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HomeMy WebLinkAbout04 O.C. RISK MGMNT 11-06-00 NO. 04 AGENDA RI- ORT , . , MEETING DATE: NOVEMBER 6, 2000 TO: FROM: SUBJECT: WILLIAM A. HUSTON, CITY MANAGER RONALD A. NAULT, FINANCE DIRECTOR AMENDMENT OF JOINT POWERS AGREEMENT ESTABLISHING THE ORANGE COUNTY CITIES RISK MANAGEMENT AUTHORITY SUMMARY: During November of 1999 the Orange County Cities Risk Management Authority (OCCRMA) held a strategic planning retreat which included City Managers and staff from the member agencies. The attached changes to the Joint Powers Agreement are one of the retreat outcomes and have been reviewed and approved by the City Managers and the OCCRMA Board of Directors. RECOMMENDATION: Authorize the Mayor to sign the City's Resolution No. 00-75 amending the Joint Powers Agreement of the Orange County Cities Risk Management Authority. FISCAL IMPACT: None. DISCUSSION: OCCRMA held a strategic planning retreat in November 1999 to discuss the direction the Authority should be moving in as we proceed through the new millennium. With the help of the members' City Managers and staff, significant changes to the Authority Agreement and other documents were recommended and have been worked on over the past year. The attached revised Joint Powers Agreement is the first document ready for your review and approval. The proposed amendments to the OCCRMA Joint Powers Agreement are based on a comprehensive review of the JPA's procedures and practices and a pre-accreditation review based on the California Area Joint Powers Authority standards. Concurrently OCCRMA is revising its by-laws, adopting a litigation management policy, and circulating for comment a new coverage contract which will provide occurrence-based coverage and broader coverage of defense costs. The proposed amendments to the Joint Powers Agreement are necessary to support the operational changes being pursued by the Authority. There are three substantial changes. First, the Agreement delegates additional responsibility for the ongoing management of the affairs of the Authority to the Executive Committee. The full Board of Directors will retain responsibility for the annual budget approval, admission of new members, by-laws changes, and the final determination regarding coverage appeals. This change is recommended to make more efficient use of member agencies' staff time and to streamline the Authority operations. This is a very common form of governance among insurance JPAs. The second significant change is to facilitate the Authority offering occurrence form insurance coverage to its members versus the current claims made form. The Agreement is also amended to reflect changes in State law regarding wind-up and dissolution of the Authority, and to clarify that final distribution will be based on contributions made and losses paid along with earned interest over the time of participation. The last significant change is a revised method of allocating potential liabilities on a more equitable basis. The Agreement is being amended to require the Authority to pay for its liabilities to the extent of its available assets and allocates member obligations based on their contributions to OCCRMA. A black lined and a clean copy of the Joint Powers Agreement are included for your review. 'Ro Finance Director Attachments RAN:AmenclmentOfJointPowersAgreement2000StaffReport.cloc 6 ? $ 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 2~ 25 26 25 RESOLUTION NO. 00-75 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TUSTIN, CALIFORNIA, APPROVING AMENDMENT OF THE JOINT POWERS AGREEMENT FOR THE ORANGE COUNTY CITIES RISK MANAGEMENT AUTHORITY WHEREAS, the City of Tustin ("City") is a member of the Orange County Cities Risk Management Authority ("Authority"); and WHEREAS, the Board of Directors of the Authority has approved changes to the Joint Powers Agreement under which the Authority operates, in order to delegate management of certain affairs of the Authority to its Executive Committee, conform the agreement to the changes in the coverage contract, and to conform the agreement to current practices; and WHEREAS, the City Council has reviewed the proposed changes and concurs that amendment of the Joint Powers Agreement would be in the best interest of the City; NOW, THEREFORE, be it resolved that the amended Joint Powers Agreement for the Orange County Cities Risk Management Authority ("Agreement"), attached hereto as Exhibit A, is hereby approved; and IT IS FURTHER RESOLVED that the Mayor is hereby directed and authorized to execute the Agreement and to forward a duly executed copy of said Agreement forthwith to the Clerk of the Authority. APPROVED AND ADOPTED by the City Council of the City of Tustin on November 6, 2000. ATTEST: Jeffery M. Thomas Mayor Pamela Stoker City Clerk JOINT POWERS AGREEMENT FOR ORANGE COUNTY CITIES RISK MANAGEME~ AUTHORITY 017.141266.1 TABLE OF CONTENTS JOINT POWERS AGREEMENT FOR ORANGE COUNTY CITIES RISK MANAGEMENT AUTHORITY Page ARTICLE 1. Definitions .................................................................................. 1 ARTICLE 2. Separate Entity ............................................................................. 3 ARTICLE 3. System Established ........................................................................ 3 ARTICLE 4. OCCRMA Powers 3 ARTICLE 5. Members; Board of Directors .......................................................... 4 ARTICLE 6. Powers of Board. ' 4 ARTICLE 7. Meetings of the Board'. ............. ~ ..................................................... 5 ARTICLE 8. Quorum; Voting ............................................................................ 5 ARTICLE 9. Executive Committee ...................................................................... 6 ARTICLE 10. OCCRMA Funds ........................................................................... 6 ARTICLE 11. Term of Agreement ........................................................................ 6 ARTICLE 12. Membership Term; Withdrawal; Termination ........................................ 6 ARTICLE 13. Disposition of OCCRMA Properly and Funds ........................................ 7 ARTICLE 14. Enforcement ............................................................. ................... 8 ARTICLE 15. Invalidity .................................................................................... 8 ARTICLE 16. Amendments ................................................................................ 8 ARTICLE 17. Bylaws and Plan Document .............................................................. 8 ARTICLE 18. Prohibition Against Assignment ......................................................... 9 ARTICLE 19. Tort Liability ............................................................................... 9 ARTICLE 20. Agreement Complete ...................................................................... 9 ARTICLE 21. Date Agreement Effective .............................................................. 10 ,t a,.,L~..a. ~Ln...,,.a...~a_~ .a.. .I.,."~,,,,.L.a.a.~,~LI,.LX.~a~a.~ .oo..ooooooooooooooooo..o.ooo.o ..... .o.