09. Resolution 5359 - Property Program Agreement - MMIADated as of July 1, 2009
The City/Town of
MONTANA MUNICIPAL INTERLOCAL AUTHORITY
Table of Contents
SECTION1: DEFINITIONS...............................................................................................................................3
SECTION 2: REPRESENTATIONS, COVENANTS AND WARRANTIES..........................................................................5
SECTION 3: ESTABLISHMENT OF ACCOUNTS; COVERAGE; PAYMENT OF SETTLEMENTS AND
OTHER PROGRAM COSTS; PURCHASE OR ACQUISITION OF OTHER INSURANCE,
EXCESS INSURANCE OR REINSURANCE............................................................................7
SECTION 4: TERM OF AGREEMENT; ASSESSMENT.................................................................................................9
SECTION 5: ADMISSION TO, WITHDRAWAL FROM AND EXPULSION FROM THE PROPERTY PROGRAM ...............11
SECTION 6: INSPECTION OF FACILITIES AND EQUIPMENT; SAFETY CONSIDERATIONS AND NOTIFICATION OF
ACCIDENT.....................................................................................................................................15
SECTION 7: AGREEMENTS WITH SERVICE PROVIDERS.........................................................................................15
SECTION 8: INDEMNIFICATION AND RELEASE; DISCLAIMER................................................................................15
SECTION 9: ASSIGNMENT AND AMENDMENT.....................................................................................................15
SECTION10: MISCELLANEOUS.............................................................................................................................16
SIGNATUREPAGE.................................................................................................................................................18
MONTANA MUNICIPAL INTERLOCAL AUTHORITY
PROPERTY PROGRAM AGREEMENT
This Amended and Restated Property Program Agreement, dated as of July 1, 2009, by
and among the MONTANA MUNICIPAL INTERLOCAL AUTHORITY, a joint exercise of powers
entity duly organized and existing under the laws of the State of Montana, (the "Authority"), and
the City or Town of , and such other political subdivisions that may hereafter
become party hereto as provided herein, each a political subdivision duly organized and existing
under the Constitution and laws of said State, (each a "Member Entity" and collectively the
"Member Entities");
RECITALS
WHEREAS, Article XI, Section 7 of the Montana Constitution provides that a political
subdivision may a) cooperate in the exercise of any function, power, or responsibility with, b)
share the services of any officer or facilities with, and c) transfer or delegate any function, power
responsibility, or duty of any officer to one or more other local government units, the state or the
United States; and
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Act) authorizes political subdivisions to create interlocal agreements to jointly perform any
undertaking that each such political subdivision unit is authorized by law to perform; and
WHEREAS, Mont. Code Ann. § 2-9-211authorizes political subdivisions of the state to
procure insurance separately or jointly with other subdivisions, and to use a deductible or self-
insurance plan, wholly or in part; and
WHEREAS, the Member Entity has determined it to be in its best interest to join with
other local governments in forming and creating the Authority through the Interlocal Cooperation
Act for the purposes of:
1. Developing effective risk management programs to reduce the amount and
frequency of their losses;
2. Sharing some portion, or all, of their losses;
3. Jointly purchasing or otherwise acquiring insurance, excess insurance or
reinsurance;
4. Jointly issuing bonds or notes to fund a self-insurance or deductible reserve;
5. Jointly purchasing administrative and other services when related to any of
the other purposes;
6. Jointly make deposits which may take the form of assessments to an account
or surplus account and pay premiums for the purposes of participating in group or captive
insurance, excess insurance or reinsurance programs, in whole or in part; and
WHEREAS, the Authority is a joint exercise of powers entity established pursuant to an
MMIA Property Program Agreement, July 1, 2009 Page 1
Interlocal Cooperation Agreement in accordance with the provisions of the Interlocal Cooperation
Act for the purpose of providing pooled risk coverage programs for the Member Entity and other
political subdivisions executing the Interlocal Agreement; and
WHEREAS, the Authority is authorized to exercise necessary powers to implement the
purposes of the Authority as established by the Interlocal Agreement;
WHEREAS, the Authority and the Member Entity, in consultation with independent
professional consultants, have formulated a Property Program, the terms and conditions of
which are set forth in this Agreement, to be administered by the Authority to meet the property
coverage needs of the Member Entity and which will provide the following advantages, among
others, to each Member Entity:
(a) the funding of a Program Operations Fund for the purposes of paying claims
and facilitating access to the reinsurance market, as well as paying operational costs of the
Program.
(b) spread and moderate the cost of property losses to each Member Entity by
mutual agreement of the Member Entities to pay annual Assessments calculated actuarially; ,
(c) relief from the burden of paying premiums to commercial insurers at levels
reflecting the insurers' high costs of underwriting, administration and brokerage fees since the
Authority's costs will be limited to reasonable administrative costs,
(d) access to the reinsurance market when reinsurance is available at rates deemed
favorable by the Member Entities,
(e) access to group coverage, excess insurance, reinsurance or other coverage
programs which may provide such coverage at reasonable rates and on advantageous terms
and conditions, and
(f) assessment payments calculated to provide amounts necessary to maintain the
Program Operations Fund at a sound level and therefore sufficient to reserve against the
incurred losses of the Member Entity; and
WHEREAS, in consideration of the factors recited above the Authority has established
and has offered to its Member Entities a Property Program since July 1, 1998, which
Property Program has remained in continuance since that time; and,
WHEREAS, by executing this Revised and Restated Property Program Agreement the
Member Entity signatory hereto has heretofore determined and does hereby confirm that the
Assessments and other charges required by the Property Program have been and are just and
reasonable and advantageous to the public benefit of the citizens of such Member Entity; and,
WHEREAS, it is the intent of the Member Entity that in executing this Revised and
Restated Property Program Agreement that the Property Program should remain in full force
and effect and that continuity of the Property Program should be and is maintained with the
execution of this Revised and Restated Property Program Agreement; and,
WHEREAS, the governing body of the Member Entity has authorized the execution of
this Agreement for the purpose of providing Coverage for the Member Entity for the benefit of
MMIA Property Program Agreement, July 1, 2009 Page 2
the Member Entity's residents and taxpayers;
WHEREAS, it is a matter for the governing board of the Member Entity to determine the
amount of assessments which the Member Entity shall pay for property coverage; and
WHEREAS, the Member Entity has heretofore determined and does hereby confirm that
the Assessments to be required hereunder are reasonable and advantageous and to the public
benefit of the citizens of such Member Entity;
WHEREAS, each Member Entity has knowingly and willingly entered into this
Agreement;
NOW THEREFORE, in consideration of the above recitals and of the mutual covenants
hereinafter contained and for other good and valuable consideration, the parties hereto agree
as follows:
SECTION 1: DEFINITIONS
1.1. Definitions and Rules of Construction. Unless the context otherwise requires, the
capitalized terms and the additional terms defined in this Section shall, for all purposes of this
Agreement, have the meanings herein specified.
