16-0720_CALIFORNIA JPIA_Amd Joint Powers AgreementJoint Powers Agreement
California Joint Powers Insurance Authority
Amended July 20, 2016
CALIFORNIA
Providing Innovative Risk 1'+ anagenictit Solutions For Our Public Agency Partners j - P ' I ' A
TABLE OF CONTENTS
ARTICLE 1 - DEFINITIONS.................................................................................................................................... 2
ARTICLE2 - PURPOSES.........................................................................................................................................
3
ARTICLE 3 - PARTIES TO AGREEMENT...........................................................................................................
3
ARTICLE 4 - TERM OF AGREEMENT................................................................................................................
4
ARTICLE 5 - CREATION OF AUTHORITY........................................................................................................
4
ARTICLE 6 - POWERS OF AUTHORITY.............................................................................................................
4
ARTICLE7 - BOARD OF DIRECTORS................................................................................................................
5
ARTICLE 8 - POWERS OF THE BOARD OF DIRECTORS..............................................................................
5
ARTICLE 9 - MEETINGS OF THE BOARD OF DIRECTORS..........................................................................
6
ARTICLE 10 - EXECUTIVE COMMITTEE..........................................................................................................
6
ARTICLE 11 - POWERS OF THE EXECUTIVE COMMITTEE........................................................................
6
ARTICLE 12 - MEETINGS OF THE EXECUTIVE COMMITTEE...................................................................
7
ARTICLE 13 - CLAIMS COMMITTEE.................................................................................................................
8
ARTICLE 14 - OFFICERS OF THE AUTHORITY..............................................................................................
8
ARTICLE 15 - ADVISORY COMMITTEES..........................................................................................................
9
ARTICLE16 - COVERAGE.....................................................................................................................................
9
ARTICLE 17 - DEVELOPMENT OF THE JOINT PROTECTION PROGRAMS ............................................
9
ARTICLE 18 - ACCOUNTS AND RECORDS.................................................................................................._...10
ARTICLE 19 - RESPONSIBILITY FOR MONIES...............................................................................................11
ARTICLE 20 - RESPONSIBILITIES OF THE AUTHORITY............................................................................11
ARTICLE 21 - RESPONSIBILITIES OF MEMBERS.........................................................................................12
ARTICLE 22 - NEW MEMBERS............................................................................................................................13
ARTICLE 23 - PROGRAM PARTICIPATION.....................................................................................................14
ARTICLE 24 - WITHDRAWAL........................................................,...................... ...........15
ARTICLE 25 - EFFECT OF WITHDRAWAL......................................................................................................15
ARTICLE 26 - CANCELLATION OF PROGRAM PARTICIPATION.............................................................16
ARTICLE 27 - CANCELLATION OF MEMBERSHIP.......................................................................................16
ARTICLE 28 - CANCELLATION FOR NON-PAYMENT..................................................................................16
ARTICLE 29 - ATTORNEY FEES AND COSTS OF COLLECTION...............................................................17
ARTICLE 30 - TERMINATION AND DISTRIBUTION......................................................................................17
ARTICLE 31 - PROVISION FOR BYLAWS.........................................................................................................18
ARTICLE32 - NOTICES.........................................................................................................................................18
ARTICLE 33 - PROVISION FOR MAILED BALLOTS.....................................................................................18
ARTICLE34 - AMENDMENT................................................................................................................................19
ARTICLE 35 - PROHIBITION AGAINST ASSIGNMENT.................................................................................19
ARTICLE 36 - AGREEMENT COMPLETE.........................................................................................................19
JOINT POWERS AGREEMENT
CREATING THE CALIFORNIA
JOINT POWERS INSURANCE AUTHORITY
THIS AGREEMENT is made and entered into by and among the public entities
organized and existing under the Constitution or laws of the State of California, hereinafter
collectively referred to as "Members" and individually as "Member," that are parties signatory to
this Agreement. Said Members are sometimes referred to herein as "parties."