°o°ooo°°°oooo°ooo°.°.°.°o°°.°ooo°°o .... 017.141266.1 -i- ADTT~T ~' 1~< A 017.141266.1 -ii- JOINT POWERS AGREEMENT FOR ORANGE COUNTY CITIES RISK MANAGEMENT AUTHORITY This Agreement is entered into pursuant to the provisions of Chapter 5 (beginning with Section 6500) of Division 7 of Title 1 of the Government Code authorizing specified local public entities to exercise jointly the power to provide Risk Management, including insurance, pursuant to the provisions of Chapter 3 (beginning with Section 989) of Part 6 of Division 3.6 of Title 1 of the Government Code. WITNESSETH: WHEREAS, the public interest requires and it is to the mutual interest of the parties hereto to join together to establish and operate a cooperative program of risk management; and WHEREAS, the operation of such a cooperative program is of such magnitude that it is necessary for the parties to this Agreement to join together to accomplish the purposes hereinafter set forth; and WHEREAS, each of the local public entities which is a party to this Agreement has the power to establish and operate a program of risk management; and WHEREAS, Title 1, Division 7, Chapter 5 of the California Government Code authorizes the joint exercise by two or more local public entities of any power which is common to each of them; and WHEREAS, each of the parties to the Agreement desires to join together with the other parties for the purpose of minimizing risk through any, all or any combination of the following: pooling of risk, joint funding of insurance or risk reserves in any legal manner, formation or rental of a captive insurer, establishing certain self-insured reserves against losses and jointly purchasing insurance, excess insurance, re-insurance and administrative services in connection with a cooperative program of risk management; NOW, THEREFORE, for and in consideration of the mutual advantages to be derived therefrom and in consideration of the execution of this Agreement by other local public entities, each of the parties hereto does agree as follows: ARTICLE 1. DEFINITIONS The following defihitions shall apply to the provisions of this Agreement and its ~ Law:Bylaws: (a) "Agreement" or "Joint Powers Agreement" shall mean this "Joint Powers Agreement for Orange County Cities Risk Management Authority," as it may be amended from time to time. 017.141266.1 -1- (b) "Authority" or "OCCRMA' shall mean the Orange County Cities Risk Management Authority created by this Agreement. ........... ~, ..... m Board of Directors or "Board" shall mean the governing body of the Authority. (-c--)(d) "Claims management" shall mean the process of identifying, controlling and resolving demands by individuals, public entities or private entities to recover losses from an insured, otherwise indemnified, or self-insured entity. Disposing of such demands for payment requires skills in insurance, law, adjusting/investigation, loss control engineering and general business. Claims management is the function of supervising legal, adjusting, investigation and engineering services to resolve such demands. (-d-)(e) "Eligible Member" shall mean a representative Member Agency eligible to vote on a matter coming before the Board in a given area of risk, due to the representative's v ..........v ,Member Agency's participation in that area of risk. In the case of new areas of risk that OCCRMA is considering, "Eligible reMembers" shall be all reMembers who reasonably expect to participate in that area of risk. qe-)09 Execuuve Cornnuttee ............. shall mean the ..... ~ ....... Ccrr',,-r.:.ucc committee of the Board of Directors responsible for management of the affairs of rity g f r~..~..~ .., r,:.~ .... ~"~'~ Authority the Autho between meetin s o the ..... (g) ?.!,:k General Manager" shall mean the person or entity appointed by the Board and given responsibility for the management, administration and operation of the cooperative programs of risk management of the Authority. (-O(h) "Local Public Entity" shall mean city, county, public authority and such other governmental entities as the Authority may determine. (i) "Member Agency" or "Member" shall mean a Local Public Entity that is. a party to this Agreement. (g-)(/) "Participation" or "Participating" shall mean a mb/ember aAgency's action or state of taking part in the programs of the Authority by doing at4;-, any, all or any combination of the following through the Authority with respect to one or more risk areas' (1) (2) (3) (4) (5) (6) purchase of risk management a~tministrative services; purchase of insurance or re-insurance; purchase of claims administration services; contributeion to designated reserve, operating and other funds or costs as required under the Authority's programs; payment or m-~e ~rcv:.:':cns providing for payment of assessments, defense costs, claim and judgment costs and other related costs as required by this Agreement ot the Authority's By-baw~laws; pa~fqe4pate-participation by the payment of premiums or contributions and entering into requisite agreements in any pooling of losses, captive 017.141266.1 -2- insurance program or other self-insurance program established and administered by the Authority. (-t~(k) "Rating Structure" shall mean the means by which premiums, assessments, contributions to a fund, or allocated expenses are established for a risk area or insurance program on the basis of conditions which affect the probability of loss. CO(l) "Risk Area" shall mean an area of exposure to pure risk of financial loss. used herein, this term refers to one of the following fields of exposure: worker's compensation, public liability, accident and health, unemployment compensation, property damage and such other areas as the Board shall agree, upon. As qO(m) "Risk Management" shall mean the process of identifying, evaluating, reducing, sharing, transferring, and eliminating risks. Risk management includes various methods of funding claims payments. Risk management includes elements of insurance, law, administration, technology and general business utilized to effectively manage risks. ARTICLE 2. SEPARATE ENTITY There is hereby created a separate public entity, the full legal name of which shall be "Orange County Cities Risk Management Authority", and may be referred to herein as "OCCRMA" or the "Authority." The Authority is a public entity separate from the parties to this Agreement. The debts, liabilities and obligations of the Authority shall not be the debts, liabilities or obligations of the parties to the Agreement. ARTICLE 3. SYSTEM ESTABLISHED A risk management system consisting of the parties to this Agreement is hereby established. This system represents a cooperative program of risk management which may encompass, but is not limited to, the following risk areas: tapublic liability, worker's compensation, accident and health, property damage and unemployment compensation and such other areas as the Board shall agree upon. r:,,~,~, .,...~. +~, .~,:,~ ^ ....... + ~,-~.~. A ..... ARTICLE 4. OCCRMA POWERS (a) OCCRMA shall have the power and the duty to establish and operate a program of risk management and provide for its execution either directly by OCCRMA or by contract. 