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1995-075-Sign An Agreement With Local Agency Workers' Compensation Excess Joint Powers Authority For Excess Joint Powers Authority For Excess Workers' Compensation Excess InsuranceRESOLUTION 1995 - 75 RESOLUTION OF THE TOWN OF LOS GATOS AUTHORIZING THE TOWN MANAGER TO SIGN AN AGREEMENT WITH LOCAL AGENCY WORKERS' COMPENSATION EXCESS JOINT POWERS AUTHORITY FOR EXCESS WORKERS' COMPENSATION EXCESS INSURANCE RESLOVED, by the Town Council of the Town of Los Gatos, County of Santa Clara, State of California, that the Town of Los Gatos enter into an agreement (Exhibit A) with Local Agency Workers' Compensation Excess Joint Powers Authority for excess workers' compensation insurance, and that the Town Manager is authorized, and is hereby directed, to execute said contract in the name and in behalf of the Town of Los Gatos. PASSED AND ADOPTED at a regular meeting of the Town Council of the Town of Los Gatos, California, held on the 19th day of June, 1995 by the following vote: COUNCIL MEMBERS: AYES: Randy Attaway, Joanne Benjamin, Steven Blanton, Linda Lubeck, Mayor Patrick O'Laughlin NAYES: None ABSENT: None ABSTAIN: None SIGNED: MAYOR OF THE TOWN F LOS GATOS LOS GATOS, CALIFORNIA ATTEST: i CLERK OF THE TOWN Ot~'ZOS GATOS LOS GATOS, CALIFORNIA JOINT EXERCISE OF POWERS AGREEMENT LOCAL AGENCY WORKERS' COMPENSATION EXCESS JOINT POWERS AUTHORITY TABLE OF CONTENTS JOINT POWERS AGREEMENT 1. Creation of the Joint Powers Entity 2. Functions of the Authority 3. Powers of the Authority 4. Term of the Agreement 5. Governing Documents 6. Organization 7. Membership in the Authority 8. Withdrawal From or Termination of Membership 9. Termination of Agreement 10. Disposition of Property and Funds 11. Amendments 12. Audits and Actuarial Analysis 13. Severability 14. Liability 15. Enforcement 16. Definitions JOINT EXERCISE OF POWERS AGREEMENT TO ESTABLISH, OPERATE, AND MAINTAIN A JOINT PROGRAM FOR WORKERS COMPENSATION EXCESS PROTECTION THIS AGREEMENT is entered into pursuant to the provisions of Title 1, Division 7, Chapter 5, Article 1 (Sections 6500, et seq.) of the California Government Code, relating to the joint exercise of powers, between the agencies signatory hereto, and also those which may hereafter become signatory hereto, for the purpose of operating an agency to be known and designated as Local Agency Workers' Compensation Excess Joint Powers Authority ( "Authority "). WITNESSETH: WHEREAS, it is to the mutual benefit of the parties herein subscribed and in the best public interest of said parties to join together to establish this Joint Powers Agreement to accomplish the purposes hereinafter set forth; and WHEREAS, the development, organization, and implementation of such an Authority is of such magnitude that it is desirable for aforesaid parties to join together in this Joint Powers Agreement in order to accomplish the purposes hereinafter set forth; and WHEREAS, the signatories hereto have determined that there is a need, by agencies, for a joint program for 'Workers' Compensation Excess" protection; and WHEREAS, it has been determined by such signatories that a joint program for "Workers' Compensation Excess" protection is of value on an individual and mutual basis; and WHEREAS, Title 1, Division 7, Chapter 5, Article 1, of the California Government Code authorizes joint exercise by two or more agencies of any power common to them; and WHEREAS, it is the desire of the signatories hereto to jointly provide for a joint program for "Workers' Compensation Excess" protection for their mutual advantage and concern; and WHEREAS, it is the desire of the signatories hereto to study and from time to time to incorporate other forms of risk management into a joint program such as that described herein. LAWCX AGREEMENT (3/19192 ad) June 18, 1992 1 NOW, THEREFORE, FOR AND IN CONSIDERATION OF THE MUTUAL ADVANTAGES TO BE DERIVED THEREFROM, AND IN CONSIDERATION OF THE EXECUTION OF THIS AGREEMENT BY OTHER AGENCIES, each of the parties hereto does agree with each of the other parties as follows: CREATION OF THE JOINT POWERS ENTITY A Joint Powers Entity, separate and apart from the agencies signatory hereto, shall be and is hereby created and shall hereafter be designated as the Local Agency Workers' Compensation Excess Joint Powers Authority ( "Authority "). 