2004-078
ORDINANCE NO. ,/,(J()ll () 1 if
AN ORDINANCE OF THE CITY OF DENTON, TEXAS APPROVING THE AMENDMENT
OF AN AGREEMENT BETWEEN THE CITY AND MCDONALD TRANSIT ASSOCIATES,
INe. FOR THE OPERATION OF BUS SERVICES DATED APRIL 16,2002, AS AMENDED,
TO ALLOW THE CITY TO PROVIDE INSURANCE COVERAGE THROUGH THE TEXAS
MUNICIPAL LEAGUE INTERGOVERNMENTAL RISK POOL ("TML RISK POOL");
APPROVING AN INTERLOCAL AGREEMENT BETWEEN THE CITY AND THE TML RISK
POOL TO PROVIDE SUCH INSURANCE; AND AUTHORIZING THE CITY MANAGER OR
HIS DESIGNEE TO EXECUTE THE AMENDMENT ON BEHALF THE CITY AND THE
MAYOR TO EXECUTE THE INTERLOCAL AGREEMENT ON BEHALF OF THE CITY;
AUTHORIZING THE EXPENDITURE OF FUNDS; AND PROVIDING FOR AN EFFECTIVE
DATE.
WHEREAS, The City has previously entered into an agreement with McDonald Transit
Associates, Inc. ("McDonald") dated April 2, 2002, as amended (the "Existing Agreement") to
provide bus service for the City; and
WHEREAS, the City and McDonald have determined that cost savings will be obtained by
amending the Existing Agreement in substantially the same form as the amendment attached hereto
and made a part hereof by reference (the "Amendment") to allow the City to provide insurance
coverage, at McDonald's expense, through an interlocal agreement with the Texas Municipal
League Intergovernmental Risk Pool (the "TML Risk Pool") in substantially the same form as the
interlocal agreement attached hereto and made a part hereof by reference (the "Interlocal
Agreement"); and
WHEREAS, the City Council finds that the Amendment and the Interlocal Agreement are in
the public interest; NOW, THEREFORE;
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
SECTION I. The findings and recitations contained in the preamble of this ordinance are
incorporated herein by reference.
SECTION 2. The Amendment and the Interlocal Agreement are hereby approved. The City
Manager or his designee is hereby authorized to execute the Amendment on behalf of the City. The
Mayor, or in her absence the Mayor ProTem, is hereby authorized to execute the Interlocal
Agreement on behalf of the City. The City Manager, or his designee, is authorized to make the
expenditures provided for in the Amendment and lnterlocal Agreement and to exercise the City's
rights and duties under the Amendment and Interlocal Agreement and to execute any other
documents on behalf of the City necessary to obtain the insurance coverage.
SECTION 3. This ordinance shall become effective immediately upon its passage and
approval.
PASSED AND APPROVED this the e~,~day of
ATTEST:
HtiRBER~Y~ ATTORNEY
EULINE BROCK, MAYOR
Page 2
AMENDMENT TO AGREEMENT TO PROVIDE
SERVICES FOR PASSENGER MOTOR CARRIER TRANSIT SYSTEM WITH
MCDONALD TRANSIT ASSOCIATES, INC.
THIS AGREEMENT is made as of the date set forth below by and between the City of
Denton (the "City") and McDonald Transit Associates, Inc. a Texas Corporation (hereinafter
referred to as "Company").
WHEREAS, on April 16, 2002 the City and the Company entered into that certain
Agreement to Provide Services for Passenger Motor Carrier Transit System which was amended
in part, providing for the operation of a Passenger Motor Carrier Transit System for the City of
Denton, Texas (the "Agreement"); and
WHEREAS, the City and the Company desire to further amend the Agreement to provide
for the establishment of a corporation to act as the City's agent to provide employee support
services under the Agreement and to revise the insurance provisions under the Agreement; and
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, the parties hereby agree as follows:
1. Section III of the Agreement is amended to add the following provision:
"The Company shall establish a corporation with the name of Denton Transit
Management, Inc. (the "Management Company"). The Company will cause the
Management Company to employ all personnel necessary for the operation of the
Transit System. The City hereby designates the Management Company as its
agent to provide employee support services for the operation of the Transit
System. The City will continue to provide maintenance services. The
Management Company shall provide all insurance required by Section XII of the
Agreement. Such insurance coverage shall include naming the University of
North Texas, its employees, officers and agents as additional insureds. The City
retains the option to provide workers' compensation coverage to the employees of
the Management Company pursuant to Chapter 504 of the Texas Labor Code.
