Resolution 2002-56
RESOLUTION NO. 2002-56
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF GILROY
AUTHORIZING PARTICIPATION IN THE LOCAL AGENCY WORKERS'
COMPENSATION EXCESS JOINT POWERS AUTHORITY
WHEREAS, pursuant to Government Code Section 6500 ~., the City of Gilroy is
authorized to enter into a joint powers agreement with other public agencies; and
WHEREAS, it is proposed that cities and special districts throughout California join
together to create the Local Agency Workers' Compensation Excess Joint Powers Authority to
provide "pooled funding" of workers' compensation insurance benefits and costs; and
WHEREAS, the City of Gilroy has decided to join and become a member of the Local
Agency Workers' Compensation Excess Joint Powers Authority;
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Gilroy as
follows:
1. The City of Gilroy hereby approves and authorizes participation in the Local
Agency Workers' Compensation Excess Joint Powers Authority.
2. The Joint Exercise of Powers Agreement to establish, operate, and maintain a Joint
Program for Workers' Compensation Excess Protection, in the form attached as
Exhibit A, is hereby approved by the City of Gilroy, and the Mayor ofthe City of
Gilroy is hereby authorized and directed to execute the Agreement on behalf of the
City of Gilroy.
3. The Mayor of the City of Gilroy is also authorized to execute any other
document(s) that may be necessary or appropriate to enter into and implement the
Agreement and the Local Agency Workers' Compensation Excess Joint Powers
Authority on behalf of the City of Gilroy.
4. The Human Resources Director of the City of Gilroy is hereby appointed as the
City of Gilroy's representative on the Local Agency Workers' Compensation
Excess Joint Powers Authority's Board, and the Administrative Services Director
ofthe City of Gilroy is hereby appointed as the City of Gilroy's alternate
representative on such Governing Board.
RESOLUTION NO. 2002-56
-1-
PASSED AND ADOPTED this 15th day of July, 2002 by the following vote:
AYES:
COUNCILMEMBERS: ARELLANO, DILLON, GARTMAN, MORALES,
VELASCO, and SPRINGER
NOES:
COUNCILMEMBERS: NONE
ABSENT: COUNCILMEMBERS: PINHEIRO
APPROVED:
ATTEJ/ . /."-)
~~::;W1.eb, 0--L ~A.-P~
lthon . a Pellin, City Clerk
RESOLUTION NO. 2002-56
-2-
JOINT EXERCISE OF POWERS AGREEMENT
.
LOCAL AGENCY WORKERS' COMPENSATION EXCESS
JOINT POWERS AUTHORITY
,
TABLE OF CONTENTS
JOINT POWERS AGREEMENT
1. Creation of the Joint Powers Entity
2. Functions of the Authority
3. Powers of the Authority
4. Te~m of the Agreement
5. Governing Documents
6. O~anization
7. Membership in the Authority
8. Withdrawal From or Termination of Membership
9. Termination of Agreement
10. Disposition of Property and Funds
11. Amendments
12. Audits and Actuarial Analysis
13. Severability
14. Liability
15. Enforcement
16. Definitions
JOINT EXERCISE OF POWERS AGREEMENT
TO ESTABLISH, OPERATE, AND MAINTAIN A
JOINT PROGRAM
FOR WORKERS COMPENSATION EXCESS PROTECTION
THIS AGREEMENT is entered into pursuant to the provisions of Title 1, Division 7, Chapter 5,
Article 1 (Sections 6500, et seq.) of the California Government Code, relating to the joint exercise of powers,
between the agencies signatory hereto, and also those which may hereafter become signatory hereto, for the pmpose
of operating an agency to be known and designated as Local Agency Workers' Compensation Excess Joint Powers
Authority ("Authority").
WIlNESSETII:
WHEREAS, it is to the mutual benefit of the parties herein subscribed and in the best public interest of said parties
to join together to establish this Joint Powers Agreement to accl'mplish the pmposes hereinafter set forth; and
WHEREAS, the development, organization, and implementation of such an Authority is of such magnitude that it is
desirable for aforesaid parties to join together in this Joint Powers Agreement in order to accomplish the pmposes
hereinafter set forth; and
WHEREAS, the signatories hereto have determined that there is a need, by agencies, for a joint program for
"Workers' Compensation Excess" protection; and
WHEREAS, it has been determined by such signatories that a joint program for "Workers' Compensation Excess"
protection is of value on an individual and mutual basis; and
WHEREAS, Title 1, Division 7, Chapter 5, Article 1, of the California Government Code authorizes joint exercise
by two or more agencies of any power common to them; and
WHEREAS, it is the desire of the signatories hereto to jointly provide for a joint program for "Workers'
Compensation Excess" protection for their mutual advantage and concern; and
WHEREAS, it is the desire of the signatories hereto to study and from time to time to inco~rate other forms of
risk management into a joint program such as that described herein.
