2007-519-Resolution No. 2007-059 Recorded 5/11/20074UGA
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COUNTY OFFICIALNANCYUTES BLANKENSHIP, COUNTY CLERKDS U2007-519
COMMISSIONERS' JOURNAL 05/11/1001 11;11;11 AM
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2007-519
For Recording Stamp Only
BEFORE THE BOARD OF COUNTY COMMISSIONERS OF DESCHUTES COUNTY, OREGON
A Resolution Authorizing Use of an
Irrevocable Standby Letter of Credit to
Satisfy Workers' Compensation Security
Deposit Requirements and Authorizing
Signatures by the County Administrator
and Finance Director.
RESOLUTION NO. 2007 - 059
WHEREAS, in the past Deschutes County has purchased a bond to cover injury reserves in
order to participate in the self-insured Workers' Compensation program through the State of
Oregon; and
WHEREAS, the State of Oregon provides alternative funding mechanisms for counties under
Oregon Administrative Rule 436-050-0165, Security Deposit Requirements, to reserve for
incurred injury losses; and
WHEREAS, Deschutes County has obtained an Irrevocable Standby Letter of Credit to meet the
deposit requirements provided under OAR 436-050-0165, now therefore,
BE IT RESOLVED BY THE BOARD OF COUNTY COMMISSIONERS OF DESCHUTES
COUNTY, OREGON, as follows:
Section 1. County agrees to utilize an Irrevocable Standby Letter of Credit in the form attached
as exhibit A, to meet conditions required by the State of Oregon to maintain its self-insured
certification for Workers' Compensation.
Section 2. County designates and authorizes the County Administrator and the Finance
Director to sign the Irrevocable Standby Letter of Credit on behalf of the County to meet State of
Oregon security deposit requirements for Workers' Compensation self-insured certification.
Section 3. The County Administrator is authorized to sign on the County's behalf a
memorandum of understanding on a form approved by the State of Oregon, attached as Exhibit
B, to acknowledge the terms and conditions for the use of the Irrevocable Standby Letter of
Credit.
Page 1 of 2 A Resolution Authorizing Use of an Irrevocable Standby Letter of Credit to Satisfy
Workers' Compensation Security Deposit Requirements and Authorizing Signatures by the
County Administrator and Finance Director. No. 2007- 059
DATED this 741 day of prt 2607
ATTEST:
1 60V�
Recording Secretary
BOARD OF COUNTY COMMISSIONERS
OF DESCHUTES COUNTY, OREGON
Page 2 of 2 A Resolution Authorizing Use of an Irrevocable Standby Letter of Credit to Satisfy
Workers' Compensation Security Deposit Requirements and Authorizing Signatures by the
County Administrator and Finance Director. No. 2007- 059
State of Oregon
Department of Consumer and Business Services
Workers' Compensation Division
Exhibit A: Resolution 2007- 056
IRREVOCABLE STANDBY LETTER OF CREDIT
(Form A)
Issuing bank name/address:
Irrevocable Standby Letter of Credit number:
Effective date:
Date and place of issue:
Expiry date and place for presentation of documents:
Date:
Expiry date:
Place:
Place for presentation:
Applicant (self-insured employer) name/address:
Beneficiary:
State of Oregon acting by and through, the
Oregon Department of Consumer and Business Services
350 Winter Street NE
P.O. Box 14480
Salem, OR 97309-0405
Confirming bank name/address: Reference number:
Amount: U.S. S (spell out amount in U.S. dollars)
[Insert bank name]
(hereinafter referred to as "Issuer") hereby issues our irrevocable standby letter of
credit (hereinafter referred to as "letter of credit") in favor of the Oregon Department of Consumer and Business Services, on behalf of
(hereinafter referred to as the "self-insured employer")
in the amount of U.S. dollars:
The credit is available with
(issuing or confirming bank located in the state of Oregon)
by presentation of the beneficiary's draft drawn at sight on the issuing bank or confirming bank, payable within three business days, when
accompanied by one of the four following statements, signed by the director of the Oregon Department of Consumer and Business Services or the
administrator of the Oregon Department of Consumer and Business Services, Workers' Compensation Division, or their designated authorized
representative:
That the self-insured employer has defaulted in payment of its workers' compensation liabilities or obligations, or in payments due the
director of the Oregon Department of Consumer and Business Services; OR
That the self-insured employer has tiled for bankruptcy; OR
That the self-insured employer has failed to renew the letter of credit or substitute acceptable security for workers' compensation
liabilities and obligations by fifteen (1 5) days before the expiry date of the letter of credit; OR
That the beneficiary has determined that the existing security is deemed to be inadequate; that additional or replacement security must be
provided by the self-insured employer and that neither has been provided, notwithstanding written notice to the self-insured employer.
