Reso 2009-767RESOLUTION NO. 2009-767
A RESOLUTION OF THE BOARD OF DIRECTORS OF THE COSTA MESA
SANITARY DISTRICT APPROVING THE FORM OF AND AUTHORIZING
THE EXECUTION OF A MEMORANDUM OF UNDERSTANDING AND
AUTHORIZING PARTICIPATION IN THE SPECIAL DISTRICT RISK
MANAGEMENT AUTHORITY'S HEALTH BENEFITS ANCILLARY
COVERAGES
WHEREAS, the Costa Mesa Sanitary District, a public agency duly organized and
existing under and by virtue of the laws of the State of California (the "Entity "), has
determined that it is in the best interest and to the advantage of the Entity to participate in
Health Benefits Ancillary Coverages offered by the Special District Risk Management
Authority (the "Authority"); and the Entity understands a condition of participation in Health
Benefits Ancillary Coverages is a minimum of 3 full years; and
WHEREAS, Special District Risk Management Authority was formed in 1986 in
accordance with the provisions of California Government Code 6500 et seq., for the
purpose of providing risk financing and risk management programs; and other coverage
protection programs; and
WHEREAS, participation in Special District Risk Management Authority programs requires
the Entity to execute and enter into a Memorandum of Understanding (the "MOU "); which
states the purpose and participation requirements for Health Benefits Ancillary Coverages;
and
WHEREAS, all acts, conditions and things required by the laws of the State of California to
exist, to have happened and to have been performed precedent to and in connection with
the consummation of the transactions authorized hereby do exist, have happened and
have been performed in regular and due time, form and manner as required by law, and
the Entity is now duly authorized and empowered, pursuant to each and every requirement
of law, to consummate such transactions for the purpose, in the manner and upon the
terms herein provided.
NOW, THEREFORE, BE IT RESOLVED BY THE GOVERNING BODY OF THE ENTITY
AS FOLLOWS:
Section 1. Findings. The Entity's Governing Body hereby specifically finds and determines
that the actions authorized hereby relate to the public affairs of the Entity.
Section 2. Memorandum of Understanding. The Memorandum of Understanding, to be
executed and entered into by and between the Entity and the Special District Risk
Management Authority, in the form presented at this meeting and on file with the Entity's
Secretary, is hereby approved. The Entity's Governing Body and /or Authorized Officers
( "The Authorized Officers ") are hereby authorized and directed, for and in the name and on
behalf of the Entity, to execute and deliver to the Authority the Memorandum of
Understanding.
Section 3. Program Participation. The Entity's Governing Body approves participating for a
minimum of three full years in Special District Risk Management Authority Health Benefits
Ancillary Coverages.
Section 4.' Other Actions. The Authorized Officers of the Entity are each hereby authorized
and directd to execute and deliver any and all documents which is necessary in order to
consummate the transactions authorized hereby and all such actions heretofore taken by
such officers are hereby ratified, confirmed and approved.
Section 5.Effective Date. This resolution shall take effect immediately upon its passage.
PASSED and ADOPTED on this 13th day of July 2009.
Secretary, C;o�t /,Mesa Sanitary District
Board of ,Directors
STATE OF CALIFORNIA)
COUNTY OF ORANGE ) SS
CITY OF COSTA MESA )
RIAII 1�
President, Costa Mesa Sanitary District
Board of Directors
I, Joan Revak, Clerk of the Costa Mesa Sanitary District, hereby certify that the
above and foregoing Resolution No. 2009 -767 duly and regularly passed and adopted by
said Board of Directors at a special meeting thereof held on the 13th day of
Jul ,_2009
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the seal of the
Costa Mesa Sanitary District, this 13th day of July 2009.
Clerk of is Costa IVles Sanitary District
SDRMA
MEMORANDUM OF UNDERSTANDING
This Memorandum of Understanding (hereafter "MEMORANDUM ") is entered into by and between the Special
District Risk Management Authority (hereafter "SDRMA ") and the participating public entity (hereafter "ENTITY ") who
is signatory to this MEMORANDUM.
Recitals
WHEREAS, on August 1, 2006, SDRMA was appointed administrator for the purpose of enrolling small public
entities typically having 250 or less employees into the California State Association of Counties ( "CSAC ") Excess
Insurance Authority ( "EIA ") EIAHealth's Small Group Health Benefits Ancillary Coverages Program (hereinafter
"PROGRAM ").
