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Arizona Metropolitan Trust
(AzMT)
Bylaws
Effective:
July 01, 2012
Revised:
May 23, 2022
TABLE OF CONTENTS
Section
Title
Page(s)
1.
Definitions
1 - 2
2.
Investments
2
3.
Expense Reimbursement
2 - 3
4.
Meetings
3
5.
Officers
3 - 4
6.
Audits
4 - 5
7.
Entity Contributions
5 - 6
8.
Membership
6 - 7
9.
Operations
8 - 10
10.
Amendments to Bylaws
10
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Section 1. Definitions
The following are definitions of terms as used in these By-Laws as well as the Trust Agreement.
To the extent a term is not specifically defined in these By-Laws, but is defined in the Trust
Agreement, the term shall have the meaning given to it in the Trust Agreement.
1.01 “A.R.S.” shall mean the Arizona Revised Statues, as amended.
1.02 “Beneficiary” shall mean Employees, their dependents and such other persons designated
by the Participating Entities as eligible for coverage as set forth in the Summary Plan Description
and approved by the Board.
1.03 “Benefits Administrator” shall mean the person(s) or firm employed by the Board who is
responsible for processing of claims and payment of benefits, and related services.
1.04 “Board of Trustees” or “Board” shall mean the Trustees of the Arizona Metropolitan
Trust acting in their joint capacity as the governing board of the Trust.
1.05 “Employee” shall mean any person employed by a Participating Entity on a regular basis
working not less than the number of hours per week required by the Participating Entities for
eligibility, and who are not eligible for benefits under any other employee benefits to which the
Participating Entity makes contributions.
1.06 “Employee Benefit Program” shall mean the program of benefits to be established by the
Board pursuant to this Trust Agreement and A.R.S. § 11-952.01(c).
1.07 “Employee Contributions” shall mean any contributions made by Employees whether
comprising part of the Entity Premium or whether made directly to the Fund in order to obtain
coverage by the Employee Benefit Program.
1.08 “Entity Contributions” shall mean the contributions made by Participating Entities
comprising all or part of the Entity Premium.
1.09 “Entity Premium” shall mean the total monies paid by each Participating Entity to the
Fund for the Employee Benefit Program, and shall be equal to the sum of Entity Contributions
and Employee Contributions.
1.10 “Fund” shall mean the Trust Fund created by this instrument, and shall mean generally, the
monies, property, contracts or things of value, tangible or intangible, received and held by the
Board for the uses and purposes of the Trust, set forth therein, and those things of value which
comprise the corpus and additions to the fund.
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1.11 “Governing Board” shall mean the policy making board of a Participating Entity duly
elected or appointed to their respective positions in accordance with the laws and constitution of
the State of Arizona.
1.12 “Participating Entities” shall mean those entities listed in Exhibit A which is attached
hereto and incorporated by reference herein, and such additional Participating Entities as may be
approved for membership by the Board of Trustees pursuant to Article XIII of this Trust
Agreement.
1.13 “Summary Plan Description” shall mean the document(s) which generally describe the
employee benefits to be provided by the Trust to the Beneficiaries.
1.14 “Trust” shall mean the entity established by the Trust Agreement pursuant to A.R.S. § 11-
952.01 et seq., which shall be referred to as the Arizona Metropolitan Trust.
1.15 “Trust Agreement” shall mean this Agreement and Declaration of Trust dated July 01,
2012 and any modifications or amendments thereto.
1.16 “Trust Administrator” shall mean the employee benefit consultant retained by the Trust to
carry out the obligations of this Agreement in compliance with Arizona Revised Statute § 11-
952.01(H)(5).
1.17 “Trustee or Trustees” shall mean the individual Trustees and their successors as provided
for in this Trust Agreement.
