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HomeMy WebLinkAboutOrdinances - O-88-449 - 04/20/1988 - AUHTORIZE MEMBERSHIP IN MCMRMARECEIVED 1'.1 PI L, _ ORDINANCE NO. 0-82-440_'jff ( ?. AN ORDINANCE AUTHORIZING MEMBERSHIP IN THE MC HENRY COUNTY MUNICIPAL RISK MANAGEMENT ASSOCIATION WHEREAS, Section 10 of Article VII of the Illinois Consti- tution of 1970 authorizes municipalities to contract or otherwise associate among themselves in any manner not prohibited by law or by ordinance; and, WHEREAS, Chapter 127, Section 741, et seq., Illinois Revised Statutes, 1985, entitled the "Intergovernmental Cooperation Act", authorizes municipalities to exercise any power or powers, privileges or authority which may be exercised and enjoyed jointly with any other municipality or governmental entity in the State; and, WHEREAS, the Intergovernmental Cooperation Act in Section 746, in furtherance of the provisions contained within Article VI:, Section 10 of the Constitution authorizes an intergovern- mental contract which, among other undertakings, allows public agencies to jointly self -insure and authorizes each public agency member of the contract to utilize its funds to protect, wholly or partially, any public agency member of the contract against liability or loss in the designated insurable area; and, WHEREAS, municipalities within McHenry County have found it increasingly difficult to purchase insurance from commercial sources and where such insurance is available, the cost of such coverage often exceeds the ability of the units of local govern- ment to pay for such insurance; and, WHEREAS, to the extent that the payment of any claim or judgment would be made directly from governmental revenues held within a mutual risk management pool, the units of local govern- ment and other public entities united by way of Joint passage of this Ordinance desire to re-establish for themselves and their officers and employees the full range of defenses and immunities granted in Chapter 85; and, WHEREAS, a number of municipalities within McHenry County have undertaken a study to determine the feasibility of entering into a joint self-insurance contract and have determined that it is f=asilole to jointly self -insure; and, W'iEREAS, the members of this corporate authority have deter- mined that they wish to participate in the creation of an inter- governmental risk management agency to be known as the MC HENRY COUNTY MUNICIPAL RISK MANAGEMENT AGENCY (MCMRMA), and a combined Contract and By -Laws for such Agency has been drafted; and, WHEREAS, the stated purposes, organizational structure and procedural structure contained within that Contract and By -Laws represent positions shared by this public body; and, WHEREAS, the Corporate Authorities of this municipality find that it. is in the best interest of its citizens that it become a Member of the MC HENRY COUNTY MUNICIPAL RISK MANAGEMENT AGENCY ( MCMF.MA) , NOW, THEREFORE, BE IT ORDAINED BY THE Piayor and City Council of the Lity of McHenr , MC HENRY COUNTY, ILLINOIS, as follows: SECTION 1: That the Mayor and Clerk are hereby authorized to execute the Contract and By -Laws of the MC HENRY COUNTY MUNI- -2- CIPAL RISK MANAGEMENT AGENCY (MCMRMA) (hereinafter "AGENCY"). A copy of the Contract and By -Laws is appended to and made a part of this Ordinance as Appendix 1. SECTION 2: The powers of the AGENCY, unless the Contract and By -Laws be amended, shall be limited to those contained within Appendix 1.. SECTION 3: The commencement of the operations of the AGENCY and the obligation of this MEMBER of the AGENCY to fully partici- pate in such operations shall be effectuated in accordance with Article IV of the Contract and By-laws. SECTION 4: Except to the extent of the limited financial contributions to the AGENCY set forth in Apepndix 1, this Muni- cipality by its entry as a MEMBER of the AGENCY shall not be held responsible in any way for claims made against any other MEMBER of the AGENCY. SECTION 5: This Ordinance shall be in full force and effect from and after its passage, and approval and it may thereafter be published in pamphlet form. PASSED this 20th day of Apri 1 , 1988. AYES: Bolger, Nolan, Lieder, Teta, Smith, McClatchey, Patterson, Serritella. NAYS: None. ABSENT: None. APPROVED this 20th day of Apri 1 , 1988. ATTEST: Clerk �'� 1. �'� �.•�.t1 � L� '� � 3/25/88 CONTRACT AND BY-LAWS MC HENRY COUNTY MUNICIPAL RISK MANAGEMENT AGENCY I N D E X Page No. ARTICLE I. Definitions and Purpose. 1 Definitions. 3 Purpose. 5 ARTICLE II. Powers and Duties. 6 ARTICLE III. Participation and Term. 8 ARTICLE IV. Commencement of the Agency. 10 ARTICLE V. Board of Directors. 18 ARTICLE VI. Board of Directors Meetings. 20 ARTICLE VII. Agency Officers. 23 ARTICLE VIII. Finances and Risk Management Pools. 31 ARTICLE IX. Scope of Loss Protection. 35 ARTICLE X. Excess Insurance. 37 ARTICLE XI. Obligations of Members. 40 ARTICLE XII. Liability of the Board of Directors or Officers. 41 ARTICLE XIII Additional Insurance. 42 ARTICLE XIV. Optional Defense by Municipality. 45 ARTICLE XV. Contractual Obligation. 47 ARTICLE XVI. Expulsion of Members. 49 AR.TICLE XVII. Termination of the Agency. PREPARED BY: STEWART H. DIAMOND ANCEL, GLINK, DIAMOND, MURPHY & COPE, P.C. APPENDIX 1 CONTRACT AND BY-LAWS MC HIENRY COUNTY MUNICIPAL RISK MANAGEMENT AGENCY ARTICLE I. Definitions and Purpose. DEFINITIONS: As used in this agreement, the following terms shall have the meaning hereinafter set out: MEMBERS - The units of local government which initially or later enter into the intergovernmental contract estab- lished by this intergovernmental agreement. AGENCY •- The McHenry County Municipal Risk Management Agency (MCMRMA or AGENCY) established pursuant to the Constitution and the Statutes of this State by this intergovernmental agreement. POOL or JOINT RISK MANAGEMENT POOL - Funds of public monies established by MCMRMA to jointly self -insure certain risks within an agreed scope and to purchase excess and aggregate stop loss insurance. The AGENCY shall fund a risk management pool and administrative expenses of operations. Funds within such pool shall also be used to purchase catastrophic, and aggregate stop loss insurance and may be used for other purposes authorized by these By -Laws. RISK MANAGEMENT - A program attempting to reduce or limit the risk of losses to local governments caused by the opera- tions of such units of local government. Where claims arise, the Risk Manager and other employees and officers of the AGENCY will process such claims, investigate their validity, settle or defend against such claims within the financial limits of the risk management agreement, tabulate such claims, costs and losses and carry out other assigned duties. SELF-INSURANCE - the decision by a unit of local government not to purchase insurance coverage for risks below certain high limits; to seek all immunities provided by Illinois law for a non-insured unit of local government; to rely upon its financial capabilities to pay any losses or claims which occur and to purchase some insurance to protect against catastrophe or aggregate losses. JOINT SELF-INSURANCE - A self insurance program in which units of local government agree to contribute annual and where required supplementary payments to support a risk management program and a joint risk management pool. INITIAL ANNUAL OR SUPPLEMENTARY POOL CONTRIBUTIONS - Amounts of money due from time -to -time as payment by a MEMBER for its pazticipation in the AGENCY. The various types of Pool Contributions shall be determined by the Board of Directors in accordance with these By -Laws. EXCESS INSURANCE - Insurance purchased by the AGENCY from an insurance company authorized to write such coverage in Illinois providing certain coverage for single losses over a pre-set amount up to a pre-set maximum amount of coverage. -2- 3 23 33 AGGREGATE STOP LOSS INSURANCE - Insurance purchased by the AGENCY from an insurance company authorized to write such coverage in Illinois providing certain coverage up to a contracted amount for otherwise uninsured losses to be borne by the Joint Risk Management Pool, which in any one year aggregate to a pre-set maximum amount of coverage. AGENCY CONTRIBUTION FORMULA - A formula contained within this Contract and By -Laws which will establish the amount of annual and supplementary payments required from the MEMBERS. CLAIMS ADMINISTRATOR - A group of persons, under the super- vision of the RISK MANAGER, who either as employees or independent contractors are employed to administer the claims made against the MEMBERS. PURPOSE: The McHenry County Municipal Risk Management Agency is a cooperative agency voluntarily established by contracting units