WHEREAS, the terms and conditions of the PROGRAM as well as benefit coverage, rates, assessments, and
premiums are governed by EIAHealth Committee for the PROGRAM (the "COMMITTEE ") and not SDRMA.
WHEREAS, ENTITY desires to enroll and participate in the PROGRAM.
NOW THEREFORE, SDRMA and ENTITY agree as follows:
1. PURPOSE. ENTITY is signatory to this MEMORANDUM for the express purpose of enrolling in the
PROGRAM.
2. INITIAL COMMITMENT PERIOD. ENTITY understands and acknowledges that it is required to remain in the
PROGRAM for a period of at least three (3) full years as a condition to participation in the PROGRAM (the
"INITIAL COMMITMENT PERIOD ").
3. ENTRY INTO PROGRAM. ENTITY shall enroll in the PROGRAM by making application through SDRMA which
shall be subject to approval by the PROGRAM's Underwriter and governing documents and in accordance with
applicable eligibility guidelines.
4. MAINTENANCE OF EFFORT. PROGRAM is designed to provide an alternative health benefit ancillary coverage
solution to all participants of the ENTITY including active employees, dependents and public officials. After the
INITIAL COMMITMENT PERIOD, ENTITY may discontinue coverage or change the contribution amount for
retirees. However, ENTITY must contribute at least the minimum percentage required by the eligibility
requirements.
5. PREMIUMS. ENTITY understands that premiums and rates for the PROGRAM are set by the COMMITTEE.
ENTITY will remit monthly premiums based upon rates established for each category of participants and the
census of covered employees, dependents and public officials.
Rates for the ENTITY and each category of participant will be determined by the COMMITTEE designated for
the PROGRAM based upon advice from their consultants and /or a consulting Benefits Actuary and insurance
carriers. In addition, SDRMA will add an administrative fee to premiums and rates set by the COMMITTEE for
costs associated with administering the PROGRAM. Rates may vary depending upon factors including, but not
limited to, demographic characteristics, loss experience of all public entities participating in the PROGRAM and
differences in benefits provided (plan design), if any.
a. SDRMA will administrate a billing to ENTITY each month, with payments due by the date specified by
SDRMA. Payments received after the specified date will accrue penalties. Health benefit ancillary coverage
premiums are based on a full month. There are no partial months or prorated premiums.
b. ENTITY must send notification of termination of ancillary benefits for a covered employee to the
PROGRAM and SDRMA by the 15th of the current month to terminate at the end of the month. Otherwise
(i.e. notification after the 15th), termination will be as of the end of the following month.
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6. BENEFITS. Benefits provided to ENTITY participants shall be as set forth in ENTITY's Plan Summary for the
PROGRAM and as agreed upon between the ENTITY and its recognized employee organizations as applicable.
7. COVERAGE DOCUMENTS. Except as otherwise provided herein, CSAC -EIA Health documents outlining the
coverage provided, including terms' and conditions of coverage, are controlling with respect to the coverage of
the PROGRAM.
8. PROGRAM FUNDING. It is the intent of this MEMORANDUM to provide for a fully funded PROGRAM by any or
all of the following: pooling risk; purchasing individual stop loss coverage to protect the pool from large claims;
and purchasing aggregate stop loss coverage.
9. ASSESSMENTS. Should the PROGRAM not be adequately funded for any reason, pro -rata assessments to the
ENTITY may be utilized to ensure the approved funding level for applicable policy periods. Any assessments,
which are deemed necessary to ensure approved funding levels, shall be made upon the determination and
approval of the COMMITTEE in accordance the following:
a. Assessments /dividends will be used sparingly. Generally, any over /under funding will be factored into
renewal rates.
b. If a dividend /assessment is declared, allocation will be based upon each ENTITY'S proportional share of
total premium paid for the preceding 3 years. ENTITY's must be current participants to receive a dividend
except upon termination of the PROGRAM and distribution of assets.
c. ENTITY will be liable for assessments for 12 months following withdrawal from the PROGRAM.
d. Fund equity will be evaluated on a total program -wide basis as opposed to each year standing on its own.
10. WITHDRAWAL. ENTITY may withdraw after their INITIAL COMMITMENT PERIOD (three (3) full year
commitment period) and subject to the following condition; ENTITY shall notify SDRMA and the PROGRAM
in writing of their intent to withdraw at least 180 days prior to their actual coverage renewal date. ENTITY may
rescind its notice of intent to withdraw.