017.141266.1 -3- (b) OCCRMA is authorized to make and enter into contracts; to employ agents and employees; to acquire, construct, manage, maintain or operate any building, works or improvements; to acquire, hold or dispose of property, liabilities or obligations; establish risk management related lines of credit, to incur indebtedness, liabilities or obligations, to sue and be sued in its own name, and to exercise all powers necessary and proper to carry out the terms and provisions of this aAgreement, or otherwise authorized by law. The foregoing powers include, but are not limited to, those relative to contracting for excess insurance or re-insurance, risk pooling, including formation of an owned or use of a non-owned captive insurance company, funding of self-insurance in any legal manner, claims administration services and consulting services. (c) The day-to-day operations of OCCRMA shall be subject to, and shall be governed by the tty-.gaw~Bylaws adopted by the Board. (d) The powers exercised by the Authority shall be subject to the restrictions upon the manner of exercising such powers of a general law city. ARTICLE 5. MEMBERS~-.; COx,~P.,N.rII~,,~C BOARD OF DIRECTORS aAgency" of ©CC?~.{A .'.nd is entitled to the rights and privileges and is subject to the obligations of rr,.e.~e.r:, all as provided for in this Agreement and the t~~,v~Bylaws. ~embers Agen~ may be accepted upon application to OCC~A ~d upon accepmce by · e Bo~d by two-~kds vote, ~d subject to accept~ce by ~e prospective member of ~e fm~cial ~r~gements ~d ~d contributiom specified by ~e ~en cu~ent members. (c) EachT ,-,,-,.-,! IN,I.,I:,-, ................ ~ Member Agency shall be entitled to one voting · 1..^,.1,, ,..c +1.,,~, A ,,+1.,,-,,.;~,, ,,,1.,l~,l-, ,,1.,r, ll 1~ representative to serve as a director on the gc;'ernmg ~ ......... ,,.~ ,,r,:~. ~ ........ , o~...~,, .,.~ .... ~'~ '~' .... ~ "' ~'~'~:" ~e "Board" (d) Each memt~Zs-Member Agency's representative shall be designated by appointment by the member's ag, c~-yZ,~-city council or other governing body. Such governing body maY delegate the authority to appoint that member's representatives to its city manager or other chief executive officer. Each member also may, in the same manner, appoint one alternate who may attend meetings and vote in the event of absence of the representative. Each representative or and alternate shall be an officer or employee of the appointing Local ~ablic ..... ~ Member Agency. ARTICLE 6. POWERS OF BOARD The Board shall have the following powers and functions: (a) To approve the annual budget of the Authority and any assessments. 017.141266.1 -4- ;.- (b) To elect a president and vice-president, and establish and appoint such other officers, including an auditor, clerk and treasurer, as may be necessary or desirable to carry out the purposes of this Agreement, and to provide therefor in the Bylaws. (-b-)(c) To establish such other-committees as it may, from time to time, deem necessary to carry out its purposes, including, but not limited to underwriting and claims ~ommittees. (d) Thc pc'.'.'er tTo exercise all of the powers and duties of OCCRMA, including all business assigned to the Executive Committee, in the ab'sence of the Executive Committee. To approve all changes to the Bylaws. This authority may not be delegated. Agreement. To perform such other duties and functions as are provided for in this ARTICLE 7. MEETINGS OF THE BOARD The Board shall establish a time and place to hold regular meetings not less often than qilai:tefly-annually. Meetings shall be conducted pursuant to the most current edition of Roberts Rules of Order or such other procedural rules as the Board shall adopt. ARTICLE 8. QUORUM; VOTING (a) A quorum for the transaction of business by the Board shall consist of a majority of the directors, or of the *~ ......... *,"*; ...... .~,~,;....,1+,~,,.~.,.,.,~,,~ Of Eligibl reMembers of c~c~-^ .~,~.:~.~.~, .... +~ ~,- +k~ ~.,,~: ..... * hand which l ............ ~, ........................ , everis ess. (b). All matters within the purview of the Board of Directors may be decided by majority vote of a quorum of the Board, except those matters which the Agreement or t~?-L-a~Bylaws specify as. requiring a two-thirds vote of the Board must be decided by a vote of two-thirds of all members of representatives on the Board. (c) Each representative ca *mc ~o-Lard director may vote on ~ach matter brought before the Board for decision. However, if the Board by majority vote designates a particular matter as one which pertains only to a given risk area (e.g., workers' compensation), or a specific insurance program (e.g., self insured pool), then only the representatives of those 017.141266.1 -5- Eligible reMembers ....... or ................ pragrmm may vote upon the ma~er. This l~mtion respecting who may vote on ce~in ma~ers is not intended to prohibit any ~ember &om expressMg its opinion as to how those qu~ified to vote should vote. ARTICLE 9. EXECUTIVE COMMITTEE The Board may-shall establish an Executive Committee of the Board of Directors which shall consist of at least three members, as provided in the P,y-gaw~Bylaws. The president of the Board shall be a member of the Executive Committee; the remainder of the members may be selected as provided in the ]?,5'-ba-wsBylaws. The Executive Committee shall exercise general supervisory and policy control over the ~U-rAe-General Manager, and may exercise any and all powers of the Board between Board meetings and when delegated by the Board, as provided in this Agreement and the ~Bylaws. The Executive Committee shall meet at least quarterly. ARTICLE 10. OCCRMA FUNDS The Treasurer of the Authority shall be the depository of the funds of OCCRMA. The TreasUrer's selection, responsibilities, compensation and related matters shall be governed by the ~-L-aw~Bylaws. The aAuditor shall be the disbursing officer of OCCRMA and shall draw warrants against the funds of OCCRMA in the treasury when demands are presented and authorized as designated in the ~Z4:~wsBylaws. The Board shall require the Treasurer, Auditor and any other person delegated charge of OCCRMA funds, to be bonded in amounts deemed reasonable by the Board. ARTICLE 11. TERM OF AGREEMENT This Agreement shall continue in effect until it is rescinded by mutual consent of the parties or terminated by the written consent of two-thirds of all mM'ember aAgencies; provided that this aAgreement and OCCRMA shall continue to exist for the purpose of disposing of all claims, distrlbutlcn distributing of assets and performing all other functions necessary to wind up the affairs of OCCRMA...T~' ,.~,..,,..o..~,.."