Public Employee Benefits Alliance (PEBA): Bylaws

ARTICLE I
Creation of PEBA

The Public Employee Benefits Alliance (hereinafter referred to as “PEBA”) was established on January 13, 2006 by the entry of certain local governments of the State of Texas into a charter interlocal agreement. These local governments created PEBA pursuant to Chapter 791 of the Texas Government Code and /or Chapter 271 of the Local Government Code to administer an agreement to combine the purchasing power of the participating local governments in order to increase their bargaining power in negotiations with providers of products and services relating to employee benefits for officials, employees, retirees, and their eligible dependents, of counties, cities, school districts and other local governments of the State of Texas and any other state of the United States of America.

ARTICLE II
Definitions

As used in this agreement, the following terms shall have the meaning hereinafter set out:

A. Board: the Board of Directors of PEBA;

B. Charter Member: a local government which signed the charter interlocal agreement that formed PEBA.

C. Member: A member of PEBA may be any one of the following: (1) a local government which enters into and maintains the requisite contractual relationship through an intergovernmental agreement with PEBA; (2) a Charter Member of PEBA; (3) a member of a Pool that is a Charter Member of PEBA.

ARTICLE III
Purposes

A. PEBA is a combination of local govenments and is organized for the benefit of local governments. PEBA will administer the cooperative purchasing of goods, services and other items to be used in the Members’ provision of employee benefits.

This cooperative purchasing will assist Members in controlling costs by taking advantage of economies and efficiencies of scale, and lessen the burdens of government. PEBA is not intended to operate as an insurance company, or to pool risks among its Members, but to administer cooperative purchasing endeavors on behalf of its Members.

B. Although PEBA’s aim is to generate savings for its Members and not to generate income for PEBA, any income received and accepted by the Board to be administered under these Bylaws may be held and invested for PEBA in such a manner as the Board shall determine. The investment policy of PEBA shall be established by resolution of the Board in compliance with the Public Funds Investment Act and may be changed from time to time.

C. No part of the income or assets of PEBA shall inure to the benefit of or be distributable to its directors, officers, Members, or private persons, except that PEBA may pay reasonable compensation for services rendered and may make payments and distributions in furtherance of the purposes set forth herein. This section does not prevent the Board from reimbursing members of the Board for reasonable and necessary expenses connected with service on the Board.

D. Upon dissolution of PEBA, the Board of Directors shall, after paying or making provision for the payment of all the liabilities of PEBA, distribute all the assets of PEBA either to the then-current Members, which are organizations whose income is excluded from federal income taxation under section 115(1) of the Internal Revenue Code and who contributed to any remaining surplus pro rata in proportion to their annualized contributions, or to a successor entity whose income is excluded from federal income taxation under section 115(1) of the Internal Revenue Code.

ARTICLE IV
Non-Waiver of Governmental or Other
Immunity or Monetary Limits

All funds, plus earned interest, contained within PEBA are funds derived from the Members or earnings thereon. It is the intent of the Members that, by entering into interlocal participation agreements to become Members of PEBA, they do not waive and are not waiving any immunity or damage limits provided by law to PEBA, its Members, or their respective officers or employees. PEBA and its Members expressly reserve their governmental immunity. No provision of these Bylaws, any interlocal agreement, or any other document governing PEBA’s creation or operation shall be construed to waive PEBA’s governmental immunity, or that of a Member.

ARTICLE V
Powers

A. The powers of PEBA to perform and accomplish the purposes set forth above shall be the following, subject to the financial limits of PEBA and the procedures set forth in these Bylaws:

To administer such cooperative purchasing endeavors as are approved by the Board and that directly relate to the provision of employee benefits for Members.
To reasonably charge Members and/or vendors for services provided, including the costs of operation;
To retain employees, agents and independent contractors necessary to administer and achieve the purposes of PEBA, including but not limited to attorneys, accountants, financial advisors, administrators, investigators, experts, consultants and others;
To purchase and lease real property, equipment, machinery, and personal property
To hold all funds contributed by Members and to invest such funds in investments authorized by the Board pursuant to its investment policy;
To carry out such other activities as are necessarily implied or required to carry out the purposes of PEBA;
To sue, to the extent authorized by law;
To enter into contracts;
To enter into interlocal participation agreements with local governments eligible to become Members under these Bylaws and to vary the provisions of such agreements in accordance with the policies and decisions of the Board;
To require at any time the execution by a Member of a new interlocal participation agreement within sixty (60) days of the Member's receipt of such new agreement, or in the absence of execution, to terminate the Member's participation in PEBA in accordance with Article XVI of these Bylaws;
To reimburse Directors, to the extent funds are available, for reasonable and approved expenses;
To purchase insurance and fidelity bonds from an insurance company approved by the Texas Department of Insurance to write surety bonds in Texas;
To enforce the terms of the interlocal participation agreements into which it enters with Members.

B. PEBA shall have only those powers consistent with Texas law, these Bylaws, the interlocal participation agreements entered into with Members, and any amendments adopted hereto and as otherwise provided by law.

ARTICLE VI
Participation

Membership in PEBA shall be limited to local governments that agree to abide by the standards for membership adopted by the Board, to abide by the Bylaws, and to enter into interlocal participation agreements with PEBA. The Board may establish a minimum initial period of participation for new Members, which shall be for a period of not less than one year, subject to the payment of such sums and under the conditions established in these Bylaws. PEBA may refuse to accept any applicant for membership.

ARTICLE VII
Duration of Membership

All Members of PEBA, unless terminated or expelled pursuant to the withdrawal or expulsion provisions of these bylaws, may remain Members indefinitely.

ARTICLE VIII
Obligations of Members

The obligations of the Members are:

A. To pay promptly amounts due to PEBA at such times and in such amounts as shall be established pursuant to these Bylaws and the interlocal participation agreement. Failure of a Member to pay any amount due within thirty (30) days of receipt of an invoice may result in the assessment of a late fee at a rate not to exceed the maximum interest rate allowed by law;

B. To designate in writing a representative to serve as a coordinator with PEBA (a “PEBA Coordinator”). The PEBA Coordinator must be an employee or officer of the Member and of department head rank or above, but may be changed from time to time;

C. To allow PEBA and its agents, contractors, and officers, reasonable access to records of the Member, as required for the administration of PEBA;

D. To cooperate fully with PEBA's agents, contractors, or officers of PEBA in activities relating to the purposes and powers of PEBA;

E. To pay to a contracted vendor all amounts due for products, services and other items purchased by the Member collectively through PEBA, and to agree that PEBA will not be financially responsible for any failure to perform by the vendor or the Member.

ARTICLE IX
Charges/Dividends

A. PEBA may charge the Members and/or the vendors for the services provided, with such charges being established by the Board and fully disclosed to the Members.

B. Any surplus resulting from an excess of accumulated income over expenses shall be available for the benefit of the membership in accordance with Board determinations, but in no event is any Member entitled to a distribution of such surplus under this section.

ARTICLE X
Board of Directors and Officers

A. The Initial Board of Directors, as constituted by the Charter Interlocal Agreement, will serve through December 31, 2007. The Initial Board of Directors shall select a Chair and Vice Chair from among the Initial Directors. The Initial Board Chair shall appoint a Secretary, who may or may not be an Initial Director, to keep the minutes and records of the Initial Board.

B. After December 31, 2007, the Board shall be comprised of ten (10) persons, three (3) of whom shall be non-voting as set forth in Article X, section E, below. No Member may have more than one employee or elected official on the Board at any one time. A Board member shall be an employee or an elected or appointed official of a local government that is a member of PEBA, shall not be currently under indictment, and shall not have been convicted of a crime of moral turpitude. Employees of the Texas Association of Counties, the Texas Association of School Boards, Inc., and TML Intergovernmental Employee Benefits Pool are not eligible to be full members of the Board, but may serve as ex officio, non-voting members of the Board, pursuant to Article X. § E of the Bylaws, The withdrawal of a Member shall vacate the membership on the Board of Directors of any employee or elected or appointed official from the withdrawing Member. Any Board member who ceases to be an employee or elected official of a Member shall immediately cease to be a member of the Board of Directors.

