Res 1655 - Pool Membership 2001
COUNCIL BILL NO. 2349
RESOLUTION NO. 1655
A RESOLUTION ENTERING INTO A CONTRACT WITH CITY COUNTY
INSURANCE SERVICES TRUST FOR MEMBERSHIP IN THE RISK SHARING POOL.
WHEREAS, City County Insurance Services Trust (CIS) is a trust established by
the League of Oregon Cities (LOC) and Association of Oregon Counties (AOC) to administer
pooled retention funds to protect members against the financial consequence of property,
casualty, and workers compensation losses pursuant to coverage agreements; and
WHEREAS, CIS provides its Members a broad array of risk management
services, including risk financing, loss prevention and loss control programs, claims management
and legal representation, risk management consulting, data gathering, information sharing,
training and related services; and
WHEREAS, the City of Woodburn finds that membership in CIS is a benefit in
managing the risks involved in providing services to its citizens; and
WHEREAS, the City of Woodburn has been provided with copies of the CIS
Trust Agreement, By-laws and Rules which have been recently updated and revised; and
WHEREAS, the CIS Bylaws, at Articles 2.2.2 and 3.3 provide that Articles 2 and
3 of the bylaws shall constitute a contract between the Member and CIS, and that the Member
shall adopt a resolution acknowledging that contractual relationship; now, therefore
THE CITY OF WOODBURN RESOLVES AS FOLLOWS:
Section 1. That the City of Woodburn does hereby acknowledge and agree that it
has received copies of the CIS Agreement and Declaration of Administrative Trust, By-laws, and
Rules and accepts the terms and conditions therein with respect to any CIS coverage programs in
which it elects to participate and for which it is accepted as a Member by CIS. A copy of said
contract is attached hereto and by this reference incorporated herein as Exhibit A.
Approved as to Form:71. %- ~
City Attorney
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Date
APPROVED~"~ )
R HARD INGS, A YOR
Page 1 - Council Bill No. 2349
Resolution No. 1655
Submitted to the Mayor
October 8, 2001
October 9, 2001
Passed by the Council
Approved by the Mayor
October 9, 2001
Filed in the Office of the Recorder
October 9, 2001
ATTEST
(), ~S
Mary ~t,'Recorder
City of Woodburn, Oregon
Page 2 - Council Bill No. 2349
Resolution No. 1655
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CITY COUNTY INSURANCE SERVICES ~Ii -'- of g ~
AGREEMENT AND DECLARATION OF ADMINISTRATIVE TRUST
TillS AGREEMENT AND DECLARATION OF ADMINISTRATIVE TRUST (hereinafter
"Declaration") is made this 1st day of October, 2000, by and between the LEAGUE OF
OREGON CITIES ("League") and the ASSOCIATION OF OREGON COUNTIES
("Association"), acting through their respective Boards of Directors.
RECITALS
1. The LEAGUE is an intergovernmental entity established by intergovernmental agreement
pursuant to Oregon Revised Statutes Chapter 190 to perform governmental purposes and
functions, to promote the common interests of its member cities and to institute programs to
assist those members in performing their proper functions at the least cost to their taxpayers.
The ASSOCIATION is an organization for intergovernmental cooperation created by its member
counties pursuant to ORS 190.010 to ORS 190.110 to promote the common interests of its
member counties and to institute programs to assist those members in performing their proper
functions at the least cost to their taxpayers.
The above intergovernmental agreements authorize the League and Association to establish by
trust or agreement a means to provide risk management and insurance services to their members.
This Declaration is adopted as an intergovernmental agreement pursuant to ORS 190.010 and
establishes an intergovernmental entity as permitted by ORS 190.010(5). Such entity shall be
known as the City County Insurance Services (CIS), and shall be administered pursuant to this
Declaration.
II. On June 22, 1958, the League established a trust known as the League of Oregon Cities
Insurance Trust to provide employee welfare benefits to employees of League members. The
trust was revised and restated November 1, 1984, and its name was changed to the League of
Oregon Cities Employee Benefits Services Trust ("EBS Trust"). The EBS Trust Agreement was
restated again on October 14, 1988, and is attached and incorporated as Exhibit A.
On March 11, 1960, the Association established a trust known as the Association of Oregon
Counties Insurance Trust ("AOCIT") to provide employee welfare benefits to employees of
Association members. The AOCIT was revised January I, 1993 and restated on July I, 1993,
and is attached and incorporated as Exhibit B.
On July 1, 1981, the League and the Association established the City/County Insurance Services
Trust (the "1981 CIS Trust") to provide property, liability and workers' compensation insurance
coverage to their members. The 1981 CIS Trust was revised February 1, 1988. A copy of the
revised Trust is attached and incorporated as Exhibit C.
On April 16, 1993, the League and the Association adopted the City/County Insurance Services
Declaration And Agreement of Trust (the "1993 CIS Trust") which established a trust and a
successor board of trustees, and consolidated the Exhibit A, B and C trusts for administration by
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that successor board. The 1993 CIS Trust, amended November 18, 1994, created an entity
known as the "CIS Trust" pursuant to ORS 190.010(5), the existence of which is ratified hereby.
This Declaration (also referred to as the "ADMINISTRATIVE TRUST") is effective October 1,
2000, and constitutes a revision and restatement of the above 1993 CIS Trust Declaration as
amended in 1994. The principal purpose of this DECLARATION is to consolidate
administration of tht.: EBS Trust, the AOCIT, and the CIS Trust in the Board of Trustees of this
ADMINISTRATIVE TRUST to accomplish the further objectives set forth in the following
Recitals:
III. In furtherance of the above, the LEAGUE and the ASSOCIATION, for the benefit of
their respective members, agree:
A. To continue and improve the CIS Trust program whereby the risks incurred by
their member governments in the areas of tort liability, property loss, and workers'
compensation may be effectively and economically managed, and whereby
insurance and self-insured retention of such risks may be most responsibly and
economically funded.
B. To continue to provide and improve the EBS Trust programs and the AOCIT
programs to which contributions from participating employers and contributions,
if any, from participating employees can be paid and through which the Trust can
create and administer health and welfare benefit plans, including (a) life,
dependent life, accidental death and dismemberment insurance; (b) health
benefits; and (c) disability benefits for non-occupational illness or injury,
according to sound actuarial and underwriting principles.
C. To consolidate administration; of the three existing trusts.
IV. This Declaration shall constitute a ratification, revision and restatement of the
City/County Insurance Services Declaration and Agreement of Trust between the same parties
dated November 18, 1994; provided, however, that amendments therein to the EBS Trust and the
AOCIT are not rescinded.
IN CONSIDERATION of the benefits to be derived for their respective members, and the
mutual covenants and conditions herein contained, the LEAGUE and the ASSOCIATION
declare and agree as follows:
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ARTICLE 1. DEFINITIONS
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For the purposes of the consolidated administration of the CIS Trust, the EBS Trust and the
AOCIT, the definitions of the EBS Trust Agreement, as restated October 14, 1988, and of the
AOCIT Agreement, revised and adopted June 14, 1993, shall apply unless the context clearly
indicates otherwise, and "Board of Trustees" or "Trustees" means the CIS Board of Trustees,
designated under Article 2 of this Declaration to administer the trust plans of the CIS Trust, the
EBS Trust, and the AOCIT.
ARTICLE 2. BOARD OF TRUSTEES.
2.1 The ADMINISTRATIVE TRUST shall be governed by a Board of Trustees composed of
ten Trustees. Four Trustees shall be appointed by the Board of Directors of the LEAGUE and
four shall be appointed by the Board of Directors of the ASSOCIATION. The Executive
Directors of the LEAGUE and the ASSOCIATION shall serve as Trustees. The LEAGUE and
the ASSOCIATION, with respect to the Trustees appointed by each, shall adopt their own rules
and procedures for the appointment, tenure, and removal of Trustees, subject to the following
minimum standards:
2.1.1 If Trustees are appointed for a fixed term, terms shall be for no less than one
year, and shall be staggered so that no more than one LEAGUE-appointed Trustee's term,
and no more than one ASSOCIATION-appointed Trustee's term expires during any
calendar year.
2.1.2 As a qualification for appointment and continued service, each appointed
Trustee shall be an elected or appointed official of a city or county which is a member of
the LEAGUE or ASSOCIATION appointing the Trustee and which is a participant in one
or more coverages offered by the ADMINISTRATIVE TRUST.
2.1.3 In order to insure the faithful, independent, and impartial exercise of judgment
and discharge of their obligations, Trustees shall, during their term of office, be subject to
removal only for just cause. Nonattendance at three consecutive regular board meetings
shall constitute good cause.
2.1.4 No Trustee shall serve, and no appointment shall be effective until such
appointee acknowledges in writing full and unconditional acceptance of the terms of this
Declaration and Agreement.
2.2 In the event of a Trustee's resignation, ineligibility (including disqualification under
Paragraph 2.1.2 hereof), removal, or refusal to act, a successor Trustee shall be appointed as
provided in Paragraph 2.1 hereof.
2.2.1 If the Trustee being replaced was serving a fixed term, the successor Trustee
shall be appointed to serve the remainder of the unexpired term.
2.2.2 In the event that a Trustee shall cease to be qualified pursuant under Paragraph
2.1.2 hereof as an elected or appointed official, such Trustee may continue to serve for a
period of 90 days or until appointment of a successor, whichever shall come first.
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2.2.3 In the event that a Trustee shall cease to be qualified under Paragraph 2.1.2
hereof as an elected or appointed official of a participant in one or more coverages
offered by the ADMINISTRATIVE TRUST, such Trustee may continue to serve for a
period of one year, or until appointment of a successor, whichever shall occur first.
2.2.4 If a Trustee, within the times set forth in Paragraphs 2.2.2 or 2.2.3 above, shall
again be qualified to serve, then such Trustee shall continue to serve as if such period of
disqualification had not occurred.
2.3 Should a vacancy exist among the Trustees, the remaining Trustees shall have full power
to act as the Board of Trustees.
2.4 Trustees, officers and agents of the ADMINISTRATIVE TRUST shall use ordinary care
and reasonable diligence in the exercise of their powers and in the performance of their duties.
2.5 Trustees, officers and employees of the ADMINISTRATIVE TRUST shall be entitled to
all rights, indemnities, immunities and defenses as provided to other public officials pursuant to
the Oregon Tort Claims Act.
