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HomeMy WebLinkAboutFS 2014-07-08 Item 2B - Resolution - Authorize Issuance of Claims Prior to Council Approval-s 4. TO: City of Tukwila Jim Haggerton, Mayor INFORMATIONAL MEMORANDUM Mayor Haggerton Finance & Safety Committee FROM: Peggy McCarthy, Finance Director BY: Vicky Carlsen, Deputy Finance Director DATE: July 2, 2014 SUBJECT: Resolution authorizing issuance of checks before approval by Council ISSUE Approve Resolution authorizing the City to issue checks before Council has approved such claims through the Consent Agenda process. BACKGROUND The City currently pays claims twice a month, immediately after Regular Council meetings. Most contracts, professional services and utilities are paid via a regularly issued check. Many supplies are purchased via a City issued credit card (PCard program) through US Bank. Occasionally, invoices are paid late due to unforeseen circumstances with vendors, mail delivery issues, etc. DISCUSSION The City is seeking formal approval from Council to issue checks prior to Council approval to address urgent claims issues that sometimes arise. While this does not happen frequently, it does occasionally occur, and having authority to pay claims prior to Council approval gives the City the flexibility to pay the invoices immediately rather than waiting for the next Regular Council meeting. RCW 42.24.180 allows taxing districts, including Cities, to issue checks before approval by the legislative body. In order for the City to seek Council authority to implement this process, the City must meet 3 conditions. The conditions are outlined in the chart below and show the current practice and what changes could occur if Council allows the City to pay claims prior to Council approval. Requirement per RCW 42.24.180 Current Practice Revised Practice • The Auditing Officer and the The Finance Director and No change individuals designated to sign other City staff are currently checks shall have in place an bonded for $250,000 per official bond for the faithful loss discharge of his or her duties in an amount equal to or exceeding $50,000 9 INFORMATIONAL MEMO Page 2 The City Council shall adopt contracting, hiring, purchasing and disbursing policies that implement effective internal controls The City Council shall provide for its review of the documentation supporting claims paid and for City Council approval of all checks issued for payment of claims at a Council meeting within one month of issuance of the checks The City Council shall require that if, upon its review, it disapproves some claims, the Director of Finance and individuals designated to sign checks shall jointly establish the disapproved claims as receivables of the City and pursue collection diligently until the amounts disapproved are collected or until the City Council is satisfied and approves the claims Policies currently in place, policies reviewed and updated as necessary Council reviews all documentation prior to issuing checks Necessary process change upon implementation of proposed resolution No change Council would continue to review all documentation on a regular schedule. Most claims would be paid after Council review and approval, The City would have the authority to pay invoices immediately when necessary. Upon Council review, if a claim is disapproved, the claim will be recognized as a receivable to the City and the City will pursue collection until either the funds are recovered or the Council approves the claim for payment. While paying claims prior to Council approval gives the City flexibility to handle claims issues that can arise, the Council shall continue to retain full authority for review and approval. If the City needed to issue a check prior to Council approval, no more than 3 weeks would lapse before Council would have the opportunity to review and approve the check. It is not uncommon for government entities to seek this authority. Many cities and other government agencies have already implemented the provisions in RCW 42.24.180 including the Cities of Federal Way, Kent, SeaTac, and Newcastle. Having this ability will allow the Finance department to optimize efficiency and effectiveness and improve service quality and better ensure timely payment of invoices. RECOMMENDATION Council is being asked to approve the resolution and consider this item at the July 14, 2014 Committee of the Whole meeting and subsequent July 21, 2014 Regular Meeting. ATTACHMENTS Draft Resolution CrimeSHIELD Policy for Governmental Entities RCW 42.24.180 Taxing district — Issuance of warrants or checks before approval of legislative body - Conditions 10 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, AUTHORIZING ISSUANCE OF CHECKS IN PAYMENT OF CLAIMS BEFORE THE COUNCIL HAS ACTED TO APPROVE SUCH CLAIMS WHEREAS, RCW 42.24.180 authorizes the legislative body of local governments to authorize issuance of checks in payment of claims, after the designated officer has signed the checks; and WHEREAS, the City Council of the City of Tukwila has determined that it would be in the best interest of the City and its citizens, and would promote effectiveness and efficiency in the administration of the accounts payable of the City, to implement this enabling statute at the City of Tukwila effective August 1, 2014; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, HEREBY RESOLVES AS FOLLOWS: Section 1. The Mayor and Auditing Officer of the City of Tukwila are authorized to sign or co-sign checks. The Mayor is the designated officer of the City, and the Finance Director shall serve as the Auditing Officer. Both the Mayor and the Auditing Officer shall be required to furnish an official bond for the faithful discharge of his or her duties in an amount not less than $50,000. Section 2. Any authorization provided by this resolution is subject to the adoption of policies and procedures for purchasing and disbursement of funds, which shall implement effective internal controls over funds and property of the City. Such policies and procedures shall be approved by resolution or other official City Council action. Section 3. Whenever checks are issued prior to City Council review and approval, as supported by this authorizing resolution, such review and approval of claims and supporting documentation shall occur at a regularly scheduled City Council meeting within one month from the date of issuance. W:\Word Processing\Resolutions\Authorize issuance of checks before Council approval 6-30-14 VC:bjs Page 1 of 2 11 Section 4. Upon the City Council's review of claims and supporting documentation, if the Council disapproves one or more claims, the Auditing Officer and Mayor shall jointly cause the disapproved claim or claims to be recognized (and shown on the City's financial books and records) as accounts receivable of the City. Collection of such accounts receivable shall be diligently pursued until the amounts are collected or until