Section 2. Investments
Investments of Trust cash assets not required for immediate operating expenses may be invested
by the Trust, but the investments are to be limited to the following investments:
A. Government Securities;
B. State of Arizona Local Government Investment Pool (LGIP); and
C. Other investments allowable under A.R.S. § 35-323.
Notwithstanding the provisions of this section, each type of investment actually utilized shall be
subject to prior approval of the Board of Trustees.
Section 3. Expense Reimbursement
Trustees shall be entitled to receive reimbursement for actual reasonable expenses incurred in
carrying out their duties as a Trustee and which are consistent with the Trust Agreement
including, but not limited to:
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A. Meals, Lodging, Air Travel. Reimbursement for the actual amount of meals, lodging and
air travel expenses as evidenced by receipts.
B. Automobile Mileage. Reimbursement for automobile travel expenses at the rate established
by the Internal Revenue Service for purpose of travel expense deductions.
C. Other Expenses. Expenses reimbursed under this provision shall be limited to those which
would be reimbursable under the policies of the Participating Entity that the Trustee has been
appointed to represent.
Section 4. Meetings
A. Open Meeting Laws. All meetings of the Trust shall comply with the requirements of the
Arizona Open Meetings Law.
B. Annual Meeting. The Trust shall designate one of its regular quarterly meetings as the
Trust’s Annual Organization Meeting for the purpose of selecting officers and to conduct
such other business as may be necessary. To the extent possible, the Board of Trustees shall
utilize the same quarterly meeting each year as the annual meeting.
C. Special Meeting. The Chairperson may call a special meeting upon seven (7) days notice to
Trustees. A special meeting may be also be called by a number of Trustees equal to one less
than a majority of the Board. In the event of an emergency, a special meeting may be held
with such lesser notice as may be appropriate and otherwise permissible by law. Upon calling
a special meeting, the Chairperson or Trust Administrator shall promptly notify all
Participating Entities and shall prepare and distribute a written agenda in compliance with the
requirements of the Open Meeting Law.
Section 5. Officers
A. Election of Officers. Every even numbered year during the Annual Organization
Meeting, there shall be an election from the Board of Trustees of the Trust, of a
Chairperson (only if the current Vice Chairperson is unable or unwilling to assume the
role of Chairperson consistent with the succession plan of the Board of Trustees) and a
Vice Chairperson. Nominees must be present to accept or decline such nominations. In
addition, the Chairperson shall designate a Recording Secretary, who does not have to be
a member of the Board of Trustees. These officers shall have the authority to act in those
circumstances and on those matters as specified in the Trust Agreement, in these Bylaws
or as otherwise directed by a majority of the Board of Trustees acting in a public meeting.
The Vice Chairperson, at the end of his/her two-year term, will succeed to the office of
Chairperson if he/she is willing and able to do so. Further, if for some reason the
Chairperson is unable or unwilling to continue in the role during his/her two-year term,
the Vice Chairperson will assume the role of Chairperson and will serve out the
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remainder of that term and continue thereafter for the next full two-year term. The
normal succession process will continue thereafter. The intent of the Board of Trustees is
to have entities who will be actively involved in the governance of the Trust and shall
seek nominations of persons who will further this goal.
B. Term of Office. The term of office for each officer is two years. Officers will serve until
the end of their term and/or when they have been replaced by election or succession.
C. Duties of Officers. The officers of the Trust shall have the following duties:
1. Chairperson. The Chairperson shall preside at all meetings of the Board of Trustees and
perform the usual and customary duties of the Chairperson and such other duties as may
be prescribed by the Board of Trustees from time to time. The Chairperson, alone or
together with such officer or officers as the Board of Trustees may designate by
resolution or bylaw, may sign any contracts or other instruments which the Board of
Trustees have authorized to be executed.
2. Vice-Chairperson. The Vice Chairperson will, in the absence of the Chairperson or in the
event of the inability or refusal of the Chairperson to act, perform the duties of the
Chairperson.