The City also retains the option to maintain automobile liability, general liability
and other coverage as may be appropriate for the Management Company, its
employees and volunteers with a combined single limit of not less than
$1,000,000.00 per occurrence. Should the City elect to maintain such insurance,
the Company shall be responsible for paying all premiums, contributions and any
per claim or per policy deductibles. The Company and the Management Company
are independent corporate entities, which shall in no way be deemed to be
affiliates, partners, subsidiaries, joint venturers, or other entities under the control
of the City."
2. All other terms and conditions contained in the Agreement that are not expressly
amended or changed by this instrument shall remain in full force and effect.
Page 1 of 3
2004.
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
HERBE~~TORNEY
CITY OF DENTON, TEXAS
Michael ~. ~onduff,~Manager
MCDONALD TRAflSIT/~-~
^ssoc~^z,~,,~ F
By: RO~3i~T T.?BABB~T
PRESIDENT
The University of North Texas ("LINT") has signed below evidencing its consent to the above
amendment and agrees that the insurance requirements contained in the Interlocal Agreement
between the City and UNT for bus services dated December 10, 2002 as amended by Interlocal
Agreements dated April 16, 2002 and July 16, 2003, may be provided by the City through a
contract with the Texas Municipal League Intergovernmental Risk Pool by naming LINT as a
covered governmental entity pursuant to an endorsement in substantially the same form as the
document attached hereto and made a part hereof by reference as Exhibit "A".
ATTEST:
APPROVED AS TO FORM:
GENERAL COUNSEL
BY:
UNIVERSITY OF NORTH TEXAS
Phillip C.'Di~belr !
Vice President for Finance and
Business Affairs
Page 3 of 3
'~ , ', :::; .: .. ~ me~fies,~ c~ato ~ is a~orded by ~e pro~sio~ of~e cover~es sno~
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G o~zcra ~nt~t,'E~fily:
Address:
D~scription
T~XAS MUNICI~AL L]~AGU~ IINTERGOVERNlV~ENTAL RISK POOL
Texas Municipal League
In[ergovernmental Risk Pool
1821 Rutherford Lane, First Floor · Austin, Texas 78754
RECEIVED
MAR ! 2 200
CITY OF DENTON
LEGAL DEPt.
LIABILITY/PROPERTY INTERLOCAL AGREEMENT
This Con~'act and Interlocel Agreement is entered into by and between political subdivisions of this state (hereinafter referred to as "Pool
Members") to form a joint serf-insurance pool to be named the Texas Municipal League Joint Serf-Insurance Fund (hereinafter referred to as
the "Fund") for the purpose of providing coverages against risks which are inherent in operating a political subdivision.
W1TNESSETH:
The undersigned Pool Member, in accordance with the/nterlocal Cooperation Act, Tcx. Gov't Code § 791.001, et seq., and the interpretation
thereof by the Attomey General of thc State of Texas (Opinion/f/vlW-347, May 29, 1981 ), and in consideration of other political subdivisions
executinglike agreemepts, dces hereby agree to beoome one of thePool Members ofthis self-insuredpool. The conditions of membership agreed
upon by and between the pe~ies are as follows:
1. Defiaitioas of terms used in this latefloeal Agreement.
Board. Refers to the Board of Trustees of the Texas Municipal League $oint Serf-Insurance Fun&
b. Fund Year. 12:01 a.m. October 1 fl~rough 12:01 a.m the following October 1.
