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HomeMy WebLinkAbout07-28-10 City Administration Committee Meeting AgendaCITY ADMINISTRATION COMMITTEE Wednesday July 28, 2010 7:00 PM COMMON COUNCIL CHAMBERS AGENDA 1. Chairperson Greeting & Opening Statement 2. Announcements 3. Agenda Review and Amendments 4. Approval of Minutes 5. Statements from the Public 6. Employee Comments 7. Common Council Response 8. Workforce Diversity Committee 9. Safety Committee 10. Fire Department 10.1 Amendment to Budget for Chemical Detection Device Grant —Resolution 11. IURA 11.1 Declaration of Lead Agency - Downtown Commons Upper Story Housing Project, Authorize Use of `Gateway' Proceeds for a Short-Term Loan from the Ithaca Urban Renewal Agency to Plantation Building LLC — Resolution 11.2 Environmental Determination - Downtown Commons Upper Story Housing Project, Authorize Use of Gateway Proceeds for a Short-Term Loan from the Ithaca Urban Renewal Agency to Plantation Building LLC — Resolution 11.3 Downtown Commons Upper Story Housing Project, Authorize Use of `Gateway' Proceeds for a Short -Term Loan From the Ithaca Urban Renewal Agency to Plantation Building LLC - Resolution 12. Common Council 12.1 Apprenticeship Policy — Discussion/Possible Resolution 13. Department of Public Works 13.1 Request to Approve Funding Match for TIGER II Grant Application — Resolution 14. Attorney's Office 14.1 Item(s) to be presented prior to or at the meeting 15. Human Resources 15.1 CSEA Compensation Study — Discussion/Possible Resolution 15.2 Director's Report CITY ADMINISTRATION COMMITTEE Wednesday July 28, 2010 Agenda - Continued 16. Finance /Controller's Office 16.1 Approval of 2008 Single Audit Report — Resolution 16.2 Authorization to Contribute to the Reserves of the Greater Tompkins County Municipal Health Insurance Consortium — Resolution 16.3 Authorization to Enter into an Agreement with the Greater Tompkins County Municipal Health Insurance Consortium - Resolution 16.4 NY Retirement Incentive — Discussion/Possible Resolution 16.5 Controller's Report 17. Reports 17.1 Mayor's Report 17.2 Sub- Committee Updates 17.3 Council Members' Announcements 17.4 Next Month's Meeting: August 25, 2010 10. Fire Department .1 Request to Amend 2010 Budget for New York State Grant WHEREAS, the City of Ithaca is the lead recipient of a 2009 New York State Office of Homeland Security Hazardous Materials Grant in the amount of $22,000, and WHEREAS, the City of Ithaca as the lead recipient is responsible for the financial execution and administration of the grant, and WHEREAS, the other grant recipients include Cayuga County, Cortland County and Tioga County, and WHEREAS, the Homeland Security Grant will be used to purchase a Chemical Detection Device on New York State Contract for $20,000, and WHEREAS, the remaining $2,000 will be used for training cost for City of Ithaca employees and employees and or agents of partner agencies; now, therefore be it RESOLVED, That Ithaca Common Council hereby amends the 2010 Authorized City Budget by the amount not to exceed $22,000 to be used for said expenses as outlined by the 2009 New York State Office of Homeland Security Hazardous Materials Grant with amended budgets as follows: Increase Revenue Account: A3410 -3989 State Aid $22,000 Increase Expense Accounts: A3410- 5225 -12150 Other Equipment $20,000 A3410 -5440 -12150 Staff Development $ 2,000 and be it further RESOLVED, That income received from the 2009 New York State Office of Homeland Security Hazardous Materials Grant shall be used to reimburse the City of Ithaca for its expenses, as outlined by the grant. J:\DRedsicker\AGE-NDAS \City Admin Comm \2010 \7 -28 CA Agenda.doc 7/28/10 11. IURA .1 Declaration of Lead Agency — Downtown Commons Upper Story Housing Project, Authorize Use of `Gateway' Proceeds for a Short -Term Loan from the Ithaca Urban Renewal Agency to Plantation Building LLC WHEREAS, the City of Ithaca Common Council is considering authorization of use of `Gateway' proceeds by the Ithaca Urban Renewal Agency (IURA) to make a short -term loan to Plantation Building LLC for construction phase project expenses to renovate the Plantation Building to implement one of the two projects included in the Downtown Commons Upper Story Housing Project for which the City of Ithaca received a $1.15 million grant award through the Restore NY program, and Whereas, Sunit "Lex" Chutintaranond and Flaminia Cervesi are each 50% owners in Plantation Building LLC, the operating company that will undertake redevelopment of a $2.47 million project to redevelop the vacant Plantation Building located at 130 -132 E. State/MLK Street to create a 4,000 square foot restaurant, 1,200 square feet of commercial office space, six market - rate, one - bedroom apartments and two affordable, one - bedroom apartments, and WHEREAS, the IURA holds `Gateway' proceeds oh behalf of the City of Ithaca, which were derived from the sale of City -owned real estate to Eddygate Park Associates in 1986 to facilitate the Eddygate mixed -use project in Collegetown for which sales proceeds were realized in 2002 and contributed to the IURA to provide loan financing to facilitate the Gateway Plaza redevelopment project at 401 E. State/MLK Street and subsequently repaid in full, and WHEREAS, on November 24, 2009, the proposed renovation of the Plantation Building underwent environmental review during the site plan review process and at that time it was determined that the project will result in no significant impact on the environment, and WHEREAS, the proposed short -term loan to Plantation Building LLC is an Unlisted action under the City Environmental Quality Review Ordinance ( CEQRO), and WHEREAS, State Law and Section 176.6 of CEQRO require that a Lead Agency be established for conducting environmental review of proposed actions in accordance with local and state environmental law, and WHEREAS, State Law specifies that for actions governed by local environmental review the Lead Agency shall be that local agency which has primary responsibility for approving and funding or carrying out the action; now, therefore, be it RESOLVED, that the City of Ithaca Common Council does hereby declare its intent to declare itself Lead Agency for the environmental review of the proposed authorization of the use of `Gateway' proceeds by the IURA to make a short term loan to Plantation Building LLC to implement the Downtown Commons Upper Story Housing project at 130 -132 E. State/MLK Street until Restore NY grant funds are available. J:\DRedsickeA\AG1✓NDAS \City Admin Comm\2010 \7 -28 CA Agenda.doc 7/28/10 11. IURA .2 Environmental Determination - Downtown Commons Upper Story Housing Project, Authorize Use of Gateway Proceeds for a Short -Term Loan from the Ithaca Urban Renewal Agency to Plantation Building LLC WHEREAS, the City of Ithaca Common Council is considering authorization of use of `Gateway' proceeds by the Ithaca Urban Renewal Agency (IURA) to make a short -term loan to Plantation Building LLC for construction phase project expenses to renovate the Plantation Building to implement one of the two projects included in the Downtown Commons Upper Story Housing Project for which the City of Ithaca received a $1.15 million grant award through the Restore NY program, and Whereas, Sunit "Lex" Chutintaranond and Flaminia Cervesi are each 50% owners in Plantation Building LLC, the operating company that will undertake redevelopment of a $2.47 million project to redevelop the vacant Plantation Building located at 130 -132 E. State/MLK Street to create a 4,000 square foot restaurant, 1,200 square feet of commercial office space, six market - rate, one - bedroom apartments and two affordable, one - bedroom apartments, and WHEREAS, the IURA holds `Gateway' proceeds oh behalf of the City of Ithaca, which were derived from the sale of City -owned real estate to Eddygate Park Associates in 1986 to facilitate the Eddygate mixed -use project in Collegetown for which sales proceeds were realized in 2002 and contributed to the IURA to provide loan financing to facilitate the Gateway Plaza redevelopment project at 401 E. State/MLK Street and subsequently repaid in full, and WHEREAS, on November 24, 2009, the proposed renovation of the Plantation Building underwent environmental review during the site plan review process and at that time it was determined that the project will result in no significant impact on the environment, and WHEREAS, the proposed action will provide financing to undertake renovation of the Plantation Building in accordance with the site plan approval issued by the City of Ithaca Planning and Development Board on November 24, 2009, and WHEREAS, on August 4, 2010, the City of Ithaca Common Council declared itself Lead Agency for the environmental review of this proposed action, and WHEREAS, the proposed short-term loan to Plantation Building is an Unlisted action under the City Environmental Quality Review Ordinance (CEQRO), which requires environmental review, and WHEREAS, the Short Environmental Assessment Form ( "SEAF ") and supporting information has been provided to the City of Ithaca Conservation Advisory Council for review of the proposed action and no comments have been received to date, and WHEREAS, the City of Ithaca Common Council, acting as Lead Agency for the environmental review, has reviewed and accepted as adequate a Short Environmental Assessment Form, Part 1, submitted by the applicant, and Part 2, prepared by Planning and Development Department staff, and other application materials; now, therefore, be it J:\DRedsicker\AGENDAS \City Admin Comm\2010 \7 -28 CA Agenda.doc 7128/10 RESOLVED, that the City of Ithaca Common Council hereby determines that the proposed authorization of use of `Gateway' proceeds by the IURA to make a short -term loan to Plantation Building LLC to implement the Downtown Commons Upper Story Housing project at 130 -132 E. State/MLK Street will result in no significant impact on the environment and that a Negative Declaration for purposes of Article 8 of the Environmental Conservation Law be filed in accordance with the provisions of Part 617 of the State Environmental Quality Review Act. J:\DRedsicker\AG1rNDAS \City Admin Comm\2010 \7 -28 CA Agenda.doc 7/28/10 11. IURA .3 Downtown Commons Upper Story Housing Project, Authorize Use of `Gateway' Proceeds for a Short -Term Loan From the Ithaca Urban Renewal Agency to Plantation Building LLC WHEREAS, on June 25, 2010, Sunit "Lex" Chutintaranond, managing member of Plantation Building LLC, requested a short -term bridge loan of $512,000 until Restore NY grant funds can be accessed from the Empire State Development Corporation (ESD) for the comprehensive rehabilitation project of the Plantation Building located at 130 -132 E. State/MLK Street, and WHEREAS, the amount of loan assistance requested is equal to approximately three months of project construction expenditures, and WHEREAS, Lex Chutintaranond and Flaminia Cervesi are each 50% owners in ItalThai LLC, the owner of the Plantations Building, and Lex Chutintaranond is the sole owner of Plantation Building LLC, the operating company that will undertake the redevelopment project and syndicate historic tax credits, and WHEREAS, the City of Ithaca was awarded $900,000 in Restore NY grant funds to assist in the $2.47 million redevelopment of the vacant Plantation Building to create a 4,000 SF restaurant, 1,200 SF of commercial office space, six market -rate, one - bedroom apartments and two affordable one - bedroom apartments, and WHEREAS, the City authorized the Ithaca Urban Renewal Agency (IURA) to administer and implement the Restore NY grant, and WHEREAS, Restore NY grant funds can be accessed via a Grant Disbursement Agreement (GDA) per the following process: A. submit proof of project readiness to ESD, including proof of completion of environmental review, state historic preservation office