2. FUNCTIONS OF THE AUTHORITY A. The Authority is established for the purposes of administering this Agreement, pursuant to the Joint Powers provisions of the California Government Code, and of providing the services and other items necessary and appropriate for the establishment, operation, and maintenance of a joint group program for "Workers' Compensation Excess" to benefit the "Members ", and to provide a forum for discussion, study, development, and implementation of recommendations of mutual interest regarding other joint programs. B. THE FUNCTIONS OF THE AUTHORITY ARE: (1) To provide a joint program and system, as described in this Agreement, the Bylaws, and the Memorandum of Coverage and give to each "Member ", of the Authority, Workers' Compensation Excess ". (2) To perform, or contract for the performance of, the financial administration, policy formulation, claim service, legal representation, safety engineering, and other development as necessary for the payment and handling of all claims against "Members" reimbursable under the "Workers' Compensation "Excess ". (3) To pursue "Member's" right of subrogation against a third party when the Authority decides such action is appropriate. (4) To enter into contracts. (5) To obtain insurance coverage for the "Members" and /or the Authority as determined appropriate by the Board of Directors. (6) To acquire, hold, and dispose of property, real and personal, all for the purpose of providing the membership with the necessary education, study, development, and implementation of a joint program of the "Workers' Compensation Excess" including, but not limited to, the acquisition of facilities and equipment, the employment of personnel, and the operation and maintenance of a system for the handling of the joint program. (7) To incur debts, liabilities, and obligations necessary to accomplish the purposes of this Agreement. (8) To receive gifts, contributions, and donations of property, funds, services, and other forms of assistance from persons, firms, corporations, associations, and any governmental entity. (9) To invest surplus reserve funds as deemed appropriate by the Board of Directors and as subject to law. LAWCX AGREEMENT 13/19/92 ad) June 18. 1992 (10) To provide a forum for discussion, study, development, and implementation of recommendations of mutual interest regarding other joint programs. (11) To establish new programs as deemed appropriate by the Board of Directors. (12) To sue and be sued in the name of the Authority. (13) To perform such other functions as may be necessary or appropriate to carry out this Agreement, so long as such other functions so performed are not prohibited by any provision of law. 3. POWERS OF THE AUTHORITY The Authority shall have the power and authority to exercise any power common to the agencies which are "Parties" to this Agreement, provided that the same are in furtherance of the functions and objectives of this Agreement as herein set forth. Pursuant to Section 6509 of the California Government Code, the exercise of the aforesaid powers of the Authority shall be subject to the restrictions upon the manner of exercising such powers by an agency having the same status as a Member Agency or Joint Powers Authority except as otherwise provided in this Agreement. TERM OF THE AGREEMENT This Agreement shall be effective and binding on any signatory thereto upon execution. This Agreement shall continue in effect until lawfully terminated as provided herein and in the Bylaws. In the event of a reorganization of one or more of the agencies participating in this Agreement, the successor in interest or successors in interest to the obligations of any such reorganized agency may be substituted as a "Party" or as "Parties" to this Agreement, subject to approval by a two-thirds (2/3) weighted vote of the "Parties" to this Agreement. 5. GOVERNING DOCUMENTS A. THE AGREEMENT If there is a conflict between this Agreement and any other document of the Authority, this Agreement shall control over such other document. Such other document shall have the effect as if the provisions in conflict with this Agreement were null and void. B. BYLAWS The Authority shall be governed pursuant to certain Bylaws, a copy of which is attached hereto as Exhibit A and incorporated herein by reference, and by such amendments to the Bylaws as may from time to time be adopted. Wherever in this Agreement "Bylaws" are referred to, said Bylaws shall be those set forth in Exhibit A, as may be amended. Each "Party" to this Agreement agrees to comply with and be bound by the provisions of said Bylaws and further agrees that the Authority shall be operated pursuant to this Agreement and said Bylaws. Procedures for amending the Bylaws shall be as provided in the Bylaws so long as they are not inconsistent with this Agreement. C. MEMORANDUM OF COVERAGE The Authority shall provide coverage according to a Memorandum of Coverage. The Authority and each "Member" shall be bound by the terms and conditions of such Memorandum of Coverage. LAWCX AGREEMENT (3/19/92 ed) June 18. 