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1995.09.08_FAB_Minutes_RegularTOWN OF HIGHLAND BEACH FINANCIAL ADVISORY BOARD REGULAR MEETING MINUTES Friday, September 8, 1995 9.30 A.M. Chairman Thomas J. Reid called the Regular Meeting to order in Commission Chambers at 9:30 A.M. Deputy Town Clerk Jane Dillon called the roll. Present were Chairman Thomas J. Reid, Vice Chairman Victor P. Hadeed and Members S. Myron Browner, John R. Demarco and Werner Wm. Rothenberg. Also present were Town Manager Mary Ann Mariano, Finance Director Michael Seaman, Commissioner John F. Rand and Felix R. Goldenson. Members of the general audience included Byron R. McKinley (Talent Bank Applicant), Thomas Salzgeber and Annette Jackson, represent- atives from Burke, Bogart & Brownell and Ernie Yarlborough, rep- resentative of Titan Insurance Group (Fla State Agent Rep for BB&B.) APPROVAL OF MINUTES Upon MOTION by MR. ROTHENBERG/MR. HADEED, the Amended Minutes of the July 17, 1995 Regular Meeting were unanimously approved. Mr. Rothenberg noted an error in the July 17 minutes which will be amended and will be signed at the next Financial Advisory Board Regular Meeting on September 12. OLD BUSINESS None. CORRESPONDANCE None. NEW BUSINESS Liability Insurance Proposal Thomas Salzgeber and Annette Jackson were present as represent- atives of Burke, Bogart & Brownell. Ms. Jackson gave a presentation on liability insurance (package attached hereto and made a part of these minutes) which the Town is considering purchasing, making a change from Florida League of Cities. She discussed the areas of liability being Commercial General Liability, Errors or Omissions, Law Enforcement, Automobile and Excess Liability (umbrella). Mr. Goldenson asked if the umbrella policy could be brought up to 10 million rather than the proposed 2 million coverage. Ms. Mariano will check with Town Attorney Tom Sliney on statute as far as whether there is any cap on the level of insurance coverage a municipality can obtain. . Financial Advisory Board Regular Meeting Minutes September 8, 1995 Page 2 of 2 Ms. Mariano informed the Board that the Town's other insurance has already been placed with Burke, Bogart & Brownell but the liability portion was kept with Florida League of Cities until the Hidden Harbor lawsuit was settled. The Board commented that they did not have the current policy at hand to make a comparison with the new proposed policy. Mr. Seaman will get copies to the members for their review. It was decided to have a FAB meeting on September 12 at 9:30 A.M. to further discuss this proposal, prior to recommendation going to the Town Commission on the September 19 Special Meeting or the September 26 Workshop Meeting. PROPOSED INVESTMENT POLICY There was lengthy discussion on the Proposed Investment Policy (attached hereto and made a part of these minutes) which, by State Law, must be put in place by October 1. Several of the Board Members found contradictions with the document and discussed these points. Commissioner Rand made comments on many items of discrepancy, of which the Board agreed. Michael Seaman will follow through on these items which will be discussed at the next Regular Meeting on September 12, and Town Attorney Tom Sliney will present his assessment of this policy. Recommendation will go to the Town Commission on the September 19 Special Meeting or the September 26 Workshop Meeting. The next Regular Meeting has been scheduled for Tuesday, September 12 at 9:30 A.M. There being no further business to come before the Board at this time, the meeting was adjourned upon MOTION by MR. BROWNER/MR. REID AT 10:55 A.M. APPROV r Thomas J. Reid, Chairman `1 Myron Browner Werner Wm.',wm.',Zbtheplipwerg 0 ATTEST: Victor P. Hadeed, Vice Chairman tiw -) � A"f— hn R. Demarco DATE: 10 TOWN OF HIGHLAND BEACH INVESTMENT POLICY I. SCOPE This Investment Policy applies to all financial assets held or controlled by the Town of Highland Beach other than pension fund assets when held by a third party custodian and/or money manager. II. INVESTMENT OBJECTIVE The following investment objectives will be applied in the management of the Town of Highland Beach's funds: The primary objective of the Town Commission's investment activities is the protection of investment principal. In investing public funds, the Town of Highland Beach will strive to maximize their return, but will limit their investments only to those recognized under the Florida Statutes.Chapter 166.261 and those institutions that are recognized under Florida Statutes Chapter 280 and insured byF.D.I.C. The Town of Highland Beach's investment portfolio will remain sufficiently liquid to enable the Town to meet operating requirements which might be reasonably