HomeMy WebLinkAbout06/17/2003, C11 - RESOLUTION TO JOIN THE CALIFORNIA JOINT POWERS INSURANCE AUTHORITY FOR GENERAL LIABILITY INSURANCE council
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CITY OF SAN LUIS OBISPO
FROM: Karen Jenny, Acting Director of Human Resource?/,y
SUBJECT`. RESOLUTION TO JOIN THE CALIFORNIA JOINT POWERS
INSURANCE AUTHORITY FOR GENERAL LIABILITY INSURANCE
CAO RECOMMENDATION
Adopt a resolution approving membership in the general liability program of the California Joint
Powers Insurance Authority.
DISCUSSION
On April 10, and again on June 3, 2003, staff updated the Council on the status of the general
liability insurance program for 2003-04. Preliminary estimates in April indicated that the liability
insurance program would cost $257,000 more in 2003-04 than the previous year. At that time staff
provided preliminary information on the California Joint Powers Insurance Authority (Ca1JPIA), an
insurance pool of 91 member agencies, including 82 cities, based in Southern California. CaIJPIA
provides liability coverage from the first dollar of any claim and manages the claims on behalf of
member agencies. On June 3, staff reported that joining the CaIJPIA's liability program would save
$160,000 per year from the previous estimate, offset by approximately $50,000 in administrative
costs for worker's compensation as a result of changing liability programs.
The City of San Luis Obispo has been a member of the Central Coast Cities Self Insurance Fund
(CCCSIF) for general liability and workers' compensation since 1978. CCCSIF is comprised of
eleven Central Coast cities that do not share risk, but join together to share administrative costs
and to obtain excess worker's compensation and liability coverage over a set amount per claim
occurrence that is "self-insured". The majority of representatives to the May 28, 2003, CCCSIF
Board of Directors' meeting voted to move the liability insurance program to CalJPIA. Since the
City, through CCCSIF, is in the first year of a three-year contract for the excess workers'
compensation coverage, no changes are recommended to that program.
Unlike the CCCSIF, where members do not share risk, membership in CaIJPIA means sharing risk
with other member agencies. However, the risk is shared among a large number of agencies, who
share common goals of risk avoidance, claims control and transfer of risk in order to eliminate or
reduce exposure. By following proven practices of risk management, member agencies assist each
other in keeping the cost of claims down. By sharing risk, the cost to an agency for a year with
significant claims experience is somewhat mitigated and spread out over a four-year period. Each
member's cost of coverage is determined by its exposures and its actual loss experience. Similar to
our current practice with CCCSIF, a premium deposit is made at the beginning of the fiscal year
and retrospective adjustments are made based on the claims history following the close of the
coverage period. Retrospective adjustments are made over a four year period.
Council Agenda Report—California Joint Powers Insurance Authority Liability Program
Page 2
The cost allocation formula used by Ca1JP1A charges each member agency for the first $30,000
in costs for each claim occurrence. Costs per occurrence from $30,000 to $750,000 are pooled
based on each members share of the under-$30,000 costs. So, by exercising good risk
management practices, member agencies can positively impact loss experience and help to
reduce their share of the program costs. Costs from $750,000 to $5,000,000 are pooled based on
the member's share of the total payroll of all the members, on the theory that larger agencies will
have more liability exposure. Finally, costs from $5,000,000 to $50,000,000 per occurrence are
transferred to the CaUPIA's re-insurer, an insurance company providing excess insurance.
Through this balanced approach to allocating costs, member agencies are encouraged to be pro-
active in loss prevention and yet are protected from catastrophic losses.
It is important to note that the City will remain a member of CCCSIF for worker's compensation
coverage for at least two more years, due to contractual obligations for excess coverage in that
program. At the end of the current contract for excess workers' compensation coverage, staff
will evaluate the feasibility of moving the workers' compensation coverage also to CaIJPIA.
FISCAL IMPACT
The cost to join Ca1JPIA's liability program for 2003-04 and to fund claims filed prior to June
30, 2003, is $160,200 less than previously estimated. This savings will be offset by higher
administrative costs in the workers' compensation program of about $50,000 per year in the
general fund, for a net savings to the general fund of$110,000 per year. Funding for the liability
program costs will be included in the two-year financial plan for 2003-05.
ALTERNATIVES
Status Quo: The City could choose to remain in the CCCSIF's liability program and pay
significantly higher costs to avoid sharing risk. Since the savings are significant, the risk-sharing
is spread over a large number of agencies who share common risk management goals, and the
cost allocation formula is multi-faceted, this alternative is not recommended.