1992 Each Memorandum of Coverage shall have an effective date and apply as if a new Memorandum were adopted annually, unless otherwise expressly stated. The Memorandum of Coverage may be amended by endorsement. The procedure for such amendment shall be described in the Bylaws. D. OTHER DOCUMENTS The Authority may adopt any other document, such as a claims procedures manual, risk management manual, etc., as may be necessary and proper for the establishment, operation, and maintenance of a joint program of "Workers' Compensation Excess ". Such documents shall be adopted by a two- thirds (2/3) weighted vote of the "Parties" present at a meeting of the Board of Directors. ORGANIZATION A. BOARD OF DIRECTORS (1) A Board of Directors is hereby established to direct and control the Authority. (2) Each "Party" of the Authority shall be entitled to a seat on the Board of Directors and shall appoint to the Board of Directors one (1) representative and one (1) alternate who shall be designated in writing. Said representative and said alternate must be an employee or authorized agent of the "Party" and shall serve at the pleasure of the "Party" by whom appointed. (3) Each "Party" shall be entitled to cast weighted votes allocated by the Authority based upon the total payroll of the members represented. Total payroll shall be the actual ending payroll of the previous fiscal year. Where the "Party" is a Joint Powers Authority, the total payroll shall be the payroll of the participants in the Workers' Compensation program of that Joint Powers Authority. All weighted votes allocated to each "Party" shall be cast together and cannot be split. Weighted votes shall be allocated as follows: (4) PAYROLL (,000) VOTES ALLOCATED $1 $ 35,000 1 $35,001 $ 75,000 2 $75,001 $125,000 3 OVER $125,000 4 Weighted votes may be cast only by a representative or, if the representative is absent, by an alternate designated in writing per paragraph B. Meetings a. The Board of Directors shall hold regular meetings as prescribed in the Bylaws, but in no event shall hold less than two (2) regular meetings a year. b. Other meetings may be held as described in the Bylaws with proper notice given as described in the Bylaws. C. All Board meetings shall be conducted in accordance with the Ralph M. Brown Act (Sections 54950, et. seq.) of the California Government Code and the Roberts Rules of Order. LAWCX AGREEMENT (3/19/92 ed) June 18, 1992 (51 The Board of Directors may delegate any authority which is not reserved exclusively for the Board by this Agreement or the Bylaws. B. EXECUTIVE COMMITTEE An Executive Committee may be formed by the Board of Directors to administer and operate the risk management programs of the Authority. The Committee shall have such authority, except those exclusively reserved to the Board, as necessary and proper for the administration of the programs of the Authority within the policies established by the Board of Directors. C. OTHER COMMITTEES The Board of Directors or the Executive Committee may establish other committees as may be deemed expedient in the establishment or implementation of a program. D. OFFICERS (1) President and Vice President At the first Board of Directors meeting, the Directors shall elect a President and Vice President from among its members as prescribed in the Bylaws. Such President and Vice President shall serve such terms a stated in the Bylaws. Subsequent Presidents and Vice Presidents shall be elected as described in the Bylaws. (2) Other Officers The President shall appoint a Secretary and a Treasurer who shall serve as described in the Bylaws. The Board may create an office as deemed appropriate for the operations of the Authority and the President shall appoint one to serve in such office. (3) Any person elected or appointed as an officer may be removed from such office by a majority of the weighted votes of the Board of Directors. 