c. Manual Rates. The basic rates applicablo to each liability classification promulgated by the Insurance Service Office or the Board of
Trustees.
d. TML Municipal Liability Serf-Insurance Plan. The liability coverage document that sets forth in exact detail the coverages provided
as part of the overall plan.
e. Adjnsmacets. Refcrstoanyoffsetstomanualpreminmthatmayrestflt fxomtbePoolMember'salectlonofdeductibles, loss experience
or Fund Medifier which reflects the savings to the Pool Member by entering into this Agreement.
f. TML Manicipal Property Self-Insurance Plan. The propon3, coverage document that sets forth in exact detail the coverages provided
as part of the overall plan.
Premium and Contrbution. Used intemhangeably in some parts of this lnteriocal Agreement. Any reference at any time in this
Interlocal Agreement to an insurance term not ordinarily a pan of serf-insurance shall be deemed for convenience only and is not
cons~ued as being contrary to the self-insurance concept except wbem the context clearly indicates no other possible interpretation
such as but not limited to the reference to "reinsurance."
Reimbursable Deductible. The amount that was chosen by this Pool Member to be applicable to the first monieS paid by the Fund to
effect judgment or settlement of any claim or suit. The Pool Member, upon notification of thc action taken, shallprompfly reimburse
the Fund for all or such part of the deductible amount as has been paid by thc Fund. Further, however, the Fund's obligation to pay
damages nhall be subject to the Limits of Liability stated in the Declarations of Coverage or Endorsements to this lnterlocal Agreement
lass the stated deductible amount.
i. Fund Moditier. A percentage figure thatis applied to tbe munualrates by the Fund to refleet the savings to the Pool Member by entering
into the lnteflocal Agreement
j. AgreementPerkzl. Thec~ntinu~nsper~~dsinceth~Poo~Member~rstbecum~amember~fthisFundexc~uding~h~wever~anyper~~d
or periods of lime therein that the member did not participate as a member of the Pool.
k. Declarations of Coverage. The specific indication of the coverages, limits, deductibles, contributions and special provisions elected
by each individual Pool Member. The Declarations of Coverages may be modified by Endorsement
2. The Board of Trustees, acting through its agents and Fund staff, is responsible for the administration of all Fund business on behalf of
the Pool Membem
Revised 10/90
In consider~on of the execution of this Agreement by end between the Pool Member and the Food and of the contributions of the Pool
Member, the coverage elected by the Pool Member is afforded according to the terms of the TML Liability Self-Insurance Plan and the
TML Property Self-Insurance Plan. The affirmative declaration of contributions and limits of liability in the Declarations of Coverage
and Endorsements determines the applicability of the Self-Insurance Hans.
Each Pool Member agrees to adopt end accept the coverages, provisions, terms, conditions, exclnsions and llmltalions as further provided
for in the TML Self-Insurance Plans or as specifically modified by the Pool Member's Declarations of Coverage. This hteriocal
Agreement shall be construed to incorporate the TML Liabil/ty Self-Insurance Plan and/or the TML Property Self-Insurance Plan,
Decisrafions of Coverage, end Endorsements and addenda whether or not physically attached hereto.
It is understood that by participating in this risk sharing mechani~ra to cover liability exposures, the Pool Member does not intend to waive
any of the immunities that its officers or its employees now possess. The Pool Member reco~iTes the Texas To~ Claims Act and its
limitations to ~ governmental functions as well as its monetary limitations and that by executng this Agreement does not agree to
expend those limitations.
The Pool Member, upon tho execution of this Agreement, shall supply the Food with a current copy of its charter provisions or ordinance
that sets out its requirement as to the number of days in which a third party liability clalm must be made against it.