RECITALS:
WHEREAS, California Government Code Section 6500 et seq. provides that two or more
public agencies may by agreement jointly exercise any power common to the contracting parties;
and
WHEREAS, California Government Code Section 990.4 provides that a local public
entity may self -insure, purchase insurance through an authorized carrier, or purchase insurance
through a surplus line broker, or any combination of these; and
WHEREAS, California Government Code Section 990.8 provides that two or more local
public entities may, 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
WHEREAS, each of the parties to this Agreement desires to join together with the other
parties for the purpose of pooling their self-insured losses and jointly purchasing excess
insurance and administrative services in connection with one or more joint protection programs
for said parties; and
WHEREAS, it appears economically feasible and practical for the parties to this
Agreement to do so;
NOW, THEREFORE, for and in consideration of all of the mutual benefits, covenants
and agreements contained herein, the parties hereto agree as follows:
Joint Powers Agreement Page 1 of 19 Amended July 20, 2016
ARTICLE I - DEFINITIONS
The following definitions shall apply to the provisions of this Agreement:
(a) "Advisory Committee" shall mean the Managers Committee, Finance Officers
Committee, and any other committee created by the Board of Directors or Executive Committee
for the purpose of providing specialized advice to the Board of Directors or Executive
Committee on the subject matter brought before it.
(b) "Alternate" shall mean that person or persons selected by the legislative body of
each Member to represent the Member at the Board of Directors meeting in the absence of the
Director, pursuant to Article 7 of this Agreement.
(c) "Authority" shall mean the California Joint Powers Insurance Authority created
by this Agreement.
(d) "Board of Directors" or "Board" shall mean the governing body of the Authority.
(e) "Chief Executive Officer" shall mean that employee of the Authority who is
appointed by the Executive Committee, and is granted authority and responsibility for the
management and administration of the Authority and its joint protection programs.
(f) "Claims" shall mean demands made against the Authority, a Member, or
Members arising out of occurrences that are within an Authority joint protection program as
developed by the Executive Committee.
(g) "Contribution" shall mean an amount determined by the Executive Committee
that is to be paid by the Member as its established share of funding required to cover the
financial obligations of each joint protection program in which the member participates.
(h) "Director" shall mean that person selected by and from the legislative body of
each Member to represent the Member on the Board of Directors pursuant to Article 7 of this
Agreement.
(i) "Executive Committee" shall mean the Executive Committee of the Board of
Directors of the Authority.
0) "Finance Officers Committee" shall mean the committee of the Authority
composed of the Finance Directors or chief finance officers of the Members by whatever title
locally designated.
(k) "Fiscal Year" shall mean that period of twelve months that is established as the
fiscal year of the Authority.
Joint Powers Agreement Page 2 of 19 Amended July 20, 2016
(1) "Insurance" shall mean and include pooled self-insurance through a funded
program and/or any commercial insurance, excess insurance, or re -insurance contract purchased
on behalf of the Authority to protect the funds of the Authority against catastrophes or an
unusual frequency of losses during a specific protection period.
(m) "Managers Committee" shall mean the committee of the Authority composed of
the City Managers, City Administrators, or chief executive officers of the Members by whatever
title locally designated.
(n) "Secretary" shall mean the person selected by the Executive Committee from
among its members to serve as Secretary of the Authority.
(o) "Treasurer" shall mean the person selected by the Executive Committee to serve
as Treasurer of the Authority.
ARTICLE 2 - PURPOSES
This agreement is entered into by the Members pursuant to the provisions of California
Government Code Sections 990, 990.4, 990.8, and 6500 et seq. in order to provide more
comprehensive and economical protection from financial loss, to reduce the amount and
frequency of their losses, and to decrease the cost incurred in the handling and litigation of
claims. This purpose shall be accomplished through the exercise of the powers of the Members
jointly in the creation of a separate entity, the California Joint Powers Insurance Authority (the
Authority), to administer joint protection programs wherein Members will pool their losses and
claims, jointly purchase insurance and administrative and other services, including claims
adjusting, data processing, risk management consulting, loss prevention, training, legal, and
related services.
It is also the purpose of this Agreement to provide, to the extent permitted by law, for the
inclusion at a subsequent date of such additional public entities organized and existing under the
Constitution or laws of the State of California as may desire to become parties to this Agreement.
ARTICLE 3 - PARTIES TO AGREEMENT
Each party to this Agreement certifies that it intends to and does contract with all other
parties who are signatories of this Agreement and, in addition, with such other parties as may
later be added as parties to and signatories of this Agreement pursuant to Article 22. Each party
Joint Powers Agreement Page 3 of 19 Amended July 20, 2016
to this Agreement also certifies that the deletion of any party from this Agreement, pursuant to
Articles 24, 26, 27, or 28 shall not affect this Agreement nor such party's intent to contract as
described above with the other parties to the Agreement then remaining.
ARTICLE 4 - TERM OF AGREEMENT
This Agreement became effective on June 29, 1977, and shall continue until and unless
terminated as hereinafter provided.