LA WCX AGREEMENT (3119/92 cd) June 18, 1992
1
NOW, THEREFORE, FOR AND IN CONSIDERATION OF THE MUTUAL
ADY ANT AGES TO BE DERIVED THEREFROM, AND IN CONSIDERATION OF THE EXECUTION OF
TIDS AGREEMENT BY OTHER AGENCIES, each of the parties hereto does agree with each of the other
parties as follows:
1. CREATION OF THE JOINT POWERS ENTITY
A Joint Powers Entity, separate and apart from the agencies signatory hereto, shall be and is hereby created
and shall hereafter be designated as the Local Agency Workers' Compensation Excess Joint Powers
Authority ("Authority").
2. FUNCTIONS OF THE AUTHORITY
A. The Authority is established for the pwposes of administering this Agreement, pursuant to the
Joint Powers provisions of the California Government Code, and of providing the services and
other items necessary and appropriate for the establishment, operation, and maintenance of a joint
group program for "Workers' Compensation Excess" to benefit the "Members", and to provide a
forum for discussion, study, development, and implementation of recommendations of mutual
interest regarding other joint programs.
B. THE FUNCTIONS OF THE AUTHORITY ARE:
(I) To provide a joint program 'and system, as described in this Agreement, the Bylaws, and
the Memorandum of Coverage and give to each "Member", of the Authority, Workers'
Compensation Excess".
(2) To perform, or contract for the performance of, the fmancial administration, policy
formulation, claim service, legal representation, safety engineering, and other
development as necessary for the payment and handling of all claims against "Members"
reimbursable under the "Workers' Compensation "Excess".
(3) To pursue "Member's" right of subrogation against a third party when the Authority
decides such action is appropriate.
(4) To enter into contracts.
(5) To obtain insurance coverage for the "Members" and/or the Authority as determined
appropriate by the Board of Directors.
(6) To acquire, hold, and dispose of property, real and personal, all for the pwpose of
providing the membership with the necessary education, study, development, and
implementation ofa joint program of the "Workers' Compensation Excess" including,
but not limited to, the acquisition of facilities and equipment, the employment of
personnel, and the operation and maintenance of a system for the handling of the joint
program.
(7) To incur debts, liabilities, and obligations necessary to accomplish the pwposes of this
agreement.
LA WCX AGREEMENT (3/19192 ed) June 18, 1992
2
(8) To receive gifts, contributions, and donations of property, funds, services, and other
forms of assistance from persons, firms, corporations, associations, and any
governmental entity.
(9) To invest smplus reserve funds as deemed appropriate by the Board of Directors and as
subject to law.
(10) To provide a forum for discussion, study, development, and implementation of
recommendations of mutual interest regarding other joint programs.
(11) To establish new programs as deemed appropriate by the Board of Directors.
(12) To sue and be sued in the name of the Authority.
(13) To perform such other functions as may be necessary or appropriate to carry out this
Agreement, so long as such other functions so performed are not prohibited by any
provision oflaw.
3. POWERS OF THE AUTHORITY
The Authority shall have the power and authority to exercise any power common to the agencies which are
"Parties" to this Agreement, provided that the same are in furtherance of the functions and objectives of
this Agreement as herein set forth. Pursuant'to Section 6509 of the California Government Code, the
exercise of the aforesaid powers of the Authority shall be subject to the restrictions upon the manner of
exercising such powers by an agency having the same status as a Member Agency or Joint Powers
Authority except as otherwise provided in this Agreement i
4. TERM OF THE AGREEMENT
This Agreement shall be effective and binding on any signatory thereto upon execution. This Agreement
shall continue in effect until lawfully terminated as provided herein and in'the Bylaws. 10 the event of a
reorganization of one or more of the agencies participating in this Agreement, the successor in interest or
successors in interest to the obligations of any such reorganized agency may be substituted as a "Party" or
as "Parties" to this Agreement, subject to approval by a two-thirds (2/3) weighted vote of the "Parties" to
this Agreement
5. GOVERNING DOCUMENTS
A. THE AGREEMENT
If there is a conflict between this Agreement and any other document of the Authority, this
Agreement shall control over such other document Such other document shall have the effect as
if the provisions in conflict with this Agreement were null and void.
