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ORDINANCE NO. 17-3651
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PLAINVIEW,
TEXAS AUTHORIZING THE CREATION AND ADOPTION OF AN
EMPLOYEE HEALTH INSURANCE BENEFITS TRUST PURSUANT TO
CHAPTER 222 OF THE TEXAS INSURANCE CODE, AS AMENDED;
APPROVING THE DECLARATION OF TRUST; APPROVING THE INITIAL
TRANSFER OF ASSETS TO THE TRUST; AND PROVIDING FOR A
REPEALER; SEVERABILITY CLAUSE; CUMULATIVE CLAUSE;
CONFLICTS CLAUSE; AND EFFECTIVE DATE.
WHEREAS, the Texas Insurance Code, Chapter 222, as amended, provides for
the creation of single purpose, nonprofit trusts, established for the payment of premiums
or revenues on group health, accident, injury or life insurance benefits of employees of a
municipality; and
WHEREAS, the creation of an Employee Health Insurance Benefits Trust (the
"Trust") will allow the City of Plainview ("City") to provide the best possible insurance
benefits to its employees at the most reasonable price; and
WHEREAS, this City Council has found and determined that all prerequisites of
law have been satisfied and that the creation of the Trust is in the best interest of the City;
and
WHEREAS, by this Ordinance the City Council intends to take all steps necessary
and prerequisite to the creation of the 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 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 it is wise, expedient, necessary
and advisable and in the public interest and benefit that a trust, to be named "CITY OF
PLAINVIEW EMPLOYEE HEALTH INSURANCE BENEFITS TRUST", be created for the
purposes defined in the Declaration of Trust.
Ord. 17- 3651
Employee Health Insurance Benefits Trust Page 1
SECTION III
The Declaration of Trust, attached hereto as Exhibit "A" and incorporated herein
for all purposes, is hereby approved by the City Council.
SECTION IV
The City Council, as Settlor of the Trust, hereby approves of the initial transfer of
the City assets as set out in Schedule 1, attached hereto and incorporated herein for all
purposes as a part of the Declaration of Trust.
SECTION V
All ordinances or parts of ordinances inconsistent with any provisions of this
ordinance are hereby repealed to the extent of such conflict, and the provisions of this
ordinance shall be and remain controlling as to the matters regulated herein.
SECTION VI
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 VII
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 VIII
All ordinances or portions of any ordinance of the City of Plainview, Texas, in
conflict herewith, are hereby amended to conform with the provisions hereof.
SECTION IX
This Ordinance shall be of full force and effect upon its passage and publication
as required by law.
Ord. 17- 3651
Employee Health Insurance Benefits Trust Page 2
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178
PASSED AND APPROVED on first reading this 14th day of March, 2017.
PASSED AND APPROVED on second reading this 28th day of March, 2017.
ATTEST:
•
Belinda Hinojosa, City Secreta
APPROVED AS TO CONTENT:
Jeffr- "•':' , City Manager
CERTIFICATION AS TO
AVAILABILITY OF FUNDS:
Sarianne Beversdorf, Director of Fjhance
APPROVED AS TO FORM:
Les
ie Spear Schmi
t, City Attorney
Wendell Dunlap, Mayor
Ord. 17- 3651
Employee Health Insurance Benefits Trust Page 3
EXHIBIT "A"
DECLARATION OF TRUST
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,
Personnel Specialist 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.
11.
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").
111.
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. Comoosition, The Trustees are the Mayor, Mayor Pro Tem, City Manager,
Assistant City Manager, Finance Director, Personnel Specialist 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
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preparation of meeting 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:
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,
Teases, 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. 17- 3GSr 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.
$ 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. 17- 3 `Sl
Employee Health Insurance Benefits Trust Page 6
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182
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.
VL
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;
to pay for all necessary professional services, property and equipment
required for the proper operation of the Trust;
to pay all legal obligations of the Trust; and
Ord. 17- 3 GSI Employee Health Insurance Benefits Trust
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183
to pay any judgment entered against the Trust or to compromise and
settle litigation in which the Trust is a party.
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 It 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 I1 herein.
Ord. 17- 34 El Employee Health Insurance Benefits Trust Page 8
184
X.
GOVERNING LAW
This Declaration of Trust and the Trust created herein shall be construed and
govemed by the laws of the State of Texas in force from time to time.
