Resolution 1986-33
..,
.
.
RESOLUTION NO. 86 - 33
A RESOLUTION OF THE COm~CIL OF THE CITY OF GILROY AUTHORIZING THE
EXECUTION AND DELIVERY OF ABAG PLAN I DOCUl~NTS.
WHEREAS, the City of Gilroy (the "City") is a municipal
corporation duly organized and existing under the Constitution and
laws of the State of California (the "State"); and
WHEREAS, the City is authorized by Part 6 of Division 3.6
of Title I, Section 990, et ~, of the California Government Code
(the "Act") to insure itself against tort or inverse condemnation
liability, to insure its e~ployees against injury resulting from an
act or omission in the scope of his/her employment and to insure
against the costs of defending such claims; and
WHEREAS, pursuant to Section 990.4 of the Act the City is
authorized to provide insurance by self-insurance which may be
funded by appropriations and to establish or maintain reserves for
such purposes; and
WHEREAS, pursuant to Section 990.6 of the Act, the costs
to the City of such self-insurance is a proper charge against the
City and therefore the governing board of the City is authorized to
make premium payments for such coverage; and
WHEREAS, pursuant to Section 990.8 of the Act, the City is
empowered to provide insurance coverage by a joint powers agreement
with other local public entities, and such pooling of self-insured
claims and the risk sharing of losses is not considered insurance
and is not subject to regulation under the California Insurance Code;
and
WHEREAS, the Association of Bay Area Governments ("ABAG") is
a joint exercise of powers agency of which the City is a member; and
RESOLUTION NO. 86 - 33
-1-
.
.
WHEREAS, ABAG is authorized to exercise necessary powers
to implement the purposes of ABAG as established by ABAG's Execu-
tive Board; and
\\HEREAS, ABAG has determined to assist the City, and
other members of ABAG empowered to self-insure under the Act, (col-
lectively the "Cities") to obtain self-insurance for liability
risks; and
\VHEREAS, ABAG and the Cities have heretofore conclusively
determined following exhaustive investigation that excess general
liability insurance coverage is not available to the Cities from
commercial insurers or from any other source at a price which is
reasonably related to the expected incurred losses of such Cities;
and
\~EREAS, ABAG and the Cities have further determined, based
upon the advice of independent professional insurance consultants
familiar witb the cyclical nature of the reasonable availability of
coverage in the commercial insurance market, that such coverage is
not anticipated to become available until late in 1986 at the
earliest, thereby in the interim exposing the Cities to self-insuring
from available revenues on a year-by-year basis with the attendant
risk of fiscal instability and ruinous burdens on its citizens in
the event of large liability claims recoveries; and
WHEREAS, ABAG and the Cities have further determined that
the periodic unwillingness of the commercial insurance market to
provide excess general liability insurance coverage to local govern-
ments at reasonable rates or, in certain cases as at present, at any
rate mandates that the Cities seek not only an immediate solution
but also a long-term permanent solution to this problem which will
in future years free them from exposure to the vagaries of commer-
cial insurance cycles; and
RESOLUTION NO. 86 - 33
- 2-.
.
.
WHEREAS, ABAG and the Cities, in consultation with inde-
pendent professional insurance consultants, have formulated a
joint risk sharing insurance program to be administered by ABAG
through the ABAG PLAN I Corporation and called the ABAG Pooled
Liability Assurance Network ("ABAG PLAN I") to meet the general
liability insurance coverage needs of the Cities; and
WHEREAS, the City staff has submitted an application
for premium quotation from ABAG for ABAG PLAN I, and the City
warrants that the information contained and representations made
therein are true, complete and accurate to the best of its know-
ledge; and
WHEREAS, the City has further determined that the Total
Premium to be paid in each year by the City as provided for and
upon the conditions set forth in the Liability Coverage Agree-
ment (the "Agreement") which will be payable only upon the condi-
tion of the receipt of the consideration represented by the in-
surance protection and services to be provided in such year under
the Agreement, but in the event that such protection and services
are so provided in any year such Total Premium will be a binding
obligation of the City payable from the income and revenue provided
for such years; and
WHEREAS, the City has further determined that the obtain-
ing of the insurance protection and services provided for under the
Agreement is essential in the preservation and fostering of the
health, safety and property rights of the citizens of the City and
the lack of availability of reasonable commercial general liability
insurance to local governments generally in the State of California
and to the Cities in particular consittutes a public emergency; and
HHEREAS, it is a matter for the governing board of the
City to determine the amount of premiums which such City shall pay
RESOLUTION NO. 86 - 33
-3-
.
.
for proper insurance coverage; and
WHEREAS, the City has heretofore determined and does
hereby confirm that the premiums to be required under the Agree-
ment are reasonable and advantageous and to the public benefit
of the citizens of such City.
NOW, THEREFORE, BE IT RESOLVED,
the Council of the
City of Gilroy hereby:
1) Authorizes and directs Jay Baksa, City Administrator
to execute and deliver, on behalf of the City, the Lia-
bility Risk Coverage Agreement for the ABAG PLAN I which
shall be in substantially the form attached hereto, minor
technical revisions and corrections excepted, and any
other necessary supporting documentation to effect the
City's participation in ABAG PLAN I; and
2) Appoints John P. Booth, Risk Manager to serve as the
City's appointee and Jay Baksa, City Administrator to
serve as Alternate to the Board of Directors of the ABAG
PLAN I Corporation, and to exercise the City's vote in
setting premiums, premium allocations, cancelling cover-
age, and admitting or expeling members to or from ABAG
PLAN I; and.
3) Elects commencement of coverage under ABAG PLAN I on
a date between June 2, 1986 and July 1, 1986, inclusive,
to wit July 1, 1986.
PASSED AND ADOPTED this 2nd day of
June
, 1986, by
the following vote:
AYES:
NOES:
ABSENT:
COUNCILHEHBERS: GAGE, KLOECKER, MUSSALLEH,
PALMERLEE, VALDEZ and ALBERT.
COUNCILME~~ERS: None
COUNC IU1EHBERS : HUGHAN
APP~
A::Jf: ~. c:h~
~~~ - i / Mayor Protempore
City Clerk
RESOLUTION NO. 86 - 33
-4-
.
.
I, SUSANNE E. STEINMETZ; City Clerk of the City of Gilroy, do
86-33
hereby certify that the attached Resolution No.
is an
original resolution, duly adopted by the Council of the City of
Gilroy at a regular meeting of said Council held on the 2nd
day of
June
, 19~, at which meeting a quorum was
present.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the
Official Seal of the City of Gilroy this
3rd day of June
19 86 .
A,~t. .
~~erk of the City 0
.
r