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16-0720_CALIFORNIA JPIA_Memo from CJPIACALIFORNIA JPIA MEMORANDUM To: Member Agency Clerk From: Jonathan Shull, Chief Executive Officer x Date: August 8 2016 g Subject: Amendments to the Joint Powers Agreement and Bylaws rye C rl ra At its meeting of July 20, 2016, the Board of Directors voted to adopt changes to the Joint Powers Agreement of the California JPIA as recommended by the Executive Committee. Additionally the board voted to ratify the amendments to the Bylaws as approved by the Executive Committee at its meeting on June 22, 2016. As the record keeper for your agency a copy of each document is enclosed. Electronic copies can also be found on our website at www.cil)ia.org. The amendments to both the Joint Powers Agreement and Bylaws fall within three major categories: 1) clean up and housekeeping; 2) clarity, consistency, and modernization; and 3) policy. Below are the outlined changes for each document. Joint Powers Agreement Cleanup and Housekeeping • Throughout the document, numerous formatting issues are addressed including insertion or removal of spaces, letters, or words, and minor typographical errors are corrected. • Grammar errors are corrected. Notably, the word "that" replaces the word "which" in sentences where the clause introduced was necessary to ensure clarity of the sentence (restrictive clause). Dates are revised to reflect the current consideration. Clarity, Consistency, and Modernization • Full names of Committees are used where there may be some ambiguity. • Some terms are changed to reflect current usage within the organization, such as replacing "deposit" with "contribution" and "coverage" with "protection." • Current terminology is inserted into the discussion of what financial information is provided to the Membership as part of the annual report. • The term "Alternate" is made a defined term. Amendments to the Joint Powers Agreement and Bylaws August 8, 2016 Page 2 • "Alternates" is added to Article 9 to reflect their role at a meeting of the Board if the Board Member is not present. • Article 19 is revised to reflect that insurance may be used in addition to a fidelity bond for personnel responsible for handling funds. Policy • Article 10 is revised to remove reference to any Past President Ex Officio Executive Committee Member. This reference seems unnecessary, as there has not been a Past President Ex Officio Executive Committee Member eligible to serve in the capacity for over 25 years. • Article 14 is revised to address succession planning for the Officers of the Authority to create a clear path by which the Vice President ascends to the position of President if he or she is no longer able to serve. The new provision also provides for the Executive Committee to appoint one of its own to the position of Vice President if that position becomes vacant. • Article 17 is revised to explicitly recognize that financial arrangements may be used to allow one program to provide monetary support to another on an interim basis. This authority already exists within the Joint Powers Agreement, but this revision explicitly identifies it. • Article 20, Section (d) is revised to explicitly recognize that the Authority may make loans to Members for loss control purposes. • Article 22 is reformatted and amended to establish a provisional membership status for new Members during their first five years of membership. o Applies only to Members joining after July 1, 2016. o Would allow for a rebasing of the contribution rate if experience of the provisional Member is materially different from what was used in underwriting. o Would allow the Authority to cancel a provisional Member without going through the Performance Improvement Plan process if the Member is demonstrating an unwillingness to operate under the Authority's rules and procedures. o Provides a provisional Member the ability to appeal the decision to terminate the membership. o Precludes a terminated or withdrawn provisional Member from receiving any sort of dividend or distribution at any time. Article 30, Section (e) is added to reiterate that provisional Members that do not complete five years of membership are not entitled to a distribution of assets upon termination of the Joint Powers Agreement. Article 24 is revised to provide that a Member joining the Authority or any of its programs is committed for three years. This is a return to the provision as it existed until it was amended in 2008. The purpose of the current revision is to ensure that Members do not "jump in and out" of the Authority or its programs. Stability of membership in the programs is important to their- success. Amendments to the Joint Powers Agreement and Bylaws August 8, 2016 Page 3 Bylaws Cleanup and Housekeeping • Throughout the document, numerous formatting issues were addressed including insertion or removal of spaces, letters, or words, and minor typographical errors were corrected. • Grammar errors were corrected. Notably, the word "that" replaces the word "which" in sentences where the clause introduced was necessary to ensure clarity of the sentence (restrictive clause). • Dates were revised to reflect the current consideration. Clarity, Consistency, and Modernization • In Article III, Section 8, Article IV, Section 2, and Article VI, Section 5, the name of the Committee being discussed was added to improve clarity. • Article III, Section 3, addresses vacancies on the Executive Committee, including those created by resignation, and how the vacancies may be filled. Article III, Section 4, previously indicated a process that was inconsistent with Section 3 for use when an Executive Committee member resigned. Section 4 was amended to remove the inconsistent process. • Article VI, Section 8 and Article VII, Section 2 were revised to modernize language to reflect current usage and technology. Policy • Article III, Section 2 was revised to remove reference to the Immediate Past President as an ex officio member of the Executive Committee. This reference seemed unnecessary, as there has not been an Immediate Past President eligible to serve in the capacity for over 25 years. Enclosures Joint Powers Agreement Bylaws