HomeMy WebLinkAbout05- Revised restated Interlocal Agreement Governing the Montana Municipal Insurance Authority
REVISED AND RESTATED INTERLOCAL
AGREEMENT
GOVERNING THE MONTANA MUNICIPAL
INSURANCE AUTHORITY
EFFECTIVE AS OF OCTOBER , 2005
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Table of Contents
ARTI C LE I, D EFIN ITIONS ............................................................................................................................2
ARTI C LE II, PU RPOS ES ..............................................................................................................................4
ARTICLE III, PARTIES TO AGREEM ENT ............... ........ ......... .................. ........ ................ ...... ........ ...........5
ARTICLE IV, TERM ...................................................................................................................................... 5
ARTICLE V, CREATION OF THE AUTHORITY .... ......................................................................................5
ARTICLE VI, POWERS OF THE AUTHORITy.................. ................ ................. ......................... ......... ....... 5
ARTICLE VII, MEMBER ENTITY RESPONSIBILITIES AND POWERS .....................................................6
ARTICLE VIII, THE BOARD OF DIRECTORS .................... ......................................................................... 7
ARTICLE IX, MEETINGS AND RECORDS ........................................... ...................... ........................ ......... 9
ARTICLE X, POWERS OF THE BOARD OF DIRECTORS.......................................................................11
ARTICLE XI, OFFICERS .......................................... ............ ...................... ....................... ...... ........... .... ....12
ARTICLE XII, EXECUTIVE COMMITTEE .......................... ............................ .................. .......... ................13
ARTICLE XIII, STANDING AN D SPECIAL COMMITTEES .......................................................................13
ARTICLE XIV, STAFF ........................................................ ............ .......................... ..... ... ........ ......... ..........13
ARTICLE XV, DEVELOPMENT, FUNDING, IMPLEMENTATION AND JOINING INSURANCE
P ROG RAMS ....................................................................................................................................... ........14
ARTICLE XVI, ACCOUNTS AND RECORDS ............................................................................................17
ARTICLE XVII, RESPONSIBILITIES FOR FUNDS AND PROPERTY......................................................17
ARTICLE XVIII, WITHDRAWAL ................................... .......... .................................. ................. ......... ........18
ARTICLE XIX, CANCELLA TION ...................................................... ................. ....... ........ ..... ......... .... ........18
ARTICLE XX, WITHDRAWAL OR CANCELLATION OF PARTICIPATION IN A PROGRAM ................19
ARTICLE XXI, TERMINATION OF AGREEMENT AND DISTRIBUTION OF ASSETS............................19
ARTICLE XXII, LIABILITY OF BOARD OF DIRECTORS, ........................................................................20
OFFICERS AN D COM M ITTEE M EM BERS ............. ... ...... ........................... ............................ ... ....... ........20
ARTI C LE XXI II, ByLAWS........................................................................................................................... 21
ARTI CLE XXIV, NOTiCES.......................................................................................................................... 21
ARTIC LE XXV, AM EN D M ENT ................................................................................................................... 21
ARTI CLE XXVI, PROH I B ITION AGAI NST ASSIGN M ENT................ ....... .... ............................................ .21
ARTI C LE XXVII, AG RE EM ENT COM PLETE................................... ..........................................................21
ARTICLE XXVIII, EFFECTIVE DATE OF AMENDMENTS ........................................................................22
ARTICLE XXIX, FILING WITH SECRETARY OF STATE AND.................................................................22
COU NTY CLERK AN D RE CORD ERS ...................................... ................................................................. 22
ARTI C LE XXX, EXEC UTI ON ........................................................ .............................................................. 22
SIGN A TU RE P AG E .................................................................................................. ............... ...... .............23
REVISED AND RESTATED INTERLOCAL AGREEMENT
GOVERNING THE MONTANA MUNICIPAL
INSURANCE AUTHORITY
EFFECTIVE AS OF OCTOBER _, 2005
THIS AGREEMENT is made in the State of Montana by and among local political
subdivisions organized and existing under the laws of the State of Montana (the State),
hereinafter referred to as "Member Entities" which are parties signatory to the
Agreement. Member Entity(ies) are sometimes referred to in this Agreement as
"party(ies). "
RECIT ALS
WHEREAS, Article XI, Section 7 of the Montana Constitution provides that a
political subdivision may a) cooperate in the exercise of a function, power, or
responsibility with, b) share the services of any officer or facilities with, and c) transfer or
delegate any function, power, responsibility, or duty of any officer to one or more other
local government units, school 'districts, the state or the United States; and
WHEREAS, Title 7, Chapter 11, Part 1, Montana Code Annotated (MCA),
authorizes political subdivisions to create interlocal agreements to jointly perform any
undertaking that each of them is authorized by law to perform; and
WHEREAS, Section 2-9-211, MCA authorizes political subdivisions of the state,
separately or jointly with other subdivisions, to procure insurance to use a deductible or
self-insurance plan, wholly or in part, and to establish a self-insurance or deductible
reserve fund; and
WHEREAS, Section 2-9-211, MCA authorizes political subdivisions or a board
created pursuant to an interlocal agreement, acting on behalf of such political
subdivisions to issue and sell bonds or notes for the purposes of funding a self-
insurance or deductible reserve fund; and
WHEREAS, the Member Entities executing this Agreement desire to join together
for the purposes of:
1. Developing effective risk management programs to reduce the amount and
frequency of their losses;
2. Sharing some portion, or all, of their losses;
3. Jointly purchasing other insurance, reinsurance, or excess insurance;
4. Jointly make Premium deposits which may take the form of contributions to
an account or surplus account and pay premiums for the purposes of
participating in group or captive insurance, excess insurance or reinsurance
programs, in whole or in part;
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5. Jointly issuing bonds or notes to fund a self-insurance or deductible
reserve;
6. Jointly purchasing administrative and other services when related to any of
the other purposes; and
7. Jointly provide such other administrative services to political subdivisions of
the State;
WHEREAS, the governing board of each Member Entity has determined that it is
in its own best interest, and in the public interest that this Agreement be executed and
that it participate as a member of the public entity created by this Agreement.
