HomeMy WebLinkAboutR-2005-195 Cities Insurance Association of Washington Agreement (CIAW)RESOLUTION NO. R-2005- 195
A RESOLUTION authorizing and directing the City Manager of the City of Yakima to
execute the Cities Insurance Association of Washington ("CIAW")
Associate Member Agreement and the Interlocal Agreement of the CIAW
and any other documents that may be necessary or appropriate to allow
the City of Yakima to become an associate member of the Cities Insurance
Association of Washington.
WHEREAS, Chapter 39.34 of the Revised Code of Washington ("RCW"), entitled
"Interlocal Cooperation Act," permits local governmental units to make the most efficient use of
their powers by enabling them to cooperate with other municipalities on the basis of mutual
advantage; and
WHEREAS, RCW 48.62 empowers local government entities to join together to form a
joint self-insurance program; and
WHEREAS, the CIAW offers pooled insurance purchasing with cost stability and
potential long-term savings; and
WHEREAS, the City of Yakima finds that membership in the CIAW is of benefit in
managing the risks involved in providing services to its citizens; and
WHEREAS, the City Council deems it to be in the best interest of the City of Yakima to
join CIAW; and
WHEREAS, the City of Yakima has been provided with an opportunity to review the
Associate Member Agreement, Interlocal Agreement, and By -Laws of the CIAW; and
WHEREAS, upon execution of the Agreements, the City of Yakima will become an
associate member of CIAW; and
WHEREAS, it is appropriate for the City Manager to negotiate and execute any
additional documents that are necessary or appropriate for the City of Yakima to enter into and
participate in CIAW; now, therefore,
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF YAKIMA:
The City Manager is hereby authorized and directed to execute the Cities Insurance
Association of Washington Associate Member Agreement and the Interlocal Agreement of the
Cities Insurance Association of Washington, and any other documents that may be necessary
or appropriate to allow the City of Yakima to become an associate member of the CIAW.
ADOPTED BY THE CITY COUNCIL this 13th day of December, 2005.
ATTEST:
A
City Clerk
CITIES INSURANCE ASSOCIATION
OF WASHINGTON
ASSOCIATE MEMBER AGREEMENT
WHEREAS, the Cities Insurance Association of Washington is entitled
under RCW 48.62 to include other municipal and governmental entities in the
Cities Insurance Association of Washington; and
WHEREAS, the Cities Insurance Association of Washington Board of
Directors has approved by Resolution the inclusion of Associate Membership to
the Cities Insurance Association of Washington subject to the Board's individual
approval of each City; and
WHEREAS, the undersigned City is entitled under RCW 48.62 to
participate in an insurance cooperative and by Resolution has chosen to apply
for Associate Membership; now, therefore,
The Cities Insurance Association of Washington (hereinafter referred to
as "CIAW"), and the City of Yakima, Washington (hereinafter referred to as
"City") agree to the following:
1. The City agrees to provide all application information to the CIAW for
consideration of membership.
2. The City agrees to pay all premiums when due as per statements
issued by the CIAW on a direct basis to the CIAW.
3. The Cities Insurance Association of Washington agrees to provide
General Liability, Public Officials Liability, and Automobile Liability
Coverages as per the policy overviews and accompanying policy
provided to the City.
4. CIAW agrees to provide risk management services to the City and the
City agrees to utilize risk management recommendations as prudent.
5. The City agrees to report all losses regardless of monetary amount or
question of liability as soon as possible to the CIAW.
6. The City agrees to pay deductibles as per the policy overviews and the
premium/assessment.
7. The City and the CIAW agree the City's membership in the CIAW is an
Associate Membership and the City shall not have any ownership in
the assets of the CIAW nor shall the City be responsible for any
shortfalls in claims reserves, if any, experienced by the CIAW.
8. The City is subject to the terms and conditions specified for Associate
Members in the Interlocal Agreement and By -Laws of the Cities
Insurance Association of Washington. However, through August 31,
2007, CIAW waives the one-year withdrawal requirement for the City
of Yakima in Section 3.13, entitled "Withdrawal," in the Interlocal
Agreement of CIAW that requires written notice prior to September 1
of the preceding calendar year of a city's decision to withdraw from the
Interlocal Agreement. Through August 31, 2007, the City of Yakima
may provide one -day written notice to withdraw from CIAW and the
Interlocal Agreement at any time during the CIAW's fiscal year(s). In
the event that the City of Yakima cancels the policy at any time prior to
August 31, 2007, the City of Yakima will be entitled to a pro rata refund
of the assessment/premium.
DATED this day of December, 2005.
