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RESOLUTION NO. 88-354
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN BERNARDINO
APPROVING AND AUTHORIZING EXECUTION AND DELIVERY OF A JOINT
POWERS AGREEMENT CREATING THE BIG INDEPENDENT CITIES EXCESS POOL
JOINT POWERS AUTHORITY, AUTHORIZING THE EXECUTION AND DELIVERY OF
A LIABILITY RISK COVERAGE AGREEMENT AND THE FILING OF VALIDATION
PROCEEDING AND CERTAIN OTHER ACTIONS IN CONNECTION THEREWITH
WHEREAS, the City of San Bernardino (the "City") is a
9 municipality duly organized and existing under the Constitution
10 and laws of the State of California (the "State").
11 WHEREAS, the City is authorized by Part 6 of Division 3.6
12 of Title 1, Section 990 et seq., of the California Governmerit
13 Code (the "Act") to insure itself against tort or inverse
14 condemnation liability, to insure its employees against injury
15 resulting from an act or omission in the scope of his employment
16 and to insure against the costs of defending such claims;
17 WHEREAS, pursuant to Section 990.4 of the Act the City is
18 authorized to provide insurance by self-insurance which may be
19 funded by appropriations and to establish or maintain reserves
20 for such purposes;
21 WHEREAS, pursuant to Section 990.6 of the Act, the cost to
22 the City of such self-insurance is a proper charge against the
23 City and therefore the City Council of the City is authorized to
24 make premium payments for such coverage in an amount such Council
25 determines to be necessary to provide such coverage;
26 WHEREAS, pursuant to Section 990.8 of the Act, the City is
27 empowered to obtain insurance coverage through a joint powers
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2 agreement with other local public entities created pursuant to
3 Chapter 5 of Division 7 of Title 1, Sections 6500 et seq. of such
4 pooling of self-insured claims and the risk sharing of losses is
5 not considered insurance subject to regulation under the
6 California Insurance Code;
7 WHEREAS, the City and certain other cities organized under
8 the laws of California having a population in excess of 100,000
9 (which are referred to below as Participants) propose to form a
10 pooled liability insurance risk sharing program pursuant to the
11 Act;
12
WHEREAS, in order to implement such pooled liability
13 insurance risk sharing program the City and the other
14 Participants propose to create a joint powers authority pursuant
15 to the Joint Powers Law, to be known as the "Big Independent
16 Ci ties Excess Pool Joint Powers Authority" (the "Authority") by
17 approving and executing a joint powers agreement creating the
18 Authority (the "Joint Powers Agreement");
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WHEREAS, the Joint Powers Agreement will authorize the
20 Authority to exercise necessary powers to implement the purposes
21 of the Authority through the Authority's Board of Directors;
22 WHEREAS, it is anticipated that the Authority will assist
23 the City and the other Participants to obtain self-insurance for
24 liabili ty risks (the "Coverage") through and on the terms set
25 forth in the Liability Risk Coverage Agreement presented to this
26 meeting and on file with the Clerk of the City Council (the
27 "Coverage Agreement") by and among the Authori ty and other
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California cities, which initially may include the Cities of
Huntington Beach, Oxnard, Pomona, San Bernardino and Santa Ana,
California (each of the City and such Cities set forth in this
paragraph being referred to herein individually as a
"Participant" and collectively as "Participants");
WHEREAS, this Council proposes to authorize the execution
of the Coverage Agreement for the purpose of providing Coverage
9 for the City for the benefit of the City's residents and
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taxpayers and for the health and safety of the public;
WHEREAS, the Participants propose to cause the Authority to
12 authorize the issuance, sale and delivery pursuant to a Trust
13 Indenture (the "indenture") of insurance program revenue bonds
14 (the "Bonds") payable from revenues of the Authority, including
15 Basic Premium (as defined in the Coverage Agreement) to be paid
16 by the City and the other Participants under the Coverage
17 Agreement, in order to fund reserves initially in an amount
18 determined sufficient to pay Settlements (as defined in the
19 Coverage Agreement) when due and to provide the Coverage
20 described in the terms set forth in the Coverage Agreement and in
21 the Memorandum of Liability Coverage attached thereto (the
22 "Memorandum" ) .
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WHEREAS, the City has further determined, based upon the
24 advice of independent professional insurance consultants familiar
25 with the cyclical nature of the reasonable availability of
26 coverage in the commercial insurance market, that it is uncertain
27 whether such liability insurance will be available at a
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2 Agreement) and Indenture. Such actions heretofore taken by such
3 officers are hereby ratified, confirmed and approved.
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This resolution shall take
SECTION 7.
Effective Date.
5 effect immediately upon its passage.
6 I HEREBY CERTIFY that the foregoing resolution was duly
7 adopted by the Mayor and Common Council of the City of San
8 Bernardino at a Reqular
meeting thereof, held on the
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, 1988, by the following vote, to wit:
19th
day of September
AYES:
Council Members Reilly, Flores, Maudsley,
Minor, Pope-Ludlam, Miller
NAYS:
None
ABSENT:
Estrada
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c~t1:Y Clerk
The foregoing resolution is hereby approv8d this ~_tb___
day of September , 1988
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t; /:...~ ,L--~ 'G;! -1-<~ i!ll A_/Jr!.A;
- lyn Wl.l,...ox, Mayor/
City of San Bernardino
Approved as to form
al4 legal content:
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City Attorney
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2 reasonable cost on a contingent basis, thereby exposing the City
3 to self-insuring from available revenues on a year by year basis
4 with the attendant risks of fiscal instability and burdens on its
5 citizens in the event of large liability claims recoveries;
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WHEREAS, this Council hereby further determines that the
7 periodic unwillingness of the commercial insurance market to
8 provide primary or excess public entity liability insurance to
9 local governments at reasonable rates or, in certain cases, at
10 any rate, mandates that the City seek not only an immediate
11 solution, but also a long-term permanent solution to this
12 problem which will in future years free them from exposure to the
13 vagaries of commercial insurance cycles;
14 WHEREAS, the City, along with a steering committee of the
15 other Participants, in consultation with independent professional
16 insurance consultants, have formulated a joint risk-sharing
17 insurance program to be administered by the Authority to meet the
18 public entity liability insurance coverage needs of the
19 Participants which will provide the following advantages, among
20 others, to Participants:
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(a) eventual funding of a claims payment fund (the "Claims
22 Payment Fund") through an initial deposit from the proceeds of
23 the sale of the Bonds for the dual purpose of providing immediate
24 protection from large claims loss and facilitating eventual
25 access to the commercial reinsurance market,
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(b) mutual agreement by the Participants to pay annual
27 premium amounts on both a prospective and a retrospective basis
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September 12, 1988
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2 calculated actuarially to spread and moderate the cost of claims
3 loss to each Participant,
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(c) the option to obtain relief from the burden of paying
5 premiums to commercial insurers at levels reflecting the
6 insurers' high costs of underwriting, administration and
7 brokerage fees since the Authority's costs will be limited to
8 reasonable administrative costs,
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(d) the option to obtain relief from the commercial
10 insurers' rights under excess liability policies to force claim
11 settlements which are payable primarily in each case from the
12 Participant's self-insurance funds,
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(e) access to the commercial reinsurance market in future
14 years when commercial reinsurance is available at rates deemed
15 favorable by the Participants, and
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(f) actuarially-determined premium payments calculated to
17 provide amounts in each year necessary to maintain the Claims
18 Payment Fund at an actuarially sound level and therefore
19 sufficient to reserve against the incurred losses of the
20 Participants;
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WHEREAS, this Council hereby further determines that the
22 Participation Premium (as defined in the Coverage Agreement) to
23 be paid in each year by each Participant, including the City, as
24 provided for and upon the conditions set forth in the Coverage
25 Agreement will be payable only upon the condition of the receipt
26 of the consideration represented by the insurance protection to
27 be provided in such year under the Coverage Agreement, but in the
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September 12, 1988
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2 Authority.
Such representative and alternative representative
3 are each hereby authorized to take all actions necessary and
4 appropriate to implement the purposes of the Joint Powers
5 Agreement and the Liability Risk Coverage Agreement (including
6 the First Amendment to Liability Risk Coverage Agreement).
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SECTION 3.
Liability Risk Coverage Agreement. The form
8 of Liability Risk Coverage Agreement (including the First
9 Amendment to Liability Risk Coverage Agreement) between the City
10 and other California cities, which may include the Cities of
11 Huntington Beach, Oxnard, Pomona, San Bernardino and Santa Ana,
12 California as Participants and the Authority, as the provider of
13 liability insurance thereunder, presented to this meeting and on
14 file with the Clerk of the City Council is hereby approved. The
15 Mayor, City Manager (or City Administrator) and Finance Director
16 are hereby authorized and directed, for and in the name and on
17 behalf of the City, to execute, acknowledge and deliver to the
18 Authority, said Liability Risk Coverage Agreement (including the
19 First Amendment to Liability Risk Coverage Agreement) in
20 substantially said form, with such changes therein as such
21 officer may require to approve, such approval to be conclusively
22 evidenced by the execution and delivery thereof.