anticipated. III. INVESTMENT SAFETY The overriding criteria on all investments done on behalf of the Town of Highland Beach shall be the safety of those funds that are invested. Therefore, no funds will be invested in or through any institution that is not on the State of Florida approved list as "Certified Public Depositories", as required by the Florida Security for Public Deposits Act., Chapter 280, Florida Statutes. All investments made in the name of the Town of Highland Beach must be in conformity with those guidelines as contained in the Florida Statutes, more specifically, Chapter 166.261. The only other time that investments will be made in instruments other than those issued by those institutions on the State of Florida approved list as "Certified Public Depositories" will be instruments that are direct obligations of the United States Government, as required by the Florida Security for Public Deposits Act, Chapter 280, Florida Statutes. TOWN OF HIGHLAND BEACH .2 , All securities purchased by the Town of Highland Beach under this section shall be properly designated as an asset of the Town of Highland Beach and held in safekeeping by a third party custodial institution on the State of Florida list as "Certified Public Depositories", as required by the Florida Security for Public Deposits Act, Chapter 280, Florida Statutes and no withdrawal of such securities, in whole or in part, shall be made from safekeeping except by the Town Manager, or his designee, as authorized herein. Third party custodial agreements will include letters of authority from the Town of Highland Beach, details as to responsibilities of each party, notification of security purchases, sales, delivery, repurchase agreements and wire transfers, safekeeping and transaction costs, procedures in case of wire failure or other unforeseen mishaps, including liability of each party. IV. AUTHORIZED INSTRUMENTS The Town Manager, or his designee (which designee must be approved by the Town Commission), may purchase investment securities, at prevailing market rates, in appropriate amounts thereof with: (a) The local government surplus funds trust fund. (State Investment Pool) (Florida Statutes Chapter 166.261) �• (b) Negotiable direct obligations of the United States Government. ` (Treasury bills, notes, bonds) (c) Non-negotiable interest bearing time certificates of deposits or savings accounts in banks organized under the laws of this state, more specifically, approved as "Certified Public Depositories" by the State of Florida, as required by the Florida Security for Public Deposits Act, Chapter 280, Florida Statutes. V. INVESTMENT MATURITY AND LIQUIDITY To the extent possible, the Town of Highland Beach will attempt to match its investments with anticipated cash flow requirements. Unless matched to specific cash flow requirements, the Town of Highland Beach will not directly invest in securities maturing more than one year from the date of purchase. VI. CRITERIA FOR SELECTION OF FINANCIAL INTERMEDIARIES AND ISSUERS All investments authorized by this resolution shall be purchased only from financial institutions approved as "Certified Public Depositories" by the State of Florida, as required by the Florida Security for Public Deposits Act, Chapter 280, Florida Statutes. Lists of authorized institutions, dealers, and issuers of the various security types will be maintained by the Town Manager or his designee. .3' TOWN OF HIGHLAND BEACH Criteria for addition to or deletion from the lists will be amended only by a majority vote of the Town Commission meeting as the Town Commission at a regularly scheduled meeting. VII. INTERNAL CONTROLS The Town Manager, or his designee, shall establish and monitor a set of written internal controls designed to protect the Town of Highland Beach's financial assets and ensure proper accounting and reporting of the transactions related thereto. These internal controls shall be recommended by the Town's external auditors and Town Financial Advisory Board. These controls will include a monthly monitoring of the Florida Administrative Weekly to ensure that all financial institutions have retained their State recognition. VIII. INSTRUMENT SELECTION The following are the authorities for investments on security issues, issuers, and maturities, as established under the authority as provided in Section 3.01 of the Town Charter. The Town Manager, or his designee, shall have the option to turther restrict investment I in selected instruments to conform to short—range strategies. 