CITY OF YAKIMA CITIES INSURANCE ASSOCIATION
OF WASHINGTON
c. AKA
By:
R. A. Zais, , ., City Manager
ATTEST:
By:
Its:
il<aiut.„. 'VHS
City Clerk / 3-/i.Vo 'y.14,
ry
CITY CONTRAC f NO 6770 5:1/7 r
RESOLUTION NO. ��•S FJ
-2-
INTERLOCAL AGREEMENT
OF
CITIES INSURANCE ASSOCIATION
OF WASHINGTON
TABLE OF CONTENTS
FOR
INTERLOCAL AGREEMENT
CREATING THE CITIES INSURANCE
ASSOCIATION OF WASHINGTON
1. Introduction 1
2. Recitals 1
3. Agreement 1
3.1 Purpose of Agreement 1
3.2 Parties to Agreement 2
3.3 Term of Agreement 2
3.4 Creation of Association 2
3.5 Powers of the Association 3
3.6 Responsibilities of the Association 3
3.7 Responsibilities of Members 4
3.8 Board of DirectorsBoard of Directors' Authority 4
3.9 Service Representative Relationship 6
3.10 Effective Date of Pooled Insurance Purchasing Program 7
3.11 Contingent Liability and Retroactive Assessments 7
3.12 New Members 7
3.13 Withdrawal 7
3.14 Cancellation 7
3.15 Effect of Withdrawal or Cancellation 8
3.16 Termination and Distribution 8
3.17 Notices 8
3.18 Amendment 8
3.19 Enforcement 9
3.20 Default and Remedies 9
3.21 No Waivers 9
3.22 Prohibition Against Assignment 9
3.23 Entire Agreement 9
3.24 Severability 9
3.25 Time 9
3.26 Section Headings 10
3.27 Governing Law 10
3.28 Counterpart Copies 10
4. Execution 10
ii
INTERLOCAL AGREEMENT CREATING THE CITIES INSURANCE
ASSOCIATION OF WASHINGTON
1. Introduction.
THIS AGREEMENT is made and entered into in the State of Washington pursuant to
the provisions of Chapter 39.34 Revised Code of Washington and Chapter 48.62 Revised Code
of Washington by and among the Washington cities and towns listed in Exhibit A attached
hereto (the "Members").
2. Recitals.
2.1 Chapter 48.62 Revised Code of Washington provides that two or more "local
governmental entities" may, pursuant to Chapter 39.34 Revised Code of Washington, jointly
purchase insurance (these activities are hereafter collectively referred to as a "Joint Insurance
Purchasing Pool").
2.2 Revised Code of Washington Section 48.62.021 defines "local government
entities" to include cities and towns organized and existing under Title 35 or 35A Revised Code
of Washington along with certain districts and municipal corporations.
2.3 It is to the mutual benefit of the Members and in the best public interest of the
Members to join together to establish this Joint Insurance Purchasing Pool to accomplish the
purpose set forth herein.
2.4 The Members have determined it is in their best interest to participate in such a
program.
3. Agreement.
In consideration of the foregoing and the mutual benefits to be derived herefrom, the
Members agree as follows:
3.1 Purpose of Agreement. This Agreement is entered into by the Members
pursuant to Chapter 39.34 Revised Code of Washington and Chapter 48.62 Revised Code of
Washington for the purpose of authorizing the creation of the Cities Insurance Association of
Washington (the "Association"), which shall be organized as a non-profit corporation under
Chapter 24.03 Revised Code of Washington, to provide a Joint Insurance Purchasing Pool for
the benefit of cities and towns in the State of Washington organized and existing pursuant to
Title 35 or 35A Revised Code of Washington and districts and other municipal corporations as
defined by RCW 48.62.021(1). The Association shall, in exchange for the payment of annual
assessments and retroactive assessment by the Regular Members, administer a Joint
Insurance Purchasing Pool wherein the Members will pool their losses and claims and jointly
purchase insurance and administrative and other services through the Association including
claims adjusting, risk management consulting, loss prevention and related services at levels
established in each annual budget. It is also the purpose of this Agreement to provide, to the
extent permitted by law, for the inclusion at a subsequent date of such additional cities and
towns organized and existing under Title 35 or 35A Revised Code of Washington and districts
and other municipal corporations as defined by RCW 48.62.021(1) as may desire to participate
in the Joint Insurance Purchasing Pool. It is also the purpose of this Agreement to provide, to
the extent permitted by law, that the Association may, at the discretion of its Board of Directors,
contract with other local governmental entities in the State of Washington to provide, at a
reasonable charge, administrative and other services, including claims adjusting, risk
management consulting, loss prevention and training.
3.2 Parties to Agreement. 3.2.1 Each party to this Agreement certifies that it intends
to contract with all parties who are signatories of this Agreement on its effective date and with
such other parties as may later be added to and become signatories to this Agreement
pursuant to Section 3.12. Each party to this Agreement also certifies that the withdrawal or
cancellation of any party to this Agreement, pursuant to Sections 3.13 or 3.14 shall not affect
this Agreement or such party's intent to contract pursuant to the terms of this Agreement with
the then remaining parties to this Agreement.
3.2.2 Types of Memberships There shall be two (2) separate
memberships in the Association. Regular Members shall be made up of Cities and Towns.
Regular Members shall be owners of the corporation with full voting rights. Associate Members
are Public Entities approved for special membership as per the By-laws of the Association.
Associate Members shall have no ownership in the corporation and shall have no vote in
corporate matters.
3.3 Term of Agreement. This Agreement shall become effective on
September 1, 1988, and shall remain in force until terminated pursuant to the provisions of
Section 3.16.
