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HomeMy WebLinkAboutR-25-46VILLAGE OF DEERFIELD RESOLUTION NO.2025 - R-25-46 A RESOLUTION AUTHORIZING THE EXTENDED TERM OF THE MUNICIPAL INSURANCE COOPERATIVE AGENCY INSURANCE POOL AND APPROVING ITS AMENDED BY-LAWS WHEREAS, the Village of Deerfield, is a member of the Municipal Insurance Cooperative Agency's ("MICA") which has been in existence for many years, and has provided comprehensive self- insurance for the governmental entities; and WHEREAS, the Village of Deerfield has been a member of MICA since 1985; and WHEREAS, the By -Laws of MICA constitute a contract among those units of local government that are members of the Agency; and WHEREAS, the current term of MICA runs from May 1, 2014 through April 30, 2026; and WHEREAS, Article IV of MICA's By -Laws allows the term of the Pool to be extended for an additional twelve-year term upon a two-thirds affirmative vote of the entire group of Board of Directors of MICA; and WHEREAS, the Board of Directors of MICA is recommending the approval by the member municipalities of the attached Second Comprehensive Amendment to the Contract and By -Laws of MICA which amended By -Laws include an extension of the term of the MICA Pool from May 1, 2026 through April 30, 2038. NOW, THEREFORE, BE IT RESOLVED BY THE PRESIDENT AND BOARD OF TRUSTEES OF THE VILLAGE OF DEERFIELD, COUNTY OF LAKE AND COOK, STATE OF ILLINOIS, as follows: SECTION 1: That the above -stated Whereas clauses are hereby adopted and incorporated into this Resolution as though fully set forth herein. SECTION 2: The Corporate Authorities of the Village of Deerfield hereby approve the Second Comprehensive Amendment to the Contract and By -Laws of the Municipal Insurance Cooperative Agency, attached hereto as EXHIBIT A, which amendments include an extension of the term of the MICA Pool from May 1, 2026 through April 30, 2038. 1 2052253_1 SECTION 3: This Resolution shall be in full force and effect immediately upon its passage. PASSED this 21i day of Jule , 2025. APPROVED this 21 st _ day of Jul% , 2025. AYES: Benton, Berg, Goldstone, Greenberg, Jacoby, Oppenheim NAYS: None ABSTAIN: None ABSENT: None RESOLUTION NO. R-25-46 ATTEST: Villagd Clerk ,���.••G of DF•.,��, F SEAL �''•.,R•�/FL D.. %V�.,� 2 Village President 2052253_1 EXHIBIT A SECOND COMPREHENSIVE AMENDMENT TO THE CONTRACT AND BYLAWS OF THE MUNICIPAL COOPERATIVE INSURANCE AGENCY (MICA) 2052253_1 2025 SECOND COMPREHENSIVE AMENDMENT TO THE CONTRACT AND BY-LAWS OF THE MUNICIPAL INSURANCE COOPERATIVE AGENCY (MICA) 2025 TABLE OF CONTENTS ARTICLE I. DEFINITIONS AND PURPOSE............................................................................. 2 ARTICLE II. POWERS AND DUTIES........................................................................................ 4 ARTICLE III. PARTICIPATION AND TERM............................................................................ 5 ARTICLEIV. TERM..................................................................................................................... 8 ARTICLE V. BOARD OF DIRECTORS..................................................................................... 8 ARTICLE VI. MEETINGS OF THE BOARD OF DIRECTORS .............................................. 15 ARTICLE VII. OTHER AGENCY OFFICERS......................................................................... 17 ARTICLE VIII. FINANCES AND AGENCY RISK MANAGEMENT .................................... 17 ARTICLE IX. SCOPE OF LOSS PROTECTION...................................................................... 23 ARTICLE X. CONVENTIONAL INSURANCE....................................................................... 25 ARTICLE XI. OBLIGATIONS OF MEMBERS........................................................................ 26 ARTICLE XII. LIABILITY OF BOARD OF DIRECTORS OR OFFICERS ............................ 28 ARTICLE XIII. NO THIRD -PARTY BENEFICIARIES............................................................ 29 ARTICLE XIV. OPTIONAL DEFENSE BY MEMBER........................................................... 29 ARTICLE XV. CONTRACTUAL OBLIGATION.................................................................... 31 ARTICLE XVI. EXPULSION OF MEMBERS.......................................................................... 32 ARTICLE XVII. TERMINATION OF THE AGENCY............................................................. 33 1 2032316_1 2025 ARTICLE I. DEFINITIONS AND PURPOSE. DEFINITIONS: As used in this agreement, the following terms shall have the meaning hereinafter set out: AGENCY - The Municipal (Self) Insurance Cooperative Agency established pursuant to the Constitution and the statutes of this State and by this intergovernmental agreement. ANNUAL PAYMENTS - The amount each Member must annually pay to fund the anticipated costs of the full operation of the Agency. CONVENTIONAL INSURANCE - Insurance of any kind, including, but not limited to, Excess, Aggregate, Reinsurance and Directors and Officers liability insurance, purchased by the Agency from an insurance company providing various types of insurance which may be subject to deductible amounts. CORPORATE AUTHORITIES - The governing body of a municipality or other governmental unit which is a Member of the Agency. EXCESS INSURANCE - Insurance purchased by the Agency providing certain coverage for losses over a pre-set amount up to a pre-set maximum amount of coverage. FLOATING SUPER FUND - A fund of public monies, interest income and other funds available to the Agency established to pay claims and expenses of the Agency attributable to any year in which the Agency is in existence. JOINT RISK MANAGEMENT FUND - A fund of public monies established by the Agency to administer and jointly self -insure certain risks within an agreed scope and to purchase conventional insurance and to pay other expenses within the scope of this Contract and By -Laws. 2 2032316_1 2025 JOINT SELF-INSURANCE - A self-insurance program in which the Members agree to contribute annual and, where required, supplementary payments to support a risk management program and a joint risk management fund. MEMBERS - The units of government or intergovernmental agencies which initially or later entered into the intergovernmental contract established by this intergovernmental agreement. RISK MANAGEMENT - A program attempting to reduce or limit losses to Members and injuries to persons or property caused by the operations of the Members. SELF-INSURANCE - The decision of the Agency to retain a certain amount of risk; to seek all immunities provided by Illinois law for a non-insured government; to rely upon its financial capabilities to pay any property losses and third -party claims which are held valid and not barred by available immunities and to purchase some insurance to protect against catastrophic loss. SUPPLEMENTARY PAYMENTS — Additional Member funding should the regular Annual Payments be insufficient to pay all costs in a given pool year. Members shall be obligated to make supplementary payments if the amount of the annual payments shall be insufficient to fund the operations of the Agency. PURPOSE: The MUNICIPAL (SELF) INSURANCE COOPERATIVE AGENCY is a cooperative agency voluntarily established by contracting municipalities and other units of government pursuant to Article VII, Section 10 of the 1970 Constitution of the State of Illinois and 5 ILCS 220/6 of the Illinois Compiled Statutes for the purpose of seeking the prevention or reduction of 3 2032316_1 2025 losses to governmental properties and injuries to persons or property which might result in claims being made against Member units. It is the intent of the Members of the Agency to create an entity which will administer a Joint Risk Management Fund and utilize such funds contributed by the Members to defend and protect, in accordance with these