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HomeMy WebLinkAbout4L - West Central Joint Powers MEETING DATE: AGENDA #: PREPARED BY: AGENDA ITEM: DISCUSSION: CITY COUNCIL AGENDA REPORT APRIL 17,2000 4L SUSAN WALSH, ASSISTANT CITY MANAGER t 1: CONSIDER APPROVAL OF RESOLUTION ooA APPROVING JOINT POWERS AGREEMENT FOR GROUP EMPLOYEE BENEFITS AND OTHER FINANCIAL AND RISK MANAGEMENT SERVICES History: On October 20, 1997 the City Council approved a joint powers agreement with the Southwest/West Central Service Cooperatives that allowed the City of Prior Lake to provide group health insurance benefits to its employees through a governmental unit cooperative program. See Exhibit B. The joint powers agreement has been updated and therefore needs to be approved and executed by participating members of the cooperative. See Exhibit A. Current Circumstances: The Southwest I West Central Service Cooperatives (" SW/WC" or "Service Cooperative") provide group insurance pooling programs for school districts, cities, counties and other governmental units. The SWIWC has 213 participating groups statewide with premiums in excess of $61 million. Belonging to a large cooperative provides the following advantages and benefits: (1) overall lower insurance premiums since a cooperative with several thousand insured members can negotiate more favorable premiums; (2) stabilized insurance rates particularly if the City's employee group experiences a year with high medical claims; (3) provides City employees with good health insurance benefits at the best possible rates available; and (4) provides compliance with statutory bidding requirements. Since joining the service cooperative in October 1997, the City has experienced an 8% increase for 1999 and a 17% increase for 2000 in premium costs. Although our premium costs did increase significantly, the City's health insurance premiums would have been even higher for these two years if the City had not been a member of this service cooperative. Health care costs will continue to be an issue in the foreseeable future. Therefore, it is advantageous for the City to belong to a cooperative that can assemble such a large pool. There are also other health insurance pools the City could join, such as Public Employees Insurance Program (PEIP), League of Minnesota Cities Insurance Trust (LMCIT) or LOGIS, but staff has determined that the Southwest/West Central Cooperatives meet the City's needs at this time by providing the lowest rates for quality health insurance. 16200 Eagle Creek Ave. S.E., Prior Lake, Minnesota 55372-1714 / Ph. (612) 447-4230 / Fax (612) 447-4245 AN EQUAL OPPORTUNITY EMPLOYER -'.Y.-"- r City Council Agenda Item 4L Apri/17, 2000 ISSUES: Approximately two years ago, the Southwest/West Central Service Cooperative became self-insured as a way of lowering its administrative costs. Prior to this time, Blue Cross/Blue Shield absorbed all risk for claims. After they became self-insured, some of the member cities and counties became concerned that they could be liable for unpaid insurance claims if the Service Cooperative didn't have appropriate funds. Although the Service Cooperative advised there were no financial risks to members, the members requested written documentation. This was achieved by redrafting the Joint Powers Agreement which is before the Council's consideration tonight. It is now two years and over $50,000 later and all of the 213 members of the cooperative have been provided with the new Joint Powers Agreement for their approval. In addressing the self-insured aspect of the original joint powers document, legal counsel for the Service Cooperative made extensive revisions to the previous agreement to comply with federal and state legal requirements and clarify provisions of the joint powers agreement. To date a good majority of the Joint Powers Agreement have been approved and returned by the members. Below is a brief summary of the main sections of the new Joint Powers Agreement that differ from the current one. Defines major terms used in the document: Section 2, entitled Definitions is much more extensive. Allows for nonprofit/nongovernmental units to participate to a limited degree: Section 2.3 was included for the purpose of allowing parochial schools to join in the pool. There are very few parochial schools in the service cooperative, and none in the City of Prior Lake's regional pool. Parochial schools cannot vote on key issues. Addresses a self.insured program: Section 4.2.4 authorizes the Board to establish a self-insurance pool. Addresses establishment of advisory committees: Section 4.8 authorizes the establishment of an advisory committee at the Board's discretion. There are nine regions in the service cooperative throughout the State, and eight of the regions have an executive committee whose members are elected by members of each region. Specifies how program funds may be used: Section 6 addresses program funds and defines that funds are used for providing employee health insurance and other related programs such as employee assistance program and wellness program; for payment of administrative costs such as legal, accounting and employment expenses; to pay for taxes, and to receive a service fee paid by the insurance company. 1:\COUNCIL\AGNRPTS\2000\0417 _ 4L.DOC City Council Agenda Item 4L April 17, 2000 CITY ATTORNEY REVIEW: The City Attorney has reviewed the SWIWC proposed Joint Powers Agreement ("Agreement"). There are several provisions in the Agreement which raise some concerns and which she felt the City Council should be made aware of. The first issue dealt with whether the SWIWC is a joint powers agreement or whether it is a contract. If it is a JPA, tort claims that arise in connection with the JPA's activities might not be covered by the City's LMC1T insurance. We have obtained written documentation from the LMC1T which provides assurance that the SWIWC will be treated as a "contract" for coverage purposes. See Exhibit "C". The second issue of concern to the City Attorney is related to Section 8 of the SWIWC Agreement. Basically, this provision required (1) the City to indemnify and hold the SWIWC harmless against any action brought against it; and (2) that the City waive its right to bring an action against the SWIWC. The City Attorney concluded that the Council should be aware of these provisions and that the benefits of membership in the SWIWC (cost of health insurance) may outweigh the risk associated with the indemnity, hold harmless and waiver provisions. The LMC1T has attempted to negotiate these provisions with the SWIWC, but to date, the provisions remain. It is the City Attorney's opinion that the City would have defenses it could argue in the event the SWIWC attempted to invoke one of these provisions. In discussing this with Peter Tritz of the LMCIT, he indicated that these discussions will be ongoing, but that the risks, in his opinion, are probably minimal. FINANCIAL IMPACT: There is no financial impact since the new agreement does not increase the City's health insurance premiums for employees. ALTERNATIVES: If the City of Prior Lake wishes to continue being a member of this cooperative as a means for purchasing health insurance for the City's employees, it is appropriate that the City Council approve the attached Joint Powers Agreement (EXHIBIT A). The City may withdraw from the pool upon a 90 day notice or at least 3 months prior to renewal which is January 1 of each year. There are three alternatives for the City Council to consider: 1. Approve Resolution DO-XX approving the Joint Powers Agreement for Group Employee Benefits and Other Financial and Risk Management Services and authorize Mayor Mader to execute the attached Joint Powers Agreement. 2. Deny the Joint Powers Agreement as presented. 3. Table this item until some date in the future. 1:\COUNCIL\AGNRPTS\2000\0417 _ 4l.DOC - T City Council Agenda Item 4L April 17, 2000 RECOMMENDED MOTION: A motion and second to adopt Resolution DO-XX Approving the Joint Powers Agreement for group employee benefits and other financial and risk management services between the City of Prior Lake and SouthwestlWest Central Services Coop atives. 