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!J' <br /> RESOLUTION 89-030 <br /> • A RESOLUTION OPPOSING THE IMPOSITION OF AN INSTITUTIONAL <br /> FEE BY THE LEAGUE OF MINNESOTA CITIES UPON THE <br /> LEAGUE OF MINNESOTA CITIES INSURANCE TRUST <br /> WHEREAS, the League of Minnesota Cities Insurance Trust was <br /> created under the authority of the Joint Powers Act, M.S. <br /> 471.59 in 1980 to provide a means through which cities <br /> can cooperate to obtain the insurance coverage they need <br /> at a reasonable cost; and <br /> WHEREAS, the League of Minnesota Cities Insurance Trust (LMCIT) <br /> is governed by a five member board of trustees appointed <br /> by the League of Minnesota Cities (LMC) ; and <br /> WHEREAS, Article VI. of the LMCIT Insurance Trust Agreement <br /> established a fund into which all of the Trust's income <br /> is to be deposited and which is used to pay the expenses <br /> of operating LMCIT's risk protection programs, including <br /> administrative, legal, and other expenses; and <br /> WHEREAS, Article VI . directs that any excess in the fund be <br /> returned to the individual LMCIT members and that each <br /> member's refund will be determined on the basis of (1) <br /> the total amount paid by the member to the Trust; and (2 ) <br /> • to the extent that the trustees decide it is advisable, <br /> the member's individual loss experience; and <br /> WHEREAS, since the beginning of LMCIT'sinsurance program, <br /> brochures and other marketing tools promoting the <br /> insurance program, as well as frequent articles in the <br /> Minnesota Cities' magazine, have consistently stated <br /> that, if premiums exceed what is needed to fund losses <br /> and expenses, the only thing which can be done with the <br /> surplus is to return the money to the cities; and <br /> WHEREAS, many cities bought into the program with confidence that <br /> this promise would be kept; and <br /> WHEREAS, since the creation of LMCIT by LMC, LMC has been, and <br /> continues to be, reimbursed by LMCIT for LMC cost of <br /> administering the insurance program. Such costs include <br /> personnel, overhead, direct costs, and pro-rated expenses <br /> and <br /> WHEREAS, the trustees of LMC and LMCIT did, in 1988, enter into <br /> a management services agreement which, for the first <br /> time, included an institutional charge of 1.5% of the <br /> gross premiums of the LMCIT workers compensation and <br /> property/casualty programs to "constitute reimbursement <br /> • <br />