By -Laws, any Member of the Agency against stated liability or loss. Such By -Laws shall constitute the substance of a contract among the Members. All funds contained within the Joint Risk Management Fund are monies directly derived from its Members which are municipalities and other units of local government within the State of Illinois. It is the intent of the parties in entering into this agreement that, to the fullest extent possible, the scope of risk management undertaken by them through a joint governmental self- insurance program using governmental funds shall not waive, on behalf of any local public entity or public employees as defined in the Local Governmental and Governmental Employees Tort Immunity Act, any defenses or immunities therein provided. ARTICLE II. POWERS AND DUTIES. The powers of the Agency to perform and accomplish the purposes set forth above shall, within the budgetary limits and procedures set forth in these By -Laws, be the following: A. To employ agents, employees and independent contractors; B. To purchase or lease real property and to purchase or lease equipment, machinery, or personal property necessary for the carrying out of the purpose of the Agency; C. To sell or issue bonds or other financial instruments, either in its own name or through one of its Members to the fullest extent permissible under the law. D. To carry out educational and other programs relating to risk reductions; 4 2032316_1 2025 E. To cause the creation of, see to the collection of funds for, and administer a Joint Risk Management Fund and Floating Super Fund; F. To purchase insurance coverage to supplement the Joint Risk Management Fund; G. To establish reasonable and necessary loss reduction and prevention procedures which shall be followed by the Members; H. To provide claims management services and the defense of settlement and subrogation of claims; I. Solely within the budgetary limits established by the Members to carry out such other activities as authorized by the Board of Directors to be performed by the Agency, it's Executive Committee or any officer or agent. ARTICLE III. PARTICIPATION AND TERM. The Members of the Agency are those entities, the names of which are listed on Appendix A. So long as the Agency shall continue in existence, any new Member joining the Agency shall remain a Member for at least three (3) years. After a new Member's initial required term of membership in the Agency, any Member of the Agency may withdraw from the Agency at the end of a fiscal year of the Agency upon the giving of at least one hundred twenty (120) days written notice prior to the close of the fiscal year. A MEMBER which gives notice of withdrawal and then wishes to rescind such notice within the one hundred twenty (120) day notice period may do so only upon approval of such action by the affirmative vote of two-thirds of the Executive Committee present at a regular or special meeting under terms established for readmission by the Executive Committee or Board of Directors. The Board may, at its sole 5 20323161 2025 discretion, choose to waive any portion of the one hundred twenty (120) day notice requirement it deems necessary in order to protect the best interests of the AGENCY. If a MEMBER withdraws from the AGENCY, it shall be entitled to coverage for the period of its membership to the same extent as other MEMBERS of the AGENCY, but it shall not continue to have a representative on the Board of Directions. The withdrawing MEMBER shall continue to be responsible for its share of the payment of all supplementary and other payments attributable to years during which it was a MEMBER of the AGENCY and other obligations of membership. The notice of intent to withdraw shall be addressed to the Chairman of the Agency and shall be accompanied by a Resolution of the Board of the MEMBER electing to withdraw from the AGENCY. Such notice shall be addressed to the Chair of the Agency and shall be accompanied by a resolution of the Corporate Authorities of the Member electing to withdraw from the Agency. A Member that withdraws from the Agency shall not be permitted to reapply for membership in the Agency for a period of two (2) years from the date on which the Member's resolution was served upon the Chair, unless such prohibition is waived by the Board of Directors upon a four/fifths vote of the entire membership of the Board. Furthermore, said Member must reapply through the normal application process, having once again met membership criteria for a new Member. A Member which gives notice of withdrawal and then wishes to rescind such notice within the one hundred twenty (120) day notice period may do so only upon approval of such action by the affirmative vote of two-thirds of the Executive Committee present at a regular or special meeting under terms established for readmission by the Executive Committee or Board of Directors. The Board of Directors may, at its sole discretion, if requested by the withdrawing 6 2032316_1 2025 Member, choose to waive any portion of the one-year notice requirement it deems necessary in order to protect the best interests of the Agency. If a Member withdraws from the Agency, it shall be entitled to coverage for the period of its membership to the same extent as other Members of the Agency, but it shall not continue to have a representative on the Board of Directors. No Member which withdraws from the Agency shall receive a return of surplus funds or rebate(s) approved by the Board of Directors from any year for which said withdrawn Member was a Member of the Agency unless, for all years the withdrawn Member was a Member of the Agency, the withdrawn Member has had a positive cash balance when its total net losses (to be defined as completed payment, including defense costs, damages, any reasonable administrative and any other non -allocated costs incurred by the Agency for all claims known to have been incurred by the withdrawing Member in all years for which the withdrawing Member participated in the Agency plus any reasonable reserve which the Executive Committee shall require to be established for any incurred but not reported claims during said years) for that withdrawn Member's claims for all years combined are compared to that withdrawn Member's total contributions to the Joint Risk Management Fund for those years. A withdrawing or withdrawn Member shall receive a distribution of surplus funds or rebate(s) approved by the Board of Directors when its total net losses for all years of its membership are less than its total loss fund contributions for said years. In no case shall a withdrawing or withdrawn Member receive a distribution of surplus funds or rebate(s) approved by the Board of Directors in excess of its final combined cash balance for all years while a Member of the Agency. The Board of Directors may, in its absolute discretion, withhold distribution of any surplus funds or rebates to any withdrawn Member until the Board of Directors is assured there 7 2032316_1 2025 is sufficient evidence to establish with reasonable certainty the withdrawn Member's total net losses. The withdrawing Member shall continue to be responsible for its share of the payment of all supplementary and other payments attributable to years during which it was a Member of the Agency and other obligations of membership. The Board may establish and periodically review standards for the admission of new Members. ARTICLE IV. TERM. The Agency commenced its operations on May 1, 1984. The Members last authorized a twelve (12) year term to commence on May 1, 2014 and run through April 30, 2026. This Second Comprehensive Amendment shall constitute a new intergovernmental agreement amongst and between the Members and, in its initial form and as it is validly amended, shall govern the relationship between the Agency and its Members during the entire