C. On or before December 31, 2007, the Board of Directors shall be elected by the Members. Three of such Directors, to be known as Group A Directors, shall serve a term of two (2) years. Another four of such Directors, to be known as Group B Directors, shall serve a term of three (3) years. The regular term of office shall be three (3) years. No person shall serve more than three (3) consecutive full terms as Director. The term for Group B Directors is a full term. Group A and B Directors will be elected from a slate of candidates submitted by the Initial Board of Directors.

D. The officers of the Board shall consist of a Chair and a Vice Chair, who shall be designated annually by a majority vote of the Board. The Chair shall appoint a Secretary, who may or may not be a member of the Board itself, to keep the minutes and records of the Board.

E. Directors shall be selected by a combination of election and appointment. One (1) Director shall be appointed by the Texas Association of Counties Health and Employee Benefits Pool (“HEBP Director”). One (1) Director shall be appointed by the Texas Association of School Boards Risk Management Fund (“TASB RMF Director”). One (1) Director shall be appointed by the TML Intergovernmental Employee Benefits Pool (“TML IEBP Director”). The HEBP Director, TASB RMF Director and TML IEBP Director are referred to collectively as the Pool Directors. The Pool Directors may be appointed from members of the boards of directors of the respective pools, or from elected officials or employees of local governments that are members of the respective pools. In addition to these voting seats on the Board, HEBP, TASB RMF and TML IEBP shall each appoint a non-voting ex officio member to the PEBA Board of Directors. Such appointees shall be employees of the respective Pools or employees of the Associations associated with the Pools, and shall serve in an advisory capacity.

The remaining four (4) Directors shall be elected in the following manner: the Chair of PEBA shall, with the concurrence of the Board of Directors (or its Executive Committee), select a nominee for each elected Director position.

Together with a ballot, notice of the nomination shall be mailed by the Secretary to the PEBA Coordinator of every Member. The elected Directors shall consist of one (1) representative from a city Member; one (1) representative from a school district Member; one (1) representative from a county and one (1) representative at large. Each mayor, county judge, chief executive officer or other designee of each Member shall, on behalf of the Member, cast the ballot by mail or other method which may be prescribed by PEBA’s Board of Directors. The ballots which are received by the Secretary no later than 5 p.m. on the fourteenth (14th) day after the date of issuance of the notice of nomination shall be canvassed by the Secretary and approved by the Chair of PEBA’s Board of Directors, subject to the discretion of the whole Board of Directors to review and approve the canvass. The person receiving the highest number of votes shall be elected to the office. The Secretary shall notify the Members of the results of the canvass.

F. Any Director who fails to attend two (2) or more meetings, whether regular or special, within a 12-month period without having been excused by the Chair, shall be deemed to have resigned. The Chair may excuse a Director from attendance at a meeting of the Board for good cause.

G. A majority of members of the Board, as the Board is constituted at the time, shall constitute a quorum. Concurrence of a majority of those present and voting shall be necessary for any official action taken by the Board, except as otherwise provided herein. Any vacancy on the Board due to death, resignation, disqualification, or inability to act shall be filled for the unexpired term by selection of another member in the same manner that the original member was selected. The designation of a person to fill an unexpired term of a Director shall not be deemed to create service in a consecutive term for purposes of the prohibition of paragraph B of this Article.

H. The duly appointed or elected, qualified and acting Members of the Board shall serve without compensation, but shall be entitled to reimbursement of reasonable expenses incurred in the performance of their official duties, if funds are available, upon the approval of such expenses by the Board or pursuant to Board policy.

I. The Directors shall not be deemed to have the duties of trustees under the Texas Trust Act or the common law, but shall be ordinary fiduciaries. They may act in accordance with the business judgment rule and the other constituencies doctrine.

J.No Director shall vote on an agenda item related to a service contract between PEBA and the Member which the Director represents.