NOW, THEREFORE, in consideration of the mutual benefits, promises and
agreements set forth below, the parties hereby agree as follows:
ARTICLE I, DEFINITIONS
l<Authority" shall mean the Montana Municipal Insurance Authority created by
this Agreement.
l<Board of Directors" or l<Board" shall mean the governing body of the
Authority.
l<Bonds and Notes" shall mean Bonds or Notes issued by the Authority
pursuant to the Law or other enabling legislation as may hereafter be enacted on behalf
of, and authorized by, Participating Entities for the purpose of financing a Program.
l<Bond or Note Resolution" shall mean the Bond or Note Resolution adopted by
a Participating Entity authorizing the Authority to issue Bonds or Notes on its behalf.
l<Bylaws" shall mean the bylaws adopted by the Board prescribing the rules for
the operations of the Authority.
l<Chair" shall mean the Chair of the Board of Directors.
l<Claim" shall mean a claim made against a Member Entity arising out of a Loss
which is covered by a Program of the Authority in which the Member Entity is a
participant.
l<Deductible" shall mean that portion of a loss experienced by a Participating
Entity which is retained as a liability or potential liability of the Participating Entity, and is
not subject to payment by the Authority under an Agreement.
"Director" shall mean a member of the Board of Directors.
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"Executive Committee" shall mean the Executive Committee of the Board of
Directors of the Authority.
"Excess Insurance" shall mean one or more additional policies or programs of
insurance or risk sharing purchased or participated in by the Authority as part of a
Program to provide for the payment of Losses in excess of the types and amounts of
coverage provided by the Authority directly in the primary Program Agreement(s) or
applicable Memorandum of Coverage with respect to a Program.
"Fiscal year" shall mean that period of twelve months which is established by
the Board of Directors as the Fiscal Year of the Authority.
"Interlocal Cooperation Act" shall mean Title 7, Chapter 11, Part 1, MCA, as
amended.
"Law" shall mean Sections 2-9-211 MCA, as amended and such other laws of
the state of Montana which authorize the Member Entities either jointly or severally to
engage in activities in furtherance of the purposes for which this Authority was created.
"Loss" shall mean a liability or potential liability of a Member Entity, including, if
applicable by Program Agreement or Memorandum of Coverage, litigation expenses,
attorneys' fees and other defense costs, which is covered by a Program of the Authority
in which the Member Entity is a participant.
"MCA" shall mean the Montana Code Annotated.
"Member Entity(ies)" shall mean any political subdivision which has executed
this Agreement and become a member of the Authority.
"Memorandum of Coverage" shall mean the document or documents issued by
the Authority with respect to each Program specifying the type and amount of
coverages provided to the Participating Entities by the Authority.
"Open Meeting Law" shall mean Title 2, Chapter 3, Parts 1 and 2, MCA, as
amended.
"Participating Entity(ies)", as used in reference to a Program of the Authority,
shall mean any Member Entity which has joined a Program pursuant to Article XV of this
Agreement, and has not withdrawn or been cancelled therefrom pursuant to Articles
XVIII and XIX.
"Policy Year" shall mean, with the exception of the initial coverage period, for
each Program of the Authority, that period of twelve months beginning and ending as
set forth in the Program Agreement.
"Policies and Procedures" shall mean the Policies and Procedures manual(s)
adopted by the Board specifying the policies and procedures to be followed by the
Authority and Participating Entities in the Programs of the Authority.
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"Premium" shall mean with respect to each Program the charges, fees and
assessments made by the Authority for participation in a Program.
"Program" shall mean arrangements to insure against or cover specific types of
claims, losses, damages and liabilities of Member Entities, which may include, but not
be limited to, liability, property, workers' compensation, employee health benefits, life,
disability, vision and dental benefits.
"Program Agreement" shall mean the agreement or agreements by and
between the Authority and the Participating Member setting forth the terms and
conditions of each Program offered by the Authority.
"Reinsurance" shall mean either treaty reinsurance or facultative reinsurance
purchased by the Authority, as part of a Program.
ARTICLE II, PURPOSES
This Agreement is entered into by the Member Entities for the following
purposes:
1. To jointly develop and fund, as provided by applicable law, programs for:
a. workers' compensation and occupational disease insurance;
b. comprehensive liability insurance;
c. property insurance
d. employee health, dental, vision and life insurance
e. disability and group disability insurance;
f. other forms of insurance coverage as the Member Entities or some
of them may deem appropriate;
g. participation in group or captive insurance, excess insurance or
reinsurance programs, in whole or in part. .
2. To develop or procure, as the Board of Directors of the Authority may from
time-to-time determine, administrative services in support of the programs
developed and funded by the Member Entities pursuant to this Agreement,
including but not limited to:
a. risk management consulting;
b. loss prevention and control;
c. centralized loss reporting;
d. actuarial consulting;
e. claims adjusting; and
f. general legal services and legal defense.
3. To provide such administrative services through the Authority to political
subdivisions of the state on such terms and conditions as the Board of
Directors of the Authority may establish, provided that the Authority must,
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at a minimum, recover the costs associated with each such service made
available to such political subdivisions.
All such purposes shall be accomplished through a joint exercise of powers by
Member Entities pursuant to this Agreement, to be administered by a separate legal
entity, the Montana Municipal Insurance Authority, as created herein.
ARTICLE III, PARTIES TO AGREEMENT
Each Member Entity, as a party to this Agreement, certifies that it intends to and
does contract with, for the purposes and to the extent as herein provided, all other
parties who are signatories of this Agreement and, in addition, with such other political
subdivisions as may later be added as parties to, and signatories of, this Agreement.
Each party also certifies that the removal of any party from this Agreement, pursuant to
Articles XVIII or XIX, shall not affect this Agreement or the remaining parties' intent to
contract as described above with the other parties to the Agreement then remaining.