If the Pool Member does not have such an ordinance provision that establishes a set number of days or if it has an ordinance provision
which provides for less than sixty (60) days notice end for good cause shown up to six (6) months notice the Pool Member agrees to adopt
an ordinance providing for such notice reasonably describing the damage or injury claimed and the time, manner end plece of the incident
from whichit arose. The notice requiremeut ~hall not be chenged by the Pool Member without first giving the Fund thirty (30) days written
notice. Violation of this provision may, at the Fund's discretion, void this hitedocal Agreement.
Tho term of this Agreement and the self-insurance provided to the PoolMember shall be continuous comR~e_ nclng 12:01 a.m. on the date
designated in this Agreement ootil terminated as provided below. Although the self-insurance provided for in this Agreement shall be
confinuons ootil terminated, the limit of liability of the Food ooder the coverages that the Pool Member elects shall be limited during any
Fund Year to the mount stated in the Declarations of Coverage for that Fund Year.
This Agreement may be terminated by either party giving to the other sixty (60) days prior written notice of intent to terminate except the
Pool Member may terminate this Agreement and its coverages thereooder without giving the sixty ( 60 ) days notice if the reason is because
of a change by the Fund in the Pool Member' s conffibufion, coverage, or other change in thelimits of liability, terms, conditions, exclusions
and limitations provided for in the Texas Municipal League Self-Insurance Plans provided that no termination by the Member
shall be effective prior to the date that written notice of termination is actually received in the offices of the Texas Municipal League Joint
Self-Insurance Food and provided that the Pool Member agrees to and shall pay the applicable premium and contribution for those
coverages it is terminating until the date the notice of marion is actually received by the Food.
The Food shall provide the Pool Member -with Declarations of Coverage and any Endorsements that determine the applicability Of the
Texas Municipal League Self-Insurance Hans annually by December 1. Such Declarations of Coverage shallincinde, but not be limited
to, the coverage period which shall be the applicable Fund Year, limits, deductibles, contributions, special provisions and limitations.
Changes made during the Food Year, whether requested by the Pool Member or required by the Food, will be handled by Endorsement.
h is the intention of the parties that the Pool Member's coverages under this Agreement shall remain in rill force and effect from Fund
Year to Fund Year, subject to the limits of habillty that the Food can provide each Food Year and the terms, conditions, limitations that
the Food may require to protect its solvency and to comply with reinsurance requirements, ootil notice of termination is given as herein
provided. Roallzlng that the Pool Member needs the earliest possible information concerning the Fund coverages, limits, and exclusions
and the Pool Member's contribution that will be required for any new Food year, the Fund will endeavor to provide this information as
soon as possible before the begqnnlng of each Fund Year. The parties recognl7~, however, that conditions in the reinsurance industry are
such that the Fund may not be able to provide this information to the Pool Member before the.be~nnln g of a Food Year for various reasons
including the failure of the Pool Member to timely submit the appropriate exposure summary or delays on the part of reinsurers in getting
· information to the Food, and so, to protect the POOl Member from gaps in its coverage and to protect the solvency of the Food, the parties
agree as follows:
Iff for any reason other than the Pool Member's failure to provide the information requested in the exposure summary, the Fund has not
been able to provide the PooI Member with information concerning available coverages for a new Fund Year or advise the Pool Member
of the amount of its contribution for the new Fund Year by the beginning of the Fund Year, the Fund shall nevertheless continue the Pool
Member's coverages at the same limits of liability (if still available and if not, then at the highest limit of liability available for the new
Fund Year) so that the Pool Member shall at all times remain covered as herein prov~led and the Pool Member's initial contributions
for the new Fund Year shallbe determined by a "tentative contribution" as determined by the Board with the PooIMember's actualannual
Re~sedl~90
10.
11.
contribution to be credited by the amount paid in accordance with the tentative contribution and adjusted during the Fund Year. In the
event the Pool Member does not wish to have it~ coverages extended or renewed at the end of any Fund Year, the burden shall be upon
the Pool Memberto give written notice to the Fund as provided hereinabove and the Pool Member agrees to pay as hereinobove stated
all contributions or pro rata contributions~until the date such written notice is received in the offices of the Fund or the date of termination
of this Agreement, whichever is later.