ATTACHMENTS
Resolution
G:Wgenda Reports\CalJP1A Liability Program Membership.Doc
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RESOLUTION NO. (2003 Series)
A RESOLUTION OF THE COUNCIL OF THE CITY OF SAN LUIS OBISPO
APPROVING EXECUTION OF THE JOINT POWERS AGREEMENT CREATING
CALIFORNIA JOINT POWERS INSURANCE AUTHORITY,AND FURTHER
APPROVING PARTICIPATION IN ITS JOINT PROTECTION PROGRAM PROVIDING
LIABILITY COVERAGE THROUGH SELF-INSURANCE,LOSS POOLING AND EXCESS
INSURANCE
WHEREAS,pursuant to the provisions of Sections 990, 990.4, 990:8 and 6500 of the
Government Code, California Joint Powers Insurance Authority("California JPIA")has been created
by a Joint Powers Agreement; and
WHEREAS, a Joint Protection Program has been developed by said California JPIA
pursuant to the provisions of said Agreement; and
WHEREAS, Article 21 of said Agreement provides for additional members to become
parties to the Joint Powers Agreement creating the California JPIA, after the first year of its
operation, and thereupon enter the Joint Protection Program providing General and Automobile
Liability Coverage through self-insurance and loss pooling; and
WHEREAS, the self-insurance and loss pooling programs of the California.JPIA, as well as
its group insurance coverage programs,offer significant advantages to the City in terms of cost,
protection, risk management and loss control advice and assistance, and entering such programs
would be and is in the best interest of this City.
NOW, THEREFORE, BE IT RESOLVED by the Council of the City of San Luis Obispo
as follows:
SECTION 1. The Mayor of the City of San Luis Obispo is hereby authorized and directed
to execute the Joint Powers Agreement, attached hereto as Exhibit "1" and incorporated herein by
this reference, on behalf of the City of San Luis Obispo binding the Member to the terms and
conditions of said Agreement.
SECTION 2. That the City of San Luis Obispo hereby joins the Joint Protection.Program of
California JPIA, providing self-insurance and loss pooling for General and Automobile Liability for
a period of not less than three (3) years.
Upon motion of , seconded by
and on the following roll call vote:
AYES:
NOES:
ABSENT:
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Resolution No. (2003 Series)
Page 2
The foregoing resolution was adopted this day of , 2003.
David F. Romero, Mayor
ATTEST:
Lee Price, C.M.C.
City Clerk
APPROVED AS TO FORM:
ibQ
na n P. Lowell
City Attorney
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EXHIBIT "1"
CALIFORNIA
J P I A
JOINT POWERS AGREEMENT
ADOPTED JANUARY 29, 1997
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TABLE OF CONTENTS
ARTICLE 1 -DEFINITIONS......................................................................................................................2
ARTICLE2-PURPOSES.........................................................................................................................3
ARTICLE 3- PARTIES TO AGREEMENT...............................................................................................3
ARTICLE 4-TERM OF AGREEMENT.....................................................................................................4
ARTICLE 5-CREATION OF AUTHORITY..............................................................................................4
ARTICLE 6- POWERS OF AUTHORITY.................................................................................................4
ARTICLE 7-BOARD OF DIRECTORS ...................................................................................................5
ARTICLE 8- POWERS OF THE BOARD OF DIRECTORS....................................................................5
ARTICLE 9- MEETINGS OF THE BOARD OF DIRECTORS.................................................................6
ARTICLE 10-EXECUTIVE COMMITTEE...............................................................................................7
ARTICLE 11 - POWERS OF THE EXECUTIVE COMMITTEE................................................................7
ARTICLE 12-MEETINGS OF THE EXECUTIVE COMMITTEE.............................................................8
ARTICLE 13-OFFICERS OF THE AUTHORITY....................................................................................8
ARTICLE 14-COMMITTEE OF CITY MANAGERS AND COMMITTEE OF FINANCE OFFICERS......9
ARTICLE 15-INSURANCE COVERAGE..............................................................................................10
ARTICLE 16-DEVELOPMENT OF THE JOINT PROTECTION AND INSURANCE PROGRAM........10
ARTICLE 17-ACCOUNTS AND RECORDS.........................................................................................12
ARTICLE 18-RESPONSIBILITY FOR MONIES...................................................................................13
ARTICLE 19-RESPONSIBILITIES OF THE AUTHORITY...................................................................14
ARTICLE 20-RESPONSIBILITIES OF MEMBERS..............................................................................15
ARTICLE21 -NEW MEMBERS.............................................................................................................16
ARTICLE 22-WITHDRAWAL................................................................................................................16
ARTICLE 23-CANCELLATION.............................................................................................................17
ARTICLE 24-EFFECT OF WITHDRAWAL...........................................................................................17
ARTICLE 25-TERMINATION AND DISTRIBUTION.............................................................................18
ARTICLE 26-PROVISION FOR BYLAWS AND MANUAL...................................................................19
ARTICLE27-NOTICES.........................................................................................................................19
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ARTICLE28-AMENDMENT.................................................................................:...............................19
ARTICLE 29-PROHIBITION AGAINST ASSIGNMENT.......................................................................19
ARTICLE 30-AGREEMENT COMPLETE.............................................................................................20
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JOINT POWERS AGREEMENT
CREATING THE CALIFORNIA
JOINT POWERS INSURANCE AUTHORITY
THIS AGREEMENT is made and entered into by and among the public entities
organized and existing under the Constitution or laws of the State of California,
hereinafter collectively referred to as "Members" and individually as "Member"which are
parties signatory to this Agreement. Said Members are sometimes referred to herein as
"parties."