the City Council is satisfied and approves such claim or claims. Section 5. The City shall implement the policies and procedures authorized per RCW 4224.180 and this resolution effective August 1, 2014. PASSED BY THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, at a Regular Meeting thereof this day of , 2014. ATTEST/AUTHENTICATED: Christy O'Flaherty, MMC, City Clerk De'Sean Quinn, Council President APPROVED AS TO FORM BY: Filed with the City Clerk: Passed by the City Council: Resolution Number: Shelley M. Kerslake, City Attorney W:\Word Processing\Resolutions\Authorize issuance of checks before Council approval 6-30-14 VC:bjs Page 2 of 2 12 CrimeSHIELD Policy for Governmental Entities Co Code Hartford Fire Insurance Company Hartford, CT 06115 Hartford Casualty Insurance Company Hartford, CT 06115 1 3 The Company is shown above by Co. Code 1 Co Code Hartford Insurance Company of Illinois Naperville, IL 60566 Hartford Insurance Company of the Midwest Indianapolis, IN 46204 Hartford Insurance Company of the Southeast Maitland, FL 32751 G J POLICY NUMBER 52BPEAD8178 In return for the payment of the premium, and subject to all the terms of this Policy, we agree with you to provide the insurance stated in this Policy. DECLARATIONS ITEM 1. Named Insured: CITY OF TUKWILA 2. Mailing Address: 6200 SOUTHCENTER BLVD. TUKWILA, WA. 98188 from April 7, 1999 until cancelled 3. Policy Period: (12:01 A.M. Standard Time at Your Mailing Address) 4. Coverages, Limits of Insurance and Deductibles: Insuring Agreements, Limit of Insurance and Deductible Amounts shown below are subject to all of the terms of this policy that apply. Insuring Agreements Forming Part of This Policy 1.A. Employee Theft - Per Loss 1.B. Employee Theft - Per Employee 2. Depositors Forgery or Alteration 3. Theft, Disappearance and Destruction Money, Securiies and Other Property 4. Robbery and Safe Burglary - Money and Securities 5. Computer and Funds Transfer Fraud Limit of Insurance $250,000 $0 $0 Deductible Amount $1,000 $0 $0 $0 $0 $0 $0 5. Form Numbers of Endorsements Forming Part of This Policy When Issued: F- 4290 -0, F- 4298 -0 6. Cancellation of Prior Insurance: By acceptance of this Policy you give us notice cancelling prior policies or bonds numbered: the cancellations to be effective at the time this policy becomes effective. This Policy has been signed by the Company's President and Secretary, but it shall not be binding unless it is countersigned by its authorized representative. Michael S. Wilder, Secretary Ramani Ayer,President & COO Countersued by: , Authorized Representative Form F- 4202 -0 Page 1 of 12 © 1998, The Hartford 13 Throughout this Policy the words "you" and "your" refer to the named Insured in the Declarations. The words "we ", "us ", and "our" refer to the Company providing this insurance. Other words and phrases that appear in quotation marks have a special meaning. Refer to Section V., Exclusions; Section VI., General Conditions; and Section VII., Definitions, to determine where this Policy restricts coverage. I. CONSIDERATION CLAUSE In exchange for the payment of premium and subject to the Declarations, Insuring Agreements, Exclusions, Genera! Conditions, Definitions and terms of this Policy, we will pay for loss which you sustain resulting directly from acts committed or events occurring at any time and discovered by you during the Policy Period shown in the Declarations or during the period of time provided in General Condition L., EXTENDED PERIOD TO DISCOVER LOSS. II. INSURING AGREEMENTS Coverage is provided under the following Insuring Agreements if either an amount is stated in the Insuring Agreement or for which there is a Limit of Liability shown in the Declarations. A. INSURING AGREEMENT 1.A. - EMPLOYEE THEFT - PER LOSS We will pay for Toss of or damage to "money", "securities" and "other property" In any one "occurrence" which results directly from "theft" by an "employee", whether or not identifiable, while acting alone or in collusion with other persons. In this Insuring Agreement, "occurrence" means all loss caused by, or involving, one or more "employees" whether the result of a single act or a series of acts. B. INSURING AGREEMENT 1.B. - EMPLOYEE THEFT - PER EMPLOYEE We will pay for loss of or damage to "money", "securities" and "other property" In any one "occurrence" which results directly from "theft" by an "employee ", whether or not identifable, while acting alone or in collusion with other persons. In this Insuring Agreement, "occurrence" means all Toss up to the Limit of Liability caused by each "employee ", whether the result of a single act or a series of acts. C. INSURING AGREEMENT 2. - DEPOSITORS FORGERY OR ALTERATION 1. We will pay for Toss resulting directly from "forgery" or alteration of checks, drafts, promissory notes, or similar written promises, orders or directions to pay a sum certain in "money" that are a. made or drawn upon you; or b. made or drawn upon one acting as your agent and drawn on your account or that are purported to have been so made or drawn. 2. We will treat mechanically reproduced signatures the same as handwritten signatures. 3. If you are sued for refusing to pay any instrument in C.1. above, on the basis that it has been forged or altered and you have our written consent to defend against that suit, we will pay for any reasonable legal expenses that you incur and pay in such defense. The amount that we will pay is in addition to the Limit of Liability applicable to this Insuring Agreement. If a Deductible Amount applies to this Insuring Agreement, we will also apply it to the amount of legal expenses incurred in this Insuring Agreement. 4. You must include with your proof of loss any instrument involved in that loss, or, if that is not possible, an affidavit setting forth the amount and cause of loss and describing both sides of said instrument. 5. This Insuring Agreement covers loss you sustain anywhere in the world; the.Territory General Condition does not apply. Form F- 4202 -0 14 © 1998, The Hartford Page 2 of 12 D. INSURING AGREEMENT 3. - THEFT, DISAPPEARANCE AND DESTRUCTION - MONEY, SECURITIES AND OTHER PROPERTY 1. INSIDE THE PREMISES a. We will pay for loss of "money" and "securities" inside the "premises" or "banking premises" resulting directly from "theft", disappearance or destruction. b_ We will pay for loss of or damage to "other property" (1) inside the "premises" resulting directly from an actual or attempted "robbery" of a "custodian "; or (2) inside the "premises" in a safe or vault resulting directly from an actual or attempted "safe burglary". c. We will pay for loss from damage to the "premises" or its exterior resulting from an actual or attempted (1) "theft" of "money" or "securities "; or (2) "robbery" or "safe burglary" of "other property" if you are the owner of the "premises" or are liable for damage to it. d. We will pay for loss of or damage to a locked safe, vault, cash register, or cash box or cash drawer located inside the "premises" resulting directly from an actual or attempted "theft" or unlawful entry into those containers. 