'a •A. LOCAL GOVERNMENT SURPLUS FUNDS TRUST FUND (TRUST FUND) 1. Authority to Invest The Town Manager, or his designee, may invest in the "Trust Fund". (State Investment Pool) B. GOVERNMENT SECURITIES 1. Authority to Purchase The Town Manager, or his designee, may invest in negotiable direct obligations of the United States Government. Such securities will be limited to the following: Direct Obligations: State and Local Government Securities (SLGS) Treasury Bills Treasury Notes Treasury Bonds .4 TOWN OF HIGHLAND BEACH • C. NON-NEGOTIABLE INTEREST BEARING TIME CERTIFICATES OF DEPOSITS i� 1. Authority to Purchase The Town Manager, or his designee, may invest in non- negotiable interest bearing time certificates of deposits or savings accounts in banking institutions approved as "Certified Public Depositories" by the State of Florida, as required by the Florida Security of Deposits Act, Chapter 280, Florida Statutes. IX. POLICY AMENDMENT This policy may be amended upon full consideration and presentation by the Town Manager, or his designee, after a review by the Financial Advisory Board and approval by the Town Commission. RECOMMENDED BY: :. .. ruaaavrn FINANCIAL ADVISORY BOARD DATE1;7171-% DATE7, Z 7, O 9 2 APPROVED BY THE TOWN COMMISSION OF THE TOWN OF HIGHLAND BEACH, FLORIDA ON L-1001 DAY OF � 19 �_. ATTEST/WITNESS: DATE: ATTACHMENTS: Florida Statutes Chapters 166.261 and 280. ELK • FL0RIDA LEAGUE OF CITIES, INC. SPONSORED INSURANCE PROGRAMS 08/10/95 AUG-1 o :- - FMIT# 250 ATTN: Ms. Mary Ann Mariano MAKE CHECKS PAYABLE TO: Town of Highland Beach FLORIDA LEAGUE OF CITIES, INC. 3614 South Ocean Boulevard Highland Beach, FL 33487 P•O• BOX 1757 TALLAH SSEE, FL 32302-1757 ***** iLEASE RETURN ONE Wpy vr' rhIS lNVOIC-C 1 XWH PAYME r FIRST INSTALLMENT BILLING - 1995/96 FY FMSIF ( 3 ) GROSS PREMIUM $ NO COVERAGE PARTICIPATION CREDIT NONE W ADJUSTED PREMIUM 1ST INSTALLMENT(.1) SUBTOTAL 0.00 0.00 UNPAID PRIOR YEARS' PENALTIES (2) TOTAL DUE OCTOBER 16, 1995 FMIT $ 59,502.00 7,435.00 52,067.00 ---__-- 26,034.00 26,034.00 TOTAL $ 59,502.00 7,435.00 52,067.00. $ 26,034.00 26,034.00 $ 26,034.00 (1) - FIRST INSTALLMENT AMOUNT IS DUE ON OR BEFORE 10/16/95 BALANCE TO .BE PAID PER ATTACHED PAYMENT SCHEDULE (2) - ALL UNPAID PRIOR YEARS S MUST BE PAID WITH THE RENEWAL PENALTIES &/OR OBLIGATIONPREMIUM YNSTALIMENT IN ORDER TO RENEW COVERAGE OCTOBER 1, 1995. (3) THE FMSIF PREMIUM REFLECTS THE 10/1/94 EXPERIENCE MOD- IFICATION AS PROMULGATED BY THE BUREAU OF SELF INSUR- ANCE. YOUR FINAL PREMIUM WILL BE CALCULATED USING • THE 10/01/95 EXPERIENCE MODIFICATION WHICH HAS NOT BEEN PROMULGATED AS OF THIS DATE. **PAYMENTS NOT RECEIVED ON OR BEFORE 10/16/95 WILL BE ASSESSED A PENALTY WITHOUT EXCEPTION - SEE ATTACHED PENALTY POLICY*** • DECLARATIONS (continued) Town of Highland Beach V. FMIT COVERAGE SECTION ® A Indemnity Agreement ® B WIT Coverage Agreements ® General/Professional Liability $100,000 - Each Person $200,000 - Each Occurrence ® a. Errors & Omissions Liability ® b. Employee Benefits Program Administration Liability Mc. Medical Attendants'/Medical Directors' Malpractice Liability Md. Broad Form Property Damage Me. Premises Medical Payments $ Each Person/$ Each Accident Of. Law Enforcement Exclusion ® g. Extra Contractual Legal Expense ® Automobile ® h. Automobile Liability $100,000 - Each Person $200,000 - Each Occurrence ® I. Uninsured Motorists Protection $ 100,000 Combined Single Limit of Liability ® j. Personal Injury Protection (Statutory) k. Automobile Medical Payments $ Per Person I. Automobile Physical Damage Coverage • SIP DEC (10/94) 2 • DECLARATIONS (continued) Town of Highland Beach Additional Designated Members 0 • Clerk of the Court Tax Collector ❑ Property Appraiser Supervisor of Elections ❑ Sheriff Property and Allied Coverages Per Scheduled Coverage Forms List Real and Personal Property Coinsurance Contract: The rate charged for this coverage is based upon the use of a coinsurance clause attached to this agreement with the consent of the member. Inland Marine Electronic Data Processing Crime/Bonds Time Element VI. FMSIF COVERAGE SECTION Workers Compensation 04 SIP DEC (10/94) Indemnity Agreement Employers Liability Statutory $1,000,000 Each Accident $1,000,000 Each Disease $1,000,000 Aggregate By Disease 3 U 18 DECLARATIONS (continued) Town of Highland,Beach VII. SPECIAL PLANS Deductibles ❑ E Workers Compensation & Employers Liability $ Deductible Each Accident ❑ F Liability Deductible Endorsement $ Deductible Per Occurrence [:]G Deductible Stoploss Endorsement $ Deductible Per Occurrence Specific Excess Coverage ❑ H Specific Excess Workers Compensation Insurance Endorsement ® I Specific Excess Endorsement - Liability ❑J Specific Excess Endorsement/Self Insured Retention Members - Liability F1K Specific Excess Endorsement/Self Insured Retention Members - Liability/Defense Costs Limit of Liability for ® I; ❑ J; ❑ K General/Professional Liability 2,000,000 Automobile Liability Aggregate Excess Coverage [:]L Aggregate Excess - Workers Compensation Insurance Endorsement r-1M Aggregate Excess Liability Insurance Endorsement ❑ N Aggregate Excess Endorsement - All Lines Large Member Ratinq Plans MO FMSIF Large Member Rating Plan MP FMIT Large Member Rating Plan Vill. OTHER SIP DEC (10/94) 4 FLORIDA MUNICIPAL INSURANCE TRUST COVERAGE SUMMARY FOR FUND YEAR 1994-1995 TOWN OF HIGHLAND BEACH FMIT 250 COVERAGE TYPE PREMIUM BASIS PREMIUM ------------------------------------------ ------------- General/Professional Liability General Liability Population 3,245 $62,573 Errors & Omissions Included Employee Benefits Program 1 Included Law Enforcement Included Full Time with Arrest Powers 11 Included Automobile Liability Number of Autos Personal Injury Protection Uninsured Motorist Total before Advance Discount Less Advance Discount Grand Total E $6,925 Included Included $69,498 $-9,297 $60,201 • Ul FLORIDA MUNICIPAL INSURANCE TRUST A. INDEMNITY AGREEMENT THIS AGREEMENT, made and entered into this 1st day of October, 1992, by and between the Florida Municipal Insurance Trust and all parties who are now or may hereafter become members of the Florida Municipal Insurance Trust, acting by and through a Board of Trustees of their own selection. RESPONSIBILITIES OF MEMBER Each member of the Fund agrees to abide by the following rules and regulations: a. The member agrees to maintain a reasonable loss prevention program in order to provide the maximum in safety and lawful practices as such may relate to the potential liability assumed by the Fund under this Agreement or any other agreement, certificate, document, or other instrument executed by the Fund and the member pursuant to this Agreement; b. In the event of an incident likely to give rise to a claim within the scope of this Agreement, or any other agreement, certificate, document or other instrument executed by the Fund and the member pursuant to this Agreement, the member agrees to provide immediate notification of such incident to the Fund; C. The member agrees to promptly make all contributions for coverages arising under this Agreement, or any other agreement, certificate, document, or other instrument executed by the Fund and the member pursuant to this Agreement at the time and in the manner directed by the Board of Trustees. Said contributions may be reduced by any discount, participation credit, or other contribution reduction program established by the Board of Trustees; d. The member agrees in the event of payment of any loss by the Fund on behalf of the member, the Fund shall be subrogated to the extent of such payment to all the rights of the member against any party or other entity legally responsible for damages resulting from said loss, and in such event, the member hereby agrees, on behalf of itself, its officers, employees, and agents to execute and deliver such instruments and papers as is required, and do whatever else is reasonably necessary, to secure such right to the Fund, and to cooperate with and otherwise assist the Fund as may be necessary to effect any recovery sought by the Fund pursuant to such subrogated rights; e. The member agrees the Board of Trustees, its Administrator, and any of their other agents, servants, employees or attorneys, shall be permitted at all reasonable times and upon reasonable notice to inspect the property, work places, plants, works, machinery and appliances covered pursuant to this Agreement or any other agreement, certificate, document, or other instrument executed by the member and the Fund pursuant to this Agreement, and shall be permitted at all reasonable times while the member participates in the Fund, and up to''and including two (2) years following the termination of its membership in the Fund, to examine the members' books, vouchers, contracts, documents and records of any and every kind which show or tend to show or verify any loss that may be paid or may have been paid by the Fund on behalf of the member pursuant to this Agreement, or any other agreement, certificate, document, or other instrument executed by the member and the Fund pursuant to this Agreement, or which show or verify the accuracy of any contribution which is paid or payable by the member pursuant to the terms of this Agreement, or any other agreement, certification, document or any other instrument executed by the Fund and the member pursuant to this Agreement; (10/92) A-1 • f. The member and the Fund agree that the Fund is to defend in the name of and on behalf of the member any claims, suits or other legal proceedings which may at any time be instituted against the member on account of bodily injury liability, property damage liability, errors and omissions liability, civil rights liability, personal injury