RECITALS:
WHEREAS, California Government Code Section 6500 et seq. provides that two
or more public agencies may by agreement jointly exercise any power common to the
contracting parties; and
WHEREAS, California Government Code Section 990.4 provides that a local
public entity may self-insure, purchase insurance through an authorized carrier, or
purchase insurance through a surplus line broker, or any combination of these; and
WHEREAS, California Government Code Section 990.8 provides that two or
more local public entities may, by a joint powers agreement, provide insurance for any
purpose by any one or more of the methods specified in Government Code Section
990;4; and
WHEREAS, each of the parties to this Agreement desires to join together with
the other parties for the purpose of pooling their self-insured losses and jointly
purchasing excess insurance and administrative services in connection with a joint
protection program for said parties; and
WHEREAS, it appears economically feasible and practical for the parties to this
Agreement to do so;
NOW, THEREFORE, for and in consideration of all of the mutual benefits,
covenants and agreements contained herein, the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
The following definitions shall apply to the provisions of this Agreement:
(a) "Authority" shall mean the CALIFORNIA JOINT POWERS INSURANCE AUTHORITY
created by this Agreement.
(b) "Board of Directors" or "Board" shall mean the governing body of the
Authority.
(c) "City Managers Committee" shall mean the committee of the Authority
composed of the City Managers, City Administrators, or Administrative Officers of
Members.
(d) "Claims" shall mean demands made against the Authority arising out of
occurrences, which are within the Authority's joint protection program as developed by
the Executive Committee.
(e) "Excess Insurance" shall mean that insurance purchased on behalf of the
Authority to protect the funds of the Authority against catastrophes or an unusual
frequency of losses during a single year.
(f) "Executive Committee" shall mean the Executive Committee of the Board
of Directors of the Authority.
(g) "Secretary" shall mean the person selected by the Executive Committee
from among its members to serve as Secretary of the Authority.
(h) "Finance Officers Committee" shall mean the committee of the Authority
composed of the Finance Officers of the Members.
(i) "Fiscal Year' shall mean that period of twelve months which is established
as the fiscal year of the Authority.
(j) 'Insurance' shall mean and include self-insurance through a funded
program and/or any commercial insurance contract.
(k) "Executive Director" shall mean that employee of the Authority who is
appointed by the Executive Committee subject to the approval of the Board of Directors,
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and responsible for the management and administration of the joint protection program
of the Authority.
ARTICLE 2
PURPOSES
This agreement is entered into by the Members pursuant to the provisions of
California Government Code Sections 990, 990.4, 990.8, and 6500 et seg. in order to
provide more comprehensive and economical insurance coverage, to reduce the
amount and frequency of their losses, and to decrease the cost incurred in the handling
and litigation of claims. This purpose shall be accomplished through the exercise of the
powers of the Members jointly in the creation of a separate entity, the CALIFORNIA JOINT
POWERS INSURANCE AUTHORITY (the Authority), to administer a joint protection program
wherein Members will pool their losses and claims, jointly purchase excess insurance
and administrative and other services, including claims adjusting, data processing, risk
management consulting, loss prevention, legal and related services.
It is also the purpose of this Agreement to provide, to the extent permitted by law,
for the inclusion at a subsequent date of such additional public entities organized and
existing under the Constitution or laws of the State of California as may desire to
become parties to this Agreement and members of the Authority, subject to approval by
the Board of Directors.