2. OUTSIDE THE PREMISES We will pay for a. loss of "money" and "securities" outside the "premises" in the care and custody of a "messenger" or an armored motor vehicle company resulting directly from "theft', disappearance or destruction; or b. Toss of or damage to "other property" outside the "premises" in the care and custody of a "messenger" or an armored motor vehicle company resulting directly from an actual or attempted "robbery". E. INSURING AGREEMENT 4. - ROBBERY AND SAFE BURGLARY - MONEY AND SECURITIES 1. INSIDE THE PREMIS ES We will pay for loss of or damage to "money" and "securities" a. resulting directly from an actual or attempted "robbery" of a "custodian" inside the "premises "; or b. resulting directly from an actual or an attempted "safe burglary" occurring inside the "premises" or inside a "banking premises ". 2. OUTSIDE THE PREMISES We will pay for Toss of or damage to 'money" and "securities" outside the "premises" in the care and custody of a "messenger" or an armored motor vehicle company resulting directly from an actual or attempted "robbery". F. INSURING AGREEMENT 5. - COMPUTER AND FUNDS TRANSFER FRAUD We will pay for Toss of and loss from damage to "money", "securities" and "other property" following and directly related to the use of any computer to fraudulently cause a transfer of that property from inside the "premises" or "banking premises" 1. to a person (other than a "messenger") outside those "premises "; or 2_ to a place outside those "premises ". And, we will pay for Toss of "money" or "securities" through "funds transfer fraud" resulting directly from "fraudulent transfer instructions" communicated to a "financial institution" and instructing such institution to pay, deliver, or transfer "money" or "securities" from your "transfer account". G. INSURING AGREEMENT 6. - MONEY ORDERS AND COUNTERFEIT CURRENCY Form F- 4202 -0 Page 3 of 12 © 1998, The Hartford 15 1. We will pay for loss resulting directly from your having in good faith, in exchange for merchandise, "money" or services accepted a. money orders issued by any post office, express company or bank in the United States of America or Canada that are not paid upon presentation; and b. "counterfeit' United States of America or Canadian Paper currency that is acquired during the regular course of business. The Limit of Insurance under this insuring agreement is $50,000. and there is no deductible applying to Toss covered under this agreement. 2. You must notify the police if you have reason to believe that you have accepted a "counterfeit" money order or "counterfeit" paper currency. III. LIMIT OF INSURANCE The most that we will pay for Toss in any one "occurrence" is the applicable Limit of Insurance shown in the Declarations. IV. DEDUCTIBLE We will not pay for loss in any one "occurrence" unless the amount of the loss exceeds the Deductible Amount shown in the Declarations. We . will then pay the amount of loss in excess of the Deductible Amount, up to the Limit of Insurance. In the event that more than one Deductible Amount could apply to the same loss, only the highest Deductible Amount will be applied. You must give us notice as soon as possible of any loss of the type insured under the Policy if, in your best estimation, such loss will, or will appear to exceed 25% of the current Deductible Amount for the Insuring Agreement under which the loss has occurred. V. EXCLUSIONS (Applying To All insuring Agreements Unless Otherwise Specified) This Policy Does Not Apply To And We Will Not Pay For: A. Accounting or Arithmetical Errors or Omissions Loss resulting from accounting or arithmetical errors. B. Acts of Employees, Managers, Directors, Trustees or Representatives Loss resulting from "theft" or any other dishonest or criminal act committed by any of your "employees ", managers, directors, trustees or representatives whether acting alone or in collusion with other persons or while performing services for you or otherwise except when covered under Insuring Agreement 1.A. or 1.B. C. Bonded Employee Loss caused by any "employee" required by law to be individually bonded. D. Damages Damages for which you are legally liable as a result of: t _ the deprivation of the civil rights of any person by an "employee"; or 2. the tortious conduct of an "employee" except conversion of property of other parties held by you in any capacity_ E. Employee Cancelled Under Prior Insurance Loss cause by any "employee" of yours or predecessor in interest of yours, for whom similar prior insurance has been cancelled and not reinstated since the last cancellation. F. Exchanges or Purchases Loss resulting from the giving or surrendering of property in any exchange or purchase. G. Fire Loss from damage to the premises resulting from fire, however caused, except for loss of or damage to "money" or "securities" and loss from damage to a safe or vault under Insuring Agreement 3. and 4. H. Governmental Action Loss resulting from seizure or destruction of property by order of governmental authority. Form F- 4202 -0 16 © 1998, The Hartford Page 4 of 12 I. Indirect Loss Loss that is an indirect result of any act or "occurrence" covered by this Policy including but not limited to loss resulting from 1. your inability to realize income that you would have realized had there been no loss of or damage to "money", "securities" or "other property ". 2. payment or damages of any type for which you are legally liable. But we will pay compensatory damages arising directly from a loss covered under this policy. 3. payment of costs, fees or other expenses you incur in establishing either the existence of or the amount of loss under this policy. J. Inventory Shortages Loss, or that part of any loss, the proof of which is as to its existence or amount is dependent upon 1. an inventory computation; or 2. a profit and loss computation. However, where you establish wholly apart from such inventory computations that you have sustained a loss covered under this Policy, then you may offer your inventory records and actual physical count of inventory in support of the amount of loss claimed. K. Legal Expenses Expenses related to any legal action except when covered under Insuring Agreement 2. L. Money Operated Devices Loss of property contained in any money operated device unless the amount of any "money" deposited in it is recorded by a continuous recording instrument in the device. M. Motor Vehicles or Equipment And Accessories Loss of or damage to motor vehicles, trailers, or semi - trailers or equipment or accessories attached to them. N. Nuclear Loss resulting from nuclear reaction, nuclear radiation, or radioactive contamination, or any related act or incident. O. Trading Losses Loss resulting directly or indirectly from trading, whether in your name or in a