Resolution 2015-28RESOLUTION NO. 2015-28
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
GILROY AUTHORIZING PARTICIPATION IN MUNCIPAL
POOLING AUTHORITY AND APPROVING THE REVISED
EXERCISE OF JOINT POWERS AGREEMENT
WHEREAS, the Municipal Pooling Authority (MPA) provides risk- sharing, pooling
liability, property, and crime /errors and omissions/public officials bond coverage to its public
entity members, as well as other ancillary coverages and services; and
WHEREAS, nineteen (19) municipalities have established a Joint Exercise of Powers
Agreement for the purpose of self-insuring costs and administration of tort liability, property, and
other common risks; and
WHEREAS, the City of Gilroy has been approved for membership in the Municipal
Pooling Authority by vote of the MPA Board of Directors; and
WHEREAS, the Gilroy City Council on May 18, 2015 directed staff to prepare the
necessary documents and approvals to join the Municipal Pooling Authority; and
WHEREAS, the Gilroy City Council must approve the Joint Exercise of Powers
Agreement for the Municipal Pooling Authority in order to become a member; and
WHEREAS, as provided for in Section 29, the Agreement may be amended from time to
time by affirming resolution of the governing bodies of two- thirds of the current participating
members.
NOW, THEREFORE, BE IT RESOLVED that:
1. The City Council of the City of Gilroy hereby approves and authorizes participation in
MPA.
2. The City Council of the City of Gilroy desires to participate in MPA beginning at 12:00
a.m. on July 1, 2015.
3. The Exercise of Joint Powers Agreement in the form attached as Exhibit A, is hereby
approved by the City Council of the City of Gilroy, and the City Administrator of the
City of Gilroy is hereby authorized and directed to execute the Agreement on behalf of
the City of Gilroy.
4. The City Administrator of the City of Gilroy is also authorized to execute any other
RESOLUTION NO. 2015-28
document(s) that may be necessary or appropriate to enter into and implement the
Agreement on behalf of the City of Gilroy.
5. The City of Gilroy shall appoint a primary Director and alternate Director to the Board of
Directors of MPA. The City shall appoint its Human Resources Director/Risk Manager
to serve as the primary Board member and the City Administrator shall serve as the
alternate Board member.
6. The City of Gilroy consents to be governed for liability, property, vehicle physical
damage, crime /errors and omissions /public officials bond coverage in accordance with
Master Program Documents, the Memorandum of Coverage (Exhibit B), Bylaws
(Exhibit C), and other documents and policies as adopted by the Board.
PASSED AND ADOPTED on this I" day of June, 2015 by the following roll call vote:
AYES: COUNCILMEMBERS: AULMAN, BRACCO, LEROE- MUNOZ,
TUCKER, VELASCO, WOODWARD and GAGE
NOES: COUNCILMEMBERS: NONE
ABSENT: COUNCILMEMBERS: NONE
ATTEST:
'--Siriawna Freels, City Clerk
APPROVED:
Donald F. Gage, May
RESOLUTION NO. 2015 -28
MUNICIPAL POOLING AUTHORITY
JOINT EXERCISE OF POWERS AGREEMENT
This Agreement is dated for convenience as of April /1 21005-
and
entered into between certain Public Entities, hereafter referred to as "Members,' as
identified in the Bylaws.
RECITALS
This Agreement is predicated upon the following facts:
1. The Members are public entities organized and operating under the laws of the
State of California;
2. The following state laws, among others, authorize the Members to enter into this
Agreement:
a. Labor Code Section 3700(b) allowing a public entity to fund its own
workers' compensation claims;
b. Government Code Section 990 permitting a public entity to insure itself
against tort or inverse condemnation liability and to insure any employee
of the public entity against all or any part of his liability for injury resulting
from an act or omission in the scope of his employment;
C. Government Code Section 990.4 permitting a public entity to provide
insurance and self - insurance in any desired combination;
d. Government Code Section 990.8 permitting two or more public entities to
enter into an agreement to jointly fund such expenditures under the
authority of Government Code Sections 6500 -6515; and
e. Government Code Sections 6500 -6515 permitting two or more public
entities to jointly exercise under an agreement any power which is
common to each of them.
3. Each of the Members desires to enter into an agreement with each of the others
for the purpose of insuring against various risks jointly, rather than individually.
4. Pursuant to Government Code Section 6508.1, the debts, liabilities and
obligations of this Authority shall not constitute debts, liabilities, or obligations of
the Members.
5. The Authority was originally formed by a Joint Powers Agreement in 1977. Since
that time the Agreement has been amended several times and Members have
withdrawn from and new Members have been added to the Authority.
NOW, THEREFORE, for and in consideration of the mutual benefits, covenants
and agreements set forth herein, the parties agree as follows:
SECTION 1
Authority and Purpose
This Agreement is made under the authority of Government Code Sections 6500 -6515
between the Members identified in the Bylaws. The purpose of this Agreement is to
exercise jointly powers common to each Member by managing risks and pooling or
purchasing coverage for losses.
SECTION 2
Definitions
Unless the context otherwise requires:
1. "Authority" means the Municipal Pooling Authority created by this Agreement;
2. "Board" is the governing body of the Authority;
3. "Chief Administrative Officer" is the person appointed by the Board to be its
secretary and Risk Manager of the Authority.
4. "Claim" means a claim for personal injury, death, real or personal property
damage, and workers' compensation benefits;
5. "Covered Losses" are those losses resulting from. claims which are in excess of
the Member's deductible and are covered by the Authority either under the
Memorandum of Coverage or purchased insurance;
6. "Member' means a party to this Joint Powers Agreement;
7. "Memorandum of Coverage" is the document memorializing the terms,
conditions, and limitations of the coverage for those risks which the Cities agree
to self- insure.
SECTION 3
Creation of Authority
The Authority is created under Section 6500 of the Government Code as a public
entity, separate and apart from the parties to this Agreement.
SECTION 4
Terms of Agreement
This Agreement becomes effective as of the date and year first above written and
continues until terminated as hereafter provided. The prior Joint Powers Agreement is
terminated upon the effective date hereof. The rights and obligations of the parties
under the prior Joint Powers Agreement remain the same under this Agreement except
to the extent of the amendments made hereby.
Board Adopted December 10, 2004 2
SECTION 5
Governing Board
The Authority shall be governed by a Board composed of one individual from
each Member, each serving in an individual capacity as a member of the Board. Each
Member's governing body shall appoint to the Board either its Manager or Director, or
the department head or staff person responsible for its risk management function. Each
Board member shall have one vote. Each Member shall appoint one Alternate to the
Board. The Alternate shall have the same qualifications as the Board member. The
Alternate may attend, participate in, and vote at any meeting of the Board at which the
regular Board member is absent.
SECTION 6
Board Meetings and Records
(a) Regular Meetings. The Board shall hold at least one regular meeting each year.
The Board shall fix the date upon which and the hour and place at which each
regular meeting is to be held, and the Chief Administrative Officer shall notify
each Member of that action. All meetings shall be held in a manner consistent
with the Bylaws and in compliance with the Ralph M. Brown Act.
(b) By -Laws and Regulations. The Board may adopt by -taws and regulations,
which are not inconsistent either with applicable law or with this Agreement. In
the event the by -laws or regulations are inconsistent with this Agreement, this
Agreement shall control. The Chief Administrative Officer shall send to each
Member each by -law and regulation and amendment thereto promptly after its
adoption by the Board.
(c) Executive Committee.The Board may establish an Executive Committee and
delegate to it functions not otherwise reserved to the entire Board.
SECTION 7
Officers
(a) The Board shall elect a president and vice - president from among its members to
perform the duties set forth in the Bylaws.
(b) The Chief Administrative Officer shall be the Secretary of the Authority and shall
be responsible for maintaining all records of the Authority.
(c) The Board shall elect a Treasurer and Auditor with the qualifications and to
perform the duties set forth in the Bylaws.
(d) The Board may appoint such other officers and employees and may contract with
consultants and other professional persons or firms, as it considers necessary to
carry out the purposes of this Agreement.
Board Adopted December 90, 2004 3
SECTION 8
Powers
The Authority is authorized, in its own name, to do all acts necessary for the
exercise of those powers referred to in the Recitals including, but not limited to, each of
the following:
(1) Make and enter into contracts;
(2) Incur debts, liabilities and obligations but no debt, liability or obligation of the
Authority is a debt, liability or obligation of any Member, pursuant to Government
Code Section 6508.1;
(3) Acquire, hold or dispose of real and personal property;
(4) Receive contributions and donations of property, funds, services and other forms
of assistance from any source;
(5) Sue and be sued in its own name;
(6) Employ agents and employees;
(7) Acquire, construct, manage and maintain buildings;
(8) Lease real or personal property including that of a Member;
(9) Receive, collect, invest, and disburse monies; and
(10) Carry out other duties as required to accomplish other responsibilities as set forth
in this Agreement.