Administrative Costs means those ordinary and necessary costs incurred in providing
administrative services to the Program, including but not limited to, the following:
a. General administrative services
b. Loss prevention and risk assessment
C. Investment services
d. Legal services
e. Accounting services
f. Actuarial services
g. Risk management consulting
h. Brokerage services.
Agreement means this Amended and Restated Property Program Agreement dated as
of July 1, 2009, by and among the Authority and the political subdivisions signatory hereto, as
Member Entities.
Assessment means Risk Assessment and Risk Assessment Adjustments and Special
Assessments payable on the Assessment Payment Date for any Coverage Year.
Assessment Payment Date means July 15 of each Coverage Year for Risk
Assessments or such other date as the Board may specify for Risk Assessment Adjustments or
Special Assessments.
Claim means a demand, action or suit by a Member Entity to recover for losses or
damages within or alleged to be within the scope of Coverage set forth in the Memorandum.
Consultant means a consultant qualified in the area of political subdivision liability
coverage or actuarial science, as the Authority deems appropriate.
MMIA Property Program Agreement, July 1, 2009 Page 3
Coverage means the coverage, excess insurance, reinsurance, and other services
provided pursuant to and in accordance with and on the terms set forth in this Agreement and in
the Memorandum provided to each Member Entity, or in such other agreements between the
Authority and a Member Entity related to other Coverage options, including, but not limited to,
rights to payment of Settlements and Judgments from funds on deposit in the Program
Operations Fund under the terms of this Agreement
Coverage Year shall mean the period beginning each July 1 and the twelve (12)
consecutive months thereafter during which the Member Entity Agreement shall be in effect for
each Member Entity, unless the Board of Directors designates such other period of twelve (12)
consecutive months as the period during which such Member Entity Agreement may be in
effect. In the case of a Member Entity which joins the Program during a Coverage Year, the
Coverage Year shall be the remaining portion of the Coverage Year from the effective date of
Coverage until the end of such Coverage Year.
Interlocal Agreement means that Interlocal Cooperation Agreement establishing the
Montana Municipal Interlocal Authority pursuant to Title 7, Chapter 11, Part 1, Mont. Code .Ann.
Judgment means a final judgment entered in a court of competent jurisdiction or by an
administrative tribunal after all appeals have been exhausted with respect to a Claim for which
Coverage is provided under this Program. The amount of any Judgment may include any costs
or expenses deemed appropriate by the Authority in connection therewith, including defense
costs as defined in the Memorandum.
Loss Reserve means amounts in the Program Operations Fund required to be
designated as reserves for payment of Settlements and Judgments pursuant to Section 3.7
hereof in accordance with prudent practice as determined by the Qualified Claims Administrator,
including additional reserves established because of changed circumstances subsequent to the
year any such Claim is filed and including the amount determined by a Consultant for loss
development of claims and unallocated loss adjustment expenses.
Member Entity means that political subdivision of the State of Montana duly organized
and existing under the Constitution and laws of the State of Montana and which has complied
with the terms and conditions of this Revised Program Agreement for participation in the
Workers' Compensation Program.
Memorandum shall mean the Memorandum of Property Coverage, as the same may
from time -to -time be amended setting forth the terms and conditions for which Coverage is
provided under the Property Program.
Program means the Property Coverage Program, the terms and conditions of which are
set forth herein.
Program Documents means this Agreement, the Interlocal Agreement, the
Memorandum, the Bylaws of the Authority, and such policies and procedures as may be
adopted by the Authority related to the Program, and all exhibits pertaining to such documents.
Program Operations Fund means the fund established to carry out the operations of
the Liability Program, including but not limited to payment of Claims, payment of Administrative
Costs, other insurance, excess insurance or reinsurance, loss reserves and unencumbered
MMIA Property Program Agreement, July 1, 2009 Page 4
reserves.
Qualified Claims Administrator means an individual or an organization experienced in
the handling of public entity liability claims, appointed by the Authority, or the Authority itself
provided the Authority employs individuals who have such experience in the handling of public
entity liability claims.
Settlement means the Settlement of a claim of a Member Entity.
Term of the Agreement means the time during which the Agreement is in effect, or
provided in Section 4.1 of this Agreement.
Total Insured Value means the total value of all property of the Member Entity identified
and valued pursuant to appropriate standards as determined by the Authority.
Unencumbered Reserves means the amount in the Program Operations Fund in
excess of the total amount that has been designated by the Authority as Loss Reserve and
amounts required for operations.
1.2. Other Terms. Such other terms as may appear in this Agreement which are not
defined in this Section I shall have such definitions as may he contained in the remainder of this
Agreement.