review and site plan review; a final project budget, including an independent construction estimate; and documentation that all project funding is committed, including bank financing, B. ESD Board approval, C. Public Authorities Control Board (PACB) approval, D. Completion of ESD public hearing, E. Issuance of a GDA, and WHEREAS, during the three month impasse to adopt the 2010 -2011 New York State budget, no GDAs for Restore NY projects were approved by the PACB, and WHEREAS, with adoption of a significant portion of the NYS 2010 -2011 budget in early July, the PACB has resumed approval of new GDAs for Restore NY projects, and WHEREAS, the Plantation Building Restore NY project is scheduled for ESD Board review in September 2010, which is expected to result in issuance of a GDA in October 2010, and J:\DRedsicker \AGENDAS \City Admin Comm\2010 \7 -28 CA Agenda.doc 7/28/10 WHEREAS, Plantation Building LLC has executed a construction contract with a guaranteed maximum price that is on- budget, and WHEREAS, the interior demolition, site preparation and asbestos removal has been completed, leaving the structure in fragile condition and developer equity exhausted, and WHEREAS, installation of an elevator, a new HVAC system and replacement of the roof all need to be completed prior to cold weather to prepare the building for winter and avoid increased project costs, and WHEREAS, shutting down the project to wait for access to Restore NY funds in late October imperils project feasibility, and WHEREAS, use of CDBG funds for the requested loan is problematic because use of CDBG funds for construction activities requires compliance with the Davis -Bacon Act which would require re- bidding the construction project, and WHEREAS, the IURA holds "Gateway" proceeds on behalf of the City of Ithaca, which were derived from the sale of City -owned real estate to Eddygate Park Associates in 1986 to facilitate the Eddygate Park Apartment mixed- income 64 -unit rental housing project in Collegetown for which sales proceeds were realized in 2002, and WHEREAS, in 2002 "Gateway" proceeds were loaned to Gateway Plaza Associates, LLC to facilitate the Gateway Plaza project located at 401 E. State/MLK Street with repayments earmarked by the City of Ithaca Common Council for affordable housing activities, and WHEREAS, the Gateway Plaza loan was fully repaid in 2007, and Whereas, the balance of "Gateway" proceeds is approximately $595,600 as of June 30, 2010, of which $100,000 has been earmarked as a contribution to the Housing Fund, leaving an unobligated balance of $495,600, and WHEREAS, the Plantations Building project includes affordable housing, and WHEREAS, use of "Gateway" proceeds requires approval from the City of Ithaca Common Council, and WHEREAS, the IURA conducted an underwriting of the loan application and recommend approval of a $490,000 short -term loan subject to approval by the City of Ithaca Common Council, and WHEREAS, the proposed IURA loan will be repaid from Restore NY grant funds disbursed by the Empire State Development Corporation to the City of Ithaca that are earmarked for the Plantation Building project and is further secured through mortgages and personal and corporate financial guarantees provided by the borrower; and WHEREAS, the Ithaca Urban Renewal Agency recommends City of Ithaca Common Council approval of the use of `Gateway' proceeds to fund this bridge loan; now, therefore, be it J:\DRedsicker\AGENDAS \City Admin Comm\2010 \7 -28 CA Agenda.doc 7/28/10 RESOLVED, that the Common Council for the City of Ithaca hereby authorizes the use of `Gateway' proceeds by the TURA to make a short -term loan to Plantation Building LLC to implement the Downtown Commons Upper Story Housing Project. 7:\DRedsicker\AGE-NDAS \City Admin Comm\2010 \7 -28 CA Agenda.doc 7/28/10 CITY SHORT ENVIRONMENTAL ASSESSMENT FORM Project Information: To be completed by applicant or project sponsor. Date: 7/16/10 1. Applicant/Sponsor: 2. Project Name: Ithaca Urban Renewal Agency (IURA) Downtown Commons Upper Story Housing Project, Authorize Use of `Gateway' Proceeds for a Short -Term Loan from the Ithaca Urban Renewal Agency to Plantation Building LLC 3. Project Location: 130 -132 E. State /MLK Street 4. Is Proposed Action: X New o Expansion o Modification/Alteration 5. Describe project briefly: Authorize use of `Gateway' proceeds for a short -term loan from the IURA to Plantation Building LLC for construction phase project expenses until Restore NY grant funds become available 6. Precise Location (Road Intersections, Prominent Landmarks, etc. or provide map) Former Plantation Building on The Commons at 130 -132 E. State /MLK Street 7. Amount of Land Affected: Initially: 5,000 Sq. ft. Ultimately: 5,000 Sq. Ft. 8. Will proposed action comply with existing zoning or other existing land use restrictions? X Yes o No If No, describe briefly: 9. What is present land use in vicinity of project: o Residential o Industrial o Agricultural o Parkland /Open Space X Commercial o Other Describe: 10. Does action involve a permit/approval, or funding, now or ultimately, from governmental agency (Federal, State or Local): X Yes o No If Yes, List Agency Name and Permit /Approval Type: Empire State Development Corp. funding of the Restore NY grant 11. Does any aspect of the action have a currently valid permit or approval? X Yes o No If Yes, List Agency Name and Permit/Approval Type: City of Ithaca Planning & Development Board — site plan approval City of Ithaca Building Department — building permit 12. As a result of proposed action will existing permit/approval require modification? o Yes X No I certify that the information provided above is true to the best of my knowledge. PREPARER'S SIGNATURE: ` DATE: 1uly 16, 2010 PREPARER'S TITLE: Nels Bohn, irector of Community Development REPRESENTING: Ithaca Urban Renewal Agency SHORT ENVIRONMENTAL ASSESSMENT FORM Part II To Be Completed By Staff lame of Project: Downtown Commons Upper Story Housing Project, Authorize Ise of `Gateway' Proceeds for a Short-Term Loan from the Ithaca Urban Renewal kgency to Plantation Building LLC Yes No 1. Will project result in a large physical change to the project site or physically alter ❑ more than one acre of land? 2. Will there be a change to any unique or unusual land form found on the site or to any ❑ El site designated a unique natural area or critical environmental area by a local or state agency? 3. Will the project alter or have any effect on an existing waterway? ❑ x❑ 4. Will the project have an impact on groundwater quality? ❑ 0 5. Will the project affect drainage flow on adjacent sites? ❑ El 6. Will the project affect any threatened or endangered plant or animal species? ❑ D 7. Will the project result in an adverse effect on air quality? ❑ IXXI 8. Will the project have an effect on visual character of the community or scenic views ❑ M or vistas known to be important to the community: 9. Will the project adversely impact any site or structure of historic, pre- historic, or ❑ D paleontological importance or any site designated a local landmark or in a landmark district? 10. Will the project have an effect on existing or future recreational opportunities? ❑ D 11. Will the project result in traffic problems or cause a major effect to existing ❑ 0 transportation systems? 12. Will the project cause objectionable odors, noise, glare, vibration, or electrical ❑ 0 disturbance as a result of the project's operation during construction or after completion? 13. Will the project have any impact on public health or safety? ❑ 0 14. Will the project affect the existing community by directly causing a growth in ❑ 0 permanent populations of more than 5 percent over a one -year period OR have a negative effect on the character of the community or neighborhood? 15. Is there public controversy concerning the project? ❑ 121 If any question has been answered YES, a completed Full Environmental Assessment Form (FEAF) is necessary. PREPARER'S SIGNATURE: DATE: PREPARER'S TITLE: � <C- f v rn REPRESENTING: C TtAxu - j: \staff\nels \nelsl \iura \loans \other \gateway \lex bridge loan plantations building \seaf part ii - bridge loan plantations building 7- 28- 10.doc Ithaca, June 25, 2010 IURA ATTN: Nels Bohn Phillysa DeSarno Request For Bridge Loan For Plantation Building Project I am writing to request a bridge loan for the restoration and renovation of the former Plantation Building. It has been more than a year since this project started, and I have worked very closely with the RJRA on this since February of 2009. Together we have won the Restore NY Grant and I have also qualified for the Federal and State Rehabilitation Tax Credits. Furthermore, I have also received tax abatement from TCAD as well as a $50,000 loan for the project. In addition, the IURA has also agreed an $80,000 loan. M &T Bank has also agreed to provide construction and permanent financing for this project. The architectural design of the building has been completed by Holt Architects and has been approved by the Building Department. The construction has already started and progress has been continuing at a very rapid speed. The current problem we face -is the delay in the distribution of the grant money, due to the state of the NYS budget. Because of the delay in passing the budget, the grant money which is held by the Empire State Development Corporation will not be available for our project until sometime in October. We have worked very hard and took great risk to get to this point. The delay in the disbursement of the grant proceeds becomes an immediate obstacle to closing the bank loan and will result in the shutdown of the current construction. The construction is scheduled to be completed by October 25`f' of this year. The delay of the construction into the winter months will make its completion, not only more expensive, but more difficult due to the weather. Any postponement will add additional increases, as material cost increases each month. Shutting down and restarting the construction will also add additional expenses. Physically, the building is no longer winter proof due to the removal of outside layers to make asbestos removal possible. Furthermore the demolition of all existing floors puts the building at a fragile state. All sprinkler pipes will freeze which will be most unsafe for the building itself as well as dangerous to the adjacent buildings. The expenses of maintaining this building is very high from mortgage payments and insurance, to school and property taxes. Having the building idle for a few more months will put further stress on my financial situation with the project. In addition., to make sure that the restaurant, which is a big part of the whole project, opens in time, I have already hired staff and put restaurant plans in action_ Any delay on the opening of the restaurant will also mean addi.tional cost of maintaining additional staff for the new business. The estimated overall cost for shutting down the construction for four months is $90,000. This is an additional cost this project cannot afford. Currently, the construction cost due for the months of April, May and June is $180,000. The construction cost for July is projected to be $332,000. LeChase Construction Services, our general contractor, understands our financial circumstances and strongly recommends that we continue with the construction until the end of July, and will not bill us until the end of August. At the end of July, we will reassess our financial situation and if we cannot get any form of interim bridge financing in place, we will have to shutdown the construction. My request to the IURA is a bridge loan for the amount of $512,000 to help keep the construction going until the Restore NY grant becomes available. If we can pay the $512,000 in pay application from Le Chase in late August or early September, we can continue the construction without