Neither a Director, nor the local government a Director represents, shall submit a proposal to PEBA in response to a Request for Proposals published by PEBA for services or products related to employee benefits. However, TAC, TASB and TML IEBP may provide administrative assistance and services to PEBA.

K. If a Director appointed pursuant to Article X, Section E ceases to serve for any reason, the entity that appointed that Director shall appoint an individual to fill the vacancy. If a Director elected pursuant to Article X, Section E ceases to serve, the Chair shall appoint an individual to fill the vacancy. An individual appointed under this section serves for the remainder of the term of the Director the individual replaced.

ARTICLE XI
Powers and Duties of the Board of Directors

A. PEBA’s Board of Directors shall have all the powers and duties necessary for the accomplishment of the purposes and goals of PEBA, including but not limited to the following specific powers and duties:

To contract for such professional services as it may deem necessary and to fix the time, manner, and payment therefor;
To carry out or supervise the performance of all of the duties necessary for the proper operation and administration of PEBA on behalf of PEBA Members. The Board shall have all of the powers necessary and desirable for the effective administration of the affairs of PEBA, including the power to delegate certain functions to contractors as described herein;
To adopt a Plan of Operation, and to adopt rules to carry out the requirements of and implement the Bylaws and Plan of Operation and all interlocal participation agreements with its Members;
To establish the fees and other payments to be paid by the Members to cover the costs of operating PEBA ;
To develop and prepare the interlocal participation agreement or agreements to be entered into by political subdivisions to become Members of PEBA, including different agreements to effect different objectives;
To set a budget and any necessary revisions to the budget;
To establish policies for the investment and disbursement of funds;
To arrange for the investing of the monies of PEBA in accordance with the Board’s investment policy and to open and maintain bank and other accounts as are deemed necessary by the Board;
To have an audit performed by a certified public accountant at the end of each fiscal year if the revenues to PEBA are in excess of $250,000(?);
To form and delegate to committees and provide other services as needed by PEBA;
To do all acts necessary and proper for the operation of PEBA and implementation of these Bylaws subject to the limits of the Bylaws and not in conflict with these Bylaws;
To implement the dissolution of and disbursement of assets of PEBA following a determination made pursuant to the provision of Article III, Section D;
To require at any time the execution by a Member of a new interlocal participation agreement within sixty (60) days of receipt of such new agreement by mail, or in the absence of execution, to terminate the Member's participation in PEBA at the option of the Board, in accordance with Article XVI of these Bylaws;
The Board shall have the general power to make and enter into all contracts, leases, and agreements necessary or convenient to carry out any of the powers granted under these Bylaws or under any other law. All such contracts, leases, and other agreements shall be approved by resolution of the Board and shall be executed by those individuals designated in such resolution. However, the Board’s designee shall have the power to execute interlocal participation agreements in accordance with the policy or practice of the Board without the necessity of express Board action on each such agreement. Additionally, the Board shall have the power to delegate all the above mentioned functions to contractors as permitted under these Bylaws or other law. In the absence of such designation or delegation, all agreements shall be executed by the Chair or Vice Chair.

B. The Chair of the Board may appoint an Executive Committee or designee of the Board to handle the affairs of the Board between the regular Board meetings or any of the called Board meetings. The Board shall review the actions of the Executive Committee at each Board meeting to ratify any actions taken. The Chair may appoint other committees with authority specifically granted by the Board and subject to its supervision. The Board may dissolve any such committee at any time.

ARTICLE XII
Meetings of the Board of Directors

A. Meetings may be called by the Chair or by a majority of the Directors or by a waiver of notice that is executed by all of the Directors.

B. All acts of the Board shall require a majority vote of the Directors present and voting, except as otherwise specifically provided in these Bylaws.

C. To the extent allowed by law, any meeting of the Board may be held by telephone conference call in which all or certain of the Directors are not physically present at the place of the meeting, but all or some participate in the conduct thereof by telephone. For the purpose of determining the presence of a quorum and for all voting purposes at such a meeting, all participating Directors, including those participating by telephone, shall be considered present and acting.