2.6 The Board of Trustees shall require designated persons performing services to the
ADMINISTRATIVE TRUST under the above provisions to be bonded or insured in a form and
amount set by the Board of Trustees.
2.7 The Board of Trustees shall be chaired by one of the appointed members chosen in
accordance with the Board of Trustees' bylaws, and, in the absence of the chair, by a vice-chair
chosen in accordance with the bylaws; provided, however, that the chair and vice-chair shall
alternate annually between appointees of the LEAGUE and the ASSOCIATION so that each
body is represented by an appointee holding one office or the other in any year, and the
following year the representation is reversed.
2.8 The Board of Trustees shall hold an annual meeting between January 1 and June 15 of
each year, and shall meet at such other times as may be necessary with the concurrence of any
six Trustees or upon call of the chair. At the request of the LEAGUE or the ASSOCIATION, the
Board of Trustees shall meet with Boards of Directors of the LEAGUE or the ASSOCIATION,
jointly or separately.
2.9 Six Trustees shall constitute a quorum; provided, however, that if there are three or more
vacancies in Trusteeships, the remaining Trustees shall constitute a quorum and shall have full
power to transact business and act for the ADMINISTRATIVE TRUST.
2.10 All ADMINISTRATIVE TRUST action shall require affirmative votes of a majority of
the members of the Board.
2.11 The chair or vice-chair of the Board of Trustees shall execute on behalf of the
ADMINISTRATIVE TRUST all contracts, documents, and pleadings as may be approved by the
Board of Trustees; provided that the Board of Trustees may delegate to any person or firm ;:'i
engaged pursuant to Paragraphs 4.1.2, 4.1.3, or 4.1.4,4.1.12 a limited agency authority to bind !:~J
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the ADMINISTRATIVE TRUST in certain cases or kinds of transactions to be specified in
writing by the Board of Trustees.
ARTICLE 3. PURPOSES OF ADMINISTRATIVE TRUST.
3.1 The express purposes and primary objectives of the ADMINISTRATIVE TRUST are:
3.1.1 To provide for the consolidated administration of the trusts described in the
Recitals.
3.1.2. To make available to the LEAGUE and ASSOCIATION, and to those members
who choose to participate, membership services in the form of a broad array of risk
management services, including but not limited to risk financing, loss prevention and loss
control programs, claims management and legal representation, risk management
consulting, data gathering, information sharing, training and related services;
3.1.3 To stabilize costs associated with financing risk by aggregating the collective
buying power of LEAGUE and ASSOCIATION members to secure the economic
advantages of group purchase, joint self-insurance and pooled risk retention;
3.1.4 To assure that there is available to LEAGUE and ASSOCIATION members a
market for liability, property and workers' compensation insurance coverage appropriate
to the risks to which such members are exposed;
3.1.5 To create and administer health and welfare benefit plans according to sound
actuarial and underwriting principles for members of the LEAGUE and ASSOCIATION,
and such other local governments whose participation may be approved by the LEAGUE
and ASSOCIATION.
3.1.6 To create and administer pooled self-insured retention fund(s) for members of
the LEAGUE and ASSOCIATION, and such other local governments whose
participation may be approved by the LEAGUE and ASSOCIATION, and to establish
actuarially sound contribution schedules for participants in such pool(s) at appropriate
retention levels;
3.1.7 To provide leadership in collaboration with CIS members, the LEAGUE and the
ASSOCIATION in presenting to appropriate legislative and administrative bodies and
committees information related to the programs administered pursuant to this
Declaration.
3.1.8 To receive, account for, invest, and disburse, as lawfully due and payable, moneys
collected from participating cities, counties and other local governments as premiums,
fees, and other contributions to the ADMINISTRATIVE TRUST, and to establish and
maintain reserves reasonably required to provide security and stability to the Trust Plans.
3.1.9 To be a leader in working with other programs and affiliates of AOC and LOC on
issues of joint interest.
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3.1.10 To recognize the diversity of Oregon's cities and counties and make every effort
to design and actively market innovative and competitive risk management products and
services appropriate for their wide range of needs and interests.
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3.2 The above purposes and objectives of the ADMINISTRATIVE TRUST shall be
construed to include those purposes stated in the trusts described in the Recitals.
3.3 The foregoing expression of purposes is not exhaustive, and in addition to other related
objectives reasonably inferred from that list, the ADMINISTRATIVE TRUST shall have such
other objectives, not inconsistent with this Declaration, as may be lawful for a trust or an
intergovernmental association under Oregon law.
3.4 To the extent of any conflict or inconsistency between this Declaration and the
declarations of trust described in the Recitals, this Declaration shall control.
ARTICLE 4. POWERS, DUTIES, AND FUNCTIONS OF BOARD OF TRUSTEES.
4.1 In furtherance of the purposes set forth above, the Board of Trustees shall have the
following powers and duties:
4.1.1 To act as the trustees of the trusts described in the Recitals, to exercise the
trustee powers described in the declarations of those trusts, and to administer those trusts
as described in this Declaration.
4.1.2. To approve the provisions of ADMINISTRATIVE TRUST plans, programs and
policies;; determine, increase, decrease, or terminate, in whole or in part, the benefits and
coverage provided by the ADMINISTRATIVE TRUST plans, programs and policies;
select the carriers providing the benefits and to exercise all rights granted to a policy
holder; and establish or modify rules of eligibility for benefits and employer
participation.
4.1.3 To engage and oversee, as the Board of Trustees deems appropriate, the services
of competent insurance agents and brokers to negotiate on behalf of the TRUST with
insurance underwriters, and to market coverage and services to prospective participants in
the ADMINISTRATIVE TRUST'S services.
4.1.4 To engage, employ and oversee, as the Board of Trustees deems appropriate, the
services of competent professionals and consultants to manage or assist in the
management, collection, investment, and disbursement of ADMINISTRATIVE TRUST
funds.
4.1.5 To engage, employ and oversee the services of competent administrators and
other staff to provide risk management and insurance related services to the
ADMINISTRATIVE TRUST and its participants, including such claims reporting and
adjusting, record keeping, information sharing, loss control and prevention consulting,
and such related administrative and consulting services as the Board of Trustees deems
appropriate, and to delegate such administrative authority deemed necessary or
convenient by the Board.
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4.1.6 To review and approve policy forms, service contract forms, and other
documents appropriate to the operation of the ADMINISTRATIVE TRUST, and to
establish the limits of authority of the persons engaged under Paragraphs 4.1. 2, 4.1. 3
and 4.1. 4.
4.1. 7 To establish methods of calculating premiwns for insurance coverages offered,
and other service fees to be charged to participants in the ADMINISTRATIVE TRUST'S
services; and to establish procedures for the collection, investment, and disbursement of
moneys owed to and by the ADMINISTRATIVE TRUST, and actions to be taken with
respect to delinquent accounts receivable.
4.1.8 To establish and maintain, from contributions and other assets of the
ADMINISTRATIVE TRUST, reserves necessary according to sound actuarial and
underwriting principles to provide stability and security to the ADMINISTRATIVE
TRUST'S programs.
4.1.9 To provide for complete accounting, and at least annually, audit of the funds
received, invested, kept and disbursed by the ADMINISTRATIVE TRUST; and to
establish such accounts with fInancial and investment institutions and brokerages as may
be necessary and prudent for the proper management of ADMINISTRATIVE TRUST
funds. All such funds of the ADMINISTRATIVE TRUST may be aggregated for
purposes of deposit, investment and disbursement. However, records of moneys received
and disbursed shall also be maintained by classes of local governments participating in
each of the separate programs and services of the ADMINISTRATIVE TRUST. Funds
from each separate program of the ADMINISTRATIVE TRUST shall not be
commingled but shall be held and used exclusively for the benefIt of current and past
participants of each separate program. This shall not preclude payment for shared
administrative costs in such proportions as the Board of Trustees, in its discretion, may
determine. .
4.1.10 To acquire and retain, to the extent allowed by state law, every kind of property,
real, personal or mixed, and every kind of investment, specifIcally including, but not by
way of limitation, bonds, debentures, and other corporate or government obligations,
interests in common trust funds, and securities of any open-end or closed-end
management type investment company or investment trust, provided that in the making
of investments the Trustees shall comply with the investment limitations of applicable
law and investment policies of the Board.
4.1.11 To hold title to all investments or other assets of the ADMINISTRATIVE
TRUST in the name of the TRUST, provided that for convenience in transferring bonds
or other negotiable securities, title to the securities may be held in the name of the
ADMINISTRATIVE TRUST'S custodian bank, or of its nominee
4.1.12 To maintain accurate records and accounts of all transactions, consistent with
generally accepted accounting practices, which shall be available at all reasonable times
for inspection by members, participating employers or benefIciaries.
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4.1.13 To contract with the LEAGUE and the ASSOCIATION for such services and
facilities as the Board of Trustees shall consider necessary and appropriate. The Board of
Trustees may pay for such services and facilities out of ADMINISTRATIVE TRUST
funds.
4.1.14 To compensate the LEAGUE and the ASSOCIATION for the use of their name
and goodwill in support of marketing the products and services of the
ADMINISTRATIVE TRUST. The Board of Trustees may pay such compensation out of
ADMINISTRATIVE TRUST funds to the extent permitted by applicable law and
prudent under pertinent tax laws.
4.1.15 To establish such advisory committees as the Board of Trustees deems advisable
to assist in policy and operations of the ADMINISTRATIVE TRUST; and to appoint
qualified persons to such committees to serve at the pleasure of the Board of Trustees.
4.1.16 To promulgate bylaws, polices and regulations for the operation of the Board of
Trustees and the ADMINISTRATIVE TRUST consistent with the provisions of this
Declaration and Agreement and the trusts described in the Recitals.
4.1.17 To exercise such other powers and to prepare and execute such other documents
and agreements as may be lawful and necessary to implement more fully this Declaration
and the purposes thereof.
ARTICLES. USE OF ADMINISTRATIVE TRUST FUNDS.
