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CITY OF SEWARD, ALASKA
RESOLUTION 2007-051
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
SEW ARD, ALASKA, AUTHORIZING THE CITY MANAGER TO
ENTER INTO THE ALASKA PUBLIC UTILITIES INSURANCE
TRUST P ARTICIP A TION AGREEMENT
WHEREAS, the Alaska Public Utilities Insurance (APUIT) board approved a mandatory Participation
Agreement that specifies terms of participation, particularly in terms orany reserves; and
WHEREAS, this Participation Agreement also provides mechanisms to assure that new members in
the trust provide adequate reserves; and
WHEREAS, the City of Seward and the present members of APUlT have established adequate
reserves and there is no immediate financial commitment for this agreement; and
WHEREAS, the City of Seward gains a financial advantage by participating in APUlT through higher
benefit levels at lower cost than available in the commercial insurance market; and
WHEREAS, the Participation Agreement helps the APUIT Trust remain financially viable; and
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WHEREAS, the Participation Agreement allows participants to utilize a portion of their dedicated
surplus reserves to fund premium contributions; and
WHEREAS, the Participation Agreement allows the APUIT Trust to seek out new APUIT
participants in order to spread the risk and potentially lower the rates; and
WHEREAS, the Participation Agreement helps the APUlT board exercise fiduciary responsibilities by
protecting the financial integrity of the Trust.
NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SEWARD,
ALASKA, that:
Section 1. The City Manager is hereby authorized to enter into the Alaska Public Utilities Insurance
Trust Participation Agreement for a five year term through December 31, 2011.
Section 2. This resolution shall take effect immediately upon adoption.
2007.
PASSED AND APPROVED by the City Council ofthe City of Seward, Alaska, this 14th day of May,
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CITY OF SEWARD
RESOLUTION 2007-051
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THE CITY OF SEWARD, ALASKA
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AYES:
NOES:
ABSENT:
ABSTAIN:
Dunham, Valdatta, Schafer, Thomas, Amberg, Shafer
None
Bardarson
None
ATTEST:
(City Seal)
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Council Agenda Statement
Meeting Date: May 14, 2007
Through: Phillip Oates, City Manager
From: Kirsten Vesel, Assistant City Manager
Agenda Item: Authorize the City Manager to Enter Into the Alaska Public Utilities Insurance Trust Participation
Agreement
BACKGROUND & JUSTIFICATION
The City of Seward participates in the Alaska Public Utilities Insurance Trust (APUIT) for the purpose of
providing healthcare benefits for eligible employees. APUIT is a self-insured Trust. Participants in APUIT
may include electric utilities, telephone utilities, utility associations and municipalities that provide utility
services to the public.
The APUIT Health Care Plan intends to solicit additional participants in order to increase the numbers
in the insurance pool. The increase in participants will disperse the overall financial risk and potentially lower
the rates. The APUIT Participation Agreement outlines the terms and conditions for new participants in the
Health Care Plan. Participants may terminate its participation in APUIT at any time. In the case that the City
of Seward does voluntarily terminate their participation in APUIT, we will be required to forfeit the City’s
“surplus” Contingency Reserve for the benefit of the APUIT Plan participants. This agreement is not
negotiable with the Trust and already has been approved by a majority vote. The Participation Agreement also
helps the APUIT board exercise fiduciary responsibilities by protecting the financial integrity of the Trust.
The City Manager recommends remaining with the APUIT Health Care Plan based on the comparison of other
health care plans attached. APUIT’s monthly and annual premiums comparison report to Aetna Plan I and
Blue Cross Heritage Select 100 indicate a significant savings for the City. APUIT remains to offer very
competitive rates in comparison to other alternatives.
The APUIT board approved a mandatory Participation Agreement that specifies terms of participation,
particularly in terms of any reserves. The Participation Agreement also provides mechanisms to assure that
new members in the trust provide adequate reserves. The City of Seward and the present members of APUIT
have established adequate reserves and there is no immediate financial commitment for this agreement. The
City of Seward gains a financial advantage by participating in APUIT through higher benefit levels at lower
cost than available in the commercial insurance market. The Participation Agreement helps the APUIT Trust
remain financially viable and allows participants to utilize a portion of their dedicated surplus reserves to fund
premium contributions. The participation agreement is mandatory to remain with the APUIT.
CONSISTENCY CHECKLIST
Where applicable, this agenda statement is consistent with the Seward City Code, Charter, Comprehensive
Plans, Land Use Plans, Strategic Plan and City Council Rules of Procedures.
FISCAL NOTE
There is no financial cost to this participation agreement.
Approved by Finance: ___________________________________
RECOMMENDATION
City Council authorize
the City Manager to Enter Into the Alaska Public Utilities Insurance Trust Participation
Agreement.