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SECTION 4.
Validation Proceeding.
The Mayor, City
24 Manager and Finance Director and any other officer or official of
25 the City authorized by the Mayor are hereby authorized and
26 directed to participate and cooperate to the fullest extent
27 practicable with the Authority, the other Participants and
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September 12, 1988
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2 representatives of Brown & Wood, San Francisco, California
3 ("Special Counsel"), which firm is proposed to be retained by the
4 Authority as legal counsel with respect to the issuance of the
5 Bonds and validation proceedings and which retention is hereby
6 approved by this Council, in the conduct of validation
7 proceedings regarding the Liability Risk Coverage Agreement
8 (including the First Amendment to Liability Risk Coverage
9 Agreement) and the Bonds and to do any and all things and to
10 execute and deliver any documents which such officers and staff
11 may deem necessary or advisable in connection therewith.
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SECTION 5.
Attestation and Seal. The Clerk of the City
13 Council is hereby authorized and directed to attest the signature
14 of the authorized signatory, and to affix and attest the seal of
15 the City, as may be required or appropriate in connection with
16 the execution and delivery of said Coverage Agreement.
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SECTION 6.
Further Actions.
Officers of the City
18 Council and the Mayor, City Manager and Finance Director and any
19 other officer or official of the City authorized by the Mayor,
20 are hereby authorized and directed, jointly and severally, to do
21 any and all things and to execute and deliver any and all
22 documents which they may be deemed necessary or advisable in
23 order to consumate the sale, execution and delivery of the Bonds
24 by the Authority and otherwise to carry out, give effect to and
25 comply with the terms and intent of this resolution, the Bonds,
26 the Joint Powers Agreement, Liability Risk Coverage Agreement
27 (including the First Amendment to Liability Risk Coverage
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2 event that such protection is so provided in any year such
3 Participation Premium will be a binding obligation of the City
4 payable from legally available moneys;
5 WHEREAS, this Council hereby further determines that the
6 obtaining of the insurance protection and services provided for
7 under the Coverage Agreement is essential in the preservation and
8 fostering of the health, safety and property rights of the
9 citizens of the City, from time to time, and the lack of
10 availability of reasonable commercial public entity liability
11 insurance to local governments generally in the State of
12 California and to the City in particular constitutes a public
13 emergency;
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WHEREAS, it is necessary and in the interest of the
15 citizens of the City to establish, through the execution of the
16 Joint Powers Agreement and the Coverage Agreement and sale of the
17 Bonds, and maintain through pro rata contributions of each
18 Participant, including the City, a debt service reserve fund
19 therefor, in order to establish adequate reserves to permit the
20 Bonds to be marketed at the lowest possible interest rates;
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WHEREAS, this Council hereby determines that it is
22 reasonably expected that the cost of funding and maintaining such
23 reserve fund will be more than offset by the anticipated benefits
24 and economies to be realized by the pooling of risks and losses
25 pursuant to the Coverage Agreement;
26 WHEREAS, Article 16, Section 6 of the Constitution of the
27 State, regarding lending of public credit or funds, provides, in
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September 12, 1988
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2 relevant part, that such Section "shall not prohibit any county,
3 city and county, city, township, or other political corporation
4 or subdivision of the State from joining with other such agencies
5 in providing for the payment of workers' compensation,
6 unemployment compensation, tort liability, or public liability
7 losses incurred by such agencies, by entry into an insurance
8 pooling arrangement under a joint exercise of powers agreement,
9 or by membership in such publicly-owned nonprofit corporation or
10 other public agency as may be authorized by the Legislature";
11 WHEREAS, Premium shall be paid by the City in consideration
12 of the Coverage offered by the Coverage Agreement and by the
13 Memorandum and the sharing of the risk of liability for claims
14 associated with the pooled self-insurance program during each
15 Coverage Period (as defined in the Coverage Agreement); this
16 Council hereby agrees and determines that such Premium payments
17 represent the fair market value of the Coverage; in making such
18 determination, consideration has been given to the initial costs
19 of establishing the pooled insurance program, the unavailability
20 of affordable commercial liability insurance to the City and to
21 other Participants from time to time, the anticipated costs of
22 commercial liability insurance in the future, the obligations of
23 the Participants under the Coverage Agreement (including the
24 other Participants' agreement to share the risk of costs imposed
25 by liability claims to the City), the obligation of the Authority
26 to provide insurance services, the benefits resulting from
27 capitalization of a pooled insurance program (including the
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September 12, 1988
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2 prospect of access to the commercial liability reinsurance
3 market) and the other benefits therefrom which will accrue to the
4 City and the health and safety of the general public;
5 WHEREAS, the City receives benefit from the sharing of risk
6 of costs imposed by liability claims under the terms of the
7 Coverage Agreement during each Coverage Period; the assessment of
8 Pure Premium is the means by which such risk-sharing is
9 implemented; and the procedure established in the Coverage
10 Agreement for the calculation, adjustment and assessment of Pure
11 Premium is hereby determined to be fair, just and reasonable as a
12 means for such risk-sharing;
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WHEREAS, Section 52511 of the California Government Code
14 provides that "[a] local agency may bring an action to determine
15 the validity of its bonds, warrants, contracts, obligations or
16 evidences of indebtedness pursuant to Chapter 9 (commencing with
17 Section 860) of Title 10 of Part 2 of the Code of Civil
18 procedure" and the City proposes to bring such an action together
19 with the other Participants to validate the Participants'
20 obligations under the Coverage Agreement, and proposes to
21 authorize legal counsel to conduct such proceedings;
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WHEREAS, the City has previously adopted a resolution
23 approving the execution and delivery of a joint powers agreement
24 creating the Authority, authorizing the execution and delivery of
25 a liability risk coverage agreement and filing a validation
26 proceeding and certain other conditions in connection therewith,
27 on the basis that the Authority's pooled liability insurance
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2 program initially would consist of at least seven participating
3 cities;
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WHEREAS, it is now expected that the Authority's pooled
5 liability insurance program will initially consist of
five
6 participating cities and, accordingly, reapproval by the City of
7 agreements and actions relating to the program is required;
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WHEREAS, it is expected that the Agreement will be
9 effective, and the Authority's risk sharing pooled liability
10 insurance program implemented thereby will commence, as of
11 October 1, 1988;
12 WHEREAS, it is expected that the Bonds will be subsequently
13 issued on or about January 1989 but that the proceeds of the
14 Bonds may be used to provide Coverage to the Participants from
15 October 1, 1988;
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WHEREAS, execution and delivery of a First Amendment to
17 Liability Risk Coverage Agreement and a First Amendment to Trust
18 Indenture, establishing the specific terms of the Bonds and the
19 obligations of the Participants relating to debt service on the
20 Bonds, will be required on or prior to the date of issuance of
21 the Bonds; and
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WHEREAS, all acts, conditions and things required by the
23 Constitution and laws of the State to exist, to have happened and
24 to have been performed precedent to and in connection with the
25 execution of the Joint Powers Agreement and the Coverage
26 Agreement as authorized hereby do exist, have happened and have
27 been performed in regular and due time, form and manner as
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2 required by law, and the City is now duly authorized and
3 empowered, pursuant to each and every requirement of law, to
4 execute the Joint Powers Agreement and the Coverage Agreement, in
5 the manner and upon the terms herein provided;
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NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY
7 OF SAN BERNARDINO AS FOLLOWS:
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SECTION 1.
Declaration of Council. This Council hereby
9 specifically finds and declares that the actions authorized
10 hereby constitute and are with respect to public affairs of the
11 City, and that the statements, findings and determinations of the
12 City set forth in the preambles above and of the documents
13 approved herein are true and correct.
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SECTION 2.
Joint Powers Agreement. Pursuant to Section
15 6502 of the Joint Powers Law, the Joint Powers Agreement creating
16 the Big Independent Cities Excess Pool Joint Powers Authority by
17 and among the City and other cities, which may include the cites
18 of Huntington Beach, Oxnard, Pomona, San Bernardino and Santa
19 Ana, California, presented to this meeting and on file with the
20 Clerk of the City Council, and the joint exercise of the powers
21 common to the contracting parties thereunder, are hereby
22 approved.
The Mayor, City Manager (or City Administrator) and
23 Finance Director are hereby authorized and directed, for and in
24 the name and on behalf of the City, to execute and deliver such
25 Joint Powers Agreement.
Mayor Evlyn Wilcox is hereby appointed
26 the City's representative to the Authority and John Kerwin is
27 hereby appointed the City's alternate representative to the
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JOINT POWERS AGREEMENT
CREATING THE BIG INDEPENDENT.CITIES EXCESS POOL
JOINT POWERS AUTHORITY
This Agreement is executed in the State of California by
and among those cities organized and existing under the
Constitution of the State of California which are parties
signatory to this Agreement. All such cities, hereinafter
called Members, shall be listed in Appendix A, which shall be
attached hereto and made a part hereof.