5.1 Without further specific action of the Board of Trustees, but subject to any limitations or
conditions set by the Board of Trustees in it~ bylaws or regulations, the administrators designated
by the Board of Trustees shall disburse or authorize disbursement of moneys from funds of the
ADMINISTRATIVE TRUST for any of the following purposes:
5.1.1 Payment of moneys due and certain under or by virtue of any contract, bond,
benefit, plan or policy of insurance made or obtained by or on behalf of the
ADMINISTRATIVE TRUST, or pursuant to any pooled self-insured retention fund
established by the ADMINISTRATIVE TRUST;
5.1.2 Investment and reinvestment of ADMINISTRATIVE TRUST funds under such
standards and limitations as may be approved by the Board of Trustees;
5.1.3 Payment of premiums due on fidelity, performance, errors and omissions, or other
bonds and insurance which the Board of Trustees may require in its bylaws to protect the
ADMINISTRATIVE TRUST and its Trustees and employees;
5.104 Reasonable and necessary expenses incurred by Trustees and employees for such
items as travel, meals, lodging, telephone calls, and other out-of-pocket expenses
incurred in performing their duties; provided that the personal services and time devoted
by Trustees shall not be compensated.
5.1.5 Any other purpose authorized by this Declaration or by the trusts described in the
Recitals.
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5.2 Except as provided in Paragraph 5.1, or as authorized in a budget duly adopted by the
Board of Trustees, ADMINISTRATIVE TRUST funds shall not be disbursed, expended or
obligated without express approval of the Board of Trustees.
5.3 The Board of Trustees shall provide for an annual audit of ADMINISTRATIVE TRUST
fimds and operations, and tor such interim audits as it deems necessary. Copies of such audits
shall be furnished to each Trustee, and to the LEAGUE and the ASSOCIATION. The cost of
such audits shall be paid out of ADMINISTRATIVE TRUST funds.
5.4 The Board of Trustees shall adopt an annual budget, consistent with generally accepted
government budgeting principles, not later than the last day of June of each year. Such budget
shall identify revenue and expenses for each ADMINISTRATIVE TRUST program, including
but not limited to the trusts described in the Recitals. The Board of Trustees or its administrator
shall, in the process of preparing the annual budget, solicit the advice of the LEAGUE and the
ASSOCIATION regarding services required by their respective members.
5.5 Income from investments of the ADMINISTRATIVE TRUST in excess of obligations
payable under this Article may, at the direction of the Board of Trustees, be distributed in whole
or in part, from time to time, to local government participants in the program, either directly or
by way of reduction of premiums, contributions, or other fees assessed to participants. Such
distributions shall be based upon such formula as the ADMINISTRATIVE TRUST shall approve
which includes both losses incurred and proportionate premiums, contributions, and fees paid by
individual local governments participating in the program during the period since the last
distribution, if any. Except as provided in this section, investment income shall remain with the
ADMINISTRATIVE TRUST for reinvestment or satisfaction of the obligations of the
ADMINISTRATIVE TRUST as provided in Paragraphs 5.1 through 5.3.
ARTICLE 6. ELIGIBILITY FOR PARTICIPATION AND TERMINATION.
6.1 Subject to the terms of the trusts described in the Recitals and to regulations adopted by
the Board of Trustees, the LEAGUE, the ASSOCIATION and each of their members shall be
eligible to participate in the coverage, programs and services offered by or through the
ADMINISTRATIVE TRUST.
6.2 In addition, "public bodies" as defined in ORS 30.260 (4) (b) and (c), may be allowed to
participate in ADMINISTRATIVE TRUST programs and services.
ARTICLE 7. INTEREST IN ADMINISTRATIVE TRUST PLAN ASSETS
7.1 Neither participating employees, participating employers, beneficiaries, parties to the
Trust Plans nor any other person or entity shall have any right, title, or interest in the assets of the
ADMINISTRATIVE TRUST.
7.2 Neither participating employees nor beneficiaries shall have any right to assign any
benefits provided by any employee benefit plan of the ADMINISTRATIVE TRUST except to a
beneficiary or to a provider of medical or hospital services. The benefits provided by plans of
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the ADMINISTRATIVE TRUST shall not be subject to seizure by legal process or be in any
way subject to the claims of creditors of a participating employee or beneficiary except for an
authorized assignment to a provider of medical or hospital services.
7.3 For the purposes of this Declaration, the assets of the EBS Trust, AOCIT and 1981 CIS
Trust shall be the oronertv of the ADMINISTRA.TIVE TRUST.
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ARTICLE 8. DISSOLUTION OR TERMINATION OF ADMINISTRATIVE TRUST.
8.1 This ADMINISTRATIVE TRUST may be voluntarily dissolved upon declaration of the
LEAGUE, acting through its Board of Directors, or the ASSOCIATION, acting through its
Board of Directors. Such declaration of dissolution shall not become effective until delivered, in
writing, to each Trustee, and to the chief administrative officer or governing body of each
participating city, county, and other public body, and then not until the happening of either of the
following:
8.1.1 Expiration or termination of every policy, contract, or other agreement under
which any city or county participates in the services offered by the ADMINISTRATIVE
TRUST, or is indemnified or insured by or through the ADMINISTRATIVE TRUST; or
8.1.2 The adoption and approval of a distribution plan pursuant to paragraph 8.3.
8.2 This ADMINISTRATIVE TRUST shall automatically terminate and dissolve upon the
first occurrence of any of the following:
8.2.1 The date, on which there are no members of the LEAGUE or ASSOCIATION
then participating in the services offered by or indemnified or insured by or through the
ADMINISTRATIVE TRUST;
8.2.2 The date on which all cities and counties then participating ill the
ADMINISTRATIVE TRUST cease to be members of the LEAGUE or the
ASSOCIATION; or
8.2.3 Upon the dissolution, adjudication of bankruptcy, or appointment of a receiver
for either the LEAGUE or the ASSOCIATION.
8.3 Upon dissolution or termination of the ADMINISTRATIVE TRUST;
8.3.1 The balance, if any, of assets arising from property/casualty programs of the
ADMINISTRATIVE TRUST remaining after satisfaction of all obligations of the
ADMINISTRATIVE TRUST shall be distributed according to a plan furthering the
purposes of this ADMINISTRATIVE TRUST and adopted by the Board of Trustees with
the approval of the LEAGUE and the ASSOCIATION. In the event such a plan is not
approved within 180 days of such termination or dissolution, such remaining assets shall
be distributed among those local governments who were participants in the
ADMINISTRATIVE TRUST at any time during the 12 months immediately preceding
dissolution or termination, in proportion to their individual actual payments made to the
ADMINISTRATIVE TRUST of premiums, contributions, and fees during that 12 month
period.
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8.3.2 The balance, if any, of assets arising from health and welfare benefits programs
of the ADMINISTRATIVE TRUST remaining after satisfaction of all obligations of the
ADMINISTRATIVE TRUST shall be applied to purchase or provision of benefits which
the Board of Trustees may determine for employers who are participating employers on
the date of termination, or for individuals who are participating employees or
beneficiaries on the date of termination. The Trust Plans' assets shaH not revert to, or be
used for, the Trustees of the Board of Trustees or the LEAGUE or the ASSOCIATION.
8.4 Automatic termination as provided in Section 8.2 shall not affect the rights of any
participating local government under any policy of insurance underwritten by an insurer other
than the ADMINISTRATIVE TRUST.
8.5 Upon dissolution or termination of the ADMINISTRATIVE TRUST, the Board of
Trustees shall continue to act for the purpose of dissolution and the execution of all instruments
which may be required to dissolve and liquidate the Trust Plans or ADMINISTRATIVE TRUST.
8.6 Termination or dissolution of the ADMINISTRATIVE TRUST shall not cause
termination or dissolution of the trusts described in the Recitals. Such trusts shall dissolve or
terminate according to the terms of each trust declaration.
ARTICLE 9. AMENDMENTS.
9.1 This Declaration and Agreement may be amended from time to time by mutual written
agreement of the LEAGUE and the ASSOCIATION acting through their respective Boards of
Directors; provided that the LEAGUE and the ASSOCIATION deliver to each Trustee a full
copy of the proposed amendment at least ten days prior to taking any action approving the
amendment, and consider any written or oral comments by the Trustees either individually or as
a Board of Trustees prior to such action.
9.2 No amendment shall operate to the prejudice of any vested rights held by any participant
in the program under a policy, contract, or other document for the benefit of such participants.
9.3 The ADMINISTRATIVE TRUST shall not be amended in any manner inconsistent with
the legal requirements applicable to the ADMINISTRATIVE TRUST to permit the
ADMINISTRATIVE TRUST'S assets, or any part thereof to revert, or be diverted, to the benefit
of any employee or any person other than the Participating Employers, Participating Employees
or Beneficiaries to the extent contributions were made for the benefit of the Participating
Employees or Beneficiaries. An amendment, by its terms, may be retroactive.
ARTICLE 10. SEVERABILITY.
If any provision of this Declaration and Agreement is adjudicated to be invalid, unenforceable, or
unconstitutional, the remainder of the provisions not subject to such adjudication shall not be
affected and shall continue in full force and effect.
11
EXHIBll . A
PaytL'/'Ql.. of 3 "
IN WITNESS WHEREOF, the LEAGUE and the ASSOCIATION have approved the foregoing
amendments on the 1st day of October 2000.
ASSOCIATION OF OREGON COUNTIES
i~i9\\r\uf
President I
\.
~<<~ ~LA ~~-
Executive Duector
,
LEAGUE OF OREGON CITIES
~~
President
;?J~~c ~~
Executive Director
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EXHIBIT A
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CITY COUNTY INSURANCE TRUSTS - BOARD OF TRUSTEES GOVERNANCE POLICY
(Last Amended April 2001)
SECTION I. BOARD PROCESS
Purpose:
In these policies, the Board identifies for whom it governs and outlines its governance
approach and governing style.
1.0. Re~onsibility. The Board recognizes its fiduciary duty to the three Trusts it administers:
The City County Insurance Services Trust (CIS), established in 1981 by the League of Oregon
Cities (LOC) and the Association of Oregon Counties (AOC), offers risk financing and risk
management related services to their members, and other governments as approved by LOC and
AOC.
The Employee Benefits Services Trust (EBS), established by LOC in 1958, provides employee
health and welfare benefits plans for city employers. In 1994, LOC designated CIS as the
successor ofEBS.
The Association of Oregon Counties Insurance Trust (AOCI1), formed by AOC in 1960,
provides similar employee benefits plans for counties. In 1994, AOC designated CIS as the
successor of AOCIT.