~*~";~'~"~ t/he Executive Committee shall be vested with all powers of OCCRMA for the purpose of winding up and dissolving the business affairs of OCCRMA. ARTICLE 12. MEMBERSHIP TERM; WITHDRAWAL; EXPULSION TERMINATION (a) A party to this Agreement shall remain a reMember aAgency for two years from the date it first joined OCCRMA; thereafter the reMember aAgency may withdraw by giving written notice to the Board or its designee, on or before the next succeeding March 1, of the intent to withdraw as of 12:01 a.m. on the next July 1. (b) On the July 1 specified in the notice the member agency withdrawing party shall cease to be a member of OCCRMA; however, the withdrawing party shall remain responsible to contribute its share of premiums, contributions or assessments, as described in Article 13, and shall continue to comply fully with the terms and conditions of this ~vtgreement as to any 017.141266.1 -6- claims outstanding which are likely to involve the Authority. Withdrawal of a'party from OCCRMA shall automatically concurrently terminate any and all coverages obtained by and through OCCRMA as to the withdrawing party and all additional insureds and named insureds affiliated with the withdrawing party, excepting only: (1) commercial insurance policies specifically naming the withdrawing party or related insureds; and (2) tail or extended reporting coverage offered by OCCRMA and accepted by the withdrawing party; (3) pending covered claims that are being litigate& and (4) continuation of any coverage provided on an occurrence basis. (c) The Board shall have the right t~ terminate, for good cause, any Local ............ : ~ Member Agency's participation in the Authority, or any program thereof, upon a 2/3 vote of the entire Board of Directors; provided that a reasonable time shall be afforded, in the discretion of the Board of Directors, for the remember to seek coverage elsewhere. (d) The Executive Committee shall have the right to terminate any Member Agency's participation in the Authority, or any program thereof upon a majority vote, in the event of nonpayment of any of the Member Agency's obligations. ARTICLE 13. DISPOSITION OF OCCRMA PROPERTY AND FUNDS (a) A remember aAgency '-~' **'~ ............ ~ may withdraw as a remember in accordance with this Agreement and the -,,-,-v,,-,- Ey Law:Bylaws, provided that no withdrawing ~party shall be entitled to payment or return of any earned premium, contribution, consideration, or property paid or donated by the party to the Authority, or to any distribution of assets prior to final termination of this Agreement, except pursuant to subparagraph (b). The withdrawal or cancellation of any,~.~.~ga~*~, · ~'=~' T~III~I:~'~· ~kaaq,~ll~ag~* ~l~'~'~'.&.~,~,~.b~l,b(g~ Member Agency shall not terminate its responsibility to contribute its share of premium or funds to any insurance program of OCCRMA or to cooperate with OCCRMA in the resolution of claims, until all claims or other unpaid liabilities covering the period the T ^..~, r,..~.,:., r:,,,;,,, Member Agency was a participant have been finally resolved and a determination of the final amount of payments due by the · ....n, r,..~.u.. ................ ~ Member Agency or credits for such period has' been made by the Authority. (b) In the event of the dissolution of OCCRMA or the complete rescission or final termination of the Joint Powers Agreement by all of the then parties thereto, any assets of OCCRMA remaining after all claims and obligations have been paid, and after the payment of all liabilities, costs, expenses and charges incurred pursuant to this Agreement, or provision made for the payment of same through establishment of a liquidation fund, purchase of insurance or reinsurance, or a combination thereof, shall be returned to the then current reMembers of OCCRMA in prcpc, rt'~cn based on to-their total net contributions from inception, determined as of the date of dissolution, rescission or final termination. For the purposes of this paragraph "net contributions" shall mean the sum of actual contributions paid in, less losses and allocated claims expenses, but not less than zero for any individual Member. Net contributions shall be reduced by any rate credits given. Losses and allocated claims expenses shall include contributions used to pay for reinsurance, but not any proceeds therefrom. Net contributions shall include any interest actually earned thereon by the 017.141266.1 -7- Authority. The Authority may adjust the interest earnings attributable to the contributions of a Member whose net contribution is zero or less based on a reasonable estimate of any periods during which no interest was earned. ARTICLE 14. ENFORCEMENT OCCRMA shall have the authority to enforce this Agreement. Any dispute regarding the interpretation of this Agreement or the Bylaws adopted, hereunder, between or among OCCRMA and any Member ~lgency or a~lgencies shall be submitted to final and binding arbitration in accordance with the procedures established in the California Code of Civil Procedure and referred to the Judicial Arbitration and. Mediation Service or other arbiter as may be agreed by the parties; except that the Authority or any affected reMember may sue for the collection or return of assessments, contributions or premiums for a given year of coverage; provided that the affected member shall have first exhausted its administrative remedies and timely presented a claim therefor to the Authority. As to such a claim for the collection or return of funds, the prevailing party shall be entitled to reasonable attorney's fees. ARTICLE 15. INVALIDITY Should any portion, term, condition or provision of this Agreement be determined by a court of competent jurisdiction to be illegal and in conflict with any law of the State of California or be otherwise rendered unenforceable or ineffectual, the validity of the remaining portions, terms, conditions and provisions shall not be affected thereby. ARTICLE 16. AMENDMENTS No amendments to this Agreement shall be effective unless accomplished by written agreement executed by the governing bodies of at least two-thirds of the parties to this Agreement. Reasonable prior notice of any Board meeting in which amendments are to' be voted uPon must be given to each mc, tuber--director in writing. Such notice must include mention of the nature of the amendments to be voted upon. ARTICLE 17. BYLAWS AND PLAN DOCLrMENT (a) By a two-thirds vote of the entire Board, the Board shall develop and adopt ~- LawgBylaws and a Plan Document to govern the day-to-day operations of OCCRMA and may amend such documents from time to time. (b) Each Member Agency agrees to comply with and be bound by the provisions of the Bylaws as the same may be amended from time to time. Notwithstanding any provision in the t~-L-aw~Bylaws or Plan Document adopted by c,c-t-r~ n n...~ :. .... ~. ..... · '~'~ the Board in the event of any conflict between this Agreement and the ]~-L-aw~Bylaws or Plan Document, this Agreement shall prevail; in the event of any conflict between the ~q- ..... Bylaws and the Plan Document, the [ly-ga,,~Bylaws shall prevail. 017.141266.1 -8- ARTICLE 18. PROHIBITION AGAINST ASSIGNMENT No mb/ember aAgency may assign any right, claim or interest it may have under this Agreement, and no creditor, assignee or third party beneficiary of any reMember shall have any right, claim or title to any part, share, interest, fund, premium or asset of the Authority. ARTICLE 19. TORT LIABILITY As to any debts or liabilities based upon Section 895.2 of the Government Code of the State of California, except as othenvise provided by individual contract, pursuant to the provisions of Section 895. 