These powers shall be exercised in the manner provided by law and as expressly
set forth in this Agreement, subject only to those restrictions upon the manner of
exercising the powers which are imposed upon Members in the exercise of similar
powers.
SECTION 9
Fiscal Year
The "fiscal year" of the Authority is the period from the first day of July of each
year to and including the 30th day of June of the following year.
SECTION 10
Coverage Provided by the Authority
Pursuant to the payment of contributions by each Member, the Authority shall
provide coverage under a Memorandum of Coverage and/or purchased insurance under
the programs selected by the Member.
Board Adopted December 10, 2004 4
SECTION 11
Establishment and Administration of Funds
The Board shall establish such funds as it deems necessary to conduct the business of
the Authority.
SECTION 12
Bucluet
The Authority shall adopt an annual budget no later than the first day of its fiscal year.
SECTION 13
Member Contributions
The Chief Administrative Officer shall calculate annually the amount of contributions to
be charged for risk coverage required by Members. The Board shall approve each
charge before it takes effect. Each Member by the act of paying its contribution accepts
the coverage provided by the Authority.
SECTION 14
Accounts and Records
The CAO shall establish and maintain the funds and accounts in accordance with
acceptable accounting practices and shall maintain such other records as the Board
requires pursuant to the procedures set forth in the Bylaws. The CAO of the Authority
shall have the custody of and disburse Authority funds as provided by accounting
procedures developed in accordance with this Agreement and the Bylaws.
SECTION 15
Reserves
Separate reserves shall be maintained in the funds for each type of coverage.
SECTION 16
Authority Functions and Responsibilities
The Authority shall provide comprehensive risk management services to its members.
SECTION 17
Member Responsibilities
Each Member has the following responsibilities:
(1) Appoint its representative and alternate to the Authority Board;
(2) Cooperate fully with the Authority in determining the cause of losses and in the
settlement of losses;
Board Adopted December 10, 2004
(3) Comply with risk management requirements established by the Authority
pursuant to this Agreement;
(4) Pay contributions and assessments approved by the Board.
SECTION 18
New Members
With the approval of two - thirds of all members of the Board, any other public
entity in Contra Costa County or in the general geographic area reasonably serviceable
from Contra Costa County may become a party to this Agreement upon execution of this
Agreement, and shall forthwith pay to the Authority its current contribution payment as
determined by the Board.
SECTION 19
Cancellation of Coveraae in a Program or Programs
If a Member fails to comply with this Agreement, the Bylaws, or any procedures
or policies established by the Board, the Board may, by a two- thirds vote, refuse to
provide coverage or may cancel any coverage being provided to that Member in any
program(s).
SECTION 20
Termination of Agreement and Disposition of Assets
Upon Termination of Agreement
This Agreement may be terminated upon the unanimous consent of all parties to
if. Upon complete termination of this Agreement by all Members and the settlement of
all liabilities and claims, including incurred but not reported claims, all property of the
Authority shall be divided among the Members in a ratio equal to that of the total
amounts paid by the Members for the five (5) fiscal years preceding the year in which
the Agreement is terminated.
SECTION 21
Withdrawal of a Member
A Member may withdraw as a party to the Agreement at the end of any fiscal year upon
giving the Authority six (6) months prior written notice of its intent to withdraw.
SECTION 22
Expulsion
The Board by a three - fourths vote of all members may expel any member for the
reasons and under the procedures set forth in the Bylaws.
Board Adopted December 10, 2004 6
SECTION 23
Effect of Withdrawal or Expulsion
The withdrawal or expulsion of any Member shall not terminate its responsibilities
and obligations as set forth in the Bylaws. Upon withdrawal of a Member, that Member
is entitled only to its pro rata share of the balance of the amount paid by it for the fiscal
year in which withdrawal takes place. That Member shall not participate in or be entitled
to any other funds, property, or other assets of the Authority. Coverages under all pool
coverage programs for the coverage periods in which that Member participated will
remain in effect and continue until the conclusion of their respective program years.
SECTION 24
Liability and Indemnification
The Authority shall defend and indemnify its directors, officers, and employees to
the same extent as any other public entity of the State of California is obliged to defend
and indemnify its public employees pursuant to California Government Code Section
825, et seq., or other applicable provisions of law.
The Authority may insure or self- insure itself to the extent deemed necessary by
the Board against loss, liability and claims arising out of or connected to the conduct of
the Authority's activities.
SECTION 25
Assessment
Upon a two- thirds vote of the entire Board, the Board shall have the authority to
levy a cash assessment for any pooled coverage program if the Board finds that there
are insufficient funds available to the Authority to meet its legal obligations.
Any cost, including attorneys' fees, incurred by the Authority in collecting any
cash assessment shall be reimbursed by the Member against which such collection
action has been taken.
SECTION 26
Dividends and Premium Rebates
Upon a two- thirds vote of the Board, the Board shall have the authority to declare
a dividend, rebate of excess contributions, and/or reduction of future contributions for
any pooled coverage program if the Board finds there are excess reserves in the
retention fund.
SECTION 27
Severability
If any portion, term, condition or provision of this Agreement is determined by a
court to be illegal or in conflict with a law of the State of California, or is otherwise
rendered unenforceable or ineffectual, the validity of the remaining portions, terms,
conditions, and provisions is not affected.
Board Adopted December 10, 2004 7
SECTION 28
Prohibition Asaainst Assianment
No Member may assign a right, claim, or interest it may have under this
Agreement. No creditor, assignee, or third party beneficiary of a Member has a right, .
claim, or title to any part, share, interest, fund, premium, or asset of the Authority.
SECTION 29
Amendment
This Agreement may be amended by Resolution of the governing bodies of two -
thirds of the then- participating Members.
SECTION 30
Notices
Notices to Members under this Agreement shall be sufficient if delivered to the
office of the Member. Notices to the Authority shall be sufficient if delivered to the office
of the CAO.
Board Adopted December 10, 2004 8
IN WITNESS WHEREOF, the parties hereto have executed this Joint Exercise of Powers
Agreement as of
2005.
GILROY
JOINT EXERCISE OF POWERS AGREEMENT
New parties to agreement after April 1,
Effective: July 1, 2014
MEMORANDUM OF COVERAGE FOR THE
MUNICIPAL POOLING AUTHORITY
Throughout this Agreement, words and phrases that appear in italics and quotation marks have special
meaning. They are defined in Section II, "Definitions."
In consideration of the payment of the premium, the Authority agrees with the "covered parties" as
follows:
SECTION I -COVERAGES
The Authority will pay up to the "limit of coverage" those sums on behalf of the "covered parties" for
"ultimate net loss" in excess of the specific deductible that the "covered parties" become legally
obligated to pay as "damages" by reason of liability imposed by law or liability assumed by contract
because of
A. "Bodily injury " or "property damage " and/or
B. "Personal injury" and/or
C. "Public officials errors and omissions "
as those terms are herein defined and to which this agreement applies, caused by an "occurrence"
during the coverage period.
As a condition precedent for the Authority to have any duty under this Memorandum, including the duty
to pay "ultimate net loss" or any portion thereof, a "covered party" shall first have complied fully with
the provisions of SECTION VIII — CONDITIONS. A "covered parry's" failure to so comply shall void
the coverage described herein, unless coverage is extended by majority vote of the Board.
This Memorandum does not provide insurance, but instead provides for pooled self - insurance. This
Memorandum is a negotiated agreement amongst the Members of the Authority, and as such, no party
to the Memorandum is entitled to interpret this agreement by reference to legal principles specific to
contracts of adhesion, or to commercial insurers. Similarly, no party to this Memorandum may rely on
any contract interpretation principles which require interpretation of ambiguous language against the
drafter of such agreement. This agreement shall be applied according to the principles of contract law,
giving full effect to the intent and reasonable expectation of the members of the Authority, acting
through the Board of Directors. As the Authority is not an insurer, it is not bound by the provisions of
Civil Code §2860, which pertains to an insurer's obligation to provide independent counsel to an
insured under circumstances defined by that statute.
SECTION II - DEFINITIONS
1. "Additional covered party" means any person or "entity" named as an "additional covered party"
and holding a certificate of coverage duly issued by the Authority, for "occurrences" during the
coverage period identified in the certificate of coverage; if a particular activity is identified in the
certificate of coverage, the person or "entity" is a "covered party" only for "occurrences" arising
out of the described activity. Coverage for an "additional covered party" shall be provided only
when and to the extent required under the contract, subject to the terms and conditions of this
Memorandum.