ARTICLE 3
PARTIES TO AGREEMENT
Each party to this Agreement certifies that it intends to and does contract with all
other parties who are signatories of this Agreement and, in addition, with such other
parties as may later be added as parties to and signatories of this Agreement pursuant
to Article 21. Each party to this Agreement also certifies that the deletion of any party
from this Agreement, pursuant to Articles 22 and 23 shall not affect this Agreement nor
such party's intent to contract as described above with the other parties to the
Agreement then remaining.
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ARTICLE 4
TERM OF AGREEMENT
This Agreement became effective on June 29, 1977 and shall continue until and
unless terminated as hereinafter provided.
ARTICLE 5
CREATION OF AUTHORITY
Pursuant to Section 6500 et seq. of the California Government Code, there is
hereby created a public entity separate and apart from the parties hereto, to be known
as the CALIFORNIA JOINT POWERS INSURANCE AUTHORITY. Pursuant to Government Code
Section 6508.1, the debts, liabilities and obligations of the Authority shall not constitute
debts, liabilities or obligations of any party to this Agreement.
ARTICLE 6
POWERS OF AUTHORITY
(a) The Authority shall have the powers common to its Members and is
hereby authorized to do all acts necessary for the exercise of said common powers,
including, but not limited to, any oral) of the following:
1. To make and enter into contracts;-
2. To incur debts, liabilities or obligations;
3. To acquire, hold.or dispose of property, contributions and donations
of property, funds, services and other forms of assistance from persons, firms,
corporations and governmental entities;
4. To sue and be sued in its own name;-and
5. To exercise all powers.necessary;and proper to.carryout the terms
and provisions of this Agreement, or otherwise authorized by law.
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(b) Said powers shall be exercised pursuant to the terms hereof and in the
manner provided by law and are subject to the restrictions upon the manner of
exercising the powers of the City of Lakewood.
ARTICLE 7
BOARD OF DIRECTORS
(a) The Authority shall be governed by the Board of Directors which is hereby
established and which shall be composed of one representative from each Member,
who shall be selected from the legislative body of that Member.
(b) Each legislative body, in addition to appointing its member of the Board,
shall appoint at least one alternate who shall be an officer or employee of the Member.
The alternate shall have the authority to attend, participate in and vote at any meeting of
the Board when the regular member for whom he or she is an alternate is absent from
said meeting.
(c) Each member of the Board shall have one vote.
ARTICLE 8
POWERS OF THE BOARD OF DIRECTORS
The Board of Directors of the Authority shall have the following powers and
functions:
(a) The Board shall elect from its members pursuant to Article 10 of this
Agreement an Executive Committee to which it may give authority to make and
implement any decisions, including those involving the administration of the Authority,
except those decisions that would require an amendment of this Agreement, under
Article 28 herein.
(b) The Board may review all acts of the Executive Committee, including
development of the memorandum of coverage, and shall have the power to modify
and/or override any decision or action of the Executive Committee upon a majority vote
of a quorum of the Board of Directors.
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(c) The Board shall review, modify if necessary, and approve the annual
operating budget of the Authority, prepared by the Executive Committee pursuant to
Article 11 (d).
(d) The Board shall receive and review periodic accountings of all funds under
Articles 17 and 18 of this Agreement.
(e) The Board shall have the power to conduct on behalf of the Authority all
business of the Authority, including that assigned to the Executive Committee, which the
Authority may conduct under the provisions hereof and pursuant to law.
(f) The Board shall have such other powers and functions as are provided for
in this Agreement.
ARTICLE 9
MEETINGS OF THE BOARD OF DIRECTORS
(a) Meetings. The Board shall provide for its regular, adjourned regular and
special meetings; provided, however, that it shall hold at least one regular meeting
annually at a time and place determined by the Executive Committee.
(b) Minutes. The Secretary of the Authority shall cause minutes of regular,
adjourned regular and special meetings to be kept and shall, as soon as possible after
each meeting, cause a copy of the minutes to be forwarded to each member.of the
Board and to the Member.
(c) Quorum. A majority of the members of the Board shall constitute a
quorum for the transaction of business, except that less than a quorum may adjourn
from time to time. A vote of the majority of those members present at a meeting shall
be sufficient to constitute action by the Board..