genuine or fictitious account. P. Transfer or Surrender of Property Loss of or damage to property of any kind after it has been transferred or surrendered to a person or place outside the "premises" or "banking premises" 1. on the basis of unauthorized instructions; or 2. as a result of a threat to do bodily harm to any person; or 3. as a result of a threat to do damage to any property. But this Exclusion does not apply under Insuring Agreement 3. or 4. to loss of "money', "securities" and `other property" while outside the "premises" or "banking premises" in the care and custody of a "messenger" if you: 1. had no knowledge of any threat at the time that the conveyance began; or 2. had knowledge of a threat at the time the conveyance began, but the loss was not related to the threat. Q. Treasurer or Tax Collector Loss caused by a treasurer or tax collector by whatever name known. R. Vandalism Loss from damages to the "premises" or to the exterior of any safe, vault, cash box, cash drawer or cash register by vandalism or mischief. S. Voluntary Parting of Title To or Possession of Property Loss resulting from your, or anyone acting on your express or implied authority, being induced by any dishonest act to voluntarily part with title to or possession of any property. T. War and Similar Actions Loss resulting from war, whether or not declared, warlike action, insurrection, rebellion, or revolution, or any related act or incident. Form F -4202 -0 Page 5 of 12 © 1998, The Hartford 17 VI. GENERAL CONDITIONS A. ARMORED MOTOR VEHICLE COMPANIES Under Insuring Agreements 3. and 4. we will pay only for the amount of loss you cannot recover 1. under your contract with the armored motor vehicle company; and 2. from any insurance or indemnity carried, by or for the benefit of customers of the armored motor vehicle company or from the armored motor vehicle company. B. CALCULATION OF PREMIUM The premium shown in the Declarations was computed based on rates in effect at the time the Policy was issued. On each renewal, continuation, or anniversary of the effecive date of this Policy, we will compute the premium in accordance with our rates and rules then in effect. C. CANCELLATION OR NONRENEWAL OF POLICY 1. CANCELLATION a. The first named Insured shown in the Declarations may cancel this Policy by mailing or delivering to us advance written notice of cancellation. b. We may cancel this policy by mailing or delivering to the first named Insured written notice of cancellation at least: (1) 10 days before the effective date of cancellation if we cancel for non - payment of premium; or (2) 90 days before the effective date of cancellation if we cancel for any other reason. c. We will mail or deliver our notice to the first named Insured's last mailing address known to us. d. Notice of cancellation will state the effective date of cancellation. The Policy Period will end on that date. e. If this policy is cancelled, we will send the first named Insured any premium refund due. If we cancel, the refund will be pro rata. If the first named Insured cancels, the refund may be less than pro rata. The cancellation will be effective even if we have not made or offered a refund. f. If notice is mailed, proof of mailing will be sufficient proof of notice. 2. NONRENEWAL a. We may elect not to renew this Policy at each annual anniversary date. b. If we decide not to renew this policy, we will mail or deliver written notice to the first named Insured shown in the Declarations, at the address shown in this Policy, at least 90 days before the annual anniversary date. c. If notice is mailed, proof of mailing will be sufficient proof of notice. D. CANCELLATION AS TO ANY EMPLOYEE Insuring Agreement 1.A. or 1.B. is cancelled as to any "employee" a. immediately upon discovery by you or any official or employee authorized to manage, govern, or control your "employees ", of "theft" or any other dishonest act committed by the "employee" whether before or after becoming employed by you. b. on the date specified in a notice mailed to you. The date will be at least 30 days after the date of the mailing. And, the mailing of notice to you at the last mailing address known to us will be sufficient proof of notice. Delivery of notice is the same as mailing. E. CHANGES This Policy contains all of the agreements between you and us concerning the insurance afforded. The first named Insured shown in the Declarations is authorized to make changes in the terms of this Policy with our consent. This Policy's terms can be amended or waived only by endorsement issued by us and made a part of this Policy. Form F- 4202 -0 Page 6 of 12 © 1998, The Hartford 18 F. CONCEALMENT, MISREPRESENTATION OR FRAUD This Policy is void in any case of fraud by you as it relates to this Policy at any time. It is also void if you or any other Insured, at any time, intentionally conceal or misrepresent a material fact concerning 1. this Policy; 2. the property covered under this Policy; 3. your interest in the property covered under this Policy; or 4. a claim under this Policy. G. CONSOLIDATION OR MERGER If through consolidation or merger with, or purchase or acquisition of assets or liabilities of, some other entity, any additional persons become "employees" or you acquire the use and control of any additional "premises" 1. you must give us written notice and obtain our written consent to extend this insurance to such additional "employees" or "premises ". We may condition our consent upon payment of an additional premium; but there shall only be a premium charge if such merger or acquisition results in a 15 %, or greater, increase in the number of "employees ", assets or revenues acquired through the merger or acquisition. 2. For the first 60 days after the effective date of such consolidation, merger, acquisition of assets or liabilities, any insurance afforded for "employees" or "premises" also applies to these additional "employees" or "premises" for acts committed within this 60 day period. H. DISCOVERY 1. We will pay for loss which you sustain through acts or events committed or occurring at any time and which are discovered by you during the Policy Period or during the period provided in General Condition L., EXTENDED PERIOD TO DISCOVER LOSS. 2. Discovery of loss occurs when you first become aware of facts which would cause a reasonable person to assume that a Toss covered by this Policy has been, or may be incurred even though the exact amount or the details of the loss may not then be known. 3. Discovery also occurs when you receive notice of an actual or potential claim against you alleging facts, which if true, would constitute a covered loss under this policy. I. DUTIES IN THE EVENT OF LOSS After you discover a loss or a situation which may result in a loss of or damage to "money", "securities" or "other property ", you must 1. notify us as soon as possible but no later than 60 days after discovery of loss. 2. submit to examination under oath at our request and give us a signed statement of your answers. 