This letter of credit is payable at:
"Drawn under
(issuing bank)
letter of credit number
(branch of bank.. name and address)
. Drafts presented must be marked
dated
�s
Drawings honored by the issuing bank or confirming bank under this letter of credit shall not, in the aggregate, exceed the total amount of credit
set forth above, or as modified by accepted amendments, and each drawing honored by the issuing bank or confirming bank shall reduce the
amount set forth pro tanto. Partial drawings are permitted.
440-3640a (8/06/DCBS/WCD/WEB)
Letter of Credit Number
Page 2
The purpose of this letter of credit is to create a primary obligation on the part of
(issuing bank)
and any confirming bank to the Oregon Department of Consumer and Business Services relating to the self-insured workers'
compensation liabilities and obligations of the self-insured employer
(applicant)
in accordance with Chapter 656 of the Oregon Revised Statutes. Except as stated herein, this letter of credit is not subject to any condition or
qualification and is the issuing and any confirming bank's individual obligation which is in no way contingent upon reimbursement, and shall
cover all of the certified self-insured employer's past, present, existing, and potential liability up to the total amount of credit set forth above for
assessments, contributions, or other obligations due from the certified self-insured employer to the Oregon Department of Consumer and Business
Services, Workers' Compensation Division.
This letter of credit will be automatically extended without amendment for one year from the expiry date shown above. or any future expiry date,
unless at least 60 days prior to expiry, we notify the beneficiary by registered mail or overnight delivery that we elect not to extend this letter of
credit for such additional period. The notification will be addressed to the Administrator, Workers' Compensation Division. Department of
Consumer and Business Services. State of Oregon, 350 Winter Street NE, P.O. Box 14480, Salem, OR 97309-0405.
Payment of any amount under this letter of credit by the issuing or a confirming bank shall be made by wire transfer to the Oregon Department of
Consumer and Business Services' bank account, as instructed in the demand notice signed by the director or the administrator or their designated
authorized representative, for deposit to the account of the Oregon Department of Consumer and Business Services for the self-insured employer's
workers' compensation liabilities and obligations under ORS 656.
If the issuing bank or any confirming bank is closed at the time of the expiry of this letter of credit for any reason that would prevent the delivery
of a demand notice during its normal hours of operation, this letter of credit will be automatically extended for a period of 30 days commencing on
the next day of operation.
All bank charges for this letter of credit are for the account of the applicant.
Any amendments to this letter of credit must be approved by the beneficiary.
Except so far as otherwise expressly stated, this letter of credit is subject to the International Standby Practices 1998 (ISP 98) International
Chamber of Commerce Publication # 590 and to the laws of the state of Oregon. In the event of a conflict between these authorities, the laws of
the state of Oregon will control.
We hereby engage with drawers, endorsers, and/or bona fide holder that drafts drawn under and presented in strict conformity with the terms of
this credit will be duly honored on presentation to us.
The funds provided by this letter of credit are not construed to be an asset of the self-insured employer. If any legal proceedings are initiated with
respect to this letter of credit, it is agreed that such proceedings shall be subject to the courts and law of the state of Oregon.