B. BYLAWS
The Authority shall be governed pursuant to certain Bylaws, a copy of which is attached hereto as
Exhibit A and incorporated herein by reference, and by such amendments to the Bylaws as may
from time to time be adopted. Wherever in this Agreement "Bylaws" are referred to, said Bylaws
shall be those set forth in Exhibit A, as may be amended. Each "Party" to this Agreement agrees
LA WCX AGREEMENT (3/19/92 cd) lune 18, 1992
3
to comply with and be bound by the provisions of said Bylaws and further agrees that the
Authority shall be operated pursuant to this Agreement and said Bylaws.
Procedures for amending the Bylaws shall be as provided in the Bylaws so long as they are not
inconsistent with this Agreement.
C. MEMORANDUM OF COVERAGE
The Authority shall provide coverage according to a Memorandum of Coverage. The Authority
and each "Member" shall be bound by the terms and conditions of such Memorandum of
Coverage.
Each Memorandum of Coverage shall have an effective date and apply as if a new Memorandum
were, adopted annually, unless otherwise expressly stated. The Memorandum of Coverage may be
amended by endorsement. The procedure for such amendment shall be described in the Bylaws.
D. OTHER DOCUMENTS
The Authority may adopt any other document, such as claims procedures manual, risk
management manual, etc., as may be necessary and proper for the establishment, operation, and
maintenance of a joint program of "Workers' Compensation Excess". Such documents shall be
adopted by a two-thirds (2/3) weighted vote of the "Parties" present at a meeting of the Board of
Directors. '
6. ORGANIZATION
A. BOARD OF DIRECTORS
I
(1) A Board of Directors is hereby established to direct and control the Authority.
(2) Each "Party" of the Authority shall be entitled to a seat on the Board of Directors and
shall appoint to the Board of Directors one (1) representative and one (1) alternate who
shall be designated in writing. Said representative and said alternate must be an
employee or authorized agent of the "party" and shall serve at the pleasure of the "Party"
by whom appointed.
(3) Each "Party" shall be entitled to cast weighted votes allocated by the Authority based
upon the total payroll of the members represented. Total payroll shall be the actual
ending payroll of the previous fiscal year. Where the "Party" is a Joint Powers
Authority, the total payroll shall be the payroll of the participants in the Workers'
Compensation program of that Joint Powers Authority. All weighted votes allocated to
each "Party" shall be cast together and cannot be split. Weighted votes shall be allocated
as follows:
PAYROLLrOOO)
VOTES ALLOCATED
$]
$35,001
$75,00]
$ 35,000
$75,~00
$125,000
OVER $125,000
I
2
3
4
LA WCX AGREEMENT (3/19192 ed) Jun. 18. 1992
4
Weighted votes may be cast only by a representative or, if the representative is absent, by
an alternate designated in writing per paragraph B.
(4) Meetings
a. The Board of Directors shall hold regnlar meetings as prescribed in the Bylaws,
but in no event shall hold less than two (2) regular meetings a year.
b. Other meetings may be held as described in the Bylaws with proper notice given
as described in the Bylaws.
c. All Board meetings shall be conducted in accordance with the Ralph M. Brown
Act (Sections 54950, et. seq.) of the California Government Code and the
Roberts Rules of Order.
(5) The Board of Directors may delegate any authority which is not reserved exclusively for
the Board by this Agreement or the Bylaws.
B. EXECUTIVE COMMITIEE
An Executive Committee may be formed by the Board of Directors to administer and operate the
risk management programs of the Authority. The Committee shall have such authority, except
those exclusively reserved to the Board, as necessary and proper for the administration of the
programs of the Authority within the policies established by the Board of Directors.
C. OTHER COMMITTEES
The Board of Directors or the Executive Committee may establish other committees as may be'
deemed expedient in the establisJunent or implementation of a program.
D. OFFICERS
(I) President sod Vice President
At the fU'St Board of Directors meeting, the Directors shall elect a President and Vice
President from among its members as prescribed in the Bylaws. Such President and Vice
President shall serve such terms as stated in the Bylaws. Subsequent Presidents and Vice
Presidents shall be elected as described in the Bylaws.