existence of the Agency. As a new Agreement, the term of the Agency shall run from May 1, 2026 through and including April 30, 2038. At the end of that twelve (12) year term, the term of the Agency may be extended for a multi -year term, as permitted by law, by a two-thirds (2/3) affirmative vote of the entire Board of Directors or, by majority action of the Board, it may continue in existence from year-to-year as an intergovernmental agreement. ARTICLE V. BOARD OF DIRECTORS. A. There is hereby established a Board of Directors of the Agency. Each Member shall appoint one (1) person to serve as the authorized representative of that body on the Board of Directors along with another person to serve as an alternate representative when the authorized representative is unable to carry out his or her 8 2032316_1 2025 duties. The representative and alternate shall be appointed as other municipal officers are appointed by the Member. Once such appointments are made known to the Agency, the persons appointed shall remain in office until the Agency receives evidence of the appointment of other persons. The Agency shall be the judge of the proper appointment of authorized representatives and alternates to the Board of Directors and shall utilize, in case of a dispute, general principles of Illinois municipal law. The representative and alternate selected need not be elected officials of the Member. B. The Board of Directors shall, during the final quarter of each even numbered fiscal year, select from among the authorized representatives, a Chair and Vice Chair and Treasurer to serve during the subsequent two fiscal years. The Chair shall be the chief executive officer of the Agency. The Chair shall preside at all meetings of the Board and the Executive Committee at which the Chair is present. The Chair may request information from any officer of the Board or the Agency or any employee or independent contractor of the Agency. The Chair shall vote on all matters that come before the Board or Committees on which the Chair serves. The Chair shall be a non -voting ex-officio Member of all committees of the Agency on which the Chair does not directly serve. The Chair shall have such other powers as are set forth in these By -Laws and such other powers as he may be given from time to time by action of the Board. C. The Vice Chair shall carry out all duties of the Chair of the Board during the absence or inability of the Chair to perform such duties and shall carry out such 9 2032316_1 2025 other functions as are assigned from time to time by the Chair or the Board of Directors. D. The Treasurer may not be a representative or alternate representative from the same Member as the Chair, the Vice -Chair or any person serving on the Executive Committee. 1. The Treasurer shall: a. Have charge and custody of and be responsible for all funds and securities of the Agency; receive and give all receipts for moneys due and payable to the Agency from any source whatsoever; deposit all such moneys in the name of the Agency in such banks, savings and loan associations or other depositories as shall be selected by the Board of Directors or Executive Committee; and, invest the funds of the Agency as are not immediately required in such securities as the Board of Directors shall specifically or generally select from time to time. Maintain the financial books and records of the Agency. Provided, however, that all investments of the Agency funds shall be made only in those securities which may be purchased by Illinois non -home rule municipalities under the provisions of the Illinois Compiled Statutes. b. In general, perform all duties incident to the office of Treasurer and such other duties as from time to time may be assigned to him by the Board of Directors or the Executive Committee; 3. The Agency shall purchase a bond in the minimum amount contained within the Joint Risk Management Fund from time to time to assure the fidelity of the Chair and the Treasurer. Without amending these By -Laws, the Executive Committee may increase the amount of the bonds for the aforesaid officers and procure fidelity and other bonds for officers, directors, employees or independent contractors of the Agency. 10 20323161 2025 4. The Board or Executive Committee may select a financial institution or certified public accounting firm to carry out some or all of the functions which would otherwise be assigned to a Treasurer to assist the Treasurer. E. The Board of Directors may from time to time establish other officers of the Board who shall serve for such terms as are established by the Board and may elect a representative of the Board to serve in any of such offices. The Executive Committee shall fill any vacancies which may occur in any offices for the remainder of the respective term of said office. F. 1. Subject to the provisions of Section F(2) following, there shall be established an Executive Committee with five (5) members. The Executive Committee shall consist of the Chair, the Vice Chair and the Treasurer of the Agency. In addition, the Board of Directors, during the last quarter of each odd numbered fiscal year, shall elect from the representatives or the Board of Directors or Alternates, two (2) persons, each serving a two (2) year term as an "at large" Member of the Executive Committee. "At large" vacancies on the Executive Committee shall be filled by a qualified appointee by the vote of at least a majority of the remaining members of the Executive Committee for the remainder of the unexpired term of the person whose resignation or inability to serve caused the vacancy. No more than one (1) member of the Executive Committee shall be a delegate or alternate of any single Member. The term of a member of the Executive Committee shall cease immediately upon the submission of a notice of withdrawal from the Agency by the Member for which 11 2032316_1 2025 he or she serves as a representative or alternate. Meetings of the Executive Committee may be called by the Chair or any two Executive Committee members. The Executive Committee may authorize and employ persons and hire independent contractors, approve expenditures, authorize the settlement of claims and suits, admit new Members into the Agency, and take such other actions as shall be delegated to it by the Board of Directors. 2. Effective October 1, 2011, the Executive Committee shall consist of seven (7) Members. There shall be added two (2) additional persons elected from the representatives of the Board of Directors or alternates, each serving a one-year term as "at large" Members on the Executive Committee. These Executive Committee Members shall serve in the same capacity and under the same conditions (except for the time of election) as is provided for in Section F(1) above. Begirming May 1, 2016, there shall be no further elections for additional "at large" Executive Committee Members. Thereafter, elections for the "at large" Executive Committee Member positions shall not take place until there are remaining only five (5) Members on the Executive Committee. Thereafter, the Executive Committee shall continue on with five (5) Members under the provisions and conditions set forth in Section F(1) above. G. The Board of Directors shall determine the general policy of the Agency which policy shall be followed by the officers, agents, employees and independent contractors employed by the Agency. Among other items, it shall have the responsibility for (1) Approval of amendments to the By -Laws, (2) Approval of 12 2032316_1 2025 the process for the acceptance of new Members; (3) Approval and amendment of the annual budget of the Agency, (4) Approval of reasonable and necessary loss reduction and prevention procedures which shall be followed by all Members, (5) Approval of annual and supplementary payments to the Joint Risk Management Fund and/or Floating