SECTION 2: REPRESENTATIONS, COVENANTS AND WARRANTIES
2.1. Representations, Covenants and Warranties of the Member Entity. The Member
Entity represents, covenants and warrants to the Authority as follows:
(a) Recitals. The Recitals to this Agreement are true and correct.
(b) Due Organization and Existence. Such Member Entity is a political
subdivision of the State, duly organized and existing under the Constitution and laws of the
State.
(c) Authorization; Enforceability. The Constitution and laws of the State
authorize the Member Entity to enter into, execute, approve and issue, as the case may be, and
to enter into the transactions contemplated by and to carry out its obligations under all of the
Program Documents, and the Member Entity has duly authorized and executed all of the
applicable Program Documents. The Program Documents constitute the legal, valid, binding
and enforceable obligations of such Member Entity in accordance with their respective terms,
except to the extent limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws or equitable principals affecting the rights of creditors generally and except as to the
limitations on remedies against public agencies generally..
(d) No Violations. Neither the execution and delivery of this Agreement or
the Interlocal Agreement, nor the fulfillment of or compliance with the terms and conditions
hereof or thereof, nor the consummation of the transactions contemplated hereby or thereby,
conflicts with or results in a breach of the terms, conditions or provisions of any restriction or
any agreement or instrument to which such Member is now a party or by which the Member is
bound, or constitutes a default under any of the foregoing.
MMIA Property Program Agreement, July 1, 2009 Page 5
(e) Risk Management Guidelines. The Member Entity covenants to
implement and follow risk management programs, guidelines and policies as adopted by the
Authority from time to time.
(f) Payment of Assessments and Acceptance of Coverage. The Member
Entity agrees to pay when due Assessment for and accept the Coverage as described herein
and the Memorandum of Coverage upon the terms and conditions set forth herein.
(g) Observance of Laws and Regulations by the Member. The Member
Entity agrees to keep, observe and perform all valid and lawful obligations or regulations now or
hereafter imposed on it by contract, or prescribed by any law of the United States, or of the
State of Montana, or by an officer, board or commission having jurisdiction or control, as a
condition of the continued enjoyment of any and every right, privilege or franchise now owned or
hereafter acquired by the Member Entity, including its right to exist and carry on business as a
municipal corporation or other local government agency, to the end that such rights, privileges
and franchises shall be maintained and preserved, and shall not become abandoned, forfeited
or in any manner impaired.
2.2. Representations, Covenants and Warranties of the Authority. The Authority
represents, covenants and warrants to each Member Entity as follows:
(a) Recitals Correct. The Recitals to this Agreement are true and correct.
(b) Due Organization and Existence; Enforceability. The Authority is a legal
entity created pursuant to the Interlocal Cooperation Act, Title 7, chapter 11, part 1, Montana
Code Annotated, duly organized, existing and in good standing under and by virtue of the laws
of the State of Montana; has the power to enter into this Agreement and possesses by virtue of
the Interlocal Agreement full power to provide coverage to parties signatory to the Interlocal
Agreement and this Agreement. This Agreement constitutes the legal, valid, binding and
enforceable obligations of the Authority in accordance with their respective terms, except to the
extent limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
or equitable principles affecting the rights of creditors generally.
(c) No Encumbrances. The Authority will not pledge the Assessments or its
rights under this Agreement except as provided under the terms of this Agreement.
(d) Equitable Exercise of Responsibilities. The Authority will exercise all
rights and responsibilities hereunder reasonably and equitably for the benefit of all Member
Entities without preference or discrimination among the Member Entities.
(e) No Violations. Neither the execution and delivery of this Agreement, nor
the fulfillment of or compliance with the terms and conditions hereof or thereby, conflicts with or
results in a breach of the terms, conditions or provisions of the Bylaws of the Authority or any
restriction or any agreement or instrument to which the Authority is now a party or by which the
Authority is bound, or constitutes a default under any of the foregoing.
(f) Agreement to Provide Coverage. The Authority agrees to provide the
Coverage to the Member Entity described herein and in the Memorandum of Coverage and
upon the terms and conditions set forth in this Revised Agreement.
MMIA Property Program Agreement, July 1, 2009 Page 6
SECTION 3: ESTABLISHMENT OF ACCOUNTS; COVERAGE; PAYMENT OF
SETTLEMENTS AND OTHER PROGRAM COSTS; PURCHASE OR ACQUISITION OF
OTHER INSURANCE, EXCESS INSURANCE OR REINSURANCE
3.1. Program Funds and Accounts. The Authority hereby creates the following Funds
and Accounts as set forth herein:
(a) Program Operations Fund. The Authority shall deposit in the Program
Operations Fund all Assessments, investment income, and other funds or revenues allocated to
the Program. This fund shall be used to pay all claims, excess insurance, reinsurance, and
administrative costs of the Program. These funds may also be expended for investment,
contribution or assessment for participation in a group or captive insurance program or pool as
provided in Section 3.5.
(b) The Program Operations Fund shall have the following accounts:
(i) one or more Program Checking Accounts into which assessments
and other revenue items shall be deposited and from which shall
be paid Program costs and expenses;
(ii) Program Investment accounts. The Program shall maintain
various investment accounts in compliance with MMIA's
Investment Policy. Unencumbered Reserves in these accounts
may be used for the following purposes:
• May be credited against future assessments;
• May be used to increase the joint deductible reserve;
• May be payable to each Member Entity on termination of the
Program.
3.2. Coverage. The Authority hereby agrees to provide the Coverage to each
Member Entity for the Coverage Year, and each Member Entity hereby agrees to accept the
Coverage, upon the terms and conditions set forth in this Agreement, the Memorandum, or in
such other agreements between the Authority and a Member Entity related to other Coverage
options; provided, however, that the Authority may revise the Coverage during the Coverage
Year by issuing endorsements to the Memorandum.
