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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)