1:\COUNCIL\AGNRPTS\2000\0417 _ 4L.DOC 2+ RESOLUTION 004 Motion By: Second By: WHEREAS, the City of Prior Lake has been a participating member of the Southwest/West Central Service Cooperatives since October 1, 1997 at which time the City Council approved a joint powers agreement; and WHEREAS, the Southwest/West Central Service Cooperatives has revised the joint powers agreement for the purposes of complying with federal and state legal requirements and for clarifying provisions of the agreement; and WHEREAS, the City of Prior Lake finds it expedient to continue providing employee health benefit~ through the Southwest/West Central Cooperatives; and WHEREAS, the City Attorney has reviewed the Joint Powers Agreement as presented and finds it acceptable. Now THEREFORE, be it resolved by the City Council of the City of Prior Lake that the following are hereby adopted: (1) that the City of Prior Lake approves the Joint Powers Agreement for Group Employee Benefits and other Financial and Risk Management Services; and (2) that the Mayor and City Manager are authorized to execute this Agreement. PASSED AND ADOPTED THIS 17TH DAY OF APRIL, 2000. YES NO Mader Mader Ericson Ericson Gundlach Gundlach Petersen Petersen Schenck Schenck {Seal} City Manager, City of Prior Lake 16200 Eagle Creek Ave. S.E., Prior Lake, Minnesota 55372-1714 / Ph. (612) 447-4230 / Fax (612) 447-4245 AN EQUAL OPPORTUNITY EMPLOYER . -.-...-..-...---r..-.--.---..---.....---..-....---- .._- EXHIBIT A JOINT POWERS AGREEMENT FOR GROUP EMPLOYEE BENEFITS AND OTHER FINANCIAL AND RISK MANAGEMENT SERVICES February 1, 2000 JOINT POWERS AGREEl\IENT FOR GROUP EMPLOYEE BENEFlTS AND OTHER FL~ANCIAL AND RISK l\ilANAGEi\'IENT SERVICES TABLE OF CONTENTS Page SECTION 1. PURPOSE, INTENT AND OBJECTNE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1.1 Purpose 1.2 Compliance with Applicable Laws SECTION 2. DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 2.1 Advisory Committee(s) 2.2 Agreement 2.3 Associate Member 2.4 Board or Joint Powers Governing Board 2.5 CBA 2.6 CBA Employee Benefits 2.7 Discretionary Employee Benefits 2.8 Group Contract 2.9 Group Employee Benefits 2.10 Other Financial and Risk Management Services 2.11 Operating Agreement 2.12 Participant 2.13 Participant Member 2.14 Pool 2.15 Program Funds 2.16 Provider 2.17 SC SECTION 3. JOINT POWERS GOVERNlNG BOARD. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 3.1 Board Membership 3.2 Upon Dissolution of SC 3.3 Acknowledgment by Associate Members 990902:lol24 -1- . SECTION 4. RIGHTS AND RESPONSmILITIES OF THE BOARD. . . . . . . . . . . . . . . . . . 4 4.1 Authorized Powers 4.2 Group Employee Benefits 4.2.1 CBA Employee Benefits 4.2.2 Discretionary Employee Benefits 4.2.3 Fleserves 4.2.4 Self-Insurance of Health Benefits 4.3 Other Financial and Risk Management Services 4.4 Operating Agreements 4.5 SC Service Fees 4.6 Service Providers 4.6.1 Selection 4.6.2 Governmental Unit Bidding and Contracting Laws 4.6.3 Service Provider Flare Increases 4.7 Premiums and/or Contract Charges 4.8 Advisory Committee(s) 4.9 Authority of Board 4.10 Liability Limited 4.11 Withdrawal by Board SECTION 5. RIGHTS AND RESPONSIBll..ITIES OF PARTICIPANTS. .. . . . . . .. . . . . . 8 5.1 Enrollment and Flenewal 5.2 Participants to Furnish Data 5.3 Flemittance of Premiums and Contract Charges 5.4 CBA Employee Benefits 5.5 Participant Withdrawal 5.5.1 Voluntary Withdrawal 5.5.2 Withdrawal Flelating to Participant Flare Solicitation 5.5.3 Withdrawal Fle1ating to Dual Offering 5.5.4 Withdrawal at Annual Flenewal 5.6 Effect of Participant Withdrawal 5.6.1 Withdrawal from this Agreement 5.6.2 Withdrawal from a Pool 5.6.3 Program Funds 5.6.4 Future Participation Limited SECTION 6. PROGRAM: FUNDS ADMINISTRA nON . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 6.1 6.2 6.3 Program Funds General Rules Regarding Management and Disposition of Program Funds Investment of Program Funds 990902: 1424 -11- 6.4 Withdrawal of Participant 6.5 Termination of Pool 6.6 Funding of Risk SECTION 7. LENGTH OF AGREENrENT AND TERMlNATION . . . . . . . . . . . . . . . . . . . 12 SECTION 8. LIABll..ITY OF PARTIES ........................................ 12 SECTION 9. AGREEMENT BY PARTICIPATION .............................. 12 SIGNATURES.......................................................... ......13 ADDENDUM A .....................,....................................... 14 99090'2:1424 -lll- . -- , JOINT PO\VERS AGREENIENT FOR GROUP EMPLOYEE BENEFlTS AND OTHER FINANCIAL AND RISK l\1ANAGEMENT SERVICES This Joint Powers Agreement, hereinafter referred to as "Agreement," is made between Participant Member and other Participant Members as are now or may hereafter become parties to this Agreement, and the hereinafter called the "Sc." RECITALS Whereas, Minn. Stat. 471.59, Subds. 1 and 10 authorizes two or more governmental units to exercise jointly or cooperatively powers which they possess in common, and \Vhereas, Minn. Stat. l23A.2l, establishes service cooperatives, the purpose of which among other things, is to assist participating governmental units in meeting certain specific needs which can most advantageously be met on a regional basis, and Whereas, the Participant Members wish to authorize the SC Board of Directors to act as a joint board for the purpose of exercising certain powers as set forth in this Agreement, and Whereas, the Participant Members acknowledge that the Board of Directors of the SC is representati'(e of the parties to this Agreement; NOW THEREFORE, the parties hereto agree as follows: SECTION 1 PURPOSE, INTENT AND OBJECTIVE 1.1 Purpose. Under the provisions of Minnesota law, governmental units may enter into contracts for the purposes of providing Group Employee Benefits for their employees and to obtain Other Financial and Risk Management Services deemed necessary or beneficial for their operation. Under the provisions of Minn. Stat. 471.59, two or more governmental units (including, but not limited to, school districts, counties, towns, other governmental agencies and service cooperatives) may agree to exercise jointly or cooperatively powers which they possess in common. The purpose of this Agreement is to authorize the Board to exercise the common powers of the participating governmental units in connection with certain matters pertaining to the administration and funding of Group Employee Benefits and the provision of Other Financial and Risk Management Services, all as described herein. It is not the purpose of this Agreement to transfer to the Board the authority to execute contracts on behalf of Participants, or to in any manner become inv.olved in any collective bargaining process. 990902:1424 1.2 Compliance with Applicable Laws. It is the parties' intent to comply with the applicable statutory requirements pertaining to requests for proposals for group insurance, self-insurance, COBRA and its Minnesota extensions, service cooperatives, and all other applicable federal and state statutes. Pursuant to the laws governing service cooperatives, it is also intended that nonprofit non-governmental units be allowed to participate as Associate Members in the Group Employee Benefits and Other Financial and Risk Management Services made available pursuant to this Agreement, although it is not intended that such nonprofit, non-governmental units exercise any of the powers or authorities exclusively delegated to governmental units described in Minn Stat. 471.59 Subd. 1. SECTION 2 DEFINITIONS 2.1 Advisory Committee(s) means committees appointed by the Board in accordance with Section 4.8 of this Agreement which are representative of the Participants as deemed appropriate by the Board for the purpose of recommending policies, procedures and actions to the Board. 2.2 Agreement means this Joint Powers Agreement as the same may be amended from time to time. This document, and all other documents in the same form executed (or deemed executed as provided in Section 9 of this Agreement) by SC and other Participant Members, all as amended from time to time, shall together constitute a single Agreement. 2.3 Associate Member means any nonprofit or non-governmental entity which participates in any of the Group Employee Benefits or Other Financial and Risk Management Services made available to Associate Members by the Board, and agrees in writing to be bound by the terms of this Agreement other than those terms explicitly applicable only to Participant Members (or is deemed to have so agreed as provided in Section 9 o( this Agreement). 