7. MEMBERSHIP IN THE AUTHORITY A. Each "Party" to this Agreement and any "Members" represented by the "Party" must be an agency permitted to self- insure in the State of California and eligible for membership in the Authority as defined in the Bylaws. Each "Party" becomes a "Member" of the Authority and shall be entitled to the rights and privileges of membership, and shall be subject to the obligations of membership, as provided in this Agreement and in the Bylaws. B. Each "Party" to this Agreement shall participate and continue to participate in the "Workers' Compensation Excess" program for a period of not less than three (3) full program years. C. This Agreement shall be binding upon the original "Parties" to this Agreement on the effective date of this Agreement. D. Upon two- thirds (2/3) weighted vote of the "Parties ", any agency, that is eligible for membership as defined in the Bylaws and is not a "Party" hereto, that desires to join the Authority created hereby, may become a "Member" hereof by executing a copy of LAWCX AGREEMENT 13/19/92 ad) June 1e, 1992 5 this Agreement whereby said agency agrees to comply with the terms of this Agreement, the Bylaws, and the Memorandum of Coverage. This Agreement shall be binding upon the agency effective as of the date of such execution. E. Each "Member" shall be subject to a retained limit per aoccurrence for "Workers Compensation Excess" as selected by the 'Party" and approved by the Board of Directors. F. Each "Member" participating in a program year with funds in excess of its obligation shall have a right to a portion of such funds pursuant to the Bylaws. Each "Member" participating in a program year with obligations in excess of the funds for that program year shall be obligated to pay any assessments charged by the Authority pursuant to the Bylaws. 8. WITHDRAWAL FROM OR TERMINATION OF MEMBERSHIP A. Any "Party" to this Agreement which has been a "Party" of the Authority for at least three (3) full program years may voluntarily terminate this Agreement as to itself and withdraw from membership in the Authority. Such termination and withdrawal of membership shall become effective subject and according to the conditions, manner, and means set forth in the Bylaws. B. A "Party" may be involuntarily terminated from the Authority upon a two- thirds (2/3) weighted vote of the other "Parties" to this Agreement. C. Withdrawal or termination of a "Party" shall not absolve such "Party" of liabilities arising out of participation in a program. 9. TERMINATION OF AGREEMENT This Agreement may be terminated effective at the end of any fiscal year by a three - fourths (3/4) weighted vote of the "Parties" present at a Board of Directors meeting, provided, however, that the Authority and this Agreement shall continue to exist for the purpose of disposing of all claims, distribution of assets, and all other functions necessary to conclude the affairs of the Authority. 10. DISPOSITION OF PROPERTY AND FUNDS A. In the event of the dissolution of the Authority, the complete recision, or other final termination of this Agreement by the agencies then a "Party" hereto, any property interest remaining in the Authority following a discharge of all obligations shall be distributed to the "Parties" in the same relationship as their total contributions over all program years to the total contributions of all "Parties" over all program years. In the event a "Party" withdraws from this Agreement, any property interest of that "Party" remaining in the Authority following discharge of all obligations shall be disposed of as provided for in the Bylaws. Obligations, as referred to herein, shall include, but not be limited to, all payments required by law together with all "Reserves" which have been established for the purpose of paying incurred claims together with any other legal obligations incurred by the Authority pursuant to this Agreement. 11. AMENDMENTS This Agreement may be amended, after sixty (60) days notice to the "Parties ", by a two- thirds (2/3) weighted vote of the "Parties ". However, this Agreement may not be amended without a unanimous vote until three (3) years after its effective date. For purposes of this paragraph, LAWCX AGREEMENT (3/19192 ad) June 10, 1992 amendment shall not include termination of the Agreement. Any such amendment shall be effective upon the date of final execution thereof, unless otherwise provided in the amendment. 