liability or any other such liability, monetary or otherwise, to the extent such defense and liability has been assumed by the Fund pursuant to this Agreement or any other agreement, certificate, documents, or other instrument executed by the Fund and the member pursuant to this Agreement, subject to any and all of the definitions, terms, conditions and exclusions contained in said agreements, certificates, documents or other instruments, although such claims, suits, allegations or demands are wholly groundless, false, fraudulent, and to pay all costs taxed against the member in any such legal proceedings defended by the Fund or the members, all interest accruing after entry of judgement in such proceedings, and all expenses incurred in the investigation, negotiation or defense of such claims, suits, allegations or demands. Such defense shall be subject to the control of the Fund and its Administrator, which may make such investigation and settlement of any such claim, suit, or other legal proceeding, monetary or otherwise, as they deem expedient; 1• g. The member agrees the liability of the Fund is specifically limited to the discharge of the liability of its members assumed pursuant to this Agreement or any other agreement, certificate, document, or any other instrument executed by the member and the Fund pursuant to this Agreement; h. The member agrees the coverage of the Fund does not apply to punitive or exemplary damages; Unless the Fund and the member otherwise expressly agree in writing, the member agrees coverage by the Fund for a member under the terms of this Agreement or any other agreement, certificate, document, or other instrument executed by the member and the Fund pursuant to this Agreement, shall expire automatically at midnight on the last day of September of each calendar year. j. Except as otherwise provided herein, the member and the Fund agree such member's coverage may be canceled by the Fund or the member at any time upon no less than forty- five (45) days prior written notice by the Board of Trustees or the Administrator to the member, or by the member to the Fund, stating the date such cancellation shall be effective; k. The member agrees excess monies remaining after the payment of claims and claim expenses, and after provision has been made for the payment of open claims and outstanding reserves, may be distributed by the Board of Trustees to the members participating in the Fund in such manner as the Trustees shall deem to be equitable; The member agrees there will be no disbursements out of the reserve fund established by the Fund by way of dividends or distributions of accumulated reserves to members until provision has been made for all obligations against the Fund and except at the discretion of the Board of Trustees: M. The member agrees to permit qualified service providers, including attorneys selected by the Fund, to defend, investigate, settle, and otherwise process and dispose of all claims, suits, allegations or demands that may result in liability assumed by the Fund on behalf of the member pursuant to this Agreement, or any other agreement, certificate, document, or other instrument executed by the Fund or the member pursuant to this Agreement; (10/92) A-2 n. The member agrees to make prompt payment of all contributions and penalties as required by the Board of Trustees, said contributions or penalties to be determined by the Board of Trustees. Any disputes concerning contributions or penalties shall be resolved after the payment of said contributions or penalties; o. The member agrees to pay reasonable penalties as determined by the Board of Trustees for late payment of contributions required under this Agreement, or any other agreement, certificate, document, or other instrument executed by the member and the Fund pursuant to this Agreement; P. The member, through the Board of Trustees, does hereby appoint the Administrator of the Fund as its agent and attorney -in -fact, to act in its behalf and to execute all necessary contracts, reports, waivers, agreements, excess insurance contracts, service contracts, and other documents reasonably necessary to accomplish the purposes and to fulfill the responsibilities of the Fund; to make or arrange for the payment of claims, claim expenses, and all other matters required or necessary insofar as they affect the member's liability under federal or Florida law and insofar as such matters are covered pursuant to the terms of this Agreement or any other agreement, certificate, document, or other instrument executed by the member and the Fund pursuant to this Agreement, and the rules and regulations now or hereafter promulgated by the Board of Trustees; q. The member agrees coverage by the Fund