ARTICLE 5 - CREATION OF AUTHORITY
Pursuant to Section 6500 et seq. of the California Government Code, there is hereby
created a public entity separate and apart from the parties hereto, to be known as the California
Joint Powers Insurance Authority. Pursuant to Government Code Section 6508. 1, the debts,
liabilities and obligations of the Authority shall not constitute debts, liabilities or obligations of
any party to this Agreement.
ARTICLE 6 - POWERS OF AUTHORITY
(a) The Authority shall have the powers common to its Members and is hereby
authorized to do all acts necessary for the exercise of said common powers, including, but not
limited to, any or all of the following:
To make and enter into contracts;
2. To incur debts, liabilities or obligations;
To acquire, hold or dispose of property, contributions and donations of
property, funds, services and other forms of assistance from persons,
firms, corporations and governmental entities;
4. To sue and be sued in its own name; and
5. To exercise all powers necessary and proper to carry out the terms and
provisions of this Agreement, or otherwise authorized by law.
(b) Said powers shall be exercised pursuant to the terms hereof and in the manner
provided by law and are subject to the restrictions upon the manner of exercising the powers of
the City of Lakewood.
Joint Powers Agreement Page 4 of 19 Amended July 20, 2016
ARTICLE 7 - BOARD OF DIRECTORS
(a) The Authority shall be governed by the Board of Directors that is hereby
established and that shall be composed of one representative Director from each Member, who
shall be selected from the legislative body of that Member by the process chosen by the Member.
(b) Each legislative body, in addition to appointing its Director of the Board, shall
appoint at least one alternate who shall be an officer or employee of the Member. The alternate
shall have the authority to attend, participate in, and vote at any meeting of the Board when the
regular Director for whom he or she is an alternate is absent from said meeting.
ARTICLE 8 - POWERS OF THE BOARD OF DIRECTORS
The Board of Directors of the Authority shall have the following powers and functions:
(a) The Board shall elect from its members pursuant to Article 10 of this Agreement
an Executive Committee, to which it may give authority to make and implement any decisions,
including those involving the administration of the Authority, except those decisions that would
require an amendment of this Agreement, under Article 34 herein.
(b) The Board may review all acts of the Executive Committee, including
development of the memoranda of coverage and the operating budget, and shall have the power
to modify and/or override any decision or action of the Executive Committee upon a majority
vote of a quorum of the Board of Directors.
(c) The Board shall receive and review periodic accountings of all funds under
Articles 18 and 19 of this Agreement.
(d) The Board shall have the power to conduct on behalf of the Authority all business
of the Authority, including that assigned to the Executive Committee, that the Authority may
conduct under the provisions hereof and pursuant to law.
(e) The Board shall have such other powers and functions as are provided for in this
Agreement.
(f) The Board shall not have the power to overturn the decisions of the Claims
Committee in regard to the settlement of claims.
Joint Powers Agreement Page 5 of 19 Amended July 20, 2016
ARTICLE 9 - MEETINGS OF THE BOARD OF DIRECTORS
(a) Meetings. The Board shall provide for its regular, adjourned regular, and special
meetings; provided, however, that it shall hold at least one regular meeting annually at a time and
place determined by the Executive Committee.
(b) Minutes. The Secretary of the Authority shall cause minutes of regular, adjourned
regular, and special meetings to be kept and shall, as soon as possible after each meeting, cause a
copy of the minutes to be forwarded to each member of the Board.
(c) Quorum. A majority of the Directors or Alternates of the Board shall constitute a
quorum for the transaction of business, except that less than a quorum may adjourn from time to
time. A vote of the majority of those Directors or Alternates present at a meeting shall be
sufficient to constitute action by the Board.
(d) Compliance with the Brown Act. All meetings of the Board, including, without
limitation, regular, adjourned regular, and special meetings, shall be called, noticed, held, and
conducted in accordance with the provisions of the Ralph M. Brown Act, California Government
Code Section 54950 et seq.
ARTICLE 10 - EXECUTIVE COMMITTEE
There shall be an Executive Committee of the Board of Directors that shall consist of
nine (9) members. Two of the members of the Executive Committee shall be the President and
Vice President of the Board of Directors. The other members of the Executive Committee shall
be elected by the Board of Directors at the Annual Meeting for the terms provided in the Bylaws.
The President of the Authority, or the Vice President in his or her absence, shall serve as the
Chairperson of the Executive Committee.