3. give us a detailed, sworn proof of Toss within 120 days. 4. cooperate with us in the investigation and settlement of any claim. 5. notify the police if you have reason to believe that your loss involves a violation of law. J. EMPLOYEE BENEFIT PLANS 1. If any one or more "employee benefit Plans" are insured jointly with any other entity under this Policy, you or the plan administrator must select a Limit of Insurance for Insuring Agreement 1. that is sufficient to provide a Limit of Insurance for each Plan which is at least equal to that required if each Plan were separately insured. 2. If the first named Insured is an entity other than a Plan, any payments we make to the Insured for loss sustained by any Plan will be held by that Insured for the use and benefit of the Plan(s) sustaining the loss. 3. If two or more Plans are insured under this Policy, any payment which we make for loss sustained by two or more Plans, or of commingled "funds" or "other property" of two or more Plans, which arises out of one "occurrence ", is to be shared by each Plan sustaining loss in the proportion that the Limit of Insurance required for each Plan bears to the total of those limits. 4. This Policy insures those Plans which are named as additional Insureds in the Declarations or on any attached Schedule for loss through fraud or dishonesty as defined in Section 2580.412 -9 of the Employee Retirement Income Security Act (ERISA) as amended. For any Plans not specifically named as Insureds, this Policy is deemed to be in compliance with, and satisfy the Form F -4202-0 © 1998, The Hartford Page 7 of 12 19 bonding requirements of Section 2580.412.11 of the act. This insurance provides a Limit of Insurance which is equal to 10% of the amount of the funds handled or $500,000., whichever is less, for each Plan bonded and the minimum Limit of Insurance for any Plan shall be $1,000. The Limit of Insurance available for any Plan loss will be determined by the amount of funds handled on the date when any covered loss occurs subject to the foregoing limitations. 5. The Deductible provision which applies to the Employee Theft Insuring Agreement shall not apply to Toss which is sustained by any Plan subject to ERISA and which Plan is covered under this insurance. K. EXAMINATION OF YOUR BOOKS AND RECORDS 1. We may examine and audit your books and records as they relate to this Policy at any time during the Policy Period and up to three years afterward. 2. We may also examine and audit the books and records of any organization which you newly acquire and that is deemed to be a named Insured under this Policy. L. EXTENDED PERIOD TO DISCOVER LOSS 1. We will pay for loss which you sustained prior to the effective date of termination or cancellation of this insurance, which is discovered by you a. no later than 60 days from the date of the termination, cancellation or non - renewal; and b. as respects any "employee benefit Plans )", no later than 1 year from the date of that termination, cancellation or non - renewal. 2. However, this extended period to discover loss terminates immediately upon the effective date of any other insurance obtained by you to replace, in whole or in part, the insurance afforded by this Policy, whether or not such other insurance provides coverage for loss sustained prior to its effective date. M. FACSIMILE SIGNATURES We will treat mechanically reproduced facsimile signatures the same as handwritten signatures. N. INDEMNIFICATION We will indemnify any of your officials who are required by law to give bonds for the faithful performance of their service against loss through "theft" by an "employee" who serves under them, subject to the Limit of insurance. O. INSPECTION AND SURVEYS 1. We have the right but are not obligated to a. make inspections and surveys at any time; b. give you reports on the conditions we find; and c. recommend changes. 2. Any inspections, surveys, reports or recommendations relate only to insurability and the premiums to be charged. We do not make safety inspections. We do not undertake to perform the duty of any person or organization to provide for the health or the safety of workers or the public. And, we do not warrant that conditions a. are safe or healthful; or b. comply with laws, regulations, codes or standards. 3. This condition applies not only to us, but also to any rating, advisory, rate service or similar organization which makes insurance inspections, surveys, reports or recommendations. P. JOINT INSURED 1. If more than one Insured is named in the Declarations, the first named Insured will act for itself and for every other Insured for all purposes of this Policy. If the first named Insured ceases to be covered, then the next named Insured will become the first named Insured. 2. if any Insured or officer of an Insured has knowledge of any information relevant to this Policy, that knowledge is considered to be knowledge of every Insured. 3. An "employee" of any Insured is considered to be an "employee" of every Insured. 4. If this Policy or any of its Insuring Agreements is cancelled, terminated or non - renewed as to any Insured, loss sustained by that Insured is covered only if discovered by you during the period of time provided in General Condition L., EXTENDED PERIOD TO DISCOVER LOSS. And, this extended period to discover loss also terminates in accordance with paragraph 2 of that condition. Form F -4202-0 Page 8 of 12 © 1998, The Hartford 20 5. We will not pay a greater amount for loss sustained by more than one Insured than we would pay if all of the loss had been sustained by one Insured. Q. LEGAL ACTION AGAINST US You may not bring any legal action against us involving loss 1. unless you have complied with all the terms of this Policy; and 2. until 90 days after you have filed proof of loss with us; and 3. unless such action is brought within 2 years from the date that you discover such loss. R. LIBERALIZATION If we adopt any revision that would broaden the coverage within the Policy without additional premium within 45 days prior to or during the Policy Period, the broadened coverage will immediately apply to this Policy. S. LOSS COVERED UNDER MORE THAN ONE INSURING AGREEMENT OF THIS POLICY If two or more Insuring Agreements of this Policy apply to the same loss, we will pay the lesser of 1. the actual amount of loss; or 2. the sum of the Limits of Insurance applicable to those Insuring Agreements. T. NON ACCUMULATION OF LIMIT OF INSURANCE Regardless of the number of years this Policy remains in force or the number of premiums paid, no Limit of Insurance cumulates from year to year or Policy Period to Policy Period. U. OTHER INSURANCE 1. This policy does not apply to loss recoverable or recovered under other insurance or indemnity. If the limit of the other insurance or indemnity is insufficient to cover the entire amount of the loss, this Policy will apply to that part of the loss, other than that failing within any Deductible Amount, not recoverable or recovered under the other insurance or indemnity. 