2016-03-28 - Village Board Special Meeting - Agenda PacketFifty Raupp Blvd
Buffalo Grove, IL 60089-2100
Phone: 847-459-2500
Call to Order
A. Pledge of Allegiance
B. Roll Call
2. Ordinances and Resolutions
A. R-2016-10 Resolution Authorizing the Potential Withdrawal from IRMA- Effective
December 31, 2016 (President Sussman)
3. Public Comment
4. Adjournment
The Village Board will make every effort to accommodate all items on the agenda by 10:30 p.m.
The Board, does, however, reserve the right to defer consideration of matters to another meeting
should the discussion run past 10:30 p.m.
The Village of Buffalo Grove, in compliance with the Americans with Disabilities Act, requests that
persons with disabilities, who require certain accommodations to allow them to observe and/or
participate in this meeting or have questions about the accessibility of the meeting or facilities,
contact the ADA Coordinator at 459-2525 to allow the Village to make reasonable
accommodations for those persons.
2.A
Resolution No. R-2016-10 : Resolution Authorizing the Potential
Withdrawal from IRMA - Effective December 31, 2016
........................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................
Recommendation of Action
Staff recommends approval.
Staff recommends the Village Board adopt the attached Resolution to preserve the Village's rights relating
to its potential withdrawal from IRMA including, but not limited to, the refund of its Member's Reserve
Fund at the appropriate time.
ATTACHMENTS:
• 2016 IRMA Memo 03 25 2016 (DOCX)
• CHICAGO1-#662262-v2-Withdrawal_from_IRMA (DOC)
Trustee Liaison Staff Contact
Sussman Dane Bragg, Office of the Village Manager
Monday, March 28, 2016
Updated: 3/25/2016 2:34 PM Page 1
Packet Pg. 2
2.A.a
11, 1 , AGE, 1'
11% I D11A CU M . 0111001
DATE: March 25, 2016
TO: Dane Bragg, Village Manager
FROM: Scott D. Anderson, Director of Finance
Arthur A. Malinowski, Jr., Director of Human Resources
IN
SUBJECT: Potential Withdrawal from IRMA - Effective December 31, 2016
Issue
Should the Village of Buffalo Grove pass a Resolution, designed to protect its rights relating to
the potential withdrawal from IRMA on December 31, 2016, including, but not limited to, the
refund of its Member's Reserve Fund at the appropriate time?
Backeround and Analysis
Pursuant to Section 4.05 — IRMA Term and Member Participation of the IRMA Contract and
Bylaws, the Village is obligated to "provide written notice of withdrawal nine months or more in
advance of the end of IRMA's fiscal year to be effective at the end of any fiscal year of IRMA
..." Additionally, Section VIII — Former Members of the IRMA Members' Reserve Fund Policy
and Procedure sets forth the refund schedule of a former member's reserve funds. The complete
IRMA Contract and Bylaws document and IRMA Members' Reserve Fund Policy and Procedure
document are attached for your information and reference.
Because the applicable sections of these documents are at times vague, staff requested that
counsel speak directly with IRMA Executive Director Margo Ely regarding the issue of
forfeiture of the Village's reserve funds in the event the Village did not provide its withdrawal
notice nine or more month in advance of the 2017 IRMA plan year, which begins on January 1,
2017. The Village's Reserve Fund is approximately $460,000, at present. Contrary to the plain
reading of the applicable documents, Village counsel was told in no uncertain terms that a
withdrawal notice received by IRMA less than nine months from the end of the plan year would
result in the forfeiture of the member's reserve funds.
Although staff is in the process of exploring alternatives to IRMA for its general liability and
workers compensation insurance coverage in 2017 and beyond, this work will not be completed
for some time, as the insurance market is reluctant to provide premium quotes nine or more
months in advance of a policy's effective date.
It should be noted that as part of their conversation, Ms. Ely did state that the Village may
choose to withdraw its withdrawal notice as late as 120 days prior to the conclusion of the IRMA
Page 1 of 2
Packet Pg. 3
2.A.a
year (December 31, 2016) and assured counsel that should the Village withdraw its withdrawal
notice in a timely manner, it would be accepted.
Therefore, this action is being requested to preserve the Village's right to receive any and all
Members Reserve Funds due upon a timely withdrawal notice and subsequent separation, rather
than arguably forfeit these substantial funds.