interruptions. The construction bill for August, which is due in September, will be paid from the $80,000 loan from the fURA (already approved) and me. By this point, the grant money as well as the bank loan should be in place to pay the future development costs_ This $512,000 bridge loan will be immediately paid by the Restore NY grant proceeds. As collateral, I would like to offer my building at 622 Cascadilla Street. The equity value on this property is estimated at $400,000- $450,000. I will provide additional equity if more is required. The Plantation Building project is not an ordinary project. I feel that we have overcome many obstacles to date and the worst is now behind us. We seem to have arrived where we were supposed to be according to our business plan. This unexpected problem with the State budget is the last obstacle we have to overcome. With the help of the IURA, which has been our greatest supporter, I am sure that we can see through to the completion of this project. Thank you very much for all your support. I remain at your disposal for any further communication on this matter. Thank you for your time and consideration. Regards, Lex Adopted Resolution IURA Economic Development Committee July 13, 2010 Gateway Proceeds — Short-Term Loan Assistance to Plantation Building LLC Whereas, on June 25, 2010, Sunit "Lex" Chutintaranond, managing member of Plantation Building LLC, requested a short-term bridge loan of $512,000 until Restore NY grant funds can be accessed from the Empire State Development Corporation (ESD) for the comprehensive rehabilitation project of the Plantation Building located at 130 -132 E. State /MLK Street, and 2. Whereas, the amount of loan assistance requested is equal to approximately three months of project construction expenditures, and 3. Whereas, Lex Chutintaranond and Flaminia Cervesi are each 50% owners in both ItalThai LLC, the owner of the Plantations Building, and Plantation Building LLC, the operating company that will undertake the redevelopment project and syndicate historic tax credits, and 4. Whereas, the City of Ithaca was awarded $900,000 in Restore NY grant funds to assist in the $2.47 million redevelopment of the vacant Plantation Building to create a 4,000 SF restaurant, 1,200 SF of commercial office space, six market -rate, one - bedroom apartments and two affordable one - bedroom apartments, and Whereas, the City authorized the Ithaca Urban Renewal Agency (IURA) to administer and implement the Restore NY grant, and 6. Whereas, Restore NY grant funds can be accessed via a Grant Disbursement Agreement (GDA) per the following process: A. submit proof of project readiness to ESD, including proof of completion of environmental review, state historic preservation office review and site plan review; a final project budget, including an independent construction estimate; and documentation that all project funding is committed, including bank financing B. ESD Board approval C. Public Authorities Control Board (PACB) approval D. completion of ESD public hearing Issuance of a GDA, and 7. Whereas, during the three month impasse to adopt the 2010 -2011 New York State budget, no GDAs for Restore NY projects were approved by the PACB, and 8. Whereas, with adoption of a significant portion of the NYS 2010 -2011 budget in early July, the PACB has resumed approval of new GDAs for Restore NY projects, and 9. Whereas, the Plantation Building Restore NY project is scheduled for ESD Board review in September 2010, which is expected to result in issuance of a GDA in October 2010, and 10. Whereas, proposed use of project funds are: $435,000 acquisition of building $159,000 demolition, site preparation & environmental remediation $1,444,000 construction $164,000 architecture /engineering $178,000 developer fees $33,000 construction interest & insurance $57,000 soft costs, reserves & leasing costs $2,470,000 Total, and 11. Whereas, the proposed sources of project funds are: $900,000 Restore NY grant $391,000 loan #1 M &T Bank — building acquisition $359,000 loan #2 M &T Bank - project $80,000 loan #3 IURA— affordable housing $156,000 equity — managing member $367,000 equity — Federal rehabilitation (historic preservation) tax credits $217,000 equity — NYS rehabilitation (historic preservation) tax credits $2,470,000 Total, and 12. Whereas, the construction project has been bid out with pricing that is on- budget, and 13. Whereas, the interior demolition, site preparation and asbestos removal has been completed, leaving the structure in fragile condition and developer equity exhausted, and 14. Whereas, bank construction financing is contingent upon final approval of the Restore NY grant, and 15. Whereas, it is imperative that the construction project advance in a timely manner to install the HVAC system and make the building weather tight to prevent the existing "wet" sprinkler system from freezing in cold weather, and to avoid increased project costs, and 16. Whereas, shutting down the project to wait for access to Restore NY funds in late October imperils project feasibility and substantially increases project costs, and 17. Whereas, all project funding sources are committed except for equity to be generated from sale of rehabilitation tax credits, and 18. Whereas, rehabilitation tax credits are made available at the Federal and State level to encourage rehabilitation of historic properties by providing a tax credit equal to 20% of the cost basis of the project that can be sold to an investor through syndication to generate equity for the project, and 19. Whereas, the New York State budget process and related legislation has delayed access to Restore NY funds and destabilized the market for purchase of rehabilitation tax credits, and 20. Whereas, NYS law, unlike many states, requires the purchaser of the Federal rehabilitation tax credit to also be the purchaser of any NYS rehabilitation tax credit, thereby effectively limiting the market to sell tax credits for this project to entities with NYS tax liabilities, and 21. Whereas, a technical error in the 2009 NYS rehabilitation tax credit law inadvertently prohibited banks and insurance companies from purchasing tax credits, and 22. Whereas, nationwide, banks and insurance companies are the top buyers of tax credits, and 23. Whereas, the NYS Senate and Assembly have passed legislation correcting this technical error, but the bill has not been signed into law by the Governor even though the Governor's office supported the initial legislation, and 24. Whereas, as part of the 2010 -2011 budget process the NYS Assembly, in support of an initiative by the Governor, passed legislation to defer 50% of a wide variety of tax credits, including rehabilitation tax credits, for 3 years and also capped the total amount of tax credits received by any single purchaser to $2 million per year, and 25. Whereas, the NYS Senate has not passed companion legislation to defer and cap tax credits, and 26. Whereas, the legislative status of NYS rehabilitation tax credits is still unresolved, resulting in a poor financial climate to sell NYS tax credits, which are projected to generate $217,000 in equity for the project in a stable market that includes banks and insurance companies who can utilize such credits in the current tax year, and 27. Whereas, the project's development consultant, Port City Preservation LLC, strongly recommends against the sale of tax credits to investors in the current unstable market and indicates that sale of the tax credits can be completed within 60 days of initiation, and 28. Whereas, tax credits must be sold by the date the project is put into use (certificate of occupancy), which is projected for March 2011, and 29. Whereas, use of CDBG funds for the requested loan is problematic because use of CDBG funds for construction activities requires compliance with the Davis -Bacon Act which would require re- bidding the construction project, and 30. Whereas, the IURA holds "Gateway" proceeds on behalf of the City of Ithaca, which were derived from the sale of City -owned real estate to Eddygate Park Associates in 1986 to 3 facilitate the Eddygate Park Apartment mixed - income 64 -unit rental housing project in Collegetown for which sales proceeds were realized in 2002, and 31. Whereas, in 2002 "Gateway" proceeds were loaned to Gateway Plaza Associates, LLC to facilitate the Gateway Plaza project located at 401 E. State /MLK Street with repayments earmarked by the City of Ithaca Common Council for affordable housing activities, and 32. Whereas, the Gateway loan was fully repaid in 2007, and 33. Whereas, the balance of "Gateway" proceeds is approximately $595,600 as of June 30, 2010, of which $100,000 has been earmarked as a contribution to the Housing Fund, and 34. Whereas, the Plantations Building project includes affordable housing, and 35. Whereas, use of "Gateway" proceeds requires approval from the City of Ithaca Common Council, and 36. WHEREAS, on July 13, 2010, the IURA Economic Development Committee reviewed this matter and recommended the following action subject to City of Ithaca Common Council approval; now, therefore, be it 1. RESOLVED, that the IURA hereby approves, subject to approval by the City of Ithaca Common Council, a loan to Plantation Building LLC in accordance with the loan application and the following terms: Borrower: Plantation Building LLC, a NYS Limited Liability Company formed in 2009 Loan Amount: Up to $490,000, not to exceed 100% of collateral value Project: Bridge loan for redevelopment of the Plantations Building at 130 -132 E. State /MLK Street, Ithaca, NY Source of Loan Funds: "Gateway" proceeds Projected Use of Funds: Construction phase project expenses Term: Up to 8 months Interest Rate: 3.5% Repayment: The loan shall be repaid from Restore NY grant funds disbursed by the Empire State Development Corporation to the City of Ithaca. M Monthly interest -only payments shall be accrued. Repayment of the loan balance plus accrued interest is due upon receipt by the City of Ithaca of Restore NY grant funds or maturity of the loan, whichever is earlier. Collateral: • 2nd mortgage on the property and building owned by ItalThai LLC located at 622 Cascadilla Street, Ithaca, NY (ZaZa's Cucina restaurant building), behind only a 1" mortgage held by M &T Bank with a balance of $440,000. • 2nd mortgage on property and building owned by Sunit Chutintaranond and Flaminia Cervesi located at 20 Rosina Drive, Ithaca, NY (residence), behind mortgages held by M &T Bank with a balance of $428,000. Guarantor(s): • Sunit Chutintaranond and Flaminia Cervesi, each individually. • Corporate guarantee of ItalThai LLC • Corporate guarantee of Za Za's Cucina, Inc. 2. RESOLVED, that the IURA hereby recommends City of Ithaca Common Council approval of the use of Gateway proceeds to fund this bridge loan, and be it further 3. RESOLVED, that upon approval by the City of Ithaca Common Council, the Director of Community Development for the IURA is authorized to issue a loan commitment in accordance with this resolution, and be it further 4. RESOLVED, that IURA Chair, upon the advise of the Executive Director and IURA Attorney, is hereby authorized to execute all necessary and appropriate documents to implement this resolution, including, but not limited to, executing loan agreement documents. Vote: Dylla — Aye Armstrong — Aye Ackerman — Aye Tegan — Aye Carried Unanimously (4 -0) j: \staff\nels \nelsl \iura \loans \other \gateway \lex bridge loan plantations building \reso iura edc bridge loan plantations building 7- 13- 10.doc 13. Department of Public Works .1 Request to Approve Funding Match for TIGER II Grant Application WHEREAS, the United States Department of Transportation (USDOT) has announced the availability of funds in the TIGER 11 Discretionary Grants (TIGER II) program, which notice was published in the Federal Register on June 1, 2010, and