4,-of the Government Code of the State of California, this paragraph allocates such liabilities. Each Member shall be liable for its pro rata share of both the debts and liabilities of the Authority to the extent such debts and liabilities exceed the available assets of the Authority, including any collectible coverage or insurance, and the Member's pro rata share of all debts and liabilities for claims against all Members, arising out of facts: (i) in the performance of this agreement, and (ii) occurring ~vhile a Member. A Member's pro rata share of debts and liabilities shall be calculated by dividing each such Member's (or former Member's) total contributions paid, by the total of all contributions paid by all such Members, from the inception of the Authority. To the extent required to achieve such purpose, each Member indemnifies the other Participants for any loss, cost or expense that may be imposed upon such other Members. The rules therefor as set forth in Civil Code Section 2778 are hereby made a part of this Agreement. For the purposes of this paragraph, "contributions" shall include all funds paid to the Authority for participation in the programs of the Authority (including group excess liability insurance programs), any liability protection programs operated on a group self-insurance basis by the Authority, and for operation of the Authority. However, "contributions" shall not include payments made to the Authority which are used for purchase of commercial insurance for other rislcs on a primary basis. ARTICLE 20. AGREEMENT COMPLETE The foregoing constitutes the full and complete Agreement of the parties. There are no oral understandings or agreements not set forth in writing herein. 017.141266.1 -9- .M1TICLE 21. DATE AGREEMENT EFFECTIVE This Agreement shall become effective ,q~pr(~w/in accord~ce with its terms. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their proper, officers thereunto duly authorized. Executed before me this __ day of CITY OF BREA City Clerk By. Executed before me this __ day of CITY OF CYPRESS City Clerk By Executed before me this __ day of , ...62000 CITY OF IRVINE City Clerk By Executed before me this __ day of CITY OF LAGUNA BEACH City Clerk By Executed before me this __ day of ,19962000 CITY OF LA PALMA 017.141266.1 -10- , . City Clerk Executed before me this ~ day of By. CITY OF LOS ALAMITOS City Clerk By Executed before me this day of CITY OF ORANGE City Clerk By, Executed before me this ~ day of CITY OF SAN CLEMENTE City Clerk By. Executed before me this ~ day of CITY OF SEAL BEACH City Clerk By. Executed before me this ~ day of , ..,.02000 CITY OF STANTON City Clerk By. 017.141266.1 -11- , . Executed before me this ~ day of , ...62000 CITY OF TUSTIN City Clerk By Executed before me this ~ day of CITY OF WESTMINSTER City Clerk By, Executed before me this ~ day of CITY OF YORBA LINDA City Clerk By. 017.141266.1 -12- , .- JOINT POWERS AGREEMENT FOR ORANGE COUNTY CITIES RISK MANAGEMENT AUTHORITY 017.141266.2 TABLE OF CONTENTS JOINT POWERS AGREEMENT FOR ORANGE COUNTY CITIES RISK MANAGEMENT AUTHORITY Page ARTICLE 1. Definitions ....................................................... , .......................... 1 ARTICLE 2. Separate Entity ....................... , ..................................................... 3 ARTICLE 3. System Established ................................................................. ' ....... 3 ARTICLE 4. OCCRMA Powers ........................................................................ 3 ARTICLE 5. Members; Board of Directors .......................................................... 4 ARTICLE 6. Powers of Board ........................................................................... 4 ARTICLE 7. Meetings of the Board .................................................................... 5 ARTICLE 8. Quorum; Voting ........................................................................... 5 ARTICLE 9. Executive Committee ..................................................................... 5 ARTICLE 10. OCCRMA Funds ..........................................................................5 ARTICLE 11. Term of Agreement ....................................................................... 5 ARTICLE 12. Membership Term; Withdrawal; Termination ....................................... 6 ARTICLE 13. Disposition of OCCRMA Property and Funds ....................................... 6 ARTICLE 14. Enforcement ................................................................................ 7 ARTICLE 15. Invalidity .................................................................................... 7 ARTICLE 16. Amendments ....... .. ........................................................................ 7 ARTICLE 17. Bylaws and Plan Document ..............................................................8 ARTICLE 18. Prohibition Against Assignment ........................................................8 ARTICLE 19. Tort Liability ............................................................................... 8 ARTICLE 20. Agreement Complete ..................................................................... 9 ARTICLE 21. Date Agreement Effective ............................................................... 9 017.141266.2 '-i- JOINT POWERS AGREEMENT FOR ORANGE COUNTY CITIES RISK MANAGEM-E~ AUTHORITY This Agreement is entered into pursuant to the provisions of Chapter 5 (beginning with Section 6500) of Division 7 of Title 1 of the Government Code authorizing specified local public entities to exercise jointly the power to provide Risk Management, including insurance, pursuant to the provisions of Chapter 3 (beginning with Section 989) of Part 6 of Division 3.6 of Title 1 of the Government Code. WITNESSETH: WHEREAS, the public interest requires and it is to the mutual interest of the parties hereto to join together to establish and operate a cooperative program of risk management; and WHEREAS, the operation of such a cooperative program is of such magnitude that it is necessary for the parties to this Agreement to join together to accomplish the purposes hereinafter set forth; and WHEREAS, each of the local public entities which is a party to this Agreement has the power to establish and operate a program of risk management; and WHEREAS, Title 1, Division 7, Chapter 5 of the California Government Code authorizes the joint exercise by two or more local public entities of any power which is common to each of them; and WHEREAS, each of the parties to the, Agreement desires to join together with the other parties for the purpose of minimizing risk through any, all or any combination of the following: pooling of risk, joint funding of insurance or risk reserves in any legal manner, formation or rental of a captive insurer, establishing certain self-insured reserves against losses and jointly purchasing insurance, excess insurance, re-insurance and administrative services in connection with a cooperative