3.3. Establishment of Deductible Plan. The Authority hereby establishes the Property
Program as a joint deductible reserve plan for the benefit of the Member Entities of the Property
Program. The initial joint deductible reserve for the Property Program shall be one hundred
thousand dollars ($100,000); provided, however, that the Board of Directors of the Authority
may from time to time either increase or decrease the joint deductible reserve for the Property
Program as in their discretion and in the exercise of sound judgment, after obtaining appropriate
actuarial or other advice from an industry professional, the Board of Directors deems prudent.
Provided, further, that nothing herein shall be construed to prohibit the Board of Directors from
amending this Program Agreement so as to authorize and elect to use a deductible or self -
group coverage plan, wholly or in part, to provide coverage for this Property Program to the
fullest extent as may be permitted by applicable law.
3.4. Establishment of Joint Purchase Program. In addition to the deductible plan
established pursuant to Section 3.3 hereinabove, the Authority hereby also establishes a joint
MMIA Property Program Agreement, July 1, 2009 Page 7
purchase program for the purchase of boiler and machinery insurance, crime and fidelity
insurance and such other forms of property insurance as the Board of Directors of the Authority
may in their sole discretion determine shall determine is in the best interests of the Member
Entities to purchase through a joint purchase program.
3.5. Payment of Claims, Settlements, Judgments and Administrative Costs.
Settlements and Judgments which the Authority is obligated to pay under the terms of this
Program Agreement and the Memorandum, or in such other agreements between the Authority
and a Member Entity related to other Coverage options shall be paid on behalf of the Member
Entities from the Program Operations Fund directly to the Claimants or designees. An amount
representing the Administrative Costs incurred by the Authority with respect to the Program
shall be paid to the Authority.
If the Program Operations Fund are insufficient to pay Settlements and
Judgments as may be required, the Authority shall individually assess each Member Entity to
the extent necessary to pay the award, and the assessment charged each Member Entity shall
be determined on a proportionate basis as may be determined by the Board of Directors with
the advice of its Consultant ("Special Assessment"). Any such Special Assessment shall be a
contractual obligation of the Member Entity.
3.6. Subrogation. Each Member Entity agrees that in the event of the payment of any
loss by the Program under this Agreement, the Program shall be subrogated to the extent of such
payment to all the rights of the Member Entity against any person or other entity legally responsible
for damages for said loss, and in such event the Member Entity hereby agrees to render all
reasonable assistance, other than pecuniary, to effect recovery.
3.7. Loss Reserves. The Authority shall employ or retain a Qualified Claims
Administrator for the purpose of adjusting Claims and submitting a report to the Authority and
each Member Entity setting forth (a) the amount of Loss Reserves necessary to be established
with respect to each Claim arising during the preceding full Coverage Year(s), and (b) any
adjustments (whether increase or decrease) necessary to be made in the amount of each Loss
Reserve previously established pursuant to this Section and to make supplemental reports from
time to time throughout each year as needed in accordance with prudent practice. In
determining the amount of Loss Reserves necessary to be established or adjusted as described
above, the Qualified Claims Administrator shall consider such facts and circumstances
occurring during the period covered by such report as it, in its independent judgment, deems
necessary in accordance with prudent practice. Notwithstanding the foregoing, the Qualified
Claims Administrator shall take into account Settlements of Claims in accordance with the
criteria set forth in this Section.
The Authority shall adjust Loss Reserves in the Program Operations Fund
annually, and additionally from time to time throughout each year as needed in accordance with
prudent practice. In the event that any such adjustment to Loss Reserves results in the
Unencumbered Reserves being reduced to zero, the Authority shall provide prompt written
notice of such fact to the Member Entities and the Authority shall have the discretion to impose,
and the Member Entities shall be obligated to pay, any Special Assessment which the Board of
Directors may determine is necessary in order to fund the Unencumbered Reserves at a
prudent level with the advice of a qualified actuary or other person knowledgeable about public
entity property programs.
3.8. Other Insurance, Excess Insurance or Reinsurance. The Authority may provide
MMIA Property Program Agreement, July 1, 2009 Page 8
Coverage, or a portion of Coverage, to the Member Entities, by purchase of property insurance,
excess insurance or reinsurance from a commercial insurer, excess insurer or reinsurer upon
the approval of the Board of Directors of the Authority; by purchase of property insurance,
excess insurance or reinsurance from a group or captive insurance program or pool; or by
participation in a group or captive insurance program or pool for the purposes of acquiring
property insurance, excess insurance or reinsurance. The Authority may use Unencumbered
Reserves to purchase or make payments to acquire such insurance, excess insurance or
reinsurance, or participate in such pool or program; provided, however, that the Authority may
use Loss Reserves to purchase or otherwise acquire such insurance, excess insurance or
reinsurance if the policy of commercial insurance, excess insurance or reinsurance to be
purchased or otherwise acquired covers the claims for which such Loss Reserves were
established. In the event of a dispute between the Authority and any Member Entity and any
insurer, excess insurer or reinsures as to payment of a Settlement or Judgment, the failure by
either to pay such Settlement or Judgment shall not result in a default by the Authority under the
terms of this Agreement. .
In a Coverage Year for which the Authority has purchased or otherwise acquired
insurance, excess insurance or reinsurance on behalf of a Member Entity, each such Member
Entity shall be obligated to pay a proportion of the costs of such insurance, excess insurance or
reinsurance, and Risk Assessment Adjustments.
SECTION 4: TERM OF AGREEMENT; ASSESSMENT
4.1. Term of Agreement; Termination of a Participant's Obligations to Pay
Assessment. The Term of this Agreement shall commence on the date of its execution and
shall, continue until the Member Entity's participation in the Program terminates as provided in
Article VI of this Agreement.