RECITALS
WHEREAS, Articles 1 and 2, Chapter 5, Division 7, Title 1
of the California Government Code (Section 6500 et seq.)
permi ts two or more public agencies by agreement to exercise
jointly powers common to the contracting parties; and
WHEREAS, California Government Code Section 990.4 provides
that a local public entity may self-insure, purchase insurance
through an authorized carrier, or purchase insurance through a
surplus line broker, or any combination of these; and
WHEREAS, Article 16, Section 6 of the California
Constitution provides that insurance pooling arrangements under
joint exercise of power agreements shall not be 90nsidered the
giving or lending of credit as prohibited therein; and
WHEREAS, California Government Code Section 990.8 provides
that two or more local entities may, by a joint powers
agreement, provide insurance for any purpose by anyone or more
of the methods specified in Government Code Section 990.4; and
WHEREAS, the cities executing this Agreement desire to join
together for the purpose of jointly purchasing insurance and
jointly funding programs of excess insurance for comprehensive
liability and other coverages to be determined;
NOW, THEREFORE, the parties agree as follows:
ARTICLE 1
DEFINITIONS
"Authority" shall mean the Big Independent Cities Excess
Pool Joint Powers Authority created by this Agreement.
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IIBoard of Directorsll or IIBoardll shall mean the governing
body of the Authority.
IIExecutive Committee II shall mean the Executive Committee
of the Board of Directors of the Authority.
IIFiscal Yearll shall mean that period of twelve months which
is established by the Board of Directors or the Bylaws as the
fiscal year of the Authority.
II Government Code II shall mean the California Government
Code, as amended.
II Insurance programll means a program of providing insurance
administered by the Authority for Members, implemented by this
Agreement and. by an insurance program agreement by and among
the Authority and such Members.
II Insurance Program Agreement II means an insurance program
agreement by and among the Authority and Members providing for
implementation of an Insurance Program.
IIJoint Powers Law II shall mean Articles 1 through 4,
Chapter 5, Division 7, Title 1 (commencing with Section 6500 of
the Government Code).
II Member II shall mean any California city which has executed
this Agreement and has become a member of the Authority.
ARTICLE 2
PURPOSES
This Agreement is entered into by the Members in order that
they may jointly develop and fund programs of excess insurance
for comprehensive liability and other coverages to be
determined, such programs to include the creation of joint
insurance funds, the purchase of reinsurance, and the provision
of necessary administrative services. Such administrative
services may include, but shall not be limited to, risk
management consulting, loss prevention and control, centralized
loss reporting, actuarial consulting, claims adjusting, and
legal defense services.
All such purposes shall be accomplished through a joint
exercise of powers by such cities, pursuant to this Agreement,
to be administered by a separate legal entity, the Big
Independent Cities Excess Pool Joint Powers Authority, as
created herein.
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ARTICLE 3
PARTIES TO AGREEMENT
Each Member, as a party to this Agreement, certifies that
it intends to and does contract with all other Members as
parties to this Agreement and with such other cities as may
later be added as parties to this Agreement.
ARTICLE 4
TERM
This Agreement shall become effective when executed and
returned to the Authori ty. by at least five (5) Members. The
Authority shall promptly notify all Members in writing of such
effective date. This Agreement shall continue in effect until
terminated as provided herein; provided that the termination of
this Agreement wi th respect to an individual Member upon its
wi thdrawal from membership in the Authority shall not operate
to terminate this Agreement with respect to the remaining
Members; and provided further that this Agreement shall
continue in effect so long as any bonds or other obligations of
the Authority are outstanding.
ARTICLE 5
CREATION OF THE AUTHORITY
Pursuant to the Joint Powers Law, there is hereby created a
public entity separate and apart from the parties hereto, to be
known as the "Big Independent Cities Excess Pool Joint Powers
Authority," with such powers as are hereinafter set forth.
ARTICLE 6
POWERS OF THE AUTHORITY
(a) Powers. The Authority shall have all of the powers
common to its Members and all additional powers set forth in
the Joint Powers Law and other statutes applicable to the joint
powers authority created hereby, and is hereby authorized to do
all acts necessary for the exercise of said powers. Such
powers include, but are not limited to, the following:
(1) To make and enter into contracts.
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(2) To incur debts, liabilities, and obligations and to
encumber real or personal property.
(3) To acquire, hold, or dispose of real or personal
property, contributions and donations of real or personal
property, funds, services, and other forms of assistance from
persons, firms, corporations, and government entities.
(4) To sue and be sued in its own name, and to settle any
claim against it.
(5) To receive and use contributions and advances from
Members as provided in Government Code Section 6504, including
contributions or advances of personnel, equipment or property.
(6) To invest any money in its . treasury that is not
required for its immediate necessities, pursuant to Government
Code Section 6509.5.
(7) To employ agents and employees.
(8) To receive, collect and disburse moneys.
(9) To develop
programs, including
reinsurance.
and implement insurance
purchase of excess
risk management
insurance and
(10) To finance, by means of the issuance of bonds or other
instruments of indebtedness, self-insurance reserve funds
necessary or convenient for the implementation of this
Agreement or an Insurance Program Agreement.
(11) To exercise all powers of entities, such as the
Authori ty, created under the Joint Powers Law including, but
not I imi ted to, those powers enumer ated under the Marks-Roos
Local Bond Pooling Act of 1985, as amended.
(12) To exercise other reasonable and necessary powers in
furtherance or support of any purpose of the Authority or power
granted by the Joint Powers Law, this Agreement or the Bylaws
of the Authority.
(b) Restrictions on Powers. Pursuant to and to the extent
required by Government Code Section 6509, the Author i ty shall
be restricted in the exercise of its powers in the same manner
as the City of Oxnard is restricted in its exercise of similar
powers; provided that, if the City of Oxnard shall cease to be
a Member, then the Authority shall be restricted in the
exercise of its power in the same manner as the City of Santa
Ana.
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ARTICLE 7
BOARD OF DIRECTORS
(a) Composition of Board. The Authority shall be governed
by the Board of Directors, which shall be composed of one
director representing each Member, appointed by the Member I s
City Council and serving at the pleasure of such City Council,
The City Council of each Member shall also appoint an alternate
director who shall have the authority to attend, participate in
and vote at any meeting of the Board when the director is
absent. A director or alternate director shall be a member of
the City Council of the City which appoints such director or
alternate director or an official or staff person of the Member
which such director or alternate director represents. Any
vacancy in a director or alternate director position shall be
filled by the appointing Member's City Council, subject to the
provisions of this Article. Inunediately upon admission of a
new Member pursuant to Article 16, such Member shall be
entitled and required to appoint a director and alternate
director.
(b) Termination of Status as Director. A director and/or
alternate director shall be removed from the Board of Directors
upon the occurrence of anyone of the following events:
(1) the Authority receives written notice from the appointing
Member of the removal of the director or alternate director,
together with a certified copy of the resolution of the City
Council of the Member effecting such removal; (2) the
withdrawal of the Member from this Agreement; (3) the death or
resignation of the director or alternate director; (4) the
Authority receives written notice from the Member that the
director or alternate director is no longer qualified as
provided in the first paragraph of this Article.
(c) Compensation. Directors and their alternates are not
entitled to compensation. The Board of Directors may authorize
reimbursement of expenses incurred by directors or their
alternates.
(d) Powers of Board. The Board of Directors shall have
the following powers and functions.
( 1) Except as otherwi se provided in thi s Agreement,
the Board shall exercise all powers and conduct all
business of the Authority, either directly or by delegation
to other bodies or persons.
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(2) The Board shall form an Executive Committee, as
provided in Article 10. The Executive Committee may
exercise all powers or duties of the Board relating to the
execution, issuance, sale or delivery of bonds or other
similar obligations of the Authority. The Board may
delegate to the Executive Committee and the Executive
Committee may discharge any additional powers or duties of
the Board except adoption of the Authority.s annual
budget. Any additional powers and duties so delegated
shall be specified in a resolution adopted by the Board.
(3) The Board may form, as provided in Article 11,
such other committees as it deems appropriate to conduct
the business of the Authority or it may delegate such power
to the Executive Committee in the Bylaws or by resolution
of the Board. The membership of any such other committee
may consist in whole or in part of persons who are not
members of the Board; provided that the Board and the
Executive Committee may delegate decision-making powers and
duties only to a committee a majority of the members of
which are Board members. Any committee a maj or i ty of the
members of which are not Board members may function only in
an advisory capacity.
(4) The Board shall elect the officers of the
Authority and shall appoint or employ necessary staff in
accordance with Articles 9 and 12.
(5) The Board shall cause to be prepared, and shall
review, modify as necessary, and adopt the annual operating
budget of the Authority. Adoption of the budget may not be
delegated.
(6) The Board shall receive, review and act upon
periodic reports and audits of the funds of the Authority,
as required under Articles 13 and 14 of this Agreement.
(7) The Board shall have such other powers and duties
as are reasonably necessary to carry out the purposes of
the Authority.