1.0A. Role. Administration of the three Trusts was consolidated under the CIS Board of
Trustees in 1994 and reaffirmed with passage of an Administrative Trust Agreement in 2000.
The Board's allegiance in trust, and CIS' long term business survival, require it to protect and
manage CIS' assets for the benefit of its members (those local governments who purchase
coverage and services through CIS) and to further the interests of the sponsoring associations.
On behalf of its members, the Board directs the CIS organization in the accomplishment of
desired results - expressed in Ends Policies (Section 4), and the avoidance of unacceptable
activities and conditions - expressed in Executive Limitations Policies (Section 3).
1.1. Linka.ge to Members. Cities and counties who have joined LOC and AOC are not
compelled to purchase coverage and services from CIS. They judge whether the products and
services offered by CIS are cost-effective when compared to other alternatives available in the
open market place. Competitive market forces influence CIS product selection and pricing.
Under Board direction, CIS seeks to attract and retain market share by understanding the
dynamics of this market place and by producing outputs and generating outcomes that are highly
valued by its members. Trustees are visible and active supporters of more aggressive risk
management practices among members.
1.IA. Member Driven. The Board educates itself regarding the values held by cities and
counties in LOC and AOC, paying particular attention to those entities that are CIS members.
The Board acts under the influence of these values. Education is facilitated by reviewing industry
reports prepared by staff and outside sources; studying responses to member surveys and focus
groups; engaging in direct contact with members, beneficiaries and stakeholders; and monitoring
the demand and utilization of similar products and services in the market place.
EXHIBIT A
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1.1A(I). If available, monies are allocated within CIS' annual operating
budget for member surveys, focus groups, opinion analysis and meeting costs associated with
ownership linkage and industry awareness.
LIB. LOC/AOC Link. The Board recognizes that LOC and AOC assist in promoting
sound risk management practices and marketing the products and services of CIS, including but
not limited to use of the names and goodwill ofLOC and AOC.
1.1B(I). If available, monies are allocated within CIS' annual operating
budget to compensate LOC and AOC for their sponsorship and support. The Board is available
to meet with the governing bodies of LOC and AOC at their request.
1.2. Explicit Governing Policies. The Board directs controls and inspires the organization
through the careful establishment of these broad written policies reflecting the Board's values
and perspectives about Ends to be achieved and Means to be avoided. The Board may change its
Ends and Executive Limitations Policies at any time, consistent with Board-Executive Director
Policy 2.4.
I.2A. Ends. The Board defines what CIS is to accomplish in terms of results, recipients,
and costs, and expresses these expectations in Ends Policies (Section 4).
1.28. Means. The Board delegates accountability for CIS' performance to the executive
director. How performance will be monitored and controlled is described in Board-Executive
Relationship policies (Section 2).
1.2C. Limits. The Board, in Executive Limitations policies (Section 3), identifies those
activities and conditions that it considers unacceptable in a business setting.
1.3. Board Governance -Procedures. The Board carries out its job with discipline,
emphasizing strategic leadership rather than administrative detail, future orientation rather than
past or present focus, outward vision rather than internal or interpersonal preoccupation, policy
rather than single events, collective rather than individual decisions and governs pro-actively
rather than re-actively.
1.3A. Board Focus. The Board cultivates a sense of group responsibility. The Board
works in partnership with the executive director, staff, members and other key stakeholders.
Only those issues that are within the Board's chosen areas of responsibility consume Board time.
That is, the Board works on the Board's job, not on the job of staff, though the Board may
review staff performance against Board policies at any time. The Board acts so that coverage,
rates, expenditures and reserves are where they need to be.
1.38. Board Meetings. Meetings are for the single task of getting the Board's business
done. CIS members are advised of meeting dates, times and locations. Meetings are open to
members, except when an executive session is called.
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1.3B(1). The Board convenes once a quarter, if needed, and designates its
annual Spring Seminars held in RiskNet regions around the state as annual member meetings.
1.3B(2). Six trustees constitute a quorum for Board meetings. All Board
action requires affirmative votes of a majority of trustees constituting a quorum.
1.3B(3). Trustees prepare for meetings, are well informed and participate
productively in discussion, always within the boundaries of discipline established by the Board.
1.3B(4). The Board is the sole authority over its own meeting agenda. The
chairperson exercises this control on behalf of the Board, though any trustee - with a majority
agreeing - can add or delete business from the agenda. Agenda material is provided to trustees
with adequate lead-time for preparation.
1.3B(5).
timely, and orderly.
Deliberation at Board meetings is fair and open, but also efficient,
1.3C. Chairperson. The Board charges the chairperson to make decisions on issues of
Board Process and Board-Executive Relationship, within established policies.
1.3C(I). The Board elects from among themselves, a chairperson, vice-chair
and secretary to serve an annual term beginning July I each year. The chair and vice-chair
positions alternate annually between appointees of LOC and AOC.
I.3C(2). The chairperson oversees the integrity and fulfillment of the
Board's process and occasionally represents the Board to outside parties.
1.3C(3). The chairperson is authorized to use any reasonable interpretation
of the provisions in Board Process and Board-Executive Relationship policies, except where the
Board specifically delegates portions of this authority to others.
I.3D. Board Members. The Board commits itself and its trustees to ethical, businesslike
and lawful conduct, including proper use of authority and appropriate decorum when acting as
trustees.
1.3D(I). Because poor governance costs more than learning to govern well,
the Board invests in its governance capacity. Trustees participate in educational and training
opportunities to ensure continual development in their roles and engage in periodic Board
discussion of process improvement.
1.3D(1) a. If available, monies are set aside in CIS' annual operating
budget for trustee training, including attendance at relevant conferences and workshops. Training
monies are used liberally to maintain and increase trustee education in the governance process.
I.3D(I) b. If available, training monies are used liberally to orient new
trustees, and candidates for service on the Board, in the Board's governance process.
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Page -Lk_ of -:? to
1.3D(2). Recognizing that the LOC and AOC appoint the CIS Board of
Trustees, the Board may choose to offer suggestions regarding qualifications for appointees and
ask that such guidelines be considered in the appointment process.
1.3D(3).
Trustees respect the confidentiality appropriate to sensitive issues.
l.3E. Board Committees. The Board structures Board committees to assist with Board
tasks.
l.3E(l). Board committees help the Board by preparing policy alternatives
and implications for Board consideration. Board committees do not speak or act for the Board
except when formally given authority for specific and time-limited purposes. Their authority
does not conflict with authority delegated to the executive director.
I.3F. Board Planning Cycle. To govern in a manner consistent with Board policies, the
Board follows an annual agenda that evaluates Ends policies at least once a year and continually
improves Board performance through trustee education and enriched input and deliberation. At
meetings, the Board deals with consent agenda items as expeditiously as possible. Staff
performance is included on the meeting agenda if monitoring reports show policy violations.
1.3F(1).
planning retreat.
The Board's first calendar quarter meeting in January is an annual
1.3F(2). The second calendar quarter meeting in March/April deals with
rate making, administrative planning and budgeting issues so that a one-year segment of the
Board's most recent statement oflong-term Ends can be accomplished.
1.3F(3). . The third calendar quarter meeting in June/July deals primarily
with renewals and developing strategies for consultation with members which takes place during
the balance of the calendar year.
1.3F(4). The fourth calendar quarter meeting in September/October focuses
primarily on trustee education.
1.3F(5). Outside monitoring assistance is arranged at Board request so the
Board can exercise control over organizational performance. This includes, but is not limited to
fmancial audits and actuarial studies.
1.3F(5) a. Monies are allocated in CIS' annual operating budget for
actuarial studies, financial audits and other third party monitoring of organizational performance.
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SECTION 2. BOARD-EXECUTIVE DIRECTOR RELATIONSHIP
Purpose
These policies spell out how the Board transfers authority to management. These policies
describe the nature of the delegation as well as the way in which the proper use of delegated
authority is monitored. Policies do not necessarily describe what is delegated, but rather how
delegation occurs. They do not tell the executive director what to do, but rather describe how
that position relates to the Board.
2.0 Relationship. The Board conducts its business through the Board's executive director.
2.1 Dele~ation. The Board instructs the executive director through written policies
prescribing the organizational Ends to be achieved - certain results, for identified recipients, at
certain costs - and, in Executive Limitation policies - describing organizational situations and
actions to be avoided. The executive director is then expected to use a reasonable interpretation
of these policies.
2.1A. Executive Director Authority. As long as the executive director uses a reasonable
interpretation of the Board's Ends and Executive Limitation Policies, the executive director is
authorized to make all decisions, take all actions, establish all practices and develop all activities.
2.2. Accountability. The executive director is the Board's link to operational achievement.
All authority and accountability of staff, as far as the Board is concerned, is considered the
authority and accountability of the executive director. The executive director is accountable to
the Board for CIS achieving the Board's Ends policies and avoiding transgressions of the
Board's Executive Limitations policies.
2.3. Assurin~ Performance. Monitoring occurs to determine the degree to which Board
policies are being met. Systematic and rigorous monitoring of the executive director's job
performance will be against the outputs and outcomes the executive director is charged to deliver
- organizational performance upon Ends policies, and organizational operation within limits
established in Executive Limitations policies.
2.3A. Method. Adopted policies will be monitored in one or more of three ways:
Internal Report: Disclosure of compliance information from the executive director.
External Report: Discovery of compliance information by a disinterested external auditor or
inspector selected by and reporting to the Board.
Direct Inspection: Discovery of compliance information by the Board as a whole, or its
designated representative.
2.3B. Frequency. Any policy can be monitored by any method at any time the Board
chooses. For regular monitoring, however, the Board classifies each Ends and Executive
Limitations policy according to established frequency and methods:
5
Policy
Ends Policies
4.0. Desired Results
Method
Staff report - participation/retention levels
Chair & executive director - overview report
Board - review of governance policies
Board - evaluating executive director performance
Staff Report - Friday Report to Trustees
Review by broker (Pools) & consultant (EBS)
Staff Report
Review by actuary
Staff report - operating performance CYPM
Staff report - rates for upcoming policy year
Value to Mbrs. Staffreport
Executive Limitations Policies
3.0. Limitations Staff Report - Friday Report to Trustees
Chair & executive director - overview report
3.1. Mber Treatment Periodic member survey
Staff report - member eligibility requirements met
3.2. Staff Treatment Staff report - personnel review
3.3. Fin. Planning Staff report - Proposed CIS operating budget
Staff report - operating budget monitoring
Financial review by auditor
Staff report - Consultation with AOC/LOC
3.4. Asset Protection Report by actuary
Staff report - loss projections
Staff report - investment of CIS funds
3.5. Board Support Review by Board Chair
Staff report - monitoring & decision data
4.1. Coverage
4.2. Risk Mgmnt.
4.3. Fin. Stability
EXHIBIT /}
Page "L8... of.. ~ t..
