HomeMy WebLinkAboutCalifornia Municipal Insurance Authority; 1989-07-01;9 WRITE IT- DON’T SAY IT!
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The Public Agency Risk Sharing Authority of California (PARSAC:) was
formerly the California Municipal Insurance Authority (CMIA).
PR AIGNER FORM NO. 55-032
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REVISED AND RESTATED
JOINT POWERS AGREEMENT
CREATING THE
CALIFORNIA MUNICIPAL INSURANCE AUTHORITY -
July 1, 1989
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TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS............................ 3
ARTICLE I1 PARTIES TO AGREEMENT.................... 6
ARTICLE I11 PURPOSES............................. 7
ARTICLE IV CREATION OF THE CALIFORNIA MUNICIPAL INSURANCE AUTHORITY ......... 8
ARTICLE V TERM OF AGREEMENT...................... 8
ARTICLE VI POWERS OF CMIA......................... 9
ARTlCLE VI1 RESPONSIBILITIES OF MEMBER ENTITIES.... 10
ARTICLE VI11 30ARD OF DIRECTORS..................... 12
ARTICLE IX OFFICERS............................... 16
ARTICLE X EXECUTIVE COMMITTEE.................... 16
ARTICLE XI ADMINISTRATION......................... 17
ARTICLE XI1 BUDGET................................. 18
ARTICLE XI11 ANNUAL AUDITS AND REVIEWS.............. 18
ARTICLE XIV ESTABLISHMENT AND ADMINISTRATION OF FUNDS............................... 19
ARTICLE XV SUPPORT OF CMIA'S GENERAL EXPENSES..... 21
ARTICLE XVI DEPOSIT PR~IUMS..........o.o.ooo.....o 22
. ARTICLE XVII LIABILITY PR~~...................... 23
ARTICLE XVIII MEMORANDUM OF COVERAGE FOR TEE LIABILITY PROG~.................. 23
ARTICLE XIX SIR MANDATORY RESERVE.................. 24
ARTICLE XX RETROSPECTIVE PREMIUM
ADJUSTMENTS AND ASSESSMENTS............ 24
ARTICLE XXI PROG~S..........~~~.~~.~...~~~....... 24
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ARTICLE XXII NEW MEMBERS ............................ 25
ARTICLE XXIII WITHDRAWAL ............................. 26
ARTICLE XXIV EXPULSION .............................. 27
ARTICLE XXV EFFECT OF WITHDRAWAL OR EXPULSION ON MEMBER ENTITY'S RESPONSIBILITIES .... 30
ARTICLE XXVI TERMINATION OF AGREEMENT AND DISTRIBUTION OF ASSETS ................. 31
ARTICLE XXVII NOTICES ................................ 32
ARTICLE XXVIII PROHIBITION AGAINST ASSIGNMENT ......... 33
ARTICLE XXIX AMENDMENTS ............................. 33
ARTICLE XXX SEVERABILITY ........................... 34
ARTICLE XXXI AGREEMENT COMPLETE ..................... 34
ARTICLE XXXII FILING WITH SECRETARY OF STATE ......... 35
APPENDIX "A"
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CALIFORNIA MUNICIPAL INSURANCE AUTHORITY
JOINT POWERS AGREEMENT
THIS AGREEMENT is made in the State of California
by and among those municipalities organized and existing
under the laws of the State of California, hereinafter
referred to as “Member Entity( ies) , ‘I which are parties
signatory to this Agreement. All such Member Entities are
listed in Appendix “A” , which is attached hereto and made a
part hereof.
RECITALS
A. California Government Code Section 6500 and
following permits two or more public agencies by agreement
to jointly exercise any power common to the contracting
parties.
B. California Government Code Section 990.4
permits a local public entity to self-insure, purchase
insurance through an authorized carrier, or purchase insur-
ance through a surplus line broker, or any combination of
these; and
C. California Government Code Section 990.6
provides that the cost of insurance provided by a local
public entity is a proper charge against that local public
entity.
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D. California Government Code Section 990.8
permits two or more local entities to, by a joint powers
agreement, provide insurance for any purpose by any one or
more of the methods specified in Government Code Section
990.4 and provides that such pooling of self-insured claims
or losses does not constitute the business of insurance
under the California Insurance Code.
E. Labor Code Section 3700(c) permits all
political subdivisions of this State, including each member
of a pooling arrangement under a joint exercise of powers
agreement, to request a certificate of consent from the
Division of Industrial Welfare to self-insure against worker
compensation claims.
F. Each of the Member Entities whiclh is a party
to this Agreement desires to join with the other Member
Entities to fund programs of insurance for workers' compen-
sation, liability, property and other coverages to be deter-
mined and for other purposes set forth in Article I11 of
this Agreement.
