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HomeMy WebLinkAboutOrdinance 1696 ORDINANCE NO. 1696 ESTABLISHING A SINGLE PURPOSE NONPROFIT TRUST FUND FOR SPLIT FUNDING GROUP INSURANCE THE STATE OF TEXAS CITY OF NORTH RICHLAND HILLS On this the 12th day of November, 1990, at a regular meeting of the City Council, sitting as the governing body of the City of North Richland Hills, Texas, at a regular meeting, upon motion of Council Member Davis , seconded by Council Member Garvin , duly put and carried, 6-0, Mayor Pro Tern Davis, Councilmen Garvin, Scoma, Welch, Sibbet and Councilwoman Spurlock voting for; Councilman Metts ~~ÅS, the City of North Richland Hills (hereinafter called "the City") provides a life, accident, medical [and dental] care plan for its employees and its employees' dependents, pursuant to a contract or contracts between the City and one or more insurance companies (hereinafter called "the insurance companies"); and WHEREAS, said contract or contracts provide that funds remaining after the payment of premiums, the payment of claims and cost of administration will be released from insurance contract obligations and become unencumbered funds of the City; and WHEREAS, pursuant to V.A.C.S., Insurance Code, Article 4.11, Section 1, the insurance companies pay to the State Board of Insurance for transmittal to the State Treasurer an annual tax upon its gross premiums received from the business of life and health insurance; and WHEREAS, V.A.C.S., Insurance code, Article 4.11, Section 2 (c), as amended, excludes from the gross premium receipts the amount of premiums paid on group health, accident, and life policies in which the group covered by the policy consists of a single nonprofit trust established to provide coverage primarily for municipal or city employees of this state; and WHEREAS, the City Council, governing body of the City, desires to establish a single nonprofit trust in accordance with the above mentioned statutory provision; IT IS THEREFORE ORDAINED by the City Council of the City of North Richland Hills that a single nonprofit trust as herein provided, be established pursuant to V. A. C. S., Insurance Code, Article 4.11, Section 2 (c), as amended. Ordinance No. 1696 Page 2 TRUST The City Council hereby declares this Trust, effective October 1, 1990, naming the City Manager of the City of North Richland Hills and the Director of Finance of the City of North Richland Hills and their successors in office, as trustees (hereinafter collectively called "the Trustee"). 1. This Trust is hereby created, effective October 1, 1990, to receive and hold all contributions of the City and its employees, necessary to provide the following benefits to City employees and their dependents: (a) to pay premiums on health, hospital, dental, life, accident, and/or medical insurance; (b) to cover reasonable reserves, unreported claims and the run-off of unreported claims; (c) to purchase stop-loss or catastrophic insurance; (d) to cover the cost of administering health, hospital, dental and/or medical care; (e) to pay for service contracts which may be entered into by the City; (f) to provide for the health, hospital, dental and/or medical care; and (g) such other or similar benefits, so long as said benefits are limited to life, health, hospital, dental and/or medical care or related costs thereof. 2. The Trustee shall disburse funds from the Trust only for the purpose of payment of the following benefits to the City employees and said employees' dependents: (a) to pay premiums on health, hospital, dental, life, accident and/or medical insurance; (b) to cover reasonable reserves, unreported claims; (c) to purchase stop-loss or catastrophic insurance; (d) to cover the cost of administering health, hospital, dental and/or medical care; (e) to pay for service contracts which may be entered into by the City; (f) to provide for the health, hospital, dental and/or medical care; and (g) such other or similar benefits, so long as said benefits are limited to life, health, hospital, dental and/or medical care or related costs thereof. 3. Duties of Trustee. The Trustee herein named is hereby authorized to do the following: (a) Receive and hold all excess funds described in Paragraph 1 above. (b) Pay insurance premiums. (c) Pay health benef its to employees and employees I dependents pursuant to and in conjunction with a health plan duly adopted by the City. (d) pay all expenses attributable to the administration of a duly adopted City health plan. Ordinance No. 1696 Page 3 4. Trust Powers. Paragraph 3 above, the following powers: In addition to the duties set forth in Trustee named herein shall have the (a) To hold, manage, invest and reinvest the principal and income of this Trust pursuant to applicable law. (b) To accept and hold property without investment. (C) To use income for any purpose not inconsistent with the provisions of this Trust. (d) To hold and retain the principal and income of this Trust undivided until actual division shall become necessary in order to make payment or distribution. (e) To do all acts and exercise all rights and privileges, although not specifically mentioned herein, as may be necessary to carry out the provisions of this Trust. (f) To continue to act pursuant to the terms and conditions of this Trust until final distributions of the principal and income of this Trust. All of the foregoing powers and duties of the Trustee may be exercised by it as often as it, in its discretion, may deem advisable without application to or approval by any court in any jurisdiction. 5. Powers and Duties of the City. The City shall prepare, execute and administer a plan for health, hospital, dental, and medical care of its employees and its employees' dependents and shall have all powers necessary to carry out its terms. All interpretations of such plan, and questions concerning its administration and applications, shall be determined by the City and such determination shall be binding on all persons. The City shall pay all expenses of administering such plan. 6. Resignation and Removal of Trustee and Appointment of Successor. Any Trustee may resign at any time by giving written notice to the City. Any Trustee may be removed at any time by the City by written notice to such Trustee. In the event a Trustee should resign or be removed, then the City Council shall appoint one or more successor Trustees. 7. Amendment. The City Council shall have the right at any time to amend, in whole or in part, any or all of the provisions of this Trust. No such amendment shall authorize or permit any part of the Trust (other than such part as is required to pay administration expenses) to be used for or diverted to purposes other than for the exclusive benefit of the said employees and the employees' dependents, or their beneficiaries or estates. Furthermore, no such amendment shall cause any reduction in the rights or interests of any employee, or cause or permit any portion of the Trust to revert to or become the property of the City. Ordinance No. 1696 Page 4 8. Termination. The City intends to continue providing life, health, hospital, medical and dental care for its employees and its employees' dependents indefinitely, but such continuance is not guaranteed by the City and it is not a contractual obligation of the City. Such care may be terminated at any time by the City. Upon termination of such care, all funds remaining in the Trust after payment of expenses properl~-ehargeable thereto, shall be used for such employee benefi~as may be designated by the City Council until such monies have been exhausted. PASSED AND APPROVED THIS 12th day of November, 1990 APPROVED: '-- 1,;K1:J. Mayor ATTEST: ~