(d) Compliance with the Brown Act. All meetings of the Board, including,
without limitation, regular, adjourned regular and special meetings, shall be called,
noticed, held and conducted in accordance with the provisions of the Ralph M. Brown
Act, California Government Code Section 54950 et seg.
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ARTICLE 10
EXECUTIVE COMMITTEE
There shall be an Executive Committee of the Board of Directors which shall
consist of nine (9) members, exclusive of any current Past President Ex Officio
Executive Committee Member. Two of the members of the Executive Committee shall
be the President and Vice President of the Board of Directors. The other members of
the Executive Committee shall be elected by the Board of Directors at the Annual
Meeting for the terms provided in the Bylaws. The President of the Authority, or the
Vice President in his or her absence, shall serve as the Chairperson of the Executive
Committee.
ARTICLE 11
POWERS OF THE EXECUTIVE COMMITTEE
The Executive Committee of the Board of Directors shall have the following
powers:
(a) The Executive Committee shall determine and select a joint protection
program for the Authority.
(b) The Executive Committee shall determine and select all necessary
insurance, including excess insurance, necessary to carry out the protection program of
Authority.
(c) The Executive Committee shall have authority to contract for or develop
various services for the Authority, including, but not limited to, claims adjusting, loss
control and risk management consulting services.
(d) The Executive Committee shall cause to be prepared the operating budget
of the Authority for each fiscal year, subject to review, modification and approval by the
Board, as provided for in Article 8(c).
(e) The Executive Committee shall receive and act upon reports of the City
Managers Committee, Finance Officers Committee, and Executive Director.
(f) The Executive Committee shall appoint the Treasurer and Executive
Director of the Authority.
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(g) The Executive Committee shall have the power to hire such persons as
the Executive Committee deems necessary for the administration of the Authority.
(h) The Executive Committee shall have the general supervisory and policy
control over the day-to-day decisions and administrative activities of the Executive
Director of the Authority.
(i) The Executive Committee shall have such other powers and functions as
are provided for in this Agreement.
ARTICLE 12
MEETINGS OF THE EXECUTIVE COMMITTEE
The meetings of the Executive Committee shall be held and conducted in the
same manner as the meetings of the Board of Directors, provided for in Article 9 of this
Agreement. In addition, the Committee shall make periodic reports to the Board of
Directors, advising the Board of its decisions and activities concerning the
implementation of the joint liability program of the Authority. .
ARTICLE 13
OFFICERS OF THE AUTHORITY
(a) President and Vice President. The Board shall elect President and Vice.
President of the Authority, each to hold office for a two year term, except as.hereinafter
provided, and until a successor is elected. The election-of=the President and Vice-- _.
President shall be on altemate.years. In.the.event the President.or Vice President so
elected ceases to be a member of the Board, the resulting,Vacancy in,the-office-of
President or Vice President shall be filled at the next regular meeting of the Board held
after such vacancy occurs. In the absence or inability of the President to act,the Vice--
President
ice President shall act as President. The immediate Past President shall serve as an ex
officio member of the Executive Committee for a term of two years, and as long as he or
she remains a member of the Board of Directors.
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(b) Executive Director. The Executive Director shall have the general
administrative responsibility for the activities of the joint protection program and shall
appoint all necessary employees thereof.
(c) Secretary. The Secretary shall be responsible for all minutes, notices and
records of the Authority and shall perform such other duties as may be assigned by the
Executive Committee.
(d) Treasurer. The duties of the Treasurer are set forth in Articles 17 and 18
of this Agreement.
(e) Attorney. The Executive Committee shall select an attorney for the
Authority. The attorney shall serve at the pleasure of the Executive Committee.
(f) The Executive Committee shall have the power to appoint such other
officers as may be necessary in order to carry out the purposes of this Agreement.
ARTICLE 14
COMMITTEE OF CITY MANAGERS
AND
COMMITTEE OF FINANCE OFFICERS
(a) There shall be established a Committee of City Managers composed of
the City Managers, City Administrators and Administrative Officers of the Members of
the Authority and a Committee of Finance Officers composed of the Finance Officers of
the Members of the Authority. Such Committees shall meet from time to time as
deemed necessary by them, and shall make recommendations to the Executive
Committee based upon their expertise.
(b) Each of these Committees may appoint from its members one person to .
serve in an Ex Officio capacity on the Executive Committee.
(c) The meetings of these Committees shall be held and conducted in the
same manner as the meetings of the Board of Directors, provided for in Article 9 of this
Agreement.