WHEREAS, Common Council is interested in applying for a TIGER II grant so as to make a large investment in the transportation system in the central business district in order to maintain a state of good repair, to make the downtown a more livable and sustainable environment, to strengthen the City of Ithaca's position as a hub for the county and region, and to encourage and support economic activity in the City, and WHEREAS, staff from the Office of the City Engineer and the Department of Planning and Development have begun scoping a grant eligible project to include, but not be limited to, the following components: • Rehabilitation of the Commons Pedestrian Street • Partnering with Tompkins Consolidated Area Transit (TCAT) to procure and install a Real Time Passenger Information System for TCAT busses and the TCAT bus stops at Green St. and Seneca St. • Partnering with NYSDOT to reconstruct Seneca Street and portions of Green Street (between East State Street and Route 13) with the ultimate intention of taking ownership of these streets in exchange for the State taking ownership of the Elmira Road section of Route 13 that the City currently owns. . • Partnering with Cornell University to rehabilitate the Cascadilla Creek Gorge Trail between Linn Street and College Avenue so that it can be reopened to the public. • Accessibility improvements in the downtown, particularly sidewalk curb ramp improvements • Installation of bicycle racks, bicycle lockers, wayfinding signage, and electric vehicle plug -in stations in the downtown, now, therefore be it RESOLVED, That the Mayor of the City of Ithaca, or her designee, is hereby authorized and directed to submit a TIGER II application for funding to the United States Department of Transportation in accordance with the provisions of the Notice of Funds Available, in a amount not to exceed $16,700,000, and upon approval of said request to enter into and execute a project agreement with USDOT, or its designee, for such financial assistance to the City of Ithaca for design, right -of -way acquisition, construction and construction inspection of the TIGER II application as submitted by the Mayor and approved by USDOT, and be it further RESOLVED, That Common Council hereby makes a commitment of funds, contingent upon an award of funds from the TIGER II program and environmental review, in an amount not to exceed 20% of the total project costs, i.e., in an amount not to exceed $3,340,000, which funds will be derived from serial bonds. JA\DRedsicker\AGENDAS \City Admin Comm\2010 \7 -28 CA Agenda.doc 7/28/10 16. Finance /Controller's Office .1 Approval of 2008 Single Audit Report RESOLVED, That the Independent Auditor's Report for the period of January 1, 2008 through December 31, 2008 prepared by the accounting firm of Ciaschi, Dietershagen, Little and Mickelson & Company, LLP be accepted to comply with all the City's applicable Governmental Accounting Standards Board (GASB) Statement 34 and other related audit and single audit requirements. J:\DRedsicker \AGENDAS \City Admin Comm\2010 \7 -28 CA Agenda.doc 7/28/10 16. Finance /Controller's Office .2 Authorization to Contribute to the Reserves of the Greater Tompkins County Municipal Health Insurance Consortium WHEREAS, the City of Ithaca shall join the Greater Tompkins County Municipal Health Insurance Consortium for the purpose of providing employee health insurance and prescription drug coverage, and WHEREAS, the Consortium, as required by the New York State Insurance Department, must establish sufficient financial reserves to begin working as a consortium, now, therefore be it RESOLVED, that the City of Ithaca shall contribute as listed as Estimated Initial Capitalization in the following table: Explanation: Four municipalities - the Towns of Ithaca, Caroline, Danby, and Dryden, are able to contribute a greater amount in reserve than what is owed for their municipal shares. It is anticipated that by the year 2013, the four municipalities will be "paid back" with 3% interest by the Consortium. Reserves Due by the County and City shall be paid in 2012. and be it further RESOLVED, That the City Controller is authorized to make payment immediately to the Consortium. 7:\ Redsicker\AG1✓NDAS \City Admin Comm\2010 \7 -28 CA Agenda.doc 7/28/10 Percent of Estimated Total Reserves 2010 Premium Total Initial Reserves Due Premium Capitalization County 13,351,312 54.55% 500,000 667,566 167,566 City of Ithaca 8,558,874 34.97% 300,000 427,944 127,944 Town of Ithaca 888,082 3.63% 137,033 44,404 - 92,629 Town of Caroline 122,633 0.50% 37,000 6,132 - 30,868 Town of Danby 81,161 0.33% 62,000 4,058 - 57,942 Town of Dryden 459,233 1.88% 137,032 22,962 - 114,070 Town of Enfield 50,400 0.21% 2,520 2,520 0 Town of Groton 126,095 0.52% 6,305 6,305 0 Town of Ulysses 113,175 0.46% 5,659 5,659 0 Village of Cayuga Heights 360,799 1.47% 18,040 18,040 0 Village of Dryden 121,349 0.50% 6,067 6,067 0 Village of Groton 150,900 0.62% 7,545 7,545 0 Village of Tiumansburg 90,696 0.37% 4,535 4,535 0 24,474,709 100.00% 1,223,736 1,223,735 0 Explanation: Four municipalities - the Towns of Ithaca, Caroline, Danby, and Dryden, are able to contribute a greater amount in reserve than what is owed for their municipal shares. It is anticipated that by the year 2013, the four municipalities will be "paid back" with 3% interest by the Consortium. Reserves Due by the County and City shall be paid in 2012. and be it further RESOLVED, That the City Controller is authorized to make payment immediately to the Consortium. 7:\ Redsicker\AG1✓NDAS \City Admin Comm\2010 \7 -28 CA Agenda.doc 7/28/10 16. Finance /Controller's Office .3 Authorization to Enter into an Agreement with the Greater Tompkins County Municipal Health Insurance Consortium WHEREAS, the Tompkins County Council of Governments ( TCCOG) is comprised of all the municipalities in Tompkins County, and WHEREAS, the City of Ithaca is a member of the Tompkins County Council of Governments ( TCCOG), and WHEREAS, in 2007 the County, on behalf of TCCOG accepted an incentive grant award under the New York State Shared Municipal Services Program to assist the municipalities in Tompkins County to create a local municipal health care consortium, and WHEREAS, the Greater Tompkins County Municipal Health Insurance Consortium will develop health benefits coverage for all participating municipalities with the intent to provide a net savings to the taxpayers of Tompkins County, a goal of the City of Ithaca supports, and WHEREAS, health care costs for Tompkins County and other local governments have been increasing each year at rates much higher than inflation, a problem which can be addressed by pooling our buying power, and WHEREAS, Council gave authorization for approval of the inter - municipal agreement at its meeting on April 7, 2010, but due to delays in the approval of the consortium, the agreement was never signed, and WHEREAS, some recent minor changes were necessary to the inter - municipal agreement to satisfy the New York State Insurance Department, and WHEREAS, TCCOG encourages the signing of the revised inter - municipal agreement by TCCOG members; now, therefore be it RESOLVED, That subject to the approval of the City Attorney, Common Council hereby authorizes the Mayor to execute the inter - municipal agreement effective October 1, 2010 with the Greater Tompkins County Health Insurance Consortium for the New York State Shared Municipal Services Program. J:\DRedsieker\AGENDAS \City Admin Comm\201.0 \7 -28 CA Agenda.doc 7/28/10 DRAFT -- 7/20/10 MUNICIPAL COOPERATION AGREEMENT THIS AGREEMENT (the "Agreement ") made effective as of 1St day of January 2010 (the "Effective Date "), by and among each of the signatory municipal corporations hereto (collectively, the "Participants "). WHEREAS: 1. Article 5 -G of the New York General Municipal Law (the "General Municipal Law ") authorizes municipal corporations to enter into cooperative agreements for the performance of those functions or activities in which they could engage individually; 2. Sections 92 -a and 119 -o of the General Municipal Law authorize municipalities to purchase a single health insurance policy, enter into group health plans, and establish a joint body to administer a health plan; 3. Article 47 of the New York Insurance Law (the "Insurance Law "), and the rules and regulations of the New York State Superintendent of Insurance (the "Superintendent ") set forth certain requirements for governing self - insured municipal cooperative health insurance plans; 4. Section 4702(f) of the Insurance Law defines the term "municipal corporation" to include a county, city, town, village, school district, board of cooperative educational services, public library (as defined in Section 253 of the New York State Education Law) and district (as defined in Section 119 -n of the General Municipal Law); and 5. The Participants have determined to their individual satisfaction that furnishing the health benefits (including, but not limited to, medical, surgical, hospital, prescription drug, dental, and /or vision) for their eligible officers, eligible employees (as defined by the Internal Revenue Code of 1986, as amended, and the Internal Revenue Service rules and regulations), eligible retirees, and the eligible dependents of eligible officers, employees and retirees (collectively, the "Enrollees ") (such defmition does not include independent contractors and/or consultants) through a municipal cooperative is in their best interests as it is more cost- effective and efficient. Eligibility requirements shall be determined by each Participant's collective bargaining agreements and /or their personnel policies and procedures. NOW, THEREFORE, the parties agree as follows: A. PARTICIPANTS. 1. The Participants hereby designate themselves under this Agreement as the Greater Tompkins County Municipal Health Insurance Consortium (the "Consortium ") for the purpose of providing health benefits (medical, surgical, hospital, prescription drug, dental, and/or vision) to those Enrollees that each Participant individually elects to include in the Greater Tompkins County Municipal Health Insurance Consortium Medical Plan(s) (the "Plan(s) "). 2. The following Participants shall comprise the initial membership of the Consortium (a) County of Tompkins; (b) City of Ithaca; (c) Town of Enfield; (d) Town of Caroline; (e) Town of Ithaca; (f) Town of Danby; (g) Town of Dryden; (h) Town of Ulysses; (i) Village of Cayuga Heights; 0) Village of Groton; (k) Village of Dryden; (1) Village of {H 1049320.11 } DRAFT - 07/20/10 Trumansburg; (m) Town of Groton. Membership in the Consortium may be offered to any municipal corporation within the geographical boundaries of the County of Tompkins; provided however, in the sole discretion of the Board (as defined below), the applicant provides satisfactory proof of its financial responsibility and is of the same type of municipal corporation as the initial Participants. Notwithstanding anything to contrary set forth in this Agreement, admission of new Participants shall not require amendment of this Section A(2). Membership shall be subject to the terms and conditions set forth in this Agreement, any amendments hereto and applicable law. 3. Participation in the Plan(s) by some, but not all, collective bargaining units or employee groups of a Participant is not encouraged and shall not be permitted absent prior Board approval. Further, after obtaining approval, any Participant which negotiates an alternative health insurance plan offering other than the plan offerings of the Consortium with a collective bargaining unit or employee group may be subject to a risk charge as determined by the Board. 4. Initial membership of additional participants shall become effective on the first day of the Plan Year following the adoption by the Board of the resolution to accept a municipal corporation as a Participant. Such municipal corporation must agree to continue as a Participant for a minimum of three (3) years upon entry. 