of local governments as defined in the Illinois Constitution of 1970 pursuant to Article VII, Section 10 of the 1970 Constitu- tion of the State of Illinois and Chapter 127, Section 746 of the Illinois Revised Statutes for the purpose of seeking the prevention or lessening of casualty losses to municipal properties and injuries to persons or property which might result in claims being made :against such units. -3- 3 Z5 33 It is the intent of the MEMBERS to create an entity which will administer a JOINT RISK MANAGEMENT POOL and utilize such funds contributed by the MEMBERS to defend and protect, in accord- ance with these By -Laws, any MEMBER of the AGENCY against stated liability or loss. Such By -Laws shall constitute the substance of a contract among the MEMBERS. All funds contained within the Risk Management Pool are funds directly derived from its MEMBERS which are local govern- ments within the State of Illinois. It is the intent of the parties in entering into this agremeent that, to the fullest extent possible, the scope of risk managment undertaken by them through a joint municipal self-insurance program using govern- mental funds shall not waive, on behalf of any local public entity or public employees as defined in the Local Govermmental and Governmental Employees Tort Immunity Act, any defenses or immunities therein provided. Specifically, the MEMBERS of this AGENCY intend to effect no waiver of immunities through their contribution of public funds retained within the Risk Management Pool. Such contributions are not intended to constitute the issuance of a policy for insurance coverage. -4- ARTICLE II. Flowers and Duties. The powers of the AGENCY to perform and accomplish the purposes set forth above shall, within the budgetary limits and procedures set forth in these By -Laws be the following: (a) To employ agents, employees and independent contractors, (b) To lease real property and to purchase or lease equipment machinery, or personal property necessary for the carry- ing out of the purpose of the AGENCY, (c) To carry out educational and other programs relating risk reductions, (d) To cause the creation of, see to the collection of funds for, and administer a JOINT RISK MANAGEMENT POOL, (e) To purchase excess insurance and aggregate stop loss insurance to supplement the JOINT RISK MANAGEMENT POOL, (f) To establish reasonable and necessary loss reduction and prevention procedures which shall be followed by the MEMBERS, (g) To provide risk management services including the defense of and settlement of claims, (h) Solely within the budgetary limits established by the Members to carry out such other activities as are neces- sarily implied or required to carry out the purposes of the AGENCY specified in Article I or the specific powers enumerated in Article II. -5- ARTICLE III. Participation and Term. Initial Membership in this AGENCY shall be limited to those municipalities the names of which are set out in Appendix A, and any other municipalities approved for membership in the AGENCY by at least the affirmative two-thirds (2/3) vote of the entire membership of the Board of Directors of the AGENCY. New MEMBERS may be admitted under such terms and with such pay- ments as are determined by the Board. All initial MEMBERS of the AGENCY except for the expulsion provisions of Article XVI, shall remain MEMBERS of the AGENCY for a period of at least four (4) years after the AGENCY shall have commenced its opera- tions. After the initial four (4) year term of the AGENCY, the MEMBERS may, through the manner provided in Article V(h)(iv), extend the term of the AGENCY for individual extended terms each of which may not be for more than four (4) years. So long as the AGENCY shall continue in existence, any new MEMBER joining the AGENCY shall remain a MEMBER for the remaining years of the then -current term or three years, whichever shall be longer. Thus, a new MEMBER joining the AGENCY for the final year of a four-year term shall be obligated to continue as a MEMBER of the AGENCY for at least the first two years of a new four-year term if such an extended term is authorized. After the initial four-year term of the AGENCY, and except as provided for new, MEMBERS, any MEMBER of the AGENCY may withdraw from the AGENCY at any anniversary date upon the giving of at least one (1) year's prior written notice. Such notice shall -6- be addressed to the Risk Manager of the AGENCY and shall be accompanied by a resolution or ordinance of the Corporate Au- thorities of the MEMBER electing to withdraw from the AGENCY. Such notice may also be given at least one year prior to the the end of the first four-year term, to effectuate withdrawal at the end of' that term. If the corporate authorities of the withdrawing MEMBER should reverse their determination to withdraw, such withdrawing MEMBER may be readmitted with or without any interruption in coverage as a new or continuing MEMBER in the same manner its new MEMBERS are admitted. -7- 3/25; 88 ARTICLE IV. Commencement of the Agency. The AGENCY shall commence its operations at 12:01 a.m. on May 1, June 1, July 1, or August 1, 1988, if respectively by April 15, May 16, June 15, or July 15, 1988, the corporate authorities of at least three (3) of the prospective MEMBERS of the AGENCY, the names of which are set forth on Appendix A, shall have passed the Contract and By -Laws of the AGENCY and shall have delivered checks in the amount of one-half (1/2) of the estimated first year's annual payment which total not less than $193,000.00. A certified copy of the ordinance or resolution authorizing the execution of the Contract and By -Laws, a signed copy of the Contract and By -Laws document, and the check shall be promptly delivered to: McHENRY COUNTY MUNICIPAL RISK MANAGEMENT AGENCY c/o City of McHenry 1111 North Green Street McHenry, Illinois 60050 The check shall be made payable to the MC HENRY COUNTY MUNICIPAL RISK MANAGEMENT AGENCY. Such MEMBERS may, at an initial meeting held in the manner specified in Article V, admit other municipal- ities, the names of which are set forth on Appendix A. Prospec- tive MEMBERS of the AGENCY, the names of which are set forth on Appendix A, which are not admitted to the AGENCY prior to its commencement date, may be admitted in the same manner as other new MEMBERS. In the event that fewer than all of the prospective MEMBERS of the AGENCY shall elect to become initial MEMBERS, the first year's annual premium may increase above the projected amount set forth on Appendix A. By approving the execution of the Contract and By -Laws document, a MEMBER agrees that the annual payment for the first fiscal year shall be as set forth in Appen- dix A, plus it possible increase in the first year's annual pre- mium, which shall be no greater than 10% higher than the amount shown on Appendix A. Within thirty (30) days after the commence- ment date of the AGENCY, Arthur J. Gallagher & Co. shall notify the MEMBERS of the AGENCY whether any increase in the annual premium shall be required. Any increased amount shall be added to the second payment by the MEMBERS which shall be due within sixty (60) days after the commencement of the AGENCY. If the required acts necessary to bring about the commence- ment of the AGENCY have not occurred by July 15, 1988, the obliga- tion of those units of local government, which have passed the resolution or ordinance to become a MEMBER of the AGENCY shall cease and all funds will be returned to them with any interest earned. WE 3, 33 ARTICLE V. Board of Directors. (a) There is hereby established a Board of Directors of the AGENCY. Each MEMBER unit of local government shall appoint one (1) person to represent that body on the Board of Directors for a term of one (1) year along with another person to serve as a first alternate repre- sentative when the initial representative is unable to carry out that representative's duties. A second alternate representative may also be appointed for when both the initial representative and first alternate are unable to carry out the representative's duties. The appointment of a second alternate representative is optional with each MEMBER. The representative and alternate shall be appointed by the chief executive officer of the MEMBER and these appointments shall be confirmed by the legislative body of the MEMBER. Once such appointments are made known to the AGENCY the! persons appointed shall remain in office until the: AGENCY receives evidence of the appointment of other persons. The AGENCY shall be the judge of the proper appointment of members of the Board of Directors and alternates and shall utilize in case of dispute general principles of Illinois municipal law. The