G. The governing body of each Member Entity has
determined that it is in its own best interest and in the
public interest that this Agreement be executed and that it
participate as a member of the California Municipal Insur-
ance Authority created by this Agreement.
H. As of the effective date of this Agreement,
this Agreement shall replace and supersede the Joint Powers
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Agreement Creating the California Municipal Insurance
Authority, dated May 21, 1986, as amended on November 20,
1987.
Now, therefore, in consideration of the above
facts and the mutual benefits, promises and agreements set
forth below, the Member Entities hereby agree as follows:
AGREEMENT
ARTICLE I
DEFINITIONS
The following terms shall have the following
definitions:
A. "Agreement" shall mean this Revised and
Restated Joint Powers Agreement Creating the California
Municipal Insurance Authority.
B. "Board" or "Board - of Directors" shall mean
the governing body of CMIA.
C. "Bylaws" shall mean the Bylaws of the CMIA,
revised as of November 11, 1988, and as they may be further
amended or revised.
D. "Claim(s)" shall mean any demand(s) made
against a Member Entity to recover for monetar:y damages
within, or alleged to be within, the scope of coverage pro-
vided by any of CMIA's Memorandums of Coverage (or any
commercial insurance policy related to a CMIA Program).
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E. "CMIA" shall mean the California Municipal
Insurance Authority created by this Agreement.
F. "Covered Layer" shall mean a Program's
layer(s) of coverage in exchange for which a Member Entity
pays a Deposit Premium.
G. "Covered Loss" shall mean any loss resulting
from a claim or claims against a member Entity wlhich is in
excess of its Self-Insured Retention and which is covered by
any of CMIA's Memorandums of Coverage (or insurance policy
related to a CMIA Program).
H. "Deposit Premium" shall mean the estimated
amount determined for each Member Entity necessaxy to fund
each layer of coverage for each Policy Year of ebach Program
of CMIA;
I, "Executive Committee" shall mean that commit-
tee of the Board, constituted and exercising the! authority
set forth in this Agreement and in the Bylaws.
J. "Fiscal Year" shall mean the period of time
ending on June 30 of each year during which CMIA is in
existence.
K. "Incurred Loss" shall mean the anxount of
monies paid and reserved by CMIA to investigate, defend and
satisfy a demand or demands made against a Member Entity.
LO taInsurance" shall mean commercial- insurance
policies which CMIA may purchase for its Member Entities,
from time to time, in order to effect a transfer of risk.
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The term "Insurance" shall not mean any self-insurance,
risk-sharing or pooling of losses or risks.
M. "Member Entity" shall mean any California
municipality which is a party signatory to this Agreement,
including any other agency for which the City Council sits
as the Governing Board.
N. "Memorandum - of Coverage" shall mean the
document or documents issued by CMIA specifying the type and
amount of coverages provided under any Program to the Member
Entities by CMIA.
0. "Municipality" shall mean an incorporated
General Law City, defined by California Government Code
Section 34102, or a Charter City, defined by California
Government Code Section 34101.
P. "Participation Agreement" shall imean a
written agreement between CMIA and the Member Entities which
participate in one of CMIA's Programs, which Participation
Agreement shall incorporate this Agreement by reference.
Q. "Policy Year" shall mean a perio'd of time,
usually 12 months, for which each Program is to determine
Deposit Premiums, Retrospective Premiums, and Retrospective
Premium Adjustments.
R. l'Proqramll shall mean arrangements to cover
specific types of claims which may include, but not be
limited to, property, workers' compensation, and compre-
hensive liability claims.
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S. "Retrospective Premium" shall mean, the
amount determined retrospectively as each Member Entity's
share of losses, reserves, expenses and interest. income as
may be determined periodically for any Program.
T. "Retrospective Premium Adjustment." shall mean
the amount necessary to periodically adjust the Deposit
Premium, or prior Retrospective Premiums if any, to the
newly calculated Retrospective Premium amount,
U. "Self-Insured Retention" or "SIR"' - shall mean
the amount of loss from each occurrence which the Member
Entity shall retain and pay directly and which shall not be
shared by the Member Entities of CMIA.
ARTICLE I1
PARTIES TO AGREEMENT
Each Member Entity is a party to this Agreement
and agrees that it intends to, and does contract: with, all
other parties who are signatories of this Agreement and with
such other parties as may later be added as parties to this
Agreement pursuant to Article XXII. Each Member Entity also
agrees that the expulsion or withdrawal of any Member Entity
from this Agreement, pursuant to Article XXIV or XXIII,
shall not affect this Agreement nor the remaining parties as
to the other Member Entities then remaining.