5. The Board, by a two- thirds (2/3) vote of the entire Board, may elect to permit a municipal corporation which is not located in the geographical or political boundaries of the County of Tompkins to become a Participant subject to satisfactory proof, as determined by the Board, of such municipal corporation's financial responsibility. Such municipal corporation must agree to continue as a Participant for a minimum of three (3) years upon entry. 6. A municipal corporation that was previously a Participant, but is no longer a Participant, and which is otherwise eligible for membership in the Consortium, may apply for re- entry after a minimum of three (3) years has passed since it was last a Participant. Such re -entry shall be subject to the approval of two- thirds (2/3) of the entire Board. This re -entry waiting period may be waived by the approval of two- thirds (2/3) of the entire Board. In order to re- enter the Consortium, a municipal corporation employer must have satisfied in full all of its outstanding financial obligations to the Consortium. A municipal corporation must agree to continue as a Participant for a minimum of three (3) years upon re- entry. B. PARTICIPANT LIABILITY. 1. The Participants shall share in the costs of, and assume the liabilities for benefits (including medical, surgical, and hospital) provided under the Plan(s) to covered officers, employees, retirees, and their dependents. Each Participant shall pay on demand such Participant's share of any assessment or additional contribution ordered by the Board, as set forth in Section L(4) of this Agreement. The pro rata share shall be based on the Participant's relative "premium" contribution to the Plan(s) as a percentage of the aggregate "premium" contribution to the Plan(s), as is appropriate based on the nature of the assessment or contribution. 2. New Participants (each a "New Participant ") who enter the Consortium may be assessed a fee for additional financial costs above and beyond the premium contributions to the Plan(s). Any such additional financial obligations and any related terms and conditions associated with membership in the Consortium shall be determined by the Board, and shall be disclosed to the New Participant prior to its admission. {H1049320.1 1 } 2 DRAFT - 07/20/10 3. Each Participant shall be liable, on a pro rata basis, for any additional assessment required in the event the Consortium funding falls below those levels required by the Insurance law as follows: a. In the event the Consortium does not have admitted assets (as defined in Insurance Law § 107) at least equal to the aggregate of its liabilities, reserves and minimum surplus required by the Insurance Law, the Board shall, within thirty (30) days, order an assessment (an "Assessment Order ") for the amount that will provide sufficient funds to remove such impairment and collect from each Participant a pro -rata share of such assessed amount. b. Each Participant that participated in the Consortium at any time during the two (2) year period prior to the issuing of an Assessment Order by the Board shall, if notified of such Assessment Order, pay its pro rata share of such assessment within ninety (90) days after the issuance of such Assessment Order. This provision shall survive termination of the Agreement of withdrawal of a Participant. C. For purposes of this Section B(3), a Participant's pro -rata share of any assessment shall be determined by applying the ratio of the total assessment to the total contributions or premium equivalents earned during the period covered by the assessment on all Participants subject to the assessment to the contribution or premium equivalent earned during such period attributable to such Participant. C. BOARD OF DIRECTORS. 1. The governing board of the Consortium, responsible for management, control and administration of the Consortium and the Plan(s), shall be referred to as the "Board of Directors" (the "Board "). The voting members of the Board shall be composed of one representative of each Participant and representatives of the Joint Committee on Plan Structure and Design (as set forth in Section C(11)), who shall have the authority to vote on any official action taken by the Board (each a "Director "). Each Director, except the representatives of the Committee on Plan Structure and Design, shall be designated in writing by the governing body of the Participant. 2. If a Director designated by a Participant cannot fulfill his/her obligations, for any reason, as set forth herein, and the Participant desires to designate a new Director, it must notify the Consortium's Chairperson in writing of its selection of a new designee to represent the Participant as a Director. 3. Directors shall receive no remuneration from the Consortium for their service and shall serve a term from January 1 through December 31 (the "Plan Year "). 4. No Director may represent more than one Participant. 5. No Director, or any member of a Director's immediate family shall be an owner, officer, director, partner, or employee of any contractor or agency retained by the Consortium, including any third party contract administrator. 6. Except as otherwise provided in Section D of the Agreement, each Director shall be entitled to one vote. A majority of the entire Board, not simply those present, is required for the Board to take any official action, unless otherwise specified in this Agreement. The "entire Board ", as used herein and elsewhere in this Agreement, shall mean the total number of Directors when there are no vacancies. fHI049320.1 1 } DRAFT - 07/20/10 7. Each Participant may designate in writing an alternate Director to attend the Board's meeting when its Director cannot attend. The alternate Director may participate in the discussions at the Board meeting and will, if so designated in writing by the Participant, be authorized to exercise the Participant's voting authority. Only alternate Directors with voting authority shall be counted toward a quorum. The Joint Committee on Plan Structure and Design may designate alternate Directors as set forth in Section C(11). 8. A majority of the Directors of the Board shall constitute a quorum. A quorum is a simple majority (more than half) of the entire Board. A quorum is required for the Board to conduct any business. This quorum requirement is independent of the voting requirements set forth in Section C(6). The Board shall meet on a regular basis, but not less than on a quarterly basis at a time and place within the State of New York determined by a vote of the Board. The Board shall hold an annual meeting (the "Annual Meeting ") between October 3rd and October 15th of each Plan Year. 9. Special meetings of the Board may be called at any time by the Chairperson or by any two (2) Directors. Whenever practicable, the person or persons calling such special meeting shall give at least three (3) day notice to all of the other Directors. Such notice shall set forth the time and place of the special meeting as well as a detailed agenda of the matters proposed to be acted upon. In the event three (3) days notice cannot be given, each Director shall be given such notice as is practicable under the circumstances. 10. In the event that a special meeting is impractical due to the nature and/or urgency of any action which, in the opinion of the Chairperson, is necessary or advisable to be taken on behalf of the Consortium, the Chairperson may send proposals regarding said actions via facsimile to each and all of the Directors. The Directors may then fax their approval or disapproval of said actions to the Chairperson. Upon receipt by the Chairperson of the requisite number of written approvals, the Chairperson may act on behalf of the Board in reliance upon such approvals. Any actions taken by the Chairperson pursuant to this paragraph shall be ratified at the next scheduled meeting of the Board. 11. The Chair of the Joint Committee on Plan Structure and Design and the at -large voting Labor Member(s) (as defined in Section K) shall serve as Directors (the "Labor Representatives ") and shall have the same rights and obligations as all other Directors. The Joint Committee on Plan Structure and Design may designate in writing alternate Directors to attend the Board's meetings when the Labor Representatives cannot attend. The alternate Director may, if designated in writing, be authorized to exercise the Labor Representatives' voting authority. D. WEIGHTED VOTING. 1. Except as otherwise provided in this Agreement, any two or more Directors, acting jointly, may require a weighted vote on any matter that may come before the Board. In such event, the voting procedure set forth in this Section D shall apply in lieu of any other voting procedures set forth in this Agreement. Such weighted voting procedures shall apply solely with respect to the matter then before the Board. 2. For purposes of this Section D, each Director shall receive votes as follows: (1-1 1 049 3 2 0.11) 4 DRAFT - 07/20/10 a. each Director representing a Participant with five hundred (500) or fewer Enrollees shall be entitled to one (1) vote. b. each Director representing a Participant with more than five hundred (500) Enrollees shall be entitled to a number of votes equaling the total number of votes assigned under subsection 2(a) above minus one (1), divided evenly by the number of Participants eligible under this subsection 2(b) and rounded down to the nearest whole number. C. the Labor Representative shall be entitled to one (1) vote. 3. Attached as Addendum "A" to this Agreement is an example of the application of the voting formula contained in subparagraph "2" of this Section. 4. Notwithstanding anything to the contrary contained in this Agreement, any action taken pursuant to this Section D shall require the approval of two- thirds (2/3) of the total number of votes, if all votes had been cast. E. ACTIONS BY THE BOARD. Subject to the voting and quorum requirements set forth in this Agreement, the Board is authorized and/or required to take action on the following matters: 1. To fill any vacancy in any of the officers of the Consortium. 2. To fix the frequency, time and place of regular Board meetings. 3. To approve an annual budget for the Consortium, which shall be prepared and approved prior to October 15th of each year, and determine the annual premium equivalent rates to be paid by each Participant for each Enrollee classification in the Plan on the basis of a community rating methodology filed with and approved by the Superintendent. 4. To audit receipts and disbursements of the Consortium and provide for independent audits, and periodic financial and operational reports to Participants. 5. To establish a joint fund or funds to finance all Consortium expenditures, including claims, reserves, surplus, administration, stop -loss insurance and other expenses. 6. To select and approve the benefits provided by the Plan(s) including the plan document(s), insurance certificate(s), and /or summary plan description(s), a copy of the Plan(s) effective on the date of this Agreement is incorporated by reference into this Agreement. 7. To annually select a plan consultant (the "Plan Consultant ") for the upcoming Plan Year, prior to October 1St of each year. 8. To review, consider and act on any recommendations made by the Plan Consultant. 