ARTICLE 11 - POWERS OF THE EXECUTIVE COMMITTEE
The Executive Committee of the Board of Directors shall have the following powers:
(a) The Executive Committee shall determine and select joint protection programs for
the Authority including adoption of language of the Memoranda of Coverage and any limitations
or endorsements to such Memoranda.
(b) The Executive Committee shall determine and select all insurance necessary to
carry out the joint protection programs of the Authority.
Joint Powers Agreement Page 6 of 19 Amended July 20, 2016
(c) The Executive Committee shall have the authority to approve membership in the
Authority and Member participation in one or more joint protection programs in accordance with
Articles 22 and 23.
(d) The Executive Committee shall have the authority to cancel Member participation
in one or more joint protection programs in accordance with Articles 26 and 28.
(e) The Executive Committee shall adopt the operating budget of the Authority.
(f) The Executive Committee shall have authority to contract for or develop various
services for the Authority, including, but not limited to, claims adjusting, loss control, and risk
management consulting services.
(g) The Executive Committee shall receive and act upon reports of the Advisory
Committees and the Chief Executive Officer.
(h) The Executive Committee shall appoint the Treasurer and Chief Executive Officer
of the Authority.
(i) The Executive Committee shall have the power to hire such persons as the
Executive Committee deems necessary for the administration of the Authority.
0) The Executive Committee shall have the general supervisory and policy control
over the day-to-day decisions and administrative activities of the Chief Executive Officer of the
Authority.
(k) The Executive Committee shall have such other powers and functions as are
provided for in this Agreement or as delegated by the Board of Directors, including the power to
create committees it deems necessary.
ARTICLE 12 - MEETINGS OF THE EXECUTIVE COMMITTEE
The meetings of the Executive Committee shall be held and conducted in the same
manner as the meetings of the Board of Directors, provided for in Article 9 of this Agreement.
In addition, the Committee shall make periodic reports to the Board of Directors, advising the
Board of its decisions and activities concerning the implementation of the joint protection
programs of the Authority.
Joint Powers Agreement Page 7 of 19 Amended July 20, 2016
ARTICLE 13 - CLAIMS COMMITTEE
The Executive Committee members, together with the Chairs of the Managers Committee
and the Finance Officers Committee, shall sit as the Claims Committee of the Authority. The
Claims Committee shall have authority to make all determinations regarding defense, indemnity,
and settlement of claims under the Memoranda of Coverage. Decisions of the Claims
Committee regarding settlement of claims shall be final and not subject to further review.
Decisions regarding coverage for defense or indemnity of claims shall be final, but subject to the
Member's appeal rights as detailed in the applicable Memorandum of Coverage.
ARTICLE 14 - OFFICERS OF THE AUTHORITY
(a) President and Vice President. The Board shall elect a President and Vice
President of the Authority, each to hold office for a two-year term, except as hereinafter
provided, and until a successor is elected. The election of the President and Vice President shall
be on alternate years. In the event the President so elected ceases to be a member of the Board,
or for other reasons is unable to serve, the Vice President shall assume the position of President
and serve the remainder of the prior President's unexpired term. In the event the Vice President
so elected ceases to be a member of the Board, or for other reasons is unable to serve, the
Executive Committee shall select from among its membership a new Vice President who shall
serve the remainder of the unexpired term.
(b) Chief Executive Officer. The Chief Executive Officer shall be authorized and
responsible for the overall management and administration of the Authority and its joint
protection programs and shall select and appoint all employees.
(c) Secretary. The Secretary shall be responsible for all minutes, notices and records
of the Authority and shall perform such other duties as may be assigned by the Executive
Committee.
(d) Treasurer. The duties of the Treasurer are set forth in Articles 18 and 19 of this
Agreement.
(e) Attorney. The Executive Committee shall select an attorney for the Authority.
The attorney shall serve at the pleasure of the Executive Committee.
(f) The Executive Committee shall have the power to appoint such other officers as
may be necessary in order to carry out the purposes of this Agreement.
Joint Powers Agreement Page 8 of 19 Amended July 20, 2016
ARTICLE 15 - ADVISORY COMMITTEES
The Board of Directors or Executive Committee may establish Advisory Committees as deemed
necessary. Such Committees shall meet from time to time as deemed necessary by them, and
shall make recommendations to the Executive Committee based upon their expertise.
ARTICLE 16 - COVERAGE
(a) The coverage provided for Members through the Authority's joint protection
programs may include protection for Personal Injury, Errors and Omissions, Contractual and
Comprehensive Liability, Workers' Compensation and such other areas of coverage as the
Executive Committee may determine. Such coverage may be through insurance as defined in
Article 1.
