured w~th~n said time frame, the party g~v~ng such not~ce may
terminate th~s 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 polltlcal 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 fall to make any required
contributions to the Plan, the Clams Administrator shall have the
right to terminate this agreement upon fifteen days written notice to
the City of Denton
8 $ 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 is 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, prowded that
the C~ty of Denton has adopted the Cafeteria Plan described ~n Section
1 1 If the C~ty of Denton has not adopted the plan on or before
January 1, 1988, th~s 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 outhned in Section 9 1
9 3 Th~s agreement may, however, be extended for up to two (2) additional
one year periods, upon wrltten approval from the Clty~na~er
IN WITNESS I~HEREOF, the C~ty of Dentor~ and the Claxms Admn~strator have.
executed this agreement at~~ , this ~/~'~day o~
CITY OF DENTON, TEXAS
RAY S~PHENS/MAYOR
ATTEST
J~FER ~LTERS, CITY SECRETARY
APPROVED AS TO LEGAL FORM
DEBRA ADAMI DRAYOVITCH, CITY ATTORNEY
~HE CLAIY~S ADMINISTRATOR
E}z~LOYEE RESOURCE
ADMINISTRATION CORPORATION
JEI~Y/PiURD, PRESIDENT
4397P
120387 1140