ARTICLE 8
MEETINGS OF THE BOARD OF DIRECTORS
(a) Reqular Meetinqs. The Board of Directors shall hold
at least two regular meetings each year. The Board of
Directors shall fix by resolution or in the Bylaws the date
upon which, and the hour and place at which, each regular
meeting is to be held.
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Lu __
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(b) Ralph M. Brown Act. Each meeting of the Board of
Directors, including without limitation regular, adjourned
regular, and special meetings shall be called, noticed, held,
and conducted in accordance with -the Ralph M. Brown Act,
Section 54950 et seq. of the Government Code.
(c) Minutes. The Authority shall have minutes of regular,
adjourned regular, and special meetings kept by the Secretary.
As soon as practicable after each meeting, the Secretary shall
forward to each Board member a copy of the minutes of such
meeting.
(d) Quorum. A majority of the members of the Board is a
quorum for the transaction of business. However, less than a
quorum may adjourn from time to time. A vote of the majority
of a quorum at a meeting is sufficient to take action.
(e) Votinq. Each member of the Board shall have one vote.
ARTICLE 9
OFFICERS
The Board shall elect a President and Vice-President from
among its members at its first meeting. Thereafter, except as
may be otherwise provided in the Bylaws of the Authority, the
Board shall elect a new President and Vice-President, in the
last meeting in each succeeding fiscal year. Each officer
shall assume the duties of his office upon election. If either
the President or Vice-President ceases to be a member of the
Board, the resulting vacancy shall be filled at the next
regular meeting of the Board held after the vacancy occurs or
at a special meeting of the Board called to fill such vacancy.
In the absence or inability of the President to act, the
Vice-President shall act as President. The President shall
preside at and conduct all meetings of the Board. The Board
may appoint such other officers as it considers necessary.
ARTICLE 10
EXECUTIVE COMMITTEE
The Board shall establish an Executive Committee of the
Board which shall consist solely of members selected from the
membership of the Board. The terms of office of the members of
the Executive Committee shall be provided in the Bylaws of the
Authority. The Executive Committee shall conduct the business
7
of the Authority between meetings of the Board, exerclslng all
those powers as provided for in section (d)(2) of Article 7, or
as otherwise delegated to it by the Board.
ARTICLE 11
COMMITTEES
The Board may establish committees as it deems appropriate
to conduct the business of the Authority or it may, in the
Bylaws or by resolution, delegate such power to the Executive
Commi ttee. Members of Committees shall be appointed by the
Board or the Executive Committee, as the case may be. Each
Committee shall have those duties as determined by the Board or
the Executive Commi ttee, as the case may be, . or as otherwise
set forth in the Bylaws. Each Committee shall meet on the call
of its chairperson, and shall report to the Executive Committee
and the Board as directed by the Board or the Executive
Committee, as the case may be.
ARTICLE 12
STAFF
(a) Principal Staff.
appointed by and serve
Directors:
The following staff members shall be
at the pleasure of the Board of
(1) General Manaqer/Secretary. The General
Manager/Secretary shall administer the business and
activities of the Authority, subject to the general
supervlslon and policy direction of the Board and the
Executive Committee; shall be responsible for all minutes,
notices and records of the Authority; and shall perform
such other duties as are assigned by the Board and
Executive Committee.
( 2) Treasurer. The dut ies of the Treasurer are set
forth in Article 14 of this Agreement. Pursuant to
Government Code Section 6505.5, the Treasurer shall be the
treasurer of one of the Members of the Authori ty or the
county treasurer in which one of the Members is situated,
or, pursuant to Government Code Section 6505.6, the Board
may appoint one of its officers or employees to the
position of Treasurer, who shall comply with the
requirements set forth for such office in the Joint Powers
Law. Should the Joint Powers Law be amended to permit the
selection of the Treasurer from another class of persons,
the Treasurer may be selected from such class.
8
(3) Auditor. The Auditor shall draw warrants to pay
demands against the Author i ty when approved by the
Treasurer. Pursuant to Government Code Section 6505.6, the
Auditor shall be the Auditor of the Member from which the
Treasurer is appointed by the Board under (2) above, or ,
pursuant to Government Code Section 6505.6, the Board may
appoint one of its officers or employees to the position of
Auditor, who shall comply with the requirements set forth
for such office in the Joint Powers Law. Should the Joint
Powers Law be amended to permit the selection of the
Auditor from another class of persons, the Auditor may be
selected from such class.
(b) Other Staff. The Board, Executive Committee or
General Manager/Secretary shall provide for the appointment of
such other staff as may be necessary for the administration of
the Authority.
(c) Compensation. The General Manager/Secretary, the
Treasurer, the Auditor and any other members of the staff or
employees of the Authority shall be compensated in such manner
as shall be approved by the Board as permitted by applicable
law.
ARTICLE 13
ACCOUNTS AND RECORDS
( a) Annual Budqet. The Author i ty shall annually adopt an
operating budget pursuant to Article 7 of this Agreement.
(b) Funds and Accounts. The Auditor of the Authority
shall establish and maintain such funds and accounts as may be
required by good accounting practices and by the Board. Books
and records of the Authority in the hands of the Auditor shall
be open to inspection at all reasonable times by authorized
representatives of the Members.
The Authority shall adhere to the standard of strict
accountability for funds set forth in the Joint Powers Law.
(c) Auditor's Report. The Auditor, within one hundred and
twenty (120) days after the close of each Fiscal Year, shall
give a complete written report of all financial activities for
such Fiscal Year to the Board and to each Member.
(d) Annual Audit. If then required by the Joint Powers
Law, the Authority shall either make or contract with a
certified public accountant to make an annual Fiscal year audit
9
of all accounts and records of the Authority, conforming in all
respects with the requirements of the Joint Powers Law. A
report of the audit shall be filed, if then required by law, as
a public record with each of the Members and with the county
auditor of the county or counties in which each of the Members
is located. Costs of the audit shall be considered a general
expense of the Authority.
ARTICLE 14
RESPONSIBILITIES FOR FUNDS AND PROPERTY
(a) Custody of Authority Funds. The Treasurer shall have
the custody of and di sburse the Author i ty I S funds, and any
other funds pledged to the payment of such bonds or
obligations. Proceeds of bonds or other similar obligations of
the authority, and any other funds pledged to the payment of
such bonds or obligations, may be deposi ted wi th an indenture
trustee, agent or other depositary and shall not be considered
the Authority.s funds for purposes of this Article. The
Treasurer may delegate disbursing authority to such persons as
may be authorized by the Board or the Executive Conuni ttee to
perform that functions, subject to the requirements of (b)
below.
(b) Duties of Treasurer. The Treasurer shall perform all
functions then required to be performed by the Treasurer under
the Joint Powers Law.
(c) Author i ty Property. Pursuant to Government Code
Section 6505.1, the General Manager/Secretary, the Treasurer,
and such other persons as the Board may designate shall have
charge of, handle, and have access to the property of the
Authority.
ARTICLE 15
MEMBER RESPONSIBILITIES
Each Member shall have the following responsibilities:
(a) To appoint its director and al ternate director to or
remove its director and al ternate director from the Board as
set forth in Article 7.
(b) To consider proposed amendments to this Agreement as
set forth in Article 23.
10
(c) To make contributions in the form of annual membership
assessments and fees, if any, determined by the Board for the
purpose of defraying the costs of providing the annual benefits
accruing directly to each party from this Agreement.
ARTICLE 16
NEW MEMBERS
Wi th the approval of two-thirds of the members of the
Board, and compliance with any requirements of the Joint Powers
Law, any qualified city may become a party to this Agreement.
A city requesting membership shall apply by presenting to the
Authority a resolution of the City Council of such city
evidencing its approval of this Agreement. The date that the
applying city wi 11 become a Member wi 11 be determined by the
Board.
ARTICLE 17
WITHDRAWAL
A Member may withdraw from membership in the Authority upon
thirty (30) days advance written notice to the Authority;
provided that an Insurance Program Agreement may set forth
additional conditions to withdrawal. A Member which no longer
participates in any Insurance Program of the Authori ty, by
reason of expulsion from an Insurance Program or otherwise,
shall be deemed to have withdrawn from this Agreement and shall
no longer be a party to this Agreement. No withdrawal,
however, shall relieve such Member from its obligations under
any outstanding agreements relating to the Authority.s bonds or
other obligations except in accordance with such agreements.
ARTICLE 18
OBLIGATIONS OF AUTHORITY
The debts, liabilities and obligations of the Authority
shall not be the debts, liabilities and obligations of the
Members. Any Member may separately contract for, or assume
responsibility for, specific debts, liabilities or obligations
of the Authority.
Pursuant to Section 895.2 of the Government Code, the
Members may be jointly and severally liable for any liability
which is imposed by any law for injury caused by a negligent or
11
wrongful act or omission occurring in the performance of this
Agreement. In the event that such liability arises out of a
negligent or wrongful act or omission with respect to an
Insurance Program, the Members hereby provide pursuant to
Section 895.6 of the Government Code that such liability shall
be borne by the Members participating in such Insurance Program
in the same proportion as administrative expenses of the
Insurance Program are allocated among such participating
Members at the time the liability is determined. In the event
a Member is held liable upon any judgment for damages caused by
such an act or omission and makes payment in excess of its
proportional share, as determined in the preceding sentence,
such Member is entitled from each of the Members which have not
paid their proportional share.