2. However, this Policy will not apply to the amount of loss that is more than the applicable Limit of Insurance shown in the Declarations. V. OWNERSHIP OF PROPERTY; INTERESTS COVERED 1. The property covered under this Policy is limited to property a. that you own or lease; or b. for which you are legally liable. W. PREMIUMS The first named Insured is responsible for the payment of all premiums and will be the payee for all return °premiums we pay. X. RECORDS You must keep records of all property covered under this policy so we can verify the amount of any loss. Y. RECOVERIES 1. Any recoveries, less the cost of obtaining them, made after the settlement of loss covered by this Policy will be distributed a. to you, until you are reimbursed for any Toss that you sustain that exceeds the Limit of Insurance and the Deductible Amount, if any;' b. then to us, until we are reimbursed for the settlement made; and c. then to you, until you are reimbursed for that part of the loss equal to the Deductible Amount, if any. 2. Recoveries do not include any recovery a. from insurance, suretyship, reinsurance, security or indemnity taken for our benefit; or b. of original "securities" after duplicates of them have been issued. Z. SOLE BENEFIT This insurance is for your sole benefit. No legal proceeding of any kind to recover on account of loss under this policy may be brought by anyone but you. Form F -4202-0 Page 9 of 12 © 1998, The Hartford 21 AA. SPECIAL LIMIT OF INSURANCE FOR SPECIFIED PROPERTY (Insuring Agreement 3.) We will pay no more than $5,000. for any one "occurrence" of loss of or damage to 1. precious metals, precious or semi- precious stones, pearls, furs or completely or partially completed articles made of or containing such materials that constitute the principal value of such articles; or 2. manuscripts, drawings or records of any kind or the cost of reconstructing them or reproducing any information contained in them. BB. TERRITORY This Policy covers acts committed or events occurring within the United States of America, U.S. Virgin Islands, Puerto Rico or Canada. However, we will pay for loss under Insuring Agreement 1. which is caused by an "employee" while temporarily outside of the territories named in this General Condition for a period of not more than 90 consecutive days. CC. TRANSFER OF YOUR RIGHTS OF RECOVERY AGAINST OTHERS TO US You must transfer to us all your rights of recovery against any person or organization for any loss you sustained and for which we have paid or settled. You must also do everything necessary to secure those rights and do nothing after loss to impair them. DD. VALUATION 1. Subject to the applicable Limit of Insurance, we will pay for a. loss of "money" but only up to and including its face value. We may, at our option, pay for a loss of "money" issued by other than the United States of America in either the face value in the "money" issued in that country, or, in the United States of America dollar equivalent determined by the rate of exchange on the day that the loss occurred. b. loss of "securities' but only up to and including their value at the close of business on the day that the loss was discovered. But, we may, at our option, 1) pay the value of such "securities ", 2) replace them in kind in which event you must assign to us all your rights, title and interest in and to those "securities" or 3) pay the cost of any Lost Securities Bond required in connection with issuing duplicates of the "securities". However, we will be liable only for the payment of so much of the cost of the bond as would be charged for a bond having a penalty not exceeding (1) the value of the "securities" at the close of the business on the day the loss was discovered; or (2) the Limit of Insurance. c. loss of or damage to "other property" or loss from damage to the "premises" or its exterior for the replacement cost of the property without deduction for depreciation, subject to 2. below. However, we will not pay for more than the lesser of (1) the Limit of Insurance applicable to the lost or damaged property; or (2) the cost to replace the lost or damaged property with property of comparable material and quality and used for the same purpose; or (3) the amount that you actually spend that is necessary to repair or replace the lost or damaged property. 2. We will not pay on a replacement cost basis for any loss or damage a. until the lost or damaged property is actually repaired or replaced; and b. unless the repair or replacement is made as soon as reasonably possible after the loss or damage. If the lost or damaged property is not repaired or replaced, we will pay based on actual cash value. 3. We may, at our option, pay for loss of or damage to property other than "money" in the "money" of the country in which the loss occurred; or in the United States of America dollar equivalent of the "money" of the country where the loss occurred determined by the rate of exchange on the day the loss was discovered. Any property that we pay for or replace becomes our property. 4. Loss of or loss from damage to any books or records of account or other records, tapes, disks, or electronic media used by you in the business but only if a_ such books, records, tapes or disks are actually reproduced and then only for not more than the blank books, pages, tapes and disks or other materials plus the cost of labor for the actual transcription or copying of data which you shall furnish to reproduce such books, records, tapes or disks. VII DEFINITIONS Form F4202 -0 22 © 1998, The Hartford Page 10 of 12 A. "Banking premises" means the interior portion of that part of any building occupied by a banking institution or similar safe depository. B. "Counterfeit" means an imitation of an actual valid original which is intended to deceive and to be taken as the original C. "Custodian" means any "employee" while having the care and custody of property inside the "premises ", excluding any person while acting as a "watchperson" or janitor. D. "Employee" means 1. any natural person a. while in your service or for 60 days after termination of service; and b. who you compensate directly by salary, wages, commissions; and c. who you have the right to direct and control while performing services for you; including d. who is performing services for you as the chairman, or a member of any committee and whether compensated or not; or f. who is a non - compensated officer, or g. who is a volunteer who is not compensated, other than one who is a fund solicitor, while performing services for you that are usual to the duties of an "employee "; or h. who is a former employee, director or trustee retained as a consultant while performing services for you; or i. who is a student intem or guest student pursuing studies or duties in any of your offices or "premises ". 