(b) The Authority shall maintain limits of coverage for Members determined by the
Executive Committee to be adequate. The Executive Committee may arrange for a group policy
to be issued for Members interested in obtaining additional coverage above the limits of
coverage at an additional cost to those participating Members.
(c) The Executive Committee shall arrange for the purchase of insurance it deems
necessary to protect the funds of the Authority against catastrophes. The Executive Committee
shall have the authority to discontinue purchase of this insurance, if at a future time the
Executive Committee determines that it is no longer needed to protect the Authority's funds.
ARTICLE 17 - DEVELOPMENT OF THE JOINT PROTECTION PROGRAMS
(a) The joint protection programs provided by the Authority shall extend to agencies
or authorities as determined in the Memorandum of Coverage of each program.
(b) The cost allocation formula for each joint protection program shall be adopted by
the Executive Committee.
(c) The contribution for each Member's participation in a joint protection program
shall be determined by the Executive Committee.
(d) The cost allocation formula adopted by the Executive Committee for each joint
protection program may provide for retrospective adjustments, and each Member shall pay any
additional contribution required by such retrospective adjustment.
Joint Powers Agreement Page 9 of 19 Amended July 20, 2016
(e) The Executive Committee may provide for payment of a portion of such
contributions to be made over a period of time on terms set by the Executive Committee.
(f) The Executive Committee may expand the Authority's offerings of joint
protection programs to make available for Members' protection in addition to that which is
provided for in this Agreement.
(g) Contributions held by the Authority for each joint protection program shall be
accounted for separately, so that only Members participating in the program will share in pooled
losses and expenses of that program. This separate accounting shall not prohibit the Authority
from commingling contributions for purposes of investment, nor from paying losses or expenses
when due from all available funds. As deemed appropriate, the Executive Committee may
provide for inter -program transfers in the forms of loans, letters of credit, or other financial
arrangements that stipulate that the lending program will be made whole by the borrowing
program through the timely repayment of principal and compensation for the value of lost
investment earnings during the financing period.
ARTICLE 18 - ACCOUNTS AND RECORDS
(a) Budget. The Authority shall adopt an operating budget, pursuant to Article 11(e)
of this Agreement.
(b) Funds and Accounts. The Treasurer of the Authority shall establish and maintain
such funds and accounts as may be required by good accounting practice or by the Executive
Committee. Books and records of the Authority in the hands of the Treasurer shall be open to
any inspection at all reasonable times by representatives of a Member.
(c) Treasurer's Report. The Treasurer, within 270 days after the close of each fiscal
year, shall give a complete written report of all financial activities for such fiscal year to the
Board and to each Member.
(d) Annual Audit. The Executive Committee shall provide for a certified, annual
audit of the accounts and records of the Authority. The audit shall conform to generally accepted
auditing standards. When such an audit of the accounts and records is made by a Certified
Public Accountant, a report thereof shall be filed as a public record with each of the Members.
Such report shall be filed within nine months of the end of the year under examination.
Joint Powers Agreement Page 10 of 19 Amended July 20, 2016
(e) Costs. Any costs of the audit, including contracts with, or employment of,
Certified Public Accountants, in making an audit pursuant to this Article, shall be borne by the
Authority and shall be considered included within the term "administrative costs."
ARTICLE 19 - RESPONSIBILITY FOR MONIES
(a) The Treasurer of the Authority shall have the custody of and disburse the
Authority's funds. He or she shall have the authority to delegate the signatory function of
Treasurer to such persons as are authorized by the Executive Committee.
(b) A bond or other insurance protection providing coverage for embezzlement or
other criminal acts in an amount determined by the Executive Committee to be adequate shall be
required of all officers and personnel authorized to disburse funds of the Authority. The cost of
such bond or insurance protection shall be paid for by the Authority.
(c) The Treasurer of the Authority shall perform the duties described in California
Government Code Sections 6505.5 and 6505.6 pertaining to the receipt, safekeeping, payment,
and reporting of Authority funds.
ARTICLE 20 - RESPONSIBILITIES OF THE AUTHORITY
The Authority shall perform the following functions in discharging its responsibilities
under this Agreement:
(a) Provide loss protection as necessary, through various means including but not
limited to insurance or other financial risk transfer, by negotiation or bid and purchase.
(b) Assist Members in obtaining coverage for risks not included within the joint
protection programs of the Authority.
(c) Assist each Member's assigned risk manager with the implementation of that
function within the Member.