under the terms of this Agreement, or any other agreement, certificate, document, or other Instrument executed by the member and the Fund pursuant to this Agreement, shall expire and be canceled, upon no less than ten (10) days prior written notice from the Fund to the member, for nonpayment of contributions; • and r. The member agrees to abide by all the terms and conditions of this Agreement, the Participation Agreement, the Fund's By-laws, the rules and regulations, and any other agreement, certificate, document, or other instrument executed by the Fund and the member pursuant to the Agreement. • (10/92) A-3 • FLORIDA MUNICIPAL SELF INSURERS FUND INDEMNITY AGREEMENT THIS INDENTURE, made and entered into this 11th day of August, 1989, by and between all the parties who are now or may hereafter become members of the Florida Municipal Self Insurers Fund, acting by and through a board of trustees of their own selection. WITNESSETH WHEREAS, the members of the Florida Municipal Self Insurers Fund, all local government entities, have agreed to pool their liabilities pursuant to the terms of the Florida Workers' Compensation Act and specifically as provided by Section 440.57 and Section 440.575, Florida Statutes; and WHEREAS, the said members have organized and formed a fund pursuant to said sections, which fund shall be known as the Florida Municipal Self Insurers Fund, hereinafter referred to as the "Fund"; and WHEREAS, the board of trustees, the governing body of the Fund, comprised entirely of local elected officials, will direct the affairs of said Fund; and WHEREAS, the Fund will maintain an excess coverage program and reserve evaluation to protect the financial stability of the Fund in an amount and manner determined by a qualified and independent • actuary; and WHEREAS, the Fund will submit to the appropriate governmental agency annually an audited fiscal year-end financial statement by an independent certified public accountant; and WHEREAS, the members of said Fund wish to discharge, by payment, any lawful awards entered against any member of the Fund, pursuant to the Workers' Compensation statutes, which awards shall have been sustained by the courts where an appeal by either parry is taken; and WHEREAS, the members of the Fund agree to pay premiums and assessments, based upon appropriate classifications and rates, into a designated cash reserve fund out of which lawful and proper claims and awards are to be paid, and further, that the members will covenant and agree there will be no disbursements out of this Fund by way of dividends or distribution of accumulated reserves to the respective members, except at the discretion of the Trustees; and WHEREAS, except for purposes of meeting reasonable expense related to the maintenance of the Fund and members' responsibilities pursuant to the Florida Workers' Compensation Law as well as all administrative and other reasonable expenses and fees related to the adjustment, settlement and defense of said responsibilities, no distribution or dividend will be made to other than a member local government entity; and WHEREAS, the members of said Fund, through their designated trustees, have elected to comply with said conditions and become self -insurers and to execute the other covenants required; (10/92) C-1 • NOW, THEREFORE, for and in consideration of the mutual covenants, promises and obligations herein contained, which are given to and accepted by each member hereof to the other, the parties to this instrument covenant, stipulate and agree as follows: 1. The Fund will pay any sum a member becomes legally obligated to pay under the workers' compensation laws of the state of Florida, including employers' liability as discussed within Coverage B attached hereto for accidents which occur during the period of this Agreement; and the Fund further agrees to pay all administration assessments as may be required in accordance with Sections 440.20(9), 440.49 and 440.51, Florida Statutes. 2. The Fund will settle or defend at its own expenses as it considers appropriate any claim covered by this Agreement. The members intend this Agreement as a mutual covenant of assumption and not as a partnership. No member shall be required to assume the liability of any other member nor be required to remit amounts beyond the agreed upon premium. 