2. "Aircraft" means a vehicle designed for the transport of persons or property principally in the air.
3. "Automobile" means a land motor vehicle, trailer or semi - trailer.
4. "Bodily injury" means bodily injury, sickness, disease, or emotional distress sustained by a person,
including death resulting from any of these at any time. Bodily injury includes "damages" claimed
by any person or organization for care, loss of service or death resulting at any time from the bodily
injury.
5. "Covered indemnity contract" means that part of a contract or agreement pertaining to the "covered
party's" governmental operations, including but not limited to:
a) Leases; b) Mutual aid agreements;
c) Public works contracts; d) Special events sponsored by the "covered party, "
e) Easement or license agreements; or f) Use of facilities or equipment by the "covered
party,"
under which the "covered party" assumes the tort liability of another party to pay for "bodily
injury" or "property damage " to a third person or organization. This definition applies only to tort
liability arising out of an "occurrence " to which this Agreement applies. Tort liability means a
liability that would be imposed by law in the absence of any contract or agreement.
6. "Covered individuals" means persons who are past or present elected or appointed officials,
employees or volunteers of the "entity", whether or not compensated, while acting for or on behalf
of the "entity," including while acting on outside boards conditioned by the following guidelines:
(a) The Authority's coverage will be excess and will not contribute to any other coverage
available to the outside Board or Commission;
(b) If the agency Board does not carry coverage, the member should encourage they obtain
coverage of their own;
(c) To be afforded coverage, the individual must be acting in good faith, without malice or
oppression, and in the best interest of the "entity; " and
(d) Extension of coverage is in the best interest of the "entity; "
except an airport or hospital board regardless of how such body is denominated.
Under no circumstances shall the Authority have a duty to defend or indemnify any "covered
individual" under circumstances in which the "entity" itself is not legally required to do so. The
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Board, at its sole discretion, may waive this section if it deems it is in the best interest of the
Authority.
7. "Covered party" means any person, organization, trust or agency qualifying as a covered party in
the covered parties section of this agreement.
8. "Damages" means compensation in money recovered by a party for loss or detriment it has suffered
through the acts of a "covered party."
9. "Defense costs" means all fees and expenses caused by and relating to the investigation, defense or
litigation of a claim including attorney's fees, court costs and interest on judgments accruing after
entry of judgment. Defense costs shall not include the office expenses of the Authority or the
"covered parry" nor the salaries of employees or officials of the Authority or any "covered party. "
Defense costs shall not include any fee or expense relating to coverage issues or disputes between
the authority and any "covered party. " Defense costs shall not include attorney fees or costs
awarded to a prevailing plaintiff against the "covered party. "
10. "Entity" means the entity named in the Declarations, including any and all commissions, agencies,
districts, authorities, boards (including the governing board) or similar entities coming under the
entity's direction or control or for which the entity's board members sit as the governing body.
Entity includes all departments and constituent agencies of the entity.
11. "Limit of coverage" means the amount of coverage stated in the declaration page or certificate of
coverage for each "covered party" per "occurrence. " For each "occurrence, " there shall be only
one limit of coverage regardless of the number of claimants or "covered parties" against whom a
claim is made. In the event that a structured settlement, whether purchased from or through a third -
party, or paid directly by the "covered party" in installments, is utilized in the resolution of a claim
or suit, the Authority will pay only up to the amount stated in the Declarations or certificate of
coverage in present value of the claim, as determined on the date of settlement, regardless of
whether the full value of the settlement exceeds the amount stated in the Declarations or certificate
of coverage.
12. "Medical malpractice" means the rendering of or failure to render any of the following services:
(a) Medical, surgical, dental, psychiatric, psychological counseling, x -ray or nursing services, or
treatment or the furnishing of any food or beverage in connection therewith; or any services
provided by a health care provider as defined in section 6146(c), (2), (3) of the California
Business and Professions Code.
(b) Furnishing or dispensing of drugs or medical, dental or surgical supplies or appliances.
Medical malpractice does not include first aid administered by employees, nor does it include
advice or services rendered by a 911 emergency dispatcher.
13. "Nuclear material" means source material, special nuclear material, or by- product material.
"Source material," "special nuclear material," and "by- product material" have the meanings given to
them by the Atomic Energy Act of 1954 or in any law amendatory thereof.
14. "Occurrence" means:
(a) With respect to "bodily injury" or "property damage: " an accident, including continuous or
repeated exposure to substantially the same generally harmful conditions, which results in
"bodily injury" or "property damage" neither expected nor intended from the standpoint of the
"covered party. "
(b) With respect to "personal injury" and "public officials errors and omissions" respectively: an
offense described in the definitions of those terms in this Memorandum.
15. "Personal injury" means injury, other than "bodily injury, " arising out of one or more of the
following:
(a) False arrest, detention or imprisonment, or malicious prosecution;
(b) Abuse of legal process;
(c) Wrongful entry into, or eviction of a person from, a room, dwelling or premises that the
person occupies;
(d) Publication or utterance of material that slanders or libels a person or organization or
disparages a person's organization's goods, products or services, or oral or written publication
of material that violates a person's right of privacy;
(e) Unlawful discrimination or violation of civil rights; or
(f) Injury resulting from the use of reasonable force for the purpose of protecting persons or
property.
16. "Pollutants" means any solid, liquid, gaseous or thermal irritant or contaminant, including smoke,
vapor, soot, fumes, acids, alkalis, chemicals, airborne particles or fibers, molds and/or fungus,
fungal pathogens, electromagnetic fields, and waste. Waste includes materials to be recycled,
reconditioned or reclaimed. The term pollutants, as used herein, do not mean potable water,
agricultural water, water furnished to commercial users, or water used for fire suppression.
17. "Property damage" means:
(a) Physical injury to tangible property, including all resulting loss of use of that property; or
(b) Loss of use of tangible property that is not physically injured or destroyed.
18. "Public officials errors and omissions" means any actual or alleged misstatement or misleading
statement or any act or omission by "covered individuals" individually or collectively in the
discharge of their duties with the "entity" and resulting in damage neither expected nor intended
from the standpoint of the "covered party. " All claims involving the same misstatement or
misleading statement or act or omission or a series of continuous or interrelated misstatements or
misleading statements or acts or omissions will be considered as arising out of one "occurrence."
19. "Ultimate net loss" means the sum actually paid or payable in cash in the settlement or satisfaction,
investigation or defense of losses for which the "covered party" is liable either by adjudication or
by compromise with the written consent of the Authority, after making proper deduction for all
recoveries and salvages and other collectible insurance. Ultimate net loss shall include "defense
costs" and related expenses incurred by the Authority. Ultimate net loss does not include attorney
fees or costs awarded to a prevailing plaintiff unless such fees or costs are related to a claim for
"damages " covered by this Memorandum.
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SECTION III -DEFENSE AND SETTLEMENT
With respect to claims or suits for "damages" to which this Memorandum applies, the Authority shall
have the right and duty to defend any claim or suit against the "covered party" even if any allegations
are groundless, false or fraudulent. However, in making the determination of its duty to defend, the
Authority may rely on the facts alleged within a third party's complaint, and those extrinsic facts known
to it. The Authority shall have no duty to speculate about unpled theories of recovery in order to
determine its obligations to defend or to indemnify, nor shall the Authority be under any continuing
duty to investigate whether a potential for coverage has arisen at some future date.
The Authority, at its own expense, and with a two -thirds vote of the Board members present at the
meeting, shall have the right to assume the control of the negotiation, investigation, defense, appeal or
settlement of any claim which the Authority determines, in its sole discretion, to have a reasonable
probability of resulting in an "ultimate net loss" in excess of the applicable retained limit. The "covered
party" shall fully cooperate in all matters pertaining to such claim or proceeding.
The "covered party" shall be obligated to pay or reimburse the Authority for the entire "ultimate net
loss, " up to the deductible. If the "ultimate net loss" exceeds the "covered party's" deductible, the
Authority shall be obligated to pay or cause to be paid the "ultimate net loss" in excess of the
deductible, up to the Limit of Liability. The Authority shall not be obligated to pay any judgment or
settlement or to participate in the defense of any claim or suit after the AUTHORITY'S LIMIT OF
LIABILITY has been totally exhausted by the payment of "defense costs" and/or judgments or
settlements.
No claim shall be settled for an amount in excess of the "limit of coverage" without the prior written
consent of the Authority, and the Authority shall not be required to contribute to any settlement to
which it has not consented.