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ARTICLE I11
PURPOSES
This Agreement is entered into by the Member
Entities in order to:
A. Create the California Municipal Insurance
Authority to carry out the purposes listed below and to
exercise the powers contained in this Agreement;
B. Develop effective risk management. programs to
reduce the amount and frequency of their losses;
C. Share some portion, or all, of the cost of
their losses;
D. Jointly purchase commercial insurance, asso-
ciate with other insurance pools, or self-insure against
risks;
E. Jointly purchase administrative and other
services including but not limited to underwriting, risk
management, loss prevention, claims adjusting, data proces-
sing, brokerage, accounting and legal services orhen related
to any of the other purposes;
F. Provide other joint powers insurance authori-
ties with risk management and related services; and
G. Do all things necessary to carry out the
foregoing purposes, as well as all things necessary to
implement the terms of this Agreement as permitted by law.
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ARTICLE IV
CREATION OF THE CALIFORNIA
MUNICIPAL INSURANCE AUTHORITY
Pursuant to Article 1 (commencing with Section
6500) of Chapter 5 of Division 7 of Title 1 of the
California Government Code, the Member Entities hereby
create a public entity, separate and apart from the parties
to this Agreement, to be known as the California Municipal
Insurance Authority ("CMIA") . Pursuant to Government Code
Section 6508.1, the debts, liabilities and obligations of
CMIA shall not constitute debts, liabilities or obligations
of any party to this Agreement. However, a Member Entity
may separately contract for or assume responsibility for,
specific debts, liabilities or obligations of CIHIA.
ARTICLE V
TERM OF AGREEMENT
This Agreement shall become effective as of the
date hereof and shall continue in full force and effect
until terminated in accordance with Article XXVI.
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RRTICLE VI
POWERS OF CMIA
CMIA shall have the powers common to its Member
Entities in California and all additional powers permitted
to a joint powers authority by California law, arid the
parties hereby authorize CMIA to do all acts necessary to
exercise such powers to fulfill the purposes of this Agree-
ment referred to in Article 111, including, but riot limited
to, the following:
A. Make and enter into contracts;
B. Incur debts, liabilities and obligations;
C. Acquire, hold, lease or dispose of real and
personal property, contributions and donations of property,
funds, services and other forms of assistance;
D. Sue and be sued in its own name arid settle
any. claim against it;
E. Employ agents and employees;
F. Acquire, construct, manage, maintain or
operate buildings, works or improvements;
G. Receive, collect, and disburse monies; and
invest its money not required for its immediate necessities,
in compliance with Government Code Section 53601; and
H. Exercise all powers necessary and proper to
carry out the terms and provisions of this Agreement.
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These powers shall be exercised in the manner
provided by applicable law and as set forth in this
Agreement.
ARTICLE VI1
RESPONSIBILITIES OF MEMBER ENTITIES
Each Member Entity shall comply with the following
responsibilities:
A. To sign this Agreement and participate in
CMIA's Liability Program;
B. To sign a Membership Resolution aind
Participation Agreement for each Program;
C. To pay Deposit Premiums, Retrospective
Premium Adjustments, and any Special Assessments to CMIA on
or before the due date;
D. To appoint, elect or remove representatives
to serve as a director and alternate on the Board as set
forth in Article VI11 and the Bylaws, which representatives
shall act on behalf of the Member Entity on all matters
coming before the Board;
E. To assure that its representative director or
alternate attends at least the annual meeting of the Board;
F. To assure that its representative director
and alternate keep informed about CMIA's activities and to
assist them in doing so.
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G. To approve amendments to this Agreement as
set forth in Article XXIX;
H. To file, in a prompt and timely manner, all
statewide, county, and locally-mandated reports and filings,
including but not limited to the Fair Political Practices
Commission's Statement of Economic Disclosure arid the
Secretary of State's Public Agency Roster Statement of
Facts:
I. To undertake an annual risk management audit
of its facilities and activities, conducted by it person
and/or firm approved by CMIA's Executive Committee, and,
based upon such audit report, to evidence correc:tion,
elimination and/or clarification of all noted deficiencies
or audit recommended corrections to the satisfaction of
CMIA's Executive Committee. Risk management audits may be
required by the Executive Committee more frequently than
annually.
charged back to Member Entities as part of the Retrospective
Premium Adjustment;
Risk management audits may be paid by CMIA and
J, To provide the CMIA with a copy of its most
recent audited annual financial statements prepared by a
Certified Public Accountant; or, if not available, provide
the CMIA with the most recent set of monthly financial
statements (which have not been audited); and provide any
other financial material as may be requested by CMIA from
time to time:
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K. To cooperate with, communicate and assist, in
a timely manner, the CMIA and any insurer, claims adjuster,
legal counsel or other service-provider engaged or retained
by CMIA in all matters relating to this Agreement;
L. To promptly cooperate with CMIA to determine
and/or clarify any incidents which might become losses, the
cause of any and all actual losses, and methods to bring
about settlement of claims; and
M. To comply with its obligations and responsi-
bilities under this Agreement, the Bylaws, the Memorandum of
Coverage, the Risk Management Standards, CMIA's policies and
procedures, and any other contract or requirement (as any of
the foregoing may be created or amended) necessary to imple-
ment this Agreement or any Program in which the Member
Entity participates.