Xl.
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. 17-3 / 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.
TRUSTEES:
i)':j'//
del( unlap, Mayor
Trustee
1
endell Dunlap, Mayor of
City of Plainview, Settlor
Date
zi47
Dr. Charles Sta
Trustee
yor Pro Tem
//n
nyde4 Ci anage
Jeffrey S r
Trustee /
Andrew Freeman, Assistant City Manager
Trustee
Date
Date
3/3,;:z/7
3- 30-)7
Date
�uw•- 3 -31 - Po17
Sarianne Beversdorf, Finance rector Date
Trustee
�1/4GwJ'4.�ae( ..3. 30 d of 7
(Air
Shane Harrel , Personnel Specialist Date
Trustee
Belinda Hinojosa, City Secre
2- 3o -c 7
Date
Ord.17-34St
Employee Health insurance Benefits Trust
Page 10
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186
Trustee
State of Texas
County of Hale
This instrument was
filar L41 , 2017
behalf of Settlor and as Trustee.
acknowledged before me on this 3154- day of
by Wendell Dunlap, Mayor of the City of Plainview, on
State of Texas
G.. -4c °won ck
Notary Public, State of Texas
County of Hale §
This instrument was acknowledged before me on this 3154- day of
"fN.0w CAN , 2017 by Dr. Charles Starnes, Mayor Pro Tem of the City of
Plainview, on behalf of Settlor and as Trustee.
State of Texas
County of Hale
This
MarCA
as Trustee.
IlipidAmdllidllidbollmillnibiapilly
1
MACE OIRSICL 0
I Meaty 10.190109023 I
I ,^�� My Commission Expires i
February 9; 2019
1
$41.4.4. 12,tor ✓i (-4c—
Notary Public, State of Texas
instrument was acknowledged before me on this 30 fh day of
, 2017 by Jeffrey Snyder, City Manager of the City of Plainview,
itastagiastftarabablibeassimilhabsi
4 0IMCE oER Ick
Mabry 10 N 12010905.1
My Commission Expires
February 9, 2019 i
Ord. 17- 3 b Si
Ca.im ee /2e., -,i CIc
Notary Public, State of Texas
Employee Health Insurance Benefits Trust Page 11
187
State of Texas
County of Hale
This ipstrument was acknowledged before me on this 3°t, day of
march , 2017 by Andrew Freeman, Assistant City Manager of the City
of Plainview, as Trustee.
State of Texas
County of Hale
I
GRACE DERRICK
NOW, IDt1301010'93
MyCommission h«
Fernery 9, 2019
Gnu 11Grri de
Notary Public, State of Texas
This instrument was acknowledged before me on this aatli day of
ourc..h , 2017 by Sarianne Beversdorf, Finance Director of the City of
Plainview, as Trustee.
llosdhAbodbodbahollbribleamarlailbolha
GRACE DERRICK
Notary ID a 130103033
My Commission Expkt
February 9, 2019
State of Texas
County of Hale
a.tcc /Zed',4 C -lc
Notary Public, State of Texas
This instrument was acknowledged before me on this 3°11 day of
March , 2017 by M. Shane Harrell, Personnel Specialist of the City of
Plainview, as Trustee.
State of Texas
County of Hale
1 GM0E DEIIRICK
l/
EF2F My Commission Expires i
0
Cote aerfiC fC
Notary Public, State of Texas
This instrument was acknowledged before
marc 2017 by Belinda Hinojosa,
Plainview, as Trustee.
me on this 3 o111 day of
City Secretary of the City of
6.4144
Win,
Ord. 17- 3(0SI Employee Health Insurance Benefits Trust Page 12
188
usiedisiftwomobsibaboonsamdmomemir
GRACE DERRICK
• J L Nelory lb • 130100033 I
Ur ConneNrion Ex01rn I
F*Nwry f, 2019
6144'14 l wj i&ic
Notary Public, State of Texas
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 (May 2017) contributions for Employee and
Dependents Medical/Pharmacy Benefits.
City of Plainview's Employee and Dependents first month (May 2017) of Plan
Year's payroll deductions or contributions for Medical/Pharmacy Benefits.
Ord. 17- WI Employee Health Insurance Benefits Trust Page 13