SECTION IV - THE AUTHORITY'S LIMIT OF LIABILITY
Regardless of the number of.
(1) Persons or "entities" covered under this agreement,
(2) Persons or organizations making claims or bringing suits, or
(3) Claims made or suits brought,
the each "Occurrence " limit is the most the Authority will pay for "ultimate net loss " arising out of any
one "occurrence. "
The "limit of coverage" for any additional "additional covered party" as defined in Section 2, # 1,
subject to the per "occurrence" limitation above, shall not exceed the limit stated in its "additional
covered parry" certificate regardless of the limit which applies to the member.
SECTION V -COVERAGE PERIOD AND TERRITORY
This agreement applies to "bodily injury, " "personal injury, " "property damage " or "public officials
errors and omissions " which occur anywhere in the world during the coverage period.
SECTION VI - "COVERED PARTIES"
The parties covered by this agreement are:
(A) The "entity. "
(B) "Covered individuals."
(C) With respect to any "automobile" owned or leased by the "entity" or loaned to or hired for use by
or on behalf of the "entity," any person while using such "automobile" and any person or
organization legally responsible for the use thereof, provided the actual use is with the permission
of the "entity, " and with respect to any "automobile " owned or leased by an employee of the
"entity" or by a member of the "entity's" governing board, if the "entity" reimburses or pays the
employee or governing board member for use of such "automobile, " and only if such
"automobile " is operated by said employee or governing board member in the course and scope of
employment and only to the extent that the coverage provided hereunder shall be in excess of any
other insurance for said "automobile. " The foregoing notwithstanding, this coverage does not
apply to:
(1) Any person or organization or any agent or employee thereof, operating an "automobile " sales
agency, repair shop, service station, storage garage or public parking place, with respect to an
"occurrence " arising out of the operation thereof, or
(2) The owner or any lessee, other than the "entity, " of a leased or hired "automobile" or any
agent or employee of such owner or lessee.
(D) Any "additional covered party. "
(E) "Covered party" does not include any person, organization, trust or estate or any other type of
entity for any risk, claim, or loss which is incurred or occurs under any other joint powers
authority, or any joint powers agreement which creates a separate agency or entity, unless added
hereto by endorsement. However, as to any person who is an official, employee, or volunteer of an
"entity" named in the Declarations and is participating in the activities of any other joint powers
authority or any separate agency or entity created under any joint powers agreement on behalf of
that "entity," the coverage afforded in this Memorandum of Coverage will apply in excess of and
shall not contribute with any collectible insurance or other coverage provided to or through the
other joint powers authority or joint powers agreement covering a loss also covered hereunder,
whether on a primary, excess, or contingent basis.
SECTION VII -EXCLUSIONS
This agreement does not apply to:
1. (a) Claims arising out of the actual, alleged or threatened discharge, dispersal, seepage, migration,
plumage, release or escape of "pollutants" into or upon land, the atmosphere, or any watercourse
or body of water. This exclusion does not apply to fire fighting activities, including training
burns, or intentional demolition or burns for the purpose of controlling a fire, or the discharge of
"pollutants" for the purpose of controlling a fire; or to police use of mace, oleoresin capsicum
(O.C.), pepper gas or tear gas; to weed abatement or tree spraying; or spraying of any pesticide.
This exclusion does not apply to claims arising from sudden and accidental sewer backups.
This exclusion does not apply to claims arising from the sudden and accidental discharge,
dispersal, release, or escape of chlorine and other chemicals (gas, liquid or solid) which are being
used or being prepared for use in fresh or waste water treatment or in water used in swimming
pools, wading pools or decorative fountains.
As used herein, "sudden" means abrupt or immediate, and occurring within a period not exceeding
twenty -four (24) hours; "accidental" means causing harm neither expected nor intended by a
"covered party. "
This exclusion does not apply to claims arising from mold and/or fungus, with coverage limited to
an amount up to $100,000 over the "covered party's" specific deductible per "occurrence."
This exclusion does not apply to claims arising from materials being collected as part of any drop -
off or curbside recycling program implemented and operated by the "covered party," if the
materials have not been stored by the "covered parry" or "parties" for a continuous period
exceeding ninety (90) days.
(b) Any loss, cost, or expense arising out of any governmental order, directions or request that the
"covered party" or any other person or organization test for, monitor, clean up, remove, contain,
treat, detoxify, neutralize, remediate, or assess the effects of "pollutants. "
(c) Any loss, cost or expense, including but not limited to costs of investigation or attorneys' fees,
incurred by a governmental unit or any other person or organization to test for, monitor, clean-up,
remove, contain, treat, detoxify, neutralize, remediate, or assess the effects of "pollutants."
2. Claims arising out of the manufacture, mining, use, sale, installation, removal or
distribution of or exposure to radon, asbestos, asbestos products, asbestos fibers,
asbestos dust, or other asbestos - containing materials and:
(a) Any obligation of the "covered party" to indemnify any party because of such claims, or
(b) Any obligation to defend any suit or claims against the "covered party" because of such
claims.
3. Any claim (including attorney's fees or salary or wage loss claims) by any potential, present or
former employee or official of the "covered party" arising out of, but not limited to, a violation of
civil rights or employment - related practices, policies, acts, or omissions. This exclusion applies to
claims of negligent supervision and/or claims of failure to prevent employment - related practices.
4. (a) Any claim by:
(1) Any present or former employee or co- employee of the "covered party" arising out of or
sustained in the course of employment with the "covered party, " or
(2) The spouse, child, unborn child or fetus, parent, brother or sister of any such employee or co-
employee as a consequence of exclusion 3, 4(a) (1) or 4(b) herein.
This exclusion applies whether the "entity" may be held liable as an employer or in any other
capacity, except with respect to. liability of others assumed under a "covered indemnity
contract."
(b) Any obligation for which the "covered party" or any insurance company as its insurer may be
held liable under any workers' compensation, unemployment compensation or disability benefits
law or any similar law.
Liability imposed under the "Employment Retirement Income Security Act of 1974" or any law
amendatory thereof, or any law or liability arising out of fiduciary activities as respects employee
benefit plans.
6. The cost of providing reasonable accommodation pursuant to the Americans with Disabilities Act,
Fair Employment and Housing Act, or other similar law.
7. Liability imposed under the Fair Labor Standards Act or any law amendatory thereof.
8. Benefits payable under any employee benefit plan (whether the plan is voluntarily established by
the "entity " or mandated by statute).
9. Claims by any "entity" against its own past or present elected or appointed officials, employees,
volunteers, or additional covered parties where such claim seeks "damages" payable to the
"entity."
10. Claims arising out of any professional "medical malpractice " except "medical malpractice"
committed by any employee of the "covered party, " if that employee is licensed and certified as
an RN, LPN, LVN, EMT, paramedic or laboratory technician, and is not employed by or working
for any hospital or hospital operated out - patient, in- patent or other clinic at the time of the
"occurrence" giving rise to the loss.
11. Ownership or operation of any hospital or airport.
12. Fines, fees, penalties, restitution, disgorgement, exemplary damages or punitive damages, whether
awarded by a court or by an administrative or regulatory agency. Restitution and disgorgement, as
used herein, refer to the order of a court or administrative agency for the return of a specific item
of property or a specific sum of money, because such item of property or sum of money was not
lawfully or rightfully acquired by the "covered party."
13. "Bodily injury" or "property damage" arising out of the hazardous properties of "nuclear
material. "
14. Claims arising out of or in connection with:
(a) Land use regulation, land use planning, the principles of eminent domain, condemnation
proceedings or inverse condemnation by whatever name called, resulting from deliberate
decision making by the "covered party" and whether or not liability accrues directly against
the "covered party" or by virtue of any agreement entered into by or on behalf of any
"covered party. "
However, the above exclusion shall not apply to inverse condemnation liability arising from
accidentally caused physical injury to or destruction of tangible property, including all
resulting loss of use of such property, for which the "covered party" may be legally
responsible. Notwithstanding what is stated in the applicable declarations, the "limit of
coverage" for claims described in this exception will be subject to a per "occurrence" and/or
annual aggregate sublimit of $250,000 per member.
Further, the above exclusion shall not apply to claims for nuisance. However, where a claim
for nuisance is alleged with a claim for inverse condemnation, the "limit of coverage" for a
claim for nuisance will be subject to a per "occurrence" and/or annual aggregate sublimit of
$500,000 per member. Such sublimit shall be in addition to the sublimit of $250,000 for
inverse condemnation liability arising from accidentally caused "property damage" if both
inverse condemnation and nuisance are alleged.
This exclusion does not apply to enforcement of parking ordinances or regulations.