Frequency
Annually- July/Oct.
Quarterly
Annually - January
Annually - January
Weekly
Annually - Jan/ April
Quarterly
Annually - January
Annually- March,
Annually - Jan/ April
Quarterly
Weekly
Quarterly
Bi-annually - January
Annually - September
Annually - April
Annually - April
Quarterly
Annually - January
Annually - April
Annually - January
Quarterly
Quarterly
Quarterly
Quarterly
2.4. Effect of Amendin~ Policies. The Board may change its Ends and Executive Limitations
policies, thereby shifting the boundary between Board and executive director domains. So long
as any particular delegation is in place, the Board is expected to support the executive director's
choices. This does not prevent the Board from obtaining information in the delegated areas.
2.5. Individual Trustees Relationship with Staff. Only decisions of the Board acting as a body
are binding upon the executive director and staff.
2.5A. Individual Board Member Contact. Decisions or instructions of individual
trustees or Board committees are not binding on staff, except in rare instances where the Board
gives specific authorization. Individual trustees may have whatever relationship with the
executive director or a staff member that is acceptable to the executive director, except that they
can never carry the instructive authority of the Board, nor can they waive requirements set by the
Board. If trustees or committee members require information or assistance without Board
authorization, the executive director may refuse such requests that require - in the executive
director's judgement - a material amount of staff time or funds, or that are disruptive.
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2.6. Evaluatinfl Performance of Executive Director. Annually, in January, the Board formally
evaluates the executive director, considering the degree of organizational accomplishment upon
Ends policies, and organizational compliance with Executive Limitations policies as primary
performance criteria.
SECTION 3. EXECUTIVE LIMITATIONS
Purpose
Executive Limitations Policies reflect assurances the Board needs before it is willing to
safely withdraw from most details of operation. While Ends policies tell the executive director
what the Board intends for the organization to achieve, Executive Limitations policies tell the
executive director and staff what the Board will not tolerate.
These policies establish the conditions for pre-approval of any staff decisions or activities
that do not violate the policies. In effect, the Board is saying to the executive director any action
you take can be considered Board-approved if it does not violate these policies and the executive
director is accountable for ensuring that all further decisions and actions constitute reasonable
interpretations of the policy limits.
If the Board worries about staff making reasonable interpretations of Board policy it can
make further clarifying policy sub-sets, until it is satisfied that staff won't get it wrong.
The Board monitors whether staff means used does indeed respect the boundaries placed
on them by these policies.
3.0 Executive Limitations. The executive director shall not cause nor allow any practice,
organizational circumstance, activity or decision that is either imprudent or in violation of
commonly accepted business or professional ethics as they might apply to organizations similar
to CIS. The executive director shall not endanger CIS' public image or credibility, thereby
jeopardizing its ability to accomplish its mission.
3.1. Treatment of Participatini Members. With respect to interactions with current or
prospective members, the executive director shall not cause or allow conditions, procedures or
decisions that are undignified, discourteous or fail to provide appropriate confidentiality or
privacy.
3.lA. Member Eligibility. CIS products and services shall not be offered to an entity
that do not belong to LOC and AOC, or whose participation AOC and LOC have not approved.
3.2 Treatment of Staff. With respect to treatment of staff, the executive director may not
cause or allow conditions that are unlawful, unfair or undignified.
3.2A. Compensation and Benefits. With respect to employment, compensation, and
benefits to employees, consultants, contract workers and volunteers, the executive director shall
not cause or allow jeopardy to fiscal integrity or public image.
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3 .2A(1). The nwnber of full-time equivalent positions, total staff
compensation, and benefits shall not exceed those authorized by the Board during the annual
budget setting process. Salaries and benefits will not deviate materially from that offered for
similar positions in comparable public or private sector market settings.
3.2A(2). CIS administrative costs will not be out ofline with those of its
competitors and other pools that offer similar programs.
3.2B. Personnel Policies. The executive director shall not operate without written
personnel policies that clarify personnel rules for staff; provide for effective handling of
grievances; and protect against unlawful or wrongful conditions.
3.3 Financial Planninc & Bud2etinc. Fiscal year planning shall not deviate materially from
the Board's Ends policies.
3.3A. Actual Expenditures. With respect to the actual ongoing financial conditions and
activities, the executive director shall not cause or allow a material deviation of actual
expenditures from the Board-approved operating budget.
3.3A(1). Funds shall not be received, processed or disbursed under controls
that are insufficient under applicable generally accepted accounting principles.
3.3B. Financial Audit. Financial record keeping for any fiscal year shall not be
complete until an independent auditor selected by the Board has conducted an annual audit of
funds received, invested, kept and disbursed by CIS.
:~
3.3C. Commingling of Funds. Funds for each separate Trust may not be commingled
without assurances that they can be accounted for and used exclusively for the benefits of
members in each separate Trust.
3.3D. Consultation with Local Government Associations. The executive director shall
not present the annual operating budget and work plan for CIS without first consulting LOC and
AOC regarding their assessment of CIS related services required by their respective members.
3.4 Asset Protection. The executive director shall not allow CIS assets to be unprotected,
inadequately maintained, inappropriately used or put at undue risk.
3.4A. Reserves. Reserves shall not be allowed to fall below the level adopted by the
Board and considered necessary to provide stability and security to CIS programs, according to
sound actuarial and underwriting principles.
3.4A(1). The assessment of actuarial soundness of CIS Trust reserves shall
not be complete until an independent and qualified actuary has advised on the sufficiency of fund
reserves. Such evaluation will be conducted as frequently as is required for prudent management
by an independent actuary selected by the Board.
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3.4A(2). The CIS Trust is a single accounting entity that prices each line of
coverage separately. In the event of excessive losses in any coverage line, transfers between lines
of coverage shall not be made unless the deficit can reasonably be made up by the end of the
next full fund year after the transfer is made.
3.4B. Bonding. The executive director shall not authorize non-bonded personnel access
to amounts of funds in excess of$l,OOO.
3.4C. Investments. The executive director shall not allow investments to be made in
violation of the Board's adopted investment policy.
3.4D. Insurance. The executive director shall not intentionally expose CIS, the Board
or staff to claims of liability.
3.4D(1). The executive director shall not fail to secure coverage against
theft and casualty losses and against liability losses to Board members, staff or each of the
Trusts, in amounts that are reasonable for similar organizations of like size.
3.4D(2). The executive director shall not fail to protect intellectual property,
information and files from loss, significant damage or misuse.
3.5. Communication and Support to the Board. The executive director shall not permit the
Board to be uninformed or unsupported in its work.
3.5A. Monitoring Data. The executive director shall not neglect to submit monitoring
data required by the Board, in a timely, accurate and understandable fashion, directly addressing
provisions of Board policies being monitored. The executive director shall not let the Board
remain unaware of relevant trends, anticipated adverse media coverage and material external and
internal changes, with particular emphasis on changes in the assumptions upon which any Board
policy has previously been established.
3.5B. Decision Data. The executive director shall not fail to assemble for the Board as
many staff and external points of view, opinions and options as needed for fully informed Board
choices. Information may not be presented in unnecessarily complex or lengthy form. The
executive director shall not fail to supply for the consent agenda all items delegated to the
executive director, yet required by law or contract to be Board-approved, along with related
monitoring assurance.
3.5C. Other Data. The executive director shall not fail to advise the Board if, in the
executive director's opinion, the Board is not in compliance with its own policies on Board
Process and Board-Executive Director Relationship. This is appropriate in the case of Board
behavior that is detrimental to the working relationship between the Board and the executive
director.
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SECTION 4. ENDS (DESIRED RESULTS)
Purpose
Ends policies clarify the results CIS is expected to accomplish. The focus is not on what
the organization does, but on what it is for. What will be different, for whom, and at what cost?
Who will or who will not benefit from CIS, and in what ways, and at what cost. Ends policies
prescribe results, recipients and costs, not activities and intentions.
4.0 Ends (Desired Results). The Board's vision is that CIS has a stellar reputation based on
stellar performance. We are loyal partners with our members, jointly investing in their long-term
future. We strive to provide the best coverage at the best rates. We offer all lines to all eligible
entities, including small entities under-served in the marketplace. If a competitor offers a better
package, it's our job to know why and to do the right thing. If a competitor is doing something
right and we're not, we make changes. But if they are simply buying business we stand firm
because we know that a mindless price war ultimately hurts our members.
At the same time we are selective and fair in our pricing. We recognize and reward good
performance and we acknowledge poor performance and set prices appropriately. We work with
poorer performing members encouraging them to manage their risks aggressively.
We provide our members with superior customer service and consistent professionalism.
They don't shop for cheaper coverage because they understand that their contribution to CIS is
an investment in long term protection. They take responsibility for reducing their own risks to
help decrease claims and increase the return on their investment. All trusts and all lines of
coverage are financially viable; all have sufficient reserves.
4.1. Coverage. CIS offers members the best coverage at the best rates.
4.1A. Offerings. CIS offers to every city and county in LOC/Aoe property and casualty
coverage and employee benefits plans that are tailored to the needs of members, are the broadest
available in the market place and are priced at competitive market rates. Staff will track and
reports the results of these marketing efforts.
4.1A (1). CIS aggregates the collective buying power of members, and utilizes the
economic advantages of individual and pooled risk retention, to provide joint self-insured risk
retention pools for property and casualty coverage which, after distributions are made, reflects
lower overall costs than commercial insurance products.
4.1A(1)(a). Members are charged rates appropriate to their exposures and
loss experience.