ARTICLE 19
TERMINATION AND DISTRIBUTION OF ASSETS
This Agreement may be terminated at any time that no bonds
or other obligations of the Authority are outstanding. Upon
termination of this Agreement, all assets of the Authority
shall, after payment of all unpaid costs, expenses and charges
incurred under this Agreement, be distributed among the parties
hereto in accordance with the respective contributions of each
of said parties; provided that an Insurance Program Agreement
may set forth the specific manner of calculation and timing of
such distributions of funds held with respect to the related
Insurance Program.
ARTICLE 20
LIABILITY OF BOARD OF DIRECTORS,
OFFICERS AND COMMITTEE MEMBERS
The members of the Board of Directors, officers and
committee members of the Authority shall use ordinary care and
reasonable diligence in the exercise of their powers and in the
performance of their duties pursuant to this Agreement. They
shall not be liable for any mistake of judgment or any other
action made, taken or omitted by them in good faith, nor for
any action taken or omitted by any agent, employee or
independent contractor selected wi th reasonable care, nor for
loss incurred through investment of Authority funds, or failure
to invest.
12
.....
No director, officer or conunittee member shall be
responsible for any action taken or omitted by any other
director, officer or conunittee member. No director, officer or
conuni ttee member shall be required to give a bond or other
security to guarantee the faithful performance of his or her
duties pursuant to this Agreement.
ARTICLE 21
BYLAWS
The Board may adopt Bylaws consistent with this Agreement
which shall provide for the administration and management of
the Authority.
ARTICLE 22
NOTICES
The Authority shall address notices, billings and other
conununications to a Member as directed by such Member. Each
Member shall provide the Authority with the address to which
conununications are to be sent. Members shall address notices
and other communications to the Authority, at the office
address of the Authority as set forth in the Bylaws.
ARTICLE 23
AMENDMENT
This Agreement may be amended at any time by vote of
two-thirds of the Members, acting through their City Councils,
and compliance wi th any requirements of the Joint Powers Law.
Any amendment of this Agreement shall become effective upon
receipt by the Authority of notice of the approval of such
amendment by the City Councils of two-thirds of the Members and
satisfaction of any requirements of the Joint Powers Law.
ARTICLE 24
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,
13
..
'"
or be otherwise rendered unenforceable or
validity of the remaining portions, terms,
provisions shall not be affected thereby.
ineffectual,
conditions,
the
and
ARTICLE 25
PROHIBITION AGAINST ASSIGNMENT
No Member may assign any right, claim or interest it may
have under this Agreement, and no creditor, assignee or third
party beneficiary of any Member shall have any right, claim or
title to any part, share, interest, fund or asset of the
Authority.
ARTICLE 26
AGREEMENT COMPLETE
This Agreement constitutes the full and complete agreement
of the parties.
ARTICLE 27
FILING WITH SECRETARY OF STATE
The General Manager/Secretary of the Authority shall file a
notice of this Agreement with the office of the California
Secretary of State within 30 days of its effective date, as
required by Government Code Section 6503.5 and within 70 days
of its effective date as required by Government Code
Section 53051.
IN WITNESS WHEREOF, the undersigned party hereto has
executed this Agreement on the dated indicated below.
9'- 7-'1- - 8'3'
::~~~~~~
DATE:
Seal:
ATTEST:
~~//c:V~W
/"
C l4.y (J Ie-y./C
14
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, .....
, .
APPENDIX A
MEMBERS
A-I
~ t
Mars'h &
M~Lennan
~
..
Marsh & Mclennan, Incorporated
Three Embarcadero Center
Post Office Box 3880
San Francisco, California 94119-3880
415-393-5000
I -j
RECtO. - AD Mitt. OFF.
!~~'1Q Oro1 r 3
t~;;\I Y\" t
n. H"\. I 7
i.; j ;....:' ,
Mr. James Robbins
City of San Bernadino
300 North "0" Street
San Bernadino, CA 92418
~
C. CVIt kjCIeRt.
ottfrl(, sk
~94.
October 11, 1988
BICEP
EXCESS LIABILITY COVERAGE
Dear James:
Enclosed is your new Excess Liability Policy for
Public Entities. Coverage may be summarized as follows:
Limit of Liability: $26,000,000 (less member cities'
retained limit) per occurrence for
bodily injury , property damage,
personal injury or Public Officials
Errors and Ommissions
Retained Limit: $1,000,000
Please review your policy carefully as all claims will
be handled in accordance with the acutal Terms, Conditions,
and Exclusions specified in the policy.
Also enclosed is the binder for your Special Excess Policy
with The Insurance Company of the State of Pennsylvania.
The policy will follow within 60 days.
Please contact us if you have
this coverage.
any questions concerning
Sincerely,
l' ~ I /-1 .J-I
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ATTACHMENT #1 TO BINDER #10177
BIG INDEPENDENT CITIES EXCESS POOL (BICEP)
EXCESS ~ PED AND PUBLIC OFFICIALS ERRORS & OMISSIONS
INS NCE COMPANY OF THE STATE OF PENNSYLVANIA
OCTOBER 1, 1988 AND ENDING OCTOBER 1, 1989
NAMED INSURED
The Named Insureds' shall consist of the following Member Cities:
Huntington Beach
Oxnard
Pomona
San Bernardino
Santa Ana
including any and all commissions, agencies, districts, author-
ities, councils (including the governing councils) or similar
entities coming under the City's direction or control or for
which the City's council member sit as the governing body.
Authorized By:
BICEP/06.2
r~-~
ATTACHMENT #2 TO BINDER #10177
BIG INDEPENDENT CITIES EXCESS POOL (BICEP)
EXCESS PI, PD AND PUBLIC OFFICIALS ERRORS & OMISSIONS
INSURANCE COMPANY OF THE STATE OF PENNSYLVANIA
OCTOBER 1, 1988 AND ENDING OCTOBER 1, 1989
TERMS & CONDITIONS
1. Limits of $8,000,000 per occurrence and aggregate respects
Products/Completed Operations and Public Officials Errors
and Omissions separately to each Member City.
2. The Self-Insured Retention of $2,000,000 applies to each and
every occurrence.
3.
Excluding (a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(j )
(k)
(1)
(m)
(n)
(0)
(p)
Discrimination
Pollution (Absolute)
Asbestos (Absolute)
E.R.I.S.A.
Care, Custody and control
Transit
Dams and Reservoirs
Dumpsites
Trampolines and Rebounding Devices
Selenium
Failure to Supply . HIJ co~~q')
Medical Malpractice (emr's) ()ccupa.t,ana) tteD. Y
Cross Suits (Named Insured vs. Named Insured)
Inverse Condemnation/Eminent Domain
Subsidence
Airports/Aircraft
4. Subject to claims audit and review of each Member City.
5. No automatic coverage is granted to new Member City's. The
inclusion of any new Member City will be subject to an addi-
tional premium, to be determined and approved by Insurance
Company of the State of Pennsylvania.
All other terms and conditions as per C. V. Starr's Special Excess
Liability Policy for Public Entities.
BICEP/06.1
Authorized By:
BIG INDEPENDENT CITIES EXCESS POOL JOINT POWERS AUTHORITY
PUBLIC ENTITY LIABILITY
DECLARA TION
CERTIFICATE NO. BOO4
This will certify that the following MEMBER is covered in accordance with the terms and con-
ditions of the Master Memorandum of Public Entity Liability Coverage by the BIG INDEPEN-
DENT CITIES EXCESS POOL JOINT POWERS AUTHORITY hereinafter called BICEP.
, ) MEMBER CITY:
2) MAILING ADDRESS:
City of San Bernardino
300 North "0" Street, San Bernardino, CA 92418
3) MEMORANDUM PERIOD: FROM 10-1-88 TO 7-1-89 , 2:01 A.M. Standard Time
at the address of the Member as stated herein.
4) LIMIT OF LIABILITY:
$ 26,000,000.
LESS MEMBER CITY'S RETAINED LIMIT AS ULTIMATE
NET LOSS as the result of anyone OCCURRENCE
because of BODILY INJURY or PROPERTY DAMAGE or
PERSONAL INJURY or PUBLIC OFFICIALS ERRORS
AND OMMISSIONS, or any combination thereof during
the AGREEMENT PERIOD.
5) MEMBER CITY'S RETAINED LIMIT:
$
1,000,000.
ULTIMATE NET LOSS as the result of anyone OCCUR-
RENCE because of BODILY INJURY or PERSONAL
INJURY or PUBLIC OFFICIALS ERRORS AND OMMIS-
SIONS, or any combination thereof during the AGREE-
MENT PERIOD.