Notwithstanding any of the above, this Memorandum of Coverage shall not apply to any claim
arising out of the design, construction, ownership, maintenance, operation, or use of any water
treatment plant or waste water treatment plant, no matter how or under what theory such claim
is alleged, unless it is a claim based upon the accidental failure of the equipment utilized or
contained within the water treatment plant or waste water treatment plant.
(b) The initiative process, whether or not liability accrues directly against any "covered party" by
reason of any agreement entered into by or on behalf of any "covered party."
15. "Property damage " to:
(a) Property owned by the "entity" or employee.
(b) Property rented to or leased to the "entity" where it has assumed liability for "damages" to or
destruction of such property, unless the "entity" would have been liable in the absence of such
assumption of liability.
(c) "Aircraft" or watercraft in the "entity's" care, custody or control.
16. "Bodily injury " or "property damage " arising out of the ownership, operation, use or maintenance
of
(a) any watercraft while being used for public commercial purpose; or
(b) any "aircraft. "
9
17. "Bodily injury " or "property damage " arising out of the operation of any transit authority, transit
system or public transportation system owned or operated by the "entity, " except a transit system
operating over non -fixed route systems such as dial -a -ride, senior citizen transportation, or
handicapped transportation.
18. Claims arising out of the failure to supply or provide an adequate supply of gas, water, electricity
or sewage capacity when such failure is a result of the inadequacy of the "entity's" facilities to
supply or produce sufficient gas, water, electricity or sewage capacity to meet the demand. If the
electrical power generation plant or power - generating enterprise or municipal utility is owned,
operated, maintained, managed, or supervised by the "entity," the provisions of exclusion 19 apply
in place of this exclusion.
19. Claims arising out of the ownership, operation, maintenance, management, supervision, or the
condition of any electrical power generation plant or power - generating enterprise or municipal
utility, including:
(a) Any failure to supply or provide power from any such plant, enterprise, or utility;
(b) Any liability arising out of ownership, operation, maintenance, use, or entrustment of any
"automobile" while used in the operation of any such plant, division, or utility; or
(c) Any obligation, whether or not based on contract, of the "covered party" to indemnify any
person, entity, or governmental agency because of such claims.
20. "Bodily injury" arising out of the ownership, maintenance or use of any trampoline, bungee
jumping or any other rebound tumbling device.
21. "Bodily injury" arising out of the ownership, maintenance or use of (a) any skate or skateboard
park or other facility officially designated for use of skates or skateboards, or (b) any bicycle park
or other facility officially designated for use of bicycles or mixed use of bicycles in a skate or
skateboard park or facility, by the member "entity. "
22. "Bodily injury " arising out of the sponsorship of any rollerblade hockey league, class or
instruction.
23. "Bodily injury" arising out of competition among students authorized by the instructor in martial
arts classes, or arising out of martial arts tournaments or contests.
24. Under Coverage C, "public officials errors and omissions," to "bodily injury" or "personal
injury.
25. Under Coverage C, "public officials errors and omissions, " to physical injury to tangible
property, including all resulting loss of use of that property.
26. Refund of taxes, fees or assessments.
10
27. Claims arising out of the intentional conduct done with willful and conscious disregard of the
rights or safety of others, or with malice. However, where the "entity" did not authorize, ratify,
participate in, consent to or have knowledge of such conduct by its past or present employee,
elected or appointed official, or volunteer, and the claim against the "entity" is based solely on its
vicarious liability arising from its relationship with such employee, official or volunteer, this
exclusion does not apply to said "entity."
This exclusion does not apply to "bodily injury," "property damage," or "personal injury," as
those terms are defined, resulting from the use of reasonable force to protect persons or property.
28. Claims arising, in whole or in part, out of a "covered party" obtaining remuneration or financial
gain to which the "covered party " was not legally entitled.
29. Claims arising, in whole or in part, out of the violation of a statute, ordinance, order or decree of
any court or other judicial or administrative body, or rule of law, committed by or with the
knowledge or consent a "covered party. "
30. Claims arising out of oral or written publication of material, if done by or at the direction of a
"covered party" with knowledge of its falsity.
31. Claims arising out of estimates of probable cost or cost estimates being exceeded or faulty
preparation of bid specifications or plans, including architectural plans, unless prepared by a
qualified, licensed and/or registered engineer or architect who is the appointed City Engineer or an
employee of the "covered party."
32. Claims arising out of:
(a) A failure to perform, or breach of, a contractual obligation or fraudulent inducement to
contract.
(b) "Bodily injury" or "property damage" for which the "covered party " is obligated to pay
"damages" by reason of the assumption of liability in a contract or agreement. This exclusion
does not apply to liability for "damages: "
(1) Assumed in a contract or agreement that is a "covered indemnity contract, " provided the
"bodily injury" or "property damage" occurs subsequent to the execution of the contract
or agreement, and then only to the extent required by the terms of the "covered indemnity
contract;" or
(2) That the "covered party " would have in the absence of the contract or agreement.
33. "Ultimate net loss" arising out of relief, or redress, in any form other than money "damages."
34. Claims arising out of liability imposed on any "covered party" under any uninsured /underinsured
motorist law or "automobile" no -fault law.
11
SECTION VIII - CONDITIONS
1. "Covered Party's" Duties in the Event of "Occurrence," Claim or Suit.
(A) In the event of an "occurrence, " written notice containing particulars sufficient to identify the
"covered party" and also reasonably obtainable information with respect to the time, place
and circumstances thereof, addresses of the injured or damaged party(ies) and the identity and
addresses of available witnesses, shall be given by or for the "covered party" to the Authority
as soon as practicable.
As a condition precedent for the Authority to have any duty under this Memorandum,
including the duty to pay "ultimate net loss" or any portion thereof, a "covered parry" shall
first have complied fully with the provisions of SECTION VIII — CONDITIONS. A "covered
parry's" failure to so comply shall void the coverage described herein, unless coverage is
extended by majority vote of the Board.
(B) If claim is made or suit is brought against the "covered party, " the "covered party" shall be
obligated upon demand to forward to the Authority every demand, notice, summons or other
process received by it or its representative.
(C) The "covered party" shall cooperate with the Authority and, upon its request, assist in the
conduct of suits and in enforcing any right of contribution or indemnity against any person or
organization who may be liable to the "covered parry" because of "bodily injury, " `personal
injury, " `property damage" or "public officials errors and omissions" with respect to which
coverage is afforded under this Memorandum of Coverage; and the "covered party" shall, as
deemed desirable by the Authority, attend hearings and trials and assist in securing and giving
evidence and obtaining the attendance of witnesses. The "covered party " shall not, except at
its own cost, voluntarily make any payment, assume any obligation or incur any expense on
behalf of the Authority. The "covered party " shall reimburse the Authority for the "ultimate
net loss" up to its deductible.
(D) Bankruptcy or insolvency of the "covered party" shall not relieve the Authority of any of its
obligations hereunder.
(E) Upon tender of a claim, the Authority shall be entitled to complete access to the "covered
parry s" claim file, the defense attorney's complete file, and all investigation material and
reports, including all evaluations and information on negotiations. The "covered party" shall
be responsible to report on the progress of the litigation and any significant developments at
least quarterly to the Authority, and to provide the Authority with simultaneous copies of all
correspondence provided to the "covered party" by its defense attorneys and/or agents.
2. Other Coverage:
If collectible insurance or any other coverage with any insurer, joint powers insurance authority or
other source respectively is available to the "covered party" covering a loss also covered hereunder
(whether on a primary, excess or contingent basis), the coverage hereunder shall be in excess of,
and shall not contribute with, such other coverage.
12
3. Severability of Interests:
The term "covered party" and its sub -terms including "entity," "covered individual" and
"additional covered party " are used severally and not collectively, but the inclusion herein of more
than one "covered party" shall not operate to increase the limits of the Authority's liability or the
retained limit applicable per "occurrence. "
4. Accumulation of Limits:
With respect to "personal injury" and "public officials errors and omissions," an "occurrence"
with a duration of more than one coverage period shall be treated as a single "occurrence " arising
during the coverage period when the "occurrence " begins.
"Property damage" or "bodily injury" with a duration of more than one coverage period shall be
deemed to occur during only one coverage period, and that coverage period shall be when any
"property damage" or "bodily injury" was first discovered. Coverage for such "property damage"
or "bodily injury" shall be provided by, at most, one Memorandum of Coverage by the Authority.
5. Termination:
This Memorandum may be terminated at any time in accordance with the Joint Powers Agreement
or by action approved by the Authority's Board of Directors.