ARTICLE XIII
Liability of Board of Directors

A. Members of the Board of Directors of PEBA and any employees thereof, shall not be personally liable to any Member, official, employee, retiree, eligible dependent of a Member, or any other person for any acts performed or omitted in good faith or in accordance with relevant objective standards. PEBA shall use its available resources to defend and indemnify the Members of PEBA's Board of Directors and employees thereof, against/any and all expense, including attorney’s fees and liability expenses sustained by them or any of them in connection with any suit or suits which may be brought against said Members of the Board of Directors and such employees involving or pertaining to any of their acts or duties performed or omitted for PEBA in accordance with the above standards. PEBA may, if funds are available, purchase insurance providing coverage for the Directors and employees thereof. Nothing herein shall be deemed to prevent compromises of any such litigation where the compromise is deemed advisable in order to prevent greater expense or cost in the defense or prosecutions of such litigation.

B. PEBA may obtain a bond or other security to guarantee the faithful performance of the duties of each Director.

ARTICLE XIV
Bond

Each member of the Board and each employee who has any authority over money in PEBA or money collected or invested by PEBA may be required by the Board to execute a bond in an amount determined by the Board, conditioned on faithful performance of his or her duties. The cost of the bond shall be paid by PEBA.

ARTICLE XV
Withdrawal from Membership

A. Any Member may withdraw from PEBA by giving at least thirty (30) days' written notice to the Board of its desire to withdraw. A withdrawing Member shall have no right to any portion of the assets or accumulated surplus of PEBA.

ARTICLE XVI
Expulsion of Members

A. By a majority vote of the Board, not including any Director disqualified pursuant to Article XVI. B., any Member may be expelled. Such expulsion, which shall take effect sixty (60) days after such meeting, may be carried out for one or more of the following reasons:

Failure to allow PEBA or its administrators reasonable access to records of the Member necessary for proper administration of PEBA;
Failure to fully cooperate with PEBA's administrators or other agent, contractor, or any officer of PEBA;
Failure to carry out any obligation of a Member which impairs the ability of PEBA to carry out its purposes or powers;
Failure to comply with the obligations of Members as set forth in Article VIII of these Bylaws;
Failure to execute a new interlocal participation agreement with PEBA when required under Article V, paragraph 10 and under Article VIII, paragraph A of these Bylaws; or

B. The vote of a Director who is employed by, an officer of, or otherwise representing a political subdivision proposed to be expelled shall not be counted in determining the number of votes required nor shall such Director be entitled to vote on the expulsion of his or her own political subdivision.

C. Except for nonpayment of an obligation to PEBA, no Member may be expelled except after written notice from the Board of Directors of the alleged failure along with a reasonable opportunity of not less than thirty (30) days to cure the alleged failure. The Member may request a hearing before the Board before any final decision, which shall be held within thirty (30) days after the expiration for the time to cure has passed. A decision by the Board to expel a Member after notice of hearing and failure to cure the alleged defect shall be final and take effect sixty (60) days after the decision to expel is rendered by the Board. After expulsion, the former Member shall continue to be liable for any unpaid contributions and to make any payment for which an obligation arose prior to expulsion or in accordance with any contract provisions. The expelled Member shall not be entitled to any reimbursement of contributions that are to be paid or that may become payable in the future; provided, however, the expelled Member shall be entitled to receive all distributions which are declared before expulsion of the Member and are given in accordance with Board determinations, subject to a set-off for any outstanding obligation to PEBA. If the Member is expelled prior to the end of Member's annual coverage period, normal short-rate earned premium factors will be applied to determine the obligation of the Members.

D. Notwithstanding any other provision in these Bylaws, the Board may terminate the membership and expel a Member without further notice if any payment owed by the Member to PEBA remains outstanding beyond sixty (60) days of the due date.

E. Expulsion shall be in addition to any other remedy which otherwise exists.

F. Expulsion is without prejudice to that local government’s ability to reapply for membership in PEBA.

ARTICLE XVII
Contractual Obligation

A. An original or certified or attested copy of each Member's executed interlocal participation agreement shall remain on file with PEBA.