3.4 Creation of Association.
3.4.1 Pursuant to Chapter 48.62 Revised Code of Washington and Chapter
39.34 Revised Code of Washington, the Members authorize the incorporation of the
Association as a non-profit corporation pursuant to Chapter 24.03 Revised Code of Washington
and articles of incorporation substantially in the form attached as Exhibit B. The Initial Board of
Directors shall serve until the first annual election of Board of Directors members, which shall
be held no later than 180 days after the effective date of this Agreement. Each Regular Member
shall become a Member of the corporation. Associate Members shall be an associate of the
corporation. The regulation and management of the affairs of the Association shall be
governed by this Agreement, and corporate By -Laws substantially in the form attached as
Exhibit C, which shall be adopted by the initial Board of Directors immediately upon the
incorporation of the Association. The Association's articles of incorporation and By -Laws may
be amended from time to time as deemed necessary by the Members and Board of Directors
pursuant to the procedures set forth in Chapter 24.03 Revised Code of Washington and Article
17 of the By -Laws.
3.4.2 Notwithstanding the foregoing, the Board of Directors shall have no
power or authority to incur any obligations on the part of, or to be chargeable to, Members or
Associates in excess of the requirement of each Member or Associate to compensate the
Association or the insurance carrier with whom the Association has affected a transaction as
authorized by this Agreement, for the individual Member's or Associate's share or obligation for
the purchase of insurance contemplated and authorized by this Agreement. The debts,
obligations and liabilities of any Member or Associates shall not become the debts, obligations
and liabilities of other Members or Associates except as provided by Section 3.11 of this
Agreement.
3.4.3 The insurance afforded to each Member or Associate pursuant to this
Agreement is limited to the insurance provided by any insurer of the Association and the
coverages defined in the policies of insurance issued by any insurer of the Association. No
coverage, benefit or insurance in excess or different from that afforded by any insurer of the
Association is offered or afforded to any Member or Associate by execution of this Agreement.
3.5 Powers of the Association. The Members and Associates
hereby delegate to the Association the powers which are common to the Members or
Associates and which are reasonably necessary and proper to carry out the purposes and
terms of this Agreement. Such powers shall include, but not be limited to, the power to:
3.5.1 Establish, and require compliance with, all terms of the Joint Insurance
Purchasing Pool to be provided by the Association including the types and limits of the
insurance coverage, the methodology to be used to allocate the Association's costs among
Regular and Associate Members, and the amount of retroactive assessments to be paid by
each Regular Member;
3.5.2 Make and enter into contracts;
3.5.3 Incur debts, liabilities or obligations;
3.5.4 Acquire, receive, hold or dispose of property, funds, services, and other
forms of assistance from persons, firms, corporations and governmental
entities;
3.5.5 Sue and be sued, complain and defend, in its corporate name;
3.5.6 Hire employees and agents; and
3.5.7 Employ a third party administrator to act in accordance with Section
3.8.6.
The powers delegated to the Association shall be exercised pursuant to the terms of this
Agreement and in the manner provided by law.
3.6 Responsibilities of the Association. The Association shall have the following
responsibilities:
3.6.1 Within thirty days after the effective date of this Agreement, the Board of
Directors shall adopt a budget. A similar budget shall be adopted by the Board of Directors
prior to the beginning of each fiscal year thereafter. Such budget shall specify the types and
limits of the insurance coverage to be provided through the Association, the estimated annual
assessment to be paid by each Member, or Associate and the methodology to be used to
allocate the Association's costs, including deductible costs, administrative costs, and loss costs,
to each Regular Member on a retroactive basis and to establish the amount, if any, of each
Regular Member's retroactive assessment.
3.6.2 The Association will assist each Member's or Associate's risk manager, upon
request, with the implementation of risk management programs.
3.6.3 The Association may provide loss prevention, safety, and consulting
services to Members and Associates.
3.6.4 The Association will provide claims adjusting and subrogation services for
claims covered by the Association's Joint Insurance Purchasing Pool.
3.6.5 The Association will provide loss analysis for the Members and
Associates for the purpose of identifying high exposure operations and evaluating proper levels
of self -retention and deductibles.
3.6.6 The Association may conduct risk management audits to assess each
Member's and Associate's participation in the Joint Insurance Purchasing Pool.
3.7 Responsibilities of Members. Members shall have the following responsibilities:
3.7.1 The governing body of each Member or Associate shall designate in
writing a representative who shall be authorized to exercise the Member's or Associate's voting
rights with respect to the Association and to act on behalf of the Member, or Associate with
respect to all matters pertaining to the Association.
3.7.2 Each Member or Associate shall maintain its own set of records, as a
loss log, on all categories of loss to insure accuracy of the Association's loss reporting system
and shall provide to the Association a written report of all potential claims or losses within 14
days after they become known to the Member or Associate.
3.7.3 Each Member or Associate shall pay to the Association when due all
assessments and retroactive assessments established by the Association pursuant to the terms
of this Agreement. After the withdrawal, cancellation, or termination of a Regular Member, such
Regular Member shall continue to pay to the Association when due its share of any retroactive
assessment established by the Association until all claims, losses, costs, and other unpaid
liabilities relating to the Regular Member's period of membership have been resolved fully.