The obligation of any Member Entity to pay Assessments under this Agreement
will terminate upon the terms and conditions set forth in Section 5 herein.
4.2. Budget and Appropriation of Assessment Payments. The Authority shall
calculate the Assessments to be paid by each Member Entity for the next succeeding Coverage
Year and provide a preliminary bill no later than April 15th of each year during the term of the
Agreement. The Authority will deliver a final bill no later than June 1st of each year to Member
Entities. Each Member Entity covenants to take such action as may be necessary to include
Assessment payments payable hereunder in its annual budget, to levy ad valorem taxes outside
its permitted mill levy limitation, if necessary, on all property within its jurisdiction to fund such
Assessment payments and to make the necessary annual appropriations for all such
Assessment payments. The covenants on the part of the Member Entity herein contained shall
be deemed to be and shall be construed to be duties imposed by law and it shall be the duty of
each and every public official of the Member Entity to take such action and do such things as
are required by law in the performance of the official duty of such officials to enable each
Member Entity to carry out and perform the covenants and agreements in this Agreement
agreed to be carried out and performed by such Member Entity.
4.3. Obligation to Pay Assessments.
(a) No Withholding. Notwithstanding any dispute between the Authority and
a Participant, including a dispute as to the scope or nature of Coverage provided by the
MMIA Property Program Agreement, July 1, 2009 Page 9
Authority or the availability of amounts in the Program Operations Fund to pay Claims made
against any Participant, or for any other reason (other than the termination of the obligation to
pay Assessment pursuant to Section 4.1 hereof), the Member Entity shall appropriate funds
sufficient to pay and shall make all Assessment payments when due and shall not withhold any
Assessment payments pending the final resolution of such dispute.
(b) Rate on overdue Payments. In the event a Member Entity fails to make
any of the payments required in this Article, the payment in default shall continue as an
obligation of the Member Entity until the amount in default shall have been fully paid, and in
addition to any remedies available with respect to such default, the Member Entity agrees to pay
the same with interest or penalty thereon, at a rate or rates to be established by the Authority,
from the date such amount was originally payable.
(c) Abatement. There shall be no abatement of Assessment payments.
4.4. Assessments.
(a) Assessment. The entire amount of Assessment is due on the
Assessment Payment Date.
(b) Risk Assessments. Risk Assessments shall be adopted by the Board of
Directors on a fiscal year basis to be effective July 1 of each year thereafter, provided, however,
that the Board of Directors may make such mid-term adjustments to Risk Assessments as may
be appropriate and in the best interests of the Program and the Member Entities to accomplish
the goals of the Program. The Board of Directors shall set such Risk Assessments utilizing
sound actuarial principles and taking into consideration the assessments or rates charged by
any excess insurer, reinsurer, or group or group captive pooled program in which the Authority
may participate to provide Coverage. The Risk Assessments charged Member Entities will be
sufficient to secure and pay for ordinary and appropriate Administrative Costs of the Program
and such other insurance, excess insurance, reinsurance, or group insurance, excess insurance
or reinsurance costs as the Authority may incur in providing Coverage under this Program.
In addition to Risk Assessment charges to the Member Entities, the Program
may realize investment income which shall be treated as income to the Program. In
establishing the Risk Assessments to be charged the Member Entities, appropriate credit shall
be given for investment income.
(c) Special Assessments. The Board of Directors of the Authority may
impose such Special Assessments as may be permitted by this Agreement or other Program
Documents.
4.5 Assessment Audits. The Authority may at its discretion audit each Member Entity
to determine the accuracy of the basis used for the assessment calculations. Total Insured
Value of scheduled property at the assessment rate established for the selected deducible level
is used to determine the annual Property Risk Assessments. Audits will verify the existence,
condition, and value of the property scheduled as well as making a reasonable attempt to
ascertain that all property that should be covered is on that schedule. There will be no
retroactive billing or refunds for property which is not included in the property schedule
submitted by the Member Entity, except as may be determined by the policies and procedures
adopted by the Board of the Authority or as may be required by any excess insurer, reinsurer or
group program providing insurance, excess insurance or reinsurance. This audit is designed to
MMIA Property Program Agreement, July 1, 2009 Page 10
ensure that future Risk Assessments are calculated on the proper basis. The audit will be
limited to the eight quarters covered by the two fiscal years prior to the fiscal year during which
the audit takes place.
4.6 Member Identified Errors. If an individual Member finds errors in the amount of
Assessments paid for prior periods, and submits documentation deemed adequate by the
Authority (e.g. an independent audit or authorized change to reports submitted to some other
government entity), a refund may be requested or additional Assessments paid in accordance
with the time limits identified above for Assessment audits.
SECTION 5: ADMISSION TO, WITHDRAWAL FROM AND EXPULSION FROM THE
PROPERTY PROGRAM
5.1. New Member Entity Applications. Applications for membership in the Property
Program are submitted on an approved form to the Chief Executive Officer of the Authority who
shall approve such applications provided the applicant meets the requirements for membership
set forth in this Agreement and the Interlocal Agreement. Concurrence of the Program's excess
insurance or reinsurance carrier or group or pooled insurance program in which the Property
Program participates may also be required as a condition for providing Coverage.
5.2. Conditions for Providing Coverage to a New Member Entity. The Authority may
provide Coverage to a new Member Entity in the Program, subject to the following conditions:
(a) such new Member Entity shall be a member of the Authority.
(b) at least 30 days prior to the commencement of Coverage under the
Program, such new Member Entity shall be signatory to the Interlocal Agreement and this
Program Agreement;
(c) at least 30 days prior to the commencement of Coverage under the
Program, such new Member Entity shall have submitted a completed application for admission
to the Program as may be required by the Board of Directors.
The minimum time requirements for execution and submission of
documents as provided in subparagraphs (b) and (c) hereinabove may be waived by the Board
of Directors at their discretion.