Commensurate with the execution of this Agreement and annually thereafter, the Pool Member shall complete the appropriate exposure
summary and deliver it or cause it to be delivered to the Fund. or, if so inslructed, to a designated contractor, no later than September 1
of each year and new annual contributions shall be calculated using mamlal rates times expoaBr~, less any adjnsmaents. Intentional or
reckless misstatements on the exposure ~mmary shall be grounds for cancellation. In the event that the Pool Member fails or refuses
to submit the appropriate exposure snmmary, the Fund reserves the right to termi hate such Pool Member by giving thirty (30) days written
notice'and to collect any and all contributions that are'earned pro rata for the period preceding conWact termlnalion.
The Pool Member agrees to pay the annual contribution to the Fund in four (4) equal quarterly installments, in advance, commencing
at the be~nnlng of this Agreement with subsequent installments due the :l~Lr S t quarter thereafter. Pool Members who ulect a deductible
in excess of $25,000 shall comply with the monthly payment schedule outlined to them in advunce of assnmin$ such a large deductible.
In the event this Agreement is terminated as herein provided, the Fund ahall promptly repay to the Pool Member any such unearned annual
eontfibulion prorated as of the date of termination and the Pool Member agrees during the term of this Agreement to promptly pay all
reimbursable deductibles upon receipt of statement.
At the end of each and every Fund Year, the Fund may require the Pun1 Member to submit the actual data requested on the exposure
summary as reflected by the books and records o£the Pool Member. The Fund reserves the right to audit the records of any Pool Member
end adjust contributions accordingly.
In the event that the Pool Member fa.lis or refuses to make the payments, including accrued interest, as herein provided, the Fund reserves
the right to terminate such Pool Member by giv~g them ten (10) days written notice and to collect any and all amounts that are earned
pm rata for the period preceding contract termination. If the amounts owed, including reimbursable deductibles, have to be collected by
suit, the PoolMember agrees to pay attorneys' fees end costs incurred in such suit.
The Fund shall maintain acetate protection from catastrophic losses to protect its financialintegrity. Aggregate protection shall also be
maintained. The Member's conffibutious shall be limited to that amount as calculated under this Agreement.
Notwithstanding the provisions of the foregoing paragraph, it is agreed the Board shall have the fight to adjust the financial protection
outlined above and/or amend coverages as it finds available or deems necessary to maintain the fiscal soundness of the Fund at the
be~nning of or during any Fund Year.
The Fund will make available loss control services to the Pool Members to assist them in following a plan of loss control that may result
in reduced losses. The Pool Member ag~..s that it will cooperate in instituting any and all reasonable loss cuntrol recommendations. In
the event that the recommeudatious submitted seem ~ounble. the Pool Member has a right to appeal to the Board of Trustees. The
Board shall hear the objections of the Pool Member at its next regularly scheduled meeting and its decisions will be final and binding on
all parties. Any Pool Member who does not agree to follow the decision of the Boant shall be withdrawn from the Fund immediately.
· The Pool Member agrees that it will appoint a contact of department head rank, and the Fund shall not be required to contact any other
individual except this one person. Any notice to or any agreements with the contact shall be binding upon the Pool Member. The Pool
Member reserves the right to change the contact from time to time by giving written notice to the Fund.
The Fund agrees to handle all liability and property claims, and provide a defense for any and all liability claims covered under this
Agreement after prompt notice has been given. The Pool Member hereby appoints the Fund staff and Contractors as its agents to act in
all matters pertaining to processing end handling of clalma covered under this Agreement and shall cooperate fully in supplying any
information needed or helpful in settlement or defense of such claims. As respects liability cIalmn, the Fund staff and Contractors shall
carry on all negotiations with the clalmaut and hi8 atturnoy and negotiate within authority previously granted by the Fund. If a personal
appearance by the Pool Member ur an employee is necessary, the expense of this appearance will not be the responsibility of the Fund.