ARTICLE IV, TERM
This Agreement shall become effective as of the date it has been duly approved
and executed by two-thirds of the Member Entities and upon filing with the Secretary of
State and the various county clerks and recorders of the county or counties where the
individual Member Entities are situated. This Agreement shall continue in effect until
terminated or amended as provided herein.
ARTICLE V, CREATION OF THE AUTHORITY
Pursuant to the Interlocal Cooperation Act, there is hereby created a public entity
separate and apart from the parties hereto, to be known as the Montana Municipal
Insurance Authority, with such powers as are hereinafter set forth.
ARTICLE VI, POWERS OF THE AUTHORITY
The Authority shall have all of the powers common to its Member Entities under
the Law and the Interlocal Cooperation Act, and is hereby authorized to do all things
necessary and proper for the exercise of said powers. Such powers include, but are not
limited to, the following:
(1 ) To make and enter into contracts.
(2) To incur debts, liabilities, and obligations.
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(3) To issue Bonds and Notes on behalf of its Member Entities for authorized
purposes when expressly authorized by Member Entities.
(4 ) To acquire, hold, or dispose of property, contributions and donations of
property, funds, services, and other forms of assistance from persons,
firms, corporations, and government entities.
(5) To sue and be sued in its own name, and to settle any claim against it.
(6) To receive contributions and donations of property, funds, services and
other forms of assistance from any source.
(7) To receive and use contributions and advances from Member Entities,
including contributions or advances of personnel, equipment, or property.
(8) Employ agents and employees.
(9) Receive, collect, and disburse monies.
(10) To invest any money in its treasury that is not required for its immediate
necessities, in the same manner and on the same conditions as Member
Entities pursuant to law.
(11 ) Jointly make Premium deposits which may take the form of contributions
to an account or surplus account, and pay premiums for the purposes of
participating in group or captive insurance, excess insurance or
reinsurance programs, in whole or in part.
(12) Jointly purchasing other insurance, reinsurance, or excess insurance.
(13) To carry out all provisions of this Agreement.
(14 ) To provide such administrative services through the Authority to political
subdivisions of the state on such terms and conditions as the Board of
Directors of the Authority may establish.
Said powers shall be exercised pursuant to the terms hereof and in the manner
provided by law.
ARTICLE VII, MEMBER ENTITY RESPONSIBiliTIES AND
POWERS
7.01 Responsibilities. Each Member Entity participating in a Program shall
have the following responsibilities:
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A. To provide the Authority with such statistical and loss experience
data and other information as may be necessary or desirable for the
Authority to carry out the purposes of this Agreement;
B. To pay Premiums to the Authority when due;
C. To cooperate fully with the Authority in determining the cause of
Losses, and in the settlement of Claims;
D. To cooperate with and assist the Authority and any insurer, claims
adjuster legal counselor other service provider engaged or retained
by the Authority, in all matters relating to this Agreement and a
Program Agreement;
E. To comply with and keep and perform its obligations under the
Program Agreements, Notes and Note Resolutions to which each
Member Entity is a party or signator thereto, the Bylaws, and all
Policies and Procedures of the Authority not inconsistent with the
provisions of this Agreement;
F. To have an audit of its risk management activities as required by the
Authority. Such audit shall be at the expense of each Member Entity
but the charge for such audit may be included within the Premiums
to be charged for a Program;
G. To maintain its own Claims and Loss records in each program of the
Authority in which the entity is a Participating Member, and to
provide copies of such records to the Authority or to such other
committees as directed by the Board.
7.02 Powers. Member Entities shall have the following powers:
A. To appoint, elect or remove members of the Board of Directors as
set forth in Article VIII;
B. To expel Member Entities as set forth in Article XIX;
C. To approve amendments to this Agreement as set forth in Article
XXV.
ARTICLE VIII, THE BOARD OF DIRECTORS
8.01 Membership of Board, Procedure for Electinq and Term in Office.
A. Membership. Subject to Section 8.01 (B) of this Agreement below,
the Board shall be composed of a minimum of 13 Directors, elected
in the following manner:
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(1) Each Member Entity participating in one or more of the
Authority's programs and has a population in excess of 20,000 is
entitled to appoint a Director; and
(2) An equal number of Directors to the number of those Directors
appointed in Section 8.01 (A)(1) above, shall be elected by and
representing Member Entities participating in one or more of the
Authority's programs, and having a population of less than 20,000;
and
(3) One (1) "At-large Director" from a member Entity participating in
one or more of the Authority's programs appointed by the Directors
selected in Sections 8.01 (A)(1) and (2) above.
B. Automatic Expansion of the Board. In the event that a Member
Entity, during the time it is a participant in one or more of the
Authority's programs, has an increase in its population to a number
in excess of 20,000 as determined in subparagraph C herein, then
such Member Entity shall be entitled to a seat on the Board, and the
total number of Directors shall increase by two, one of whom shall
be appointed by the Member Entity which has experienced the
described increase in population, and one of whom shall be an
additional representative elected by and representing Member
Entities who have a population of less than 20,000. The expansion
in the number of Directors shall occur at the next annual meeting of
the Member Entities following the annual census that established
said population.
C. Procedure. The nomination and election of Board of Directors will
be conducted at the regular annual meeting of the Authority. Each
Member Entity shall appoint and elect Directors for its respective
category as herein provided. No Member Entity shall have more
than one Director at any time. To be eligible to vote for the Board of
Directors, a Member Entity must be a participant in one or more of
the Authority's programs at the time of the annual meeting. For
purposes of this Article, the population of the Member Entity shall be
as determined by the most recent census statistics published by the
United States Census Bureau.
D. Terms.
(1 ) Directors shall serve a term of two (2) years from the date of
the Annual meeting at which their appointment under Section
8.01 (A)(1) and (3) or their election under Section 8.01 (A)(2)
occu rred .
