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HomeMy WebLinkAbout19-3692 Amended Declaration of Trust (Employee Benefits Trust) mlw rev ORDINANCE NO. 19-3692 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PLAINVIEW, TEXAS, AMENDING ORDINANCE 17-3651 RELATIVE TO THE EMPLOYEE HEALTH INSURANCE BENEFITS TRUST CREATED PURSUANT TO CHAPTER 222 OF THE TEXAS INSURANCE CODE, AS AMENDED; APPROVING THE AMENDED DECLARATION OF TRUST; AND PROVIDING FOR A SEVERABILITY CLAUSE; CUMULATIVE CLAUSE; CONFLICTS CLAUSE; EFFECTIVE DATE; AND PUBLICATION. WHEREAS, the City Council of the City of Plainview, Texas (the “City”) passed and approved Ordinance 17-3651, which created the Employee Health Insurance Benefits Trust, pursuant to Texas Insurance Code, Chapter 222, as amended; and WHEREAS, the creation of an Employee Health Insurance Benefits Trust (the “Trust”) allows the City to provide the best possible insurance benefits to its employees at the most reasonable price; and WHEREAS, by this Ordinance the City Council intends to make necessary revisions to the Trust’s Declaration of Trust to better conform with the City’s current staffing structure(s); and WHEREAS, this City Council desires to appropriately follow all statutory and legal guidelines for the efficient operation of the Employee Health Insurance Benefits Trust; and WHEREAS, this meeting is open to the public as required by law, and public notice of the time, place and purpose of this meeting was given as required by Chapter 551, Texas Government Code. NOW, THEREFORE, The City Council of the City of Plainview hereby ordains that: SECTION I The findings and declarations contained in the preambles of this Ordinance are incorporated herein as part of this Ordinance. SECTION II The City Council hereby finds and determines that the Amended Declaration of Trust is hereby adopted as amended and shall be executed by the Settlor and Trustees. Ord. 19-3692 Employee Health Insurance Benefits Trust Page 1 SECTION III Severability is intended throughout and within this Ordinance. If any provision, including any section, paragraph, sentence, clause, phrase or word or the application thereof to any person or circumstance is held invalid, unconstitutional, or unenforceable by a court of law or administrative agency with jurisdiction over the matter, such action shall not be construed to affect any other valid portion of this Ordinance. A constitutional construction hereof is intended and shall be given. There is not intent herein to violate either of the Texas Constitution or the Constitution of the United States. SECTION IV Provisions of this ordinance are cumulative and nothing herein shall prevent, alter, or diminish the applicability or enforcement of other ordinances restricting, regulating, or governing the subject matter herein. SECTION V In the event of an irreconcilable conflict between this ordinance and another ordinance governing the matters regulated and subject matter outlined herein, the provisions of this ordinance shall be and remain controlling as to the matters regulated and subject matter outlined herein. SECTION VI This Ordinance shall be of full force and effect upon its passage and publication as required by law. SECTION VII The City Secretary of the City of Plainview is hereby authorized and directed to cause publication of the descriptive caption of this Ordinance as an alternative method provided by law. PASSED AND APPROVED on first reading this ____ day of May, 2019. PASSED AND APPROVED on second reading this _____ day of May, 2019. _____________________ Wendell Dunlap, Mayor Ord. 19-3692 Employee Health Insurance Benefits Trust Page 2 ATTEST: ____________________________ Belinda Hinojosa, City Secretary APPROVED AS TO CONTENT: ___________________________ Jeffrey Snyder, City Manager APPROVED AS TO FORM: ______________________________ Matthew L. Wade, City Attorney Ord. 19-3692 Employee Health Insurance Benefits Trust Page 3 EXHIBIT "A" DECLARATION OF TRUST I. CREATION OF TRUST The City of Plainview ("City"), Texas, as settlor or creator of the Trust, designates the Mayor, Mayor Pro Tem, City Manager, Assistant City Manager, Finance Director, Director of Human Resources and City Secretary to be Trustees of the Trust and declares that the City holds in trust the funds described in Schedule 1 attached hereto and incorporated herein by reference, which is the property of the City, and all substitutions and additions to such funds, for the purpose of providing or offering, whether now or possibly in the future, health insurance benefits to the City's officers, employees, and qualified retirees and their dependents. II. PURPOSE This is a nonprofit trust created for the purpose of providing or offering, whether now or possibly in the future, City officers, employees, and qualified retirees and their dependents with health insurance benefits either directly or through the purchase of insurance and to perform operations in furtherance thereof. The Trust is intended to qualify as a tax-exempt trust performing an essential governmental function within the meaning of Section 115 of the Internal Revenue Code (the "Code"). III. DURATION The Trust shall continue until terminated by operation of law by the City Council or by majority vote of the Trustees. IV. TRUSTEES: COMPOSITION, OFFICERS, COMPENSATION, AND MEETINGS A. Composition. The Trustees are the Mayor, Mayor Pro Tem, City Manager, Assistant City Manager, Finance Director, Director of Human Resources and City Secretary, and each Trustee's term is contemporaneous with his or her term of office or employment with the City. Whenever a Trustee ceases to be a member of the City, the person succeeding him or her in office will automatically be appointed to serve as a successor Trustee of the Trust. B. Officers. The Mayor shall serve as Chairman and shall preside at meetings of the Trustees and shall have all such other powers as are conferred herein or by majority vote of the Trustees at a duly called meeting at which a quorum is present. The Secretary shall be the City Secretary. The Secretary will oversee the preparation of meeting Ord. 19-3692 Employee Health Insurance Benefits Trust Page 4 agendas, giving notice of meetings to the Trustees, and the minutes of the meetings of the Trustees. C. Compensation. The Trustees shall be reimbursed for all reasonable and necessary expenses incurred by them in the performance of their duties and will otherwise receive no compensation for their service as Trustees. D. Meetings. A meeting of the Trustees may be called by the Chairman or on written request to the Chairman by two or more Trustees. Trustees shall have at least three days written notice of any meeting. For purposes of this section, electronic mail notice is written notice. V. RIGHTS, POWERS, AND DUTIES OF TRUSTEES; QUORUM AND VOTING A. Rights, Powers, and Duties. In addition to all other powers and duties conferred on them by this Trust document and imposed or authorized by law, the Trustees shall have the following powers and duties, but only to the extent permissible for a single purpose non-profit trust under Section 222.002(c)(5) of the Texas Insurance Code: 1. The Trustees shall carry out all of the duties necessary for the proper operation and administration of the Trust on behalf of the covered persons and shall have all the powers necessary and desirable for the effective administration of the affairs of the Trust. 2. The Trustees have the general power to make and enter into all contracts, leases, and agreements necessary or convenient to carry out any of the powers granted by this Trust document or by law or to effectuate the purpose of the Trust. All such contracts, leases, and agreements or any other legal documents herein authorized shall be approved by the Trustees by majority vote at a duly called meeting at which a quorum is present and signed by the Chairman on behalf of the Trust. The Trustees may also designate another Trustee to sign such documents. 3. The Trustees shall use the Trust's funds to accomplish the purpose of the Trust, as described in Section II herein, and to operate and administer the Trust solely in the interest of the covered City officers, employees, and qualified retirees and dependents thereof and for the exclusive purpose of providing or offering health insurance benefits to such persons and defraying the reasonable expenses of administration of the Trust. To this end, the Trustees may purchase health insurance to provide or offer coverage for participating City officers, employees, and qualified retirees and their dependents. The Trustees may also adopt a health benefits plan that covers eligible City officers, employees, and qualified retirees, and their dependents. Ord. 19-3692 Employee Health Insurance Benefits Trust Page 5 4. The Trustees may accept contributions to the Trust funds from any source including contributions from covered persons receiving benefits from the Trust. 5. The Trustees shall be authorized to contract with any qualified organization to perform any of the functions necessary for providing or offering health insurance benefits, including but not limited to excess loss insurance, stop loss insurance, claims administration, administrative services, and any other services that the Trustees shall deem expedient for the proper operation of the Trust. When required by law or desired by the Trustees, the Trustees shall seek sealed competitive bids or sealed competitive proposals with respect to contracts required to carry out the operations of the Trust and to affect the purpose of the Trust. 6. The investment of funds of the Trust shall be in accordance with the City of Plainview's Investment Policy. 7. The City of Plainview's Depository shall serve as the depository for the Trust. 8. The Trustees may purchase insurance for the Trustees and any other fiduciaries appointed by the Trustees and for the Trust itself to cover liability or losses occurring by reason of the act or omission of any one or more of the Trustees or any other fiduciary appointed by them. Any insurance purchased by the Trustees must give the insurer recourse against the Trustees or other fiduciaries concerned for breach of any fiduciary obligation or fiduciary duty owed to the Trust. 9. The Trustees shall arrange for proper accounting and reporting procedures for the Trust's funds and shall also provide for an annual audit of the Trust's financial affairs by a certified public accountant. This audit will be incorporated into the City of Plainview’s Annual Audit and presented to the City Council. 