With the advice and consent of the Fund, the Fund staff and the Contractors. will retain and supervise legal counsel for the prosecution
and defense of any litigation, All decisions on individual cases shall be made by the Fund through the Fund staff and the ConU'actors,
which includes the decision to appeal or not to appeal. However, any Pool Member shall have the right in any ease to consult with the
Fund on any decision made by the Fund staff or Contractors. The Board shall hear the objeclions of the Pool Member at its next regularly
scheduled meeting end its decision will be final end binding on all parties. Any suit brought or defended by the Fund shall be brought
or defended only in the name of the Pool Member and/or its officers or employees. There shall be supplied periodically to each Pool
Member a computer printout involx~ing a statement of claims. As respects the TML Municipal Liability Self-Insurance Plan, the Fund
Revised 10/90
12.
13.
14.
15.
16.
shall have priority in enforcing its subwgation c!aim ~ against the claim s of Pool Member except as to elalm ~ of the Texas Municipal League
Workers' Compensation Joint Insurance Fund, which ~h~ll ~ preference.
The Pool Member acknowledges that.it has received a copy of the Bylaws of the Fund and agrees to abide by the Bylaws and any
ansendments thereto.
The l~.nd agrees that all Fund transactions will be annually audited by a nationally recognized certified public accounting finn.
If legally required, the Fund ahall cause to be filed the necessary tax forms with the Internal Revenue Service.
As the admini sRators of the Fund, the Board shallprl madly and consistently keep foremost in their deliberations and decisions in operating
the Fund that each of the participating Pool Members is a "self-insorecL" At least annually, the Board shall carefully review, study and
consider the actual clalms or loss experience (including reserves for future claims payments) of each of the Pool Members, the pro rata
savings to the Fund resulting from overall loss experience a~ributed to each Pool Member, and the pro rata portion of the cost of all
catastrophic loss protection and aggregate stop loss protection allocated to each Pool Member as well as the pro tutu allocation, as
determined by the Board of the other and necessary administrative expenses of the Pool, in order to reasonably determine the actual pro
rata cost, expense and loss experience of each Pool Member in order to maintain as nearly as possible an equitable and reasonable self-
JlBorance arlmlni~tration of the Fund as applied to each Pool Member.
The Fund shall maintain case reserves and supplemental reserves computed in accordance with standard actuarial principles, taking into
account historical and other data, designed to measure claims development and claims inculred but not yet reported, so that funds will
be available to meet these clalmg as they become due. The Fund shall also establish and maintain a reserve for Return of Contributions
to further ensure the fiscal integrity of the Fund in the event of a potential adverse loss devciopmenC Only current Pool Members may
'receive return of contribution.
The Pool Member may elect to participate in the Fund only to the extent of obtainl n g administrative services, and, if desired and available,
reinsurance. In that event, the Pool Member shall not m~ke contributions as provided in Paragraph 5 nor receive the coverages provided
for in the TML Serf-Insurance Plan, nor shall the TML Joint Self-Insurance Fund be liable for the payment of claima against the Pool
Member. The Fund shall only handle and service claims for the Pool Member and pay s amc out of funds to be deposited by the PoolMember
in a separate account administered by the Fund for the payment of claims and judgments only against that Pool Member as hereinafter
provided.