6. Changes:
Notice to any agent or knowledge possessed by any agent of the Authority or by another person
shall not affect a waiver or a change in any part of this Memorandum of Coverage, nor shall the
terms of this Memorandum of Coverage be waived or changed, except by endorsement issued to
form a part of this Memorandum of Coverage.
7. No action:
No person, organization or other entity shall have the right under this Memorandum of Coverage to
join the Authority as a party in any action against any "covered party " to determine the Authority's
liability.
8. Subrogation:
The Authority shall be subrogated to the extent of any payment hereunder to all the "covered
party's" rights of recovery therefore; and the "covered party" shall do nothing after loss to
prejudice such rights and shall do everything necessary to secure such rights. Any amount so
recovered shall be apportioned as follows:
(A) Any interest (including the "covered party's ") having paid an amount in excess of the covered
"ultimate net loss " hereunder shall be reimbursed on a pro -rata basis of the respective share of
the loss paid between the Member and Authority.
(B) The expenses of all such recovery proceedings shall be apportioned in the ratio of respective
recoveries. If there is no recovery in the proceedings conducted solely by the Authority, it
shall bear the expenses thereof.
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SECTION IX RESOLUTION OF COVERAGE DISPUTES
1. GENERAL
The following procedures shall be followed in resolving any dispute, claim, or controversy arising
out of or connected with this Memorandum of Coverage. Such disputes shall be resolved by either
administrative proceedings or binding arbitration as provided herein.
2. PROCEDURES FOR RESOLVING DISPUTES
Decisions by the Authority whether to assume control of the negotiation, investigation, defense,
appeal, or settlement of a claim, or whether or not coverage exists for a particular claim or part of a
claim, shall be made by the Board of Directors of the Authority. An appeal to the Board from a
written coverage opinion by staff or coverage counsel must be made in writing to the Authority by
the covered party within ninety (90) days of receipt of such opinion. If, either prior to or following
the Board's decision, a new coverage opinion is sent by staff or coverage counsel to the covered
party, a new ninety (90) day period commences from receipt of such new opinion in which the
covered party may appeal to the Board.
Any dispute concerning a decision by the Board shall be submitted to final binding arbitration
within ninety (90) days of written notification of the Board's decision. The arbitration shall be held
before a neutral arbitrator, selected by mutual agreement of the parties, who is a lawyer experienced
in contract interpretation or a retired federal or California State judge. The arbitrator shall not be
employed by or affiliated with the Authority, the covered party, or any Member of the Authority.
Such arbitration shall be conducted under the auspices of, and in accordance with, the procedures
and rules of the California Code of Civil Procedure. Any hearings held in the course of such
arbitration shall be held in Walnut Creek, California, unless the parties mutually agree in writing to
another location.
The selection of the arbitrator shall take place within twenty (20) calendar days from the receipt of
the request for arbitration. The arbitration hearing shall commence within forty-five (45) calendar
days from the date of the selection of the arbitrator. These timelines may be extended by agreement
of the parties.
Each party shall bear one -half the cost of the selected arbitrator. Except for the shared cost of the
arbitrator, each party shall be responsible for its own fees, costs and expenses of arbitration.
Except for notification of appointment and as provided in the California Code of Civil Procedure,
there shall be no communication between the parties and the arbitrator relating to the subject of the
arbitration other than at oral hearings.
The decision of the arbitrator shall be final and binding, and shall not be subject to appeal.
During the course of the administrative and arbitration proceedings provided herein, the "covered
party" will be responsible for all fees and expenses for the defense or litigation of a claim or lawsuit
for which coverage has been denied. In the event the arbitrator determines that a duty of defense
applies, the Authority will reimburse the "covered party" for "defense costs" as defined in Section
H (9).
14
3. FUNDING OF DEFENSE AND CLAIMS PENDING RESOLUTION OF DISPUTE
During the course of the administrative and arbitration proceedings provided herein, the "covered
parry" will be responsible for all fees and expenses for the defense or litigation of a claim or
lawsuit. In the event the arbitrator determines that a duty of defense applies, the Authority will
reimburse the "covered party" for "defense costs" as defined in Section II (9).
4. EFFECT OF ARBITRATION DECISIONS
All decisions on appeals, whether by the Board of Directors (after the time to request arbitration has
expired) or by an arbitrator, shall be final and binding upon the "parties."
5. NOT APPLICABLE TO EXCESS CARRIERS
These arbitration provisions are intended to bind only the Authority and its member agencies. They
are not intended to be binding upon any of the Authority's excess carriers.
:
Issued By:
MUNICIPAL POOLING AUTHORITY
Risk Manager /CAO
Date:
15
BYLAWS
OF THE
MUNICIPAL POOLING AUTHORITY
These Bylaws are for the regulation of the MUNICIPAL POOLING AUTHORITY, except
as otherwise provided by law or by the Joint Powers Agreement establishing said Authority.
The Authority is comprised of the Cities of ANTIOCH, BRENTWOOD, CLAYTON, DANVILLE,
EL CERRITO, HERCULES, LAFAYETTE, MANTECA, MARTINEZ, MORAGA, OAKLEY,
ORINDA, PINOLE, PITTSBURG, PLEASANT HILL, RICHMOND, SAN PABLO, SAN RAMON
and WALNUT CREEK.
ARTICLE I
DEFINITIONS
The terms in these Bylaws shall be as defined in the Joint Powers Agreement creating
the Authority, unless otherwise specified herein..
ARTICLE 11
OFFICES
The principal executive office for the transaction of business of the Authority is hereby
fixed and located at Walnut Creek, California. The Board shall have the authority to change the
location of the principal executive office from time to time. Any such change shall be noted in
the Bylaws by the Secretary, opposite this section, or this section may be amended to state the
new location.
Other business offices may, at any time, be established by the Board at any place or
places where the Authority is qualified to do business.
ARTICLE 111
FUNCTIONS OF THE AUTHORITY
The Authority shall perform the following functions in discharging its responsibilities
under the Joint Powers Agreement and these Bylaws:
(1) Provide coverage for risks selected by the Members, by pooling or purchasing
coverage for losses;
(2) Assist Members in developing their risk management statements;
(3) Participate in Members' risk management advisory committees;
(4) Provide loss prevention, safety and security advice;
(5) Provide claims management services for non - covered risks and for high
deductibles;
(6)
(7)
(8)
Provide claims recovery and subrogation services to investigate, pursue and
collect for damages caused by the acts of others;
Negotiate and purchase excess coverage and/or insurance policies;
Assist in providing rehabilitation services under workers' compensation to reduce
industrial disability and retirement liabilities;
(9) Establish actuarial methods and procedures to distribute costs and generate
revenues equitably, and perform or contract for claims audits and actuarial
studies to determine cost allocations;
(10) Provide loss analysis control by use of statistical analysis, data processing,
record and file keeping services. The purpose of this information is to identify
high exposure operations and to evaluate proper levels of self - retention and
deductibles;
(11) Assist in maintaining proper building and contents values by location;
(12) Conduct risk management evaluations to review the participation of each
Member in the program;
(13) Select legal counsel after recommendation by a committee composed of city
attorneys of the Members;
(14) Advise Members on selection of defense counsel;
(15) Prepare an annual budget;
(16) Provide litigation management oversight; and
(17) Perform other functions as required by the Board for the purpose of
accomplishing the goals of the Joint Powers Agreement.
ARTICLE IV
BOARD OFFICERS
The governing body of the Authority shall be the Board of Directors, which shall provide
policy direction for the Officers, the Chief Administrative Officer (CAO), and any standing
committee including the Executive Committee. The Board may delegate any or all of its
responsibilities, except that the Board reserves to itself the authority to do the following, by
majority vote unless otherwise stated:
1. Accept a new Member to the Authority (two-thirds vote of the Board);
2. Accept indebtedness (two- thirds vote of the Board);
3. Adopt a budget;
4. Amend these Bylaws;
5. Alter a Member's retained limit (two- thirds vote of the Board);
6. Approve contracts for Authority administrative services including legal counsel;
Revised December 10, 2004
2
7. Approve equity distributions;
8. Approve Memoranda of Coverage;
9. Assess Members for an actuarially unsound coverage year
(two - thirds vote of the Board);
10. Establish or terminate a coverage program (two- thirds vote of the Board);
11. Elect the officers of the Authority;
12. Remove an officer (two-thirds vote of the Board);
13. Expel a Member from the Authority (three- fourths vote of the Board);
14. Cancel or refuse to provide coverage to a member (two- thirds vote of the Board);
15. Approve the rescission of a Member's withdrawal notice;
16. Acquire and/or dispose of real property; and
17. Settle claims in excess of the authority of the Executive Committee and CAO.
The officers of the Board shall be the President, Vice- President, Secretary, and
Treasurer /Auditor. The positions of Treasurer and Auditor may be filled by one person or
separate persons. The CAO shall serve as Assistant Treasurer and Secretary to the Board.
