HomeMy WebLinkAbout30-Administrator
Ct. 'f OF SAN BERNARD-...40 - REQUE~ I FOR COUNCIL AC1....)N
From: James E. Robbins, Acting City
Administrator
Dept: Administrative
Su~~t: Authorization to issue bonds to
provide fully-funded excess
liability coverage--Big Independent
Cities Excess Pool (BICEP)
Date: November 10, 1988
Synopsis of Previous Council action:
:If4!,
9-19-88
Resolution No. 88-354 was approved creating a
Big Independent Cities Excess Pool Joint Powers
Authority (JPA)
Recommended motion:
Adopt resolution.
~ t-Lr~~'
/' /
\./
---) /J I) ---.
i) :-:~',.f~/'..
Signature
James E. Robbins
Phone:
5122
Contact person :
Supporting data attached: Yes
Ward:
FUNDING REQUIREMENTS:
Amount:
Source: (Acct. No.)
(Acct. DescriPtion)
Finance:
Council Notes:
75-0262
Agenda Item No. -., 0
Clr~ , OF SAN BERNARDl....O - REQUE~.. FOR COUNCIL ACT~"JN
STAFF REPORT
Over the last year and one-half the city, in cooperation with
four other cities, has caused the formation of Big Indepen-
dent cities Excess Pool (BICEP). BICEP was formed to pro-
vide, fully-funded, excess liability coverage for each of the
participants. In order to provide the fully-funded excess
coverage, the BICEP Joint Powers Authority (JPA) will issue
bonds. This is in addition to the purchase, when possible,
of excess liability coverage.
In order to insure complete understanding of the actions to
be taken; the proposed resolution sets forth the background
leading up to the authorization to approve the issuance of
the bonds. It then authorizes the cities' representative
(Mayor or Risk Manager) to authorize the sale of bonds in the
amount of $18,800,000 with an interest rate not to exceed 9%
per annum. The resolution further authorizes approval of
purchase contract, official statement and any other action
appropriate to consummate sale of bonds.
As we have throughout this process, all attendant documenta-
tion as well as the the purchase contract and official
statement have been reviewed by the City Attorney and City
Treasurer.
It is respectfully recommended by the Risk Manager with the
concurrence of the Acting City Administrator that the attach-
ed resolution be adopted.
Attachment
11/10/88
75-0264
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
RESOLUTION NO.
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN
BERNARDINO APPROVING AND AUTHORIZING MAXIMUM BASIC PREMIUM
OBLIGATIONS UNDER A LIABILITY RISK COVERAGE AGREEMENT AND
AUTHORIZING THE CITY'S REPRESENTATIVES TO THE BIG INDEPENDENT
CITIES EXCESS POOL JOINT POWERS AUTHORITY TO APPROVE THE ISSUANCE
OF BONDS, THE EXECUTION OF A PURCHASE CONTRACT AND THE EXECUTION
AND DISTRIBUTION OF AN OFFICIAL STATEMENT BY THE BIG INDEPENDENT
CITIES EXCESS POOL JOINT POWERS AUTHORITY AND CERTAIN OTHER
ACTIONS IN CONNECTION THEREWITH
THEY MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO
DO ORDAIN AS FOLLOWS:
WHEREAS, the City Council of the City of San Bernardino, on
September 19, 1988, duly adopted Resolution No. 88-354 (the
"First Program Resolution") 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 a validation proceeding and
certain other actions in connection therewith;
WHEREAS, pursuant to the First Program Resolution, the City
of San Bernardino (the "City") duly executed the Joint Powers
Agreement Creating the Big Independent Cities Excess Pool Joint
Powers Authority, effective September 22, 1988 (the "Joint Powers
Agreement"), by and among the Cities of Huntington Beach, Oxnard,
Pomona, San Bernardino and Santa Ana, California (the "Initial
Participants"), which established the Big Independent Cities
Excess Pool Joint Powers Authority (the "Authority");
WHEREAS, the Authority was formed to jointly develop and
fund programs of excess liability and other coverages, such
programs to include the creation of joint insurance funds, the
DAB:cez
November 15, 1988
1
1
2
3
4
5
6
7
8
9
10
11
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN BERNARDINO
APPROVING AND AUTHORIZING MAXIMUM BASIC PREMIUM OBLIGATIONS UNDER
A LIABILITY RISK COVERAGE AGREEMENT
purchase of reinsurance, and the provision of necessary
administrative services;
WHEREAS, pursuant to the First Program Resolution and the
Joint Powers Agreement, the City executed a Liability Risk
Coverage Agreement, dated as of October 1, 1988 (the "Liability
Risk Coverage Agreement"), by and among the Initial Participants
and the Authority, pursuant to which the Authority's pooled
excess liability program (the "Program") was established;
WHEREAS, the Authority has implemented a pooled self-
12 insurance program for certain levels of coverage and has
13 purchased a policy of excess liability insurance for the Initial
14 Participants for coverage of $8 million in excess of $2 million
15 for the period of October 1, 1988 to October 1, 1989;
16
WHEREAS, full implementation of the Program requires the