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ARTICLE 15
INSURANCE COVERAGE
(a) The insurance coverage provided for Members through the Authority shall
include protection for Personal Injury, Errors and Omissions, Contractual and
Comprehensive Liability, and such other areas of coverage as the Executive Committee
may determine.
(b) The Authority shall maintain an insurance limit for Members determined by
the Executive Committee to be adequate. The Executive Committee may arrange fora
group policy to be issued for Members interested in obtaining additional coverage above
this limit, at an additional cost to those participating Members.
(c) The Executive Committee shall arrange for the purchase of insurance
necessary to protect the funds of the Authority against catastrophes. The Executive
Committee shall have the authority to discontinue purchase of this excess insurance, if
at a future time it is no longer needed to protect the Authority's funds.
ARTICLE 16
DEVELOPMENT OF THE JOINT PROTECTION AND INSURANCE PROGRAM
(a) The joint protection program provided by the Authority shall extend to
agencies or authorities existing within Members created pursuant to Health & Safety
Code Sections 33000 et seg. and Sections 34200 et seg., agencies within Members
who are Cities the governing board of which is the City Council or is appointed by the
City Council of the City, and such other-agencies. Member:Cities or entities created
entirely by Member Cities, as the Board of Directors may determine.
(b) The initial deposit for each Member shall be determined by-the-Executive
Committee.
(c) The cost allocation plan and formula adopted by the Executive Committee
shall provide for an adjustment in the Members' deposits at the end of each year of .
operation in order to produce a deposit for each year for each Member that is equal to
the sum of the following three items:
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1. That amount of losses bome individually by the Member, each of
which losses is less than an amount determined by the Executive Committee; and
2. The Member's share of pooled losses and other expenses, as
determined by the Executive Committee; and
3. The Member's contribution to a catastrophe fund and reserves for
incurred-but-not-reported losses.
The Executive Committee may make such deposit adjustments retrospective to
the prior year and each Member shall pay any additional deposit required by such
retrospective adjustment.
(d) The Executive Committee shall develop criteria for determining each
Member's annual share of pooled losses and expenses and contribution to a
catastrophe fund which may include the Member's payroll as compared to the total
payroll of all Members, the Member's individual loss experience, and such other criteria
as the Executive Committee may determine to be relevant.
(e) The annual readjustment of the amount of deposit shall be made and
notices for readjusted deposit amounts and the next year's deposits shall be distributed
at least sixty (60) days prior to the close of each fiscal year. This deposit amount,
together with any readjusted amount due under paragraph (d) above, shall be due and
payable within thirty days of receipt of such notices.
(f) Inasmuch as some Members may experience an unusual frequency of
losses during a single fiscal year, which could increase their final deposit substantially
above the prepaid deposit for that year and cause.budgetary.problems,.the Executive
Committee may provide for payment of a portion of such additionaldeposit to be made
over period of time, not to exceed five years,_plus reasonable interest. .
(g) An individual Member's annual deposit-including any readjusted amount
for that year shall not in any event exceed five times its average annual deposit,
including readjusted amount,for the last preceding three years. -
(h) The Executive Committee may-expand the-Authority's joint protection and
insurance program to make available to Members protection in addition to that which is.
provided for in this Agreement as well as employee benefit insurance plans.
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ARTICLE 17
ACCOUNTS AND RECORDS
(a) Annual Budget. The Authority shall adopt an annual operating budget,
pursuant to Article 8(c) of this Agreement.
(b) Funds and Accounts. The Treasurer of the Authority shall establish and
maintain such funds and accounts as may be required by good accounting practice or
by the Executive Committee. Books and records of the Authority in the hands of the
Treasurer shall be open to any inspection at all reasonable times by representatives of
a Member.
(c) Treasurer's Report. The Treasurer, within One Hundred and Twenty (120)
days after the close of each fiscal year, shall give a complete written report of all
financial activities for such fiscal year to the Board and to each Member.
(d) Annual Audit. The Executive Committee shall provide for a certified,
annual audit of the accounts and records of the Authority which audit shall conform to
generally accepted auditing standards. When such an audit of the accounts and
records is made by a Certified Public Accountant, a report thereof shall be filed as a
public record with each of the Members. Such report shall be filed within six months of
the end of the year under examination.
(e) Costs. Any costs of the audit, including contracts with, or employment of,
Certified Public Accountants, in making an audit pursuant to this Article, shall be borhe
by the Authority and shall be considered included within the term 'administrative costs."
