Second Amended Restatement of Trusts

SECOND AMENDED RESTATEMENT OF TRUSTS FOR
CITY OF MESA PROPERTY AND PUBLIC LIABILITY TRUST FUND AND
CITY OF MESA EMPLOYEE BENEFITS TRUST FUND
This Second Amended Restatement of Trusts (“Restatement of Trusts”) for City of Mesa
Property and Public Liability Trust Fund (“PPL Trust”) and City of Mesa Employee Benefits
Trust Fund (“EBT”) (collectively, the “Trusts”), dated and effective _________ __, 2026, is
adopted by the City of Mesa, an Arizona political subdivision (the “City”).
RECITALS
Whereas, Arizona law allows the City to establish self-insurance programs for the management
and administration of claims of property and public liability or losses and for health, wellness, and
welfare employee benefit programs.
Whereas, Arizona law requires the funding for such self-insurance programs to be deposited in a
trust.
Whereas, Section 610 of the City Charter authorizes the City to provide self-insurance programs.
Whereas, the City has established such self-insurance programs and has established trust funds for
each of its self-insurance programs.
Whereas, the City intends the Trusts to satisfy the requirements of Arizona Revised Statutes
(“A.R.S.”) § 11-981.
Whereas, on October 1, 2012, pursuant to Resolution No. 10139, the City adopted the
“Restatement of Trusts for the Property and Public Liability and Employee Benefits Self-Insurance
Trust Funds.”
Whereas, on December 1, 2015, pursuant to Resolution No. 10717, the City adopted the “First
Amended Restatement of Trusts for the City of Mesa, Arizona Property and Public Liability and
Employee Benefits Self-Insurance Trust Funds.”
Whereas, this Restatement of Trusts constitutes the entire restatement of trusts with respect to the
PPL Trust and EBT, and supersedes and replaces the “Restatement of Trusts for the Property and
Public Liability and Employee Benefits Self-Insurance Trust Funds” and “First Amended
Restatement of Trusts for the City of Mesa, Arizona Property and Public Liability and Employee
Benefits Self-Insurance Trust Funds.”
THE CITY DECLARES THE FOLLOWING TRUSTS:
ARTICLE I. RESTATEMENT OF TRUSTS; GENERAL PROVISIONS.
1.01. The EBT was created on September 20, 1976, pursuant to Resolution No. 4100, from which
health, wellness, and welfare insured or self-insured employee benefits are paid.
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1.02. The PPL Trust was created on July 19, 1977, pursuant to Resolution No. 4196, from which
property and public liability and loss claims are expended.
1.03. The PPL Trust is funded by allocation of funds, including from the General Fund,
Enterprise Fund, Special Revenue Funds, and investment earnings. The EBT is funded by City
contributions, employee and retiree contributions, health premium subsidy contributions from the
Arizona State Retirement System, the Public Safety Personnel Retirement System, the federal
government for Medicare program subsidies, and various contracted reimbursements, credits, or
rebates from third-party administrators or insurers of health, wellness, and welfare employee
benefit programs.
1.04. The funds in the Trusts must be (a) accounted for separately from all other City funds and
accounts; and (b) used only for expenditures as allowed by this Restatement of Trusts or applicable
policies adopted by the City.
1.05. The funds in the Trusts must be invested consistent with the City’s financial policy. The
funds in the Trusts may be commingled with other City funds only for investment purposes;
however, each Trust must retain its own investment earnings.
1.06. The PPL Trust’s balance must be maintained by the City Manager or designee(s) with an
average intended annual balance of ten million dollars ($10,000,000) to fifteen million dollars
($15,000,000), with transfers periodically (e.g., quarterly or semiannually) throughout the fiscal
year, or such other balance amount as may be approved by resolution of the City Council. If the
PPL Trust’s balance is below ten million dollars ($10,000,000) at the end of a fiscal year, City
staff will report the balance to the Self-Insurance Program Board of Trustees (the “Board”) and
will recommend a plan to return the balance to the average intended annual balance of ten million
dollars ($10,000,000) to fifteen million dollars ($15,000,000).
1.07. The Trusts must comply with all applicable federal, state, and local laws, rules, regulations,
standards, and executive orders, as amended (“Applicable Law(s)”), without limitation to those
designated within this Restatement of Trusts. Any change to an Applicable Law during the term
of this Restatement of Trusts will apply to the Trusts, and if any term or provision of this
Restatement of Trusts conflicts with or violates any Applicable Law, this Restatement of Trusts
will be automatically deemed amended to conform to such Applicable Law.