3.7.4 Each Member or Associate shall provide the Association with such
information or assistance as may be necessary for the Association to carry out the Joint
Insurance Purchasing Pool.
3.7.5 Each Member or Associate shall comply with all By -Laws, resolutions,
and policies adopted by the Board of Directors and shall cooperate with the Association, and
any insurer of the Association in accomplishing the purposes of this Agreement.
3.7.6 Each Member or Associate shall participate as provided herein in the
selection of members of the Board of Directors.
3.8 Board of Directors' Authority.
3.8.1 The Association shall be governed by a Board of Directors. The Board of
Directors shall consist of ten members, to be selected from the Regular Membership.
Beginning with the second election of members to the Board of Directors, the regular members
of that Committee shall be selected as follows. The area served by the Association shall be
divided into seven geographic regions with each region represented by a number of
representatives assigned to the region based on the number of Regular Members from that
region.
3.8.2 To insure that consistent management is provided for the Association into
the future, the initial Board of Directors members shall have terms of one, two or three years.
After the initial election, all Board of Directors members will be elected for a three year term.
Those terms will provide that four of the ten committee members will be elected for full terms in
two consecutive years and three of the regular committee members will be elected for full
terms the third year.
3.8.3 The Board of Directors shall elect a Chair for each fiscal year. In addition,
the Board of Directors shall elect a Vice -Chair who will in the absence of the Chair or, in the
event of the Chair's inability or refusal to act, perform the duties of the Chair.
3.8.4 Each member of the Board of Directors shall have one vote.
3.8.5 A majority of the members of the Board of Directors shall be required to
transact the business of the Board of Directors.
3.8.6 The Third Party Administrator shall have the general supervisory control
over the day to day decisions and administrative activities of the Association. Activities shall
include but not be limited to: (1) negotiations and placement for insurance coverage contracts,
(2) disbursal billings to individual Members and Associate for their proportionate charges, (3)
payment and management of claims sustained by Members or Associate of the Association and
liaison with representatives acting on behalf of participating Members or Associate.
3.8.7 Administrative costs and charges to be paid to the Third Party
Administrator shall be negotiated between the Board of Directors and the Administrator.
3.8.8 Pool funds shall be administered by the Association Administrator under
the control and supervision of the Board of Directors. The Administrator will be authorized to
disburse funds for the processing of covered claims and administrative costs. All parties having
check writing authority on Association funds shall be bonded to the Association in an amount
established by the Board of Directors.
3.8.9 The Board of Directors will provide for an audit of the accounts and
records of the Association. When such an audit of the accounts and records is made by the
Washington State Auditor's office, a report thereof shall be filed as a record with the office of
the Administrator. Such reports shall be conducted and filed as required by law. Costs of this
audit shall be borne by the Association and shall be considered as administrative costs.
3.8.10 Pursuant to the laws and regulations of the State of Washington, the
Association elects to invest its assets in permissible investments in a manner which is permitted
by law, such manner of investment to be selected from time to time by resolution of the Board
of Directors.
3.8.11 The Board of Directors shall establish an annual budget for the
Association. The Administrator shall submit a proposed budget for the following fiscal year sixty
days prior to the end of each fiscal year to the Board of Directors. Fiscal years for the
Association shall be from September 1 through August 31 of the next calendar year. The Board
of Directors shall determine the estimated expenses and costs to be incurred by the Association
for the next fiscal year and shall adopt a budget derived from the Administrator's proposed
budget. The budget shall be in a form to provide the following information for the Association
as a whole: (1) beginning and ending unreserved fund balance, (2) anticipated revenues in
detail, and (3) appropriations in detail. The Board of Directors shall apportion that budget cost
among the Members and Associate. All payments due the Association from Members or
Associate upon the basis of each budgeted assessment shall be paid as invoiced for the fiscal
year for which the assessment is made.
3.8.12 The first budget and premium assessments shall be proposed by the
Administrator and approved by the Board of Directors not later than thirty days after the
effective date of this Agreement.
3.8.13 Any vacancies on the Board of Directors that occur during a term of
office shall be filled by an election of the Board of Directors by a simple majority vote. Any
replacement shall fill out the unexpired term of the Committee Member replaced.
3.9 Service Representative Relationship.
3.9.1 Each participating Member or Associate of the Association shall
designate a servicing representative to act on their behalf in liaison with the needs of the
Association Administrator. Should a participating member choose not to designate a local
servicing representative, the Association shall supply such services in accordance with a fee
schedule adopted annually by the Board of Directors. Service representatives minimum duties
and criteria will be established by resolution of the Board of Directors and reviewed annually.
Duties will include, but are not limited to the providing of local claims assistance, the securing of
underwriting information, completion of applications, updating of vehicle lists and information
and such other functions as the Board of Directors may from time to time establish by
resolution.
3.9.2 Any fees to be paid the servicing representative by each Member or
Associate will be established and paid by the Member or Associate.
3.9.3 Each Member and Associate agrees to indemnify and hold the
Association, its Administrator, employees and agents, harmless from and indemnify them
against any claims, complaints, causes of action or judgments arising from any allegation of a
failure of the performance or negligence on the part of the Member's or Associate's servicing
representative including a failure to communicate to or forward communications from the
Association, the Association's Administrator or any Association insurer. The employment of a
servicing representative and the scope of the services performed by that representative is
completely within the domain of the Member or Associate. A Member or Associate acts upon
the advise and actions or inactions of its servicing representative at its sole risk.