12. AUDITS AND A.CTLJARIAL ANALYSIS At the end of each fiscal year, the Authority shall have a financial audit by a qualified, independent Certified Accountant. A report from the accountant shall be distributed to each and every "Party" to this Agreement. The Authority shall have an audit of its claims performed at least once every two (2) years. Such audit shall be performed by an independent individual or company qualified to perform such audits. A report of the findings of such audit shall be distributed to each and every "Party" to this Agreement. The Authority shall have an actuarial study performed at least once every two (2) years. Such actuarial study shall be performed by a qualified actuary and the findings of such a study shall be distributed to each and every "Party" to this Agreement. 13. SEVERABILITY Should any portion, term, condition, or provision of this Agreement be decided by a court of competent jurisdiction 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. 14. LIABILITY A. If a "Member" or the Authority is held liable upon any judgement for damages caused by an act or omission that is subject to Sections 895, et. seq., of the California Government Code and makes payments in excess of its "Pro Rata Share" on such judgement, such "Member" of the Authority is entitled to contribution from each of the other "Parties" to the Agreement. A "Member's" "Pro Rata Share" shall be determined in the same manner as for the disposition of property and funds as provided in the Agreement and the Bylaws. B. The Authority may insure itself, its directors, officers, and employees, to the extent deemed necessary or appropriate by the Board of Directors, against loss, liability, and claims arising out of or connected with this Agreement. 15. ENFORCEMENT The Authority is hereby given authority to enforce this Agreement. In the event the Authority brings suit against a "Member" for breach of this Agreement and a judgement is rendered for the Authority, the "Member" shall pay all costs incurred by the Authority as a result of such suit, including reasonable attorney's fees as fixed by the court. 16. DEFINITIONS The terms used herein and in the Bylaws shall have the following meanings: A. "Claims Service" shall mean a claim adjuster or claims adjusting company as may be engaged by the Board of Directors for the purpose of determining losses and payments with respect to the Claims Fund. LAWCX AGREEMENT (3/19/92 ed) June le. 1992 B. "Contribution" shall mean money payable by a "Party" to the Authority for the purpose of funding for losses and administrative expenses of the Authority. C. "Workers' Compensation Excess" shall mean coverage for Workers' Compensation and Employers' Liability claims in excess of "Parties" retained limit as further defined in the Memorandum of Coverage. D. "Loss Reports" shall mean a report showing claims under a "Member's" "Workers' Compensation Excess" including current status. E. "Member" shall mean any "Party" to this Agreement, and if such "Party" is a joint powers authority and the participants if its Workers' Compensation program. F. "Memorandum of Coverage" shall mean the document stating the scope of the "Workers' Compensation Excess" as adopted by the Board of Directors. G. "Party" shall mean a signatory to the Agreement. H. "Program Year" shall mean that period of time, normally July 1 to the following June 30, designated by the Board of Directors as one (1) coverage period. I. "Agency" shall mean a special district, city, county, or joint powers Authority comprised largely of the above agencies. J. "Reserves" shall mean those parts of the "member's" "Contributions" held by the Authority to make expected future payments on "Workers' Compensation Excess" claims, whether known or unknown. K. "Joint Program" shall mean the group purchasing of insurance or the funding of loss to be paid by the group. L. "Pro -Rata Share" shall mean each "Member's" financial "Contribution" in proportion to the total of all "Member's" "Contributions" for each fiscal year. IN WITNESS WHEREOF, the "Parties" hereto have caused this Agreement to be duly executed by their authorized officers thereunto duly authorized as set forth herein below. Party: Date: is Title: LAWCX AGREEMENT (3/19/92 ed) June 18, 1992 a B. "Contribution" shall mean money payable by a "Party" to the Authority for the purpose of funding for losses and administrative expenses of the Authority. C. "Workers' Compensation Excess" shall mean coverage for Workers' Compensation and Employers' Liability claims in excess of "Parties" retained limit as further defined in the Memorandum of Coverage. D. "Loss Reports" shall mean a report showing claims under a "Member's" "Workers' Compensation Excess" including current status. E. "Member" shall mean any "Party" to this Agreement, and if such "Party" is a joint powers authority and the participants if its Workers' Compensation