1.08. Arizona law governs the rights of the parties, the performance of the Trusts, this
Restatement of Trusts, and the resolution of any disputes thereunder. Any action relating to this
Restatement of Trusts must be brought in a Maricopa County, Arizona court or the United States
District Court in Arizona, as applicable.
1.09. Nothing in this Restatement of Trusts is intended to confer the status of third-party
beneficiary on any person or entity.
1.10. The recitals of this Restatement of Trusts are incorporated by reference as though fully set
forth herein.
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1.11. This Restatement of Trusts will become effective only when approved by a resolution of
the City Council. This Restatement of Trusts and the Trusts will continue until terminated by a
resolution of the City Council.
1.12. This Restatement of Trusts constitutes the entire restatement of trusts with respect to the
PPL Trust and EBT, and supersedes and replaces all other understandings, oral or written,
including the “Restatement of Trusts for the Property and Public Liability and Employee Benefits
Self-Insurance Trust Funds” and “First Amended Restatement of Trusts for the City of Mesa,
Arizona Property and Public Liability and Employee Benefits Self-Insurance Trust Funds.”
1.13. This Restatement of Trusts may be amended or modified only by a resolution of the City
Council, with notice to and consultation with the Board.
1.14. This Restatement of Trusts may be executed in several counterparts, all of which together
will be considered an original.
ARTICLE II. SELF-INSURANCE PROGRAM BOARD OF TRUSTEES.
2.01. The City created the Board on August 16, 1979, pursuant to Ordinance No. 1260. Except
as set forth in the paragraphs below, members of the Board (the “Trustees”) are appointed and
serve terms in accordance with Title 2, Chapter 17 of the Mesa City Code.
2.02. The Trustees are not entitled to receive compensation for their services, except the Trustees
are entitled to receive reimbursement for any reasonable out-of-pocket costs and expenditures
made by the Trustees in performing their duties.
2.03. The Trustees must be bonded or insured. This requirement may be satisfied by the blanket
performance bond or other coverage provided by the City.
2.04. The Trustees must comply with A.R.S. Title 38, Chapter 3, Article 8 (A.R.S. §§ 38-501
through 511) and all other Applicable Laws regarding conflicts of interest.
2.05. In appointing the Trustees, the Mayor and City Council must comply with the Immigration
Reform and Control Act of 1986 (IRCA), and the City Clerk must keep appropriate records to
demonstrate all the Trustees have a legal right to live and work in the United States. The City
must comply with the employment verification provisions prescribed by sections 274A and 274B
of the Federal Immigration and Nationality Act and the E-Verify requirements prescribed by
A.R.S. § 23-214(A).
2.06. In appointing the Trustees, the Mayor and City Council must comply with Title VII of the
Civil Rights Act of 1964, as amended, section 504 of the Federal Rehabilitation Act, the Americans
with Disabilities Act (42 U.S.C. § 12101 et seq.), and all other Applicable Laws regarding
employment.
2.07. The Trustees must comply with the City of Mesa Ethics Handbook for Elected Officials
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and Advisory Board Members.
ARTICLE III. POWERS AND DUTIES OF THE BOARD.
3.01. The Board must meet periodically as determined by the Chair of the Board. Such meetings
must comply with the Arizona Open Meetings Act (A.R.S. § 38-431 et seq.).
3.02. The Board must make recommendations to the City Council regarding the financial
viability of the Trusts and perform such duties as may be delegated by the City Council from time
to time.
3.03. After the end of a fiscal year for which City staff reported to the Board that the PPL Trust’s
balance is below ten million dollars ($10,000,000), the Board will consider and advise on City
staff’s recommended plan to return the balance to the average intended annual balance of ten
million dollars ($10,000,000) to fifteen million dollars ($15,000,000).
3.04. Upon request from the City Attorney to increase the then-existing Notification and
Consultation Amount, the Board will review and approve or deny the request. “Notification and
Consultation Amount” means that amount (sum of money) per claimant for claims and civil
lawsuits, exclusive of attorneys’ fees and costs, over which (in excess of) the City Attorney must
notify or consult with Councilmembers before settling the claim or civil lawsuit with funds from
the PPL Trust. The Board may not approve a Notification and Consultation Amount that exceeds
two hundred thousand dollars ($200,000).
ARTICLE IV. OPERATION OF PUBLIC AND PROPERTY LIABILITY SELF-
INSURANCE PROGRAM AND PPL TRUST.