representative and alternate selected need not be an elected official or employee of the MEMBER. The AGENCY shall hold an organizational meeting in the period from thirty (30) days before to thirty _in_ (30) days after the commencement of its term. At that meeting, Board officers shall be selected. In subsequent years, the Board of Directors shall annually select Board officers during the final quarter of each fiscal year to serve during the subsequent fiscal year. The Chairman shall be the chief executive officer of the AGENCY. The Chairman shall preside at all meetings of the Board. The Chairman may request information from any officer of the Board or of the AGENCY or any employee or independent contractor of the AGENCY. The Chairman shall vote on all matters that come before the Board or Committees on which the Chairman serves. The Chairman shall be a non -voting ex-officio member of -all committees of the AGENCY on which the Chairman does not. directly serve. The Chairman shall have such other powers as are set forth in these By -Laws and such other powers as he may be given from time to time by action of the Board. The Vice Chairman shall carry out all duties of the Chairman of the Board during the absence or inability of the Chairman to perform such duties and shall carry out such other functions as are assigned from time to time by the Chairman or the Board of Directors. The: Board of Directors may from time to time establish other officers of the Board and may elect a member of the Board to serve in any of such offices. The -11- Board shall fill any vacancies which may occur in such offices for the remainder of the term. (b) The Board of Directors shall determine the general policy of the AGENCY which policy shall be followed by the AGENCY officers, agents, employees and independent contractors employed by the AGENCY. Among other items, it shall have the responsibility for (1) Hiring of AGENCY officers, agents, non -clerical employees and independent contractors, (2) Setting of compensation for all persons, firms and corporations employed by the AGENCY, (3) Setting of fidelity bonding requirements for employees or other persons, (4) Approval of amend- ments to the By -Laws, (5) Approval of the acceptance of new MEMBERS and expulsion of MEMBERS, (6) Approval and amendment of the annual budget of the AGENCY, (7) Resolution of disputes over the scope of pooled self- insurance coverage provided by the AGENCY, (8) Approval of educational and other programs relating to risk reduction, (9) Approval of reasonable and necessary loss reduction and prevention procedures which shall be followed by all MEMBERS, (10) Approval of annual and supplementary payments to the Risk Management Pool for each MEMBER, and any other funds required to be paid for administrative purposes, (11) Approval of additional terms for the existence of the AGENCY. The Board of Directors may establish such rules and -12- 7, 7 regulations regarding the payout of funds from the Risk: Management Pool as shall from time to time seem appropriate. (c) Each MEMBER shall be entitled to one (1) vote on the Board of Directors. Such vote may be cast only by the designated representative of the MEMBER or in the representative's absence, by the first alternate selected by the MEMBER or in the absence of both the MEMBER and the first alternate, by the second alternate selected by the MEMBER in the same manner as specified for the selection of the principal representative. No proxy votes or absentee votes shall be permitted. MEMBERS of the AGENCY which withdraw shall be entitled to vote only on matters directly affecting their limited con- tinuing interest in the AGENCY. Voting shall be con- ducted by voice vote unless one (1) or more MEMBERS of the Board of Directors shall request a roll call vote; provided, however, that 1. Any vote which requires a greater than majority vote for passage shall be by roll call vote, and 2. Any member of the Board who abstains or casts a vote in a minority position on a matter upon which a voice vote is taken may have that vote specifically recorded in the Minutes by indicat- ing such desire to the presiding officer. -13- (d) The representative selected by the MEMBER shall serve for a one (1) year term co-existant with the fiscal year of the AGENCY and until a successor has been se- lected. If the Board of Directors modifies the fiscal year of the AGENCY, it may cause the extension of such terms. The representative chosen by the MEMBER may be removed in the same manner as other non -tenured appointive officers within the MEMBER. In the event that: a vacancy occurs in the representative or alternate representative selected by the corporate authorities of a MEMBER, that body shall appoint a successor. The failure of a MEMBER to select a representative or the failure of that person to participate shall not affect the responsibilities or duties of a MEMBER under this Contract. (e) The Board of Directors shall have the power to establish both standing and ad hoc committees. The Chairman of the Board may also establish ad hoc committees which do not conflict with those established by the Board. Unless the Board of Directors shall establish some other procedure, the selection of members of the Board of Directors who shall serve on such committees and chair them shall reside with the Chairman of the Board of Directors. The Chairman of the Board of Directors may appoint non -voting and non -paid persons who are not: members of the Board of Directors to serve on com- -14- mittees of the AGENCY. The Board of Directors may assign to a committee or to the Chairman or Vice Chairman the authority to authorize the expenditure of funds and to settle claims or suits brought against entities within the scope of coverage provided by the AGENCY. The motion authorizing such authority may set the dollar limits within which the authority may be exercised. The Risk Manager and Claims Administrator may also be c1ranted such authority. (f) The Board of Directors may establish rules governing its own conduct and procedure not inconsistent with the By -Laws and loss reduction and prevention procedures which shall be followed by the MEMBER. (g) A quorum shall consist of a majority of the MEMBERS of the Board of Directors. Except as provided in Sub- section (h), herein, or elsewhere in these By -Laws, a simple majority of a quorum shall be sufficient to pass upon all matters. (h) A greater vote than a majority of a quorum shall be required to approve the following matters: 1. Such matters as the Board of Direc- tors shall establish within its rules as requiring for passage a vote greater than a majority of a quorum, provided, however, that such a rule can only be es- tablished by a greater than a majority vote at least equal to the greater than majority percentage within the proposed rule. -15- 2. The admission of a new MEMBER and the expulsion of a MEMBER shall require at least the af- firmative two-thirds (2/3) vote of the entire membership of the Board of Directors. 3. Any amendment of these By -Laws except as provided in Subsection 4 below, shall require at least the affirmative two-thirds (2/3 vote of the entire membership of the Board of Directors. 4. The amendment of these By -Laws to cause the termination of this Agreement sooner than four (4) years after its commencement, or earlier than any other fixed term when the reason for that termination is other than because of loss of MEMBERS, the amendment of these By -Laws to cause a modi- fication of more or less than the high or low range of the pool contribution factor, as established within Article VIII(d), or the continuation in existence of the AGENCY after its first four-year term for single individually ap- proved fixed periods each not in excess of four years, shall require that specific written notice of the proposed change be sent by mail to the chief ex- ecutive officer of the MEMBER and to the regular and alternate representative of the MEMBER on the Board of Directors, no less than ten (10) days prior to a meeting at which this matter is proposed and that the amendment as proposed or as amended at a Board meeting receive at least the affirmative two-thirds (2/3) vote of the entire membership of the Board of Directors. 