program. F. "Memorandum of Coverage" shall mean the document stating the scope of the "Workers' Compensation Excess" as adopted by the Board of Directors. G. "Party" shall mean a signatory to the Agreement. H. "Program Year" shall mean that period of time, normally July 1 to the following June 30, designated by the Board of Directors as one (1) coverage period. "Agency" shall mean a special district, city, county, or joint powers Authority comprised largely of the above agencies. J. "Reserves" shall mean those parts of the "member's" "Contributions" held by the Authority to make expected future payments on "Workers' Compensation Excess" claims, whether known or unknown. K. "Joint Program" shall mean the group purchasing of insurance or the funding of loss to be paid by the group. L. "Pro -Rata Share" shall mean each "Member's" financial "Contribution" in proportion to the total of all "Member's" "Contributions" for each fiscal year. IN WITNESS WHEREOF, the "Parties" hereto have caused this Agreement to be duly executed by their authorized officers thereunto duly authorized as set forth herein below. Party: Date: La Title: LAWCx AGREEMENT 13/19/92 ed1 June 16, 1992 8 r3'RTA", 9 LOCAL AGENCY WORKERS' COMPENSATION EXCESS JOINT POWERS AUTHORITY BYLAWS PREAMBLE I. Interim Board of Directors II. Board of Directors III. Rules of the Board of Directors IV. Executive Committee V. Officers VI. Manager VII. Claims Administrator Vlll. Pools IX. Finance X. Memorandum of Coverage XI. Accounts and Records XII. Risk Management XII1. Procedures for Prospective Members XIV. Withdrawal from or Termination of Membership XV. Disposition of Property and Funds XVI. Investment of Funds XVII. Amendment XVI11. Severability XIX. Effective Date EXHIBIT "A" BYLAWS OF THE LOCAL AGENCY WORKERS' COMPENSATION EXCESS JOINT POWERS AUTHORITY PREAMBLE Local Agency Workers' Compensation Excess Joint Powers Authority, ( "Authority ") is established for the purpose of providing the services and other items necessary and appropriate for the establishment, operation, and maintenance of a joint program of "Workers' Compensation Excess" protection for the public agencies who are members hereof, and to provide a forum for discussion, study, development, and implementation of recommendations of mutual interest regarding programs of "Workers' Compensation Excess ". ARTICLE I INTERIM BOARD OF DIRECTORS 1. An Interim Board of Directors is hereby appointed, with all of the duties and responsibilities of the Board of Directors. The Interim Board of Directors shall serve but not to go beyond July 1, 1992, by which time the members of the full Board of Directors shall be established. 2. The Interim Board of Directors shall be comprised of one representative from each of the following entities upon joining the Authority: Edward J. Bickmore CENTRAL SAN JOAQUIN VALLEY RMA Patricia Caldow CITY OF ALAMEDA Kirk Evans CITY OF LODI Robert Hallock COACHELLA VALLEY JOINT POWER INSURANCE AUTHORITY Norton Hastings CITY OF FREMONT Charles 0. Lamoree CITY OF VACAVILLE David Lindquist CITY OF VALLEJO Donald McMurchie PARDEC /CSDA Charlene M. Minnick CITY OF LIVERMORE Barry A. Mlinarcik CITY OF REDDING Jerry Stockett ASSOCIATION OF CALIFORNIA WATER DISTRICTS JPIA Jeanette Workman VECTOR CONTROL JPA 3. The Interim Board of Directors shall operate pursuant to the Articles of these Bylaws. LAWC%BYLAWS 13119192 ed) Jul 16. 1992 ARTICLE II BOARD OF DIRECTORS A Board of Directors is hereby established to direct and control the Authority. A. REPRESENTATION (1) Each "Party" of the Authority shall be entitled to a seat on the Board of Directors and shall appoint to the Board of Directors one representative and one alternate who shall be designated in writing. Said representative and said alternate must be an employee or authorized agent of the "Party" and shall serve at the pleasure of the "Party" by whom appointed. Only the designated representative or designated alternate who has filed a Statement of Economic Interest Form 730 with the State of California may represent a "Party ". The designated representative and designated alternate may invite individuals of their agencies' staff or consultants to attend meetings of the Board of Directors in an advisory capacity. (2) Each "Party" shall be entitled to cast weighted votes as set forth in the Joint Powers Agreement, 2. MEETINGS A. The Board of Directors may conduct regular, adjourned regular, special, and adjourned special meetings, provided, however, that it will hold at least two regular