3. Recording Secretary. The Chairperson shall appoint a Recording Secretary who shall
keep minutes of all meetings, proceedings and acts of the Board of Trustees, which
records shall be available at the Principal Office for inspection by all the Trustees and
interested persons during usual business hours. Such records and minutes need not be
verbatim. The Recording Secretary need not be a Trustee.
Section 6. Audits
A. Mandatory Financial Audit. The Board of Trustees shall retain the appropriate
independent professional to perform an annual financial audit as provided by applicable law
and the Trust Agreement. In addition to complying with the requirements imposed by statute
and the Trust Agreement, the financial auditor shall perform such additional duties as may be
directed by the Board of Trustees.
B. Recommended Audits. In addition to the mandatory audit, the Board of Trustees may
conduct the following audits at such intervals as they may determine is in the best interest of
the Trust:
1. Claims Audit. The performance of the Benefits Administrator may be audited to
determine whether claims have been paid in accordance with applicable provisions of the
Plan Document or to otherwise evaluate the general or specific performance of the
Benefits Administrator as deemed appropriate or desirable by the Board of Trustees.
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2. Operational Audit. The Board of Trustees may direct that an independent party conduct
an operational audit of the Trust, its individual service providers or any aspect or
operation of the Trust.
Section 7. Entity Contribution
A. Entity Contribution and Premium Payments. Participating Entity Contribution
payments for Medical/Rx, Dental and Vision shall be due and payable on the first day of
each month with a grace period that requires receipt of the payment by the last business
day of each month.
Premium payments for Life/AD&D, Short- and/or Long-Term Disability shall be due and
payable on the first day of each month with a grace period that requires receipt of
payment by the 20th of each month in order to accommodate timely payment to the
carriers.
B. Entity Contribution Rates. Contribution rates shall be established annually or at other
intervals if determined by the Board of Trustees to be in the best interest of the Trust and its
beneficiaries. Rates shall be based upon sound actuarial principles consistent with fiscal
stability of the Trust and the interest of the Beneficiaries.
C. Past Due Entity Contribution and Premium Payments. Entity Contributions and
Premiums not paid as of the date specified in Paragraph A of this Section shall be subject to
the following late payment process which shall be in addition to any penalties set forth in the
Trust Agreement:
• 1st Late Payment – Letter of Warning;
• 2nd Late Payment – Shall accrue a late payment penalty equal to 0.5% of the Entity’s
current monthly billing amount;
• 3rd Late Payment – Shall accrue a late payment penalty equal to 1.0% of the Entity’s
current monthly billing amount;
• 4th Late Payment – Shall accrue a late payment penalty equal to 1.5% of the Entity’s
current monthly billing amount;
• 5th Late Payment and thereafter – Shall accrue a late payment penalty equal to 2.0% of
the Entity’s current monthly billing amount.
1. Late Payment Penalty Timing. The late payment penalty shall be added by the
Benefits Administrator, or Trust Administrator, to the Entity's monthly contribution
statement and shall be due and payable as part of the Entity’s next monthly
contribution.
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2. Penalties Cumulative. The late payment penalties set forth above are cumulative, such
that any late payments during the term of the Trust Agreement, including payments
that remain unpaid over more than one payment period, shall be counted for purposes
of determining the total number of late payments. The following are two examples of
the manner in which penalties may be cumulated:
Example 1: A Participating Entity’s first late payment receives a letter of warning. If
the first late payment is not paid by the next payment due date, a late payment penalty
of 0.5% shall be applied to any outstanding late balances. If the first late payment
remains unpaid by the next succeeding payment due date, a late payment penalty of
1.0% shall be applied to any outstanding late balances, including any penalty
amounts.
Example 2: A Participating Entity makes the first three payments timely, but is late
with the fourth, which results in a letter of warning. The Participating Entity then
timely makes the next three payments, but is late with the eighth payment; a 0.5%
penalty shall be assessed.