program of risk management; NOW, THEREFORE, for and in consideration of the mutual advantages to be derived therefrom and in consideration of the execution of this Agreement by other local public entities, each of the parties hereto does agree as follows: ARTICLE 1. DEFINITIONS The following definitions shall apply to the provisions of this Agreement and its Bylaws: (a) "Agreement" or "Joint Powers Agreement" shall mean this "Joint Powers Agreement for Orange County Cities Risk Management Authority," as it may be amended from time to time. 017.141266.2 - 1- , . June 16, 2000 (b) "Authority" or "OCCRMA" shall mean the Orange County Cities Risk Management Authority created by this Agreement. (c) · Authority. "Board of Directors" or "Board" shall mean the governing body of the (d) "Claims management" shall mean the process of identifying, controlling and resolving demands by individuals, public entities or private entities to recover losses from an insured, otherwise indemnified, or self-insured entity. Disposing of such demands for payment requires skills in insurance, law, adjusting/investigation, loss control engineering and general business. Claims management is the function of supervising legal, adjusting, investigation and engineering services to resolve such demands. (e) "Eligible Member" shall mean a Member Agency eligible to vote on a matter coming before the Board in a given area of risk, due to the Member Agency's participation in that area of risk. In the case of new areas of risk that OCCRMA is considering, "Eligible Members" shall be all Members who reasonably expect to participate in that area of risk. (f) "Executive Committee" shall mean the committee of the Board of Directors responsible for management of the affairs of the Authority between meetings of the Authority. (g) "General Manager" shall mean the person or entity appointed by the Board and given responsibility for the management, administration and operation of the cooperative programs of risk management of the Authority. (h) "Local Public Entity" shall mean city, county, public authority and such other governmental entities as the Authority may determine. (i) "Member Agency" or "Member" shall mean a Local Public Entity that is a party to this Agreement. (j) "Participation" or "Participating" shall mean a Member Agency's action or state of taking part in the programs of the Authority by doing any, all or any combination of the following through the Authority with respect to one or more risk areas: (1) (2) (3) (4) (5) (6) purchase of risk management administrative services; purchase of insurance or re-insurance; purchase of claims administration services; contribution to designated reserve, operating and other funds or costs as required under the Authority's programs; payment or providing for payment of assessments, defense costs, claim and judgment costs and other related costs as required by this Agreement or the Authority's Bylaws; participation by the payment of premiums or contributions and entering into requisite agreements in any pooling of losses, captive insurance program or other self-insurance program established and administered by the Authority. 017.141266.2 -2- , - June 16, 2000 (k) "Rating Structure" shall mean the means by which premiums, assessments, contributions to a fund, or allocated expenses are established for a risk area or insurance program on the basis of conditions which affect.the probability of loss. (1) "Risk Area" shall mean an area of exposure to pure risk of financial loss. As used herein, this term refers to one of the following fields of exposure: worker's compensation, public liability, accident and health, unemployment compensation, property damage and such other areas as the Board shall agree upon. (m) "Risk Management" shall mean the process of identifying, evaluating, reducing, sharing, transferring, and eliminating risks. Risk management includes various methods of funding claims payments. Risk management includes elements of insurance, law, administration, technology and general business utilized to effectively manage risks. ARTICLE 2. SEPARATE ENTITY There is hereby created a separate public entity, the full legal name of which shall be "Orange County Cities Risk Management Authority", and may be referred to herein as "OCCRMA' or the "Authority." The Authority is a public entity separate from the parties to this Agreement. The debts, liabilities and obligations of the Authority shall not be the debts, liabilities or obligations of the parties to the Agreement. ARTICLE 3. SYSTEM ESTABLISHED A risk management system consisting of the parties to this Agreement is hereby established. This system represents a cooperative program of risk management which may encompass, but is not limited to, the following risk areas: public liability, worker's compensation, accident and health, property damage and unemployment compensation and such other areas as the Board shall agree upon. ARTICLE 4. OCCRMA POWERS (a) OCCRMA shall have the power and the duty to establish and operate a program of risk management and provide for its execution either directly by OCCRMA or by contract. (b) OCCRMA is authorized to make and &nter into contracts; to employ agents and employees; to acquire, construct, manage, maintain or operate any building, works or improvements; to acquire, hold or dispose of property, liabilities or obligations; establish risk management related lines bf credit, to incur indebtedness, liabilities or obligations, to sue and be sued in its own name, and to exercise all powers necessary and proper to carry out the terms and provisions of this Agreement, or otherwise authorized by law. The foregoing powers include, but are not limited to, those relative to contracting for excess insurance or re-insurance, risk pooling, including formation of an owned or use of a non-owned captive insurance company, funding of self-insurance in any legal manner, claims administration services and consulting services. 017.141266.2 -3 June 16, 2000 (c) The day-to-day operations of OCCRMA shall be subject to, and shall be governed by the Bylaws adopted by the Board. (d) The powers exercised by the Authority shall be sUbject to the restrictions upon the manner of exercising such powers of a general law city. ARTICLE 5. MEMBERS; BOARD OF DIRECTORS (a) Each Member Agency is entitled to the rights and privileges and is subject to the obligations as provided for in this Agreement and the Bylaws. (b) A new Member Agency may be accePted upon application to OCCRMA and upon acceptance by the Board by two-thirds vote, and subject to acceptance by the prospective member of the financial arrangements and fund contributions specified by the then current members. (c) Each Member Agency shall be entitled to one voting representative to serve as a director on the Board. (d) Each Member Agency's representative shall be designated by appointment by the member's city council or other governing body. Such governing body may delegate the authority to appoint that member's representatives to its city manager or other chief executive officer. Each member also may, in the