ARTICLE VI11
BOARD OF DIRECTORS
Except as otherwise provided in this Agreement or
in the Bylaws, the powers of CMIA shall be exercised, its
property shall be controlled, and its affairs shall be
conducted by its Board of Directors, whose meetings, func-
tions and activities shall be governed by the Eiylaws.
The Board shall be composed of one director who
represents and acts on behalf of each respective Member
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Entity which participates in CMIA's liability program. The
number of persons on the Board shall equal to the number of
Member Entities which participate in the liability pro-
gram. In addition, each Member Entity shall appoint a
second individual, as alternate director, who shall have the
authority to attend, participate in, and vote at: any meeting
of the Board when the respective director is absent. Each
director and alternate director shall be an elected official
or employee of the respective Member Entity, shall be
appointed by the respective Member Entity's governing body,
and shall serve at its pleasure. If a director or alternate
ceases to be an employee or elected official of a Member
Entity for any reason, his or her position on the Board and
any of its committees shall immediately terminate.
The Board of Directors shall have the following
powers and functions:
A. The Board shall exercise all powers and
conduct all business of CMIA, either directly ar by dele-
gation of authority to other bodies or persons pursuant to
this Agreement and applicable law. €3. The Board shall form an Executive Committee
from its membership. In the Bylaws the Board shall delegate
to that Committee such powers as it sees fit.
C. The Board may form such other ccmmittees as
it deems appropriate in conducting CMIA's business.
D. The Board shall elect CMIA's officers.
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E. The Board shall cause to be prepared and
adopt CMIA's annual operating budget.
F. The Board shall develop, or cause to be
developed, and shall review, moaify as necessary, and adopt
each of CMIA's Programs, including all provisions for
reinsurance and administrative services necessary to carry
out such Program.
G. The Board shall contract or otherwise provide
for necessary services to CMIA and to Member Entities.
These necessary 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.
H, The Board, either directly or through the
Executive Committee, shall provide general supervision and
policy direction to CMIA's General Manager.
I. The Board shall receive and act upon reports
of its committees and the General Manager, either directly
or through the Executive Committee.
3. The Board shall establish monetary limits
upon any delegation of the claims payment and settlement
authority, beyond which a proposed settlement must be
referred to the Board for approval.
K. The Board may require that CMIA review,
audit, report upon, and make recommendations with regard to
the safety or claims administration functions of any Member
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Entity insofar as those functions are affecting C:MIA's lia-
bility or potential liability. The Board may forward any or
all such recommendations to the Member Entity with a request
for compliance and a statement of potential consequences for
noncompliance.
L. The Board shall receive, review and act upon
periodic reports and audits of CMIA's funds.
M. The Board shall appoint the General Manager
as Secretary of MIA, to serve at the Board's pleasure.
N. The Board may amend, repeal or adopt new
Bylaws, this Agreement or other key documents.
0. The Board may increase, decrease, or other-
wise amend the coverages, limits and other terms of any
Memorandum of Coverage.
P. The Board shall approve any proposal by the
Executive Committee for Special Assessments from, the Member
Entities before such Special Assessments are billed.
Q. The Board may expel a Member Entity from any
Program or from membership in CMIA pursuant to Article XXIV
of this Agreement.
R. The Board may ratify actions of the Executive
Committee, where such ratification is required before the
action becomes final.
S. The Board may enter into a joint venture or
contractual arrangement with any similar entity and may also
enter into a merger or acquisition agreement with a similar
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entity, provided that if CMIA is not the surviving entity in
any such merger or acquisition, such action shall require
approval by the vote of three-fourths of the Member
Entities.
T. The Board shall have such other powers and
functions as are provided for in this Agreement, the Bylaws,
and applicable law.
ARTICLE IX
OFFICERS
The officers of CMIA shall be the President, Vice
President, General Manager/Secretary, Treasurer, and
Auditor/Controller, and their qualifications an'd duties
shall be those set forth in the Bylaws.