1 1. LIAISON WITH SDRMA. Each ENTITY shall maintain staff to act as liaison with the SDRMA and between the
ENTITY and the SDRMA's designated PROGRAM representative.
12. DISPUTES. Disputes between the parties related to this MEMORANDUM shall be resolved as follows:
a. Mediation Before Litigation. The parties agree that in the event of any dispute by and between them, they
shall first attempt to resolve the dispute by way of an informal mediation and if such efforts do not result in
a resolution, they may proceed to litigate the claims.
Selection of Mediator. The mediation shall be held before a neutral mediator having at least 15 years civil
business litigation experience or a retired judge. Within ten (10) days of a demand for mediation, the parties
shall attempt to mutually select a neutral and qualified mediator. If the parties agree on the selection of the
mediator, the mutually selected mediator shall be appointed for the mediation. If the parties are unable to
mutually select a qualified mediator, they shall each select a neutral mediator and the two shall then select
the third who shall be designated as the parties' neutral mediator for the dispute. Any selected mediator who
is unable or unwilling to fulfill his duties may be replaced.
c. Time of Mediation. Subject to the mediator's availability, the parties will make best efforts to have the
mediation scheduled and held within 45 days of a demand.
d. Costs of Mediation. The parties shall split and pay for the fees charged by the mediator equally.
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e. Confidentiality of Mediation Process. The parties agree that the mediation of the dispute will be an effort to
compromise disputed claims and that mediation shall be deemed confidential and no statements made at the
mediation can be used against them in the event of future litigation.
Position Statements. Any party making a demand for mediation shall set forth in their written demand for
mediation the factual and legal basis known to them for their claims or dispute and provide copies of any
statements, summaries, reports, or documentary information known to them at the time to support their
claims, save and except, privileged or confidential information, which may be withheld. Within thirty (30)
days after receipt of a demand for mediation, the recipient shall provide a written response to the claims
setting forth the factual and legal basis known to them to support the response or affirmative defenses and
also provide copies of any statements, summaries, reports, or documentary information known to them at the
time to support the response or affirmative defenses, save and except, privileged or confidential information,
which may be withheld. Copies of the position statements and information exchanged between the parties
under this provision shall be provided to the mediator in advance of the mediation.
g. Failure to Participate in Mediation. Any party who fails to participate in the mediation shall waive their right
to collect attorney fees herein.
h. Exclusions From Mediation. The parties agree that any claim for immediate injunctive relief is specifically
excluded from the requirements of mediation. The parties further agree that disputes related to coverage
under the PROGRAM are excluded from this provision and shall be governed in accordance with CSAC-
EIAHealth documents and/or PROGRAM documents.
13. GOVERNING LAW. This MEMORANDUM shall be governed in accordance with the laws of the State of
California.
14. VENUE. Venue for any dispute or enforcement shall be in Sacramento, California.
15. ATTORNEY FEES. The prevailing party in any dispute shall be entitled to an award of reasonable attorney fees.
16. COMPLETE AGREEMENT. This MEMORANDUM together with the related PROGRAM documents constitutes the
full and complete agreement of the ENTITY.
17. SEVERABILITY. Should any provision of this MEMORANDUM be judicially determined to be void or
unenforceable, such determination shall not affect any remaining provision.
18. AMENDMENT OF MEMORANDUM. This MEMORANDUM may be amended by the SDRMA Board of Directors and
such amendments are subject to approval of ENTITY'S signatory to this MEMORANDUM. Any ENTITY who
fails or refuses to execute an amendment to this MEMORANDUM shall be deemed to have withdrawn from the
PROGRAM on the next annual renewal date.
19. EFFECTIVE DATE. This MEMORANDUM shall become effective upon the signing of this MEMORANDUM by
the ENTITY and Chief Executive Officer or Board President of SDRMA.
20. EXECUTION IN COUNTERPARTS. This MEMORANDUM may be executed in several counterparts, each of which
shall be an original,. all of which shall constitute but one and the same instrument.
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In Witness Whereof, the undersigned have executed the MEMORANDUM as of the date set forth below.
Dated:
Dated: oo�
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Special,111�,ffic'tkisk,
Mana gement Authority.
By:—
Costa Mesa Sanitary, Di-Sti-ci
Special DistrJ_Cu Risk Management Authority Page 4:4
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