same manner, appoint one alternate who may attend meetings and vote in the event of absence of the representative. Each representative and alternate shall be an officer or employee of the appointing Member Agency. ARTICLE 6. POWERS OF BOARD The Board shall have the following powers and functions: (a) To approve the annual budget of the Authority and any assessments. (b) To elect a president and vice-president, and establish and appoint such other officers, including an auditor, clerk and treasurer, as may be necessary or desirable to carry out the purposes of this Agreement, and to provide therefor in the Bylaws. (c) To establish such committees as it may, from time to time, deem necessary to carry out its purposes, including, but not limited to underwriting and claims committees. (d) To exercise all of the powers and duties of OCCRMA, including all business assigned to the Executive Committee, in the absence of the Executive Committee. (e) To approve all changes to the Bylaws. This authority may not be delegated. (f) To perform such other duties and functions as are provided for in this Agreement. 017.141266.2 -4- . . June 16, 2000 ARTICLE 7. MEETINGS OF THE BOARD The Board shall establish a time and place to hold regular meetings not less often than annually. Meetings shall be conducted pursuant to the most current edition of Roberts Rules of Order or such other procedural rules as the Board shall adopt. ARTICLE 8. QUORUM; VOTING (a) A quorum for the transaction of business by the Board shall consist of a majority of the directors, or of the Eligible Members, whichever is less. (b) All matters within the purview of the Board of Directors may be decided by majority vote of a quorum of the Board, except those matters which the Agreement or Bylaws specify as requiring a two-thirds vote of the Board must be decided by a vote of two-thirds of all representatives on the Board. (c) Each director may vote on each matter brought before the Board for decision. However, if the Board by majority vote designates a particular matter as one which pertains only to a given risk area (e.g., workers' compensation), or a specific insurance program (e.g., self insured pool), then only the representatives of those Eligible Members may vote upon the matter. This limitation respecting who may vote on certain matters is not intended to prohibit any Member from expressing its opinion as to how those qualified to vote should vote. ARTICLE 9. EXECUTIVE COMMITTEE The Board shall establish an Executive Committee of the Board of Directors which shall consist of at least three members, as provided in the Bylaws. The president of the Board shall be a member of the Executive Committee; the remainder of the members may be selected as provided in the Bylaws. The Executive Committee shall exercise general supervisory and policy control over the General Manager, and may exercise any and all powers of the Board between Board meetings and when delegated by the Board, as provided in this Agreement and the Bylaws. The Executive Committee shall meet at least quarterly. ARTICLE 10. OCCRMA FUNDS The Treasurer of the Authority shall be the depository of the funds of OCCRMA. The Treasurer's selection, responsibilities, compensation and related matters shall be governed by the Bylaws. The Auditor shall be the disbursing officer of OCCRMA and shall draw warrants against the funds of OCCRMA in the treasury when demands are presented and authorized as designated in the Bylaws. The Board shall require the Treasurer, Auditor and any other person delegated charge of OCCRMA funds, to be bonded in amounts deemed reasonable by the Board. ARTICLE 11. TERM OF AGREEMENT This Agreement shall continue in effect until it is rescinded by mutual consent of the parties or terminated by the written consent of two-thirds of all Member Agencies; provided 017.141266.2 -5 .... June 16, 2000 that this Agreement and OCCRMA shall continue to exist for the purpose of disposing of all claims, distributing assets and performing all other functions necessary to wind up the affairs of OCCRMA. The Executive Committee shall be vested with all powers of OCCRMA for the purpose of winding up and dissolving the business affairs of ©CCRMA. ARTICLE 12. MEMBERSHIP TERM; WITHDRAWAL; TERMINATION (a) A party to this Agreement shall remain a Member Agency for two years from the date it first joined OCCRMA; thereafter the Member Agency may withdraw by giving written notice to the Board or its designee, on or before the next succeeding March 1, of the intent to withdraw as of 12:01 a.m. on the next July 1. (b) On the July 1 specified in the notice the withdrawing party shall cease to be a member of OCCRMA; however, the withdrawing party shall remain responsible to contribute its share of premiums, contributions or assessments, as described in Article 13, and shall continue to comply fully with the terms and conditions of this Agreement as to any claims outstanding which are likely to involve the Authority. Withdrawal of a party from OCCRMA shall automatically concurrently terminate any and all coverages obtained by and through OCCRMA as to the withdrawing party and all additional insureds and named insureds affiliated with the withdrawing party, excepting only: (1)commercial insurance policies specifically naming the withdrawing party or related insureds; (2) tail or extended reporting coverage offered by OCCRMA and accepted by the withdrawing party; (3) pending covered claims that are being litigated; and (4) continuation of any coveragexxxfrom occrma or anyone? provided on an occurrence basis. (c) The Board shall have the right to terminate, for good cause, any Member Agency's participation in the Authority, or any program thereof, upon a 2/3 vote of the entire Board of Directors; provided that a reasonable time shall be afforded, in the discretion of the Board of Directors, for the Member to seek coverage elsewhere. (d) The Executive Committee shall have the right to terminate any Member Agency's participation in the Authority, or any program thereof, upon a majority vote, in the event of nonpayment of any of the Member Agency's obligations. ARTICLE 13. DISPOSITION OF OCCRMA PROPERTY AND FUNDS (a) A Member Agency may withdraw as a Member in accordance with this Agreement and the Bylaws, provided that no withdrawing party shall be entitled to payment or return of any earned premium, contribution, consideration, or property paid or donated by the party to the Authority, or .to any distribution of assets prior to final termination of this Agreement, except pursuant to subparagraph (b). The withdrawal or cancellation of any Member Agency shall not terminate its responsibility to contribute its share of premium or funds to any insurance program of OCCRMA or to cooperate with O'CCRMA in the resolution of claims, until all claims or other unpaid liabilities covering the period the Member Agency was a participant have been finally resolved and a determination of the final amount of 017.141 266.2 -6- , .. June 16, 2000 payments due by the Member Agency or credits for such period has been made by the Authority. (b) In the