9. To establish administrative guidelines for the efficient operation of the Plan. 10. To establish financial regulations for the entry of new Participants into the Consortium consistent with all applicable legal requirements and this Agreement. {H1049320.11 } DRAFT - 07/20/10 11. To contract with third parties, which may include one or more Participants, for the furnishing of all goods and services reasonably needed in the efficient operation and administration of the Consortium, including, without limitation, accounting services, legal counsel, contract administration services, consulting services, purchase of insurances and actuarial services. Provided, however (a) the charges, fees and other compensation for any contracted services shall be clearly stated in written administrative services contracts, as required in Section 92 -a(6) of the General Municipal Law; (b) payment for contracted services shall be made only after such services are rendered; (c) no Director or any member of such Director's immediate family shall be an owner, officer, director, partner or employee of any contract administrator retained by the Consortium; and (d) all such agreements shall otherwise comply with the requirements of Section 92 -a(6) of the General Municipal Law. 12. To purchase stop -loss insurance on behalf of the Consortium and determine each year the insurance carrier or carriers who are to provide the stop - loss insurance coverage during the next Plan Year, as required by Section 4707 of the Insurance Law. 13. To determine and notify each Participant prior to October 15th of each Plan Year of the monthly premium equivalent for each enrollee classification during the next Plan Year commencing the following January 1St 14. To designate the banks or trust companies in which joint funds, including reserve funds, are to be deposited and which shall be located in this state, duly chartered under federal law or the laws of this state and insured by the Federal Deposit Insurance Corporation, or any successor thereto. 15. To designate annually a treasurer (the "Treasurer ") who may or may not be a Director and who shall be the treasurer, or equivalent financial officer, for one of the Participants. The Treasurer's duties shall be determined by the Chief Fiscal Officer to whom he /she will report. 16. To designate an Officer or Director to retain custody of all reports, statements and other documents of the Consortium and take minutes of each Board meeting which shall be acted on by the Board at a subsequent meeting. 17. To choose the certified public accountant and the actuary to provide the reports required by this Agreement and any applicable law. 18. To designate an attorney -in -fact to receive summons or other legal process in any action, suit or proceeding arising out of any contract, agreement or transaction involving the Consortium. The Board designates John G. Powers, Esq. as the Consortium's initial attorney -in- fact. 19. To take all necessary action to ensure that the Consortium obtains and maintains a Certificate of Authority in accordance with the Insurance Law. 20. To take all necessary action to ensure the Consortium is operated and administered in accordance with the law of the State of New York. 21. To take any other action authorized by law and deemed necessary to accomplish the purposes of this Agreement. {H 1049320.11 } 6 DRAFT - 07/20/10 F. EXECUTIVE COMMITTEE. 1. The Executive Committee of the Consortium shall consist of the Chairperson, the Vice - Chairperson, and the Chief Fiscal Officer of the Consortium. 2. The Executive Committee may meet at anytime between meetings of the Board, at the discretion of the Chairperson. The Executive Committee shall make recommendations to the Board. 3. The Executive Committee shall manage the Consortium between meetings of the Board, subject to such approval by the Board as may be required by this Agreement. G. OFFICERS. 1. At the Annual Meeting, the Board shall elect from its Directors a Chairperson, Vice Chairperson, Chief Fiscal Officer, and Secretary, who shall serve for a term of one (1) year or until their successors are elected and qualified. Any vacancy in an officer's position shall be filled at the next meeting of the Board. 2. Officers of the Consortium and employees of any third party vendor, including without limitation the officers and employees of any Participant, who assist or participate in the operation of the Consortium, shall not be deemed employees of the Consortium. Each third party vendor shall provide for all necessary services and materials pursuant to annual contracts with the Consortium. The officers of the Consortium shall serve without compensation from the Consortium, but may be reimbursed for reasonable out -of- pocket expenses incurred in connection with the performance of such officers' duties. 3. Officers shall serve at the pleasure of the Board and may be removed or replaced upon a two- thirds (2/3) vote of the entire Board. This provision shall not be subject to the weighted voting alternative set forth in Section D. H. CHAIRPERSON; VICE CHAIRPERSON. The Chairperson shall be the chief executive officer of the Consortium. 2. The Chairperson, or in the absence of the Chairperson, the Vice Chairperson, shall preside at all meetings of the Board. 3. In the absence of the Chairperson, the Vice Chairperson shall perform all duties related to that office. Y. PLAN ADMINISTRATOR. The Board, by a two- thirds (2/3) vote of the entire Board, may annually designate an administrator and/or insurance company of the Plan (the "Plan Administrator ") and the other provider(s) who are deemed by the Board to be qualified to receive, investigate, and recommend or make payment of claims, provided that the charges, fees and other compensation for any contracted services shall be clearly stated in written administrative services and/or insurance contracts and payment for such contracted services shall be made only after such services are rendered or are reasonably expected to be rendered. All such contracts shall conform to the requirements of Section 92 -a(6) of the General Municipal Law. (H 1049320.11) 7 DRAFT - 07/20/10 J. CHIEF FISCAL, OFFICER. 1. The Chief Fiscal Officer shall act as the chief financial administrator of the Consortium and disbursing agent for all payments made by the Consortium, and shall have custody of all monies either received or expended by the Consortium. The Chief Fiscal Officer shall be a fiscal officer of a Participant. The Chief Fiscal Officer shall receive no remuneration from the Consortium. The Plan shall reimburse the Participant that employs the Chief Fiscal Officer for reasonable and necessary out -of- pocket expenses incurred by the Chief Fiscal Officer in connection with the performance of his or her duties that relate to the Consortium. 2. All monies collected by the Chief Fiscal Officer relating to the Consortium, shall be maintained and administered as a common fund. The Chief Fiscal Officer shall, notwithstanding the provisions of the General Municipal Law, make payment in accordance with procedures developed by the Board and as deemed acceptable to the Superintendent. 3. The Chief Fiscal Officer shall be bonded for all monies received from the Participants. The amount of such bond shall be established annually by the Consortium in such monies and principal amount as may be required by the Superintendent. 4. All monies collected from the Participants by the Chief Fiscal Officer in connection with the Consortium shall be deposited in accordance with the policies of the Participant which regularly employs the Chief Fiscal Officer and shall be subject to the provisions of law governing the deposit of municipal funds. 5. The Chief Fiscal Officer may invest moneys not required for immediate expenditure in the types of investments specified in the General Municipal Law for temporary investments or as otherwise expressly permitted by the Superintendent. 6. The Chief Fiscal Officer shall account for the Consortium's reserve funds separate and apart from all other funds of the Consortium, and such accounting shall show: a. the purpose, source, date and amount of each sum paid into the fund; b. the interest earned by such funds; C. capital gains or losses resulting from the sale of investments of the Plan's reserve funds; d. the order, purpose, date and amount of each payment from the reserve fund; and C. the assets of the fund, indicating cash balance and schedule of investments. 7. The Chief Fiscal Officer shall cause to be prepared and shall furnish to the Board, to participating municipal corporations, to unions which are the exclusive bargaining representatives of Enrollees, the Board's consultants, and to the Superintendent: (141049320.111 DRAFT - 07/20/10 a. an annual audit, and opinions thereon, by an independent certified public accountant, of the financial condition, accounting procedures and internal control systems of the municipal cooperative health benefit plan; b. an annual report and quarterly reports describing the Consortium's current financial status; and C. an annual independent actuarial opinion on the financial soundness of the Consortium, including the actuarial soundness of contribution or premium equivalent rates and reserves, both as paid in the current Plan Year and projected for the next Plan Year. 8. Within ninety (90) days after the end of each Plan Year, the Chief Fiscal Officer shall furnish to the Board a detailed report of the operations and condition of the Consortium's reserve funds. K. JOINT COMMITTEE ON PLAN STRUCTURE AND DESIGN. 1. There shall be a Joint Committee on Plan Structure and Design (the "Joint Committee "), which shall consist of (a) a representative of each collective bargaining unit that is the exclusive collective bargaining representative of any Enrollee or group of Enrollees covered by the Plan(s) (the "Union Members "); and (b) a representative of each Participant (the "Management Members "). Management Members may, but are not required to be, Directors. 2. The Joint Committee shall review all prospective Board actions in connection with the benefit structure and design of the Plan(s), and shall develop findings and recommendations with respect to such matters. The Chair of the Joint Committee shall report such findings and recommendations to the Board at any regular or special meeting of the Board. 3. The Joint Committee shall select (a) from among the Union Members, an individual who shall serve as Chair of the Joint Committee; and (b) from among the Management Members, an individual who shall serve as Vice Chair of the Joint Committee. The Joint Committee shall establish its own parliamentary rules and procedures. 4. Each eligible union shall establish such procedures by which its representative to the Joint Committee is chosen and such representative shall be designated in writing to the Chairperson of the Board and the Chair of the Joint Committee. 5. The Union Members on the Joint Committee shall select from among the Union Members an individual to serve as an additional at -large voting Labor Member on the Board of Directors of the Consortium. If the number of municipal members on the Consortium rises to seventeen (17), the union members of the Joint Committee shall select from among the Union Members an additional at -large voting Labor Member on the Board of Directors of the Consortium. The at -large voting Labor Member(s) along with the Joint Committee Chair shall collectively be the "Labor Representatives" as defined in Section C(11) of this Agreement. L. PREMIUM CALCULATIONS/PAYMENT. 1. The annual premium equivalent rates shall be established and approved by a majority of the entire Board. The method used for the development of the premium equivalent rates may be changed from time to time by the approval of two- thirds (2/3) of the entire Board, subject to review and approval by the Superintendent. The premium equivalent rates shall DRAFT - 07/20/10 consist of such rates and categories of benefits as is set forth in the Plan[s] that is determined and approved by the Board consistent with New York law. 2. The Consortium shall maintain reserves and stop -loss insurance to the level and extent required by the Insurance Law and as directed by the Superintendent. 