Super Fund for each Member, (6) Approval of additional terms for the existence of the Agency, and (7) Resolution of disputes over the scope of Agency self-insurance coverage or over late notice of a claim provided by the Agency on an appeal from the decision of the Executive Committee, and (8) Selection of a claims administrator which may be given discretionary authority to settle claims within certain standards. The Board of Directors may establish such rules and regulations regarding the payout of funds from the Joint Risk Management Fund as shall from time to time seem appropriate. H. Each voting Member shall be entitled to one (1) vote on the Board of Directors. Such vote may be cast only by the authorized representative of the Member or, in the representative's absence, by an alternate selected by the Member in the same manner as specified for the selection of the authorized representative. No proxy votes or absentee votes shall be permitted. Voting shall be conducted by voice vote unless one (1) or more Members of the Board of Directors shall request a roll call vote; provided, however, that 1. Any vote which requires a greater than majority vote for passage shall be by roll call vote, and 2. In the event that an authorization of the expenditure of funds shall pass by a voice vote, any Member of the Board seeking to abstain or vote in the negative regarding such authorization and wishing that vote to be 13 2032316_1 2025 specifically recorded shall indicate such vote to the presiding officer. On any other vote taken by the Board, a Member voting in the minority position on a voice vote may also have that vote recorded in the Minutes by specifically indicating such vote to the presiding officer. I. The representative appointed by the Member may be removed at any time by that Member. In the event that a vacancy occurs in the representative or alternate representative, the Member shall appoint a successor. The failure of a Member to select a representative or the failure of that person to participate shall not affect the responsibilities or duties of a Member under this Contract. J. The Board of Directors and Executive Committee shall have the power to establish both standing and ad hoc committees. The Chair may also establish ad hoc committees which do not conflict with those established by the Board or Executive Committee. Unless the Board of Directors shall establish some other procedure, the selection of persons who shall serve on such committees and chair them shall reside with the Chair. The Board of Directors may assign to a committee the authority to authorize the expenditure of funds and to settle claims or suits brought against entities within the scope of coverage provided by the Agency. K. The Board of Directors and Executive Committee may establish rules governing their own conduct and procedures not inconsistent with the By -Laws. L. A quorum at a meeting of the Board of Directors or Executive Committee or any standing or ad hoc committee shall consist of a majority of the Board or Committee. Except as otherwise provided in these By -Laws, a simple majority of a quorum shall be sufficient to pass upon all matters. 14 2032316_1 2025 M. A greater vote than a majority of a quorum shall be required to approve the following matters: 1. Such matters as the Board of Directors shall establish within its rules as requiring for passage a vote greater than a majority of a quorum, provided, however, that such a rule can only be established by a greater than a majority vote at least equal to the greater than majority percentage within the proposed rule. 2. The expulsion of a Member shall require two-thirds (2/3) vote of the entire voting membership of the Board of Directors. 3. Any amendment of these By -Laws except as provided in Subsection four (4) below, shall require the two-thirds (2/3) vote of a quorum of the Board of Directors. 4. The amendment of these By -Laws to cause a reduction or elimination in the scope of loss protection set out in Article IX to be furnished by the Agency derived from payments from the Members. 5. The continuation in existence of the Agency after each approved fixed term shall require a vote as described in these By -Laws. N. No one serving on the Board of Directors shall receive any salary or other payment from the Agency and any salary, compensation, payment or expenses for such representative, shall be paid by each Member separate from this Contract. The Chair, Vice Chair, Treasurer and such other officers as may be selected from time to time may submit to the Executive Committee for their approval reimbursement of the actual cost of expenses incurred on behalf of the Agency. ARTICLE VI. MEETINGS OF THE BOARD OF DIRECTORS. A. Regular meetings of the Board of Directors shall be held at least two (2) times a year. One regular meeting second regular meeting during the second six months with the exact dates to be determined each year by the Executive Committee. 15 2032316_1 2025 Any item of business may be considered and voted on at a regular meeting. Special meetings of the Board of Directors may be called by its Chair, or by representatives of any three Members. The Chair or in the Chair's absence, the Vice Chair, shall give at least five (5) days' written notice of regular or special meetings to the authorized and alternate representatives of each Member and an agenda specifying the subject of any special meeting shall accompany such notice. Business conducted at special meetings shall be limited to those items specified in the agenda. B. The time, date and location of regular and special meetings of the Board of Directors shall be determined by the Chair, or in the Chair's absence, by the Vice Chair or by the convenor(s) of a special meeting. C. To the extent not contrary to these By -Laws, and except as modified by the Board of Directors, Roberts Rules of Order, latest edition, shall govern all meetings of the Board of Directors. Minutes of all regular and special meetings of the Board of Directors shall be sent to all Members of the Board of Directors. D. Directors may attend regular meetings remotely provided that the majority of the members of the Board of Directors are physically present at each meeting to establish a quorum. The Board member participating by audio or video conference may not be counted for purposes of establishing a quorum but may participate fully in the meeting and any action to be taken upon approval of a majority of those Board members physically present at the meeting. The Board member must inform the Chair , or his / her designee, as soon as possible, and at 16 2032316_1 2025 least 1 hour before the meeting, of expected participation in a meeting by audio or video conference so that necessary arrangements can be made. ARTICLE VII. OTHER AGENCY OFFICERS. A. Other Officers of the Agency (in addition to the Chair, Vice -Chair and Treasurer) shall consist of such other officers as are established from time to time by the Board of Directors. All Agency officers shall be selected by the Board of Directors unless authority to do so is assigned to the Executive Committee. ARTICLE VIII. FINANCES AND AGENCY RISK MANAGEMENT. A. The fiscal year of the Agency shall commence on May 1, and end on April 30 of each year. B. The annual payments from the Members shall be in an amount sufficient to fund the administrative expenses of the Agency, the Joint Risk Management Fund, the purchase of Conventional Insurance, and other costs relating to the services and projects of the Agency. In determining the amount of the Annual Payment due from each Member, the Executive Committee may recommend and the Board of Directors may take into consideration some or all of the following factors: 1. Population of the governmental body; 2. Property values of the governmental body; 3. Number of vehicles owned by the