(d) Provide loss prevention and safety and consulting services to Members as
required, which may include programs for grants or loans to Members for loss prevention or
safety purposes.
(e) Provide claims adjusting and subrogation services for claims covered by the
Authority's joint protection programs.
Joint Powers Agreement Page 11 of 19 Amended July 20, 2016
(f) Provide loss control and analysis by the use of statistical analysis, data processing,
and record and file keeping services, in order to identify high exposure operations and to
evaluate proper levels of self -retention and deductibles.
(g) Provide contract review when requested by Members to determine sufficiency of
indemnity and insurance provisions.
(h) Conduct risk management evaluations of each Member to encourage
implementation of best risk management practices.
(i) The Authority shall have standing and shall pursue recovery in its own name or in
the name of a Member for losses covered by a joint protection program. Such recovery may be
through subrogation, cross complaint, or salvage, as appropriate.
0) The Authority shall have such other responsibilities as deemed necessary by the
Board of Directors or Executive Committee in order to carry out the purposes of this Agreement.
ARTICLE 21 - RESPONSIBILITIES OF MEMBERS
Members shall have the following responsibilities:
(a) The legislative body of each Member shall appoint a representative and at least
one alternate representative to the Board of Directors, pursuant to Article 7 of this Agreement.
(b) Each Member shall appoint an employee to be responsible for the risk
management function of that Member, and to serve as a liaison between the Member and the
Authority as to risk management.
(c) Each Member shall maintain an active safety officer and/or committee, and shall
consider all recommendations of the Authority concerning unsafe practices or exposures.
(d) Each Member shall pay its contribution and any retrospective adjustment
promptly to the Authority when due. After withdrawal or termination, each Member shall pay
promptly to the Authority its share of any additional contribution, when and if required of it by
the Executive Committee under Articles 24, 25, 26, 27, and 28 of this Agreement.
(e) Each Member shall report all claims to the Authority in accordance with the
policies and procedures governing the joint protection program to which the claim applies.
(f) Each Member shall provide the Authority with such other information or
assistance as may be necessary for the Authority to carry out the joint protection programs under
this Agreement.
Joint Powers Agreement Page 12 of 19 Amended July 20, 2016
(g) Each Member shall cooperate with and assist the Authority in the pursuit of
recoveries for losses covered by a joint protection program, including assigning its right to
recover subrogated amounts, and if necessary, executing a written agreement to effect such
assignment.
(h) Each Member shall in any and all ways cooperate with and assist the Authority,
and any insurer of a joint protection program, in all matters relating to this Agreement and
covered losses, and will comply with all bylaws, rules and regulations adopted by the Board of
Directors and Executive Committee.
(i) Each Member shall actively participate in the Authority's Risk Management
Evaluation and Loss Control Action Plan (LossCAP) programs.
ARTICLE 22 - NEW MEMBERS
The Authority shall allow entry of new Members approved by the Executive Committee.
(a) Executive Committee approval for new Members shall be according to the
following procedure:
1. Investigation of each potential member by Authority staff and preparation
of a report;
2. Review of the report by the Underwriting Committee, which shall then be
forwarded to all Directors for review and comment;
Review by the Directors and submittal of comments to the Chief
Executive Officer during the comment period; and
4. Approval by a two-thirds vote of the Executive Committee.
(b) Membership is effective immediately upon approval by the Executive Committee
and execution of this Agreement by the new Member to join the Authority.
(c) A Member entering under this Article may be required to pay its share of
organization expenses as determined by the Executive Committee including those necessary to
analyze its loss data and determine its contributions.
(d) Should the Board of Directors rescind the membership approval made by the
Executive Committee pursuant to Article 8(b), the Member shall be given at least ninety days
advance notice of the effective date of termination of Membership, and the Member shall be
Joint Powers Agreement Page 13 of 19 Amended July 20, 2016
treated as if it had withdrawn on the effective date, and shall have the same responsibilities as if
the Member had voluntarily withdrawn on the effective date.
(e) New Members, accepted into membership after July 1, 2016, shall have
provisional membership status throughout the initial five years of membership. During the
provisional membership period:
The Authority reserves the right to retrospectively adjust the cost of
coverage for provisional Members based on actual claims development, in
the event that it varies materially from claims data provided to the
Authority at the time of the initial underwriting; and
2. The Authority reserves the right to terminate membership of any
provisional Member at the end of a protection period, with or without
cause, by a two-thirds vote of the Executive Committee, provided the
Executive Committee gives the provisional Member at least ninety days
advance notice of the effective date of the termination of membership.