2.4 Board or Joint Powers Governing Board means the SC Board of Directors acting as the joint board authorized to exercise certain powers of the Participant Members, as permitted by Minn. Stat. 471.59, Stibd. 2 and as set forth in this Agreement. 2.5 CBA means collective bargaining agreement. 2.6 CBA Employee Benefits means employee welfare and retirement benefits made available by the Board from time to time for adoption by a Participant pursuant to the terms of a CBA, and may include, but shall not be limited to health benefits coverage, wellness and employee assistance programs, life insurance, disability income protection, dental insurance, flexible spending programs, retirement programs and long term care insurance. In no event shall any Discretionary Employee Benefits be considered CBA Employee Benefits unless and until they become part of a collective bargaining agreement between a union and a Participant. 990901:1414 -2- . 2.7 Discretionary Employee Benefits means employee welfare and retirement benefits made available by the Board from time to time for adoption by a Participant, exclusive of any CBA Employee Benefits, and may include, but shall not be limited to health benefits coverage, wellness and employee assistance programs, life insurance, disability income protection, dental insurance, flexible spending programs, retirement programs and long term care insurance. Discretionary Employee Benefits may be temtinated or reduced by the Board at any time. In the event any Discretionary Employee Benefit is terminated by the Board but continued by one or more Participants, the provision of such Discretionary Employee Benefit shall become the sole responsibility of such Participants. 2.8 Group Contract shall mean an agreement for the rendering of services by and between a Participant and a Provider of such services. In connection with the self-insurance of employee health benefits, such an agreement may also mean a Participant's agreement to participate in a program of self-insurance. 2.9 Group Employee Benefits shall mean CBA Employee Benefits and Discretionary Employee Benefits. 2.10 Other Financial and Risk Management Services may include, but shall not be limited to. technical advice regarding borrowing programs, contracted legal services, property/casualty safety group protection, personal property and casualty protection, student accident, coverage, and other services as made available by Group Contract for Participants from time to time by the Board. 2.11 Operating Agreement means an agreement by and between the Board and a Provider which establishes terms for the benefits, administration or funding of Group Employee Benefits or Other Financial and Risk Management Services. 2.12 Participant means both Participant Members and Associate Members. It does not refer to individual employees obtaining insurance or other benefit coverage pursuant to a plan offered by a Participant which is funded or administered in whole or in part pursuant to this Agreement. . 2.13 Participant Member means any governmental unit as defined in Minn. Stat. 471.59 which is accepted for participation in this Agreement by the Board, certifies that its employee benefit plans qualify as "governmental plans" that are exempt from application of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), and agrees in writing to be bound by the terms of this Agreement (or is deemed to have so agreed as provided in Section 9 of this Agreement). 2.14 . Pool means the collective group of Participants in a given program of Group Employee Benefits or Other Financial and Risk Management Services, as the context shall require. Absent an agreement expressly to the contrary, a separate Pool shall exist for each such program and a separate Group Contract shall exist between the Provider and each Participant for the rendering of services or benefits for which such Pool is formed. 990902:1424 -3- 2.15 Program Funds means any monies, reserves, e;1Ccesses or other amounts, whether acquired through contributions, payments, discounts. dividends, refunds, credits, reserves, savings, interest or otherwise, that are held and administered in accordance with Section 6 of this Agreement. 2.16 Provider means the person, insurance carner, third party administrator, or other entity which is selected by the Board, in its discretion, to provide Participants with Group Employee Benefits or Other Financial and Risk Management Services or, as in the case of self-insured health benefits, to provide administrative or other services in co~ection with such Benefits or Services. 2.17 SC means the S\,IJI wr. Serv~ce Cooperative, a governmental agency and public corporation, whose e;1Cistence is authorized by Minn. Stat. 123A.21. SECTION 3 JOlL'lT POWERS GOVER1'ilNG BOARD 3.1 Board Membership. The se Board of Directors, when e;1Cercising the joint powers authorized by this Agreement, will also serve as the Board referred to in this Agreement. The Board will be elected pursuant to the Bylaws of the se. As appropriate, the Board may designate one or more representatives to act on its behalf. 3.2 Upon Dissolution of SC. In the event that the SC is dissolved, the Board shall continue to e;1Cist and its members shall be elected solely from the governing bodies of the Participant Members to this Agreement in a manner consistent with the provisions of the Joint Powers Act, Minn. Stat. 471.59, Subd.2. Any administrative services provided by the SC prior to its dissolution shall be provided thereafter as determined by the Board in its discretion. 3.3 Acknowledgment by Associate Members. Associate Members acknowledge that Minn. Stat. 471.59 does not authorize their participation in a Joint Powers Agreement, even though Minn. Stat. 123A.21, Subd.3 authorizes nonprofit, non-governmental organizations to participate in Group Employee Benefits, Other Financial and Risk Management Services, and other programs made available from time to time by service cooperatives. By participating in any such program made available by the se, such non-governmental Associate Members agree to be bound by the tenns of this Agreement (other than those"terms e;1Cplicitly applicable only to Participant Members) and that the Board is representative of their interests. SECTION 4 RIGHTS AND RESPONSmILITIES OF THE BOARD 4.1 Authorized Powers. Pursuant to Minn. Stat. 471.59, Subd. 2, in addition to any other powers specifically delegated to the Board by this Agreement, the Board is hereby authorized to: 990902:1424 -4- . (a) establish, procure and administer Group Employee Benefits and Other Fir..:L-c:21 and Risk Management Services; (b) define and clarify requests for proposals, rights and responsibilities, ===::gth of contract, premium or contribution rates and other costs, termination guidelines, the ::lative liability of the parties, and the methodes) by which parties to this Agreement shaI.:... -::xercise their common powers; and (c) receive, collect, hold, invest, expend and disburse Program Funds in co;:ne::::i:l::: with the exercise of its powers under this Agreement. 4.2 Group Employee Benefits. 4.2.1 CBA Employee Benefits. The Board may from time to time make emp~oye::: welfare and retirement benefits available for adoption by Participants pursuant to a CBA. Tee B.::z.. ~ may arrange alternative financing arrangements respecting such benefits, and may adrninis~er a::- .?:~ange for the administration of such benefits. Any employee or collective bargaining repre...-:e:::ative notification of alternative fmancing arrangements shall be the responsibility of the ParJci~<.2:l:' The Group Contract for the provision of such benefits shall be between the Participant and the =7C'vider. Pursuant to Minn. Stat. 471.6161, Subd.5, the Board has no authority nor authorization ::: ::~ange a policy or benefit respecting a Participant's CBA Emploxee Benefits in a manner that woc''': :educe the aggregate value of such benefits. 4.2.2 Discretionary Employee Benefits. The Board may from time to tiI::J:; make available for adoption by Participants Discretionary Employee Benefits. The Board ma::- .=....