B. Except to the extent of the financial payment to PEBA agreed to herein or such additional obligations as may come about through amendments to these Bylaws, no Member agrees or contracts herein to be held responsible for any claims made against any other Member. The contracting parties intend in the creation of PEBA to establish an organization to operate only within the scope herein set out and have not herein created as between Member and Member any relationship of surety, agency, indemnification or responsibility for the debt of or claims against any other Member.

ARTICLE XVIII
Fiscal Year

The fiscal year of PEBA shall be the calendar year or other twelve (12) month period as established by the Board of Directors.

ARTICLE XIX
Severability

In the event that any article, provision, clause or other part of these Bylaws is held invalid or unenforceable by a court of competent jurisdiction, such validity or unenforceability shall not affect the validity or enforceability with respect to other articles, provisions, clauses, applications or occurrences, and these Bylaws are declared to be severable.

ARTICLE XX
Amendment of Bylaws

A. The Board may amend these bylaws at any meeting of the board. Any amendment to the Bylaws shall become binding on any PEBA Member upon its adoption. The provisions of any amendment which alter the rights of a Member which would otherwise exist under a contract shall be effective on the thirtieth (30th) day after written notice of the provision has been served on the Member in accordance with the contract provisions, or otherwise as the parties may agree.

B. Notwithstanding the provisions of Article XX, Section A, amendments to Article III, Purposes, can only be amended by a majority vote of the entire PEBA Membership. Each Member shall have one (1) vote.

ARTICLE XXI
Notices

A. Any notice required or permitted by these bylaws to be given to a Member, a Director, an officer, or member of a committee of PEBA may be given by facsimile, mail, telegram, or e-mail. If mailed, a notice is deemed delivered when deposited in the mail addressed to the person at his or her address as it appears on the PEBA’s records, with postage prepaid. If given by telegram, a notice is deemed delivered when accepted by the telegraph company and addressed to the person at his or her address as it appears on the PEBA’s records. If given by facsimile transmission, a notice is deemed delivered when printed confirmation of receipt is obtained from the transmitting mechanism. If given by e-mail, a notice is deemed delivered at the moment it is sent. PEBA is not responsible for failure of delayed delivery of notice by the United States Postal Service, the facsimile service provider, the internet service provider or any other intermediary transmitting the notice. A person may change his or her address in PEBA’s records by giving written notice of the change to the secretary of PEBA.

B. Whenever any notice is required by law or these bylaws, a written waiver signed by the person entitled to receive such notice is considered the equivalent to giving the required notice. A waiver of notice is effective whether signed before or after the time stated in the notice being waived.

C.A person’s attendance at a meeting constitutes waiver of notice of the meeting unless the person attends for the express purpose of objecting to the transaction of any business because the meeting was not lawfully called or convened.

ARTICLE XXII
Miscellaneous Provisions

A. These bylaws will be construed under Texas law. All references in these bylaws to statutes, regulations, or other sources of legal authority will refer to the authorities cited, or their successors, as they may be amended from time to time.

B. To the greatest extent possible, these bylaws shall be construed to conform to all legal requirements and all requirements for obtaining and maintaining all tax exemptions that may be available to unregistered organizations such as PEBA. If any bylaw provision is held invalid, illegal, or unenforceable in any respect, the invalidity, illegality, or unenforceability will not affect any other provision, and the bylaws will be construed as if they had not included the invalid, illegal, or unenforceable provision. Venue for any dispute arising out of or under these bylaws shall be in Travis County, Texas.

C. The headings used in the bylaws are for convenience and may not be considered in construing the bylaws.

D. All singular words include the plural, and all plural words include the singular.

E. A person may execute any instrument related to PEBA, except a vote or written consent of a director or committee member, by means of a power of attorney if an original executed copy of the power of attorney is provided to the secretary to be kept with the corporate records.

F. The bylaws will bind and inure to the benefit of the directors, officers, committee Members, employees, and agents of PEBA and their respective heirs, executors, administrators, legal representatives, successors, and assigns except as the bylaws otherwise provide.