Notwithstanding the provisions of any other section of this Interlocal Agreement, a Pool Member who elects to receive Admlnistllttive
Services Only as specifiedin the attached Declarations (hereinafter referred to as the "AS O Pool Member') shallbe subj eot to the following
requirements and conditions:
Although the ASO Pool Member will receive coverage documents setting forth the coverages, provisions, tea'ms, conditions,
exclusions and limitations provided for in the TIVlL Serf-Insurance Plans, these documents are not intended to and shall not create
aninsured-lnsurer relationship between the Fund or any of its other Pool Members and the ASO Pool Member, but rather are provided
solely for theporposes of: (1) definlng the scope of clalms the Fund will handle on behalf of the ASO Pool Member, and (2) defining
the nature and scope of claim~ and conditions applicable thereto that will be covered by reinsurance, if available and obtained by
the ASO Pool Member, beyond the ASO Pool Member's self-insared retention. The Fund shall not itself be liable for the payment
of elelm~ or judgments against the electing ASO Pool Member, nor to pro'ride the electing ASO Pool Member with a defense of any
such claims or suits at the expense of the F~nd. The Fund will only make payments on behalf of the ASO Pool Member out of the
ASO Pool Member's clalma account. The ASO Pool Member shall comply with all requirements of any reinsurer including but not
limited to furnishing timely claims reports, proposed settlements that would impact the reinsurer as well as progress reports involving
litigation. The ASO Pool Member further agrees to hold the Fund hamaless from any and all ¢laimn (including attorney fees) that
may be asserted against the Fund for the non-payment of any claims due to the failure of the ASO PoolMember to maintain adequate
reserves for the paymem of claims as well as claims based upon breach of a duty of good faith and fair dealing because of the ASO
Pool Member's or their agents' conduct toward the claimant.
B. lh connection with claims within the scope of the coverage documents, the Fund shall provide the following services or on behalf
of the ASO Pool Member as.cunfLrmed specifically in tho attached Declarations:
1. Overall conWact and claimn attminiatration;
2. Loss control services to the ASO Pool Member to assist it in developing a plan of loss control to attempt to control or reduce the
frequency and severity of claim~ agnin~t it;
Reviaed 10/90
3. Claims servicing including investigation and recommendation by the Fund's conlractors; periodic meetings with the ASO Pool
Member's cl,lm~ official or elaim~ committee attended by representatives of Contractors;
4. Claims administration including coordination and recommendation of defense; reserve recommanda~ions; claims handling and
defense recommendations by the Fund claims manager and assistants, as well as review of all files to monitor the ASO Pool
Member' s self-insurance exposure; participation by Fund staff member(s) in the periodic meetings to review claims with the ASO
Pool Member's elalms official or claims committee.
5. Storage and retention of claims records; periodic MIS reports detailing claims and loss information and history.
The Fund shall charge the ASO Pool Member its usual and customary charges for the aforesaid services based on actual services provided.
Allocated claim expenses, including defense attorney's fees, discovery fees, expert and wimess fees and Court costs shall be paid by the Fund
on behalf of the ASO Pool Member out of the ASO Pool Member's claims account as part of the administrative services provided bY the Pool,
but shall never be an expense or liability of the Fund but rather is solely that of the ASO Pool Member.
The Fund shall handle all liability and automobile physical damage claim~ and oversee, coordinate and make recommendations in connection
with the defense of any and allliability lawsuits coveredunder this Agreemeut after prompt notice has been given. The ASO Pool Member bereby
appoints Fund staff and Conlractors as its agents to act in all matters pertalnln 5 to processing and handling of cl alto s covewd under this Agreement
and shall cooperate fully in supplying any information needed or helpful in settlement or defense of such claims. As respects liability ciaims,
the Fund staff and Conh'actors shall cany on all negotiations with the clalma~lt or his attorney, but no settlement shall be made without express
prior approval of the ASO Pool Member. All claims will be discussed with the ASO Pool Member's claims official or claims committee on
a periodic basis. As information on each cl aim develops, the Fund staff and Coniractors shall make recommendations concerning claim reserves,
settlement and whether or not a case should be tried or settled or a judgment should be appealed, but all decisions on individual cases shall be
