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HomeMy WebLinkAbout55A - BICEP CITY COUNCIL MEETING DATE: CLERK OF COUNCIL USE ONLY: REQUEST FOR COUNCIL ACTION JUNE 19, 2006 TITLE: AMENDMENTS TO BIG INDEPENDENT CITIES EXCESS POOL (BICEP) AGREEMENTS AND NEW PROGRAM DOCUMENTS APPROVED o As Recommended o As Amended o Ordinance on 1st Reading o Ordinance on 2nd Reading o Implementing Resolution o Set Public Hearing For !l../lJ U. CITY MANAGER CONTINUED TO --- FILE NUMBER RECOMMENDED ACTION Adopt a resolution which shall: 1. Approve the Amended and Restated BICEP Joint Powers Agreement among the five city members of BICEP. 2. Approve the Amended Bylaws between BICEP and the member cities. 3. Approve the Revised Master Memorandum of Liability Coverage. 4. Approve the Liability Program document. 5. Approve the Workers' Compensation Program document. DISCUSSION BICEP was initially formed in 1988 in response to the extreme difficulty cities were having in obtaining liability insurance coverage. The cities of Huntington Beach, Santa Ana, San Bernardino, Oxnard and Pomona were the charter members which formed BICEP. Subsequently, the City of Pomona withdrew and the City of West covina joined BICEP in October 2003. In order to provide adequate reserves for liability coverage, BICEP issued bonds in 1988 and as a further consequence entered into certain legal "operating" documents to provide the necessary and required protection for bondholders. More specifically, the Liability Risk Coverage Agreement and Trust Indenture were specifically crafted to ensure that the premiums paid in and the settlements paid out under the liability coverage program, were administratively handled to protect the interest of bondholders. In October 2003, BICEP determined to retire the bonds and with the ratification of the City Councils of each Member, undertook necessary actions to defease the bonds in March 2004. With the retirement of this 55A-1 Amendments to BICEP Agreements June 19, 2006 Page 2 of 3 bonded indebtedness, the BICEP Board has been diligently working to revise the "operating" documents to remove the now unnecessary and burdensome provisions related to bondholder protection. The goal of the Board is to replace the existing operating documents with new operating documents that ensure efficiency in handling claims and provide clarity in the obligations and rights of each City member in BICEP. with these goals in mind, and in consultation with the City Attorney, the amended and restated Joint Powers Agreement, along with the new operating documents, are being presented for your review and approval. These documents are intended to fully replace the existing Joint Powers Agreement and operating documents originally entered into in 1988, with one exception. That exception relates to how a charter member (i. e . , Huntington Beach, Oxnard, San Bernardino and Santa Ana)will continue to participate in the reserves for liability coverage created by the now- retired bonds. To this extent only and subject to the final disposition of all claims which occurred prior to the defeasance of the bonds, the terms and conditions of the existing Liability Risk Coverage Agreement would remain in force and effect. Otherwise, on or after July 1, 2004, the rights and obligations for coverage of any Member of BICEP would be controlled under the proposed operating documents, if approved. In drafting the new Joint Powers Agreement and each proposed new operating document, all member's City Attorney were consulted. The attached operating documents provide the following: . The Joint Powers Agreement and the proposed Bylaws will broaden the definition of "Member" from any "California city which has executed the Agreement (i.e., the Joint Powers Agreement)" to "any public agency as the term 'public agency' is defined by Section 6500 of the Joint Powers Law" (the Joint Exercise of Powers Act, Government Code Section 6500 et seq.). . The proposed Bylaws would include and change the eligibility criteria for admission to BICEP. . The proposed new Bylaws would clarify that the Board of BICEP has the authority to make substantive revisions to the operating documents and the terms and conditions of coverage for the Members. Each Member City continues to protect its individual interests through the City Council's designation of the representative to the Board. · Pursuant to the Bylaws, coverage for each Member of BICEP would be provided through a Memorandum of Liability Coverage and through various Risk Management Programs determined and authorized by the BICEP Board, which is a similar procedure in other such pools. 55A-2 Amendments to BICEP Agreements June 19, 2006 Page 3 of 3 FISCAL IMPACT The approval of the above five documents will make it easier for BICEP to add new members in the future; hereby, reducing the City's future premiums. 55A-3 (JWF 6/13/06) RESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA ANA AMENDING THE LIABILITY RISK COVERAGE AGREEMENT AND THE JOINT POWERS AGREEMENT CREATING THE BIG INDEPENDENT CITIES EXCESS POOL JOINT POWERS AUTHORITY, AUTHORIZING, RATIFYING, AND APPROVING CERTAIN OTHER ACTIONS IN CONNECTION THEREWITH. BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SANTA ANA AS FOLLOWS: Section 1. The City Council of the City of Santa Ana hereby finds, determines and declares as follows: A. The City of Santa Ana is a charter city and municipal corporation organized and existing under and by virtue of the constitution and laws of the State of California (the "City"); and B. The Cities of Huntington Beach, Oxnard, West Covina, San Bernardino, and Santa Ana (the "Cities") are the current Members of the Big Independent Cities Excess Pool Joint Powers Authority (BICEP), a joint exercise of powers entity organized and existing under the laws of the State of California (the "Authority"); and C. The Authority approved and entered into certain operating documents to carry out the purpose of the Authority to jointly develop and fund programs for comprehensive liability coverage and other coverages, including but not limited to, Bylaws, a Liability Risk Coverage Agreement, a Memorandum of Liability Coverage, and the Trust Agreement, all originally dated as of October 1, 1988 and subsequently amended from time to time (the "Original Operating Documents"); and D. The Cities and the Authority now desires to amend and restate the form of the Authority's operating documents in order to provide clarity and efficiency in providing coverages to its Members, and to allow the expansion of membership in the Authority to any public agency, as that term is defined in the California Government Code commencing at Section 6500 et seq. Section 2. The forms of the following documents are on file with the Clerk of the Council (the "Clerk") and have been submitted to this City Council for approval: 55A-4 Resolution No. 2006-XXX Page 1 of 3 (a) The Joint Powers Agreement; (b) The Amended Bylaws; (c) The Memorandum of Liability Coverage; (d) The Liability Program; (e) The Workers' Compensation Program. Section 4. The City Manager is hereby authorized and directed, for and in the name of the City; to execute and deliver foregoing documents and such approval to be conclusively evidenced by the execution and delivery thereof, with such non-substantive changes as may be approved by the City Attorney. The City Manager is hereby authorized and directed to take such actions and approve such document as the City Manager, in consultation with the Risk Manager and City Attorney, deems necessary or convenient to carry out the purpose of this resolution. Section 5. This Resolution shall take effect immediately upon its adoption by the City Council, and the Clerk of the Council shall attest to and certify the vote adopting this Resolution. ADOPTED this day of ,2006. Miguel A. Pulido Mayor APPROVED AS TO FORM: Joseph W. Fletcher, City Attorney Resolution No. 2006-XXX Page 2 of 3 55A-5 AYES: Councilmembers NOES: Councilmembers ABSTAIN: Councilmembers NOT PRESENT: Councilmembers CERTIFICATE OF ATTESTATION AND ORIGINALITY I, PATRICIA E. HEALY, Clerk of the Council, do hereby attest to and certify the attached Resolution No. 2006-XXX to be the original resolution adopted by the City Council of the City of Santa Ana on Date: Clerk of the Council City of Santa Ana 55A-6 Resolution No. 2006-XXX Page 3 of 3