10. The Trustees may retain legal counsel to represent the Trust and the Trustees in all legal proceedings as well as to advise the Trust and the Trustees on all matters pertaining to the operation and administration of the Trust. 11. The Trustees have the authority to terminate the Trust at any time. 12. Upon termination of the Trust, the Trustees shall provide for the payment of Trust obligations, debts, losses, and other liabilities and shall provide for the disposition of the remaining Trust funds in accordance with Section IX herein. Ord. 19-3692 Employee Health Insurance Benefits Trust Page 6 B. Quorum and Voting. A majority of the Trustees shall constitute a quorum for the transaction of business at any meeting of the Trustees and the vote of a majority of the Trustees present shall be required for approval of any action at such meeting. The vote of such majority of the Trustees at such meeting shall constitute action of the Trustees as a group. VI. BENEFICIARIES The beneficiaries of the Trust are the City officers, employees, and qualified retirees and their dependents who are covered by a health insurance benefits plan purchased or adopted by the Trust (also called "covered persons" herein). Beneficiaries may make contributions to the Trust for use by the Trustees in fulfilling the purposes of the Trust. No beneficiary shall have any claim against the funds or any other property of the Trust. The rights and interests of the beneficiaries are limited to the insurance or health benefits specified in any policy purchased or plan adopted by the Trustees. VII. TRUST FUNDS The Trust funds consist of the funds described in Schedule 1 hereto as provided by the Settlor to institute this Trust, future contributions by the Settlor, beneficiary contributions, investment income, and any other money or property which shall come into the hands of the Trustees in connection with the administration of the Trust. The funds of the Trust shall not inure to the benefit of, or be distributed to, any private person, except for the payment of necessary costs and benefits described below. The Trustees may use the Trust's funds as follows: 1. to pay all expenses which the Trustees consider necessary in establishing the Trust and in administering the Trust and all reasonable expenses incurred by the Trustees in the performance of the duties; 2. to pay premiums on any insurance policies purchased by the Trust; 3. to make authorized investments; 4. to pay claims under any health insurance benefits plan adopted by the Trustees; 5. to pay for all necessary professional services, property and equipment required for the proper operation of the Trust; 6. to pay all legal obligations of the Trust; and 7. to pay any judgment entered against the Trust or to compromise and settle litigation in which the Trust is a party. Ord. 19-3692 Employee Health Insurance Benefits Trust Page 7 VIII. LIABILITY OF TRUSTEES AND OFFICERS The Trustees shall use ordinary care and reasonable diligence in the exercise of their powers and the performance of their duties hereunder; and they shall not be liable for any mistake of judgment or other action made, taken or omitted by them in good faith, nor for any action taken or omitted by any agent, employee or independent contractor selected with reasonable care; nor for loss incurred through investment of the Trust funds or failure to invest. No Trustee shall be liable for any action taken or omitted by any other Trustee. No Trustee shall be required to give a bond or other security to guarantee the faithful performance of his or her duties hereunder. To the fullest extent permitted by law: (a) the City shall indemnify each Trustee who was, is, or is threatened to be made a party to any threatened, pending, or completed action, suit, or proceeding ("Proceeding"), any appeal therein, or any inquiry or investigation preliminary thereto, by reason of the fact that the Trustee is or was a Trustee; (b) the City shall pay or reimburse a Trustee for expenses incurred (i) in advance of the final disposition of a Proceeding to which such Trustee was, is or is threatened to be made a party, and (ii) in connection with such Trustee's appearance as a witness or other participation in any Proceeding. IX. AMENDMENT, REVOCATION AND TERMINATION This Declaration of Trust and the Trust created herein shall terminate when and if required by operation of law. The Trustees shall have the power to amend, modify, terminate or revoke, in whole or in part, this Declaration of Trust and the Trust created herein by majority vote at a duly called meeting at which a quorum is present. Notwithstanding the foregoing, the Trustees shall have no power to amend Section II of this Declaration of Trust. Beneficiaries of the Trust shall have no right to amend this Declaration of Trust, and their approval shall not be a condition or requirement for an authorized amendment by the Trustees. Upon termination of the Trust, the Trustees shall pay all obligations, debts, losses, and other liabilities of the Trust. Thereafter, the Trustees shall first use the remaining trust funds to pay covered claims of persons covered under the City's health benefits plan that may be in effect at the time of termination of the Trust and then, either apply any remaining balance of the