3.10 Effective Date of Pooled Insurance Purchasing Program. The Joint Insurance
Purchasing Pool shall become effective on September 1, 1988 or upon execution of this
Agreement by two or more Members whichever occurs first.
3.11 Contingent Liability and Retroactive Assessments.
3.11.1 Pursuant to the provisions of Revised Code of Washington Section
48.62.141, each Regular Member shall be contingently liable for the liabilities of the Association
in the event the assets or insurance of the Association are not sufficient to cover its liabilities.
Any actual or projected deficits of the Association shall be financed through retroactive
assessments levied against each Regular Member in accordance with the following cost
allocation methodology. The City of Yakima's membership in the Association is an Associate
Membership and the City of Yakima shall not have any ownership in the assets of the
Association nor shall the City be responsible for any shortfalls in claims reserves, if any,
experienced by the Association.
3.11.2 In the event the Association's assets should be insufficient to cover
liabilities, the Board of Directors shall direct the Administrator to reassess Regular Members an
amount according to the following formula:
Member
(Liability Due and Not Contribution or Assessments
Serviced By Current Pool Since Inception
Member Assets) + (Required
Reassessment = Reserve Account) X TOTAL OF ALL Assessment
Amount or Contributions Since
Inception
The reassessment will be implemented only after a review of the circumstances surrounding the
deficiency by the Board of Directors and approved by the Board of Directors. Should any
Member leave the Association and subsequently a deficiency exist in the period that the entity
was a Regular Member of the Association, the city or town in question shall be assessed the
amount that the Association is held liable for the period in question.
3.12 New Members. Members admitted as Regular Members of the
Association after one year from the effective date of the Joint Insurance Purchasing Pool may
be required to pay a reasonable share of the unreserved fund balance of the Association and
the costs necessary to analyze their loss data and determine their premiums. Any costs to be
paid by the Regular or Associate new Members shall be determined by the Board of Directors.
3.13 Withdrawal. Any Member or Associate may withdraw only at the end of
the Association's fiscal year (August 31) and only after it has given the Association written
notice prior to September 1 of the preceding calendar year of its decision to withdraw from this
Agreement. However, through August 31, 2007, the Association waives the one-year
withdrawal requirement for the City of Yakima. Through August 31, 2007, the City of Yakima
may provide one -day written notice to withdraw from the Association and the Interlocal
Agreement at any time during the Association's fiscal year(s). In the event that the City of
Yakima cancels the policy at any time prior to August 31, 2007, the City of Yakima will be
entitled to a pro rata refund of the assessment/premium.
3.14 Cancellation. The Association shall have the right to cancel any
Member's or Associate's participation in the Joint Insurance Purchasing Pool upon the
affirmative vote of at least three-fourths of the whole Board of Directors at any regular or
special meeting. Any Member or Associate so canceled shall be given 180 days' notice prior to
the effective date of the cancellation.
3.15 Effect of Withdrawal or Cancellation. Neither the withdrawal nor the
cancellation of any Member or Associate shall cause the termination of this Agreement. No
Member or Associate by withdrawing or having its membership canceled shall be entitled to
payment or return of any assessment paid by the Member or Associate to the Association or
any Association insurer, or to any distribution of the Association's assets. The withdrawal or
cancellation of any Regular Member after the effective date of the Joint Insurance Purchasing
Pool shall not terminate its responsibility to contribute its share of any assessments or
retroactive assessments established by the Association until all claims, losses, costs, and other
unpaid liabilities relating to the Regular Member's period of membership have been resolved
fully and a determination of the final amount of payment owed by the Regular Member or credit
due the Regular Member for the period of its membership has been made by the Board of
Directors. In making this determination, the Board of Directors shall use the cost allocation
methodology or methodologies established by the budgets adopted pursuant to the requirement
of Section 3.6.1 hereof. It is the intent of this Agreement no assets of the Association shall be
owned by Associate Members nor shall Associate Members be responsible for debts incurred
by the Association other than insurance premiums, assessments and claim deductibles
attributed to the Associate Members' membership
3.16 Termination and Distribution.
3.16.1 Termination. This Agreement may be terminated at any
time by the written consent of three-fourths of the Members. However, this Agreement and the
Association shall continue to exist for the purpose of paying all debts and liabilities, disposing of
all claims, distributing net assets, and otherwise winding up and liquidating the affairs of the
Association. The Board of Directors is vested with all powers of the Association during such
winding up and liquidation, including the power to require Regular Members, including those
Regular Members which withdrew prior to the termination date, to pay any retroactive
assessments deemed necessary by the Board of Directors to fully resolve and dispose of all
claims, losses and liabilities covered by this Agreement. The retroactive assessment shall be
determined on the basis of the cost allocation methodology or methodologies established by the
resolutions adopted pursuant to the requirements of Sections 3.6.1 and 3.11.2 hereof.