The President, Vice- President, Treasurer /Auditor shall be elected at the first meeting of the
calendar year by a majority of the full Board of Directors and shall serve for two -year terms.
The President, Vice- President, Treasurer /Auditor may be removed at any time by a two- thirds
(2/3) vote of the full Board of Directors. In the event of resignation by, or removal of, the
President, the Vice - President shall preside pro tem and the resulting vacancy shall be filled at
the next regular meeting of the Board held after the vacancy occurs.
The Board of Directors may from time to time adopt and /or amend policies and
procedures which shall amplify the general provisions of the Joint Powers Agreement or the
Bylaws and give direction to the Executive Committee and the CAO
ARTICLE V
DUTIES OF THE OFFICERS
A. The President shall be empowered in his or her discretion to undertake action necessary
to administer the terms and conditions of the Joint Powers Agreement, these Bylaws and
the policies and procedures adopted by the Board except to the extent that:
1) Such action requires the approval of the Board of Directors, in which case the
President shall act in conformity with the Board and carry out its instructions; or
2) Such action is delegated by the Joint Powers Agreement, these Bylaws or the
Board's policies or procedures to the CAO or other designated officer. However,
if the position of CAO is vacant, the President shall exercise the powers and
duties of the CAO until a successor is appointed and qualified.
The President shall preside at all meetings of the Board and the Executive Committee.
B. The Vice - President shall preside in the absence or inability of the President and perform
such other duties as the Board may specify from time to time.
C. The CAO shall be the Secretary to the Board, and shall maintain all records of the
Authority.
Revised December 10, 2004
D. The Board of Directors shall elect as Treasurer /Auditor a Finance Director or City
Manager or Assistant City Manager with financial background of one of the Members.
The Board may appoint someone other than the Treasurer to perform the functions of
Auditor of the Authority but, if so, the appointment shall be from the same Member as
the Treasurer. The CAO shall serve as Assistant Treasurer. The Assistant Treasurer and
Treasurer /Auditor shall have those duties specified in Section 6505.5 and 6505.6 of the
Califomia Government Code and shall maintain or cause to be maintained all accounting
and other financial records of the Authority and shall file all financial reports required of
the Authority and shall perform such other duties required by the Joint Powers
Agreement and as the Board may specify. The Assistant Treasurer and
Treasurer /Auditor shall each furnish a corporate surety bond in an amount acceptable to
the Board, but in no case less than $100,000.00, conditioned upon the faithful
performance of his or her respective duties. Premiums for such bonds shall be paid by
the Authority. The Assistant Treasurer shall also invest surplus funds in depositories
approved by the Board and shall attempt to obtain the maximum return to the Authority.
Surplus funds may be invested in any manner in which the Members may legally and
customarily invest. The Assistant Treasurer shall prepare and recommend to the Board
an Investment Policy and shall comply with the provisions of section 53646 of the
Govemment Code.
In addition to those duties specified in Section 6505.5 and 6505.6 the Treasurer /Auditor
is charged with monitoring compliance with these Bylaws and any policies and
procedures adopted by the Board, and will report any unresolved discrepancies to the
Executive Committee.
ARTICLE VI
OFFICERS AND EMPLOYEES — DUTIES
The Board shall retain and employ a GAO to perform the duties prescribed herein. The
CAO shall a) serve at the pleasure of the Board; b) be chosen on the basis of qualifications; c)
be paid a salary fixed by the Board commensurate with the responsibilities of the position; and
d) not engage in any incompatible business or occupation.
In addition to the duties prescribed by the Joint Powers Agreement, these Bylaws and
any policies and procedures adopted by the Board, the CAO shall:
a) Appoint, remove and discipline all administrative officers and employees of the
Authority except as otherwise provided herein;
b) Annually, prepare and submit to the Board a proposed budget for the ensuing
fiscal year, and properly administer the budget adopted by the Board;
C) Keep the Board advised of the financial condition and future needs of the
Authority and make such recommendations to the Board concerning the affairs of
the Authority as are deemed necessary or desirable;
d) Provide for the enforcement of all rules and regulations of the Authority; and
e) Perform or make recommendations to the Board for the performance of the
Authority's functions and responsibilities set forth herein and in the Joint Powers
Agreement.
Revised December 10, 2004
The Board may retain and employ a General Counsel who shall serve as the chief legal
officer of the Authority and carry out all duties consistent therewith including but not limited to: a)
preparation, review and approval of contracts, leases and other legal documents; b) prosecution
on behalf of and defense of actions against the Authority; c) recommendations to the Board on
form and content of coverage memoranda; and d) such other matters as the Board may
prescribe. The General Counsel shall serve at the pleasure of the Board.
ARTICLE VII
COMMITTEES
There is hereby established an Executive Committee of the Board which shall consist of
the President, Vice - President, and three (3) individuals who are Directors on the Board
designated by the Board, and the immediate Past - President, in the capacity as ex- officio officer.
The immediate Past - President will not have a vote unless necessary to meet quorum
requirements. The Executive Committee shall meet as necessary or as called by the President
or CAO to conduct the business of the Authority, The Executive Committee shall receive
recommendations from the CAO and other officers and employees of, and consultants to, the
Authority and shall make recommendations thereon to the Board.
The Executive Committee shall review and have the authority to approve all
recommended settlements, purchases and budget transfers as required by the applicable
policies and procedures adopted by the Board.
The Board may from time to time appoint and dissolve other committees as necessary
for the conduct of the Authority business.
ARTICLE Vlll
MEETINGS
The Board shall fix the time and place for its meetings and shall hold at least one regular
meeting each year. Special meetings may be called from time to time by the President of the
Board, or upon written demand by one -third (1/3) of the members of the Board. The CAO shall
notify each Member in writing of the date, time, and place of each meeting and the business to
be transacted. Such written notice must be delivered personally or mailed, so as to reach each
board member, at least three working days prior to the time of such meeting.
All meetings of the Board, except duly authorized closed sessions, shall be open to the
public and conducted in accordance with the Ralph M. Brown Act. Notice to the public of such
meetings shall be given and /or posted as required by law. Each Board member shall be
provided with the minutes as soon as possible after each meeting for their review.
Business shall not be transacted without a quorum of the Board members present. A
quorum shall consist of at least ten Board members. Except as otherwise stated in these Bylaws
or in the Joint Powers Agreement, actions by the Board shall be by a majority vote of the
members present, provided there is a quorum.
Revised December 10, 2004
ARTICLE IX
BUDGET
The annual fiscal year budget shall separately show the following:
a) A General and Administrative Section.
b) An Interest Income Section.
C) The funds for each type of coverage afforded the Members of the Authority
showing:
1. The actuarial estimated claims including allocated claims adjustment
costs;
2. An equitable allocation of the general and administrative costs;
3. An equitable allocation of the interest income;
4. Reserves.
ARTICLE X
DISBURSEMENT OF FUNDS
The Assistant Treasurer may receive and invest funds as necessary for the operation of
the Authority and shall disburse all funds as detailed in the annual budget adopted by the Board
of Directors and consistent with the Joint Powers Agreement, these Bylaws and any policies
and procedures adopted by the Board of Directors.
All checks drawn for the purpose of claim settlement in excess of $100,000.00 and for
the purchase of equipment, supplies or services in excess of $50,000.00 shall be signed by any
two (2) of the following officers of the Authority: The President, Vice- President, Assistant
Treasurer and Treasurer /Auditor. All other checks shall be signed by the Assistant Treasurer
and the appropriate Claims Manager as designated by the CAO.
ARTICLE XI
MAINTENANCE OF FUNDS AND FINANCIAL RECORDS
The CAO shall establish and maintain the funds and accounts in accordance with
acceptable accounting practices and shall maintain such other records as the Board requires.
Books and records of the Authority in the hands of the CAO shall be open to inspection to all
reasonable times by representatives of the Cities.
The CAO shall have the custody of and disburse Authority funds as provided by
accounting procedures developed in accordance with the Joint Powers Agreement, these
Bylaws, and policies and procedures adopted by the Board, and in accordance with generally
accepted accounting principles. The Authority is responsible for the strict accountability of all
funds and reports of all receipts and disbursements, and shall comply with the laws relating to
the subject, particularly Section 6505 of the Government Code.