4.1A (2). eIS aggregates the collective buying power of members to secure
employee benefits coverage options that respond to member needs, and negotiates group rates
with carriers. CIS' employee benefits Trusts' market a choice of coverage options for health and
welfare benefit plans, i.e. medical, dental, vision, life, short and long term disability and other
coverage and related services. These options are offered to local government employers, their
employees and dependents, at rates that seek to stabilize the cost of funding these programs for
members.
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4.2. Risk Management. CIS works with members to aggressively manage risks.
4.2A. Services. CIS makes available effective loss prevention and loss control programs,
claims management and consulting, data gathering, information sharing, education, training and
related risk management services.
4.2A (1). CIS risk management efforts will focus on areas of greatest risk as
reflected in claims experience data - law enforcement, employment-related claims and OR-
OSHA compliance.
4.2A (2). As a result of CIS risk management intervention, at least 5% of the
entities with incurred loss ratios of over 60% (least desirable) will improve their ratios to
between 40% to 60% (more desirable).
4.2A (3). Overall, CIS risk management efforts will result in an overall 5%
improvement in loss ratios and reduce the number, frequency and severity of claims.
4.3. Financial Viability of CIS. CIS is financially stable and highly valued by its members.
4.3A. Self-insured Pools. CIS self-insured pools are financed through the use of
actuarially sound contribution schedules at appropriate retention levels. Each year's
contributions are expected to cover that year's losses and expenses and add to surplus. The Board
establishes target surplus levels.
4.3B. Group Purchase. CIS' employee benefits Trusts operate using sound actuarial and
underwriting principles. Surplus amounts generated in CIS' employee benefits Trusts may be
used, subject to Board approval, as a subsidy to write down group rates proposed by carriers in
order to provide pricing stability to members.
4.3C. Reporting. The CIS Board and members will receive regular reports on key
benchmarks that reflect the status of CIS operations.
4.3D. Cooperative Efforts. CIS works together with those who have common interests
when these efforts have the potential to produce benefits for CIS members. CIS acts as a catalyst
for change and innovation that helps members better fmance and manage their risks. CIS is a
leader in working with other programs and affiliates of the local government associations on
issues of joint interest.
4.3E. Membership Services. CIS acknowledges the importance of membership services
and works with LOC and AOC to improve and expand services to local governments in ways
that are consistent with CIS' own mission.
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4.3F. Local Agents. The Board acknowledges the potential for risk management
assistance to be provided by local insurance agents and the value of such assistance to members
and to CIS. CIS has no direct agency relationship with local agents, allowing that relationship to
be negotiated in each local community. Fee-for-service compensation is handled at the member
entity level. If it is the preference of the entity and local agent, CIS accommodates the collection
of local agent commissions.
4.3G. Diversity. The Board recognizes the geographic and size diversity of local
governments and designs and actively markets innovative and competitive products and services
appropriate for the wide range of needs and interests of the members. CIS exercises the
necessary judgement to find the appropriate balance between being responsive to the needs of
prospective members, and individual members, while protecting the basic integrity of its core
programs for current members.
4.3H. New Products & Services. New products and services, which do not have a
demonstrated link to the pricing for current programs, are financed from sources other than
existing Trust funds.
4.31. Service Approach. CIS trustees and staff recognize they are customers of, and
service providers to, others with an interest in CIS. As such, CIS representatives communicate
and treat people with respect and courtesy while consciously adding value to CIS' relationships
with members, local agents, LOCI AOC, suppliers, citizens and other stakeholders.
4.3I(a). Personal Responsibility. Representatives of CIS accept personal
responsibility and accountability for their own actions as they strive to create opportunities,
remove barriers and ensure that CIS is highly valued by its members.
4.3J. Legislative Involvement. CIS acts as an information resource to members and
LOCI AGC in presenting to appropriate legislative bodies and committees, data related to the cost
of public body risk in Oregon.
Policy Gov 200l/March 2001
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CITY/COUNTY INSURANCE SERVICES ADMINISTRATIVE TRUST
BYLAWS
EXHIBIT B
Page ~ of =<~
ARTICLE 1
DEFINITIONS
Terms as utilized in the Bylaws shall have the meanings as set forth in this Article.
1.1. Administration. Administration shall include, without limitation, payment of costs
and expenses related to loss prevention, claims administration, data processing, financial
accounting and other Trust expenses, whether performed by the Trust or a Service Company.
Capital expenditures for facilities and equipment necessary to carry out the purposes of the Trust
shall be deemed as part of Administration.
1.2. Association of Oregon Counties. Association of Oregon Counties ("AOC") shall
mean the Association of Oregon Counties, an intergovernmental agency established under the
laws of the State of Oregon and having a principal place of business in Salem, Oregon.
1.3. Bylaws. The Bylaws shall mean the Bylaws of the City/County Insurance Services
Trust as set forth herein and as amended from time to time whether before or after the date
hereof.
104. Contribution. Contribution shall mean required payments to purchase excess
insurance in the name of the Trust, to establish Loss Funds and any other necessary or prudent
reserves, and to provide administration. The term Contribution does not include premiums paid
to CIS for any insurance coverage provided on a group purchase or individual basis.
1.5. Executive Director. The Executive Director shall mean the person appointed by the
Trustees, to be responsible for the daily activities of the Trust.
1.6. Fund Year. The Fund Year shall mean a twelve (12) consecutive month period
chosen from time to time by the Trustees. The initial Fund Year shall end on June 30 unless the
Board of Trustees shall provide otherwise. A Fund Year may be any period less than twelve (12)
months ifit is the first or last such year of the Fund or a year or years involving a change in the
Fund Year.
1.7. Governing Body. Governing Body shall mean the City Council in cities, the Board
of Commissioners or County Court in counties, and other similar governing bodies of authorities,
agencies or entities eligible to become Members.
1.8. Insurer. Insurer shall mean any insurance company providing any insurance contract
to the Trust and providing any benefit, directly or indirectly, for any Member or Participant,
including, but not limited to, any such policy that the Trustees deem necessary or prudent for the
proper operation of the Trust.
1.9. League of Oregon Cities. League of Oregon Cities ("LOC") shall mean the League
of Oregon Cities, an intergovernmental agency established under the laws of the State of Oregon
and having a principal place of business in Salem, Oregon.
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EXHIBIT - ~=?b
1.10. Loss Fund. Loss Fund shall mean all Contributions made.by Memb~~ro~e~lge
pursuant to the Trust Agreement, Bylaws, Rules or other agreements pursuant or incident thereto;
all of the sums, contracts, policies or properties received by the Trustees from the Members or
other persons pursuant to the Trust Agreement, Bylaws, Rules or other agreements pursuant or
incident thereto for the uses, purposes and trusts as set forth in the Trust Agreement, Bylaws and
Rules; and all income, gains, and all other increments of any nature whatsoever, if any,
therefrom.
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1.11. Member. Member shall mean any city, county or other entity which becomes a
Member pursuant to Article 2 of the Bylaws and whose membership has not been terminated or
suspended pursuant to the Bylaws.
1.12. OfficiaL Official shall mean any publicly elected or appointed official or employee
of a Member or entity eligible to become a Member.
1.13. Participant. Participant shall mean any city, county or other entity purchasing
insurance coverage through CIS which is offered on a group purchase or individual basis.
1.14. Premium. Premium shall mean any sum due to an Insurer.
1.15. Rules. Rules shall mean any Rules adopted by the Trustees pursuant to authority
granted in the Trust Agreement or Bylaws, as amended from time to time whether before or after
the date of adoption of the Bylaws.
1.16. Service Company. Service Company shall mean any person or agency (other than
CIS) designated to operate or provide a claims administration service, a Loss Prevention Program
or insurance accounting program or perform similar or other services as directed by the Board.
1.17. Surplus. Surplus shall mean those monies remaining in a Loss Fund after the
payment of the costs of Administration and excess insurance, payment of claims and
establishment of prudent reserves for outstanding claims.
1.18. Trust. Trust shall mean the City/County Insurance Administrative Trust ("CIS")
and as the context requires all funds, property and assets of the Trust.
1.19. Trust Agreement. Trust Agreement shall mean the City/County Insurance Services
Agreement and Declaration of Administrative Trust entered into by AOC and the LOC effective
October 2, 2000 and as amended from time to time.
1.20. Trustee. Trustee shall mean each person then serving as Trustee pursuant to the
Trust Agreement, including ex officio Trustees unless specifically indicated otherwise.
1.21. Trustees or Board of Trustees. Trustees or Board of Trustees shall mean the Board
of Trustees established by the Trust Agreement.
u
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ARTICLE 2
MEMBERSHIP AND PARTICIPATION
EXHIBIT /J
Page.i2:2.. of .3 (p
2.1. Eligibility to Become Member. Entities eligible to become Members or Participants
of the Trust are:
2.1.1. Any Oregon city which is a member of the LOC.
2.1.2. Any Oregon county which is a member of the AOC.
2.1.3. Any other public body, as defined by ORS 30.260, which is created by a
city or county under statutory or home rule charter authority.
2.1.4. Any Oregon community college created under ORS Chapter 341.
2.2. Such entities prior to becoming a Member or Participant must:
2.2.1. Complete such written application as the Trustees shall determine;
2.2.2. Pass by its governing body such resolution or contract as the Trust may
prescribe;
2.2.3. Pay the Contributions or Premiums to the Trust determined pursuant to the
provisions of the Bylaws and the Rules;
2.2.4. Meet all other criteria established and provide all information requested by
the Trustees or an Insurer which Trustees deem necessary and prudent for the proper
administration of the Trust, including but not limited to unqerwriting criteria; and
2.2.5. Receive written acceptance of Membership or Participation from the Trust.
2.3. Acceptance as Member or Participant by Trustees. As set forth in Section 2.2 of the
Bylaws, an entity shall be accepted as a Member or Participant only upon the approval of the
Trustees and any Insurer whose approval is required as a condition of providing insurance. The
decision of the Trustees in this regard shall be finaL Any such entity which has been refused the
status as a Member or Participant in the Fund may again request such status after a period
determined by the Trust.
204. Effective Time of Becoming a Member or Participant. The effective date upon
which an entity may become a Member or Participant shall be determined by the Trustees and set
forth in the Trustee's written notice of acceptance of membership or participation.
Notwithstanding the foregoing, the date for commencement of membership or participation may
be specified by such entity in its written request to become a Member or Participant, in which
case such entity shall become a Member or Participant upon such date if approved by the
Trustees.