(name of confirming bank or N/A)
Issuing bank
Name:
Title:
Signature:
(name of confirming bank or N/A)
drawn under and in strict conformity with the terms of this credit.
Confirming bank
Name:
Title:
Signature:
is requested to add its confirmation to this letter of credit.
Date:
hereby undertakes to honor any drafts presented to it when
Accepted by the Oregon Department of Consumer and Business Services
Name:
Title:
Signature:
440-3640a (8/06/DCBS/WCD/WEB)
Date:
Date:
Exhibit B. Resolution 2007- 056
MEMORANDUM OF UNDERSTANDING
This is a memorandum of understanding between Deschutes County and the State of
Oregon, Department of Consumer and Business Services, Workers' Compensation
Division. As used in the memorandum of understanding, "self-insured employer" means
Deschutes County and all subsidiaries and affiliated entities approved by the department
and included in the employer's self-insurance certification and any new entities approved
by the department and included in the employer's self-insurance certification.
WHEREAS, employer has applied for certification as a self-insured workers'
compensation employer or is a certified self-insured workers' compensation employer
pursuant to Oregon Revised Statute (ORS) 656.407 and 656.430; and
WHEREAS, a condition for certification as a self-insured employer or continuing as a
certified self-insured employer is the requirement that the employer provide the
department with a security deposit in an amount as required and by a type of deposit that
is approved by the department; and
WHEREAS, employer wishes to meet the security deposit requirement by posting an
irrevocable standby letter of credit (ISLOC) issued by an Oregon state -chartered bank or
federally chartered bank with an Oregon branch office; therefore,
The Department of Consumer and Business Services and the self-insured employer agree
as follows:
1. An ISLOC is being furnished to the director instead of a surety bond or other
type of security that may be determined to be acceptable for certification as a
self-insured employer or for continuing as a certified self-insured employer.
2. The self-insured employer understands the letter of credit will be
automatically extended without amendment for an additional one (1) year
from the expiry date, or any subsequent expiry date, unless, at least 60 days
before the expiry date the administrator of the Workers' Compensation
Division is notified in writing by the issuing or confirming bank that the
ISLOC will not be renewed.
3. The ISLOC may be replaced with another ISLOC or approved surety bond of
equal amount or a policy of workers' compensation insurance that is approved
by the director or the Administrator of the Workers' Compensation Divison or
their designated authorized representative, as substitute security for the
ISLOC, if the new ISLOC or surety bond or policy of insurance covers all
workers' compensation liabilities and obligations that would have been
covered by the ISLOC to be replaced.
4. The self-insured employer affirms that the ISLOC, in the amount required by
the department, is being offered with the understanding that the ISLOC can be
called immediately, at the director's or the administrator of the Workers'
Compensation Divison's discretion if the director or administrator receives
notice that the ISLOC will not be renewed; or the self-insured employer fails
to pay its workers' compensation liabilities, obligations or payments due to
the director under ORS 656; or the self-insured employer files bankruptcy; or
the self-insured employer fails to renew or provide acceptable substitute
440-3529 (7/03/DCBS/WCD/WEB)
security by 15 days prior to the expiry date of the ISLOC; or the director has
determined the existing security is deemed inadequate, that additional or
replacement security must be provided by the self-insured employer and that
neither has been provided, notwithstanding written notice to the self-insured
employer.
5. If legal proceedings are initiated by any party with respect to payment of any
ISLOC, then it is agreed that the proceedings shall be subject to the
jurisdiction of Oregon courts and application of Oregon laws.
EMPLOYER
By: DAVE KANNER
Name and title of authorized representative
Signature:
Title: Deschutes County Administrator
Date:
OREGON DEPARTMENT OF CONSUMER AND
BUSINESS SERVICES, WORKERS'
COMPENSATION DIVISION
By:
Name and title of authorized representative
Signature:
Date:
440-3529 (7/03/DCBS/WCD/WEB)