Coverage of such new Member Entity shall be effective on the first day of
the month next succeeding the approval of the new Participant's application by the Authority
and the execution of the documents as provided herein.
5.3. Automatic Renewal for Succeeding Coverage Year. Each Member Entity's
participation in this Program shall renew automatically for each succeeding Coverage Year
unless the Member Entity provides at least one hundred twenty (120) days' notice prior to
commencement of the next Coverage Year in writing to the Board of Directors of its desire to
withdraw from the Program, as provided in section 5.6.
5.4. Requirements for Participation in the Program.
Each Member Entity who participates in the Program shall execute this
MMIA Property Program Agreement, July 1, 2009 Page 11
Agreement. Each Member Entity hereby acknowledges and agrees that, commencing with the
effective date of its participation in the Program, the Member shall be obligated to pay
Assessments as computed pursuant to this Agreement.
5.5. Capital Assessment of New Member Entity to Program Operations Fund.
(a) If the Program Operations Fund is not adequately funded, the new
Member Entity may be assessed a non-refundable amount to be deposited into the Program
Operations Fund as determined by the Authority ("Capital Assessment"). Such new Member
Entity shall pay all components of the Risk Assessment in addition to this Capital Assessment.
(b) If the Program Operations Fund is adequately funded as determined by a
Consultant, no initial capital assessment will be required of the Member Entity.
5.6. Withdrawal by Member Entity.
(a) Notification. Any Member Entity may withdraw from the Program by
giving written notice to the Board of Directors (120 days) prior to the commencement of the next
Coverage Year of its desire to withdraw, provided such withdrawal is permitted under the terms
of the Program Documents entered into by the Authority and the Member Entity. Such
withdrawal will be effective at 11:59 p.m. Mountain Time of the last day of the Coverage Year in
which such notice of withdrawal is given.
In no event shall withdrawal from Coverage release a Member Entity from
its obligation to pay damages resulting from default under the terms of this Agreement which is
not remedied by payment of Termination Assessment or from its obligation to pay Assessments
determined subsequent to the date of the withdrawal. The Authority shall continue to pay
Settlements and Judgments of covered Claims relating to the withdrawn Member Entity which
arose prior to withdrawal as provided herein, unless the Member Entity defaults in the payment
of its continuing obligations described in the preceding sentence.
Notice to withdraw shall be revocable only at the option of the Authority.
(b) Re -Admission. Any re-entry into the Program by a former Member Entity
whose participation in the Program has been terminated either voluntarily or involuntarily, or has
provided a notice of withdrawal, may be conditioned upon such terms and conditions as the
Board of Directors may require. Re -admission may be subject to the payment by such former
Member Entity of a re-entry fee in such amount as the Board may determine in its sole
discretion to the extent permitted by applicable law and such re-entry shall commit the re-
entering Member Entity to be treated as a new Member Entity for purposes of the Initial
Commitment Period.
(c) Withdrawing Members. In the event that a Member Entity shall withdraw
from the Program as provided in this Agreement, such withdrawing Member Entity shall be
liable for any Assessment levied by the Board within the twelve (12) month period immediately
following such withdrawal. In the event that the Board of Directors elects a rating plan which
includes amortized payment of Loss Reserves, either actual or anticipated, and a Member Entity
withdraws before the amortized losses have been fully paid by such Member Entity, any unpaid
losses shall become immediately due and payable as a Special Assessment against such
withdrawing Member Entity. In no event shall a Member Entity exercising its unilateral right to
MMIA Property Program Agreement, July 1, 2009 Page 12
withdraw be entitled to any refund or repayment of assessments or reserves.
5.7. Membership Review and Termination Procedure.
(a) The Authority may suspend or expel a Member Entity from the Program
(i) if the Member Entity is in default under the terms of this Agreement or (ii) when, in the
determination of the Chief Executive Officer, a Member Entity has engaged in conduct, other
than a default under this Agreement that warrants expulsion from membership in the Program.
(b) The following shall be "Events of Default" under this Agreement and the
terms "Events of Default' and "default" shall have the same meaning whenever they are used in
this Agreement with respect to a Member Entity,:
(1) failure by such Member Entity to observe and perform any covenant,
condition or agreement on its part to be observed or performed herein or otherwise with respect
hereto, for a period of 30 days after written notice specifying such failure and requesting that it
be remedied has been given to such Member Entity by the Authority, provided, however, if the
failure stated in the notice cannot be corrected within the applicable period, the Authority, as the
case may be, shall not unreasonably withhold its consent to an extension of such time if
corrective action is instituted by the Member Entity within the applicable period and diligently
pursued until the default is corrected: or
(2) the filing by such Member Entity of a case in bankruptcy, or the subject of
any right or interest of such Member Entity under this Agreement to any execution, garnishment
or attachment, or, adjudication of such Member Entity as a bankrupt, or assignment by such
Member Entity for the benefit of creditors, or the entry by such Member Entity into an agreement
of composition with creditors, or the approval by a court of competent jurisdiction of a petition
applicable to the Member Entity in any proceedings instituted under the provisions of the federal
bankruptcy code, as amended, or under any similar act which may hereafter be enacted.
(c) When a Member Entity has been determined by the Authority to be in
default under the terms of the Agreement, the Member Entity shall be given written notice of
such default and shall be required to cure such default within ten (10) calendar days of receipt of
such notice. If such default is not cured within the time prescribed herein, said Member Entity
will be suspended from the Program and Coverage shall be terminated during the period of
suspension, which shall be effective, without the need for a meeting of the Board of the
Authority, at 12:01 a.m. on the 30th day after notice of termination has been received by the
Member Entity. Such period of suspension shall continue until the conditions of termination or
expulsion have been met, at which time the defaulting Member Entity's participation in the
Program shall be immediately terminated without a meeting.