3. That the trustees of the Fund shall set up, operate, and enforce its own administrative rules, regulations and by-laws as between the individual members of the Fund. 4. The members hereby delegate to the board of trustees the responsibility to contract -for handling the administrative and servicing functions of the Fund. The trustees may pay a reasonable fee for such, which shall be negotiated from time to time by the trustees. These fees shall be in consideration of all services and expenses contracted for with the Fund, which services or expenses may include the collecting, disbursing, and accounting for monies collected, counseling with members as to the safety hazards, claims handling and investigations, and legal services, actuarial services and accounting services and for the purpose of providing for excess insurance coverage. Books and records of all contractors employed by the Fund are to be open to inspection by the trustees or their agents at all reasonable times and as otherwise required by law. 5. The administrator, to be appointed by the trustees, shall deposit to the account of trustees, at any bank or banks designated by the trustees, all premiums as and when collected and said monies shall be disbursed only as provided by (1) the rules, regulations and by -taws of the trustees, and (2) the Agreement between the trustees and the administrator. 6. The trustees shall provide for a minimum of excess coverage or reserves designed to protect said members against excess losses as determined by a qualified and independent actuary. All members of the Fund hereby agree that the trustees may admit as members of this Fund only acceptable employers in the state of Florida who have common governmental interest. The trustees or its designee shall be sole judge of whether or not an applicant shall be admitted to membership; and further, that a member may be suspended or expelled from the Fund after forty-five (45) days notice has been given to it and that no liability shall accrue to the Fund or its members for any accident to an employee of the suspended or expelled member occurring after forty-five (45) days notice has been given to it as above provided or as otherwise provided by law. 8. The rules and regulations for the administering of the Fund and the admission and expulsion or suspension of members shall be promulgated by the trustees; however, each member of the Fund agrees to abide by the following rules and regulations: (10/92) (a) The member agrees to follow the reasonable safety recommendations of the trustees and the administrator in order to give his employees the maximum in safe and sanitary working conditions and to follow the general recommendations of the Fund in this field to promote the general welfare of his employees. C-2 • (b) In the event of an accident or a reported claim, to make immediate provision for remedial care for his employee and to give immediate written notification of said accident along with all relevant information concerning the accident to the claims agent on the prescribed forms. The member shall have continuing duty to provide the Fund all relevant information promptly as the member becomes aware of such information. (c) Agree to take all action which shall facilitate settlement of claims including providing reasonable re-employment for injured worker. (d) The member agrees to responsible counsel selected by the Fund to defend all claims (e) The member shall make prompt payment of all premiums and assessments as required by the trustees, said premiums to be determined by the trustees. The member shall fully cooperate with auditors of the Fund to promptly determine final audited premiums. Any disputes concerning premiums shall be resolved after payment. Any objections concerning the final audited premium shall be filed within 60 days of billing of the final audited premiums. After that time, the audit shall be considered to be final. (f) The members, through the trustees of the Fund, do hereby appoint the administrator of this Fund as its agent and attorney -in -fact, to act in its behalf and to execute all contracts and reports, waivers, agreements, excess insurance contracts, and service contracts; to make or arrange for payment of claims, medical expenses, and all other things required or necessary insofar as they affect its workers' compensation and/or employers' liability under Florida law and as covered by the terms of this Fund agreement and the rules and regulations as now provided or as hereafter promulgated by the trustees. • (g) The member agrees that in the event of the payment of any loss by the Fund under this contract, the Fund shall be subrogated to the extent of such payment to all the rights of the member against any person or other entity legally responsible for damages for said loss, and in such event the member hereby agrees to render all reasonable assistance, other than pecuniary, to effect recovery. (h) The fund is to defend in the name of and on behalf of the members any suits or other proceedings which may at any time be instituted against them on account of injuries or death within the purview of the Florida