(2) Other Officers
The President shall appoint a Secretary and a Treasurer who shall serve as described in
the Bylaws.
The Board may create an office as deemed appropriate for the operations of the Authority
and the President shall appoint one to serve in such office.
(3) Any person elected or appointed as an officer may be removed from such office by a
majority of the weighted votes of the Board of Directors.
l.A WCX AGREEMENT (3/19/92 ed) June 18, 1992
5
7. MEMBERSHIP IN THE AUTHORITY
A. Each "Party" to this Agreement and any "Members" represented by the "Party" must be an agency
permitted to self-insure in the State of California and eligible for membership in the Authority as
dermed in the Bylaws. Each "Party" becomes a "Member" of the Authority and shall be entitled
to the rights and, privileges of membership, and shall be subject to the obligations of membership,
as provided in this Agreement and in the Bylaws.
B. Each "Party" to this Agreement shall participate and continue to participate in the "Workers'
Compensation Excess" program for a period of not less than three (3) full program years.
C. This Agreement shall be binding upon th.e original "Parties" to this Agreement on the effective
date of this Agreement.
D. Upon two-thirds (213) weighted vote of the "Parties", any agency, that is eligible for membersbip
as dermed in the Bylaws and is not a "Party" hereto, that desires to join the Authority created
hereby, may become a "Member" hereof by executing a copy of this Agreement whereby said
agency agrees to comply with the terms of this Agreement, the Bylaws, and the Memorandum of
Coverage. This Agreement shall be binding upon the agency effective as of the date of such
execution.
E. Each "Member" shall be subject to a retained limit per aoccurrence for "Workers' Compensation
Excess" as selected by the "Party" and approved by the Board of Directors.
F. Each "Member" participating in a program year with funds in excess of its obligation shall have a
right to a portion of such funds pursuant to the Bylaws. Each "~mber" participating in a
program year with obligations in excess of the funds for that proiram year shall be obligated to
pay any assessments charged by the Authority pursuant to the Bylaws.
8. WITHDRAWAL FROM OR TERMlNA TION OF MEMBERSHIP
A. AIty "Party" to this Agreement which has been a "Party" of the Authority for at least three (3) full
program years may voluntarily tenninate this Agreement as to itself and withdraw from
membership in the Authority. Such termination and withdrawal of membership shall become
effective subject and according to the conditions, manner, and means set forth in the Bylaws.
B. A "Party" may be involuntarily tenninated from the Authority upon a two-thirds (213) weighted
vote of the other "Parties" to this Agreement.
C. Withdrawal or termination of a "Party" shall not absolve such "Party" ofliabilities arising out of
participation in a program.
9. TERMINATION OF AGREEMENT
This Agreement may be terminated effective at the end of any fiscal year by a three-fourths (3/4) weighted
vote of the "Parties" present at a Board of Directors meeting, provided, however, that the Authority and
this Agreement shall continue to exist for the purpose of disposing of all claims, distribution of assets, and
all other functions necessary to conclude the affairs of the Authority.
LA WCX AGREEMENT (3/19192 ed) Juno 18. 1992
6
10. DISPOSITION OF PROPERTY AND FUNDS
A. In the event of the dissolution of the Authority, the complete recision, or other fmal termination of
this Agreement by the agencies then a "Party" hereto, any property interest remaining in the
Authority following a discharge of all obligations shall be distributed to the "Parties" in the saine
relationship as their total contnbutions over all program years to the total contributions of all
"Parties" over all program years.
B. In the event a "Party" withdraws from this Agreement, any property interest oftbat "Party" '
remaining in the Authority following discharge of all obligations shall be disposed of as provided
for in the Bylaws. Obligations, as referred to herein, shall include, but not be limited to, all
payments required by law together with all "Reserves" which have been established for the
purpose of paying incurred claims together with any other legal obligations incurred by the
Authority pursuant to this Agreement
11. AMENDMENTS
This Agreement may be amended, after sixty (60) days notice to the "Parties", by a two-thirds (213)
weighted vote of the "Parties". However, this Agreement may not be amended without a unanimouS vote
until three (3) years after its effective date. For purposes of this paragraph, amendment shall not include
termination of the Agreement. Any such amendment shall be effective upon the date of final execution
thereof, unless otherwise provided in the amendment.