A provisional Member subject to termination under Paragraph 2, above,
may appeal said termination to a panel of five chief executives randomly
selected from the other Members.
(f) If a provisional Member does not complete five successive years of membership
in good standing, due to withdrawal or termination, that provisional Member is not eligible to
receive in any refunds, dividends, or equity distributions that may occur during the provisional
membership period or at any time thereafter.
ARTICLE 23 - PROGRAM PARTICIPATION
The Authority shall allow for the participation of Members in the joint protection
programs as approved by the Executive Committee.
(a) Executive Committee approval for new Members shall be according to the
following procedure:
1.
2.
Investigation of a potential participant by Authority staff and preparation
of a report;
Consideration of the report by the Underwriting Committee with a
recommendation to the Executive Committee; and
Joint Powers Agreement Page 14 of 19 Amended July 20, 2016
3. Approval by a two-thirds vote of the Executive Committee,
(b) Program participation is effective immediately upon approval by the Executive
Committee and execution of appropriate resolutions and/or other documents by the new
participant allowing participation in the joint protection program.
(c) A Member entering into a joint protection program may be required to pay its
share of program development expenses as determined by the Executive Committee including
those necessary to analyze its loss data and determine its contributions.
(d) Should the Board of Directors rescind the program participation approval made
by the Executive Committee pursuant to Article 8(b), the Member shall be given at least ninety
days advance notice of the effective date of termination of program participation, and the
Member shall be treated as if it had withdrawn on the effective date, and shall have the same
responsibilities as if the Member had voluntarily withdrawn on the effective date.
ARTICLE 24 - WITHDRAWAL
(a) A Member that enters into this Agreement may not withdraw as a party to this
Agreement and as a Member of the Authority for a three-year period commencing on the
effective date of its membership.
(b) A Member that enters into a joint protection program may not withdraw as a
participant in that program for a three-year period commencing on the effective date of its
participation in the joint protection program.
(c) After the initial three-year non -cancellable commitment to membership in the
Authority or participation in a joint protection program, a Member may withdraw only at the end
of any protection period, provided it has given the Authority a twelve-month written notice of its
intent to withdraw from this Agreement and/or any joint protection programs in which it
participates.
ARTICLE 25 - EFFECT OF WITHDRAWAL
(a) The withdrawal of any Member from this Agreement shall not terminate the
Agreement, and no Member by withdrawing shall be entitled to payment or return of any
deposits, contributions, consideration or property paid, or donated by the Member to the
Authority, or to any distribution of assets.
Joint Powers Agreement Page 15 of 19 Amended July 20, 2016
(b) The withdrawal of any Member from participation in a joint protection program
shall not terminate the Member's responsibility to contribute its share of contributions or funds
to the program until all claims, or other unpaid liabilities, covering the period the Member was
signatory hereto have been finally resolved and a determination of the final amount of payments
due from the Member or credits to the Member for the period of its participation has been made
by the Executive Committee. In connection with this determination, the Executive Committee
may exercise similar powers to those provided for in the Article 30(c) of this Agreement.
ARTICLE 26 - CANCELLATION OF PROGRAM PARTICIPATION
The Executive Committee shall have the right to cancel any Member's participation in one or
more joint protection programs upon the recommendation of the Chief Executive Officer and in
accordance with the Healthy Members Practices and Procedures protocol. Any Member so
cancelled shall on the effective date of the cancellation be treated the same and shall have the
same responsibilities as if the Member had voluntarily withdrawn from the joint protection
program.
ARTICLE 27 - CANCELLATION OF MEMBERSHIP
The Board of Directors shall have the right to cancel the membership of any Member
based upon a three-fourths vote of the entire Board of Directors. Any Member so cancelled shall
on the effective date of the cancellation be treated the same as if the Member had voluntarily
withdrawn from membership, and said Member shall have the same responsibilities.
Cancellation, as specified above, shall be within the sole discretion of the Board of Directors and
may occur with or without cause, and the Board's discretion shall not be subject to any further
review or appeal.