Workers' Compensation Law or on the basis of employers' liability, including suits or other proceedings alleging such injuries and demanding damages or compensation therefor, although such suits, other proceedings, allegations or demands are wholly groundless, false, or fraudulent, and to pay all costs taxed against members in any legal proceeding defended by the members, all interest accruing after entry of judgment and all expenses incurred for investigation, negotiation or defense. (i) Liability of the Fund to the employees of any employer is specifically limited to such obligations as are imposed by the Florida law against the employer for workers' compensation and/or employers' liability as provided in Coverage B. Ij) The trustees of the Fund, any of their agents, servants, employees or attorneys, shall be permitted at all reasonable times to inspect the work places, plants, works, machinery, and appliances covered by this Agreement, and shall be permitted at all reasonable times and within two (2) years after the final termination of the membership to examine members' books, vouchers, contracts, documents, and records of any and every kind which show or tend to show or verify the premium which is payable under the terms hereof. • (k) The coverage of the Fund does not apply to punitive or exemplary damages on account of such injuries to any employee or employer in violation of law. (10/92) C-3 • (I) The member agrees to pay reasonable penalties as determined by the trustees and coverage by the Fund under the terms of this Agreement shall expire and be cancelled automatically for nonpayment of premium, and a member may be expelled and dropped from the Fund upon forty-five (45) days written notice by the trustees or the administrator of the Fund to the member and to the Division of Workers' Compensation stating when, no less than forty-five (45) days thereafter, cancellation shall be effective. (m) The Fund shall not be liable for any additional compensation imposed by Section 440.54, Florida Statutes. 9. The trustees are authorized to set aside from the premiums collected a reasonable sum for the operating expenses or administrative expenses of the Fund including the fees enumerated in paragraph 4. All remaining funds coming into their hands during any one fiscal year of the Fund shall be set aside and shall be used only for the following purposes: (a) Payment of a fee for the administrator and claims agent for said Fund. (b) Payments for medical, surgical, hospital and nursing expenses, and payments of compensation to employees covered by this contract, including settlements, awards, judgments, legal fees, and costs in all contested cases. (c) Payment of administrative, Special Disability Fund, and other assessments as required by the Florida Department of Commerce. (d) Payment of cost of all bonds, actuarial and auditing expenses required of the Fund or its agents or employees by the Department. . (e) Distribution to members in such manner as the trustees shall deem to be equitable of any excess monies remaining after payment of claims and claims expenses and after provision has been made for open claims and outstanding reserves; provided, however, that no such distributions shall be made earlier than twelve (12) months after the end of such Fund year, except that surplus monies not needed to satisfy the loss fund requirements (i.e. trustees' funds) as established by the aggregate excess contract may be refunded immediately after the end of the Fund year and after approval by the trustees; provided further, that undistributed excess funds from previous Fund years may be distributed at any time if not required for reserves and if approved for distribution by the trustees. 10. The Fund shall operate on a fiscal year from 12:01 a.m. October 1st to midnight on the last day in September of the succeeding year. Application for continuing membership, when approved in writing by the trustees or their designee, shall constitute a continuing contract for each succeeding fiscal period unless cancelled by the trustees or unless the member shall have resigned or withdrawn from said Fund by written notice. 11. The members covenant and agree that there will be no disbursement out of this Fund by way of dividends or distribution of accumulated reserve to members until after provision has been made for obligations under the Workers' Compensation Law against said Fund and except at the discretion of the trustees. 12. Any member who formally applies for membership in this Fund and is accepted by the trustees shall thereupon become a party to this Agreement and be bound by all of the terms and conditions hereof, and said application shall constitute a counterpart of this Agreement. (10/92) C-4