5. A modification in the manner in which the pool Contribution Formula is determined shall require the affirmative vote of all MEMBERS, -16- which vote may be achieved at two (2) consecutive meetings so that a MEMBER absent at one meeting may add its vote at the second meeting. (i) No one serving on the Board of Directors shall receive any salary or other payment from the AGENCY and any salary, compensation, payment or expenses for such representative, shall be paid by each MEMBER separate from this Contract. Provided, however, that the Chairman of the Board, Vice Chairman, Treasurer and such Board officers as are given the right to reimbursement may submit to the Board of Directors for their approval reimbursement of expenses incurred in the pursuit of their position as officers of the AGENCY. The reim- bursement for such expenses shall include amounts ad- vanced on behalf of the AGENCY either by the officer himself or by a MEMBER. If the amount requested is not within the approved budget, a request to amend the budget shall accompany the request for reimbursement. -17- ARTICLE VI. Board of Directors Meetings. (a) Regular meetings of the Board of Directors shall be held at least four (4) times a year. The dates of any regular meetings of the Board shall be established at the beginning of each fiscal year. Any item of business may be considered at a regular meeting. At least two (2) meetings must be held during the first hall: of the fiscal year and at least two (2) meetings must be held during the second half of the fiscal year. Special meetings of the Board of Directors may be called by :its Chairman, or by any two (2) Directors. Except for meetings called in emergency situations in the manner provided by law, ten (10) days written notice of regular or special meetings shall be given to the official. representatives of each MEMBER government and an agenda specifying the subject of any special meeting shall accompany such notice. Business conducted at special meetings shall be limited to those items specified in the agenda. (b) The, time, date and location of regular and special meetings of the Board of Directors shall be determined by the Chairman of the Board of Directors or by the convening authority. (c) To the extent not contrary to these By -Laws, and except as modified by the Board of Directors, Roberts Rules of Order, latest edition, shall govern all meetings -18- of the Board of Directors. Minutes of all regular and special meetings of the Board of Directors shall be sent to all members and alternate members of the Board of Directors and to the chief executive officer of each MEMBER. -19- 3/288 ARTICLE VII. Agency Officers. (a) Officers of the AGENCY shall consist of a Risk Manager, a Treasurer and such other officers as are established from time to time by the Board of Directors. All offi- cers shall be appointed by the Board of Directors. (b) The Risk Manager shall be the chief administrative officer of the AGENCY and shall in general supervise and control the day-to-day operations of the AGENCY and shall carry out the policy of the AGENCY as estab- lished in these By -Laws and by the Board of Directors. Among his duties shall be the following: 1. He may sign, with such other person authorized by the Board of Directors, any instruments which the Board of Directors have authorized to be executed and, in general shall perform all duties incident to the office of Risk Manager and such other duties as may be prescribed by the Board of Directors from time to time. 2. The Risk Manager shall prepare a proposed annual budget and proposed annual Joint Risk Man- agement Pool payment and, where required, supplementary payments to the Joint Risk Management Pool and shall submit such pro- posals to the Board of Directors. 3. The Risk Manager shall, where necessary, make recommendations regarding policy decisions, the creation of other AGENCY officers and the employment of a CLAIMS ADMINISTRATOR, agents and independent contractors. At each regular meeting of the Board of Directors and at such -20- other times as he shall be re- quired to do so, he shall present a full report of his activities and the fiscal condition of the AGENCY. 4. The Risk Manager shall report monthly to all MEMBERS on all claims filed and payouts made. S. The Risk Manager shall, within the constraints of the approved or amended budget, employ all secretarial, clerical and other similar help and expend funds for administrative expenses. (c) In the absence of the Risk Manager or Treasurer, or in the event of the inability or refusal of such officers to act, the Chairman of the Board of Directors may perform the duties of the Risk Manager or Treasurer, and, when so acting, shall have all of the powers of and be subject to all of the restrictions upon the Risk Manager or Treasurer. (d) The AGENCY shall purchase a bond in an amount established from time -to -time by the Board to assure the fidelity of the Chairman and Vice Chairman of the Board, the Treasurer and any other officer, committee member, or employee who shall have the right to authorize the transfer or payment of AGENCY funds. (e) The Treasurer shall: 1. Have charge and custody of and be responsible for all funds and securities of the AGENCY; receive and give all receipts for moneys due and payable to the AGENCY from any source what- soever; deposit all such moneys in the name of the AGENCY in such banks, savings and loan associations or other depositories as shall -21- be selected by the Board of Directors; and, invest the funds of the AGENCY as are not im- mediately required in such securities as the Board of Directors shall specifically or generally select from time to time. Maintain the financial books and records of the AGENCY. Provided, however, that all investments of AGENCY funds shall be made only in those securities which may be purchased by Illinois non -home rule com- munities under the provisions of the Illinois Revised Statutes. 2. In general, perform all the duties incident to the office of Treasurer and such other duties as from time to time may be assigned to him by the Risk Manager or the Board of Directors. (f) The Board may select a financial institution to carry out some or all of the functions which would otherwise be assigned to a Treasurer and may select a risk manage- ment company or agent to serve as claims administrator or to carry out some or all of the functions which would otherwise be assigned to a Risk Manager. The Board may also employ persons or companies as independent contractors to carry out some or all of the functions of officers of the AGENCY. -22- MCMR,,% , 3; 11/88 3/25/88 ARTICLE VIII. Finances and Risk Management Pools. (a) The fiscal year of the AGENCY shall commence on the date of the commencement of the AGENCY, except that one change in the fiscal year may thereafter be selected by the Board of Directors, which may extend or contract the term of the AGENCY until the conclusion of the new fiscal year. The terms of officers shall be extended or contracted to match the end of the fiscal year. (b) The Board of Directors shall approve a preliminary budget for the succeeding year for the administration of the AGENCY by the beginning of the ninth month of each fiscal year. Copies of all preliminary and final budgets shall be promptly mailed to each Member of the Board of Directors. The Board of Directors shall, by the beginning of the eleventh month of each fiscal year adopt a final budget for the following fiscal year and determine the amount of annual payments to be made by each MEMBER and the date upon which the payment is due. Provided, however, that in its first year., the annual budget shall be established by the end of the first quarter of the fiscal year and annual payments shall be as established in Article IV. Failure of the Board of Directors to approve a preliminary or final budget within the times set forth within this Section shall not relieve the MEMBERS of the obligation -23- to make annual, supplementary or other required payments to the AGENCY so long as such budgets are finally adopted, and •the MEMBERS are given at least thirty (30) days after the passage of the final budget or the call for supplementary or other required payments in which to make payments to the AGENCY. MEMBERS shall be respon- sible for supplementary payments during the life of the AGENCY and any later period when claims or expenses need be paid which are attributable to the year of membership when the event out of which the expense or claim occurred. (c) The forewarding of annual, supplementary and other required payments within the time specified in notices to the MEMBERS giving them not less than thirty (30)days to make such payments, shall be of the essence of this contract. Supplementary payments and payments for administrative costs shall only be required by the Board of Directors in a situation in which there is a reasonable concern that the sum remaining from the annual payment will not be sufficient to meet the re- sponsibilities of the AGENCY established in these By - Laws. MEMBERS shall be responsible for supplementary payments and other required payments during the entire life of the AGENCY and any later period when claims or expenses need be paid which are attributable to the year, of membership when the event out of which the expense or claim occurred. 