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(2) A Director shall hold office until: (i) the expiration of his or
her term of office or the Member Entity it represents no longer
participates in a Program of the Authority and (ii) until a successor
has been elected or appointed. In the event of a vacancy, the
remaining Directors shall appoint a replacement Director who shall
serve until the expiration of the predecessor's term or the next
Annual meeting, whichever occurs first.
8.02 Resiqnation of a Director. A Director may resign upon giving thirty (30)
days' notice in writing to the Authority.
8.03 Removal of a Director. Any director may be removed from office at any
time by a majority vote of the Board, for neglect of duty or malfeasance in office.
Notification of such removal or appointment of a successor shall be by instrument in
writing by the Board and delivered to all Member Entities.
8.04 Compensation of Directors. The Directors shall receive no salary but may
be compensated for any reasonable and necessary expenses incurred in connection
with the performance of their duties.
8.05 Vacancies. Vacancies on the Board elected by Member Entities pursuant
to Sections 8.01 (A)(2) or (3) may be filled by a majority of the remaining Directors, and
each Director so elected shall hold office until the next meeting of Member Entities and
until that Director's successor has been elected and qualified. At the next Annual
Meeting, Member Entities shall have the power to appoint a Director to fill the remaining
term of office. Vacancies on the Board for a Director appointed pursuant to Section
8.01 (A)(1) shall be filled by the Member Entities which appointed the representative
whose position is vacant.
ARTICLE IX, MEETINGS AND RECORDS
9.01 Member Entitv Meetinqs. Member Entities shall hold at least one regular
meeting each year which will be designated the "Annual Meeting", and the Board shall
fix the date, hour and place at which the Annual Meeting or other meetings of the
Member Entities are to be held. Member Entities may vote by absentee ballots or by
proxy according to rules established by the Bylaws of the Authority. The Chair shall
preside at all meetings of the Member Entities. Special meetings may be called upon
written request by the Chair, by one-third or more of the Directors, or by one-third or
more of the Member Entities.
9.02 Member Entitv Votinq. Each Member Entity shall have one (1) vote on
each matter presented to Member Entities, but in election of Directors, shall have one
(1) vote for each Director to be elected and may not cumulate votes; provided however
that in the event that the matter presented to the Member Entities for a vote involves a
specific Program, then only those Member Entities which are participants in such
Program may vote on such matter.
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9.03 Board Meetinqs. The Board shall hold at least four (4) regular meetings
each year. The Board shall provide by resolution or in the Bylaws, the time for holding
regular meetings. The Board shall fix the place where each regular meeting is to be
held. Special meetings may be called upon written request by the Chair or one-third or
more of the Directors.
9.04 Meetinq Minutes. The Board shall have minutes of all regular, adjourned
regular, special and adjourned special meetings of the Member Entities, and of the
Board kept and available for inspection at any reasonable time. As soon as possible
after each meeting, a copy of the minutes of each Member Entity meeting and each
Board meeting shall be forwarded to each member of the Board.
9.05 Open Meetinq Law. All meetings of the Member Entities and the Board
shall be called, noticed, held and conducted in accordance with the provisions of the
Open Meeting Law.
9.06 Quorum and Conduct of Business. A majority of the authorized number of
Directors constitutes a quorum. Member Entities representing a majority of the Member
Entities constitutes a quorum. Every act done or decision made by a majority of
Member Entities, present in person or by proxy at a Member Entity Meeting, or Directors
present in person at a Board meeting duly held at which a quorum is present shall be
the act of that body, unless a vote by a greater number is required by law, this
Agreement, or the Bylaws. Provided, however, that any action required to be taken by
the Board or the Member Entities, as the case may be, which is restricted in effect to
one of the Authority's Programs, as determined by the Chair of the Board, shall also
require the affirmative vote of a majority of those Directors in person at a Board
meeting, or Member Entities present in person or by proxy and voting at a Member
Entity Meeting who represent or are Participating Entities in that Program. No business
may be transacted by the Board or by the Member Entities without a quorum of their
respective members being present; provided however, less than a quorum may adjourn
from time to time. Meetings of the Board and the Member Entities shall be conducted in
accordance with Roberts Rules of Order, except when in conflict with applicable law,
this Agreement or the Bylaws.
9.07 Bylaws and Policies and Procedure Manual. The Board shall cause
Bylaws to govern the day-to-day operations of the Authority, and one or more Policies
and Procedures Manual(s) to govern the day-to-day operations of the Programs to be
developed, which shall not be inconsistent either with applicable law or with this
Agreement. Each Director shall receive a copy of the Bylaws and Policies and
Procedures Manual(s) developed under this Section. Each member Entity shall receive
a copy of the Bylaws and Policies and Procedures Manual(s) developed under this
Section upon request made to the Chief Executive Officer of the Authority. The Board
may adopt additional Bylaws and Policies and Procedures or change existing ones so
long as the additions or changes shall be, and remain consistent with both applicable
law and with this Agreement. The Chief Executive Officer shall send, or cause to be
sent, each Bylaw amendment and Policy and Procedure change to each Director
promptly after its adoption by the Board. The Chief Executive Officer shall send, or
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cause to be sent, a summary of each such Bylaw amendment and Policy and
Procedure change to each Member Entity in a timely manner.
ARTICLE X, POWERS OF THE BOARD OF DIRECTORS
The Board of Directors shall have the following powers and functions:
A. The Board shall exercise all powers and conduct all business of the
Authority, either directly or by delegation of authority to other bodies or
persons unless otherwise prohibited elsewhere in this Agreement or by
applicable law.
B. The Board may form an Executive Committee from its membership, as
provided in Article XII, and may delegate to that Committee such powers as
it sees fit, provided that all powers of the Executive Committee shall be
exercised under the direction of the Board.
C. The Board shall form, as provided in Article XIII, such other committees as
it deems appropriate in conducting the business of the Authority. The
membership of any such other committee may consist in whole or in part of
non-Board members; provided, that the Board may delegate its powers and
duties only to a committee of the Board composed of a majority of Board
members. Any committee which is not composed of a majority of Board
members may function only in an advisory capacity.