-:-ange alternative financing arrangements respecting such benefits, and may administer or arrarr::;:- ::)r the administration of such benefits. The Group Contract for the provision of such benefiG 5:::.11 be between the Participant and the Provider. Notwithstanding that a Group Contract for Dis,-=:i ::mary Employee Benefits be between a Participant and a Provider, the Board, upon reasonable -,:>:ice to Participants, may prospectively amend, reduce or terminate any such Discretiona.-y ';=":-loyee Benefits in its sole and absolute discretion. 4.2.3 Reserves. The Board shall from time to time determine the minimum a!:::l:>~t of funds needed for purposes of risk management and rate stabilization. Any such funds shaC ~ held and used in accordance with, and subject to the limitations set forth in, Section 6. 4.2.4 Self-Insurance of Health Benefits. In accordance with Minn. Stat. 471.6 r.:.-. Group Employee Benefits that are employee health benefits may be self-insured. A self-in.sur;l.-e Pool made available by the Board shall be a pool established and operated by the Board, or by ~ Board and one or more other joint powers governing boards governed by Minn. Stat. 471.59 c:::- service cooperatives governed by Minn. Stat. 123A.21. 990902:1424 -5- 4.3 Other Financial and Risk Management Services. The Board may mak.e available Other Financial and Risk Management Services for electing Participants and may administer, or arrange for the administration of such services. The Board will determine the most cost-effective and appropriate manner in which to deliver Other Financial and Risk Management Services and the service fees and other costs pertaining to the same. 4.4 Operating Agreements. The Board, alone or in collaboration with other governmental units. whether acting alone or jointly, including other service cooperatives, may negotiate Operating Agreements for the benefit of the SC and each of the Participants with respect to any Group Employee Benefit or Other Financial and Risk Management Service. Such Operating Agreemencs may establish, among other things: (a) the terms and conditions for any program, (b) premium or contribution rates and other costs, (c) funding arrangements, (d) administrative arrangements, induding the extent to which the SC shall provide administrati ve services, (e) the applicable responsibilities of the Board, and (f) the amount of service fees payable to the SC. The Operating Agreement is a proprietary document between the Service Cooperative and the provider. However, at the request of any Participant, the Board may provide that Participant with any information regarding the applicable Operating Agreement that is reasonably necessary for the Participant to understand its rights and obligations thereunder. . 4.5 SC Service Fees. The SC may be paid a service fee in consideration for services rendered pursuant to this Agreement and any Operating Agreements. The amount and source of such service fee shall be established from time to time by the Provider and the SC and shall be approved by the Board. Such service fee may include, but shall not be limited to, a percentage of premiums collected from Participants for the payment of Group Employee Benefits, a fixed fee, or such other arrangements approved from time to time by the Board. At the time a Participant elects to participate in any of the Group Employee Benefits made available by the Board, the Participant shall, by execution of this Agreement (or by the deemed execution of this Agreement as provided in Section 9), be deemed to have acknowledged and agreed to the amount of such service fee as set forth in Addendum A attached hereto (as in effect from time to time), and the source of its payment, including any part thereof derived from discounts, refunds, dividends, or similar revenues. Services fees payable with respect to Other Financial and Risk Management Services shall be established and 990902:1424 -6- . disclosed from time to time as determined by the Board. Participants shall be given advance notice of any change in Addendum A. 4.6 . Service Providers. 4.6.1 Selection. The Participants hereby delegate to the Board the right to select the Providers for Group Employee Benefits and Other Financial and Risk Management Services. . . 4.6.2 Governmental Unit Bidding and Contracting Laws. As applicable, the Board shall comply with all state and federal laws relating to requests for proposals, review of proposals, length of Group Contract rules, and other laws and regulations relating to contracting for Group Employee Benefits and Other Financial and Risk Management Services. 4.6.3 Service Provider Rate Increases. The Board will annually review renewal information as presented by Providers, make recommendations and determine if requests for proposals are necessary. Rate renewals for group insurance will be determined on the basis of the aggregate change of premiums. 4.7 Premiums and/or Contract Charges. To the extent not established by the applicable Operating Agreement or in any other manner prescribed by this Agreement, premiums and/or contract charges shall be determined by the Board in its discretion; provided, however, that in accordance with Section 6.5, no retroactive assessment may be made without the consent of the affected Participants. 4.8 Advisory Committee(s). The Board may, but is not required to, appoint one or more advisory committees. The purpose of any such corIlIIl;ittee may include, without limitation, the receipt and processing of information relating to group employee benefits, and the future .direction of such benefits as well as other programs and services. The Board shall consider, but is not required to adopt, advisory committee recommendations and proposals. Labor representation, when appropriate, on any advisory committee fonned by the Board shall be, in so far as is reasonably possible, representative of the bargaining representatives of individuals covered in the relevant Pool. Notwithstanding' anything to the contrary in this Section 4.8, the SC shall create a labor-management committee to advise it on certain matters as required by Minn. Stat. 123A.25. 4.9 Authority of Board. The Board, with due consideration given to recommendations submitted by any advisory committee which may be established, shall, unless otherwise expressly agreed, retain final authority in all matters relative to this Agreement and to the Group Employee Benefits and Other Financial and Risk Management Services subject to this Agreement; provided, however, that nothing in this Agreement shall permit the Board to enter into a Group Contract on behalf of a Participant, and that, subject to any applicable notice rules, nothing in this Agreement shall prevent a Participant from withdrawing from this Agreement, any Group Employee Benefit, or any Other Financial and Risk Management Service. 990902:1424 -7- 4.10 Liability Limited. The Board, its authorized representatives. employees and designees shall have no duty or liability to any of the Participants or Providers with respect to the fees, premiums and/or contract charges, offers, acceptances or binders of coverage, cancellation notices, or other matters relating to a Participant's subscribers, all of which shall be the responsibility of the Participant. The Board, its authorized representatives, employees and designees, and each Participant shall have no duty or liability due to negligence of other Participants and Providers. When it is not exercising the joint powers authorized by this Agreement (and therefore not acting as the Board), the SC Board of Directors shall.have no duty or obligation whatsoever to act for the benefit of Participants (as Participants). . 4.11 Withdrawal by Board. The undertakings for the provision of Group Employee Benefits ir: this Agreement may be terminated by the Board or the SC (as applicable) at any time. SECTION 5 RIGHTS AND RESPONSIBILITIES OF PARTICIPANTS 5.1 Enrollment and Renewal. Participants may elect whether to participate in any Group Employee Benefit and any Other Financial and Risk Management Service made available by the Board. If a Participant elects to participate in a Group Employee Benefit or Other Financial or Risk Management Service, the Participant must execute any applicable Group Contract, Group Contract amendment, enrollment and renewal documents directly with the Provider. 5.2 Participants to Furnish Data. Each Participant agrees to furnish all reasonably necessary employee data directly to the SC or its designee. 