3.16.2 Distribution. Upon termination of this Agreement and full
satisfaction of all outstanding claims, losses, and liabilities of the Association, all assets of the
Association shall be distributed among the Regular Members that were Members of the Joint
Insurance Purchasing Pool, on the date action to terminate this Agreement was taken, in
proportion to the cash payments made by each Regular Member during the term of this
Agreement. The Board of Directors shall determine such distribution within six months after the
last pending claim or loss covered by this Agreement has been resolved fully.
3.17 Notices. Notices to Members or Associate hereunder shall be sufficient if
mailed to the office of the last official address of the respective Member.
3.18 Amendment. This Agreement may be amended at any time by the
approval of three-fourths of the Members present or voting at any meeting of the Members. All
amendments shall be in writing. Amendments may be proposed by the Board of Directors. Any
proposed amendment to this agreement adopted by three-fourths of the whole Board of
Directors shall be deemed adopted subject to review by the Members. If four -tenths of the
Members present or voting at any meeting of the Members (called in accordance with Article 3
of the By -Laws) vote to repeal any amendment adopted by three-fourths of the whole Board of
Directors, that amendment is deemed repealed.
3.19 Enforcement. The Association is hereby granted the authority to enforce the
terms of this Agreement. In the event action is instituted to enforce any term of this Agreement
or any term of the By -Laws against any Member or Associate or previous Member, or Associate
the Member or Associate or previous Member or Associate agrees to pay such sums as the
court may fix as reasonable attorneys' fees and costs in said action including fees and costs on
appeal.
3.20 Default and Remedies. If any Member or Associate fails to perform
any term or condition of this Agreement and such failure continues for a period of sixty days
after the Association has given the Member or Associate written notice of such failure, the
Member or Associate shall be in default hereunder. Upon default, the Association may
immediately cancel the Member's or Associate's membership effective immediately without
further notice, or exercise any remedies herein provided or otherwise provided by law. The
rights and remedies of the Association are cumulative in nature and pursuit of any particular
remedy shall not be deemed an election of remedies or a waiver of any other remedies
available hereunder or otherwise available by law.
3.21 No Waivers. No waiver or forbearance of a breach of any covenant,
term, or condition of this Agreement shall be construed to be a waiver or forbearance of any
other or subsequent breach of the same or of any other covenant, term or condition, and the
acceptance of any performance hereunder, or the payment of any sum of money after the
same has become due or at a time when any other default exists hereunder, shall not constitute
waiver of the right to demand payment of all other sums owing or a waiver of any other default
then or thereafter existing.
3.22 Prohibition Against Assignment. No Member or Associate may
assign any right, claim or interest it may have under this Agreement, except to a successor
entity following a statutory reorganization. Should any Member or Associate reorganize in
accordance with the statutes of the State of Washington, the successor in interest, or
successors in interest, may be substituted as a Member or Associate or Members or Associate
upon approval of the Board of Directors. No creditor, assignee or third party beneficiary of any
Member or Associate shall have any right, claim or title to any part, share, interest, fund
premium or asset of the Association.
3.23 Entire Agreement. This Agreement contains the entire understanding
of the parties, and they acknowledge that there is no other written or oral understanding or
promise between them with respect to the matters addressed by this Agreement. This
Agreement may not be altered, amended, or revoked except pursuant to the provision of
Section 3.18.
3.24 Severability. If any term or provision of this Agreement shall to
any extent be determined by a court of competent jurisdiction to be invalid or unenforceable, the
remainder of this Agreement shall not be affected thereby, and each term and provision in this
Agreement shall be valid and be enforceable to the fullest extent permitted by law.
3.25 Time. Time is of the essence of this Agreement and each and every
provision hereof.
3.26 Section Headings. The section headings in this Agreement are
inserted for convenience only and are not intended to be used in the interpretation of the
contents of the sections they introduce.
3.27 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Washington.
3.28 Counterpart Copies. This Agreement may be signed in counterpart or duplicate
copies, and any signed counterpart or duplicate copy shall be equivalent to a signed original for
all purposes.