A formal analysis of IRMA coverage and costs, as compared to alternatives within the insurance
market, will be presented to the Village President and Board of Trustees as soon as they have
been provided by consultants and analyzed by staff, with a recommendation developed.
Again, it is important reiterate that the Resolution protects the Village's right to its reserve
balance but does NOT commit the Village to terminate its membership in IRMA. Any
recommendation to seek alternate liability coverage options will not be tendered to the Village
Board until all financial information and comparables are available and analyzed.
Recommendation
Staff recommends the Village Board adopt the attached Resolution to preserve the Village's
rights relating to its potential withdrawal from IRMA including, but not limited to, the refund of
its Member's Reserve Fund at the appropriate time.
Page 2 of 2
Packet Pg. 4
2.A.b
3/25/2016
RESOLUTION NO. 2016 -
A RESOLUTION AUTHORIZING THE VILLAGE OF BUFFALO GROVE TO ISSUE A
REVOCABLE WITHDRAWAL NOTICE TO THE INTERGOVERNMENTAL RISK
MANAGEMENT AGENCY
WHEREAS, the Village of Buffalo Grove ("Village") is and has been a member of the
Intergovernmental Risk Management Agency ("IRMA") which has served as the Village's
primary risk management and insurance provider for numerous years; and
WHEREAS, the Village is in the midst of conducting due diligence regarding the pricing
and services provided by IRMA as well as other potential risk management and insurance
carriers; and
WHEREAS, pursuant to the terms of the Contract and Bylaws of IRMA, a member
must give at least 120 days notice prior to withdrawing from IRMA as a member, but must also
provide such notice at least nine (9) months prior to the end of IRMA's fiscal year in order to
receive its Member Reserve Funds back; and
WHEREAS, the Village currently has approximately $460,000 in the Members Reserve
Fund; and
WHEREAS, IRMA's executive director has indicated that failure to provide this notice
nine (9) months prior to the end of IRMA's fiscal year would in fact result in a forfeiture of the
Village's Member Reserve Fund if it were to withdraw after that nine month period during this
fiscal year; and
WHEREAS, IRMA's executive director also indicated that such notice of withdrawal
may be revoked should the Village decide to stay with IRMA after the completion of its due
diligence; and
WHEREAS, the provisions of IRMA's Contract and Bylaws and IRMA's refusal to
waive those provisions have forced the Village to issue a revocable notice of withdrawal; and
WHEREAS, the President and Board of Trustees of the Village of Buffalo Grove believe
it is in the best interests of the Village and its residents to preserve its right to withdraw from
IRMA and secure its Member Reserve Fund should the results of the Village's due diligence
reveal a cost savings requiring it to withdraw from IMRA.
NOW, THEREFORE, BE IT RESOLVED BY THE PRESIDENT AND BOARD
OF TRUSTEES OF THE VILLAGE OF BUFFALO GROVE, COOK AND LAKE
COUNTIES, ILLINOIS, AS FOLLOWS:
SECTION 1: The foregoing findings and recitals, and each of them, are hereby adopted as
Section 1 of this Resolution and are incorporated by reference as if set forth verbatim herein.
Packet Pg. 5
2.A.b
SECTION 2: The President and Board of Trustees authorize that a notice be given, by
the Village Manager or his designee, to IRMA's executive director notifying IRMA of the
Village's intention to withdraw from IRMA this fiscal year pursuant to Article IV of IRMA's
Contract and Bylaws.
SECTION 3: The President and Board of Trustees hereby authorize that such
withdrawal be revocable and that the Village Manager is authorized, in his discretion based upon
the results of the Village's due diligence, to revoke the withdrawal notice by sending the same to
IRMA's Executive Director.
SECTION 4: This Resolution shall be in full force and effect from and after its passage
and approval as provided by law. All prior resolutions, motions and orders in conflict herewith
are hereby repealed, to the extent of such conflict.
AYES:
NAYES:
ABSENT:
ABSTAIN:
PASSED:
2016
APPROVED: , 2016
ATTEST:
JANET SIRABIAN, Village Clerk
APPROVED:
2
BEVERLY SUSSMAN, Village President
Packet Pg. 6