5.3 Remittance of Premiums and Contract Charges. The Participant shall remit premiums and/or contract charges in the time and manner as from time to time determined by the Board. 5.4 CBA Employee Benefits. Each Participant that participates in CBA Employee Benefits shall be solely responsible for the collective bargaining of such benefits, and for providing any notices regarding CBA Employee Benefits, including, without limitation, the obligation to notify certain representatives regarding the adoption of a self-insured health benefit plan set forth in Minn. Stat. 471.617, Subd. 4. 5.5 Participant Withdrawal. 5.5.1 Voluntary Withdrawal. At any time during a year, (but at least three (3) months prior to renewal), a Participant may terminate its participation in this Agreement or in a Pool upon ninety (90) days written notice to the Board and to all Providers of programs in which it participates. 5.5.2 Withdrawal Relating to Participant Rate Solicitation. If a Participant solicits proposals independently of this Agreement when there has not been a fifty percent (50%) increase 990902:1424 -8- . -.-----r----.--- in the aggregate rates for that Participant group in a given year, the Board retains the right to deem that the Participant has withdrawn from the appropriate Pool. "Soliciting proposals" shall be defined as requesting and/or accepting written or verbal proposals of any kind, regardless of how fonnal or informal. Notwithstanding the foregoing, a Participant receiving a 50% or greater increase in the aggregate rate for that Participant group in a given year shall be allowed to solicit proposals without jeopardizing their participation in the Pool. If the Participant elects to reject all proposals and remain a Participant in the Pool, the Participant will receive a rate to be established by the Board. 5.5.3 \Vithdrawal Relating to Dual Offering. If a Participant offers Group Employee :Benefits through an additional or different plan which, in the discretion of the Board, are considered to be substantially similar to those provided by a Pool in which the Participant participates, then the Board retains the right to deem that such Participant has withdrawn from the Pool. 5.5.4 Withdrawal at Annual Renewal. If a material change in any tenn or condition of a Group Employee Benefit or Other Financial or Risk Management Service in which a Participant participates is proposed to commence as of the Participant's annual renewal date, the Participant may withdraw from the applicable Pool as of the renewal date, provided the Participant gives advance written notice of its intent to withdraw promptly (within 30 days) after receiving notice of the material change, even if such notice is given less than 120 days in advance of the renewal date. 5.6 Effect of Participant Withdrawal. Upon a Participant's withdrawal or deemed withdrawal from this Agreement or from a Pool, the following rules shall apply: 5.6.1 Withdrawal from this Agreement. Upon its withdrawal from this Agreement, a Participant shall be deemed to have withdrawn from all Pools maintained under this Agreement in which the Participant is participating'at the time of such withdrawal. If a Participant no longer participates in any Pool, the Participant shall be deemed to have withdrawn from this Agreement, as well as from the applicable Pool(s). 5.6.2 Withdrawal from a Pool. Withdrawal by a Participant from any Pool shall not affect the Participant's participation in any other Pool. . 5.6.3 Program Funds. No Program Funds or any other amounts that may, in any way, be attributable to a Participant's participation in a Pool shall be returned to the Participant in the event such Participant's participation in the Pool ends prior to the Pool's termination. 5.6.4 Future Participation Limited. If a Participant withdraws or is deemed by the Board to have withdrawn from a Pool, such Participant's participation in such Pool shall be prohibited for a period of twenty-four (24) months from the date of such withdrawal or deemed withdrawal. If a Participant withdraws or is deemed by the Board to have withdrawn from this Agreement, such Participant's participation in this Agreement (and any Pool offered hereunder) shall be prohibited for a period of twenty-four (24) months from the date of such withdrawal or deemed withdrawal. 990902: 1424 -9- SECTION 6 PROGRAM FUNDS ADMINISTRATION 6.1 Program Funds. It is understood and agreed that, in connection with the Group Employee Benefits and Other Financial and Risk Management Services made available pursuant to this Agreement, the Board may acquire Program Funds. The Board may, in its discretion, establish and maintain separate accounts for specified portions of the Program Funds, and may designate specific purposes, such as the payment and financing of Group Employee Benefits or the stabilization of the cost of such benefits, for which the amounts credited to such account &hall be used, but it shall not be required to do so. 6.2 General Rules Regarding Management and Disposition of Program Funds. Program Funds shall be used solely for the purposes of providing Group Employee Benefits and Other Financial and Risk Management Services, providing related services, defraying the reasonable expenses of administering such benefits and services, and, if the Board determines that such use would either directly or indirectly benefit Participants (e.g., by spreading risk, achieving economies of scale, generating revenues or enhancing the Board's ability to negotiate with Providers as a result of the Board's visibility, presence in the marketplace or enhanced expertise), establishing, providing and administering similar benefits and services offered by the joint action of other governmental units. Program Funds shall not inure to the benefit of the Board; this prohibition shall not, however, prohibit the payment of service fees to an SC as provided below. Subject to the foregoing, the Board, in it sole discretion, shall determine the management and disposition of the Program Funds. The Board may consider Advisory Corrunittee recommendations regarding the use of Program Funds before any determinations are made. The following are examples of purposes for which the Board may use and apply Program Funds. (a) to negotiate the purchase of, administer, provide and maintain (either directly or through the purchase of insurance, or both) Group Employee Benefits (including, but not limited to programs related to the purpose for which the Fund was created, such as, for example, in the case of a Health Pool, an Employee Assistance Program (EAP) and Wellness Program) and Other Financial and Risk Management Services; (b) to payor provide for the payment of reasonable and necessary expenses of administering Group Employee Benefits and Other Financial and Risk Management Services including, without limitation, all expenses which may be incurred in connection with the establishment and administration of Pools, the employment of administrative, legal, accounting, other expert and clerical assistance, the leasing of such premises and the purchase of lease materials, supplies. equipment, and liability and property insurance; (c) to establish and accumulate funds deemed adequate by the Board to carry out the purposes of the Pools, for example, for purposes of rate stability and risk reserve; 990902:1424 -10- . r (d) to pay any federal, state or local income, employment. death or other tax which may be properly imposed on or levied against Group Employee Benefit, Other Financial and Risk Management Service, a Pool, or on benefits paid therefrom; (e) to pay for any bond and to pay the premiums on any insurance purchased by a Pool, including, but not limited to liability insurance, "stop loss" insurance and other insurance intended to pay directly or indirectly the benefits established with respect to a Pool; and (t) to pay the SC any service fee payable to it pursuant to, or authorized pursuant to, this Agreement 6.3 Investment of Program Funds. Program Funds shall be held and invested in a manner that is consistent with any applicable legal requirements regarding the holding and investment of funds by the Participant Members who are governmental units within the meaning of~finn. Stat 471.59. 