D. The Board shall elect the officers of the Authority, shall appoint the staff
members designated in Article XIV, and shall provide for the appointment of
such other staff as may be necessary for the administration of the Authority,
pursuant to that article.
E. The Board shall cause to be prepared, and shall review, modify as
necessary, and adopt the annual operating budget of the Authority.
F. The Board shall develop, or cause to be developed, and shall review,
modify as necessary, and adopt each Program of the Authority, including all
provisions for reinsurance and administrative services necessary to carry
out such Program.
G. The Board shall provide for necessary services to the Authority and to
Member Entities, by contract or otherwise, which may include, but shall not
be limited to, risk management consulting, loss prevention and control,
centralized loss reporting, actuarial consulting, claims adjusting, and legal
defense services.
H. The Board shall provide general supervision and policy direction to the
Chief Executive Officer, either directly or through the Executive Committee.
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L The Board shall receive and act upon reports of the committees as
established by the Board, and the Chief Executive Officer, either directly or
through the Executive Committee.
J. The board shall act upon each claim involving liability of the Authority,
either directly or by delegation of authority to the Executive Committee or
other committee, body or person, provided that the Board shall establish
monetary limits upon any delegation of claims settlement authority, beyond
which a proposed settlement must be referred to the Board for approval.
K. The Board may require that the Authority review, audit, report upon, and
make recommendations with regard to the safety or claims administration
functions of any Member Entity, insofar as those functions are affecting the
liability or potential liability of the Authority. The Board may forward any or
all such recommendations to the Member Entity with a request for
compliance and a statement of potential consequences for noncompliance.
L. The Board shall receive, review and act upon periodic reports and audits of
the funds of the Authority, as required under Articles XVI and XVII of this
Agreement.
M. The Board shall provide for the creation of positions through its budget
process as may be necessary for the administration of the Authority. The
Chief Executive Officer will recommend to the Board for its approval the
necessary positions for the administration of the Authority.
N. The Board shall have such other powers and functions as are provided for
in this Agreement, in the Bylaws of the Authority, and in applicable law.
ARTICLE XI, OFFICERS
The Board of Directors shall elect from its membership a Chair, Vice Chair,
Secretary and Treasurer, to serve for one-year terms.
The Chair, or in his or her absence, the Vice Chair, shall preside at and conduct
all meetings of the Board, the Member Entities and shall chair the Executive Committee.
The Secretary shall have those duties normally associated with such office.
The Treasurer shall have those duties normally associated with such office.
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ARTICLE XII, EXECUTIVE COMMITTEE
12.01 Composition. The Board of Directors may establish an Executive
Committee of the Board which shall consist of five members: the Chair and Vice Chair
of the Board, and three members elected by the Board from its membership.
12.02 Term. The Terms of office of the three non-officer members shall be as
provided for in the Bylaws of the Authority.
12.03 Responsibilitv. If established, the Executive Committee shall conduct the
business of the Authority between meetings of the Board, exercising such powers as
are delegated to it by the Board, through the adoption of Board resolutions, under the
direction of the Board.
ARTICLE XIII, STANDING AND SPECIAL COMMITTEES
13.01 Standinq Committees. The Board shall establish Standing
Committees, as it deems appropriate to conduct the business of the Authority consisting
of at least five members. Members of the Standing Committees shall be appointed by
the Chair with approval of the Board. Members of Standing Committees shall serve two
year terms, subject to reappointment by the Chair with the approval of the Board. The
members of each Standing Committee shall annually select one of its members to chair
the Committee.
13.02 Special Committees. The Board may also establish Special
Committees, as it deems appropriate. Members of such Special Committees shall be
appointed by Chair with the approval of the Board for terms as specified by the Board.
The Chair of Special Committees shall be designated by the Chair of the Board.
13.03 Duties. Each committee shall have those duties as determined by
the Board, or if so directed, by the Executive Committee, or as otherwise set forth in the
Bylaws.
13.04 MeetinQs. Each Committee shall meet on the call of its Chair, and
shall report to the Executive Committee and the Board as directed by the Board.
ARTICLE XIV, STAFF
Principal Staff. The following staff members shall be appointed by and
serve at the pleasure of the Board:
A. Chief Executive Officer. The Chief Executive Officer shall administer the
business and activities of the Authority, subject to the general supervision and policy
direction of the Board or Executive Committee; shall be responsible along with the
Secretary for all minutes, notices and records of the Authority; and shall perform such
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other duties as are assigned by the Board or Executive Committee. The principal staff
shall be appointed by and seNe at the pleasure of the Chief Executive Officer.
B. Chief Financial Officer. The Chief Executive Officer shall appoint a Chief
Financial Officer. The Chief Financial Officer shall be responsible for the financial,
banking and investment activities of the Authority, and shall perform such other duties
as are assigned by the Chief Executive Officer. Except for those independent duties
that the Chief Financial Officer may owe to the Board or Finance Committee, the Chief
Financial Officer shall report to the Chief Executive Officer.
ARTICLE XV, DEVELOPMENT, FUNDING, IMPLEMENTATION
and JOINING INSURANCE PROGRAMS
15.01 Proqram Coveraqe. Insurance programs of the Authority may provide
coverages for one or more or any combination of the following:
(1 ) Workers' compensation;
(2) Comprehensive liability, including but not limited to general,
automobile, personal injury, contractual, malpractice liability;
(3) Property;
(4 ) Employee health, vision and dental benefits;
(5) Life and disability; and
(6) Any other coverages authorized by the Board.
The Board shall determine, for each such Program, a minimum number of
participants required for Program implementation.