6) CLAIMS ADJUSTING FIRM:
Self-Administered
7) ANNUAL DEPOSIT PREMIUM:
$452,863.
8) Endorsements attached to policy at inception:
Countersigned by ~. I /;~
This Declarations and Coveragefs), with Standard Provisions and Endorsements, if any,
issued to form a part thereof, completes the above-numbered Agreement.
BICEP 3/9/88
BICEP Premium Endorsement
City of San Bernardino
Certificate #BOO4
Deposit Pure Premium:
$ 99,710.
$ 20,580.
Administrative Premium:
Excess Insurance Premium for the period 10-1-88 to 10-1-89
Deposit Premium:
$332,573.
Total Deposit Premium:
$452,863.
MASTER MEMORANDUM OF LIABILITY COVERAGE
FOR THE
BIG INDEPENDENT CITIES EXCESS POOL JOINT POWERS AUTHORITY
Throughout this AGREEMENT, words and phrases that appear capitalized have special
meaning. They are defined in Section II - Definitions.
In consideration of payment of the premium, the Big Independent Cities Excess Pool Joint
Powers Authority, (BICEP) hereinafter known as the Authority agrees with the respective
member CITY of BICEP as follows:
SECTION I - COVERAGES
The Authority will pay those sums on behalf of the CITY for ULTIMATE NET LOSS in excess
of the Retained Limit stated in Item 5 of the Declarations that the CITY becomes 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. Included in
Authority's obligation to pay are DEFENSE COSTS falling within the definition of COVERED
ULTIMATE NET LOSS.
SECTION II - DEFINITIONS
A. AGREEMENT - means the Memorandum of Liability Coverage for the Authority.
B. AIRCRAFT - means a vehicle designed for the transport of persons or property
principally in the air.
C. AUTOMOBILE - means a land motor vehicle, trailer or semi-trailer.
D. BODILY INJURY - means bodily injury, sickness or disease sustained by a person,
including death resulting from any of these at any time.
E. CITY - means the entity named in the Declarations, including any and all commis-
sions, agencies, districts, Authorities, councils (including the governing councils)
or similar entities coming under the CITY's direction or control or for which the
CITY's council members sit as the governing body.
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F. CLAIM - means a demand against an Insured (as defined in Section IV hereof) to
recover for losses or damages within or alleged to be within the scope of this
AGREEMENT.
G. COVERED INDIVIDUALS - means persons who are past or present elected or ap-
pointed officials, employees or volunteers of the CITY whether or not compen-
sated, while acting for or on behalf of the CITY, including while acting on outside
committees, commissions, agencies, districts, authorities, councils, commissions
or boards at the direction of the CITY.
H. COVERED ULTIMATE NET LOSS - means an amount by which ULTIMATE NET
LOSS not covered by other available Insure.nce or self-insurance exceeds the Re-
tained Limit stated in Item (5), of the Declaration, such amount not in any event
however to exceed the Limit of Liability stated in Item (4) of the Declarations.
I. DEFENSE COSTS - means fees and expenses incurred by the Authority or an In-
sured caused by and relating to the adjustment, investigation, defense or appeal of
a claim including attorney's fees, court costs and interest on judgements accruing
after entry of judgement all within the scope of coverage afforded by this agree-
ment. DEFENSE COSTS shall not include the office expense of the Authority or
any Insured nor expenses of a claims administrator engaged by any CITY or the
Authority, except CITY DEFENSE COSTS which will be reimbursed on an agreed
flat fee per day of service to CLAIM.
J. INVERSE CONDEMNATION - means a claim by any one other that an Insured that
an Insured has taken or diminished the value of land through land use restrictions
on such land or use of adjacent land or air space by an Insured, or otherwise.
K. MEMORANDUM PERIOD - means the period stated in Item (3) of the Declara-
tions.
L. NUCLEAR MATERIALS - means source material, special nuclear material, or
byproduct material. Source Material, Special NUCLEAR MATERIAL and Byproduct
Material have the meanings given to them by the Atomic Energy Act of 1954 or in
any law amendatory thereto.
M. OCCURRENCE - means:
1. With respect to BODILY INJURY or PROPERTY DAMAGE: an accident or
event, including injurious or repeated exposure to substantially the same con-
ditions, which results, during the memorandum period, in BODILY INJURY or
PROPERTY DAMAGE neither expected nor intended from the standpoint of
the Insured.
2. With respect to PERSONAL INJURY and PUBLIC OFFICIALS ERRORS AND
OMMISSIONS respectively: an offense described in the definitions of those
terms in this section.
N. PERSONAL INJURY - means injury caused by or arising out of one or more of the
following offenses:
1. False arrest, detention or imprisonment, or malicious prosectuion;
2. Wrongful entry or eviction or other invasion of the right of private occupancy;
BICEP 3/9/88
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'/<
3. Publication or utterance of material that slanders or libels a person or organiza-
tion or disparages a person's or organization's goods, products or services, or
oral or written publication of material that violates a person's right of privacy;
and
4. Discrimination based upon race, religion, nationality, national origin, color,
creed, sex, sexual preference, age or employment;
5. Assault and battery.
O. POLLUTANTS - means any solid, liquid, gaseous, or thermal irritant or contami-
nant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals, and waste.
Waste includes materials to be recycled, reconditioned ~r reclaimed. The term
POLLUTANTS as used herein is not defined to mean potable water or agricultural
water or water furnished to commercial users or water used for fire suppression.
P. PROPERTY DAMAGE - means:
,. Physical injury to tangible property, including all resulting loss of use to that
property; or
2. Loss of use of tangible property that is not physically injured.
a. PUBLIC OFFICIALS ERRORS AND OMISSIONS - means an offense consisting of
any actual or alleged misstatement or misleading statement or act or omission by
neglect or breach of duty including misfeasance, malfeasance, or nonfeasance by
COVERED INDIVIDUALS individually or collectively in the discharge of their duties
with the CITY, or any matter claimed against them solely by reason of their being
or having been public officials.
R. ULTIMATE NET LOSS - means the sum for which the Insured is liable either by ad-
judication or by compromise after making proper deduction for all recoveries and
salvages, and also includes DEFENSE COSTS.
SECTION III - DEFENSE AND SETTLEMENT
The Authority shall have the right and duty to participate in the defense of any suit against an
Insured, where such suit is likely to involve a COVERED ULTIMATE NET LOSS even if any
allegations are groundless, false or fraudulent. After the amount of the CITY's Retained Limit
has been exhausted by payment of judgements, settlements and DEFENSE COSTS, the
Authority shall pay any excess within its Limit of Liability.
The Authority shall at its own expense, have the right to participate in the investigation,
negotiation, settlement or defense of any CLAIM or suit against any Insured when the final,
in the opinion of the Authority, such claim may result in a COVERED ULTIMATE NET LOSS.,
The Insured shall fully cooperate in all matters pertaining to such claims or proceeding.
No CLAIM shall be settled for an amount in excess of the Insured's Retained Limit without
the prior consent of the Authority.
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SECTION IV
RETAINED LIMIT - THE AUTHORITIES LIMIT OF LIABILITY
The Authorities Liability as the result of anyone OCCURRENCE shall be only the ULTIMATE
NET LOSS in excess of the CITY's Retained Limit as specified in Item 5 of the Declarations;
and then for an amount not exceeding the amount specified in Item (4) of the Declarations.
For the purpose of determining the Authorities Limit of Liability and the CITY's Retained
Limit, all damages arising out of continous or repeated exposure to substantially the same
general conditions shall be considered as arising out of one OCCURRENCE.
SECTION V - COVERAGE PERIOD AND TERRITORY
Each Insured shall have coverage for all BODILY INJURY, PROPERTY DAMAGE, PUBLIC
OFFICIALS ERRORS AND OMISSIONS and PERSONAL INJURY which occur anywhere in
the world during the MEMORANDUM PERIOD.
SECTION VI - ENTITIES OR PERSONS INSURED
The Insureds covered by this agreement are:
A. The CITY;
B. COVERED INDIVIDUALS;
C. With respect to any AUTOMOBILE usage, Insured does not include:
1. Any person or organization, or any agent or employee thereof, operating an
AUTOMOBILE sales agency, commercial repair shop, commercial service sta-
tion, commercial storage garage or commercial public parking place, with
respect to an OCCURRENCE arising out of the operation thereof. This does not
apply to publicly owned, operated, or publicly owned and leased parking
garages or lots; or
2. The owner or any lessee, other than the CITY or COVERED INDIVIDUAL, of a
hired AUTOMOBILE or any agent or employee of such owner or lessee.
SECTION VII - EXCLUSIONS
A. This AGREEMENT does not apply to:
1 . Any claims arising out of the contamination 0 the environment by POLLUTANTS
introduced at anytime into or upon land, the atmosphere or any watercourse or
body of water or aquifer. This exclusion applies whether or not the contamination
is introduced into the environment intentionally or accidentally or gradually or
suddenly and whether or not the insured or any other person or organization is
responsible for the contamination. This exclusion does not apply, however, to
BODILY INJURY OR PROPERTY DAMAGE caused by heat, smoke or fumes from a
hostile fire. As used in this exclusion, a hostile fire means one which becomes un-
controllable or breaks out where it was not intended to be.