funds to provide the benefits described herein or transfer such funds to a successor whose income is excluded under Section 115(1) of the Code. Notwithstanding the foregoing, the Trustees, upon termination of the Trust and payment of all Trust obligations may, by vote of a majority of the Trustees, transfer the remaining funds or any portion thereof to the trustees of any trust or trusts established by the City for a substantially similar purpose to be applied for uses substantially similar to those set forth in Section II herein. Ord. 19-3692 Employee Health Insurance Benefits Trust Page 8 X. GOVERNING LAW This Declaration of Trust and the Trust created herein shall be construed and governed by the laws of the State of Texas in force from time to time. XI. MISCELLANEOUS Whenever the context so admits, and such treatment is necessary to interpret this Declaration of Trust in accordance with its apparent intent, the use herein of the singular shall include the plural, and vice versa, and the use of the feminine, masculine, or neuter gender shall be deemed to include the other genders. The captions or headings above the various Sections of this Declaration of Trust have been included only to facilitate the location of the subjects covered by each Section but shall not be used in construing this Declaration Trust. If any clause or provision of this Declaration of Trust proves to be or is adjudged invalid or void for any reason, such invalid or void clause, provision, or portion shall not affect the whole, but the balance of the provisions hereof shall remain operative and shall be carried into effect insofar as is legally possible. \[REMAINDER OF PAGE INTENTIONALLY BLANK; SIGNATURE PAGE FOLLOWS.\] Ord. 19-3692 Employee Health Insurance Benefits Trust Page 9 IN WITNESS HEREOF, the undersigned parties have executed this Declaration of Trust, consisting of twelve (12) pages and Schedule 1 attached hereto, on the dates of their respective acknowledgments below. By joining in the execution of this Declaration of Trust, the Trustees acknowledge receipt of the property described in Schedule 1, signify acceptance of the Trust created hereunder, and covenant that the Trust will be executed with all due fidelity. This Trust is effective as of the last date of signature below. __________________________ Wendell Dunlap, Mayor of the City of Plainview, Settlor TRUSTEES: _____________________________________ _______________________ Wendell Dunlap, Mayor Date Trustee ____________________________________ _______________________ Susan Blackerby, Mayor Pro Tem Date Trustee _____________________________________ _______________________ Jeffrey Snyder, City Manager Date Trustee _____________________________________ _______________________ VACANT, Assistant City Manager Date Trustee _____________________________________ _______________________ Sarianne Beversdorf, Finance Director Date Trustee _____________________________________ _______________________ Rachael Foster, Director of Human Resources Date Trustee _____________________________________ _______________________ Belinda Hinojosa, City Secretary Date Trustee Ord. 19-3692 Employee Health Insurance Benefits Trust Page 10 State of Texas § § County of Hale § This instrument was acknowledged before me on this _____ day of ___________________, 2019 by Wendell Dunlap, Mayor of the City of Plainview, on behalf of Settlor and as Trustee. __________________________ Notary Public, State of Texas State of Texas § § County of Hale § This instrument was acknowledged before me on this _____ day of ___________________, 2019 by Susan Blackerby, Mayor Pro Tem of the City of Plainview, as Trustee. __________________________ Notary Public, State of Texas State of Texas § § County of Hale § This instrument was acknowledged before me on this _____ day of ___________________, 2019 by Jeffrey Snyder, City Manager of the City of Plainview, as Trustee. __________________________ Notary Public, State of Texas Ord. 19-3692 Employee Health Insurance Benefits Trust Page 11 State of Texas § § County of Hale § This instrument was acknowledged before me on this _____ day of ___________________, 2019 by Sarianne Beversdorf, Finance Director of the City of Plainview, as Trustee. _________________________ Notary Public, State of Texas State of Texas § § County of Hale § This instrument was acknowledged before me on this _____ day of ___________________, 2019 by Rachael Foster, Director of Human Resources of the City of Plainview, as Trustee. __________________________ Notary Public, State of Texas State of Texas § § County of Hale § This instrument was acknowledged before me on this _____ day of ___________________, 2019 by Belinda Hinojosa, City Secretary of the City of Plainview, as Trustee. __________________________ Notary Public, State of Texas Ord. 19-3692 Employee Health Insurance Benefits Trust Page 12 SCHEDULE 1 The following is a list of the assets initially transferred by the City of Plainview, Texas, to the Trust: City of Plainview's first month contributions for Employee and Dependents Medical/Pharmacy Benefits. City of Plainview's Employee and Dependents first month of Plan Year's payroll deductions or contributions for Medical/Pharmacy Benefits. Ord. 19-3692 Employee Health Insurance Benefits Trust Page 13