3. Each Participant's monthly premium equivalent, by enrollee classification, shall be paid by the first day of each calendar month during the Plan Year. A late payment charge of one percent (1 %) of the monthly installment then due will be charged by the Board for any payment not received by the first of each month, or the next business day when the first falls on a Saturday, Sunday, legal holiday or day observed as a legal holiday by the Participants. The Consortium may waive the first penalty once per Plan Year for each Participant, but will strictly enforce the penalty thereafter. A repeated failure to make timely payments, including any applicable penalties, may be used by the Board as an adequate justification for the expulsion of the Participant from the Consortium. 4. The Board shall assess Participants for additional contributions, if actual and anticipated losses due to benefits paid out, administrative expenses, and reserve and surplus requirements exceed the amount in the joint funds, as set forth in Section B(3) above. 5. The Board, in its sole discretion, may refund amounts in excess of reserves and surplus, or retain such excess amounts and apply these amounts as an offset to amounts projected to be paid under the next Plan Year's budget. M. EMPLOYEE CONTRIBUTIONS. If any Participant requires an Enrollee's contribution for benefits provided by the Consortium, the Participant shall collect such contributions at such time and in such amounts as it requires. However, the failure of a Participant to receive the Enrollee contribution on time shall not diminish or delay the payment of the Participant's monthly premium equivalent to the Consortium, as set forth in this Agreement. N. ADDITIONAL BENEFITS. Any Participant choosing to provide more benefits, coverages, or enrollment eligibility other than that provided under the Plan(s), will do so at its sole expense. This Agreement shall not be deemed to diminish such Participant's benefits, coverages or enrollment eligibility, the additional benefits and the payment for such additional benefits, shall not be part of the Plan(s) and shall be administered solely by and at the expense of the Participant. O. REPORTING. The Board, through its officers, agents, or delegatees, shall ensure that the follow reports are prepared and submitted: 1. Annually after the close of the Plan Year, not later than one - hundred twenty (120) days after the close of the Plan Year, the Board shall file a report with the Superintendent showing the financial condition and affairs of the Consortium, including an annual independent (H1049320.1 11 10 DRAFT - 07/20/10 financial audit statement and independent actuarial opinion, as of the end of the preceding plan year. 2. Annually after the close of the Plan Year, the Board shall have prepared a statement and independent actuarial opinion on the financial soundness of the Plan, including the contribution or premium equivalent rates and reserves, both as paid in the current Plan Year and projected for the next Plan Year. 3. The Board shall file reports with the Superintendent describing the Consortium's then current financial status within forty -five (45) days of the end of each quarter during the Plan year. 4. The Board shall provide the annual report to all Participants and all unions, which are the exclusive collective bargaining representatives of Enrollees, which shall be made available for review to all Enrollees. 5. The Board shall submit to the Superintendent a report describing any material changes in any information originally provided in the Certificate of Authority. Such reports, in addition to the reports described above, shall be in such form, and containing such additional content, as may be required by the Superintendent. P. WITHDRAWAL OF PARTICIPANT. 1. Withdrawal of a Participant from the Consortium shall be effective only once annually on the last day of the Plan Year. 2. Notice of intention of a Participant withdraw must be given in writing to the Chairperson prior to October 3rd of each Plan Year. Failure to give such notice shall automatically extend the Participant's membership and obligations under the Agreement for another Plan Year, unless the Board shall consent to an earlier withdrawal by a two- thirds (2/3) vote. 3. Any withdrawing Participant shall be responsible for its pro rata share of any Plan deficit that exists on the date of the withdrawal, subject to the provisions of subsection "4" of this Section. The withdrawing Participant shall be entitled to any pro rata share of surplus that exists on the date of the withdrawal, subject to the provisions of subsection "4" of this Section. The Consortium surplus or deficit shall be based on the sum of actual expenses and the estimated liability of the Consortium as determined by the Board. These expenses and liabilities will be determined one (1) year after the end of the Plan Year in which the Participant last participated. 4. The surplus or deficit shall include recognition and offset of any claims, expenses, assets and /or penalties incurred at the time of withdrawal, but not yet paid. Such pro rata share shall be based on the Participant's relative premium contribution to the Consortium as a percentage of the aggregate premium contributions to the Consortium during the period of participation. This percentage amount may then be applied to the surplus or deficit which existed on the date of the Participant's withdrawal from the Consortium. Any pro rata surplus amount due the Participant shall be paid to the Participant one year after the effective date of the withdrawal. Any pro rata deficit amount shall be billed to the Participant by the Consortium one year after the effective date of the withdrawal and shall be due and payable within thirty (30) days after the date of such bill. {H1049320.11 } 11 DRAFT - 07/20/10 Q. DISSOLUTION; RENEWAL,; EXPULSION. 1. The Board at any time, by a two- thirds (2/3) vote of the entire Board, may determine that the Consortium shall be dissolved and terminated. If such determination is made, the Consortium shall be dissolved ninety (90) days after written notice to the Participants. a. Upon determination to dissolve the Consortium, the Board shall provide notice of its determination to the Superintendent. The Board shall develop and submit to the Superintendent for approval a plan for winding -up the Consortium's affairs in an orderly manner designed to result in timely payment of all benefits. b. Upon termination of this Agreement, or the Consortium, each Participant shall be responsible for its pro rata share of any deficit or shall be entitled to any pro rata share of surplus that exists, after the affairs of the Consortium are closed. No part of any funds of the Consortium shall be subject to the claims of general creditors of any Participant until all Consortium benefits and other Consortium obligations have been satisfied. The Consortium's surplus or deficit shall be based on actual expenses. These expenses will be determined one year after the end of the Plan Year in which this Agreement or the Consortium terminates. C. Any surplus or deficit shall include recognition of any claims /expenses incurred at the time of termination, but not yet paid. Such pro rata share shall be based on each Participant's relative premium contribution to the Plan as a percentage of the aggregate premium contributions to the Plan during the period of participation. This percentage amount would then be applied to the surplus or deficit which exists at the time of termination. 2. The continuation of the Consortium under the terms and conditions of the Agreement, or any amendments or restatement's thereto, shall be subject to Board review on the fifth (5th) anniversary of the Effective Date and on each fifth (5th) anniversary date thereafter (each a "Review Date "). a. At the annual meeting a year prior to the Review Date, the Board shall include as an agenda item a reminder of the Participants' coming obligation to review the terms and conditions of the Agreement. b. During the calendar year preceding the Review Date, each Participant shall be responsible for independently conducting a review of the terms and conditions of the Agreement and submitting to the Board of Directors a written resolution containing any objection to the existing terms and conditions or any proposed modification or amendment to the existing Agreement, such written resolution shall be submitted to the Board on or before March 1 st preceding the Review Date. Failure to submit any such resolution shall be deemed as each Participant's agreement and authorization to the continuation of the Consortium until the next Review Date under the existing terms and conditions of the Agreement. C. As soon as practicable after March 1St, the Board shall circulate to all Participants copies of all resolutions submitted by the Participants. Subject to Section S hereof, any resolutions relating to the modification, amendment, or objection to the Agreement submitted prior to each Review Date shall be considered and voted on by the Participants at a special meeting called for such purpose. Such special meeting shall be held on or before July 1St preceding the Review Date. {H 1 049320.11 } 12 DRAFT - 07/20/10 d. Notwithstanding the foregoing or Section S hereof, if at the Annual Meeting following any scheduled Review Date the Board votes on and approves the budget and annual assessment for the next year, the Participants shall be deemed to have approved the continuation of the Consortium under the existing Agreement until the next Review Date. 3. The Participants acknowledge that it may be necessary in certain extraordinary circumstances to expel a Participant from the Consortium. In the event the Board determines that: a. a Participant has acted inconsistently with the provisions of the Agreement in a way that threatens the financial well -being or legal validity of the Consortium; or b. a Participant has acted fraudulently or has otherwise acted in bad faith with regards to the Consortium, or toward any individual Participant concerning matters relating to the Consortium, the Board may vote to conditionally terminate said Participant's membership in the Consortium. Upon such a finding by the affirmative vote of seventy -five percent (75 %) of the Participants, the offending Participant shall be given sixty (60) days to correct or cure the alleged wrongdoing to the satisfaction of the Board. Upon the expiration of said sixty (60) day period, an absent satisfactory cure, to the Board may expel the Participant by an affirmative vote of seventy -five percent (75 %) of the Participants (exclusive of the Participant under consideration). This section shall not be subject to the weighted voting provision provided in Section D. Any liabilities associated with the Participant's departure from the Consortium under this provision shall be determined by the procedures set forth in Section P of this Agreement. R. REPRESENTATIONS AND WARRANTIES OF PARTICIPANTS. Each Participant by its approval of the terms and conditions of this Agreement hereby represents and warrants to each of the other Participants as follows: 1. The Participant understands and acknowledges that its participation in the Consortium under the terms and conditions of this Agreement is strictly voluntary and may be terminated as set forth herein, at the discretion of the Participant. 2. The Participant understands and acknowledges that the duly authorized decisions of the Board constitute the collective will of each of the Participants as to those matters within the scope of the Agreement. 3. The Participant understands and acknowledges that the decisions of the Board made in the best interests of the Consortium may on occasion temporarily disadvantage one or more of the individual Participants. 