4. Execution. The parties have executed this Agreement by authorized officials thereof.
City of Yakima
Name of City or Town or Public Entity
129 North Second Street
Mailing Address
Yakima 98901
City
By
R. A. Zais, , City Manager
ATTEST:
City Clerk
Date
509-575-6040
Zip Phone
CITY CONTRAC r NO./4)4CW
RESOLUTION NO: n�►s �9`s
CITIES INSURANCE ASSOCIATION OF
WASHINGTON
MEMBERS
2005 - 2006
1. Town of Albion
2. Town of Almira
3 City of Asotin
4. City of Bingen
5. City of Black Diamond
6. City of Blaine
7 City of Brewster
8 City of Buckley
9. City of Burlington
10. Town of Carbonado
11. Town of Cathlamet
12. City of Chewelah
13 City of Colfax
14 City of College Place
15. Town of Colton
16 City of Colville
17. Town of Concrete
18 City of Connell
19. City of Cosmopolis
20. Town of Coulee Dam
21. Town of Creston
22 City of Davenport
23 City of Dayton
24. City of Duvall
25. City of East Wenatchee
26 Town of Electric City
27. Town of Elmer City
28 Town of Endicott
29. City of Entiat
30. City of Ephrata
31. City of Everson
32. City of Federal Way
33. Town of Garfield
34. City of Grand Coulee
35. City of Granite Falls
36. Town of Hamilton
37 Town of Hartline
38 Town of Hatton
39. Town of lone
40. City of Kahlotus
41. City of Kennewick
42. City of Kittitas
43. Town of Krupp
44 Town of LaCrosse
45. City of Lakewood
46 City of Liberty Lake
47. Town of Lind
48. Town of Lyman
49. City of Lynden
50. City of Lynnwood
51. Town of Malden
52. Town of Mansfield
53. Town of Marcus
54. Town of Mattawa
55. Town of Metaline
56. Town of Metaline Falls
57. Town of Millwood
58. City of Moxee
59. City of Napavine
60. Town of Nespelem
61. City of Newport
62. City of Nooksack
63. City of Oakville
64. City of Okanogan
65. City of Omak
66. City of Oroville
67. City of Othello
68. City of Pacific
69. City of Palouse
70. City of Pateros
71. City of Pomeroy
72. City of Prosser
73. City of Quincy
74. Town of Reardan
75. City of Redmond
76. City of Republic
77. City of Ritzville
78. Town of Riverside
79. City of Rock Island
80. Town of Rosalia
81. City of Roslyn
82. City of Royal City
83. Town of Saint John
84. City of Sea -Tac
85. City of Sedro-Woolley /
Sedro Woolley FD
86. City of Selah
87. City of South Bend
88. Town of South Cle Elum
89. City of Sprague
90. Town of Starbuck
91. City of Stevenson
92. City of Sultan
93. City of Sumas
94.
95.
96.
97.
98.
99.
100.
101.
102.
103.
104.
105.
106.
107.
108.
109.
110.
111.
City of Sunnyside
City of Tekoa
City of Tenino
City of Tieton
Town of Tonasket
Town of Uniontown
City of Vader
City of Waitsburg
City of Warden
Town of Washtucna
Town of Waterville
City of White Salmon
Town of Wilbur
Town of Wilkeson
Town of Wilson Creek
City of Woodland
Multi -Agency Comm. Ctr
Whitcom 911 Center
Revised 09-20-05
BUSINESS OF THE CITY COUNCIL
YAKIMA, WASHINGTON
AGENDA STATEMENT
Item No. `. /6
For Meeting Of December 13 2005
ITEM TITLE: Consideration of resolution authorizing the City Manager of the City of
Yakima to execute an agreement for the City of Yakima to join the Cities
Insurance Association of Washington ("CIAW") as an associate member
and to execute an interlocal agreement as a party to the CLAN pooled
insurance purchasing program; approving the City of Yakima to become an
associate member of CIAW with its attendant requirements; and
authorizing the City Manager to execute all documents necessary to
accomplish the purposes and intent of the resolution.
SUBMITTED BY: City Manager
Finance Department
Legal Department
CONTACT PERSON/TELEPHONE: Dick Zais, City Manager, 575-6040
Rita Anson, Finance Director, 575-6070
Helen Harvey, Senior Assistant City Attorney, 575-6030 144
SUMMARY EXPLANATION: Staff respectfully requests approval of this Resolution,
which would allow the City of Yakima to join the Cities Insurance Association of Washington
(CIAW"), which offers pooled insurance purchasing for liability coverage.
The City's insurance broker, Marsh Advantage America ("Marsh") advises the City on insurance
coverage and markets its insurance coverage for various types of insurance, including property,
excess liability, boiler and machinery, and excess workers compensation insurance. Joel Pearson
and Deborah Krautwurm of Marsh work on the Marsh service team, and have provided insurance
and risk management services to the City since the 1980's. They feel the CIAW program
provides a good option to insure the liability exposure for the City of Yakima, and they both
recommend that the City join the CIAW pooled insurance purchasing program.
(Continued on Page Two)
Resolution X Ordinance_ Other (Specify)
Contract .X Mail to (name and address): Joel Pearson and Deb Krautwurm
Marsh Advantage America, P. 0. Box 2547, Yakima, WA 98907 Phone: (509) 248-7460
Funding Source Risk Manaiienent, Account No. 515-515-641-0000-51476-462
APPROVED FOR SUBMITTAL:
City Manager
STAFF RECOMMENDATION: Staff respectfully recommends that City Council adopt the
attached resolution required for the City of Yakima to join CIAW,
BOARD/COMMISSION RECOMMENDATION:
COUNCIL ACTION:
Resolution passed. RESOLUTION NO. R-2005-195
The Cities Insurance Association of Washington (CIAW) is a property and liability risk and
insurance pooling program for cities. CIAW was formed in 1988 with 32 founding member
cities. In 1998, CIAW added fire, irrigation, water and sewer districts to its membership as non
-
asset owning Associate Members. Larger cities are also Associate Members CIAW currently
insures approximately 300 members. The Board of Directors contracts with Canfield &.
Associates, a third party administrator instrumental in forming the program, to carry out the day-
to-dav administrative, claims and risk management services. In September 2003, Canfield &
Associates was sold to Brown & Brown Insurance of Daytona, Florida. Canfield & Associates
believes that tins sale has allowed the company to have a broader base of insurance options,
marketability and access to a variety of excess carriers.