ARTICLE X
EXECUTIVE COMMITTEE
The Board shall create an Executive Clommittee, all
of whose members shall be directors. The Executive Commit-
tee shall be composed of nine (9) members, including the
elected officers of CMIA (the President, Vice-president,
Treasurer, and Auditor/Controller), who shall serve ex-
officio, and five (5) other individuals, who sh.all be
elected by a majority vote of the Board for two-year terms
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at its annual meeting. The General Manager of CMIA shall
attend meetings of the Executive Committee and shall serve
as its Secretary but shall have no vote.
The authority of the Executive Committee and pro-
visions for its meetings shall be as stated in the Bylaws.
ARTICLE XI
ADMINISTRATION
CMIA shall have a General Manager, whLo may be
appointed or terminated by the Executive Committee, and who
shall serve as the Secretary of CMIA. The General Manager
shall attend meetings of the Board, the Executi.ve Committee
and other committees of the Board but shall have no vote and
shall be responsible for the preparation and maintenance of
all minutes of meetings of the Board and its Committees,
notices of meetings, and records of CMIA. The General
Manager shall also administer and supervise CMICA's business
and activities, subject to the direction and supervision by
the Board and the Executive Committee, and sha:L1 be respon-
sible for carrying out the duties set forth in the Bylaws.
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ARTICLE XI1
BUDGET
The Board shall adopt an annual budget: as recom-
mended by the Executive Committee prior to the beginning of
each Fiscal Year.
ARTICLE XI11
ANNUAL AUDITS AND REVIEWS
A. Financial Audit. The Auditor/Controller
shall cause an annual financial audit of the accounts and
records to be prepared by a Certified Public Accountant in
compliance with California Government Code Sect.ions 6505 and
6505.5 or 6505.6 with respect to all receipts, disburse-
ments, other transactions and entries into the books of
CMIA. The minimum requirements of the audit Shisll be those
prescribed by the State Controller for special districts
under Government Code Section 26909 and shall conform to
generally accepted accounting standards.
such audit shall be filed as a public record with the Board,
each of the Member Entities, and each county auditor of the
county in which each of the Member Entities is located. The
report shall be filed within twelve (12) months of the end
of the fiscal year under examination. CMIA shall pay all
costs for such financial audits.
A report of each
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B. Actuarial Review. The Board shall cause an
annual actuarial review to be prepared for each of the
Programs of CMIA and a report of such actuarial review shall
be made available for inspection by the Board and the Member
Entities. CMIA shall pay all costs for such actuarial
reviews.
C. Claims Review. The Board shall cause an
annual claims review to be prepared of the administration of
the claims for each of the Programs of CMIA. A report of
such claims review shall be made available for inspection by
the Board and the Member Entities. CMIA shall pay all costs
of such claims reviews,
ARTICLE XIV
ESTABLISBMENT AND ADMINISTRATION OF FUNDS
CMIA shall be responsible for the strict account-
ability of all funds and the reporting of all receipts and
disbursements in accordance with generally accepted account-
ing principles. It will comply with all provisions of law
relating to this subject, including California Glovernment
Code Sections 6505, 6505.1, 6505.5 or 6505.6.
The Treasurer of CMIA shall establish and maintain
such funds and accounts as may be required by good account-
ing practices and by the Board. Separate accounts shall be
established and maintained for each Program Year of each
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Program of CMIA. Books and records of CMIA in the hands of
the Treasurer or other designated person shall be open to
inspection at all reasonable times by members of the Board
or authorized representatives of the Member Entities.
The Treasurer shall have the custody of and dis-
burse CMIA's funds. He or she may delegate disbursing
authority to such persons as may be authorized by the Board
to perform that function; provided that, pursuant to Govern-
ment Code Section 6505.5, the Treasurer shall:
A. Receive and acknowledge receipt of all funds
of CMIA and place them in the treasury to the credit of
CMIA;
B. Be responsible upon his or her official bond
for the safekeeping and disbursement of CMIA's funds so held
by him or her:
C. Pay any sums due from CMIA as approved for
payment by the Board or by any body or person to whom the
Board has delegated approval authority, making such payments
from CMIA's funds upon warrants drawn by the Auditor;
E). Verify and report in writing to CMIA and to
Member Entities, as of the first day of each quarter of the
fiscal year, the amount of money then held for CMIA, the
amount of receipts since the last report, and the amount
paid out since the last report;
E. Prepare a complete written report of all
financial activities within one hundred and twenty (120)
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days after the close of each fiscal year for such fiscal
year to the Board and to each Member Entity; and
F. Receive, invest, and disburse funds in accor-
dance with the procedures established by the Board or the
Bylaws and in conformity with applicable law.
Pursuant to Government Code Section 6505.1, the
General Manager, the Treasurer, and such other persons as
the Board may designate shall have charge of, handle, and
have access to CMIA's property.