2 2 5 2 (d) In subsequent years, the Board of Directors may require, the annual or supplementary payments to be made on a monthly or quarterly basis. The Board of Directors may establish debits or credits in the pool contribution payment for those MEMBERS with above average or below average loss or claim records. Such increase or decrease above or below the payment which would otherwise be required without the experience modification shall not affect such unmodified amount by more than plus or minus 25%. (e) unless this Contract and By -Laws shall be amended, each MEMBER of the AGENCY shall make annual or supple- mentary or other payments for all but the first fiscal year of the AGENCY based upon four factors. The four factors are property values, payrolls, vehicles and revenues. These factors shall be weighed in the follow- ing proportions: Property Values 10% Payrolls 45% Vehicles 25% Revenues 20%. Each of these factors shall be defined as follows: (i) "Property values" shall mean the replacement cost evaluation of all real and personal property re- ported to the AGENCY. The AGENCY may require the MEMBERS to have their property periodically appraised. The -25- AGENCY may pay for the appraisal on a basis determined by the Board of Directors, which may be different than the basis on which the annual, supplementary or other payments are based. (ii) "Payrolls" shall mean the audited total payroll of the MEMBER. (i_ii) "Vehicles" shall mean the number of licensed motor vehicles owned or used on a regular basis by the MEMBER. (:iv) "Revenues" shall mean the total income of the MEMBER from the following sources: 1. Taxation of all kinds, 2. License and franchise revenues, 3. Fines, 4. The sale of sewer, water or other utility services and other payments received in the provision of such utility services, 5. Permit fees and service charges, 6. Annual income received through special assessments or special service taxing district projects, 7. All funds received which are expected to continue to 'be received in generally similar or greater amounts for at least a three (3) year period in- cluding funds from other governmental units at the local, State or federal levels. 8. Revenues shall be defined as excluding the proceeds of bond issues. 3,� Z 8 Any MEMBER which has a municipal Library Board under the Local. Library Act of Chapter 81 of the Illinois Revised Statutes, shall elect whether to have the AGENCY extend its coverage to that entity for all matters within its scope of coverage except card catalog replace- ment. If the MEMBER elects to provide such coverage, for the Library Board, the factors relating to the Library Board shall be included within the report of the MEMBER for the purpose of determining the amount of the annual payments. The MEMBER shall notify the AGENCY in writing of its determination regarding this matter at least thirty (30) days before the start of each fiscal year and at least fifteen (15) days before the commencement of the AGENCY in the first year of operation. The amount of the initial payment based upon the factors of the MEMBERS with Library Boards shall be adjusted depending upon the decision of the MEMBER as to whether or not to extend coverage to that entity. In computing the four factors, the Risk Manager shZL11 require each MEMBER to submit documents to permit the! computation to be made. The Board of Directors shall, after reviewing the documentation, establish a tentative computation for each MEMBER. Written notice of this tentative revenue determination shall be sent to each MEMBER. If a MEMBER wishes to contest the -27- determination, it may request a hearing before the Board. The decision by the Board after such a hearing shall be final unless the Board shall be found by a court to have committed a gross abuse of discretion. A decision by the Board that a local, State or federally funded program is expected to continue for at least a three-year period shall, unless reconsidered, be f ina.l . (e) Each MEMBER shall submit to the AGENCY its annual audited statement of revenues prepared by a Certified Public Accountant in accordance with generally acceptable auditing principles. The revenue factor shall be based upon the municipal revenues shown in the annual audit statement of the MEMBER for the last fiscal year for which at least three-quarters (3/4) of the MEMBERS have available audited statements at the date upon which the request for annual audited statements of revenue are made by the AGENCY. In the event that for some reason no such current audit or other docu- mentation is available, or a dispute should arise over the validity of the material submitted, the Board of Directors shall estimate the four factors of the MEMBER based upon the best figures then available. The decision of the Board shall be final. In the event that the Board has made such an estimate, adjustments shall be carried out between the estimated actual amounts -28- when such figures are available, such that MEMBERS shall be required to make additional payments or shall receive a credit upon payments to be paid in subsequent years. (f) Calls for supplementary payments shall be made by the Board of Directors, providing, however, that such ad- ditional sums may be called for in a total amount at- tributable to one year of no more than a sum equal to fifty percent (50%) of the final regular annual payment for that year. More than one call for supple- mentary payments may be made, but the total amount sought shall not exceed 50% of the final regular payment for that year. In addition to annual and supplementary payments, each MEMBER shall be responsible for the payment of its proportional share of the administrative costs of the AGENCY and payments in accordance with Article XIV, without regard to the 50% maximum on supplementary payments, but a call for such funds shall only be made if all other available funds have been expended. Pay- ments for administrative costs may be assessed during the period after the term of the AGENCY has concluded if such sums are required to pay continuing administra- tive costs. (g) In the event that the Board of Directors should find that the amount Dn hand is greater than the amount -29- J 2 _D 7 required to pay administrative expenses and claims, a refund may be made to the MEMBERS in the proportion of their contributions. Supplementary payments may be called for if it should occur that more funds are required to meet all expenses or covered claims for the year in question. (h) The Board of Directors shall provide to the MEMBERS an annual audit of the financial affairs of the AGENCY to be made by a certified public accountant at the end of each fiscal year in accordance with generally accepted auditing principles. The annual report shall be delivered to the representative or alternate of each MEMBER. (i) At the conclusion of the administration of the affairs of -the AGENCY, the Board of Directors shall distribute all remaining assets of the AGENCY, which have not theretofore been distributed with respect to a claim year or years, to the MEMBERS who were MEMBERS on the date the AGENCY ceased its existence. Such distribution shall be in proportion to the ANNUAL PAYMENTS made by such MEMBERS during the fiscal year at the end of which the AGENCY ceased its existence. Amounts received by such MEMBERS in the final distribution may be used by such MEMBERS only for the operation of their exempt purposes as units of local government. -30- 3,'2 a9 ARTICLE IX. Scope of Loss Protection. In the absence of a motion by the Board of Directors expand- ing or contracting the scope of loss protection furnished by the AGENCY, the AGENCY shall provide loss protection to the extent that protection would be accorded within the terms of the excess and aggregate stop loss insurance policies held from time to time by the AGENCY for the benefit of its MEMBERS. The intent of this Contract and By -Laws shall be that except to the extent to which the scope of coverage provided by the AGENCY is specifically expended by action of the Board of Direc- tors, the MEMBERS herein do not intend to utilize the loss fund of the AGENCY to cover matters in which aggregate stop loss and excess coverage is not contemporaneously provided. The initial scope of protection to be furnished by the AGENCY shall be substantially as is established in Appendix B, attached to and made a part of this Contract. Provided, however, that without limiting the generality thereof, the AGENCY shall not provide self-insurance pooled coverage in the following areas: 1. Punitive or exemplary damages not covered by excess and aggregate insurance. 