15.02 Proqram and Authoritv Fundinq. The Member Entities developing or
participating in a Program shall fund all costs of that program, including administrative
costs as hereinafter provided, or as provided in the Program Agreement relating to that
Program. Costs of staffing and supporting the Authority, hereinafter called Authority
general expenses, shall be equitably allocated among the various Programs by the
Board, and shall be funded by the Member Entities developing or participating in such
Programs in accordance with such allocations, as hereinafter provided or as provided in
the Program Agreements.
A. Development Charqe. Development costs of a Program may be funded
by a development charge, as fixed by this Agreement or determined by the Board of
Directors. The development charge shall be paid by each Member Entity which wishes
to join in development of the Program, and thereby reseNe the option to participate in
the Program following adoption by the Board. Development costs are those costs
incurred by the Authority in developing a Program for review and adoption by the Board
of Directors, including but not limited to: research, feasibility studies, information and
liaison work among political subsidiaries, and preparation and consulting seNices. The
development charge may also include a share of Authority general expense, as
allocated to the Program development function by the Board.
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The development charge shall be billed by the Authority to all Member Entities
upon authorization of Program development by the Board and shall be payable within
thirty (30) days of the billing date.
Upon the conclusion of Program development, any deficiency in development
funds shall be billed to all Member Entities which have paid the development charge, on
a pro-rata or other equitable basis, as determined by the Board; and any surplus in such
funds shall be transferred into the loss reserve funds for the Program, or, if the Program
is not implemented, into the Authority's general expense funds.
B. Inter-Proqram Loans. Except to the extent otherwise prohibited by any
Program Agreement, one Program may loan funds to be used to develop any new
Program of the Authority, provided however, that any such loan shall be secured by the
promise of one or more Member Entities to repay the amount of any such loan with
interest, if any, as may be established by the Board to the Program lending the funds in
the event that the new Program is not created or has inadequate funds to repay such
loan.
C. Premium. Except as provided in Section 15.03 below, all post-
development costs of a Program shall be funded by Premiums charged to the
Participating Entities in the Program each Policy Year, and by interest earnings on the
funds so accumulated. Such premiums shall be determined by the Board upon the
basis of a cost allocation plan and rating formula developed by the Authority with the
assistance of a casualty actuary, risk management consultant, or other qualified person
and set forth in the Program Agreement. The premium for each participating entity may
include that entity's share of expected program losses, program reinsurance costs, and
program administrative costs for the year, that Participating Entity's share of Authority
general expense allocated to the program by the Board, plus that Participating Entity's
share of any principal and interest that may become due in that year and a debt service
reserve fund payment with respect to any notes or bonds issued by the Authority for
such Program on behalf of that Participating Entity, as authorized by such Participating
Entity.
Premiums shall be billed by the Authority at the beginning of each policy year or
more frequently and shall be due and payable as provided in a Program Agreement. At
the end of each policy year, program costs shall be audited by the Authority. Any
deficiency or surplus in the Premiums paid by a Participating Entity, as shown by such
audit, may be adjusted by a corresponding increase or decrease in the Premiums
charged to that Participating Entity for the next succeeding year, as provided in the
Program Agreement, unless the Participating Entity withdraws or is cancelled from a
Program, in which case the provisions of Article XVIII and XIX shall control.
D. Premium Adiustments. If the Authority experiences an unusually large
number of losses under a Program during a policy year, such that notwithstanding
reinsurance coverage for large individual losses, the joint insurance funds for the
Program may be exhausted before the next annual premiums are due, the Board of
Directors may, upon consultation with a casualty actuary, impose premium surcharges
Page 15 of 23
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on all participating cities, which, in total amount, will assure adequate funds to the
Authority for the payment of all such losses; provided, that the Program Agreements
shall provide the maximum surcharge to be levied against any Participating Entity in any
year.
15.03 Proqram Implementation and Effective Date. Following development of a
Program and upon its adoption by the Board, the Authority shall give each Member
Entity which has paid the development charge, if such charge has been levied for the
Program, a written notice of the Program, which shall include: a form of the Program
Agreement, the minimum number of participants required for the Program's
implementation, and the estimated first year premium to the Member Entities for
Program participation. Each such Member Entity may elect to enter the Program by
giving written notice of such election, in a form prescribed by the Authority, to the Chief
Executive Officer within thirty (30) days of the date of the Authority's notice of the
Program. Any Member Entity which has not paid the development charge as of the
date of the Program notice may enter the Program only if it pays such charge and gives
notice of such election within the above 30-day period and executes a Program
Agreement.
When at least the minimum number of participating Member Entities required for
program implementation shall have elected to enter a Program, the Authority shall
determine the actual first-year premium for each participating Member Entity so electing
and shall give each such entity written notice thereof. If a Participating Entity's actual
first-year premium is more than that estimated by the Authority, the entity may revoke its
election to enter the Program by giving the Chief Executive Officer written notice of such
decision within thirty (30) days of the date of the actual premium notice.
When the Authority determines that at least the minimum number of participating
Member Entities required for Program implementation remain entered in a Program, it
shall give written notice to that effect to all Participating Entities which have elected to
enter, and the Program shall become effective on the date of such notice. All such
entities shall thereafter be considered Participating Entities in the Program, except for
any entity which has revoked its entry into the Program under the terms and within the
time period above provided.
15.04 Late Entry Into Proqram. A member Entity which does not elect to enter a
Program upon its implementation, pursuant to section 15.03 above, or a political
subdivision which becomes a Member Entity and a party to this Agreement following
implementation of a Program, may petition the Board for late entry into the Program.
Such request may be granted, if authorized in the Program Agreement, upon a vote of a
majority of all Directors present and voting, such a vote to include a majority of those
Directors present and voting who represent Participating Entities in the Program, upon
satisfaction of requirements set forth in the Program Agreement, provided that the
applicant meets the various underwriting criteria of the individual Program.
As a condition of late entry, the Participating Entity shall pay the development
charge for a Program, if required by the Board, as adjusted at the conclusion of the
development period, but not subject to further adjustment, and also any costs incurred
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by the Authority in analyzing the Participating Entity's loss data and determining its
annual premium as of the time of entry.