CMIA shall secure and pay for a fidelity bond or
bonds, in an amount or amounts and in form specified by the
Board covering all officers and employees of CMIA who are
authorized to hold or disburse CMIA's funds, and all
officers and employees who are authorized to have charge of,
handle, and have access to CMIA's property.
The Auditor/Controller shall draw warrants to pay
demands against CMIA when the demands have been. approved by
both the President and the General Manager.
ARTICLE XV
SUPPORT OF CMIA'S GENERAL EXPENSES
Costs of staffing and supporting CMIA (hereinafter
called CMIA's general expenses) shall be equitably allocated
among the various Programs by the Board, and shall be funded
by the Member Entities which participate in such Programs
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(and ex-Member Entities) in accordance with such
allocations.
ARTICLE XVI
DEPOSIT PREMIUMS
The Deposit Premiums for each Member Entity shall
be set by CMIA using various rating and underwriting
criteria, such as:
(1) The Member Entity's payroll;
(2) The Member Entity's exposure base;
(3) The results of an on-site underwriting
inspection;
(4) The Member Entity's prior claims history;
(5) Total insurable values; and/or
(6) Employee classification ratings.
Deposit Premiums shall be billed to the Member :Entities at
least thirty (30) days prior to the inception of coverage or
a new Policy Year. All Deposit Premiums shall Ibe due and
payable before the inception of coverage or on (31: before the
first day of a new Policy Year.
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ARTICLE XVII
LIABILITY PROGRAM
Member Entities shall participate in (:MIA's
Liability Program as a condition of membership in CMIA.
The first Policy Year shall end on June 30,
1987. Subsequent Policy Years shall begin on July 1 of each
succeeding year and shall continue through the following
June.
Retroactive coverage may be provided as approved
by the Board and documented on the Declaration page of the
respective Memorandum of Coverage.
ARTICLE XVIII
MEMORANDUMS OF COVERAGE
The types and amounts of coverage for each Program
provided to Member Entities shall be specified in a Memoran-
dum of Coverage which shall be issued by CMIA to each Member
Entity for each Program Year in which the Member Entity has
coverage.
decrease, increase, or amend the coverage provi-ded by a
Memorandum of Coverage. If any such amendment is approved
by the Board during a Policy Year, no Member Entity partici-
pating in that Policy Year shall be entitled to withdraw by
reason of any said amendment prior to the termination of
that Policy Year.
The Board shall have the power and authority to
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ARTICLE XIX
SIR MANDATORY RESERVES
The Board may determine and require that Member
Entities establish and maintain mandatory loss reserves for
claims which are less than Member Entities' self-insured
retention (SIR) or deductible.
ARTICLE XX
RETROSPECTIVE PREMIUM ADJUSTMENTS AND
ASSESSMENTS
Retrospective Premium Adjustments for each Program
shall be calculated periodically, as determined by the Board
and specified in the respective Participation Agreement.
The Board may determine and levy special assessments on
Member Entities by majority vote.
ARTICLE XXI
PROGRAMS
The coverage for each Policy Year of each Program
shall be as specified in the respective Participation Agree-
ment and Memorandum of Coverage. All Member Entities shall
participate in the Liability Program, and subject to
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approval by the Board, which approval shall not be unreason-
ably withheld, each Member Entity may determine in which
other Programs it will participate.
ARTICLE XXII
NEW MEMBERS
Any California municipality may apply for member-
ship in CMIA and participation in any of CMIA's Programs at
any time. Municipalities must participate in at least the
Liability Program.
CMIA shall review all requests for membership and
shall determine which applicants shall be accepted for
membership, in which Programs they may participate, and when
such participation shall begin. Municipalities shall become
new Member Entities as of the effective date off coverage
under the Liability Program. Municipalities which are in
the process of incorporation shall be covered only as of the
effective date of incorporation.
Deposit Premiums for coverage which begins during
a Policy Year may be prorated for the remainder of the
Policy Year, in accordance with the. provisions of the
respective Participation Agreement.
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ARTICLE XXIII
WITHDRAWAL
Member Entities shall be obligated to participate
in the Liability Program for rolling three-year periods (the
current Policy Year plus the two next consecutive Policy
years). Participation in other Programs shall 'be specified
in the respective Participation Agreement.
In order to withdraw from participatilon from the
Liability Program, a Member Entity shall give CMIA written
notice of its intent to withdraw at any time during a Policy
Year, which withdrawal shall be effective on the expiration
of the two-year period which begins with the first day of
the next Policy Year. Withdrawal from the Liability Program
shall terminate coverage under it and shall constitute with-
drawal from this Agreement and from membership in CMIA,
subject to the ex-Member Entity's continuing oblligations
under Article XXV, below.
