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(A) There is hereby established a special trust to be called the City of Yuma Workers' Compensation Trust and all monies of whatever nature and whatsoever source that are paid into said trust, together with all earnings from the investment and reinvestment thereof, are hereby declared to be a Trust Fund to be used solely to provide health and welfare benefits associated with industrial injury claims. There shall be paid into the Trust Fund such funds as the City Council shall from time to time designate from the General Fund of the City, based on rates adopted by the City Council. The Trust Fund shall be administered by the Board for the purpose of providing for payment of the City's workers' compensation obligations as follows:
(1) All monies received by the City for the purpose of funding the City's workers' compensation obligations shall be deposited into the Trust Fund, including all contributions, premiums, credits, rebates, refunds, and third-party lien recoveries.
(2) The Trust Fund shall be used for the purpose of administering, staffing, managing, and funding the City's obligations arising under the provisions of A.R.S. Title 23, Chapters 5 and 6 or any other compensation due to a former or current City of Yuma employee which is in the nature of workers' compensation.
(3) The City shall adopt a Trust Agreement that sets forth the specific terms of the Trust. A stop-loss provision shall be incorporated into the Trust Agreement.
(4) An annual audit of the Trust Fund shall be conducted by an external auditor designated by the City Administrator. A copy of the audit report shall be kept on file in the Office of the City Clerk for a period of not less than five years.
(B) Definitions. For the purposes of this section the following definitions shall apply unless the context clearly indicates or requires a different meaning.
BOARD. The City of Yuma Workers' Compensation Trust Board.
CITY. The City of Yuma.
PLAN. The trust arrangement pursuant to which the City provides self-insurance for obligations arising under A.R.S. Title 23, Chapters 5 and 6 or similar obligations arising under the City Charter, Code, or Administrative Rules.
TRUST. The City of Yuma Workers' Compensation Trust.
TRUST AGREEMENT. A separate document adopted by the City setting forth the specific terms for the administration of the City of Yuma Workers' Compensation Trust, including any amendments or supplements to the Trust Agreement.
TRUST FUND. The City of Yuma Workers' Compensation Trust Fund.
TRUSTEE. A person appointed and serving on the Board.
(C) Workers' Compensation Trust Board. A Workers' Compensation Trust Board is hereby established for the City of Yuma, which shall serve as trustees for the Trust.
(1) Composition. The Board shall consist of five Trustees. No more than one Trustee may be a member of the City Council, and no more than one Trustee may be an employee of the City. One Trustee shall be the Finance Director of the City of Yuma, as appointed by the City Administrator with the approval of the City Council, or the Finance Director's designee, who will serve for so long as he/she is so employed or so designated. Four Trustees will be citizens of the City of Yuma, however, if a member of the City Council is appointed as a Trustee, only three citizens may be appointed as Trustees.
(2) Appointment and terms. The Board shall be appointed in accordance to City Charter Article IX, Section 1(b) and the Trust Agreement. The initial term of the Trustees shall be as follows: one member whose term shall expire December 31, 2021, one member whose term shall expire December 31, 2019, and two members whose terms shall expire December 31, 2017. If a member of the City Council is appointed as a Board member as permitted in subsection (C) of this section, only one Board member will have a term that expires on December 31, 2017. After the initial term set forth above, the Trustees shall be appointed for terms of five years.
(3) Filling of vacancies. In the event of a death, resignation, or removal of a Trustee, the majority of the City Council shall appoint a new member to serve during the remainder of the unexpired term.
(4) Compensation. The Trustees shall serve without compensation.
(5) Bonding. All Trustees shall be bonded in an amount to be approved by the City Administrator. This requirement may be satisfied by a blanket performance bond or other coverage provided by City.
(6) Duties and powers.
(a) The Board shall:
1. Administer the Trust Fund in accordance with the Trust Agreement and this section;
2. Pursuant to A.R.S. § 11-981(B), hire an external auditor to perform an annual audit. A copy of the report shall be kept on file in the offices of the governing body of the City, for a period of not less than five years;
3. Provide financial oversight of the Trust Fund by evaluating claim expenses and reserve amounts;
4. Review the Trust Fund quarterly to insure sufficient funds exist to pay outstanding and future benefits, to pay losses or claims or any combination of insurance and direct payment, and to pay for a Third-Party Administrator, as defined in the Trust Agreement, for the purpose of providing health and welfare benefits associated with industrial injury claims;
5. Make recommendations to the City Administrator on financial issues relating to the Trust;
6. Comply with all requirements of state and federal laws and regulations relating to self-insurance programs for the management and administration of the Trust or other self-insurance system for direct payment of benefits, losses or claims or any combination of insurance and direct payment; and
7. Meet at least four times a year, or more frequently as the Chairperson of the Board deems necessary or upon the request of the City Administrator.
(b) The Board may:
1. Adopt rules or policies for the operation of the Board, which are not inconsistent with the City Code, the laws of the State of Arizona, the City Charter, or any City ordinances or resolutions;
2. Appoint committees;
3. Request the City Administrator to designate City staff to perform assignments necessary for the administration of the Trust Fund;
4. Consult with or advise any committee, task force, or working group established by the City Council to address workers' compensation issues to make recommendations to the City Administrator regarding such issues; and
5. Delegate the duties and responsibilities of the Board solely in a manner consistent with the Board's fiduciary responsibilities and the Trust Agreement.
(D) Risk management consultant or an insurance administrator. Pursuant to A.R.S. § 11-981(B)(1), the City Administrator shall designate a risk management consultant or an insurance administrator licensed pursuant to A.R.S. Title 20, Chapter 2, Article 3 or 9. The City Council shall verify that any risk management consultant or insurance administrator designated by the City Administrator is licensed as required by the laws of the State of Arizona.
(E) Termination. The City Council may determine that the City will no longer provide the Plan or any other self-insured program for the management and administration of a system for direct payment of benefits, losses or claims or any combination of insurance and direct payment, and including risk management consultation, at which time the Trust Fund will be dissolved after the payment of its outstanding liabilities. Any funds remaining will revert to the City's General Fund
(Ord. O2016-012, passed 5-28-16)