2.5. Effective Date of Acceptance. Each entity, on becoming a Member or Participant,
thereby agrees to be bound by the provisions and terms of the Trust Agreement, Bylaws, Rules,
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IX. H.II.~n./l ~
Page~ of < "
other agreements pursuant thereto and any documents required by an Insurer, then in effect or
that may be adopted from time to time by the Trustees.
2.6. Appeal from Denial of Membership or Participation. In the event an entity eligible
to become a Member or Participant and which has made application therefor, has had
membership or participation denied by the Executive Director or any Committee of the Board of
Trustees, such entity may request the Board of Trustees to review such decision of denial. Such
request for review shall be made within thirty (30) days of such denial by written notice to the
Chairman of the Trust with a copy to the Executive Director. The Trustees shall meet at the time
and place designated by the chairman, Procedural matters regarding the conduct of the hearing
shall be the same as set forth in Section 2.9 hereof regarding membership and participation
review and termination. No appeal shall lie from a denial of membership or participation as a
result of any Insurer failing to give its required approval.
2.7. Term of Membership. Status as a Member will be continuous unless terminated by
the Member or the Trust pursuant to the provisions ofthe Bylaws.
2.8. Termination of Membership. A Member mayor shall be suspended or expelled from
the Trust in accordance with the provisions set forth below.
2.8.1. Conduct that is determined by the Trustees in their sole absolute discretion
pursuant to 2.11 of the Bylaws to warrant suspension or termination.
2.8.2. Failure to pay any Contribution to the Loss Funds or Premium required by
the Trustees when due and owing. Any Member failing to make a Contribution or
Premium required by proper notice may be suspended from Membership by action of the
Executive Director without further action by the Board of Trustees. The Member's
coverage and benefits hereunder shall immediately cease on the effective date of such
notice. If the Member shall subsequently submit its payment, the Executive Director may,
in his discretion, reinstate such Membership.
2.8.3. Failure-to comply with the Trust Agreement, Bylaws, or Rules.
2.804. Failure to continue to meet the criteria required by any Insurer or the Trust
including, without limitation, underwriting criteria.
2.8.5. Failure to comply in good faith with Loss Prevention Programs instituted
by the Trust or non-cooperation with staff of the Trust regarding loss prevention
procedures including, without limitation, training programs.
2.8.6. Unless otherwise provided in a particular policy of insurance, suspension
or expulsion shall be evidenced and preceded by a sixty (60) day written notice to the
Member from the Trustees except that ten (10) days notice shall be sufficient for
non-payment of all or any part of a Contribution or Premium.
2.8.7. Termination of Participation. A Participant may be suspended or expelled
from the Trust in accordance with, and for the reasons set forth in Section 2.8. Time
limits and notice provisions shall be as set forth in the policy of insurance involved and
applicable laws and regulations.
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U
I
2.9. Withdrawal. EXHIBIT 19
pageM- of ~~
2.9.1. Each Member shall continue its membership for a period not less than that
established for a coverage by the Trust, which period shall not exceed three (3) full Fund
Years. Ifno such period is established, the membership period shall be one (1) full Fund
Year. A Member may withdraw prior to the end of such period upon delivery to the Trust
of a resolution adopted by the Member's governing body authorizing withdrawal. Such
resolution shall be delivered 180 days prior to the effective date of withdrawal for three
year membership periods and 60 days in all other cases. A Member withdrawing shall
have no claim on the reserves being maintained by the Trust for losses incurred by the
withdrawing Member. The Trust shall continue the servicing of any covered claim after
the withdrawal of a Member.
2.9.2. If a Member does not give notice required pursuant to 2.9.1 above, a sum
calculated as set forth below shall be deducted from any Distribution of Surplus, or any
number of such Distributions, otherwise due to such Member, until total deduction(s)
equals the contribution for the coverage from which the Member is withdrawing without
notice, multiplied by 1.0 minus the loss ratio for the Trust for that coverage for the most
current three-year period, as of the end of the Fund Year during which the notice was
required to be given, multiplied by one-half if less than two full calendar years of a
three-year membership period shall have been completed prior to withdrawal and by
one-quarter otherwise.
2.9.3. In the case of withdrawal a Member shall remain liable for any
Contribution which has or will have accrued for any Fund Year prior to the effective date
of such withdrawal.
2.9.4. Participants may withdraw at any time upon 30 days written notice to CIS.
Refund of any Premium will be determined in accordance with the terms of the insurance
policy involved.
2.10. AOC and LOC Membership. All Members and Participants eligible for
membership in AOC or LaC shall maintain membership in the AOC or LaC. On failure to do so
Members or Participants shall be notified that their membership or participation in the Trust shall
be terminated if AOC or LOC membership is not renewed prior to the due date of the next
Contribution to the Trust in the case of a Member, or policy expiration in the case of a
Participant which comes due thirty (30) days or more from the lapse in membership in the AOC
or LOc. Such termination shall be effective as of the due date of such Member's next
Contribution to the Trust or Participant's policy expiration. A Member or Participant not eligible
to maintain full membership in AOc or LOC may satisfy the provisions ofthis section by
maintaining any other membership status in AOC or LOC for which it is eligible.
2.11. Membership and Participation Review and Termination.
2.11.1. When in the determination of the Executive Director a Member has
engaged in conduct, other than nonpayment of Contributions or Premiums, that warrants
review of that membership or participation status, the Executive Director shall file a
written report with the Trustees. Said report shall contain a summary of the facts and the
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~XH'II'f.. /J
E . D' d . d' . d b hi ag~-S-l?_ 01 3b
xecutlve lrector recommen atIOns regar mg contmue mem ers p or partIcIpatIOn
status.
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2.11.2. A copy of the Executive Director report shall be served by mail on the
Member or Participant along with a notice of hearing of the Trustees. Such notice of
hearing shall include the place, date and time of the hearing and a request for attendance
at the hearing. At their discretion the Trustees may submit written questions to the
Member or Participant, written answers to which must be mailed to the Executive
Director no later than seven (7) calendar days prior to the date of the hearing. A Member
or Participant objecting to the report and recommendations ofthe Executive Director
shall have the right to submit a written statement to the Trustees setting out in detail the
basis of the objection and any other information the Member or Participant desires to
submit. Said statement must be mailed to the Executive Director no later than five (5)
calendar days prior to the hearing. Such hearing shall be scheduled no less than ten (10)
nor no more than twenty (20) days from the date of such notice of the Trustees; provided,
however, that if the Trustees submit written questions to the Member or Participant, the
date of such hearing shall be set or re-set so that such Member or Participant shall have at
least fifteen (15) days from the mailing of such questions by or on behalf 'ofthe Trustees
to prepare such written answers.
2.11.3. The Trustees shall meet at the time and place designated in the notice of
hearing. The Member or Participant shall be entitled to be represented at the hearing and
present an oral statement and other information.
2.11.4. Following the hearing, the Trustees shall affirm, modify, or reject the
recommendation of the Executive Director. The Board shall have the authority to place a
Member or Participant on probation, the terms and duration of which it shall determine.
A copy of the Trust's decision shall be served by mail on the Member or Participant.
2.11.5. The action of the Trustees shall be final and binding.
2.12. Meetings of the-Membership. One or more meetings ofthe Members ofthe Trust
shall be held annually at such time and place as determined by the Trustees. Members shall be
notified of the time and place of each meeting by at least ten (10) days written notice. Such
notice may be by first class mail and may be included as part of any Trust publication.
ARTICLE 3
OBLIGATIONS OF MEMBERS AND PARTICIPANTS
3.1. Obligations of Members and Participants. The obligations of Members and
Participants of the Trust shall be as follows:
3.1.1. To appropriate all adequate available revenues, as permitted by applicable
law, for and to pay promptly all Contributions and Premiums to the Trust at such times
and in such amounts as shall be established by the Trustees within the scope of the Trust
Agreement, Bylaws and Rules.
::JI
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3.1.2. To allow the Trust and its agents reasonable access to all facilities of the
Member or Participant and all records, including but not limited to financial records,
which relate to the purposes or powers of the Trust. EXHIBIT h
Page~ of 3~
3.1.3. To allow attorneys selected by the Trust or Service Company to represent
the Member or Participant in investigation, settlement discussions and all levels of
litigation arising out of any claim made against the Member or Participant within the
scope of coverage furnished by the Trust.
3.1.4. To furnish full cooperation with the claims adjusters, the Service Company
and any agent, employee, officer or independent contractor of the Trust relating to the
purposes and powers of the Trust.
3.1.5. To follow loss reduction and prevention procedures established by the
Trust within the purposes and powers of the Trust.
3.1.6. To furnish to the Trust any budget and audit information of revenues and
expenditures of the Member or Participant for any fiscal year for which figures are
requested by the Trust.
3.1.7. To report as promptly as possible all incidents which could result in the
Trust being required to consider a claim within the scope of coverage undertaken by the
Trust
3.1.8. All information gathered or received by the Trust pursuant to any provision
of these Bylaws shall be utilized by the Executive Director only in connection with the
operation of and to further the purposes of the Trust and shall not otherwise be
distributed, disseminated or communicated to any person unless authorized by the Board
of Trustees or required by law.
3.2. Optional Defense by Member. The Trustees shall promulgate Rule(s) to permit
Members a reasonable opportunity in casualty cases or claims to participate in their own defense
or to prevent the settlement of such cases or claims by the Trust in a manner contrary to the
wishes ofthe Member.
The Rule(s) shall provide that in the event that a Member exercises its privilege to
prevent the settlement of a case or claim, the Member shall be responsible for any additional
cost, including but not limited to legal and investigation expense and subsequent judgment or
settlement, above the costs which would have been incurred had the Member not elected to
prevent the acceptance of a settlement offer or proposal pursuant to this section.
3.3. Contractual Obligation. The provisions of Articles 2 and 3 of these Bylaws shall
constitute a contract between each Member and Participant and the CIS Trust. The agreement of
a Member or Participant thereto shall be evidenced by a properly signed application for
Membership or Participation and a signed copy of a resolution or contract adopted by its
governing body. Nothing herein contained shall be deemed to create any relationship of surety,
indemnification guarantee or responsibility between Members or Participants for the debts of or
claims against any other Member or Participant or on the part of any Member or Participant with
respect to CIS or the Trust.