2. Liability of individuals otherwise covered for acts committed outside of the scope of their duties and powers. 3. Unless covered by a jointly purchased conventional policy, causes of action seeking only non -monetary claims such as injunction, mandamus and declaratory relief . _-A1 - 4. The payment of the attorneys' fees of opposing counsel or other court costs where a judgment providing no other monetary relief to the plaintiff is entered. 5. Causes of action where the plaintiff seeks no damages but only the return of tax funds or any other funds alleged to have been paid to or received by the muni- cipality in error or without authority in law. 6. Causes of actions grounded solely in contract except for validly extended contractual obligations of MEMBERS to indemnify third -parties. 7. Causes of action seeking only back pay or retroactive salary increases based upon alleged discrimination. 8. Causes of action alleging improper acts by officers of MEMBER municipalities who serve as representatives of those municipalities on other intergovernmental agencies to the extent that such a claim alleges actions performed beyond service as a mere member of the legisla- tive body of such agency. (For example, acts performed by an agency officer). 9. Causes of action involving the ownership, operation or participation of a MEMBER in any way in an airport facility. 10. Allegations relating to the area of liquor liability beyond the scope of coverage provided within the excess or aggregate policies purchased by the AGENCY. 11. An alleged continuing tort arising out of the existence or enforcement or a regulatory enactment or policy -32- 1 i _ when the Board of Directors finds that the action imposes an unacceptable risk of continuing loss against the AGENCY. In reaching such a decision, the Board of Directors may decline to extend the coverage of the AGENCY or place a .limit on the amount of money damages and defense costs it will assume. Prior to taking such a decision, the Board shall consider the matter at a regular or special meeting at which the issue shall be noted on the agenda. The municipality for which coverage may be limited or withdrawn shall receive specific notice that this matter will be considered. The Board shall pay for any defense costs incurred prior to the date at which coverage is withdrawn or limited for such a continuing tort. 12. Fire or casualty losses to property owned by the MEMBER at -the submission of, but not listed upon the statement of 'values property report, furnished to the AGENCY. In listing the items set forth above, the MEMBERS merely wish to take formal note of certain areas found by other similar agencies to be beyond the scope of protection accorded by the AGENCY. These limitations in coverage are not, however, intended as a complete statement of those areas which may not be found within the scope of coverage provided by the AGENCY. Nor are these listed areas of exclusion intended to be outside the scope of protection afforded by the AGENCY to the extent that the Board of Directors specifically authorizes such coverage and -33- aggregate, excess or other policies purchased by the AGENCY may from time to time provide such coverage. The Risk Manager, after having reviewed a claim forwarded to the AGENCY for coverage shall be permitted to decline to provide coverage for such claim if, in his opinion, the claim is not within. the scope of coverage accorded by the AGENCY. The Risk Manager may also agree to accept the claim and provide a defense but, may reserve the right of the AGENCY to withdraw from the defense or to refuse to provide indemnification against the claim in the event that it is later determined that the claim is not properly within the scope of protection accorded by the AGENCY. By entering into this Contract and By -Laws or seeking benefits from the AGENCY, each MEMBER of the AGENCY or other person or entity seeking coverage, agrees to be bound by a decision by a majority vote of the Board of Directors of the AGENCY that a particular matter presented to the AGENCY for defense and indemnification is or is not within the scope of coverage provided by the AGENCY. Any MEMBER of the AGENCY may request that the Board of Directors take official action to affirm or reverse a decision by the Risk Manager or other officer, employee or independent contractor of the AGENCY that a particular matter is or is not. within the scope of coverage provided by the AGENCY. The MEMBER requesting such a consideration by the Board of Directors shall have a full opportunity to explain the position being urged by the MEMBER. The decision of the AGENCY shall be final in the absence of a clear abuse of its discretion. -34- ARTICLE X. Excess Insurance. The AGENCY may purchase excess insurance for the Joint Risk Management Pool from a company authorized to write such coverage in Illinois. The amount of such excess insurance shall be established by the Board of Directors. The AGENCY may obtain aggregate stop loss insurance such that in the event that the AGENCY should in any period expend a maximum aggregate sum set from time to time by the Board of Directors for the payment of claims, the stop loss protection would pay additional claims above that amount to certain maximum amount. The Board of Directors by contracting for such insurance shall determine the commencement level of the aggregate stop loss protection and its limit based upon the current assets and risk history of the AGENCY. The sequence of the obligations of the MEMBER, the AGENCY and the excess and aggregate insurers for a claim within the scope of theAAGENCY is, as follows: The MEMBER shall pay any required deductible amount. The next payment will come from the AGENCY in accordance with the scope of loss protection set forth in ARTICLE IX. The next level of responsibility shall be that assumed by the excess insurers. In the event that a series of losses should exceed the amount of coverage provided by the Joint Risk Management Pool, the excess insurance and the aggregate stop loss insurance for any one year, then the payment of such uncovered valid loss shall be the ob- -35- ligation of the individual MEMBER or MEMBERS against whom the claim was made and perfected by judgment or settlement. In the event that the amount of funds in the Risk Management Pool are not: sufficient to pay all claims, they shall be paid in the order in which settlements can be reached or judgments are entered. The Board of Directors, by a majority vote of the entire membership of the Board of Directors may also provide that sup- plementary payments up to no greater than the maximum allowable amount as provided for in Article VIII(f), may be called for in the event that the amount received from aggregate stop loss insurance policies is not sufficient to pay losses and claims for any claim year. Provided, however, that this special fund shall not be used to pay any single claim of more than $50,000.00. -36- ARTICLE XI. Obligations of Members. The obligations of MEMBERS of the AGENCY shall be as follows: (a) To appropriate or budget for, where necessary to levy for and to promptly pay all annual and supplementary or other payments to the Risk Management Pool at such timers and in such amounts as shall be established by the Board of Directors within the scope of this agree- ment:. The MEMBERS shall also be required to pay neces- sary administrative expenses of the AGENCY. Any delin- quent payments shall be paid with a penalty which shall be equal to the highest interest rate allowed by statute to be paid by an Illinois non -home rule municipality on the date of delinquency. MEMBERS delinquent in their payments may also be charged with the costs of collection. (b) To select a person to serve on the Board of Directors and to select alternate representatives. (c) To allow the AGENCY reasonable access to all facilities of the MEMBER and all records including but not limited to financial records which relate to the purpose or powers of the AGENCY. (d) To allow attorneys employed by the AGENCY to represent the MEMBER in investigation, settlement discussions and all level of litigation arising out of any claim made against the MEMBER within the scope of loss protec- tion furnished by the AGENCY. -37- (e) To furnish full cooperation with the AGENCY'S attorneys, Claims Administrators, the Risk Manager and any agent, employee, officer or independent contractor of the AGENCY relating to the purpose and powers of the AGENCY. (f) To follow in its operations all loss reduction and prevention procedures established by the AGENCY within its purpose