4.01. The daily operations of the property and public liability self-insurance program and PPL
Trust will be performed by the City Attorney or designee(s). In operating the property and public
liability self-insurance program and PPL Trust, the City Attorney will have all powers and duties
granted to the City Attorney in the City Charter and City Code, including granted pursuant to Title
1, Chapter 19 of the City Code.
4.02. The City Attorney, through the City’s contracted national insurance broker and with
approval of the City Manager, is authorized to procure and modify the City’s liability insurance
coverages with funds from the PPL Trust, as set forth in Title 1, Chapter 19 of the City Code.
4.03. The City Attorney is authorized to file, pursue, defend, appeal, settle, dismiss, and resolve
any and all claims and civil lawsuits. The City Attorney is authorized to pay claims and lawsuits,
including settlements, judgments, and verdicts with funds from the PPL Trust.
4.04. The process for handling claims and lawsuits, including the settlement, resolution, and
payment of claims and lawsuits with funds from the PPL Trust will be established in and subject
to policies adopted by the City Attorney (the “Litigation Policies”). The Litigation Policies must
at a minimum include policies for claims and risk management, setting financial reserves,
settlement authority and process, and payment approval process.
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4.05. The City Attorney, through the Litigation Policies, is authorized to delegate to members of
the City Attorney’s Office litigation unit, including the Risk Management Claims Analyst,
Assistant City Attorneys, and Deputy City Attorney, authority to settle claims and lawsuits and is
further authorized to determine preapproved settlement amounts for each such member of the
litigation unit and the process for obtaining settlement authority, including settlement authority
from the City Attorney.
4.06. The City Attorney or designee(s) must annually review the Litigation Policies. The City
Attorney is authorized to modify the Litigation Policies at their discretion, including the policies
for settlement authority and settlement amounts; provided however, the City Attorney may not
increase the Notification and Consultation Amount without approval of the Board, and the
Notification and Consultation Amount may not exceed two hundred thousand dollars ($200,000).
The Mesa City Code authorizes the City Attorney to settle all claims and lawsuits on behalf of the
City, but to settle a claim or civil lawsuit in an amount greater than the Notification and
Consultation Amount (per claimant and exclusive of attorneys’ fees and costs) with funds from
the PPL Trust, the City Attorney must notify and consult with Councilmembers, which includes
providing information about the claim or lawsuit and the basis for the settlement to
Councilmembers and consulting with Councilmembers, but it does not include or require a vote of
the City Council.
4.07. The City Attorney or designee(s) must annually provide updates and recommendations to
the Board.
ARTICLE V. OPERATION OF EMPLOYEE BENEFITS SELF-INSURANCE
PROGRAM AND EBT.
5.01. The daily operations of the employee benefits self-insurance and insured benefits programs
and EBT will be performed by the Employee Benefits Administrator or designee(s) in accordance
with the City of Mesa Health Plan Document (the “Plan Document”). Designee(s) of the
Employee Benefits Administrator may include members of the City’s employee benefits
administration unit or the City’s contracted employee benefits third-party administrators or
insurers.
5.02. The duties of the Employee Benefits Administrator include all the following:
A. Determine the eligibility for, and administer the enrollment of eligible members in,
self-insurance and fully insured health, wellness, and welfare employee benefit programs
in accordance with the Plan Document.
B. Process and pay or deny benefits claims, establish and administer provider
networks, conduct appeals administration, execute health, wellness, and welfare employee
benefit contracts on behalf of the City, and authorize funding and payments for professional
services, insurance premiums, fees, and self-insured claims payments related to health,
wellness, and welfare employee benefit programs.
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C. Determine coverage and authorization of health care program services and
compliance with Health Insurance Portability and Accountability Act (HIPAA) and other
state and federal requirements.
D. Make recommendations to the City Manager and appropriate City board or
commission or Council committee (e.g., Employee Benefits Advisory Committee)
regarding authorization of and revisions to the Plan Document, including clarifications,
vendor updates, compliance requirements, cost containment activities, and plan
enhancements to help ensure the Plan Document is comprehensive, competitive, and
compliant with Applicable Laws.
5.03. The Employee Benefits Administrator or designee(s) must annually provide updates and
recommendations to the Board.
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The City has executed this Restatement of Trusts as of the date first set forth above.
CITY OF MESA
______________________________
Scott Butler
City Manager
Attest:
______________________________
Holly Moseley
City Clerk
Approved as to form:
______________________________
Jim Smith
City Attorney
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