6.4 \Vithdrawal of Participant. In the event of the withdrawal of a Participant prior to the termination of this Agreement or of a Pool, Program Funds attributable to contributions of such Participant shall not be returned to such Participant 6.5 Termination of Pool. In the event of termination of a Pool, any portion of the Program Funds that has been designated for use solely in connection with the terminating Pool, and any other portion allocated to the tenninating Pool by the Board in its sole discretion, shall be distributed to the Pool Participants in a manner to be determined by the Board, which may include the following: (a) payment of benefits to or on behalf of enrolled employees with respect to claims arising prior to such termination; (b) provision of similar benefits for such employees; (c) payment of reasonable and necessary expenses incurred in such termination; (d) payment of taxes; and (e) cash payments to Participant Members according to a formula established by the Board. Upon such termination, the Board shall continue to serve for such period of time and to the extent necessary to carry out the directions of the preceding sentence. The Participants who receive such distributions shall be solely responsible for determining whether, and to what extent, any amounts they receive will be distributed to individuals who were covered by benefit programs provided by the terminating Pool. 990902:14'2 -11- 6.6 Funding of Risk. Premiums may be adjusted, but no retroactive assessment shall be made without consent and agreement by the affected Participants. Subject to their obligation to provide accurate information regarding the individuals who will receive benefits from a Pool, no Participant or its employees shall bear any financial risk other than the agreed upon premium. SECTION 7 LENGTH OF AGREEMENT AND TER1\1L'fA TION Pursuant to Minn. Stat. 471.59, Subd. 4, but subject to the provisions herein relating to Participant withdrawal, this Agreement shall be ongoing. SECTION 8 LIABILITY OF PARTIES Any Participant to this Agreement holds the Board and its employees and it designees, and the SC and its board, employees and designees, hannless from any and all causes of action arising at law or in equity unless such action shall arise from its or their gross negligence and is pennitted, after application of all doctrines and statutes respecting immunity, by applicable law. The parties agree to waive any rights to litigation from any dispute arising out of this Agreement unless such action is the result of intentional wrongdoing. All benefits hereunder are the sole responsibility of the Provider(s) and the Participants, and shall not be the responsibility of the Board or the SC. SECTION 9 AGREEMENT BY PARTICIPATION Any governmental unit, and any nonprofit or non-governmental entity, which participates in any of the Group Employee Benefits or Other Financial and Risk Management Services and remits premium and/or contract charges in accordance with this Agreement, shall be deemed to have approved this Agreement and, in the case of an eligible governmental unit, to have executed this Agreement by its duly authorized officers, and shall be bound by the terms and conditions of this Agreement to the same extent as if such formal approval had been obtained and such execution had occurred. 990902:1424 -12- . r Pursuant to all applicable state and federal laws, this Agreement has been approved by the governing boards of the parties and is signed by the duly authorized officers of the parties. P ARTICIP ANT MEMBER Name of Organization By Title Date SERVICE COOPERATIVE Name of Organization By Title Date 990902:1424 -13- ADDENDUM A I. SC Service Fees The SC shall be paid a monthly administration fee as provided in Section 5 J of the Operatir:g Agreement between the SC and Blue Cross and Blue Shield of Minnesota equal to 2.0% of the tota: monthly contract charges paid by each Participant. 990902:1424 -14- . EXHIBIT B Revised 10/26/95 Revised 10/10/97 JOINT POWERS AGREEMENT FOR GROUP EMPLOYEE BENEFITS SOUTHWESTIWEST CENTRAL SERVICE COOPERATIVES' MEMBER CITY AND OTHER GOVERNMENTAL UNIT INSURANCE PROGRAM This Joint Powers Agreement hereinafter referred to as "agreement", is made as of the I s-f day of ('R.:-J.ob....- .19 q 1 , betweeo Member Q;-f Y o{' f,;OI' if", ~ , and such other members as now or hereafter become partfes to this agreement, hereinafter individually called "Participant" and the SOUTHWESTIWEST CENTRAL SERVICE COOPERATIVES (SWIWC SC), hereinafter called the "SC" and/or its designee. Pursuant to M.S. 471.59, Subd. 2: It is agreed and understood that: 1. the objective of this Joint Powers Agreement is to establish, procure and administer group employee benefits and financial risk management services that embody the concept of pooling risks for the purpose of stabilizing -and/or reducing costs, and 2. the purpose of this agreement is to define/clarify bid procedures, rights and responsibilities, length of contract, termination guidelines, liability and the method(s) by which parties to this agreement shall exercise their common power. DEFINITIONS 1. Participant - any entity or individual that (who) has been accepted for participation by the joint powers governing board. 2. Group Employee Benefits, (hereinafter referred to as "GEB") shall include, but not be limited to, health benefits coverage, life insurance, disability income protection, dental insurance, and flexible spending programs, and other services as directed by the Board. 3. Other Financial Risk Management Services shall include, but not be limited to, investments, contracted legal services, property/casualty safety group, student accident, and other services as directed by the Board. 4. Board - the SC Board of Directors will serve as the joint powers governing board for the group employee benefits and financial risk management services and all associated services. This Board will be elected pursuant to the Bylaws of the SC, governing election of its board of directors. If the SC is abolished, the governing board will be that of the SC designee. As appropriate, the Board may designate a representative to act on its behalf. 5. Pool - the collective group of participants in a given program or group employee benefits or other risk management service or activity. RECITALS Each of the parties enters into this agreement pursuant to: A. MSA 471.59, Subd. 1 and 10: which authorizes two or more governmental units to exercise jointly or cooperatively powers which they possess in common, or B. M.S. 123.58: defining Service Cooperatives. Participation in programs and services provided by SC shall be discretionary (id. Subd. 4), or C. acceptance by the Board of participation by non-profit, non-governmental units, which shall be held contractually to all terms and conditions of this agreement. 11. Pursuant to M.S. 471.59, M.S. 471.61, and M.S. Section 16.07, the intent of this agreement is to delegate the Participant's right to purchase certain group employee benefits to the Board under the terms and conditions of this Agreement. 111. The parties desire to state in this agreement that their common power shall be exercised for the purpose of providing financial risk management services, wDich may include but not be limited to: investments, contracted legal services, property/casualty, student accident insurance, dental, Section 125, life and health group insurance pooling, and other services as directed by the Board. IV. The parties desire to state in this agreement their intent to comply with the statutory requirements of group insurance, governmental unit bidding laws, COBRA and its Minnesota extensions, ERISA, and all other applicable federal and state statutes. V. It is not the intent of the parties to the agreement to transfer authority, liability or responsibility for matters other than-securing proposals, establishing master contracts, negotiation of operating agreements and funding arrangements, and the facilitation of administrative services and funding arrangements as defined for each component of the group employee benefits and financial risk management services. AGREEMENT The parties agree as follows: I. The Recitals are part of this agreement. II. PROCEDURES FOR SECURING GROUP EMPLOYEE BENEFITS AND FINANCIAL RISK MANAGEMENT SERVICES. A. The Board shall from time to time change the procedures to comply with applicable law. B. Group Employee Benefits 1. Definition: pursuant to M.S. 471.6161, Subd. 1 "Group Insurance Coverage" is defined as benefit coverage provided to a group through a carrier authorized under Chapters 61A, 62A, 62C, 620, and 62E to do business in the state. 