4. The Participant represents and warrants that its designated Director or authorized representative understands the terms and conditions of this Agreement and is suitably experienced to understand the principles upon which this Consortium operates. 5. The Participant understands and acknowledges that all Directors, or their authorized representatives, are responsible for attending all scheduled meetings. Provided that the quorum rules are satisfied, non - attendance at any scheduled meeting is deemed acquiescence by the absent Participant to any duly authorized Board - approved action at the meeting. However, a Participant that was absent from a meeting will not be presumed to have acquiesced in a JH1049320.11) 13 DRAFT - 07/20/10 particular action taken at the meeting if, within fifteen (15) calendar days after learning of such action, the Participant delivers written notice to the Chairperson that it dissents from such action. The Participant shall also notify the other members of the Board of such dissent. The Chairperson shall direct the Secretary to file the notice with the minutes of the Board. 6. The Participant understands and acknowledges that, absent bad faith or fraud, any Participant's vote approving any Board action renders that Board action immune from later challenge by that Participant. S. RECORDS. The Board shall have the custody of all records and documents, including financial records, associated with the operation of the Consortium. Each Participant may request records and documents relative to their participation in the Consortium by providing a written request to the Chairperson and Chief Fiscal Officer. The Consortium shall respond to each request no later than thirty (30) days after its receipt thereof, and shall include all information which can be provided under applicable law. T. CHANGES TO AGREEMENT. Any change or amendment to this Agreement shall require the unanimous approval of the Participants, as authorized by their respective legislative bodies. U. CONFIDENTIALITY. Nothing contained in this Agreement shall be construed to waive any right that a covered person possesses under the Plan with respect to the confidentiality of medical records and that such rights will only be waived upon the written consent of such covered person. V. ALTERNATIVE DISPUTE RESOLUTION ("ADR"). 1. General. The Participants acknowledge and agree that given their budgeting and fiscal constraints, it is imperative that any disputes arising out of the operation of the Consortium be limited and that any disputes which may arise be addressed as quickly as possible. Accordingly, the Participants agree that the procedures set forth in this Section V are intended to be the exclusive means through which disputes shall be resolved. The Participants also acknowledge and agree that by executing this Agreement each Participant is limiting its right to seek redress for certain types of disputes as hereinafter provided. 2. Disputes subject to AD R. Any dispute by any Participant arising out of or relating to a contention that: a. the Board, the Board's designated agents, or any Participant has failed to adhere to the terms and conditions of this Agreement; b. the Board, the Board's designated agents, or any Participant has acted in bad faith or fraudulently in undertaking any duty or action under the Agreement; or {H 1049320.11) 14 DRAFT - 07/20/10 C. any other dispute otherwise arising out of or relating to the terms or conditions of this Agreement or requiring the interpretation of this Agreement shall be resolved exclusively through the ADR procedure set forth in paragraph (3) below. 3. ADR Procedure. Any dispute subject to ADR, as described in subparagraph (2), shall be resolved exclusively by the following procedure: a. Board Consideration: Within ninety (90) days of the occurrence of any dispute, the objecting party (the "Claimant ") shall submit a written notice of the dispute to the Chairperson specifying in detail the nature of the dispute, the parties claimed to have been involved, the specific conduct claimed, the basis under the Agreement for the Participant's objection, the specific injury or damages claimed to have been caused by the objectionable conduct to the extent then ascertainable, and the requested action or resolution of the dispute. A dispute shall be deemed to have occurred on the date the objecting party knew or reasonably should have known of the basis for the dispute. (1) Within sixty (60) days of the submission of the written notice, the Executive Committee shall, as necessary, request further information from the Claimant, collect such other information from any other interested party or source, form a recommendation as to whether the Claimant has a valid objection or claim, and if so, recommend a fair resolution of said claim. During such period, each party shall provide the other with any reasonably requested information within such party's control. The Executive Committee shall present its recommendation to the Board in writing, including any underlying facts, conclusions or support upon which it is based, within such sixty (60) day period. (ii) Within sixty (60) days of the submission of the Executive Committee's recommended resolution of the dispute, the Board shall convene in a special meeting to consider the dispute and the recommended resolution. The Claimant and the Executive Committee shall each be entitled to present any argument or material it deems pertinent to the matter before the Board. The Board shall hold discussion and/or debate as appropriate on the dispute and may question the Claimant and/or the Executive Committee on their respective submissions. Pursuant to its regular procedures, the Board shall vote on whether the Claimant has a valid claim, and if so, what the fair resolution should be. The weighted voting procedure set forth in Section D shall not apply to this provision. The Board's determination shall be deemed final subject to the Claimant's right to arbitrate as set forth below. b. Arbitration. The Claimant may challenge any Board decision under subparagraph (V)(3)(a)(ii) by filing a demand for arbitration with the American Arbitration Association within thirty (30) days of the Board's vote (a "Demand "). In the event a Claimant shall fail to file a Demand within thirty (30) days, the Board's decision shall automatically be deemed final and conclusive. In the event the Participant files a timely Demand, the arbitrator or arbitration panel may consider the claim: provided however; (i) in no event may the arbitrator review any action taken by the Board that occurred three (3) or more years prior to when the Chairperson received notice of the claim; and {H1049320.11 } 15 DRAFT - 07/20/10 (ii) in no event may the arbitrator award damages for any period that precedes the date the Chairperson received notice of the claim by more than twenty -four (24) months. C. The Participants agree that the procedure set forth in this Section V shall constitute their exclusive remedy for disputes within the scope of this Section. W. MISCELLANEOUS PROVISIONS. 1. This instrument constitutes the entire Agreement of the Participants with respect to the subject matter hereof, and contains the sole statement of the operating rules of the Consortium. This instrument supersedes any previous Agreement, whether oral or written. 2. Each Participant will perform all other acts and execute and deliver all other documents as may be necessary or appropriate to carry out the intended purposes of this Agreement. 3. If any article, section, subdivision, paragraph, sentence, clause, phrase, provision or portion of this Agreement shall for any reason be held or adjudged to be invalid or illegal or unenforceable by any court of competent jurisdiction, such article, section, subdivision, paragraph, sentence, clause, phrase, provision or portion so adjudged invalid, illegal or unenforceable shall be deemed separate, distinct and independent and the remainder of this Agreement shall be and remain in full force and effect and shall not be invalidated or rendered illegal or unenforceable or otherwise affected by such holding or adjudication. 4. This Agreement shall be governed by and construed in accordance with the laws of the State of New York. Any claims made under Section V(3)(b) except to the extent otherwise limited therein, shall be governed by New York substantive law. 5. All notices to any party hereunder shall be in writing, signed by the parry giving it, shall be sufficiently given or served if sent by registered or certified mail, return receipt requested, hand delivery, or overnight courier service addressed to the parties at the address designated by each party in writing. Notice shall be deemed given when transmitted. 6. This Agreement may be executed in two or more counterparts each of which shall be deemed to be an original but all of which shall constitute the same Agreement and shall become binding upon the undersigned upon delivery to the Chairperson of an executed copy of this Agreement together with a certified copy of the resolution of the legislative body approving this Agreement and authorizing its execution. 7. The provisions of Section V shall survive termination of this Agreement, withdrawal or expulsion of a Participant, and /or dissolution of the Consortium. 8. Article and section headings in this Agreement are included for reference only and shall not constitute part of this Agreement. 9. No findings or recommendations made by the Joint Committee on Plan Structure and Design or by the Chair of the Joint Committee shall be considered a waiver of any bargaining rights under any contract, law, rule, statute, or regulation. {H1049320.11 } 16 DRAFT - 07/20/10 X. APPROVAL, RATIFICATION, AND EXECUTION. 1. As a condition precedent to execution of this Municipal Cooperative Agreement and membership in the Consortium, each eligible municipal corporation desiring to be Participant shall obtain legislative approval of the terms and conditions of this Agreement by the municipality's governing body. 2. Prior to execution of this Agreement by a Participant, the Participant shall provide the Chairperson with the resolution approving the municipality's participation in this Consortium and expressly approving the terms and conditions of this Municipal Cooperative Agreement. Each presented resolution shall be attached to and considered a part of this Agreement. 3. By executing this Agreement, each signatory warrants that he /she has complied with the approval and ratification requirements herein and is otherwise properly authorized to bind the participating municipal corporation to the terms and conditions of this Agreement. [Signature Pages Follow] {H1049320.11 } 17 DRAFT - 07/20/10 IN WITNESS WHEREOF, the undersigned has caused this Agreement to be executed as of the day and year first above written. CITY OF ITHACA TOWN OF ENFIELD By: C Mayor COUNTY OF TomPKINS Chair of the County Legislature TOWN OF CAROLINE By: Town Supervisor TOWN OF DANBY By: Town Supervisor TOWN OF ULYSSES By: Town Supervisor VILLAGE OF CAYUGA HEIGHTS By: Mayor VILLAGE OF TRUMANSBURG By: Mayor By: Town Supervisor TOWN OF GROTON By: Town Supervisor TOWN OF ITHACA By: Town Supervisor TOWN OF DRYDEN By: Town Supervisor VILLAGE OF GROTON By: Mayor VILLAGE OF DRYDEN By: Mayor f H 1049320.11) 18 DRAFT - 07/20/10 Addendum "A" Example of Weighted Voting Formula under Section D(2) If 10 Participants have 500 or fewer enrollees each and 2 Participants have more than 500 enrollees each, under subparagraph "a" the 10 each get 1 vote. Under subparagraph "b" the 2 large Participants get 4 votes each, which is calculated by taking the total number of votes under subparagraph "a" [10] subtracting 1, dividing by the number of eligible Participants under subsection "b" [2], and rounding the result [4.5] down to the nearest whole number [4]. The Labor Representative shall have 1 vote, irrespective of the votes available to the Participants. {1-11049320.11 } 19