ARTICLE XVI, ACCOUNTS AND RECORDS
16.01 Annual Budqet. The Authority shall annually adopt an operating budget
pursuant to Article X of this Agreement, which shall include a separate budget for each
Program under development or adopted and implemented by the Authority.
16.02 Funds and Accounts. The Chief Financial Officer of the Authority, under
the direction of the Finance Committee, shall establish and maintain such funds and
accounts as may be required by good accounting practices and by the Board. Separate
accounts shall be established and maintained for each Program under development or
adopted and implemented by the Authority. Books and records of the Authority shall be
open to inspection at all reasonable times by authorized representatives of Member
Entities.
The Authority shall adhere to the standard of strict accountability of public funds.
16.03 Annual Report. The Authority, within one hundred and eighty (180) days
after the close of each fiscal year, shall give a complete written report of all financial
activities for such Fiscal Year to the Board and to each Member Entity.
16.03 Annual Audit. The Authority shall either make or contract with a certified
public accountant or the Audit Division of the Department of Commerce pursuant to Title
2, Chapter 7, Part 5, MCA to make an annual fiscal year audit of all accounts and
records of the Authority. A report of the audit shall be filed as a public record with each
Member Entity within six months of the end of the fiscal year under examination. Costs
of the audit shall be considered a general expense of the Authority.
ARTICLE XVII, RESPONSIBiliTIES FOR FUNDS AND
PROPERTY
Custody of Funds. The Chief Financial Officer, under the direction of the Finance
Committee, shall have the custody of and disburse the Authority's funds.
17.01 Duties of the Chief Financial Officer. The Chief Financial Officer shall:
A. Receive and acknowledge receipt for all funds of the Authority and place
them in the treasury to the credit of the Authority.
B. Be responsible upon his or her official bond for the safekeeping and
disbursement of all Authority funds so held by him or her.
Page 17 of 23
C. Pay any sums due from the Authority, as approved for payment by the
Board or by any body or person to whom the Board has delegated approval authority,
making such payments from Authority funds.
D. Verify and report in writing to the Authority and to Member Entities, as of
the first day of each quarter of the fiscal year, the amount of money then held for the
Authority, the amount of receipt since the last year, and the amount paid out since the
last report.
17.02 Property of the Authoritv. The Chief Executive Officer, the Chief Financial
Officer and such other persons as the Board of Directors may designate shall have
charge of, handle, and have access to the property of the Authority.
17.03 Fidelity Bonds. The Authority shall secure and pay for a fidelity bond or
bonds, and/or crime and fidelity coverage, in an amount or amounts and in the form
specified by the Board of Directors, covering all officers and staff of the Authority who
are authorized to hold or disburse funds of the Authority, and all officers and staff who
are authorized to have charge of, handle, and have access to property of the Authority.
ARTICLE XVIII, WITHDRAWAL
18.01 Withdrawal Prior to Becominq a Participatinq Entity. A Member Entity may
withdraw as a party to this Agreement upon thirty (30) days advance written notice to
the Authority if it has never become a participant in any Program pursuant to Article XV,
or if it has withdrawn from all Programs in which it was a participant, pursuant to 18.02
below.
18.02 Withdrawal Subsequent to Becominq a Participatinq Entity. After
becoming a participant in any Program pursuant to Article XV, a Participating Entity may
withdraw from that Program only as provided in the respective Program Agreement.
ARTICLE XIX, CANCELLATION
19.01 Cancellation bv the Board. Notwithstanding the provisions of Article XXI,
but subject to the terms of the Program Agreements, the Board of Directors may:
A. Cancel any Member Entity from this Agreement and membership in
the Authority, upon a vote of a majority of the Directors present and voting. Such action
shall have the effect of canceling the Member Entity's participation in all insurance
programs of the Authority as of the date that all membership is cancelled.
B. Cancel any Member Entity's participation in a Program, without
canceling the Member Entity's membership in the Authority or participation in other
Programs, upon a vote of a majority of the Directors present and voting, such vote to
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include a majority of those Directors present and voting who represent Participating
Entities in the Program from which the Member Entity is to be expelled.
The Board shall give sixty (60) days advance written notice of the effective date
of any cancellation under the foregoing provisions, unless otherwise provided in a
Program Agreement. Upon such effective date, the Member Entity shall be treated the
same as if it had voluntarily withdrawn from this Agreement.
19.02 Automatic Cancellation.
A. A Member Entity that does not enter one or more Programs within
the Member Entity's first year (a period of twelve months) as a member of the Authority
shall be considered to have withdrawn as a party to this Agreement at the end of such
period, and its membership in the Authority shall be automatically cancelled as of that
time, without action of the Board.
B. A Member Entity which withdraws from all programs in which it was
a participant and does not enter any other Program for a period of six (6) months
thereafter shall be considered to have withdrawn as a party to this Agreement at the
end of such period, and its membership in the Authority shall be automatically cancelled
as of that time, without action of the Board.
ARTICLE XX, WITHDRAWAL OR CANCELLATION OF
PARTICIPATION IN A PROGRAM
The effect of withdrawal or cancellation of participation in a Program and the
terms and conditions governing such withdrawal shall be as set forth in each of the
Program Agreements.
ARTICLE XXI, TERMINATION OF AGREEMENT AND
DISTRIBUTION OF ASSETS
21.01 Termination of Aqreement. This Agreement may be terminated at any
time upon the election to terminate of three-fourths of the Member Entities, acting
through their governing bodies; provided, however, that this Agreement and the
Authority shall continue to exist after such election for the purpose of retiring any debt,
disposing of all claims, distributing all assets, and performing all other functions
necessary to conclude the affairs of the Authority and any program.
21.02 Distribution of Assets. Upon termination of this Agreement, all assets of
the Authority in each Program shall be distributed among Participating Members in
proportion to their contributions to the program, including premiums paid cash and
property contributed or revenues attributed to the Participating Member (at market value
when contributed) in accordance with the terms of the Program Agreement.