Revised December 10, 2004
6
ARTICLE XII
AUDITS
Within 120 days after the close of each fiscal year, the CAO shall give a complete written
report of all financial activities for that fiscal year to each Member. The Board shall either make
an annual audit or contract with a certified public accountant to make an annual audit of the
accounts and records of the Authority. In each case, the minimum requirements of the audit
shall be those prescribed by the State Controller for special districts under Government Code
Section 26909 and shall conform to generally accepted auditing standards. When an audit is
made by a certified public accountant, the Authority shall have a copy of the audit report filed as
a public record with each Member. The audit report shall be filed within six (6) months of the
end of the fiscal year under examination.
The Authority shall bear the costs of the audit, including any amounts paid to a certified
public accountant.
ARTICLE XIII
PROPERTY
No real property shall be acquired or disposed of except upon order of the Board. No
purchase of equipment, services or supplies in excess of $25,000.00 shall be made except
upon order of the Executive Committee. Approval of the budget containing specific line item
authorization to purchase equipment, services and supplies shall constitute approval by the
Executive Committee.
ARTICLE XIV
NEW MEMBERS
The Authority has established the following criteria for considering new members:
1. Pool Membership. Applicants accepted for membership must participate in
the liability or workers' compensation pooled coverage program.
2. Coverage. The applicant shall agree to participation in the Authority for a
minimum period of three (3) consecutive years following its admission as a new
Member.
3. Vesting, The applicant shall agree to a five -year vesting schedule, providing an
escalating share of any dividend or premium rebates as follows: after one year,
not eligible for any rebate; after two years, eligible for 25% of its pro rata share;
after three years, eligible for 50% of its pro rata share; after four years, eligible for
75% of its pro rata share; and after five years, eligible for 100% of its pro rata
share.
4 Application Process. Any applicant desiring to be considered for membership by
the Authority must follow the following procedure:
A. Complete an application form which may include, but not be limited to, the
following information:
Underwriting data for current year;
Revised December 10, 2004
ii. Payrolls for the prior five (5) years;
iii. Loss history for the prior five (5) years;
iv. A copy of the most recent claims audit and actuarial reports, if
available;
V, A copy of the most recent audited financial statements;
vi. An indication as to the pooled coverage programs in which the
applicant wishes to participate and the anticipated deductible level
for such program; and
vii. Description of its Risk Management Programs.
B. Provide an actuarial study in a framework that is acceptable to the
Authority.
C. Submit to a staff analysis of its qualifications for membership and provide
whatever documentation is required.
D. Comply with any other requests or considerations made by the Board.
E. Pay an application - processing fee as determined by the Board.
Additionally, applicants may, at their option, request a non - binding vote regarding their
membership application. Subsequent to that vote, it shall be the applicant's decision as to
whether or not it wishes to continue with the application process.
Upon review of an application, and after necessary site visits by staff, a report,
containing a staff recommendation, will be presented to the Board. The applicant will be invited
to attend a meeting of the Board to respond to questions concerning the application. The
affirmative vote of two-thirds of the members of the entire Board is necessary for admission to
the Authority.
ARTICLE XV
ELIGIBILITY AND UNDERWRITING GUIDELINES
Any prospective member, including existing members not participating in a program,
must meet the following minimum underwriting guidelines to participate in any of the Authority's
pooled coverage programs.
a. Have a loss rate calculated for the past three years that does not exceed the
average loss rate measured over the same period for the current members.
b. Demonstrate a commitment to support risk management and safety programs in
order to control and prevent claims.
C. Have a minimum deductible for participation in the Liability program of $25,000.
d. Pay an application fee equal to the cost charged by consultants retained to
evaluate the member's eligibility for the program.
Revised December 10, 2004
8
Where, in the opinion of the CAO and with the concurrence of two- thirds of the Board,
the strict application of the guidelines in this Article would prevent the acceptance of
membership of an otherwise qualified applicant, the CAO may waive any guideline or any part
of any guideline in this Article.
ARTICLE XVI
CLAIMS AUDITS
An independent claims audit will be conducted on the Liability and Workers'
Compensation Programs at least once every twenty -four (24) months to ensure compliance with
reasonable claims administration practices.
ARTICLE XVII
EXPULSION FROM AUTHORITY
The Board by a three - fourths vote of all members may expel, for default, any Member
from the Authority after 180 days' written notice. The notice shall enumerate the reasons for the
expulsion.
The following shall be considered "defaults" under the Joint Powers Agreement and
these Bylaws:
1. Failure to observe and/or perform any covenant, condition, or agreement under
the Bylaws and /or Joint Powers Agreement and /or any other policy or procedure
adopted by the Board, including but not limited to risk management or loss
reporting procedures;
2. Failure to pay any amount, including penalties and interest, due to the Authority
for more than thirty (30) days;
3. Excessive losses as determined by the Board;
4. The filing of a petition applicable to the Member in any proceedings instituted
under the provisions of the Federal Bankruptcy Code or under any similar act
which may hereafter be enacted; or
5. Any condition of the Member, which the Board believes, jeopardizes the financial
viability of the Authority.
The condition of default under paragraph 4 shall result in immediate termination of
membership in the Authority. The Board shall give one hundred eighty (180) days' written
notice of condition of default under paragraphs 1, 2, 3, and 5 prior to expulsion. Within ninety-
(90) days of receiving such notice, the Member may attempt to correct or cure the condition of
default to the satisfaction of the Board. The Board's decision as to the effectiveness of the cure
shall be final.
The above list of grounds for expulsion shall not limit the Board's authority to determine
whether a Member is in violation of the Joint Powers Agreement, Bylaws, or any policy or
procedure adopted by the Board and, if so, to notify said Member that its participation in the
Authority or in any coverage program provided by the Authority will be terminated. In the case
Revised December 10, 2004
9
of termination of membership for grounds other than those set forth hereinabove, the Board
shall give sixty (60) days' notice of termination and, in the Board's discretion, may give such
Member an opportunity to cure the condition which is the basis for termination.
ARTICLE XV111
EFFECT OF WITHDRAWAL OR EXPULSION
The withdrawal or expulsion of a Member shall not terminate the Authority nor alter any
of the terms or conditions of the Joint Powers Agreement, Bylaws, or any policy or procedure
adopted by the Board. The withdrawal or expulsion of a Member shall not terminate that
Member's responsibility to contribute its share of contributions, assessments, or other funds to
the Authority until all unpaid claims, or other unpaid liabilities, covering the period during which
the Member was a participant in the Authority's coverage program or programs have finally
been resolved and those program years are closed.
In addition, the withdrawal or expulsion of any Member shall not terminate its
responsibility:
(a) To cooperate fully with the Authority in determining the cause of losses and in the
settlement of claims incurred during the coverage period(s), as defined in the
Memorandum of Coverage, in which the Member participated.
(b) To pay any cash assessments or other amounts determined by the Board to be
due and payable for each program year of each program in which it participated
until all claims or other unpaid liabilities covering such periods have been finally
resolved.
(c) To provide the Authority with statistical and loss experience data and other
information as may be necessary for the Authority to carry out the purposes of
this Agreement.
(d) To cooperate with and assist the Authority in all matters relating to this
Agreement.
Coverages under all pool coverage programs for the coverage periods in which that
Member participated will remain in effect and continue until the conclusion of their respective
program years.
Upon withdrawal or expulsion of a Member, that Member is entitled only to its pro rata
share of the balance of the amount paid by it for the fiscal year in which withdrawal or expulsion
takes place. That Member shall not participate in or be entitled to any other funds, property, or
other assets of the Authority.
Revised December 10, 2004
10
ARTICLE XIX
DISPUTES OR CLAIMS BETWEEN MEMBERS
After being notified in writing that one Member of the Authority has filed a formal claim,
which is potentially covered by a program of the Authority, against another Member in
accordance with provisions of the California Government Code, the Authority will no longer act
on behalf of either Member without the written consent of all Members involved, insofar as the
case giving rise to the claim is concerned.
ARTICLE XX
AMENDMENTS
These Bylaws may be amended by a majority of the Board provided that any
amendment is compatible with the purposes of the Authority, is not in conflict with the Joint
Powers Agreement and has been submitted to the Board at least fourteen (14) days in advance
of a Board meeting. Any such amendments shall be effective immediately unless otherwise
designated.
Revised December 10, 2004
I1
I, SHAWNA FREELS, City Clerk of the City of Gilroy, do hereby certify that the
attached Resolution No. 2015 -28 is an original resolution, or true and correct copy of a city
Resolution, duly adopted by the Council of the City of Gilroy at a regular meeting of said
Council held on the I" day of June, 2015 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 2 "d day of June, 2015.
it
Shawna Freels, MMC
City Clerk of the City of Gilroy
(Seal)