17 Authority to issue bonds to establish larger claims payment
18 reserves in accordance with the recommendations of an actuary
19 retained by the Authority;
20 WHEREAS, the Authority has executed a Trust Indenture,
21 dated as of October 1, 1988, by and between the Authority and
22 Seattle First National Bank, as trustee thereunder, pursuant to
23 which the Trustee is holding certain funds of the Authority and
24 pursuant to which the Authority proposes to issue its first
25 series of Insurance Program Revenue Bonds (the "Bonds");
26 III
27 III
28
DAB:cez
November 15, 1988
2
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN BERNARDINO
APPROVING AND AUTHORIZING MAXIMUM BASIC PREMIUM OBLIGATIONS UNDER
A LIABILITY RISK COVERAGE AGREEMENT
WHEREAS, in order for the Authority to issue the Bonds, the
Initial Participants must execute a First Amendment to Liability
Risk Coverage Agreement (the "First Amendment to Liability Risk
Coverage Agreement") establishing the obligations of the Initial
Participants to pay Basic Premium under the Liability Risk
Coverage Agreement to provide for payment of principal of and
interest on the Bonds;
WHEREAS, the City approved the form of the First Amendment
to Liability Risk Coverage Agreement in the First Program
Resolution and the City proposes to authorize execution of the
First Amendment to Liability Risk Coverage Agreement containing a
specified maximum annual Basic Premium obligation;
WHEREAS, in order to complete the Bond financing, the
16 Authority must execute and deliver the First Amendment to Trust
17 Indenture, the First Amendment to Liability Risk Coverage
18 Agreement, a Purchase Contract with municipal underwriters
19 relating to the sale of the Bonds and an Official statement
20 relating to the public offering of the Bonds;
21 WHEREAS, the City Council desires to specifically authorize
22 the representatives of the City to the Authority to approve the
23 issuance of the Bonds and the execution and delivery by the
24 Authority of such related agreements and documents, subject to
25 certain limitations, in order to establish a record that the City
26 Council has been informed of, and has approved, the issuance of
27 the Bonds by the Authority, although the City Council
28
DAB:cez
November 15, 1988
3
1
2
3
4
5
6
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN BERNARDINO
APPROVING AND AUTHORIZING MAXIMUM BASIC PREMIUM OBLIGATIONS UNDER
A LIABILITY RISK COVERAGE AGREEMENT
acknowledges that the representatives of the City to the
Authority were duly authorized to so act by the First Program
Resolution;
WHEREAS, all acts, conditions and things required by the
7 Constitution and laws of the State to exist, to have happened and
8 to have been performed precedent to and in connection with the
9 execution of the First Amendment to Liability Risk Coverage
10 Agreement as authorized hereby do exist, have happened and have
11 been performed in regular and due time, form and manner as
12 required by law, and the City is now duly authorized and
13 empowered, pursuant to each and every requirement of law, to
14 execute the First Amendment to Liability Risk Coverage Agreement,
15 in the manner and upon the terms herein provided;
16 NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND COUNCIL OF
17 THE CITY OF SAN BERNARDINO AS FOLLOWS:
18
SECTION 1. Declaration of Council.
This Council hereby
19 specifically finds and declares that the actions authorized
20 hereby constitute and are with respect to public affairs of the
21 City, and that the statements, findings and determinations of the
22 City set forth in the preambles above, in the First Program
23 Resolution and of the document approved herein are true and
24 correct.
25 SECTION 2. Basic Premium Obligation Under First Amendment
26 to Liability Risk Coverage Agreement.
The Mayor, City Manager
27 (or City Administrator) and Finance Director are hereby
28
4
DAB:cez
November 15, 1988
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN BERNARDINO
APPROVING AND AUTHORIZING MAXIMUM BASIC PREMIUM OBLIGATIONS UNDER
A LIABILITY RISK COVERAGE AGREEMENT
authorized and directed, for and in the name and on behalf of the
City, to execute, acknowledge and deliver to the Authority the
First Amendment to Liability Risk Coverage Agreement in
substantially the form approved by this City Council by
Resolution No. 88-354 and on file with the Clerk of the City,
with such changes therein as such officer may require or approve,
such approval to be conclusively evidenced by the execution and
delivery thereof; provided, however, that the maximum annual
Basic Premium obligation of the City established thereunder shall
not exceed 8540,000 and the aggregate principal component of
Basic Premium established thereunder shall not exceed 84,800,000.