(d) In the event the Chief Executive Officer has determined that the Member
Entity has engaged in conduct that warrants expulsion other than a default under this
Agreement, the Chief Executive Officer shall file a written report with the Board of Directors.
Said report shall contain a summary of the facts and the recommendations regarding continued
membership status. A copy of the report shall be served by mail to the Member Entity along
with a Notice of Meeting of the Board of Directors. Said Notice of Meeting shall include the
place, date and time of the meeting. At its discretion, the Board of Directors may submit written
questions to the Member Entity, written answers to which must be mailed to the Chief Executive
Officer no later than seven (7) calendar days prior to the date of the meeting. A Member Entity
objecting to the report and recommendations of the Chief Executive Officer shall submit a
MMIA Property Program Agreement, July 1, 2009 Page 13
written statement to the Board of Directors setting out in detail the basis for the objection and
any other information the Member Entity desires to submit. Said statement must be mailed to
the Chief Executive Officer no later than seven (7) calendar days prior to the meeting. The
Board of Directors shall meet at the time and place designated in the Notice of Meeting. The
Member Entity shall be entitled to be represented at the meeting and present an oral statement
and other information. Following the meeting, the Board of Directors shall affirm, modify, or
reject the recommendation of the Chief Executive Officer. The Board of Directors shall have the
authority: (i) to place a Member Entity on probation, the terms and duration of which it shall
determine; (ii) to suspend a Member Entity from Coverage; or (iii) to expel a Member Entity from
the Program. A copy of the Board of Directors' decision shall be served by mail on the Member
Entity. In the event that the Board of Directors votes to suspend or terminate membership, such
suspension or termination shall not take place for at least thirty (30) days after the Member
Entity has received notice of the suspension or termination. The duration of the notice period
shall be determined by the Board.
A Member Entity whose participation in the Program is to be terminated
or who is expelled from the Program pursuant to this Section 5.4 shall be deemed to be
suspended from the Program and Coverage under the Program shall be terminated during the
period of suspension, which shall be effective at 12:01 a.m. on the 30th day after notice of
termination or expulsion has been received by the Member Entity. Such period of suspension
shall continue until the conditions of termination or expulsion have been met, at which time the
Member Entity's participation in the Program shall be immediately terminated.
5.8. Damages from Suspension from, Termination of, or Expulsion from, the Program.
In no event shall involuntary termination or expulsion release a Member Entity of its obligation
to pay damages resulting from default under the term of this Agreement or Assessments as
provided in the Program Documents.
5.9. No Remedy Exclusive. No remedy conferred herein upon or reserved to the
Authority is intended to be exclusive and every such remedy shall be cumulative and shall be in
addition to every other remedy given under this Agreement or now or hereafter existing at law or
in equity, including, but not limited to the right by mandamus or other suit or proceeding at law
or in equity to enforce his rights against the Member Entity and to compel the Member Entity to
perform and carry out its duties under this Agreement. No delay or omission to exercise any
right or power accruing upon any default shall impair any such right or power or shall be
construed to be a waiver thereof, but any such right and power may be exercised from time to
time and as often as may be deemed expedient. In order to entitle the Authority to exercise any
remedy reserved to it in this Section, it shall not be necessary to give any notice, other than
such notice as may be required in this Section or by law.
5.10. Agreement to Pay Attorneys' Fees and Expenses. In the event either party to
this Agreement should default under any of the provisions hereof and the nondefaulting party
should employ attorneys or incur other expenses for the collection of moneys or the
enforcement of performance or observance of any obligation or agreement on the part of the
defaulting party contained herein, the defaulting party agrees that it will on demand pay to the
nondefaulting party the reasonable fees of such attorneys and such other expenses so incurred
by the nondefaulting party awarded to the nondefaulting party by a court of competent
jurisdiction.
5.11. No Additional Waiver Implied by One Waiver. In the event any covenant
contained in this Agreement should be breached by either party and thereafter waived by the
MMIA Property Program Agreement, July 1, 2009 Page 14
other party, such waiver shall be limited to the particular breach so waived and shall not be
deemed to waive any other breach hereunder.
SECTION 6: INSPECTION OF FACILITIES AND EQUIPMENT; SAFETY CONSIDERATIONS
AND NOTIFICATION OF ACCIDENT
6.1. Inspection of Facilities, Equipment and Records. The Authority and any of its
agents, employees or attorneys shall be permitted at all reasonable times to inspect the work
places, plants, works, machinery and appliances covered by this Agreement and the Member
Entity's books, vouchers, contracts, documents and records of any and every kind which show
or tend to show or verify the Assessments which are payable under the terms hereof. This right
to inspect or examine shall continue after termination of membership with respect to all Claims
or matters arising during or relating to membership status.
6.2. Safety Considerations. Each Member Entity must follow the safety
recommendations of the Authority or any other agent of the Authority, in order to maintain its
covered property in a safe and secure condition.
SECTION 7: AGREEMENTS WITH SERVICE PROVIDERS
7.1. Agreements with Service Providers. The Board of Directors may approve
agreements with various service providers to perform such services as may be reasonably
necessary for the operation of the Program.
SECTION 8: INDEMNIFICATION AND RELEASE; DISCLAIMER
8.1. Release and Indemnification Covenants. Each Member Entity shall and hereby
agrees to indemnify and save the Authority and all other Member Entities harmless from and
against all claims, losses and damages, including legal fees and expenses, arising out of (1) its
breach or default in the performance of any of its obligations under this Agreement or (ii) its act
or negligence or that of any of its agents, contractors, servants, employees or licensees with
respect to the Coverage. No indemnification is made under this Section or elsewhere in this
Agreement for claims, losses or damages, including legal fees and expenses arising out of the
willful misconduct, negligence, or breach of duty under this Agreement by the Authority, its
officers, agents, employees, successors or assigns.