Any notice of intent to withdraw may be rescinded
in writing with Executive Committee consent at any time
earlier than ninety days before the expiration of the
withdrawal period.
[Member Entities' participation in other Programs
shall be specified in the respective Participation
Agreements.]
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Any Member Entity which withdraws as a participant
in any Program may renew participation in that Program by
complying with all Program rules and regulations.
ARTICLE XXIV
EXPULSION
Regardless of its three-year commitment under the
Liability Program, a Member Entity may be expel-led from CMIA
or a Program either with or without cause. The General
Manager shall review any lack of satisfactory performance or
other problem with the Member Entity and shall attempt to
resolve the matter. If the General Manager determines that
the Member Entity is unwilling or unable to correct the
problem, the General Manager shall present the matter to the
Executive Committee, The Executive Committee may recommend
to the Board that the Member Entity be expelleld, either for
cause or without cause. Action by the Board shall require
the vote of a majority of the total number of directors.
A. Expulsion Witnout Cause. The Executive
Committee may decide to recommend that a Member Entity be
expelled without cause (for no stated cause). Written
notice of the Executive Committee's recommendation for
expulsion shall be delivered to the Member Entity by
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certified mail at least fourteen (14) days before the Board
meeting at which the matter will be discussed.
B. Expulsion for Cause. If the Executive
Committee's recommendation is to expel a Member Entity for
cause, the Board shall appoint a hearing officer to conduct
a hearing on the matter, and the hearing officer shall be
responsible for all notices, procedures and reports in
connection with the hearing, Written notice of the date,
time and place of the hearing, along with a summary of the
reasons supporting the expulsion for cause shall. be
delivered to the Member Entity at least fourteen (14) days
before the hearing, by certified mail. The notice shall
also include any guidelines concerning the procedures to be
followed at the hearing. The hearing officer shall preside
at the hearing and shall be responsible for the conduct of
the hearing and all rulings on procedure, evidence and law
during the hearing. Both the Member Entity and CMIA shall
be represented by legal counsel at the hearing. Both par-
ties may present written and oral evidence. A transcript of
the proceedings shall be kept, either by a court: reporter or
by a good quality tape recorder, a written transcription of
which may be prepared at the requesting party's expense.
Within thirty (30) days after the hearing is declared closed
by the hearing officer, he or she shall prepare written
rulings of fact and law, with a recommendation for further
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action by the Board, and shall deliver the decision to the
Member Entity and CMIA. Within thirty (30) days after
receipt of the hearing officer's decision, the Board shall
consider and act on the hearing officer's recomniendation.
The Board shall permit the Member Entity to present a
written response to the hearing officer's recomiendations.
The Board's decision shall be final, and if it decides to
expel the Member Entity, it shall also state the effective
date on which coverage terminates.
C. Opportunity to Remedy. In considering the
expulsion of a Member Entity, the Executive Committee shall
allow the affected Member Entity a reasonable opportunity to
address and remedy the reasons, if any, for the proposed
expulsion. The period of time so allowed shall be within
the sole discretion of the Executive Committee. If such a
reasonable opportunity is allowed, the CMIA may require
quarterly audits to monitor the affected Member Entity's
remedial actions or any other conditions to ita continued
participation in CMIA or its Programs.
D. Alternative Coverage. A Member Entity which
is the subject of a proposed expulsion shall be responsible
for investigating the availability of alternate coverage.
On the request of the Member Entity, the Board may permit
the Member Entity a reasonable time to make arrangements for
alternative coverage, but such period of time shall be at
the Board's sole discretion.
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* .* .
ARTICLE XXV
EFFECT OF WITHDRAWAL OR EXPULSION
ON MEMBER ENTITY'S RESPONSIBILITIES
The withdrawal or expulsion of any Member Entity
(the ex-Member Entity) after its participation in any
Program shall not terminate its responsibility with respect
to the following:
A. Provide CMIA with such statistic'al and loss
experience data and other information as may be necessary
for CMIA to carry out the purposes of this Agreement;
B. Pay to CMIA when due any Deposit Premiums or
Retrospective Premium Adjustments for each Policy Year of
each Program in which it participated;
C. Cooperate fully with CMIA in determining the
cause of losses in the settlement of claims;
D. Cooperate with and assist CMIA and any
insurer, claims adjuster, legal counsel or other service
provider engaged or retained by CMIA in all matters relating
to this Agreement or a Participation Agreement: and
E. Comply with the Bylaws, Participation Agree-
ments, and all policies and procedures of CMIA not inconsis-
tent with the provisions of this Agreement and not inconsis-
tent with its withdrawal from CMIA.