The City of Yakima has been self-ansured for many years, and is currently- subject to a 51,000,000
retention and 38,000,000 excess liability coverage limit through a policy issued by Genesis
Insurance Company ("Genesis"). Since Apnl 3, 2002, the City has had excess liability coverage
with Genesis. The current occurrence policy with Genesis is for the policy period from April 3,
2005 to April 3, 2006.
For 11-ie City of Yakima Transit Division, including the van pool program, there is liability
coverage through the Washington State Transit Insurance Pool (WSTIP), which the City of
Yakima joined effective September 1, 2005. The deductible for the Transit division under the
WSTIP program is 35,000.
Program Structure
The CLAW program is structured somewhat differently from other pools in that only the nsk for
the first 3100,000 of each claim is shared among the member participants. Losses above
5100,000 are fully insured by St. Paul Travelers, an A+ XV rated insurance carrier. The City
would be au 'associate member with a 3100,000 retention, so would not participate in the shared
retention with the other cities. Yakima's program is structured similar to a fully insured program
with a 3100,000 deductible.
CIAW AdY:ill ta.ges
The CIAW program offers the following advantages as compared to the current program:
Reduction of Risk: The City's current insurance program with Genesis is subject to a
31,000,000 per occurrence retention (deductible). The CIAW program reduces the retention lo
5100,000 per occurrence and nearly doubles the liability limits for a premium difference of
3129,987. The attached chart compares the premiums for the t-wo alternatives. This allows the
City to reduce the budgeted funding for claims within the retention level.
Greater Liability Limits: The current program provides an 38,000,000 limit of liability
coverage The optional (-LAW prop-am has a 315,000,000 limit of liability coverage.
rrernium Stability: As part of a major group purchasing program including approximatel-y
111 cities and towns and 300 total entities. Marsh believes that the insurance premiums should be
not only be competitive, but more stable from year to year. The insurance carrier, St. Paul
Travelers, has an A± XV rating in Bests Guide, which is one of the highest ratings available.
Loss Control: The CIAW program includes loss control services available at the request of
the City to help minimize loss exposure, for which there is no additional charge. These services
would include training programs for City employees.
CIAW Disadvantages
The disadvantage of the CLAW program is that the City would lose some control of claims in
excess of the $100,000 retention. Since the insurance company, St. Paul Travelers, is required to
pay covered losses over $100,000, it has the right to handle those claims. However, to minimize
the loss of control, the City would continue to use loss adjusting services of Craig Nance at
Zaremba Claims Service in Yakima. The local, prompt claims adjusting is not only important to
help control claims expenses, but provides quality service to City residents who have legitimate
claims. Also, as requested by the City, the CIAW program has agreed to add local attorneys to its
list of approved counsel who have represented the City in the past. In addition, through
August 31, 2007, CIAW has waived its usual one-year notice of withdrawal requirement for the
City of Yakima, so the City of Yakima could withdraw from CIAW on short notice through
August 31, 2007, if any concerns about the CIAW program develop.
Conclusion
Because of the way the program is structured, the City is not really joining a pool in the
traditional sense, but accessing a proven stable insurance program that greatly reduces the amount
of risk currently retained by the City. The City is not responsible for any shortfalls in claims
reserves, if any, experienced by the CIAW. The key aspects of the self-insured program that have
proven so successful over the years including local claims adjusting and attorneys are part of the
new program. Although the insurance premiums are somewhat higher than the current program,
the rates are reasonable in view of the lower deductible and the higher liability coverage limits.
The overall level of risk exposure to the City should be reduced through broader insurance
coverage.
3
X)00,000
12,000,000
10,000,000
8,000,000
6,000,000
4,000,000
2,000,000
1,000,000
500,000
m�..1. d 16.:23;05
City of Yakima
Excess Liability Comparison
Current Genesis and W.S.T.I.P. Program C.I.A.W. & W.S.T.I.P Option
All Liability Coverage
Except Transit & Van Pool
Genesis
$8,000,000 Limit
City $1,000,000
Retention
Transit &
Van Pool
Liability Coverage
W.S.T.I.P
$12,000,000
Liability Limit
Except
Employment Practices
Liability
$7,000,000 Limit
City
All Liability
Coverage Except
Transit Department
C.I.A.W.
$15,000,000
Liability Limit
Except
Employment Practices
Liability
$5,000,000 Limit
$100,000 Retention
Transit &
Van Pool
All Liability Coverage
W.S.T.I.P
$12,000,000
Liability Limit
Except
Employment Practices
Liability
$7,000,000 Limit
$5,000 Deductible $5,000 Deductible
MARSH
City of Yakima
Annual Liability Premium Comparison
10/28/2005
Limit
Retention
Premium
Current Program & WSTIP
Excess Liability Excluding Transit
$8,000,000
$1,000,000
$269,700
Zaremba (Budgeted 2005)
Annual Contract Fee
$39,100
$308,800
Proposed Programs (Annual Costs)
CIAW Pool Option Excluding Transit
$15,000,000
$100,000
$399,687
Zaremba Annual Contract Fee
$39,100
$438,787
10/28/2005