Page 19 of 23
21.03 Future Assessments. Following termination of this Agreement, any
participating Entity in a Program may be required to pay an additional amount of
Premium, determined by the Board in accordance with the terms of the Program
Agreement, which may be necessary to enable final disposition of all Claims arising
from Losses under that Program during the Participating Entity's period of participation.
ARTICLE XXII, LIABILITY OF BOARD OF DIRECTORS,
OFFICERS AND COMMITTEE MEMBERS
22.01 Standard of Care. The Directors, Officers and committee members of the
Authority shall use ordinary care and reasonable diligence in the exercise of their power
and in the performance of their duties pursuant to this Agreement. They shall not be
liable for any mistake of judgment or any other action made, taken or omitted by them in
good faith, nor for any action taken or omitted by any agent, employee or independent
contractor selected with reasonable care, nor for loss incurred through investment of
Authority funds, or failure to invest.
22.02 Not Liable for Action of Others. No Director, Officer or committee member
shall be responsible for any action taken or omitted by any other Director, Officer or
committee member. No Director, Officer or committee member shall be required to give
a bond or other security to guarantee the faithful performance of their duties pursuant to
this Agreement.
22.03 Indemnification. Any person who at any time shall serve, or shall have
served as a Director, Committee Member, or Officer of the Authority, shall be
indemnified, held harmless and defended by the Authority against all costs and
expenses (including but not limited to attorney's fees of an attorney approved by the
Authority), amounts of judgments, and settlements reasonably incurred in connection
with the defense of any claim, action, suit, or proceeding, whether civil, criminal,
administrative, or other, in which he, she, or they may be involved by virtue of such
person's being or having been a Director, Committee Member, or Officer; provided
however, that such indemnity shall not be operative with respect to: (1) the Director,
Committee Member, or Officer gaining any personal profit or advantage in his or her
capacity as Director, Committee Member, or Officer, (2) the dishonesty of a Director,
Committee, or Officer, (3) a Director's, Committee Member's, or Officer's conflict of
interest, (4) willful violation of a statute or ordinance committed by a Director,
Committee Member, or Officer or with the Director's, Committee Member's, or Officer's
knowledge or consent, or (5) any matter as to which the Director, Committee Member,
or Officer shall have been finally adjudged in such action, suit or proceeding to be liable
for misconduct in the performance of his or her duties as Director, Committee Member,
or Officer. The indemnification will not be operative for any settlement unless the
settlement is approved by a majority of the Directors.
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ARTICLE XXIII, BYLAWS
The Bylaws of the Authority, or any subsequent amendment thereto, shall be in
conformity with the provisions of this Agreement.
ARTICLE XXIV, NOTICES
The Authority shall address notices, billings and other communications to a
Member Entity at the address and to the attention of the individual set forth on each
Member Entities' signature page hereto or as otherwise directed by the Member Entity.
Member Entities shall address notices and other communications to the Authority to the
Chief Executive Officer of the Authority, at the office address of the Authority which shall
be, until otherwise notified, PO Box 6669, Helena MT 59604-6669.
ARTICLE XXV, AMENDMENT
This Agreement may be amended at any time by approval of any amendments
by two-thirds of the Member Entities, acting through their governing bodies, either at a
meeting in person, by proxy, or by mail ballot: provided however, that no amendment
may be made which would have the effect of altering or amending any Program
Agreement or altering or limiting any obligations of the Authority or Member Entities
thereunder.
ARTICLE XXVI, PROHIBITION AGAINST ASSIGNMENT
No Member Entity may assign any right, claim or interest it may have under this
Agreement, and no creditor, assignee or third party beneficiary of any Member Entity
shall have any right, claim or title to any part, share, interest, fund, premium or asset of
the Authority.
ARTICLE XXVII, AGREEMENT COMPLETE
The foregoing constitutes the full and complete Agreement of the parties with
respect to the Authority. There are no oral understandings or agreements not set forth
in writing herein, provided, however, that participation in any insurance program of the
Authority is subject to the terms and conditions of separate Program Agreements not
inconsistent herewith.
Page 21 of 23
ARTICLE XXVIII, EFFECTIVE DATE OF AMENDMENTS
Any amendment of this Agreement shall become effective upon the Authority
receiving notice of the approval of any Amended Agreement by the Governing bodies of
two-thirds of the Member Entities and upon filing with the Secretary of State and the
various county clerk and recorders of the counties in which Member Entities are located.
ARTICLE XXIX, FILING WITH SECRETARY OF STATE AND
COUNTY CLERK AND RECORDERS
Within thirty (30) days after the approval of any amendment, the Chief Executive
Officer of the Authority shall file a copy of this Agreement with the Secretary of State
and the county clerk and recorder of each county in which Member Entities are located.
ARTICLE XXX, EXECUTION
This Interlocal Agreement shall be executed on behalf of the Member Entity by its
Chief Executive Officer and attested by the Clerk only upon approval thereof by the
governing body. This Agreement may be executed in several counterparts, each of
which shall be an original and all of which shall constitute but one and the same
agreement.
Page 22 of 23
REVISED AND RESTATED INTERLOCAL AGREEMENT
GOVERNING THE MONTANA MUNICIPAL
INSURANCE AUTHORITY
EFFECTIVE AS OF OCTOBER , 2005
~nature Paqg
IN WITNESS WHEREOF, the undersigned parties hereto have executed this
agreement on the date indicated below.
City of Bozeman
ByC~A ?L L (1~'
Its City Manaqer
Date Signed November 21. 2005
Attest: r2~ Z A&.:-)
Clerk
Notices required to be mailed to the City/Town under the foregoing Agreement
shall be mailed to:
City/Town of Bozeman
Attention: Anna Rosenberry
O:\BW orthington\Bob\Board\Governance documents\1 nterlocalAgreementFI NALOctoberZ005 .doc
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