2. a natural person who is a trustee, officer, "employee", administrator or manager, except an administrator or a manager who is an independent contractor, of any "employee benefit Plan(s)" insured under this Policy; and your director or trustee while that person is handling "funds" or "other property" of "employee benefit Plan(s)" insured under this Policy. 3. a natural person who is furnished temporarily to you to substitute for a permanent "employee" to meet seasonal or short term work load conditions and while that temporary person is subject to your direction and control and performing services for you. However, such persons are excluded while having care and custody of property outside the "premises "; and a. "employee" does NOT mean (1) any agent, broker, person leased to you by a labor leasing firm, factor, commission merchant, consignee, independent contractor or representative of the same general character; or (2) any manager, director or trustee except while performing acts coming within the scope of the usual duties of an "employee". E. "Employee benefit Plan(s)" means any welfare or pension Plan listed in the Declarations, on an attached schedule or for which automatic coverage is afforded that is subject to the Employee Retirement Income Security Act (ERISA) of 1974, as amended. F. "Financial institution" means a bank, savings bank, savings and loan association or similar thrift institution, a stockbroker, mutual fund, liquid assets fund, or similar investment institution in which you maintain a "transfer account". G. "Forgery" means the signing of the name of another person or organization with intent to deceive; it does riot mean a signature which consists in whole or in part of one's own name signed with or without authority, in any capacity, for any reason. H. "Fraudulent transfer instructions" means 1. fraudulent electronic, telegraphic, facsimile, cable, teletype or telephone instructions to a "financial institution" to debit a "transfer account" and to pay, transfer or deliver "money" or "securities" from such account and which instructions purport to have been authorized by you but which have been fraudulently transmitted by another; or 2. fraudulent written instructions to a "financial institution" to debit a "transfer account" and to pay, transfer or deliver "money" or "securities" from such account through an electronic funds transfer system at specified times or under specified conditions and which instructions purport to have been duly authorized by you but which have been fraudulently issued, forged or altered by another. 1. "Funds transfer fraud" means "theft" of "money" or "securities" from any of your "transfer accounts" at a "financial institution" and occurring through "fraudulent transfer instructions" communicated to such "financial institution". J. "Messenger" means you or any "employee" while having care and custody of property outside the "premises ". one Form F- 4202 -0 Page 11 of 12 © 1998, The Hartford 23 K. "Money" means currency, coins and bank notes in current use and having a face value; and travelers checks, register checks and money orders held for sale to the general public. L. "Occurrence" means 1. as respects the Employee Theft Insuring Agreement, all loss caused by, or involving, one or more "employees ", whether the result of a single act or a series of acts. 2. as respects the Forgery or Alteration Insuring Agreement, all loss caused by any person or in which that person is involved, whether the loss involves one or more instruments. 3. as respects all other Insuring Agreements, an act or series of related acts involving one or more persons; or an act or event or a series of related acts or events not involving any person. M. "Other Property" means any tangible property other than "money" or "securities" that has intrinsic value but does not include any property excluded under this Policy. "Other property" does not include trade secrets, proprietary information, confidential information or any copyrights, patents, trademarks, proprietary manufacturing or processing procedures, or secret or confidential information, including but not limited to credit card numbers, bank account numbers or any similar information. N. "Premises" means the interior of that portion of any building which you occupy in conducting your business. O. "Robbery" means the unlawful taking of property from the care and custody of a person by one who has caused or threatened to cause that person bodily harm, or, committed an obviously unlawful act witnessed by that person. P. "Safe burglary" means the unlawful taking of property from within a locked safe or vault by a person unlawfully entering the safe or vault as evidenced by marks of forcible entry upon its exterior, or, the taking of a safe or vault from inside the "premises ". Q. "Securities" means negotiable or non - negotiable instruments or contracts representing either "money" or property and includes tokens, tickets, revenue and other stamps (whether represented by actual stamps or unused value in a meter) in current use; and, evidences of debt issued in connection with credit or charge cards, which cards are not issued by you; but does not include "money". R. "Theft" means the unlawful taking of "money", "securities" or "other property" to the deprivation of the Insured. S. "Transfer account" means an account maintained by you at a "financial institution" from which you or your authorized representative may cause the payment, transfer or delivery of "money" or "securities" by any means described in the "fraudulent transfer instructions" definition. T. "Watchperson" means any person who you retain specifically to have the care and custody of property inside the "premises" and who has no other duties. Form F -4202-0 24 © 1998, The Hartford Page 12 of 12 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. BRIDGE ENDORSEMENT The word "Policy" replaces the phrases "Crime General Provisions" and "Crime Coverage Forms" or "Coverage Part" wherever they appear in this Policy or in any endorsement made a part of the Policy. Form F- 4290 -0 Page 1 of 1 © 1998, The Hartford 25 26 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. WASHINGTON CHANGES A. The following General Conditions in the Policy are deleted in their entirely and replaced with the following: CANCELLATION a. The first named Insured shown in the Declarations may cancel this Policy by mailing or delivering to us advance written notice of cancellation. b. We may cancel this Policy by mailing or delivering to the first named Insured and the first named Insured's agent or broker written notice of cancellation, including the actual reason for the cancellation, to the last mailing address known to us, at least: (1) 10 days before the effective date of cancellation if we cancel for nonpayment of premium; or (2) 45 days before the effective date of cancellation if we