8.2. Disclaimer. THE AUTHORITY MAKES NO WARRANTY OR
REPRESENTATION, EITHER EXPRESS OR IMPLIED, AS TO THE ADEQUACY OF THE
COVERAGE FOR THE NEEDS OF THE MEMBER ENTITIES.
SECTION 9: ASSIGNMENT AND AMENDMENT
9.1. No Assignment by the Member Entities. This Agreement may not be assigned
by any Member Entity.
9.2. Amendment. This Agreement may be amended by a written instrument duly
authorized and executed by the Authority and a majority of the Member Entities. It is expressly
MMIA Property Program Agreement, July 1, 2009 Page 15
agreed and understood that approval of any amendment by a majority of the Member Entities
who are signatories to this Agreement at the time of such amendment shall operate to bind each
Member Entity to such amendment. All costs and expenses incurred in connection with any
amendment to this Agreement shall be borne pro rats by the Member Entities.
SECTION 10: MISCELLANEOUS
10.1. 10.1. Notices. All notices or other communications hereunder shall be
sufficiently given and shall be deemed to have been received five business days after deposit in
the United States mail in certified form, postage prepaid.
If to the Member Entity the City or Town Clerk
At the address of the City or Town
As maintained in the official records of the Authority
If to the Authority: Montana Municipal Interlocal Authority
PO Box 6669
Helena, MT 59604-6669
The Authority and the Member Entities, by notice given hereunder, may
designate different addresses to which subsequent notices, bonds or other communications will
be sent.
10.2. Binding Effect. This Agreement shall inure to the benefit of and shall be binding
upon the Authority and the Member Entities and their respective successors and assigns.
10.3. Severability. In the event any provision of this Agreement shall be held invalid or
unenforceable by a court of competent jurisdiction, such holding shall not invalidate or render
unenforceable any other provision hereof.
10.4. Further Assurances and Corrective Instruments. The Authority and the Member
Entities agree that they will, from time to time, execute, acknowledge and deliver, or cause to be
executed, acknowledged and delivered, such supplements hereto and such further instruments
as may reasonably be required for correcting any inadequate or incorrect description of the
Coverage hereby provided or intended so to be or for carrying out the expressed intention of
this Agreement.
10.5. Execution in Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original and all of which shall constitute but one and the
same instrument.
10.6. Applicable Law. This Agreement shall be governed by and construed in
accordance with the laws of the State.
10.7. Effect of Revised Agreement. This Revised Agreement amends and supersedes
each prior Liability Program Agreement, and this Revised Agreement shall effect a continuation of
the Program for all purposes with respect to the continuity of Coverage, expenses, accounts,
contracts, and other agreements related to the operation of the Program.
MMIA Property Program Agreement, July 1, 2009 Page 16
MONTANA MUNICIPAL INTERLOCAL AUTHORITY
FIRST AMENDED PROPERTY
PROGRAM AGREEMENT
Dated as of July 1, 2009
Signature Page
IN WITNESS WHEREOF, The Authority has caused this FIRST AMENDED PROPERTY
PROGRAM AGREEMENT to be executed in its name by its duly authorized officers;
MONTANA MUNICIPAL INTERLOCAL AUTHORITY,
as Authority
By
Chief Executive Officer
Date Signed
and the Members have caused this Agreement to be executed in its name by its duly authorized
officers, as of the date first above written.
City of
as Member Entity
Address
By
Its
Date Signed
ATTEST:
City Clerk
MMIA Property Program Agreement, July 1, 2009 Page 18
11 lay DR1911W.11WAU I a* WitivraD10 IV 9611ADI Do I
WHEREAS, the City of Kalispell is duly organized under the laws of the State of Montana;
and
WHEREAS, Article XI, Section 7 of the Montana Constitution provides that a political
subdivision may (a) cooperate in the exercise of any function, power, or
responsibility with, (b) share the services of any officer or facilities with, and (c)
transfer or delegate any function, power responsibility, or duty of any officer to
one or more other local government units, the state or the United States;
WHEREAS, Mont. Code Ann. Title 7, Chapter 11, Part 1, (the Interlocal Cooperation Act)
authorizes political subdivisions to create interlocal agreements to jointly perform
any undertaking that each such political subdivision unit is authorized by law to
perform;
WHEREAS, Mont. Code Ann. § 2-18-702, authorizes cities and towns to enter into group
hospitalization, medical, health, including long-term disability, accident or group
life insurance contracts or plans for the benefit of their officers and employees
and their dependents;
WHEREAS, Mont. Code Ann. § 2-18-711, permits the establishment of group programs by
local government entities to provide employee group benefits;
WHEREAS, the Montana Municipal Interlocal Authority (Authority) is a joint exercise of
powers entity established pursuant to an Interlocal Cooperation Agreement in
accordance with the provisions of the Interlocal Cooperation Act for the purpose
of providing pooled risk coverage programs for the Member Entity and other
political subdivisions executing the Interlocal Agreement; and
WHEREAS, the Authority is authorized to exercise necessary powers to implement the
purposes of the Authority as established by the Interlocal Agreement;
WHEREAS, by executing this Program Agreement, the Member Entity signatory hereto has
heretofore determined and does hereby confirm that the Assessments and other
charges required by the Employee Benefits Program have been and are just and
reasonable and advantageous to the public benefit of the citizens of such Member
Entity.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
KALISPELL AS FOLLOWS:
SECTION I. That the City of Kalispell hereby approves and adopts this Employee
Benefits Program Agreement.
PASSED AND APPROVED BY THE CITY COUNCIL AND SIGNED BY THE MAYOR OF
THE CITY OF KALISPELL, THIS 20TH DAY OF APRIL, 2009.
Pamela B. Kennedy
Mayor
ATTEST:
Theresa White
City Clerk