governmental body and the use made of the vehicles; 4. The size and scope of the governmental programs of the Member; 5. The payroll of the Member; 17 2032316 1 2025 6. The budget and revenue of the Member; 7. The claims and loss experience of the Member; 8. Such other factors as the Executive Committee and Board shall deem relevant. The Annual Payments due shall be based, in whole or in part, upon an objective formula which may vary from year to year. This formula must be applied equally to all Members similarly situated. It is the responsibility of each Member to provide the Agency with accurate information relating to the factors used in determining the amount of the annual payment due from each Member pursuant to this Section (B). In the event the Executive Committee determines that a Member has failed to report to the Agency accurate information relating to these factors, then the Executive Committee shall have the authority to impose the following remedies: i. To assess against the Member the amount which properly would have been charged as that Member's annual payment for all years for which improper information was provided by the Member. Interest at the maximum rate permitted by law shall be charged on all amounts equal to the proper sum which should have been charged as an annual payment less any payments actually made by the Member for all applicable years; and ii. In the event the Executive Committee determines that a Member has intentionally or with reckless disregard failed to report to the Agency accurate information relating to these factors, then, for each year for which improper information was so reported by the Member to the Agency, an amount equal to 25% of the difference between what should have been the Member's proper annual payment for that year and the actual payment charged to the Member. For example, if due to a Member's improper reporting it appears that a Member's annual payment should have been $80,000.00, but rather was $60,000.00, the Member would be 18 2032316_1 charged, pursuant to this sub -paragraph, the sum of $5,000.00, that being 25% of the difference between $80,000.00 and $60,000.00. A Member accused of improper reporting pursuant to this paragraph, shall have the right to appeal any decision of the Agency to the full Board of Directors. The procedure to be used for such an appeal shall be the same as is provided for a Member who may be expelled from the Agency. Any decision of the Board of Directors is final. The Board of Directors may grant debits or credits to Members with above or below average loss or claims records for a period of no more than five (5) years immediately preceding the fiscal year for which contributions are to be determined. The amount of such debits or credits may not vary more than 25% above or below the amount which the Member would pay if it were not to have been granted the debit or credit. When admitting a new Member, the Executive Committee may establish the rate and amount which the new Member shall pay for at least two years and may take into consideration, in setting such a rate, factors and formula other than those described above in this Article. C. Calls for Supplementary Payments may be made by the Board of Directors, providing, however, that such additional sums may be called for in a total amount attributable to any one year of not more than once again the regular Annual Payment for that year. The Board shall also make calls for Supplementary Payments from Members which have withdrawn or been expelled for years during which they were Members. The forwarding of such Annual and Supplementary 19 2032316 1 Payments within a time specified in notices to the Members giving them not less than forty-five (45) days to make such payments, shall be of the essence of this contract. Supplementary Payments shall only be required by the Board of Directors in a situation in which there is a reasonable concern that the sum remaining from the Annual Payments will not be sufficient to meet the responsibilities of the Agency established in these By -Laws. Members shall be responsible for Supplementary Payments during the entire life of the Agency and any later period when claims or expenses need be paid which are attributable to the year of membership when the event out of which the expense or claim occurred. Supplementary Payments may be called for in a number of individual requests provided that the total amount of the Supplementary Payments may not exceed the maximum amount permitted. D. The Board of Directors, at any time, may allocate a portion of the Joint Risk Management Fund for any year during which the Agency has been in existence, into a separate account to be known as the Floating Super Fund. The money in this account may be utilized to pay claims and expenses of the Agency attributable to any year during which the Agency is in existence. In the creation of and with regard to payments to the Floating Super Fund, it is one of the desires of the Members to be able to consider purchasing less Conventional Insurance of any kind and to fund losses previously covered within the scope of such insurance from the Floating Super Fund. It is anticipated that claims for such losses will occur infrequently but will require significant amounts of money. Amounts of 20 2032316 1 money sufficient to cover such claims can best be achieved through the accumulation of funds over a number of claims years. Any Member which leaves the Agency, in any way, shall not have any claim against the funds within the Floating Super Fund, except for the payment of claims during the years in which it was a Member of the Agency. Provided, however, that in the event that the Agency should terminate, any surplus amounts within the Floating Super Fund which are available after all claims and expenses of the Agency have been paid, shall be returned to all of those Members which contributed to the Floating Super Fund in the proportion to which they made contributions to the Fund. Any new Member which joins the Agency shall be entitled to the use of the monies within the Floating Super Fund for claims which occurred during the period of its membership in the Agency, but any funds which it contributes to the Floating Super Fund shall also be available for claims which occurred during prior years. E. The Executive Committee may permit the Annual or Supplementary Payments to be paid on a monthly or quarterly basis. The amount of any Supplementary Payments required shall be based upon the same formula as was used in establishing the Annual Payment for that year. F. If, for any year during which the Agency was in existence, all claims known or unknown have either been paid or provision has been made for such payment, the Board of Directors as then constituted shall distribute surplus funds to the Members who constituted the membership of the Agency in that prior year, after first deducting therefrom reasonable administrative and other non -allocated costs 21 2032316_1 incurred by the Agency in the processing of the claims in years other than the one in which the claim was made. G. If Conventional Insurance of any kind is purchased, and the insurance provider should fail to perform its contractual obligations, the Members shall be called upon to repay to the Agency, within a period of time of not less than sixty (60) days after notice, any amounts, then needed for reserves or to make payments, for the claim year in question, as had been previously distributed to them as refunds, rebates or other repayment of surplus funds. The Executive Committee shall determine the extent to which the Floating Super Fund may be used to establish reserves or to pay some or all of such claims before a call for the return of some or all of the returned surplus funds for the claim year in question is made. Members shall also be obligated to make Supplementary