3. Discretionary Penalty Waiver. The Board of Trustees retains the authority to waive, at
its sole discretion, the late payment penalty in the case of extenuating circumstances
if requested by the Participating Entity. The decision whether to waive the late
penalty shall be made at the Board’s next-available regularly-scheduled meeting
following the Participating Entity’s request and such decision shall be final and
binding.
Section 8. Membership
A. Eligibility. Effective July 02, 2012, cities, towns, counties, fire districts, municipal
corporations and any other political subdivisions of these types of entities as may be eligible
for membership pursuant to A.R.S. § 11-952 et seq. located within Maricopa, Pima and Pinal
counties in the State of Arizona shall be eligible to be considered for membership as a
Participating Entity. Membership of fire districts, municipal corporations and other political
subdivisions shall not exceed 25% of the total membership. Arizona Revised Statutes (ARS)
11-952 allows public entities to enter into an agreement or form a separate
legal entity (SLE), including a non-profit organization, to perform powers that are held by all
the contracting parties referred to as Joint Powers of Authority (JPAs). JPAs will not be
considered for membership in the Trust..
B. Application for Membership.
1. Form of Application. Application for membership shall be made on forms provided by
the Trust.
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2. Deadline for Application. Completed applications, as defined by the Board of Trustees,
shall be received by the Trust no less than sixty (60) calendar days prior to the proposed
date that membership would be effective.
3. Evaluation Criteria. Application for membership in the Trust shall be based upon criteria
approved by the Board of Trustees.
4. Board of Trustees Action. The Board of Trustees shall act on applications no less than
ten (10) business days after notification to the applicant that its application is complete.
This limit may be extended in order to obtain additional information required by the Trust
or other parties involved in the underwriting/selection process.
C. Acceptance of Membership Invitation. Upon notification to an applicant of an offer for
membership in the Trust, the applicant shall provide to the Trust a resolution of its Governing
Body, no more than thirty (30) calendar days following such notification accepting the offer
to become a member of the Trust. The resolution shall include:
1. Approval of the Trust Agreement and designation of a representative to execute the
agreement;
2. Acceptance of the proposed schedule of premiums as determined by the Board of
Trustees;
3. Acceptance of the Trust Bylaws as approved and adopted; and
4. Determination by legal counsel for the entity that the resolution and agreements are in
proper form and are within the powers of the entity to approve.
D. Membership Requirements. Members agree to the following:
1. Member employers may not offer any direct or indirect incentive to its employees to
decline coverage under the Trust.
2. Member employers may not contribute more than 50% of the deductible to a Health
Savings Account (HSA).
3. Member employers agree to actively support the Trust’s wellness program in the form of
marketing and communication, allowing employees to participate, providing staff to work
with the Trust’s Administrator in program planning and implementation and similar such
activities.
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Section 9. Operations
A. Applicable Laws. The Trust and its officers, employees and contractors will conform to all
applicable state and federal laws, rules and regulations.
B. Principal Office. The Principal Office of the Trust shall be the office of the Trust’s legal
counsel as follows:
Jones, Skelton & Hochuli, P.L.C.
ATTN: Michael Hensley, Esq.
40 N. Central Ave., Ste. 2700
Phoenix, Arizona 85004
C. Risk Management Plan. The Board of Trustees shall prepare, or cause to be prepared, a
Plan of Risk Management for the Trust. The Plan shall include one or combinations of the
following:
1. The employee benefits to be offered through the Trust;
2. Limits of coverage, whether through self-insurance, conventional insurance purchased
from a commercial carrier or reinsurance;
3. The amount of risk to be retained by the Trust;
4. Major loss control techniques to be implemented;
5. The proposed method of assessing Entity Contributions to be paid by each Participating
Entity of the Trust;
6. A summary of the preceding year's operations and major activities planned for the
coming year;
7. Coverage to be purchased from a commercial carrier, if any; and
8. Such additional information as may be identified by the Board of Trustees.
D. Financial Statements and Operating Reports. The Trust shall provide its members with
periodic reports concerning the financial condition and operation of the Trust. These shall be
provided at least quarterly and may be made more frequently if specified by the Board of
Trustees.