and powers. (g) To furnish to the AGENCY an audit prepared by a Certified Public Accountant of all revenues received by the MEMBER for any fiscal year of the MEMBER for which figures are request by the AGENCY and other information required to determine its proper level of payments. (h) To report to the Claims Administrator within the time limit specified the following items: (i) To report, within ten (10) days of receipt, a statutory notice of claim, a claim before the Industrial Commission, a summons and complaint or other pleading before a court or agency for which coverage from the AGENCY is sought. (:ii) To report, within thirty (30) days of receipt, a written demand for monetary relief for which coverage from the AGENCY is sought. (i.ii) To report to the Claims Administrator at the earliest practicable moment any information of an occurrence received by the MEMBER and from which the MEMBER could reasonably conclude that coverage from the AGENCY will be sought. In the event that: the items set forth above are not submitted to the Claims Administrator within the time periods set forth above, the Board of Directors of the AGENCY, by a vote of a majority of a quorum of the Board, at a regular or special meet- -38- ing, may in whole or in part decline to provide a defense to the MEMBER or to extend the funds of the AGENCY for the payment of losses or damages incurred. In reaching its decision, the Board shall consider whether and to what extent the AGENCY was prejudiced in its ability to investigate and defend the claim due to the failure of the MEMBER to promptly furnish notice of the claim to the Claims Administrator. In the absence of fraud or a clear abuse of discretion, the decision of the Board of Directors shall be final. -39- ARTICLE XII. Liability of the Board of Directors or Officers. The members of the Board of Directors or officers of the AGENCY should use ordinary care and reasonable diligence in the exercise of their power and in the performance of their duties hereunder; they shall not be liable for any mistake of judgment or 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 AGENCY funds, or failure to invest. No Director shall be liable for any action taken or omitted by any other Director. No Director shall be required to give a bond or other security to guarantee the faithful per- formance of their duties hereunder. The Risk Management Pool shall be used to defend and hold harmless the AGENCY and any Director or Officer of the Board for actions taken within the scope of the authority of the AGENCY. The amount of coverage to be provided shall be the same amount applicable to officers of the MEMBERS. The AGENCY may purchase conventional insurance providing similar coverage. -40- ARTICLE XIII. Additional Insurance. Membership in the AGENCY shall not preclude any MEMBER from purchasing any insurance coverage above those amounts pur- chased by the AGENCY. The AGENCY shall make its facilities available to advise MEMBERS of the types of additional or dif- ferent coverages available to units of local government. -41- ARTICLE XIV. Optional Defense by Municipality. Whenever the AGENCY proposes to settle any pending claim or suit where the amount of that proposed settlement shall exceed Five Thousand Dollars, the MEMBER shall be given advance notice of that settlement. Such notice may be given by the establishment of a reserve amount in excess of Five Thousand Dollars, provided that the amount of the settlement does not exceed the amount reserved. The officers and employees of the AGENCY shall, how- ever, endeavor to give specific oral or written notice to a MEMBER of the exact amount of any proposed settlement in excess of Five Thousand Dollars at least fourteen (14) days prior to the date at which the AGENCY proposes to bind itself to pay such settlement amount. It is recognized by the MEMBERS that under some circumstances the AGENCY may not be able to give fourteen (14) days prior oral or written notice of the proposed settlement. The officers, employees or independent contractors of the AGENCY shall attempt to give the MEMBERS as much notice of the settlement as is possible under the circumstances of each case. In the event that a MEMBER should disagree with the amount at which the AGENCY proposes to settle a case or claim, the representative of the MEMBER on the Board of Directors of the AGENCY, the alternative member, the municipal attorney or the Mayor or Chief Administrative Officer of the MEMBER may notify the Risk Manager of the AGENCY that the MEMBER exercises its right to prevent the AGENCY from reaching a settlement at the -42- agreed upon amount. The Risk Manager may require that such information be transmitted in writing. In the event that the AGENCY does not settle a case based upon the objection of a MEMBER, the AGENCY shall continue to provide a defense to the defendants unless the MEMBER should desire to itself undertake the defense. In the event that the case or claim is eventually resolved through a settlement or judgment in an amount less than the amount at which the case could have been previously settled by the AGENCY then the MEMBER which has undertaken the costs of its own defense shall be entitled to its additional actual costs, including attorneys' fees, up to the level at which its coasts and the prior allocated costs of the AGENCY, including attorneys' fees, equal the amount at which the case could have been settled by the AGENCY. To the extent that the case or claim is resolved through settlement or judgment at an amount greater than that at which the case or claim could have been previously settled by the AGENCY, the MEMBER shall be obligated for that portion of the settlement or judgment which exceeds the sum of money at which the case could have been earlier settled by the AGENCY including all allocated costs of the AGENCY. The obligation of the MEMBER shall be in addition to and shall. not be subject to the limitation in SUPPLEMENTARY PAYMENTS contained within Article VIII(f). If at any time the amount of the allocated costs of the AGENCY devoted to the case shall equal or exceed the amount at which the case could have been settled, the AGENCY may require periodic SUPPLEMENTARY -43- �, 288 PAYMENTS from the MEMBER if the MEMBER wishes to have the AGENCY continue to provide the defense. The MEMBER shall pay its portion of the judgment or settlement directly to the plaintiff and the AGENCY shall not be required to pay the MEMBER'S portion of such judgment or settlement. Allocated costs shall mean those costs which are allocated to individual cases under the bookkeeping and accounting system utilized by the AGENCY. The AGENCY may establish the amount at which it could have settled the case through a written settle- ment offer by the plaintiff or through other competent evidence of the availability of the settlement at a particular sum. To the extent that payment shall be made with funds derived from an aggregate, excess or other insurance carrier, the provi- sions of this Article shall prevail when not contrary to those insurance contracts. -44- ARTICLE XV. Contractual Obligation. This document shall constitute a contract among those units of local government which become MEMBERS of the AGENCY. The obligations and responsibilities of the MEMBERS set forth herein including the obligation to take no action inconsistent with these By -Laws as originally written or validly amended shall remain a continuing obligation and responsibility of the MEMBER. The terms of this Contract may be enforced in a court of law by the AGENCY or any of its MEMBERS. The consideration for the duties herewith imposed upon the MEMBERS to take certain actions and to refrain from certain other actions; shall be based upon the mutual promises and agree- ments of the MEMBERS set forth herein. This Contract and By -Laws may be executed in duplicate originals and its passage by units of local government shall be evidenced by a certified copy of an ordinance or resolution passed by a majority of the corporate authorities then in office. Provided, however, that except to the extent of the limited financial contributions to the AGENCY agreed to herein or such additional obligations as may come about through amendments to these By -Laws no MEMBER agrees or contracts herein to be held responsible for any claims in tort or contract made against any other MEMBER. The contracting parties intend in the creation of the AGENCY to establish an organization for joint risk management only within the scope herein set out and for which statutory and common law immunities are not available and have not herein created as between MEMBER -45- )f Members. idemnification or respon- irmative vote of