12. AUDITS AND ACTUARIAL ANALYSIS
At the end of each fiscal year, the Authority shall bave a fmancial audit by a qualified, independent
Certified Accountant. A report from the Accountant shall be distributed to each and every "Party" to this
Agreement
The Authority shall have an audit of its claims performed at least once every two (2) years. Such audits
shall be performed by an independent individual or company qualified to perform such audits. A report of
the fmdings of such audit shall be distributed to each and every "Party" to this Agreement
The Authority shall have an actuarial study performed at least once every two (2) years. Such actuarial
study shall be performed by a qualified actuary and the fmdings of such a study shall be distributed to each
and every "Party" to this Agreement.
13. SEVERABILITY
Should any portion, term, condition, or provision of this Agreement be decided by a court of competent
jurisdiction to be illegal or in conflict with any law of the State of California, or be otherwise rendered
unenforceable or ineffectual, the validity of the remaining portions, terms, conditions, and provisions shall
not be affected thereby.
14. LIABILITY
A. If a "Member" or the Authority is held liable upon any judgement for damages caused by an act or
omission that is subject to Sections 895, et. seq., of the California Government Code and makes
payments in excess of its "Pro Rata Share" on such judgement, such "Member" of the Authority is
entitled to contribution from each of the other UParties" to the Agreement A "Member's" uPro
LAWCX AGREEMENT (3119192 ed) June 18. 1992
7
,
Rata Share" shall be determined in the same manner as for the disposition of property and funds
as provided in the Agreement and the Bylaws.
B. The Authority may insure itself, its directors, officers, and employees, to the extent deemed
necessary or appropriate by the Board of Directors, against loss, liability, and claims arising out of
or coooected with this Agreement.
IS. ENFORCEMENT
The Authority is hereby given authority to enforce this Agreement. In the event the Authority brings suit
against a "Member" for breach of this Agreement and a judgement is rendered for the Authoiity, the
"Member" shall pay all costs incurred by the Authority as a result of such suit, including reasonable
attorney's fees as fixed by the court. .
16. DEFINmONS
The tenns used herein and in the Bylaws shall have the following meanings:
A. "Claims Service" shall mean a claim adjuster or claims adjusting company as may be engaged by
the Board of Directors for the p~se of detennining losses and payments with respect to the
Claims Fund.
B. "Contribution" shall mean money payable by a "Party" to the Authority for the p~se of
funding for losses and administrative expenses of the Authority.
C. "Workers' Compensation Excess" shall mean coverage for Workers' Compensation and
Employers' Liability claims in excess of "Parties" retained limit as further dermed in the
Memorandum of Coverage.
D. "Loss Reports" sball mean a report showing claims under a "Member's" "Workers' Compensation
Excess" including current status.
E. "Member" shall mean any "Party" to this Agreement, and if such "Party" is a joint powers
authority and the participants if its Workers' Compensation program.
F. "Memorandum of Coverage" shall mean the document stating the scope of the "Workers'
Compensation Excess" as adopted by the Board of Directors.
G. "Party" shall mean a signatory to the Agreement.
H. "Program Year" shall mean that period of time, nonnally July 1 to the following June 30,
designated by the Board of Directors as one (I) coverage period.
I. "Agency" shall mean a special district, city, county, or joint powers Authority comprised largely
of the above agencies.
J. "Reserves" shall mean those parts of the "member's" "Contributions" held by the Authority to
make expected future payments on "Wor"ers' Compensation Excess" claims, whether known or
unknown.
LA WCX AGREEMENT (3/19/92 cd) June 18, 1992
8
.'
.
K. "Joint Program" shall mean the group purchasing of insurance or the funding ofloss to be paid by
the group.
L. "Pro-Rata Share" sball mean each "Member's" fmandaI "Contribution" in proportion to the total
of all "Member's" "Contributions" for each flSCllI year.
IN WI1NESS WHEREOF, the "Parties" hereto have caused this Agreement to be duly executed
by their authorized officers thereunto duly authorized as set forth berein below.
Party:
Date:
By:
Title:
LA WCX AGREEMENT (3/19/92 cd) June 18. 1992
9
I, RHONDA PELLIN, City Clerk of the City of Gilroy, do hereby certify that the attached
Resolution No. 2002-56 is an original resolution, duly adopted by the Council of the City of
Gilroy at a regular meeting of said Council held on the 15th day of July, 2002, 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 22nd day of July, 2002.
~~/~,
City Clerk of the.city of Gilroy
(Seal)