SECTION 3. Authorization of Representatives to Authorize
Issuance of Authority Bonds.
The representatives of the City to
the Big Independent Cities Excess Pool Joint Powers Authority
(the "Authority") are hereby authorized and directed to
authorize, as representatives of the City to the Authority, the
issuance of the first series of Insurance Program Revenue Bonds
(the "Bonds") by the Authority; provided that the principal
amount of the Bonds shall not exceed 818,800,000 and the interest
rate per annum on the Bonds shall not exceed nine percent (9%).
SECTION 4.
Authorization of Representative to Approve
24 Purchase Contract Relating to Authority Bonds. The
25 representatives of the City to the Authority are hereby
26 authorized and directed to approve, as representatives of the
27 City to the Authority, the execution and delivery by the
28
DAB:cez
November 15, 1988
5
1
2
3
4
5
6
7
8
9
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN BERNARDINO
APPROVING AND AUTHORIZING MAXIMUM BASIC PREMIUM OBLIGATIONS UNDER
A LIABILITY RISK COVERAGE AGREEMENT
Authority of a Purchase Contract relating to the Bonds with
municipal bond underwriters; provided that the underwriters'
discount thereunder shall not exceed 2.35% of the aggregate
principal amount of the Bonds.
SECTION 5.
Authorization of Representatives to Approve
Official Statement Relating to Authority Bonds.
The
representatives of the City to the Authority are hereby
10 authorized and directed to approve, as representatives of the
11
12
13
14
15
City to the Authority, the execution and distribution by the
Authority of a Preliminary Official Statement and an Official
Statement relating to the Bonds.
SECTION 6.
Authorization of Representatives to Take
Further Actions Relating to Authority Bonds.
The representatives
16 of the City to the Authority are hereby authorized and directed
17 to do any and all things which they may deem necessary or
18 advisable in order to consummate the issuance, sale and delivery
19 of the Bonds, including approval of execution by the Authority of
20 the First Amendment to Liability Risk Coverage Agreement and a
21 First Amendment to trust Indenture relating to the Bonds.
22
SECTION 7. Attestation and Seal. The Clerk of the City is
23 hereby authorized and directed to attest the signature of the
24 authorized signatory, and to affix and attest the seal of the
25 City, as may be required or appropriate in connection with the
26 execution and delivery of said First Amendment to Liability Risk
27 Coverage Agreement.
28
DAB:cez
November 15, 1988
6
1
2
3
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN BERNARDINO
APPROVING AND AUTHORIZING MAXIMUM BASIC PREMIUM OBLIGATIONS UNDER
A LIABILITY RISK COVERAGE AGREEMENT
SECTION 8. Further Actions. Officers of the City Council
4 and the Mayor, City Manager (or City Administrator) and Finance
5 Director and any other officer or official of the City authorized
6 by the Mayor, are hereby authorized and directed, jointly and
7 severally, to do any and all things and to execute and delivery
8 any and all documents which they may deem necessary or advisable
9 in order to consummate the issuance, sale and delivery of the
10 Bonds by the Authority and otherwise to carry out, give effect to
11 and comply with the terms and intent of this resolution, the
12 Bonds, the Joint Powers Agreement, the Liability Risk Coverage
13 Agreement (including the First Amendment to Liability Risk
14 Coverage Agreement) and the Trust Indenture (including the First
15 Amendment to Trust Indenture) relating to the Bonds.
Such
16 actions heretofore taken by such officers are hereby ratified,
17 confirmed and approved.
18
SECTION 9. Effective Date.
This resolution shall take
19 effect immediately upon its passage.
20 III
21 III
22 III
23 III
24 III
25 III
26 III
27 III
28
DAB:cez
November 15, 1988
7
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15 of
16
17
18
19
20
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN BERNARDINO
APPROVING AND AUTHORIZING MAXIMUM BASIC PREMIUM OBLIGATIONS UNDER
A LIABILITY RISK COVERAGE AGREEMENT
I HEREBY CERTIFY that the foregoing resolution was duly
adopted by the Mayor and Common Council of the City of San
Bernardino at a
meeting thereof, held on the
day
of , 1988, by the following vote, to wit:
AYES: Council Members
NAYS:
ABSENT:
City Clerk
The foregoing resolution is hereby approved this
day
, 1988.
Elvyn Wilcox, Mayor
City of San Bernardino
Approved as to form
and legal content:
21
22
23
24
25
26
27
28
#~
DAB:cez
November 15, 1988
8