2. Requests for Proposals/Selection of Carrier/Contract Length a) . Pursuant to M.S. 471.6161, Subd. 2, SC will request proposals from, and enter into contracts with, carriers that in the judgment of the Board are best qualified to provide coverage. The request for proposals shall be in writing and at a minimum shall include: coverage to be provided, criteria for evaluation of carrier proposals, and the aggregate claims records for the appropriate period. Public notice of the request for proposals will be provided in a newspaper or trade journal at least 21 days before the final date for submitting proposals. b) Pursuant to M.S. 471.6161, Subd. 3, the Board shall make benefit and cost comparisons and evaluate the proposals using the written criteria. The Board may negotiate with the carrier on premiums and other contract terms. The Board must prepare a written rationale for its decision before entering into a contract with the selected carrier. c) Pursuant to M.S. 471.6161, Subd. 4, group insurance contracts may not exceed five (5) years in length, including all extensions. The Board shall request proposals for coverage at . 2 least once every sixty (60) months. Employees may be added to an existing group pursuant to a joint powers agreement under section 471.59. 3. Rate Increases a) The Board will annually review renewal information as presented by the carrier, make recommendations and determine if requests for proposals are necessary. b) Rate increases will be determin~~ on the basis of single coverage. c) The carrier shall notify each Participant and the Board of any changes in rates at least sixty (60) days prior to the effective date of the rate change. Final rate adjustments will be effective the first day of the month following thirty (30) days written notice by the carrier. d) Pursuant to M.S. 471.616, Subd. 1, should the aggregate pool rate increase for single coverage equal twenty-five percent (25%) or more in a given contract year, the Board may solicit quotes for the pool. 4. Benefit Reduction: pursuant to M.S. 471.6161, Subd. 5, the aggregate value of benefits provided by a group insurance contract for employees covered by a collective agreement shall not be reduced unless the Participant employer and exclusive representative of the employees of an appropriate bargaining unit, certified under Section 179A 12, agree to a reduction in benefits. 5. Master Contract: The Board shall negotiate the master contract with the carrier selected for the pool on behalf of the Participants of the pool. Further, the Board will negotiate an operating agreement for the purpose of administering the master contract. C. Other Financial Risk Management Services 1. The Board will determine the most cost-effective and appropriate manner in which to deliver other financial risk management services. Methods may include, but are not limited to, provision for staff consultation services and contracting for professional services with independent contractors. (RE: Krohnberg V. Pass, 187 Minn. 73, 244 N.W. 329; 1932). Bids and/or quotations may be requested but are not required. 2. Selection of Carrier: the Board will contract with the carrier that, in the judgment of the Board, is best qualified to provide the service. III. RIGHTS AND RESPONSIBILITIES OF THE BOARD A. Group Employee Benefits . 1. The Board shall negotiate master contracts for its own benefit and for the benefit of each of the Participants. A copy of the master contract shall be available for review by Participants. 2. Pursuant to M.S. 471.6161, Subd. 5, the Board has no authority nor authorization to change a policy or benefit of the Participant's group insurance policy without written authorization or request of the Participant. The policy of the Participant may be amended with respect to any matter relating to the insurance protection provided thereunder for the officers, employees and their dependents, and retired officers, employees and their dependents of any party by rider, amendment, or endorsement issued by the insurance carrier by law, or with the written request of the Participant. The original of each such rider, amendment or endorsement shall be mailed or delivered by the carrier to the Board to be attached to, and held with, the policy; and a copy of each such rider, amendment or endorsement will be furnished by the carrier to each of the Participants. 3 3. The Board shall secure quotes from carriers for entities requesting participation in the pool and respond to the carrier(s) with acceptance or rejection of their proposal within sixty (60) days of receiving necessary data. . 4. The Board shall serve as liaison between representatives of the Participants to this agreement and the carrier, including general communications, problem resolution, transmittal of material, and pool meeting coordination. 5. The Board retains the right and responsibility, upon consultation with its Participants, to terminate any agreement into which it has entered on behalf of the pool. In the course of carrying out its responsibility, the Board may conduct other business negotiations consistent with group benefits and their delivery mechanisms. 6. The Board may negotiate, implement, and administer alternative financing arrangements which if. determines best serves the interests of the Participants of the pool. 7. .Xhe Board shall determine the utilization of any monies acquired through discounts, credits, reserves, savings or in any other manner. B. Other Financial Risk Management Services 1. The Board may negotiate operating agreements for its own benefit and for the benefit of each of the Participants. Copies of the operating agreements shall be on file for review by any Participant upon request. 2. The Board may request proposals from and enter into contracts with carriers/providers that in the judgment of the Board are best qualified to provide the.service. Bids and/or quotations may be requested but are not required. 3. The responsibilities of the Board in the performance of other financial risk management services will be set forth in individual agreements. C. The Board, its authorized representatives, employees and designees shall have no duty or liability to any of the Participants, carriers, providers, or other financial risk management service providers with respect to the fees, premiums and/or contract charges, offers, acceptances or binders of coverage, cancellation notices, or other changes relating to the Participant's subscribers. The Board, its authorized representatives, employees and designees, and each Participant shall have no duty or liability due to negligence cf other Participants, carriers, and providers. D. Upon request, the Board will assist in the resolution of disputes between a Participant and the carrier regarding claims, fees, premiums, and/or contract charges. E. The Board may recover the cost of administering services in the group employee benefits and financial risk management services as part of the premium or cost of the benefits provided by such means as deemed appropriate by the Board. IV. RIGHTS AND RESPONSIBILITIES OF PARTICIPANTS: A. Any Board Participant or other governmental unit, through its governing authority, may become a party to this agreement by executing and delivering this agreement to the Board. B. Group Employee Benefits 4 . r 1. Each Participant will execute necessary enrollment and renewal documents directly with the carrier for insurance protection for its officers and employees and dependents, retired officers and employees and dependents under their policy which shall be provided by the carrier. 2. Each Participant of the pool agrees to furnish employee data (census) pertaining to insurance coverage (Le., name, date of birth, gender, single or family coverage status, salary, date of hire, benefits, class of benefit levels, experience records, medical information and other information required, etc.) directly to the carrier, as required. 