two-thirds (2/3) of st any MEMBER. the Board of Directors, any MEMBER xpulsion may be carried out for one reasons: any payments due to the AGENCY, �rtake or continue loss reduction and ::edures adopted by the AGENCY, ow the AGENCY reasonable access to all the MEMBER and all records which relate or powers of the AGENCY, -nish full cooperation with the AGENCY'S aims administrator, the Risk Manager and ployee, officer or independent contractor relating to the purpose and powers of ►rry out any obligation of a MEMBER which ability of the AGENCY, to carry out its owers. lled except after notice from the AGENCY e along with a reasonable opportunity of (30) days to cure the alleged failure. st a hearing before the Board before any to whether the expulsion shall take place. the date for a hearing which shall not be 5) days after the expiration of the time -A7_ ETC'. D, 38 to cure has passed. A decision by the Board to expel a MEMBER after notice and hearing and a failure to cure the alleged defect shall be final unless the Board shall be found by a Court to have committed a clear abuse of discretion. The Board of Direc- tors may establish the date at which the expulsion of the MEMBER shall be effective at any time not less than sixty (60) days after the vote expelling the MEMBER has been made by the Board of Directors.. If the motion to expel the MEMBER made by the Board of Directors or a subsequent motion does not state the time at which the expulsion shall take place, such expulsion shall take place sixty (60) days after the date cf the vote by the Board of Directors expelling the MEMBER. After expulsion, the former MEMBER shall continue to be fully obligated for its portion of any claim against the assets of the Risk Management Pool which occurred during the term of its membership along with any other unfulfilled obligation as if it was still a MEMBER of the AGENCY. The expelled MEMBER shall, after expulsion, no longer be entitled to participate or vote on the Board of Directors, but shall be entitled to distribution of surplus funds if any are made for the period of its membership, provided that there shall be deducted from that payment any unpaid amounts due the AGENCY. -48- � 1'_ 'Co 3,'25/8R ARTICLE XVII. Termination of the Agency. If, sixty (60) days prior to the conclusion of any fixed term of the AGENCY, the Board of Directors does not vote to continue the existence of the agency, or if, because of with- drawals, there will not be at least three (3) municipalities with total annual payments of not less than $386,000.00, which will be continuing MEMBERS of the AGENCY, then the AGENCY shall cease its existence at the close of the then -current fiscal year. Under those circumstances, the Board of Directors shall continue to meet on such a schedule as shall be necessary to carry out the winding up of the affairs of the AGENCY. It is contemplated that the Board of Directors may be required to continue to hold meetings for some substantial period of time in order to accomplish this task. All MEMBERS of the AGENCY, including those which have with- drawn or been expelled, shall remain fully obligated for the payment of SUPPLEMENTARY PAYMENTS attributable to years during which they were MEMBERS of the AGENCY. Such SUPPLEMENTARY PAY- MENTS (within the limitation in an amount provided for in Article VIII), may include but are not limited to sums sufficient to pay claims, retain reserve levels and pay for continuing claims administration. MEMBERS shall also be responsible for the payment of any additional sums required to pay for the administration of the AGENCY. In addition, all such MEMBERS shall continue to be responsible for all other obligations of membership attrib- utable to such prior years. -49- ` � • V 'If 3'288 Where any MEMBER withdraws from the AGENCY, at a time when the AGENCY shall continue in operation, the withdrawing MEMBER shall continue to hold membership on the Board of Directors but only for --he purpose of voting on matters effecting its limited continuing interest in the AGENCY for such years as it was a MEMBER of the AGENCY. Such MEMBER shall only be counted as a MEMBER of a quorum on those matters for which its representa- tive is eligible to cast a vote. -50- \I -%1:: , J 1 3,'2 "88 Whereupon under the authority granted to me by Ordinance (Resolution) Number Authorities on the day of , passed by the Corporate 1988, I do hereby execute and the Clerk does hereby attest to my signa- ture as evidence that the NV has approved participation in the McHenry County Municipal Risk Management Agency, on , 19 , in accordance with this Contract and By -Laws in its executed form and as it may subsequently be validly amended. ATTEST: Municipal Clerk This day of , 1988. -51- APPENDIX A MEMBERS 1. Village of Fox River Grove 2. City of Harvard 3. City of Marengo 4. City of McHenry 5. Village of Spring Grove 6. City of Woodstock EXPECTED 1st YEAR ANNUAL PAYMENT* $ 42,860.00 $ 79,382.00 $ 68,796.00 $195,102.00 $ 9,634.00 $235,560.00 *Please send a check for 1/2 this amount, along with a certified copy of the Ordinance and a signed copy of the Contract and By -Laws to: McHENRY COUNTY MUNICIPAL RISK MANAGEMENT AGENCY c/o City of McHenry 1111 North Green Street McHenry, Illinois 60050 APPENDIX B McHENRY COUNTY MUNICIPAL RISK MANAGEMENT ASSOCIATION Property Covered Items Valuation Policy Limits Building Replacement Cost Reported Value Contents Replacement Cost Reported Value Property in Open Replacement Cost Reported Value Automobiles Actual Cash Value $500,000 Mobile Equipment Actual Cash Value Reported Value EDP Equipment Replacement Cost $500,000 EDP Media Actual Loss Sustained 500,000 EDP Extra Expense Actual Loss Sustained $100,000 Builders Risk: Owned -Automatic Replacement Cost $500,000 Extra Expense Actual Loss Sustained $100,000 Accounts Receivable Actual Loss Sustained $100,000 Valuable Papers & Records Actual Loss Sustained $100,000 Coverage: All Risk Flood - $500,000 Limit Earthquake - $500,000 Limit Subject to policy exclusions Deductible $1,000to individual member 'Self -Insured Retention - $50,000 Annual Loss Fund - To be determined March 1988 McHENRY COUNTY MUNICIPAL RISK MANAGEMENT ASSOCIATION Comprehensive General liability Limit of Liability: $1,000,000 Coverage: - Occurrence Premises Operations Premises Medical Payments - $5,000310,000 Per Accident Products/Completed Operations Independent Contractors Contractual Liability Personal Injury - (Civil Rights Limit $250,000) Athletic Participation Law Enforcement Liability Host/Liquor Law Liability Watercraft Liability Employee Benefit Liability Errors and Omissions - $250,000 aggregate limit Deductible $0 Self -Insured Retention - $100,000 Annual Loss Fund - To be determined Coverage Exclusions: AIDS Aircraft/Airport Liability Workers' Compensation Physicians/Hospital Malpractice Inverse Condemnation Sexual Misconduct Pollution/Asbestos Nuclear March 1988 McHENRY COUNTY MUNICIPAL RISK MANAGEMENT ASSOCIATION Automobile Liability Limit of Liability: $1,000,000 Coverage: - Claims Made Bodily Injury Property Damage Medical Payments - $5,000 each person Underinsured Motorists-$1,000,000 Uninsured Motorists - $1,000,000 Deductible - $0 Self -Insured Retention - $100,000 Annual loss Fund - To be determined March 1988 MCHENRY COUNTY MUNICIPAL RISK MANAGEMENT ASSOCIATION Crime Coverage Coverage/Limits: Money and Securities - within premises $100,000 Money and Securities - outside premises 100,000 Employee Blanket Bond 100,000 Depositors Forgery 100,000 Counterfeit Paper 100,000 Deductible 0 Self -Insured Retention 100,000 Annual Loss Fund (To be determined) March 1988 McHENRY COUNTY MUNICIPAL RISK MANAGEMENT ASSO�II TION Workers' Compensation Coverage: Statutory Limits Employers Liability—$500,000 U.:i. Longshoremen's and Harbor Workers Deductible Self -Insured Retention Annual Loss Fund 0 150,000 To be determined March 1988 McHENRY COUNTY MUNICIPAL RISK MANAGEMENT ASSOCIATION Limit: Coverage: Objects Covered: Boiler and Machinery S 10,000,000 per accident All owned, leased locations Replacement Cost Valuation Spoilage & Contamination Ammonia Contamination Water Damage Refrigeration Interruption All -Risk Service Interruption Earthquake Extra Expense Expediting Expense Business Interruption Explosion Automatic Coverage All Risk Joint Loss Agreement "Connected & Ready for Use" - Waived Boilers & Pressure Vessels Static Content Vessels Vacuum Vessels Air Conditioning Systems Transformers Electrical Wiring Electric Motors Switchgear Generators Turbines Combustion Engines Pumps Compressors Fans/Blowers Hot Water Heating System Piping Refrigeration Systems Deep Well Pumps Deductible - $1,000 all objects 24 hrs. for Business Interruption March 1988