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In addition, CMIA may retain all Deposit Premiums,
assessments, property or other charges paid or transferred
to CMIA, and the ex-Member Entity is obligated to pay any
future assessments made with respect to the Policy Years of
any Program in which it participated, until all claims
relating to such Policy Year(s) and Program(s) are settled,
paid or resolved, at which time CMIA shall refund to the ex-
Member Entity any premiums, deposits, or property which it
has retained and which were not expended in settling, paying
or otherwise resolving claims against the ex-Member Entity.
ARTICLE XXVI
TERMINATION OF AGREEMENT AND DISTRIBUTION OF ASSETS
This Agreement shall continue in full force and
effect until terminated. Termination of this Agreement
shall also constitute the termination of all Participation
Agreements and all Programs. This Agreement may be termi-
nated at any time by the vote of three-fourths of the Member
Entities; provided, however, that this Agreement and CMIA
shall continue to exist for the purpose of displosing of all
claims, the distribution of assets, and any oth.er functions
necessary to wind up the affairs of CMIA.
Upon termination of this Agreement, ail1 assets of
each Program of CMIA shall be distributed amonq the Member
Entities (and ex-Member Entities which previously withdrew
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or were expelled) which participated in such Programs, in
accordance with and proportionate to their net premium
payments made during the term of this Agreement. Such
distributions shall be determined within six (6) months
after the disposal of the last pending claim or other
liability covered by each Program.
Following the termination of this Agreement., any Member
Entity which was a participant in any Program of CMIA shall
pay any additional amount of premium, determined by the
Board or its designee in accordance with a retrospective
premium adjustment, which may be necessary to enable final
disposition of all claims arising from losses under that
Program during the Member Entity's period of participation.
The Board is vested with all powers of CMIA for
the purpose of concluding and dissolving the business
affairs of CMIA. The Board may designate legal counsel and
any committee or person to carry out a plan of dissolution
adopted by the Board.
ARTICLE XXVII
NOTICES
Notices to Member Entities under this Agreement, a
Participation Agreement, or the Bylaws shall be sufficient
if mailed to their respective addresses on file with CMIA.
Notices to CMIA shall be sufficient if mailed t.o the address
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of the principal executive office of CMIA, addressed to the
General Manager.
ARTICLE XXVIII
PROHIBITION AGAINST ASSIGNMENT
No Member Entity may assign any right, claim, or
interest it may have under this Agreement, and 130 creditor,
assignee or third party beneficiary of any Member Entity
shall have any right, claim or title to any part, share,
interest, fund, premium or asset of CMIA.
ARTICLE XXIX
AMENDMENTS
This Agreement may be amended by a two-thirds vote
of the Board at any duly convened regular or special
meeting; provided that, any such amendment has been sub-
mitted to the directors and the Member Entities; at least
thirty (30) days in advance of such meeting. Any such
amendment shall become effective immediately, unless
otherwise stated therein.
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*<-* ,
ARTICLE XXX
SEVERABILITY
Should any portion, term, condition or provision
of this Agreement be decided by a court of competent juris-
diction to be illegal or 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 XXXI
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, except as
noted with respect to the Bylaws, Participation Agreements,
and Memorandums of Coverage. If any provision lof this
Agreement conflicts with a provision of the Bylaws, a
Participation Agreement, a Memorandum of Coverage or other
document, such conflicting provisions shall be interpreted
to avoid any such conflict, but this Agreement shall govern.
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ARTICLE XXXII
FILING WITH SECRETARY OF STATE
A notice of this Agreement and any amendments
thereto shall be prepared and filed with the California
Secretary of State within thirty (30) days of the effective
date of this Agreement or any amendment. The notice shall
contain the name of each public agency which is a party to
the Agreement, the date upon which the Agreement became
effective, a statement of purpose of the Agreement or the
power to be exercised, and a description of the amendment or
amendments made to the Agreement, if any.
In witness whereof, the authorized officials of
the parties hereto have executed this Agreement as of the
date indicated below.
7
f icial)
Claude A. Lewis, Mayor
Date: December 4, 1990
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.h.* .
APPENDIX "A"
LIST OF MEMBER ENTITIES
City of Alturas
City of Avalon
City of Blue Lake
City of Calistoga
City of Clearlake
City of Coalinga
City of Ferndale
City of Grass Valley
City of Highland
City of Nevada City
City of Pacific Grove
City of Placentia
City of Placerville
City of Point Arena
City of Rancho Cucamonga
City of Rialto
City of Ridgecrest
City of Rio Dell
City of South Lake Tahoe
City of Tehama
City of Trinidad
City of Twentynine Palms
City of Wheatland
"*
ncrrnn 7 A