Payments, up to the maximum allowed amount, for losses or claims which fall within the scope and amount of coverage which the Agency agreed to cover through Joint Self - Insurance rather than through levels of coverage which were to be paid from the proceeds of Conventional Insurance of any kind. In all cases where the Agency has purchased Conventional Insurance of any kind, the Members shall look solely to the provider of the Conventional Insurance coverage for the payment of claims or losses within the scope of coverage of the policies purchased. Neither the Joint Risk Management Fund or Floating Super Fund, nor funds procured through Supplementary Payments, shall be used to pay claims or losses within the dollar amount and scope of coverage 22 2032316_1 assumed by an insurance company which has sold Conventional Insurance of any kind to the Agency. Provided, however, that the Board of Directors may authorize the use of Agency funds to pay the costs of litigation of a Member against such Conventional Insurance provider which contends that a claim or loss has not been paid as contractually required by the Conventional Insurance company. H. A budget for the Agency shall be recommended to the Board of Directors by the Executive Committee for each fiscal year. That budget shall confirm and authorize the payment of any funds made earlier during that first fiscal year as well as such funds as are estimated to be required during the remainder of that fiscal year. ARTICLE IX. SCOPE OF LOSS PROTECTION. In the absence of a motion by the Board of Directors expanding or contracting the scope of loss protection furnished by the Agency, the Agency shall provide loss protection from its self -insured retention funds only to the extent that protection would be accorded within the terms of the Conventional Insurance held from time to time by the Agency for the benefit of its Members. The intent of this Contract and By -Laws shall be that except to the extent to which the scope of coverage provided by the Agency is specifically expanded by action of the Board of Directors, the Members herein do not intend to utilize the Joint Risk Management Fund or Floating Super Fund of the Agency to cover claims or losses where the conventional, excess, aggregate or reinsurance covers the claim or loss. Provided, however, that without limiting the generality thereof, except in the amount and to the extent paid for by the conventional, excess 23 2032316_1 aggregate or re -insurance purchased by the Agency, the Agency shall not provide self-insurance pooled coverage in the following areas: A. Punitive or exemplary damages. B. Liability of individuals otherwise covered for acts committed outside the scope of their duties and powers. C. Those portions of causes of action seeking only non -monetary claims such as injunction, mandamus and declaratory relief D. The payment of the attorneys' fees of opposing counsel or other court costs where a judgment providing no other monetary relief to the plaintiff is entered. E. Those portions of causes of action where the plaintiff seeks no damages but only the return of tax funds or any other fund alleged to have been paid or received by the Member in error or without authority in law. F. Those portions of causes of actions grounded solely in contract except for validly extended contractual obligations of Members to indemnify third -parties. For a contractual obligation of a Member to indemnify third parties to be validly extended, it must be approved by the Chair in writing through the issuance of a Certificate of Protection/ Insurance specifically naming the Member and the third party to whom a contractual obligation to indemnify is being extended. The Executive Committee may establish guidelines to be used by the Chair in determining whether to extend a contractual obligation to indemnify third parties. G. Those portions of causes of action seeking only back pay or retroactive salary increases based upon alleged discrimination. 24 2032316_1 H. Those portions of causes of action alleging improper acts by officers of Members who serve as representatives of those Members on other intergovernmental agencies. I. Fire or casualty losses to property owned by the Member not listed upon the annual statement of values or property report furnished to the Agency. J. Continuing damages for an action of a Member, where the Member has been requested to terminate the practice during litigation by the written request of the Executive Committee and refuses to do so within no more than 30 days thereafter. The Chair, after having reviewed a claim forwarded to the Agency for coverage shall be permitted to decline to provide coverage for such claim if, in his opinion, the claim is not within the scope of coverage accorded by the Agency. The Chair may also agree to accept the claim and provide a defense but may reserve the right of the Agency to withdraw from the defense or to refuse to provide indemnification against the claim in the event that it is later determined that the claim is not properly within the scope of protection accorded by the Agency. Any decision by the Chair on coverage may be appealed, in writing, to the Executive Committee within thirty (30) days after the Chair has issued a written decision on coverage. By entering into this Contract and By -Laws, each Member of the Agency agrees to be bound by a decision of the Executive Committee that a particular matter presented to the Agency for defense and indemnification is or is not within the scope of coverage provided by the Agency. The decision of the Executive Committee shall be final in the absence of fraud or a gross abuse of its discretion. ARTICLE X. INSURANCE. 25 2032316_1 The Agency may purchase insurance or reinsurance in such amounts as shall be approved by the Board of Directors. In the event that a series of losses should deplete the amounts which could be raised from Annual and all callable Supplementary Payments, the excess insurance, the aggregate insurance and reinsurance for any one year and the funds of the Floating Super Fund have been entirely depleted, then the payment of such uncovered valid loss shall be the obligation of the individual Member or Members against which the claim was made and perfected by judgment or settlement. Unless otherwise provided for, the Agency shall make payments from the Joint Risk Management Fund and Floating Super Fund, insurance proceeds in the order in which the judgments against the Agency have been entered or settlements of claims have been reached. ARTICLE XI. OBLIGATIONS OF MEMBERS. The obligations of Members of the Agency shall be as follows: A. To budget for, where necessary to levy for and to promptly pay all Annual and Supplementary or other payments to the Agency at such times and in such amounts as shall be established by the Board of Directors within the scope of this agreement. Any delinquent payments shall have added to them an amount equal to the highest interest rate allowed by statute to be paid by an Illinois unit of local government. B. To appoint an authorized representative to serve on the Board of Directors and to appoint an alternate representative. 26 2032316 1 C. To allow the Agency reasonable access to all facilities of the Member and all records including but not limited to financial records which relate to the purpose or powers of the Agency. D. To allow attorneys employed by the Agency to represent the Member in investigation, settlement discussions and all level of litigation including subrogation arising out of any claim made against the Member within the scope of loss protection furnished by the Agency. E. To furnish full cooperation with the Agency's attorneys, claims adjusters, and any agent, employee, officer or independent contractor of the Agency relating to the purpose and powers of the Agency. F. To follow in its operations all loss reduction and prevention procedures established by the Agency within its purpose and powers. G. To report to the Agency within the time limit specified the following items: 1. To report, within ten (10) days of receipt, a statutory notice of claim, a summons and complaint or other pleading before a court or agency for which coverage is sought. 