3. The Participant shall remit, upon receipt of the appropriate bill from the carrier, contract charges to the appropriate authority prior to the due date. " 4. The Participant will be responsible to notify the Board and the carrier at least forty-five (45) days prior to the effective date of any rate change of its intent to withdraw from the pool. C. Other Financial Risk Management Services 1. ,'. The Participant agrees to execute and submit all necessary data required to perform the respective service requested to the appropriate parties as directed by the Board. 2. The Participant shall remit payment as designated by the Board for services as billed and when due. V. LENGTH OF CONTRACT AND TERMINATION A. This agreement shall continue for a period of four years. . The effective date shall be the date both parties have signed this agreement. Any Participant wishing to withdraw from this agreement shall provide a minimum of forty-five (45) days written notice prior to annual renewal of said intent to the Board, and the service carrier/provider, unless otherwise specified in a given contract. B. Group Employee Benefits 1. Participants receiving a fifty percent (50%) or greater increase in single rates in a given policy year shall be allowed to solicit proposals without jeopardizing their particfpation in the pool. Once the Participant accepts the proposal, it is excluded from the pool for two (2) years and forfeits all residuals and claim to excess pooled dollars. If the Participant elects to reject all proposals and retain participation in the pool, the Board will determine the applicable rate for the Participant, which will be one of the following: a. The Participant will be obligated to accept the actual formula rate as determined by the Participant's own utilization and the carrier's rating formula; or b. The Participant will receive a rate to be established by the Board. If the Participant's single insurance rate is increased by more than fifty percent (50%) in any given policy year, the affected Participant may withdraw from this agreement by giving written notice of its withdrawal to the Board and the carrier at least forty-five (45) days prior to the start of the policy year for which the rate increase is effective. 2. Should an individual Participant solicit proposals independently without a fifty percent (50%) increase in single rates in a given year, the Board retains the right to terminate said Participant's participation in the appropriate group insurance service. An individual Participant terminated under these conditions shall be ineligible to participate for a period of not less than two (2) complete policy years and forfeits any pool reserves or excesses. 5 "Soliciting proposals" shall be defined as requesting and/or accepting proposals. 3. Any Participant wishing to withdraw from the pool at a time other than the date of renewal shall provide a minimum of ninety (90) days written notice of said intent to the Board and to the carrier. If a Participant withdraws from the pool without a fifty percent (50%) increase in a given year. the Participant shall be ineligible to participate for a period of not less than two (2) complete policy years and forfeits any interest in and rights to any pool reserves. 4. The Board retains the right to shorten or extend the policy/plan year should such action benefit the Participants. VI. LIABILITY OF PARTIES: The Board, acting on behalf of the Participants, shall exercise reasonable care with the bidding, rating, claims. renewal, and administrative matters associated with the master agreement. Certain other responsibilities, including but not limited to collective bargaining disputes, benefit disputes, claims payments..employee ERISA and COBRA rights, claims, compliance with statutes, eligibility. premium and/or contract charge payments, retiree benefits, and enrollments, are the sole responsibility of the respective Participant. " Pursuant to all applicable state and federal laws, this agreement has been approved by the governing boards of the parties and is signed by the duly authorized officers of the parties. Minnesota Service Cooperatives BY: TITLE: DATE: //-/9-11 BY: TITLE: DATE: //-/q-17 DATE: /0/2//97 / / I IV 1m /fl I / BY' TITLE: ----1rlO-l,l l \ /"'"" DATE: 6 . ~-------r- SOUTHWEST AND WEST CENTRAL SERVICE COOPERATIVES MINNESOTA CITIES, COUNTIES, AND OGA METRO SC DUES CONTRACT 1999-2000 THIS AGREEMENT, made and entered into this 15th day of February, 1999, by and between Southwest and West Central Service Cooperatives, hereinafter referred to as SC, and SC Member City of Prior Lake, located at Prior Lake, Minnesota, hereinafter referred to as Member, witnesseth: That for good and valuable consideration of the premises, mutual terms, covenants, provisions, and conditions hereinafter set forth, it is agreed by and between the parties as follows: WHEREAS, the SC was created by the legislature (M.S. 123.582) to perform planning on a regional basis and to assist in meeting specific needs of clients in participating governmental units which could be better provided by a SC than by the members themselves. The SC shall provide those programs. and services which are determined, pursuant to subdivision 7, to be priority needs of the particular" "''''6~VH i:lud ::;haU'assist in meeting special needs which arise from. fundamental contraints upon individual' members; . WHEREAS, Members participating in programs and services shall share in costs incurred for providing those programs and services; the SC Board of Directors shall determine the approximate cost of each program and service which remains after funds from other sources have been budgeted; and the SC Board of Directors shall assess each participating member a proportionate share of the remaining cost in the form of a service fee; and WHEREAS, the SC Board of Directors has established the service fee in the form of membership dues for Members who want to participate in SC programs for 1999-2000, it is hereby stipulated and agreed that the Member desires to support the organizing, establishing, financing, administering, and operating of the SC and to pay for such support and service in the amount of: . $75.00 per site = $75.00 $3.00 per employee = $189.00 TOTAL: * = $250.00 Maximum *NOTE: No Member shall pay more than $250.00 maximum. Upon initial membership, the first six months are free. Membership year runs from July 1, 1999 to June 30, 2000. All payments due SC by Member shall be paid upon receipt of invoice. IN WITNESS WHEREOF, Parties hereto have executed this agreement that day and year first above written. SC Member Citv of Prior Lake Prior Lake, Minnesota BY: /~A-_ (Chairperson) (Clerk) .:z) <f /9 C!{ . (Date) Southwest and West Central Service Cooperatives /d /{ -'L. r"}/ ......!-. ..~::6-~~y' ..v./yI~ (C~o!6 . / . ~.. I?7-L-Lq ~;'~hR 2 4 1999 BY: (Date) EXlIIBIT.C LMC 145 University Avenue West, St. Paul, MN 55103-2044 Phone; (651) 281-1200 · (800) 925-11~2 TDD (651) 281-1290 J.oMe Fax: (651) 281-1299 . LMCrr Fax: (651) 281-1298 Web Site: http://-.lmnc.org J..."gw of ]of;,,_o'. Cifit!8 Cilia F9"'oIing _eo"""... March 29, 2000 To: Susan Walsh, City of Prior Lake From: Peter Tritz, LMCIT ~ Re: sw /We joint powers agreement for group benefits In her March 29 letter to me, Prior Lake City Attorney Suesan Lea Pace asked that we confirm how the city's LMCIT liability coverage would respond to claims arising from the city's participation in the group health benefits program offered by the Southwest / West Central Service Coop pursuant to the city's contract with the service coop. The city's LMCIT liability coverage will respond to tort claims arising from activities related to this contract, including any tort claims for which the city may be required to defend and indemnify the service coop. While the service coop's contract is rather ambiguous on this point, LMCIT will treat the city's contract with the service coop as not creating a "joint powers entity" as defined in the LMCIT liability coverage document, so the '10int powers" exclusion in the city's LMCIT liability coverage will therefor not c:ome into play. These and several other issues relating to the service coop contract are discussed in greater detail in my March 23 memo to Pipestone City Attorney Jeff Jones, a copy of which we had faxed to you a couple days ago. As always, if you have any questions or need anything else please feel free to give me a call. Cc: Suesan Lea Pace - TOTRL P.02