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ARTICLE 4
EXHIBIT _ _ J9
P/;lga ..3.~ of .3 fa
MEETINGS
4.1. Regular Meetings. The Board of Trustees may provide, by resolution, the time and
place, for the holding of regular meetings without other notice than such resolution.
4.2. Special Meeting. Special Meetings of the Board of Trustees may be called by the
ChaIrman or any four (4) Trustees. The person or persons authorized to call any such Special
Meeting may fix the time and any place, within the State of Oregon, for the holding of any such
Special Meeting ofthe Board of Trustees called by him or them. Any such meeting may be
called upon at least five (5) days written notice delivered personally or mailed to each such
Trustee at his or her business address or residential address, or by facsimile. Such notice shall
specify the date, time, place and purposes thereof.
4.3. Attendance at Meeting. The attendance of a Trustee at any meeting ofthe Board of
Trustees shall constitute a waiver of notice of such meeting, except where a Trustee attends a
meeting for the express purpose of objecting to the transaction of any business because the
meeting is not lawfully called or convened.
404. Action by Trustees Without a Meeting. Any action, other than an appeal pursuant to
sections 2.5, 2.6 or 5.1.15, which may be taken at a meeting of the Trustees may be taken without
a meeting if a consent in writing setting forth the actions so taken shall be signed by all of the
Trustees then serving.
ARTICLE 5
OFFICERS OF THE BOARD OF TRUSTEES
5.1. The Trustees shall annually elect from themselves, as provided by the Trust
Agreement, a Chairman and a Vice-Chairman, for a term from July 1 of the year in which elected
to June 30 ofthe following year. The Chairman shall preside at all meetings of the Trustees. The
Vice-Chairman shall preside at all meetings in the absence of the Chairman. In the absence of
both the Chairman and the Vice-Chairman the Trustees constituting a quorum may elect a
Chairman pro-tem for purposes of conducting a meeting and transacting Trust business. The
Trustees shall also elect a Secretary who mayor may not also be a Trustee. The Secretary shall
cause the records of the proceedings of the meetings of the Trustees to be kept and maintained.
All such officers of the Board of Trustees who are also Trustees may vote on any issue or matter
properly before the Board of Trustees.
ARTICLE 6
COMPENSATION OF TRUSTEES
6.1. The Trustees may reimburse themselves for reasonable expenses properly and
actually incurred in the course of acting as Trustees. To the extent that such Trustee is
reimbursed by a Member or other entity for expenses as Trustee, such Trustee shall not be so
reimbursed, but such reimbursement may be paid to the Member or other entity, as the case may
be, with respect to which such Trustee is an Official.
k)
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ARTICLE 7
EXHIBIT A
Page.3lL of ~ ~
~
COMMITTEES
7.1. Investment Committee. The Trustees may establish an Investment Committee. In
selecting committee members the Board shall consider investment expertise and personal and
professional qualifications and shall make appointments for such terms as it may deem desirable.
7.2. Underwriting Committee. The Trustees may establish an Underwriting Committee.
The duties of the Underwriting Committee shall be determined by the Trustees but may include
recommendations regarding development of underwriting standards and rating procedures, and
review of applications for membership or participation.
7.3. Loss Prevention Committee. The Board of Trustees may establish a Loss Prevention
Committee. The duties of the Loss Prevention Committee shall be determined by the Trustees,
but may include arranging for and evaluating the regular conduct ofloss control services,
production of recommendations to prevent losses, maintenance of a loss control manual and the
conduct of seminars regarding loss control.
7.4. Advisory Committees. The Board of Trustees may, in its sole, absolute discretion
appoint advisory committees to the Board of Trustees or any Committee of the Board comprised
of individuals who are not Trustees but whose expertise, experience or knowledge may be
helpful to the Trustees in the performance of their duties. The Board of Trustees may provide for
such compensation to such members of any advisory committee as it shall in its sole discretion
determine. .
ARTICLE 8
ADMINISTRATION
8.1. Appointment of an Executive Director. The Trustees shall appoint an Executive
Director to manage the daily affairs of the Trust. The Executive Director shall serve under such
terms and conditions as the Trustees shall prescribe. Such Executive Director shall not be an
owner, officer or employee of any Service Company. The duties of the Executive Director shall
include, without limitation, carrying out of policies established by the Board, locating and
recommending various contractors, supervising and reporting on contractor's performance, the
provision of financial and accounting reports and the maintenance of excess reinsurance or other
insurance. In addition, the Executive Director shall:
8.1.1. Pay claims to or on behalf of the Members in accordance with purposes of
the Trust Agreement, Bylaws, Rules and coverage documents.
8.1.2. Create a reserve for the payment of claims.
8.1.3. Payor provide for the payment on behalf of Members and Participants
hereunder all Premiums as they become due to an Insurer on any policy of insurance.
8.1.4. Cause to be maintained accounts of all investments, receipts,
disbursements and all other transactions affecting funds or property of the Trust.
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EXHIBIT If
Page .3.L of 3b
8.1.5. Engage an independent certified public accountant to perform a financial
audit of the Trust at least once per Fund Year and to report regarding such audit to the
Members at the meetings of the Members.
8.1.6. Engage an independent and qualified actuary to perform actuarial
calculations and provide advice regarding the sufficiency of the Loss Funds as frequently
as is required for prudent management.
8.1.7. Maintain minutes of all meetings of the Trustees and Members and cause
copies thereof to be distributed in a timely manner to all Trustees.
8.1.8. Publish such claim reports, financial statements and actuarial projections as
necessary to advise Members of the current and projected financial status of the Trust.
8.1.9. Pay all taxes and assessments that may be levied or assessed under existing
or future laws upon, or in respect of, the Trust or its income.
8.1.10. Cause the terms and provisions of the Trust Agreement, the Bylaws and
the Rules to be performed and carried out and the assets of the Trust to be properly held
and administered.
8.1.11. Payor provide for the payment of all reasonable and necessary expenses
of administering the Trust and all charges reasonably incurred by the Trustees in
protecting the funds and property of the Trust and in carrying out the purposes of the
Trust.
8.2. Bonds and Insurance. Any Executive Director, employee or agent shall be required
to be bonded or insured in a form and amount set by the Trustees. The cost of such bonds or
.insurance shall be paid as an expense of the Trust.
8.3. Service Company. Ifservices are not otherwise provided by the Trust, the Board
shall obtain the services of a Service Company for the purpose of servicing claims. The Service
Company shall adhere to guidelines for the performance of its duties as set forth by the Trustees.
ARTICLE 9
AMENDMENTS
9.1. Method of Amendment. The Bylaws may be amended at any time by a written
instrument approved by the Trustees then serving, a copy of which shall be furnished to each
Trustee.
9.2. Limitation on Amendments. No amendment shall be adopted which alters the basic
purpose of the Trust, conflicts with the Trust Agreement or with any applicable law or
government regulation, causes the use or diversion of any part of the Trust for purposes other
than those authorized by the Trust Agreement, or retroactively deprives any person of a vested
right or interest.
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ARTICLE 10
GENERAL PROVISIONS
EXHIBIT t1..
Paye~ of ~h
10.1. Title to Trust Assets. Title to the funds and property of the Trust, including without
limitation Loss Funds, shall be vested in and remain exclusively in the Trustees and no Member
shall have any right, title or interest in the Loss Funds nor any right to Contributions made or to
be made thereto, nor any claim against any Member on account thereof, except only as provided
from time to time by the Bylaws.
10.2. Nonalienation of Benefits. The funds and property of the Trust, including without
limitation Loss Funds, shall not be subject in any manner to anticipation, alienation, sale,
transfer, assignment, pledge, encumbrance or charge by any person other than the Trustees and
their duly authorized representative to the extent and for the purposes as herein specifically
provided.
10.3. Examination of Books and Records by the Trust. The Trust, its agents, employee or
attorneys shall be permitted at all reasonable times prior to the expiration of two (2) years after
the termination of a Member's participation in the Trust to examine the Member's books,
vouchers, contracts, documents and records of any and every kind which show or tend to show or
verifY the amount which is payable from the Fund to such Member or any of its Employee.
1004. Examination_ of Books and Records by Members. Any member, or their designated
representative, shall be permitted to examine the Trust's books, contracts, documents and records.
However, such examination shall not extend to matters relating to other Members. Such
examination shall be limited to such times and places as is reasonable. The cost of copying,
transcribing or abstracting records shall be borne by the Member.
10.5. Right to Obtain Adjudication of Disputes. In the event any question or dispute shall
arise as to the property or person or persons to whom any payment shall be made from the Fund,
the Trustees may withhold such payment until an adjudication of such question or dispute
satisfactory to the Trustees in-their sole absolute discretion shall have been made, or the Trust
shall have been adequately indemnified against loss.
10.6. Notice of Delivery of Documents. Any notice required to be given hereunder,
except as otherwise provided, shall be in writing and by certified mail, return receipt requested
and shall be deemed to have been given as of the date of posting to whomever may properly
receive legal service of process for the addressee of such notice. Any notice actually received
shall be deemed properly given whether or not pursuant to the provisions of the Bylaws.
10.7. Gender, Number and Captions. Wherever any words are used herein in the
masculine gender, they shall be construed as though they were also used in the feminine or
neuter gender in all cases where they would so apply, and wherever any words are used herein in
the singular form they shall be construed as though they were also used in the plural form in all
cases where they would so apply. Titles of articles and headings of sections and subsections are
inserted for convenience of reference only and are not to be considered in the construction
hereof.
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EXHIBIT _ rJ
Page~ of 3~
10.8. Construction. This Agreement is created and shall be construed in accordance with
the laws of the State of Oregon. All questions pertaining to its validity or construction not
otherwise preempted shall be determined in accordance with the laws of the State of Oregon. If
any provision contained in the Bylaws or Rules should be held invalid, unenforceable or
unconstitutional the remainder ofthe provisions not subject to such adjudication shall not be
affected and shall continue in full force and effect. If any provision contained in the Bylaws or
Rules should be held invalid, unenforceable or unconstitutional as to any Member or Participant,
the provisions of the Bylaws and Rules shall continue in full force and effect as to any or all
other Members and Participants.
l~~~
Chamrtan, CIS Board of Trustees
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Date
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