2. To report, within thirty (30) days of receipt, a written demand for monetary relief for which coverage is sought. 3 To report to the Agency at the earliest practicable moment any information of an occurrence received by the Member and from which the Member could reasonably conclude that coverage will be sought. In the event that the items set forth above are not submitted to the Agency within the time periods set forth above, the Chair may, in whole or in part, decline to provide a defense to the Member or to extend the funds of the Agency for the 27 2032316_1 payment of losses or damages incurred. In reaching its decision, the Chair shall consider whether and to what extent the Agency was prejudiced in its ability to investigate and defend the claim due to the failure of the Member to promptly furnish notice of the claim. Any Member may, within thirty (30) days after receiving such a decision of the Chair, request, in writing, that the Executive Committee take official action to affirm or reverse that decision. In the absence of fraud or a gross abuse of discretion, the decision of the Executive Committee shall be final. ARTICLE XII. LIABILITY OF BOARD OF DIRECTORS OR OFFICERS. The Members of the Board of Directors or officers of the Agency should use ordinary care and reasonable diligence in the exercise of their power and in the performance of their duties hereunder; they shall not be liable for any mistake of judgment or other action made, taken or omitted by them in good faith; nor for any action taken or omitted by any agent, employee or independent contractor selected with reasonable care; nor for loss incurred through investment of Agency funds, or failure to invest. No Director shall be liable for any action taken or omitted by any other Director. No Director shall be required to give a bond or other security to guarantee the faithful performance of their duties hereunder. The Agency may purchase Conventional Insurance providing liability coverage for such Directors or officers. Where no such insurance has been purchased to provide liability coverage for such Directors or officers, or the amount of the Conventional Insurance purchased shall be inadequate to cover all claims, the Joint Risk Management Fund shall be utilized to defend and pay claims on behalf of such Directors or officers. 28 2032316 1 ARTICLE XIIL NO THIRD -PARTY BENEFICIARIES. The scope of coverage of the Agency shall extend only to the Members and this intergovernmental agreement is not intended to, nor does it grant any rights, including, but not limited to, the right to an interpretation of its provisions or benefits to any third parties. Any language in Conventional, Excess, Aggregate or Reinsurance policies expanding the scope of coverage to any third parties extends to the Members only, and not to such third parties. ARTICLE XIV. OPTIONAL DEFENSE BY MEMBER. Whenever the Agency proposes to settle any pending claim or suit where the amount of that proposed settlement shall exceed an amount established from time to time by the Executive Committee, the Member shall be given advance notice of that settlement. Such notice may be given by the establishment of a new reserve amount. The officers and employees of the Agency shall, however, endeavor to give specific oral or written notice to a Member of the exact amount of any proposed settlement in excess of the reserved amount at least fourteen (14) days prior to the date at which the Agency proposes to bind itself to pay such settlement amount. It is recognized by the Members that under some circumstances the Agency may not be able to give fourteen (14) days' prior oral or written notice of the proposed settlement. The officers, employees or independent contractors of the Agency shall attempt to give the Members as much notice of the settlement as is possible under the circumstances of each case. In the event that a Member should disagree with the amount at which the Agency proposes to settle a case or claim, the authorized representative of the Member on the Board of Directors of the Agency, the alternative representative, or the Manager or other Chief Executive Officer of the Member may notify the Chair of the Agency in writing that the Member exercises 29 2032316_1 its right to prevent the Agency from reaching a settlement at the agreed upon amount. In cases where such a written objection is received, the Agency will not settle the case without the consent of the Member. In the event that the Agency does not settle a case based upon the objection of a Member, the Agency shall continue to provide a defense to the defendants unless the Member should desire to itself undertake the defense.. In the event that the case or claim is eventually resolved through a settlement or judgment in an amount less than the amount at which the case could have been previously settled by the Agency then the Member which has undertaken the costs of its own defense shall be entitled to its additional actual costs, including attorneys' fees, up to the level at which its costs and the prior allocated costs of the Agency, including attorneys' fees, equal the amount at which the case could have been settled by the Agency. To the extent that the case or claim is resolved through settlement or judgment at an amount greater than that at which the case or claim could have been previously settled by the Agency, the Member shall be obligated to pay to the Agency, within thirty (30) days upon receipt of written notice, the amount that the sum of the settlement or judgment, plus all other allocated costs of the Agency, exceed the sum of money at which the case could have been earlier settled by the Agency. Such payments shall be unlimited in amount and the Agency shall not be required to advance the payment due from the Member. If at any time the amount of the allocated costs of the Agency devoted to the case shall equal or exceed the amount at which the case could have been settled, the Agency may require periodic payments from the Member if the Member wishes to have the Agency continue to provide the defense. Allocated costs shall mean those costs which are allocated to individual cases under the bookkeeping and accounting system utilized by the Agency. The Agency may establish the 30 2032316_1 amount at which it could have settled the case through a written settlement offer by the plaintiff, or through other competent evidence of the availability of the settlement at a particular sum. To the extent that payment shall be made from an aggregate, excess or other insurance carrier, the provision of this Article shall prevail when not contrary to those insurance contracts. ARTICLE XV. CONTRACTUAL OBLIGATION. This document shall constitute a contract among those units of local government which become Members of the Agency. The obligations and responsibilities of the Members set forth herein, including the obligation to take no action inconsistent with these By -Laws as originally written or validly amended shall remain a continuing obligation and responsibility of the Member. The terms of this Contract may be enforced in a court of law by the Agency or any Member. Should the Agency be required to enforce the terms of this Agreement against a Member in a court of law and the Agency be the prevailing party, the Member (or former Member) against which the claim is brought shall pay the Agency's costs and attorney's fees within sixty (60) days after the litigation is terminated. The consideration for the