E. Requests for Information. Requests for records or documents of the Trust shall be made
through the Trust Administrator or the Trust’s legal counsel.
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F. Surplus Goal. The Trust has adopted a surplus goal equal to 5 months of budget. Said goal
will be evaluated annually through a recommendation from the Finance Subcommittee
during the annual renewal meeting. Trustees will determine each year whether to change the
surplus goal and/or whether to include additional funding in the renewal numbers in an effort
to grow the surplus.
G. Allocation and Distribution of Surpluses and Deficits
1. Date Credited. Surpluses and deficits shall be credited to the fiscal year in which they
accrue.
2. Surplus/Deficit Allocation. Surpluses and deficits shall be allocated amongst
Participating Entities in accordance with the Surplus/Deficit Allocation Policy and
according to such Surplus/Deficit Allocation Formula/Methodology as the Board of
Trustees may from time to time approve. Adoption of the Surplus/Deficit Allocation
Policy and the Surplus/Deficit Allocation Formula/Methodology to be followed in
allocating surpluses or deficits shall be by two thirds (2/3) vote of the Board of Trustees.
3. Supplemental Assessments for Statutory Compliance. The Board of Trustees shall order
supplemental assessments as needed to comply with applicable provisions of A.R.S. §
11-952.01. Supplemental assessments ordered by the Board of Trustees under this
section shall be calculated in accordance with the Surplus/Deficit Allocation
Formula/Methodology approved by the Board of Trustees at the time the supplemental
assessment is ordered.
4. Supplemental Assessments for Deficits. The Board of Trustees may order supplemental
assessments to cure deficits that arise in any fiscal year but which are not sufficiently
severe to jeopardize the overall solvency of the Trust. Supplemental assessments ordered
by the Board of Trustees under this section shall be calculated in accordance with the
Surplus/Deficit Allocation Formula/Methodology approved by the Trustees at the time
the supplemental assessment is ordered.
5. Release of Surplus. The Board of Trustees may allow for the release of surplus to
Participating Entities through credits applied to monthly contributions in accordance with
the
Surplus/Deficit
Allocation
Policy
and
Surplus/Deficit
Allocation
Formula/Methodology approved by the Trustees at the time the release of surplus is
authorized.
6. Votes for Assessments. Decisions by the Board of Trustees to order supplemental
assessments or allow for releases of surpluses as provided for under this section shall be
by two thirds (2/3) vote of the Board of Trustees.
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7. Compliance with Applicable Law. The Board of Trustees shall comply with all
applicable Federal, State and Local laws in allocating and/or distributing any surpluses or
deficits.
H. Restrictions on Dissemination of Entity Loss Experience. Consistent with the intent and
policy of the Trust to spread risk among all members of the Trust, Participating Entities agree
that only total (aggregate) loss experience of the Trust can be shared amongst its members;
individual entity loss experience will only be shared with the entity for which it is applicable.
Individual entity loss information shall never be shared with other Participating Entities.
Section 10. Amendments to Bylaws
A. Submission. Proposed amendments to the Bylaws should be filed in writing with the Board
of Trustees no less than thirty (30) calendar days prior to the scheduled date of consideration
except in cases of a bona fide emergency. A statement explaining the purpose and effect of
the amendment shall be included. Proposed amendments to the Bylaws shall be reviewed
and approved in writing as to form by counsel for the Trust prior to approval by the Board of
Trustees.
B. Notice to Trustees. All proposed amendments and accompanying statements shall be
transmitted in writing to each Trustee at least fifteen (15) business days prior to the
scheduled date of consideration.
C. Consideration. Except in a bona fide emergency, amendments shall be considered at a
regular meeting of the Board of Trustees. Amendment of the Bylaws shall require a majority
vote of the Board of Trustees.