cancel for any other reason. G. We will also mail or deliver to any mortgage holder, pledgee or other person shown in this Policy to have an interest in any loss which may occur under this Policy, at their last mailing address known to us, written notice of cancellation, prior to the effective date of cancellation. This notice will be the same as that mailed or delivered to the first named Insured. d. Notice of cancellation will state the effective date of cancellation. The Policy Period will end on that date. e. If this Policy is canceled, we will send the first named Insured any premium refund due. If we cancel, the refund will be pro rata. If the first named Insured cancels, the refund will be at least 90% of the pro rata refund. The cancellation will be effective even if we have not made or offered a refund. f. If notice is mailed, proof of mailing will be sufficient proof of notice. CHANGES This Policy contains all the agreements between you and us concerning the insurance afforded. The first named Insured shown in the Declarations is authorized on behalf of all insured to agree with us on changes in the terms of this Policy. If the terms are changes, the changes will be shown in an endorsement issued by us and made a part of this Policy. EXAMINATION OF YOUR BOOKS AND RECORDS 1. We may examine and audit your books and records as they relate to this Policy at any time during the Policy Period and up to three years afterward. 2. We may do the same as to the books and records of any organization you newly acqui re or form that is deemed to be named Insured under this Policy. INSPECTIONS AND SURVEYS We have the right but are not obligated to: 1. Make inspections and surveys at any time; 2. Give you reports on the conditions we find; and 3. Recommend changes. Any inspections, surveys, reports or recommendations relate only to insurability and the premiums to be charged. Such inspections are not safety inspections. We do not undertake any duty to provide for the health or safety of any person. And we do not represent or warrant that conditions: 1. Are safe or healthful; or Form F- 4298 -0 © 1998, The Hartford Includes copyrighted material of Insurance Services Office, Inc. with its permission ©copyright, Insurance Services Office, inc., 1988, 1997 Page 1 of 2 27 2. Comply with laws, regulations, codes or standards. This condition applies not only to us, but also to any rating, advisory, rate service or similar organization which makes insurance inspections, surveys, reports or recommendations on our behalf. NONRENEWAL We may elect not to renew this Policy by mailing or delivering written notice of non - renewal, stating the reasons for nonrenewal, to the first named Insured and the first named Insured's agent or broker at their last mailing addresses known to us. We will also mail to any mortgage holder, pledgee or other person shown in this Policy at their last mailing address known to us, written notice of nonrenewal. We will mail or deliver these notices at least 45 days before the: a. Expiration of the Policy; or b. Anniversary date of this Policy if this Policy has been written for a tern of more than one year. Otherwise, we will renew this Policy unless: a. The first named Insured fails to pay the renewal premium after we have expressed our willingness to renew, including a statement of the renewal premium, to the first named Insured and the first named Insured's agent or broker at least 20 days before the expiration date; or b. Other coverage acceptable to the insured has been procured prior to the expiration date of the Policy. PREMIUMS The first named Insured shown in the Declarations: 1. Is responsible for the payment of all premiums; and 2. Will be the payee for any return premiums we pay. RECOVERIES Any recovery or salvage on a loss will accrue entirely to our benefit until the sum paid by us has been made up. But, we will be entitled to any other recovery only after you have been fully compensated for the loss. B. The TRANSFER OF YOUR RIGHTS OF RECOVERY AGAINST OTHERS TO US General Condition is replaced by the following: If any person or organization to or for whom we make payment under this Policy has rights to recover damages from another, those rights are transferred to us to the extent of our payment. That person or organization must do everything necessary to secure our rights and must do nothing after loss to impair them. Form F- 4298 -0 Page 2 of 2 © 1998, The Hartford Includes copyrighted material of Insurance Services Office, Inc. with its permission ©copyright, Insurance Services Office, inc., 1988, 1997 28 RCW 42.24.180: *Taxing district — Issuance of warrants or checks before approval by legislative body ... Page 1 of 1 RCW 42.24.180 *Taxing district — Issuance of warrants or checks before approval by legislative body — Conditions. In order to expedite the payment of claims, the legislative body of any *taxing district, as defined in RCW 43.09.260, may authorize the issuance of warrants or checks in payment of claims after the provisions of this chapter have been met and after the officer designated by statute, or, in the absence of statute, an appropriate charter provision, ordinance, or resolution of the *taxing district, has signed the checks or warrants, but before the legislative body has acted to approve the claims. The legislative body may stipulate that certain kinds or amounts of claims shall not be paid before the board has reviewed the supporting documentation and approved the issue of checks or warrants in payment of those claims. However, all of the following conditions shall be met before the payment: (1) The auditing officer and the officer designated to sign the checks or warrants shall each be required to furnish an official bond for the faithful discharge of his or her duties in an amount determined by the legislative body but not Tess than fifty thousand dollars; (2) The legislative body shall adopt contracting, hiring, purchasing, and disbursing policies that implement effective internal control; (3) The legislative body shall provide for its review of the documentation supporting claims paid and for its approval of all checks or warrants issued in payment of claims at its next regularly scheduled public meeting or, for cities and towns, at a regularly scheduled public meeting within one month of issuance; and (4) The legislative body shall require that if, upon review, it disapproves some claims, the auditing officer and the officer designated to sign the checks or warrants shall jointly cause the disapproved claims to be recognized as receivables of the *taxing district and to pursue collection diligently until the amounts disapproved are collected or until the legislative body is satisfied and approves the claims. [1994 c 273 § 18; 1984 c 128 § 11.] Notes: *Reviser's note: "Taxing district" redesignated "local government" by 1995 c 301 § 15. http: // apps .leg.wa.gov /rcw /default.aspx ?cite= 42.24.180 6/30/20