duties herewith imposed upon the Members to take certain actions and to refrain from certain other actions shall be based upon the mutual promise and agreements of the Members set forth herein. This Contract and By -Laws may be executed in duplicate originals and its passage shall be evidenced by a certified copy of an ordinance or resolution passed by a majority of the Members. Provided, however, that except to the extent of the limited financial contributions to the Agency agreed to herein or such additional obligations as may come about through amendments to these By -Laws no Member agrees or contract herein to be held responsible for any claims in tort or contracts made against any other Member. The 31 2032316_1 contracting parties intend in the creation of the Agency to establish an organization for joint risk management only within the scope herein set out and have not herein created as between Member and Member any relationship of surety, indemnification or responsibility for the debts of or claims against any Member. ARTICLE XVI. EXPULSION OF MEMBERS. By the vote of two-thirds (2/3) of the entire membership of the Board of Directors, any Member may be expelled. Such expulsion may be carried out for one or more of the following reasons: A. Failure to make any payments due to the Agency. B. Failure to undertake or continue loss reduction and prevention procedures adopted by the Agency. C. Failure to allow the Agency reasonable access to all facilities of the Member and to all records which relate to the purpose or powers of the Agency. D. Failure to furnish full cooperation with the Agency's attorneys, claims adjusters, and any agent, employee, officer or independent contractor of the Agency relating to the purpose and powers of the Agency. E. Failure to carry out any obligation of a Member which impairs the ability of the Agency to carry out its purpose or powers. No Member may be expelled except after notice from the Chair of the alleged failure along with reasonable opportunity of not less than thirty (30) days to cure the alleged failure. The Member may request a hearing before the Board before any decision is made as to whether the expulsion should take place. The Board shall set the date for a hearing which shall not be 32 2032316 1 less than fifteen (15) days after the expiration of the time to cure has passed. A decision by the Board to expel a Member after notice and hearing and a failure to cure the alleged defect shall be final unless the Board shall be found by a court to have committed a gross abuse of discretion. The Board of Directors may establish the date at which the expulsion of the Member shall be effective at any time not less than thirty (30) days after the vote expelling the Member has been made by the Board of Directors except that the expulsion of a Member for reason A may be made effective immediately. If the motion to expel the Member made by the Board of Directors or a subsequent motion does not state the time at which the expulsion shall take place, such expulsion shall take place thirty (30) days after the date of the vote by the Board of Directors expelling the Member. After expulsion, the former Member shall continue to be fully obligated for its portion of any claim against the assets of the Risk Management Agency which was created during the term of its Membership along with any other unfulfilled obligations as if it was still a Member of the Agency. The Agency shall continue to provide coverage for all claims which would have been covered prior to the expulsion except that it shall be excused from such coverage if the actions of the Member prevent the Agency from providing an adequate defense on its behalf. The expelled Member shall, after expulsion, no longer be entitled to participate or vote on the Board of Directors and shall not be entitled to any refund, rebate or other return of surplus funds which may be authorized by the Agency for any year for which the expelled entity was a Member of the Agency nor shall the expelled Member be entitled to the return of any funds declared by the Agency to be surplus from the Floating Super Fund. ARTICLE XVII. TERMINATION OF THE AGENCY. 33 2032316_1 If, at the conclusion of any fixed term of the Agency, the Board of Directors does not vote to continue the existence of the Agency, or, if at any time the number of the Members of the Agency which will continue as Members into the next fiscal year shall be less than five (5), or at any time upon a two-thirds (2/3) vote of the entire Board of Directors at a regular or special meeting thereof, then the Agency shall cease its existence at the close of the then current fiscal year. Under those circumstances, the Board of Directors and the Executive Committee shall continue to meet on such a schedule as shall be necessary to carry out the winding up of the affairs of the Agency. It is contemplated that such meetings may continue for some substantial period of time in order to accomplish this task. All Members upon a general termination of the Agency shall remain fully obligated for their portion of any claim against the assets of the Joint Risk Management Fund or Floating Super Fund which was created during the term of their membership along with any other unfulfilled obligations, including, but not limited to calls for Supplementary Payments for years of their membership which may be required and called for in subsequent years. 34 2032316 1 To: Kent Street, Village Manager From: Eric Burk, Director of Finance Re: MICA Insurance Term Extension and By -Law Approval Date: June 6, 2025 The Village of Deerfield obtains property, liability and workers compensation insurance coverage through its membership in the Municipal Insurance Cooperative Agency (MICA). MICA is an intergovernmental insurance pool with over 20-member communities/entities. It was formed in the mid-1980s after civil rights legislation sent municipal liability insurance rates soaring and coverage was withdrawn by many carriers. Pooling's main advantage is economies of scale to obtain competitive coverage and rates, as well as combining entities to allow the larger group to self -insure some portion of the combined risk. MICA is able to eliminate agent commission and insurer overhead by retaining a layer of self-insurance, bulk -buy excess insurance and services at lower rates than communities could on their own, smoothing large claim costs over a number of years and accumulate surplus to allow calculated risk (i.e. increase self -insured layers). MICA continues to provide excellent coverage at very competitive rates. Deerfield joined MICA in 1985 and I have served on the Executive Committee for several years, which has benefited Deerfield directly. The term of MICA is nearing its end. In order to continue the agency, the term must be extended. In conjunction with this, the By -Laws have been reviewed and updated. The amendments to the By -Laws are largely clean up amendments. The most significant changes are that the By -Laws now incorporate the State Law requirement that a member can leave the pool upon 120 days' notice. Further, the By -Laws include an extended term for the MICA Pool which is a new 12-year term from May 1, 2026 through April 30, 2038. The current term expires April 30, 2026. It is important to note the term extension does not commit an individual member to that term, it simply extends the life of the Agency as an entity. While the Board of Directors can approve the term extension by two-thirds vote, MICA found it prudent to take the term extension and By -Law amendment back to individual members for approval. A copy of the Resolution Authorizing the Extended Term of the Municipal Insurance Cooperative Agency Insurance Pool and Approving its Amended By -Laws is attached. I recommend seeking Board approval for Deerfield's continued participation in MICA.