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Contamination includes any unclean, unsafe or unhealthful condition either actual
or potential, which arises out of the presence in the environment of any POLLU-
TANT, whether permanent or transient.
Environment includes land, bodies of water, underground water or water table or
aquifer, the atmosphere and any other natural feature of the earth, whether or not
altered, developed or cultivated.
2. Any loss, cost or expense arising out of any governmental directions or request
that the CITY test for, monitor, clean up, remove, contain, treat, detoxify or
neutralize POLLUTANTS.
3. Any CLAIM for past salary or wages due because of discrimination or because of
wrongful termination or violation of civil rights of any employee or official of the
CITY;
4. BODILY INJURY to:
a. An employee of the CITY arising out of and in the course of employment by
the CITY; or
b. Tfle spouse, child, parent, brother or sister of that employee as a conse-
quence of actions of the employee arising out of and in the course of his/ her
employment by the CITY.
This exclusion applies whether the CITY may be liable as an employer or in any
other capacity, except with respect to Liability of others assumed under contract;
5. Any obligation for which the CITY or any Insurance company as its Insurer may be
held liable under any workers' compensation or disability benefits law or any
similar law;
6. Liability arising out of the ownership or operation of any hospital or airport;
7. BODILY INJURY or PROPERTY DAMAGE arising out of or in connection with the
operation of any hospital, clinic, or established health care facilities owned or
operated by the CITY due to:
1 . The rendering of or failure to render
A. Medical, surgical, dental, X-ray or nursing service or treatment,
or the furnishing of food or beverages in connection therewith;
B. Any service or treatment conductive to health, or of a profes-
sional nature or;
C. Any cosmetic or tonsorial service or treatment.
2. The furnishing of or dispensing of drugs or medical, dental, or surgical sup-
plies or appliances.
This exclusion shall not apply, however, to BODILY INJURY or PROPERTY
DAMAGE arising out of the performance of occupational physical examinations,
paramedics services, emergency care, or T.B. testing clinics;
8. Liability arising out of the rupture, bursting, overflow, or release of water from any
dam(s), etc.
9. Fines, punitive damages, or damage multiples such as treble damages awardable
pursuant to statute; or other applicable law.
BICEP 3/9/88
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10. PROPERTY DAMAGE to:
a. Property owned by the Insured; or
b. Property rented to, leased or in the care, custody and control of the Insured
where it has assumed the Liability for damage to or destruction of such prop-
erty, unless the Insured would have been liable in the absence of such
assumption of Liability;
c. Watercraft exceeding 26 feet in length, in the CITY's care, custody or con-
trol;
d. AIRCRAFT
11. Any Liability arising out of the ownership, operation, use or maintenance of any
AIRCRAFT;
1 2. Any Liability arising out of the operation of any transit authority, transit system, or
public transportation system owned or operated by the Insured, except a transit
system operating over non-fixed route systems such as dial-a-ride, senior citizen
transportation, or handicapped transportation; and
1 3. Any Liability arising out of the failure to supply or provide an adequate supply of
gas, water or electricity when such failure is a result of the inadequacy of the In-
sured's facilities to supply or produce sufficient gas, water or electricity to meet
the reasonable demand.
14. Any Liability arising out of, or in connection with the principles of eminent do-
main, condemnation proceedings or INVERSE CONDEMNATION by whatever
name called, and whether or not Liability accrues directly against the Insured by
virtue of any agreement entered into by or on behalf of the Insured.
This exclusion shall not apply to PROPERTY DAMAGE caused by the negligence
or other fault of the Insured even though a legal theory upon which a claimant
seeks recovery is the principle of INVERSE CONDEMNATION.
B. This agreement does not apply under Coverage C (PUBLIC OFFICIALS ERRORS AND
OMISSIONS) :
1. BODILY INJURY;
2. PROPERTY DAMAGE;
3. PERSONAL INJURY;
4. Benefits payable under any employee benefit plan (whether the plan is negotia-
ted, or voluntarily established by the CITY or mandated by law because of unlaw-
ful discrimination;
5. Refund of taxes, fees or assessments;
BICEP 3/9/88
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6. Liability of a COVERED INDIVIDUAL (a) arising in whole or in part out of a
COVERED INDIVIDUAL'S obtaining remuneration or financial gain to which the
COVERED INDIVIDUAL was not legally entitled or (b) arising out of the willful! vio-
lation of any applicable law or other regulation committed by, or with the know-
ledge or consent of any Insured.
7. To any Liability arising out of estimates of probable costs or cost estimates being
exceeded or faulty preparation of bid specifications or plans including architec-
tural plans;
8. Failure to perform, or breach of, a contractual obligation;
9. Liability imposed under the Employee Retirement Income Security Act of 1 974
(ERISA), as may be amended from time to time.
10. Liability imposed under the Consolidated Omnibus Budget Reconciliation Act of
1985 (COBRA), as may be amended from time to time.
BICEP 3/9/88
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SECTION VIII - CONDITIONS
A. PREMIUM AND AUDIT
The premium designated in the Declaration as "Deposit Premium" is a deposit premium
only.
The Authority shall be permitted but not obligated to inspect the Insured's property and
operations at any reasonable time. Neither the Insured's rights to make inspections nor
the making thereof nor any report thereon shall constitute an undertaking, on behalf of
or for the benefit of the Insured or others, to determine or warrant that such property or
operations are safe. The Authority may examine the Insured's books and records at any
reasonable time during the MEMORANDUM PERIOD and extensions thereof and within
three years after the final termination of this memorandum, as far as they relate to the
subject matter of this AGREEMENT.
B. DUTIES IN THE EVENT OF AN OCCURRENCE
CITY's duty in the event of an OCCURRENCE, claim or suit:
1. In the event of an OCCURRENCE reasonably likely to involve a COVERED ULTI-
MATE NET LOSS written notice containing particulars sufficient to identify the
entity and also reasonably obtainable information with respect to the time, place
and circumstances thereof, and the names and addresses of the entity( s) and of
available witnesses shall be given by or for the Insured to the Authority or any of
its authorized agents as soon as practicable.
2. If a claim is made or suit brought against the Insured, the Insured shall be obligated
upon demand to forward to the Authority every demand, notice, summons or
other process received by the Insured or the Insured's representative.
3. The Insured shall cooperate with the Authority and upon its request assist in en-
forcing any right of contribution or indemnity against any person or organization
who may be liable to the Insured because of an OCCURRENCE with respect to
which coverage is afforded under this AGREEMENT: and the Insured shall attend
hearings and trials and assist in securing and giving evidence and obtaining the at-
tendance of witnesses. The Insured shall not, except at its own cost, voluntarily
make any payment, assume any obligation or incur any expense which is likely to
result in an ULTIMATE NET LOSS that exceeds the Retained Limit stated in Item
(5) of the Declarations. In the event that the amount of ULTIMATE NET LOSS be-
comes certain either through final court judgement of agreement among the In-
sured, the claimant and the Authority shall then pay on behalf of the Insured the
COVERED ULTIMATE NET LOSS.
C. BANKRUPTCY AND INSOLVENCY PROVISION
Bankruptcy or insolvency of the CITY shall not relieve the Authority of any of its obliga-
tions hereunder.
D. OTHER INSURANCE
If collectible insurance or other coverages with any joint powers Authority or other self-
funding mechanism is available to the Insured covering a loss also covered hereunder
(whether on a primary, excess or contingent basis), such contribution shall apply to-
wards the satisfaction of the Insured's Retained Limit. The coverage hereunder shall
contribute with, such other insurance, provided that this clause does not apply with
respect to excess insurance purchased specifically to be in excess of this AGREEMENT.
BICEP 3/9/88
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.'.
E. DURATION OF AN OCCURENCE
An OCCURRENCE with a duration of more than one coverage period shall be treated as
a single OCCURENCE arising during the coverage period when the OCCURRENCE
begins.
F. ENDORSEMENT CONDITIONS
Notice to any agent or knowledge possessed by any agent or by any person shall not ef-
fect a waiver or change in any part of this AGREEMENT or stop the Authority from
asserting any right under the terms of this memorandum, nor shall the terms of this
AGREEMENT be waived or changed, except by endorsement issued to form a part of
this memorandum.
G. ACTION AGAINST THE AUTHORITY
No actions shall lie against the Authority with respect to the coverages and related pro-
visions defined in this AGREEMENT unless, as a condition precedent thereto, there
shall have been full compliance with all the terms of this AGREEMENT, nor until the
amount of the Insured's obligations to pay shall have been finally determined either by
judgement against the Insured after actual trial or by written agreement of the Insured,
the claimant and the Authority. Any person or organization or the representative there-
of who has secured such judgement or written agreement shall thereafter be entitled to
recovery under this AGREEMENT to the extent of the coverage afforded by this
AGREEMENT.