ARTICLE 28 - CANCELLATION FOR NON-PAYMENT
In the absence of a payment plan as authorized in Article 17(e), any Member's
participation in a joint protection program may be cancelled automatically in the event of a
failure of the Member to pay any contribution as required in this Agreement. Should any
contribution remain unpaid more than thirty (30) days after receipt of notice by the Member, the
Authority will send a notice advising the Member that it is in default under the terms of this
Agreement, and that the Member's participation will be cancelled within thirty (30) additional
Joint Powers Agreement Page 16 of 19 Amended July 20, 2016
days unless full payment is received. Failure to make full payment as required in the notice of
default shall be considered a withdrawal by the Member from the program effective on the date
of cancellation specified in the notice of default; and no coverage shall apply to any claims
submitted subsequent to the effective date of cancellation that arise from occurrences taking
place during the current protection period. A Member cancelled for non-payment shall remain
liable for a prorated share of the current year's contribution and for all retrospective adjustment
contributions through the date of cancellation and attributable to prior years of coverage in which
it participated.
ARTICLE 29 - ATTORNEY FEES AND COSTS OF COLLECTION
Should any Member or former Member fail to pay any contribution or retrospective
adjustment contribution when due, the Member shall also be liable to the Authority for attorney
fees and costs incurred by the Authority in pursuing collection of such sums.
ARTICLE 30 - TERMINATION AND DISTRIBUTION
(a) This Agreement may be terminated by the written consent of three-fourths of the
Members; provided, however, that this Agreement and the Authority shall continue to exist for
the purpose of disposing of all claims, distribution of assets and all other functions necessary to
wind up the affairs of the Authority.
(b) Upon termination of this Agreement, all assets of the Authority shall be
distributed only among the parties that have been Members of a joint protection program,
including any of those parties that previously withdrew pursuant to Article 24 of this Agreement,
in accordance with and proportionate to their cash (including contributions) payments and
property (at market value when received) contributions made reduced by their share of losses and
expenses paid during the term of this Agreement. The Executive Committee shall determine
such distribution within six months after the last pending claim or loss covered by this
Agreement has been finally disposed of.
(c) The Executive Committee is vested with all powers of the Authority for the
purpose of winding up and dissolving the business affairs of the Authority. These powers shall
include the power to require Members, including those that were Members at the time a claim
arose or at the time a loss was incurred, to pay their share of any additional amount of
Joint Powers Agreement Page 17 of 19 Amended July 20, 2016
contribution deemed necessary by the Executive Committee for final disposition of all claims
and losses covered by this Agreement. A Member's share of such additional contributions shall
be determined on the same basis as that provided for annual contributions in Article 17 of this
Agreement, and shall be treated as if it were the next year's annual contribution for that Member.
(d) In the absence of an Executive Committee, the Secretary shall exercise all powers
and authority under this Article. The decision of the Executive Committee or Secretary under
this Article shall be final.
(e) A provisional Member that does not complete five years of membership pursuant
to Article 22 shall not be entitled to any distribution of assets upon termination of this
Agreement.
ARTICLE 31 - PROVISION FOR BYLAWS
The Board shall cause to be developed Authority Bylaws. Each Member shall receive a
copy of any Bylaws developed under this Article.
ARTICLE 32 - NOTICES
Notices to Members hereunder shall be sufficient if delivered to the administrative office
of the respective Member. Delivery may be by U.S. Mail, email, or other form of notice
acceptable under the Ralph M. Brown Act.
ARTICLE 33 — PROVISION FOR MAILED BALLOTS
Unless specifically prohibited elsewhere within this Agreement or the Bylaws, all actions
contemplated by the Board of Directors may be voted on by mailed ballot as defined in the
Bylaws. This shall not include the election of officers or members of the Executive Committee.
Actions taken by mailed ballot shall require the same percentage of votes cast by the entire
Board of Directors as the percentage that would be required of a quorum voting on an item at a
Board of Directors meeting.
Joint Powers Agreement Page 18 of 19 Amended July 20, 2016
ARTICLE 34 - AMENDMENT
With the exception of Article 27, this agreement may be amended by a two-thirds vote of
the Directors present at a duly held Board of Directors meeting, or by a two-thirds vote of the
entire Board of Directors for an amendment placed before the Membership by mailed ballot.
Amendment to Article 27 shall require a three-fourths vote of the entire Board of Directors,
whether at a meeting or by mailed ballot.
ARTICLE 35 - PROHIBITION AGAINST ASSIGNMENT
With the exception of Article 21 (g), no Member may assign any right, claim or interest it
may have under this Agreement, and no creditor, assignee or third party beneficiary of any
Member shall have any right, claim or title to any part, share, interest, fund, contribution, or asset
of the Authority.
ARTICLE 36 - 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.
IN WITNESS WHEREOF, the parties hereto have first executed this Agreement by
authorized officials thereof on the date indicated below.
Date:
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Joint Powers Agreement Page 19 of 19 Amended July 20, 2016