made by the ASO Pool Member. Ia the event of litigation, the Fund staff and Contractors will retain on behalf of the ASO Pool Member legal
counsel approved by the ASO Pool Member to represent it and will supervise the defense of the litigation, including any appeals. '
The ASO Pool Member shall, establish in its name a "clalms account" at a bank designated by the Fund, out of which the Fund, through its agents,
shall pay on behalf of the ASO Pool Member qtmlified claims or losses and allocated claims expense including court costs, fees and expenses
of attorneys, independent investigators, experts and wimesses and all other costs, charges or expense properly chargeable to a qualified claim
or loss. Funds shall be provided at the inception of the ASO Member's self-insurance program and promptly from time to lime under the
following formula based on estimates furnished by the Fund of the anticipated or actual level and voltune of qualified claim~ or losses and
allocated expenses: The ASO Pool Member shall deposit into the account initially an amount equal to one-fourth qA) of the estimated volume
of qualified clalm, or losses and allocated claim expenses during the first twelve (12) months of its self-insurance program and each month
thereafter, or sooner if necessary, shall deposit into the account an amount sufficient to restore, maintain or increase the account balance to an
amount equal to one-fourth (~A) of the estimated volume of qualified c] alma or losses and allbcated claim expenses during the next twelve (12)
manths;
The Fund shall account to the ASO Pool Member monthly for all expenditures from the claims account. If at any time the c]almn ac, oount balance
drops to below fffiy percent (50%) of the balance currunfly called for under the above formula, the ASO Pool Member shall promptly deposit
additional funds to restore the full balance. During any period of firae that the claims account balance is fifty percent (50%) or less of that currently
called from under the formula, only allocated claim expenses shall be paid out and the ASO Pool Member shall directly pay qualified claims
or losses out of other funds until it deposits into the claims account the amount necessary to restore the account to its full balance. Ia the event
payment of a qualified claim or loss wouldreduce the claims account balance to less than fifty percent (50%) of that called for under the formula,
the ASO Pool Member shall be promptly notified and shall either pay the qualified ciaim or loss directly out of othes funds or deposit into the
claims account sufficient funds for its payment.
It is expressly understood that the Fund shall not be required to advance its own funds or those of the Joint Self-iasurance Fund to pay
or losses or allocated expenses hereunder, or continue to perform any services hereunder if the ASO Pool Member fails to provide necessary
and adequate funds as herein set forth.
It shall be the sole respons~ility of die ASO Pool Member to establish and malniain adeqante resorves in addition to the limited funds in the
claims account for payment of all claims, including catastrophic claims, The Fund will provide reserve recommendations and estimates of
liability exposures, but both pardes realize that judges and juries have wide discretion in assessing damn ge awards and the award in any particular
case may be greatly in excess of or greatly less thnn a recommended reserve.
1
Either party to this agreement may at any time terminate it upon sixty (60) days written notice for any reason as to either all pending and future
¢laimg: or alternatively, only as to future clalm~ fu the event cancellation is with respect to both pending and future claims, the Fund will no
longer be obligated to perform the services outlined in this Agreement and shall promptly and in an orderly manner forward to the A~O Pool
Member or its designee all pending claim files. In the event ~rmlnatlon is only as to futore ¢laJ~, this Agreement shall continue in full force
ande~ectwithrespecttea1~pending~msandc~aim~ccur~ngbutn~trep~v~ip~i~rtocancellati~nuntl~c~nc~ude~L Ineitherevent, theASO (
Pool Member shall be entitled, if it so requests and at its own expense, to have the closed claim filed relieved from storage and delivered to
it. In the event the ASO Pool Member does not request closed files in the notice of cancellation, however, they will be relained or destroyed
at the Fund's option and the ASO Pool Member shall have no recourse against the Fund for failure to retain them.
TO BE COMPLETED BY MEMBER:
Member ~
Fund Cont~c~ Inform~oa (if diff~r~ from member)
Telephone
E-mail,,
EMPLOYER lvlEMBERS' FUND CONTACT (See Section 10):
Member Name
Name of Contac[ Title
Mailing Address
Street Address (ff different from above)
city
Zip Phone
SIGNATURE OF ALrrHOR~7~.D MEaX~ER OFFICIAL
MaT0r
Title
March 23~ 2004
Date
Member's Federal Tax I.D. Number
This Information is MANDATORY
TO BE COMPLETED BY FUND: (OFFICE USE ONLY)
Revised 10/90