No person or entity shall have any right under this AGREEMENT to join the Authority as
a party to any action against the Covered Party to determine the Insured's Liability, nor
shall the Authority be impleaded by the Insured's or its legal representative.
H. SUBROGATION
The Authority shall be subrogated to the extent of any payment hereunder to all the In-
sured's rights of recovery thereof, and the Insured shall do nothing after loss to pre-
judice such right and shall do everything necessary to secure such right. Any amount so
recovered shall be apportioned as follows:
1 . The expenses of all such recovery proceedings shall be paid before any reimburse-
ments are made for the highest layer of coverage. If there is no recovery in the pro-
ceedings conducted by the Authority, it shall bear the expense thereof.
2. The highest layer of coverage shall be reimbursed first and if there be sufficient re-
coveries then the next highest layer until all recoveries are used up.
I. ASSIGNMENT OF INTEREST
Assignment of interest under this memorandum shall not bind the Authority unless and
until its consent is endorsed hereon.
J. CROSS LIABILITY
In the event of ULTIMATE NET LOSS to one or more Insureds for which another Insured
is or may be held liable, then this policy shall cover such entity or person against whom
claim is made or may be made, the same as if separate memorandums of coverage had
been issued to each Insured, except that the Limits of Liability for all such Insureds shall
not exceed the Limits of Liability set forth in the memorandum declarations.
BICEP 3/9/88
9
K. CANCELLATION
This AGREEMENT may be cancelled by the Authority in accordance with Article VI Sec-
tion 6.3 of the Liability Risk Coverage Agreement by receipted delivery to the Insured
CITY at the address shown in this AGREEMENT, written notice stating when not less
than sixty days thereafter such cancellation shall be effective, provided that, if the In-
sured fails to discharge when due any of its obligations in connection with the payment
for this AGREEMENT or any installment thereof, extension or credit, this AGREEMENT
may be cancelled by the Authority in accordance with Article VI Section 6.3 of the
Liability Risk Coverage Agreement, by receipted delivery to the Insured CITY at the ad-
dress shown in the AGREEMENT, written notice when not less than ten days thereafter
such cancellation shall be effective.
The time of surrender or the effective date and hour of cancellation stated in the notice
shall become the end of the coverage period.
BICEP 3/9/88
10
BIG INDEPENDENT CITIES EXCESS POOL
LIABILITY RISK MANAGEMENT REQUIREMENTS
1 . Each Participant shall maintain a full time risk management employee or other risk man-
agement professional or otherwise must be able to demonstrate a sound professionally
administered risk management program. If there is no risk manager then approval is
subject to unanimous consent of the membership. The person so designated will serve
as liason for the Participant to the Authority for all matters relating to risk management.
(Risk management means the process of identifying, evaluating, reducing, controlling,
transfering and eliminating risks through various methods such as purchasing Insur-
ance, funding claims payments, legal defense of claims, controlling losses and claims
reserves. )
2. Each Participant shall maintain a loss prevention program, and shall consider and act
upon all reoommendations of the Authority concerning the reduction of unsafe condi-
tions. (Loss prevention means developing techniques for changing or removing condi-
tions which would be likely to cause loss.)
3. Each Participant shall maintain records of claims which provide at a minimum, the
following information by fiscal year: number of claims (open and closed); amounts
paid; amounts reserved; and the total amount incurred (allocated expenses shall be in-
cluded). If losses are capped the potential excess amount provided for all losses incur-
red in excess of 50% of the Retained Limit or $ 500,00 whichever is less. Loss records
will be provided for the preceding five years.
Copies of records maintained shall be submitted to the Authority as directed by the
General Manager, Liability Risk Committee, Claims Review Committee or other duly
constituted committees.
4. The Participant shall use only qualified personnel to administer its Liability claims.
5. The Participant shall litigate suits using qualified defense counsel experienced in tort
Liability. Authority retains the right to associate with the defense counsel for cases like-
ly to exceed the Participant'-s retained limit.
6. The Participant shall use, as guidelines, the Authoritie's Liability Claims Audit Control
Guidelines and shall advise its claims administrator that these standards are to be utili-
zed in the Authoritie's Liability claims audits.
7. The Participant shall furnish to the Authority written notice as soon as practicable of
any potential or actual claims to recover losses or damages within or alleged to be with-
in the scope of the Memorandum in accordance with the following requirements:
A. A claim or occurrence which is, or is reserved at, an amount at least equal to, 50%
of the Participant's retained limit or $500,000 whichever is less;
B. A claim or occurrence which is the result of an incident involving potential joint
and several Liability, if reserved at 50% of the Participant's retained limit or
$ 500,000 whichever is less;
BICEP 3/9/88
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r ·
C. A claim or occurrence which is the result of incidents involving paralysis, or brain
damage, dismemberment or death;
D. An occurrence which results in two or more claims from the same incident if
reserved in total at 50% of the Participant's retained limit or $ 500,000 which-
ever is less.
8. A claims administration audit utilizing the Authoritie' s Liability Claims Quality Control
Guidelines shall be performed, at a minimum, of once every three years, or more often
at the sole discretion of the Authority, particularly if:
A. There is an unusual fluctuation or increase in the Participant's claims experience
or number of claims;
B. There is a change of Liability claims administration firms; or in-house claims/litiga-
tion management;
C. The P.articipant is a new Participant.
In most cases an audit will be performed on an "as needed" basis, but at least within
twelve months of the above-mentioned event( s).
The claims audit shall be performed by a firm select~d by the Authority. Recommenda-
tions made in the claims audit shall be addressed by the Participant and a written re-
sponse outlining a program for corrective action shall be furnished to the Authority
within sixty days of receipt of the audit.
9. The Participant shall obtain an actuarial study performed by a Fellow of the Casualty
Actuarial Society (FCAS) once every three years, or more often if indicated. Based
upon the Actuarial recommendations, the Participant shall maintain reserves and make
funding contributions equal to or exceeding the "Marginally Acceptable" ranges of the
actuarial report.
10. The Participant shall furnish an annual audited financial statement to the Authority.
NOTICES
1 . The Authority shall furnish the Participant written notification of the Participant's
failure to meet any of the above-mentioned guidelines. .
2. The Participant shall furnish a written response outlining a program for corrective ac-
tion, within thirty days of receipt of the Authoritie's notification. Extensions may be
granted under extenuating circumstances, at the discretion of the Authority.
3. After approval by the Authority of the Participant's corrective program, the Participant
shall implement the approved program within sixty days. The Participant may request
an additional sixty days from the Authority.
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13
t .
. .
SANCTIONS
1 . Failure to comply with these guidelines and a failure to cure such noncompliance as
described in NOTICES Section 2 or 3 above (after notice as described in (1 ) above)
shall constitute an event of default in default accordance with the Liability Risk
Coverage Agreement.
LIABILITY CLAIMS QUALITY CONTROL GUIDELINES
I. CLAIMS INVESTIGATION
A. Factual investigation within thirty days of the Participant's knowledge of the
Claim, including statements from participants and witnesses. (Answer questions
who, what, where, when and why.)
B. Develop information regarding Liability issues, including immunities, comparative
negligence, joint tortfeasors, and joint and several Liability.
C. Begin to develop information on damages.
1. Property damage.
2. Nature and extent of injuries.
3. Medical costs.
4. Lost wages.
5. Other damages.
D. Obtain and review contracts that may be in effect relating to specific accidents.
1. Hold harmless indemnity agreements.
2. Additional insured requirements.
3. Other applicable insurance.
E. Obtain defective products and/ or other evidence, and hold if at all possible, or at
least locate where it is being held.
Obtain product information for the file.
F. Utilize experts appropriately in cases.
G. Maintain membership in Claims Index Bureau.
1. Report all claims to the Claims Index Bureau.
2. Follow up on Claims Index Bureau information.
H. Arrange appraisals for damaged property.
I. Timely report to Authority and / or excess carrier.
II. TORT CLAIM REQUIREMENTS
All notices (pertaining to claims insufficiency, returning late claims, claims rejections,
etc.) shall be timely given in accordance with the relevant provisions of applicable law.
BICEP 3/9/88
14
. .
.
III. DOCUMENTATION
A. Reasonable reserves shall be established based upon facts known, within thirty
days of receipt of investigative report. Expenses shall be included.
B. File shall contain documentation necessary to support the decisions made with
respect to claims disposition.
C. Photos, diagrams, plans, contracts, medical and law enforcement reports, and
other relevant documents shall be deposited in the claims file in a timely fashion.
IV. CASE SETTLEMENT FACTORS
A. Reasonable settlement considering value of damages, injury, and liability.
B. Timeliness of settlement.
C. Contributions from joint tortfeasors considered.
D. Documents evaluating and authorizing settlements.
E. Appropriate releases secured.
V . LITIGATED FILES
A. Defense attorney evaluation in file.
B. Proper follow-up for investigation requested by defense attorney.
C. Actions to monitor claim defense expenses.
D. Timely recommendations from defense firms regarding settlements and trial
preparation.
E. Results and total expenses documented.
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