ARTICLE 18
RESPONSIBILITY FOR MONIES -
(a) The Treasurer of the Authority shall have the custody of and.disburse the
Authority's funds. He or she shall have the authority to delegate the signatory function
of Treasurer to such persons as are authorized by the Executive Committee:
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(b) A bond in the amount determined by the Executive Committee to be
adequate shall be required of all officers and personnel authorized to disburse funds of
the Authority, such bond to be paid for by the Authority.
(c) The Treasurer of the Authority shall assume the duties described in
California Government Code Section 6505.5, including:
1. Receive and receipt for all money of the Authority and place it in the
treasury of the Treasurer to the credit of the Authority;
2. Be responsible upon his or her official bond for the safekeeping and
disbursement of all of the Authority's money so held by him or her;
3. Pay, when due, out of money of the Authority so held by him or her,
all sums payable on outstanding bonds and coupons of the Authority;
4. Pay any other sums due from the Authority only upon warrants
signed by the public officer performing the functions of Controller; and
5. Verify and report in writing on the first day of July, October, January
and April of each year to the Authority and to Members the amount of money held for
the Authority, the amount of receipts since the last report, and the amount paid out
since the last report.
ARTICLE 19
RESPONSIBILITIES OF THE AUTHORITY
The Authority shall perform the following functions in discharging its
responsibilities under this Agreement:
(a) Provide insurance coverage as necessary, including=but not lirnited to_a.
self-insurance fund and commercial insurance, as well as excess coverage and
umbrella insurance, by negotiation or bid, and "purchase, as necessary:
(b) Assist Members in obtaining insurance.-coverage for risks-not included
within the basic coverage.of the Authority, such as bus and diaka-ride services and
aviation exposure.
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(c) Assist each Member's assigned risk manager with the implementation of
that function within the Member.
(d) Provide loss prevention and safety and consulting services to Members as
required.
(e) Provide claims adjusting and subrogation services for claims covered by
the Authority's joint protection program.
(f) Provide loss analysis control by the use of statistical analysis, data
processing, and record and file keeping services, in order to identify high exposure
operations and to evaluate proper levels of self-retention and deductibles.
(g) Provide for Members when requested a review of their contracts to
determine sufficiency of indemnity and insurance provisions.
(h) Conduct risk management audits to review the participation of each
Member in the program.
(i) The Authority shall have such other responsibilities as deemed necessary
by the Board of Directors or Executive Committee in order to carry out the purposes of
this Agreement.
ARTICLE 20
RESPONSIBILITIES OF MEMBERS
Members shall have the following responsibilities:
(a) The legislative body of each Member shall appoint a representative and at
least one alternate representative to the Board of Directors, pursuant to Article 7-of.-this
Agreement.
(b) Each Member shall appoint an employee to be responsible for the risk
management function of that Member, and to serve as.a liaison.between the Member - _and the Authority as to risk management. -
(c) Each Member shall maintain an active safety officer and/or committee,
and shall consider all recommendations of the Authority concerning unsafe practices.
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(d) Each Member shall maintain its own set of records, as a loss log, in all
categories of loss to ensure accuracy of the Authority's loss reporting system.
(e) Each Member shall pay its deposit and any readjusted amount promptly to
the Authority when due. After withdrawal or termination, each Member shall pay
promptly to the Authority its share of any additional deposit, when and if required of it by
the Executive Committee under Article 24 or 25 of this Agreement.
(f) Each Member shall provide the Authority with such other information or
assistance as may be necessary for the Authority to carry outthe joint protection
program under this Agreement.
(g) Each Member shall in any and all ways cooperate with and assist the
Authority, and any insurer of the joint protection program, in all matters relating to this
Agreement and covered losses, and will comply with all bylaws, rules and regulations
adopted by the Board of Directors and Executive Committee.
.ARTICLE. 21
NEW MEMBERS
The Authority shall allow entry into the program of new members approved-by
the Board. Board approval for new Members shall be according to the following
procedure: (1) investigation of each potential member by the Authority staff and
preparation of a report; (2) review Of the report by the-Executive Committee and, if
approved, sent to each Member for review; (3) return by each Member of the form
indicating approval or disapproval to the Executive Director; and (4) upon receipt by the
Executive Director of approvals by two-thirds of the Members, or, in the alternative, by a
two-thirds vote of a quorum of the Board of Directors at a meeting of the Board, the
new Member shall be deemed approved by the Board..
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Members entering under this Article will be required to pay their share of
organization expenses as determined by the Board, including those necessary to
analyze their loss data and determine their deposits.