event of the dissolution of OCCRMA or the complete rescission or final termination of the Joint Powers Agreement by all of the then parties thereto, any assets of OCCRMA remaining after all claims and obligations have been paid, and after the payment of all liabilities, costs, expenses and charges incurred pursuant to this Agreement, or provision made for the payment of same through establishment of a liquidation fund, purchase of insurance or reinsurance, or a combination thereof, shall be returned to the then current Members of OCCRMA based on their total net contributions from inception, determined as of the date of dissolution, rescission or final termination. For the purposes of this paragraph "net contributions" shall mean the sum of actual cOntributions paid in, less losses and allocated claims expenses, but not less than zero for any individual Member. Net contributions shall be reduced by any rate credits given. Losses and allocated claims expenses shall include contributions used to pay for reinsurance, but not any proceeds therefrom. Net contributions shall include any interest actually earned thereon by the Authority. The Authority may adjust the interest earnings attributable to the contributions of a Member whose net contribution is zero or less based on a reasonable estimate of any periods during which no interest was earned. ARTICLE 14. ENFORCEMENT OCCRMA shall have the authority to enforce this Agreement. Any dispute regarding the interpretation of this Agreement or the Bylaws adopted hereunder, between or among OCCRMA and any Member Agency or Agencies shall be submitted to final and binding arbitration in accordance with the procedures established ia the California Code of Civil Procedure and referred to the Judicial Arbitration and Mediation Service or other arbiter as may be agreed by the parties; except that the Authority or any affected Member may sue for the collection or return of assessments, contributions or premiums for a given year of coverage; provided that the affected member shall have first exhausted its administrative remedies and timely presented a claim therefor to the Authority. As to such a claim for the collection or return of funds, the prevailing party shall be entitled to reasonable attorney's fees. ARTICLE 15. INVALIDITY Should any portion, term, condition or provision of this Agreement be determined by a court of competent jurisdiction to be illegal and in conflict with any law of the State of California or be otherwise rendered unenforceable or ineffectual, the validity of the remaining portions, terms, conditions and provisions .shall not be affected thereby. ARTICLE 16. AMENDMENTS No amendments to this Agreement shall be effective tmless accomplished by written agreement executed by the governing bodies of at least two-thirds of the parties to this 017.141266.2 -7- , - June 16, 2000 Agreement. Reasonable prior notice of any Board meeting in which amendments are to be voted upon must be given to each director in writing. Such notice must include mention of the nature of the amendments to be voted upon. ARTICLE 17. BYLAWS AND PLAN DOCUMENT (a) By a two-thirds vote of the entire Board, the Board shall develop and adopt Bylaws and a Plan Document to govern the day-to-day operations of OCCRMA and may amend such documents from time to time. (b) Each Member Agency agrees to comply with and be bound by the provisions of the Bylaws as the same may be amended from time to time. Notwithstanding any provision in the Bylaws or Plan Document adopted by the Board in the event of any conflict between this Agreement and the Bylaws or Plan Document, this Agreement shall prevail; in the event of any conflict between the Bylaws and the Plan Document, the Bylaws shall prevail. ARTICLE 18. PROHIBITION AGAINST ASSIGNMENT No Member Agency 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, premium or asset of the Authority. ARTICLE 19. TORT LIABILITY As to any debts or liabilities based upon Section 895.2 of the Government Code of the State of California, except as otherwise provided by individual contract, pursuant to the provisions of Section 895.4, of the Government Code of the State of California, this paragraph allocates such liabilities. Each Member shall be liable for its pro rata share of both the debts and liabilities of the Authority to the extent such debts and liabilities exceed the available assets of the Authority, including any collectible coverage or insurance, and the Member's pro rata share of all debts and liabilities for claims against all Members, arising out of facts': (i) in the performance of this agreement, and (ii) occurring while a Member. A Member's pro rata share of debts and liabilities shall be calculated by dividing each such Member's (or former. Member' s) total contributions paid, by the total of all contributions paid by all such Members, from the inception of the Authority. To 'the extent required to achieve such purpose, each Member indemnifies the other Participants for any loss, cost or expense that may be imposed upon such other Members. The rules therefor as set-forth in Civil Code Section 2778 are, hereby made a part of this Agreement. For the purposes of this paragraph, "contributions" shall include all funds paid to the Authority for participation in the programs of the Authority (including group excess liability insurance programs), any liability protection programs operated on a group self-insurance basis by the Authority, and for operation of the Authority. However, "contributions" shall not include payments made to the Authority which are used for purchase of commercial insurance for other risks on a primary basis. 017.141266.2 -8 .... June 16, 2000 ARTICLE 20. AGREEMENT COMPLETE The foregoing constitutes the full and complete Agreement of the parties. There are no oral understandings or agreements not set forth in writing herein. ARTICLE 21. DATE AGREEMENT EFFECTIVE This Agreement shall become effective as of July 1, 2000 upon approval in accordance with its terms. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their proper officers thereunto duly authorized. Executed before me this . day of ,2000 CITY OF BREA City Clerk By Executed before me this ~ day of ,2000 CITY OF CYPRESS City Clerk By. Executed before me this ~ day of ,2000 CITY OF IRVINE City Clerk By. Executed before me this ~ day of ,2000 CITY OF LAGUNA BEACH City Clerk By Executed before me this 017.141266.2 -9- June 16, 2000 day of ,2000 CITY OF LA PALMA City Clerk By. Executed before me this day of ,2000 CITY OF LOS ALAMITOS City Clerk By Executed before me this ~day of ,2000 CITY OF ORANGE City Clerk By Executed before me this ~day of ,200O CITY OF SAN CLEMENTE City Clerk By. Executed before me this ~day of ,2000 CITY OF SEAL BEACH City Clerk By Executed before me this ~ day of ,2000 CITY OF STANTON City Clerk By. 017.141266.2 -10- June 16, 2000 Executed before me this ~ day of ,2000 CITY OF TUSTIN City Clerk By. Executed before me this ~day of ,2000 CITY OF WESTMINSTER City Clerk By. Executed before me this ~day of ,2000 CITY OF YORBA LINDA City Clerk By. 017.141266.2 -11- June 16, 2000