ARTICLE 22
WITHDRAWAL
(a) A Member which enters the joint protection program may not withdraw as
a party to this Agreement and as a member of the Authority for a three-year period
commencing on the effective date of its participation in the joint protection program.
(b) After the initial three-year noncancellable commitment to the program, a
Member may withdraw only at the end of any fiscal year, provided it has given the
Authority a twelve-month written notice of its intent to withdraw from this Agreement and
the joint protection program.
ARTICLE 23
CANCELLATION
The Authority shall have the right to cancel any Member's participation.in the joint
protection program upon a three-fourths vote of the entire Board of Directors. Any
Member so canceled shall on the effective date of the cancellation be.treated the same
as if the Member had voluntarily withdrawn from this.program.
ARTICLE 24
EFFECT OF WITHDRAWAL
(a) The withdrawal of any Member from this Agreement shall not terminate
the same and no Member by withdrawing shall be entitled to payment or return of any
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deposits, consideration or property paid, or donated by the Member to the Authority, or
to any distribution of assets.
(b) The withdrawal of any Member after the effective date of the joint
protection program shall not terminate its responsibility to contribute its share of
deposits or funds to any fund or insurance program created by the Authority until all
claims, or other unpaid liabilities, covering the period the Member was signatory hereto
have been finally resolved and a determination of the final amount of payments due
from the Member or credits to the Member for the period of its membership has been
made by the Executive Committee. In connection with this determination, the Executive
Committee may exercise similar powers to those provided for in Article 25(c) of this
Agreement.
ARTICLE 25
TERMINATION AND DISTRIBUTION
(a) This Agreement may be terminated by the written consent of three-fourths
of the Members; provided, however, that this Agreement and the Authority shall
continue to exist for the purpose of disposing of all claims, distribution of assets and all
other functions necessary to wind up the affairs of the Authority.
(b) Upon termination of this Agreement all assets of the Authority shall be
distributed only among the parties that have been Members of the joint protection
program, including any of those parties which previously withdrew pursuant to Article
22(b) or 23 of this Agreement, in accordance with and proportionate to their cash .
(including deposits) payments and property (at market-value when received) -=-
contributions made during the term of this Agreement. The Executive Committee shall
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determine such distribution within six months after the last pending claim or loss
covered by this Agreement has been finally disposed of.
(c) The Executive Committee is vested with all powers of the Authority for the
purpose of winding up and dissolving the business affairs of the Authority. These
powers shall include the power to require Members, including those which were
Members at the time the claim arose or at the time the loss was incurred, to pay their
share of any additional amount of deposit deemed necessary by the Executive
Committee for final disposition of all claims and losses covered by this Agreement. A
Member's share of such additional deposits shall be determined on the same basis as
that provided for annual deposits in Article 16 of this Agreement, and shall be treated as
if it were the next year's annual deposit for that Member, subject to the limits described
in Article 16(h) of this Agreement.
(d) In the absence of an Executive Committee, the Secretary shall exercise all
powers and authority under this Article. The decision of the Executive Committee or
Secretary under this Article shall be final.
ARTICLE 26
PROVISION FOR BYLAWS AND MANUAL
The Board shall cause to be developed Authority Bylaws and a Policy and
Procedure Manual to govern the day-to-day operations of the Authority. Each Member
shall receive a copy of any Bylaws, Policy Statement or Manual developed under this
Article.
ARTICLE 27
NOTICES
Notices to Members hereunder shall be sufficient if delivered to the
administrative office of the respective Member.
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ARTICLE 28
AMENDMENT
When a quorum of the Board of Directors is present, this Agreement may be
amended at any time by a two-thirds vote, with the exception of an amendment to
Article 23 which shall require a three-fourths vote of the entire Board of Directors.
ARTICLE 29
PROHIBITION AGAINST ASSIGNMENT
No Member may assign any right, claim or interest it may have under this
Agreement, and no creditor, assignee or third party beneficiary of any Member shall
have any right, claim or title to any part, share, interest, fund, deposit or asset of the
Authority.
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ARTICLE 30
AGREEMENT COMPLETE
The foregoing constitutes the full and complete Agreement of the parties. There
are no oral understandings or agreements not set forth in writing herein.
IN WITNESS WHEREOF, the parties hereto have first executed this Agreement
by authorized officials thereof on the date indicated below.
Date:
MEMBER: City of San Luis Obispo
By:
David F. Romero, Mayor
ATTEST:
Lee Price, C.M.C.
City Clerk
APPROVED AS TO FORM:
J P. Lowell
City Attorney
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