meetings each fiscal year. The date, time, and place for each such regular meeting shall be fixed by the Board of Directors. All meetings of the Board of Directors shall be called, held, and conducted in accordance with the terms and provisions of the Ralph M. Brown Act (Sections 54950, et seq.), of the California Government Code, as said Act may be modified by subsequent legislation, and as the same may be augmented by rules of the Board of Directors not inconsistent therewith. Except as otherwise provided or permitted by law, all meetings of the Board of Directors shall be open and public. B. The Manager shall mail notices of any and all meetings of the Board of Directors stating the time and place of such meetings and the matters to be discussed. The Manager shall also keep minutes of each meeting and distribute to the "Parties" of the Authority true and accurate copies of such minutes within fifteen (15) days after the meeting. 3. DUTIES AND RESPONSIBILITIES The Board of Directors has the authority and duty to manage the affairs of the Authority as is consistent with the laws of the State of California, the Agreement, and these Bylaws. The Board may delegate any or all authority, except the following authorities and responsibilities. (1) The Board of Directors may amend these Bylaws with a two- thirds (2/3) weighted vote. (2) The Board may create or dissolve a risk management of self - insurance program with a two - thirds (2/3) weighted vote. (3) The Board of Directors shall directly or by contract provide for services required to effectively implement all aspects of the joint program established by the Authority. (4) The Board of Directors shall designate a specific location at which it will receive notices, correspondence, and other communications. LAWC% BYLAWS 13118/82 ed) JL1 16, 1982 (5) The Board of Directors shall comply with the provisions of Sections 6503.5 and 53051 of the Government Code requiring the filing of a statement with the Secretary of State and with the County Clerk. (6) The Board of Directors shall approve a budget for each fiscal year at least three (3) months prior to the inception of such fiscal year. (7) The Board of Directors shall approve contributions and the method by which contributions will be paid to the Authority. Contributions shall be based upon the method as defined in Article IX of these Bylaws. (8) The Board of Directors shall approve annually an investment policy. (9) The Board of Directors shall ensure that a complete and accurate system of accounting of the Authority shall be maintained at all times consistent with standards established by the Financial Accounting Standards Board and the Government Accounting Standards Board. ARTICLE III RULES OF THE BOARD OF DIRECTORS 1. The Board of Directors may establish rules governing its own conduct and procedure and have such expressed or implied authority as is not inconsistent with or contrary to the laws of the State of California, these Bylaws, or the Joint Powers Agreement. A. A quorum for the transaction of business by the Board of Directors shall consist of the representatives or alternates of no fewer than seven "Parties" having no fewer than a cumulative weighted vote of no less than twelve (12). B. No one serving on the Board of Directors shall receive any salary or compensation from the Authority. C. The Board of Directors may approve reimbursement for expenses incurred by a director at its direction. ARTICLE IV EXECUTIVE COMMITTEE The Board of Directors may establish an Executive Committee to assist in the management of the Authority. The executive Committee, if established, shall have the authority, except such authority as is reserved exclusively to the Board of Directors, to administer the risk management programs in accordance with the Agreement and these Bylaws. ARTICLE V OFFICERS 1. OFFICERS OF THE AUTHORITY The principal officers shall be a President, a Vice President, a Secretary, a Treasurer, and others as may be deemed appropriate by the Board of Directors. The President and Vice LAWCX BYLAWS (3110182 "E) Jw 10. 1902 3 President shall be elected by the Board of Directors. The Secretary and Treasurer, and other officers shall be appointed by the President. 2. ELECTION OF OFFICERS AND TERM OF OFFICE A. The term of office for the President and Vice President shall be one year coincident with the fiscal year of the Authority. The term of all other offices shall continue until such time as the President appoints another to the office. B. Elections for the President and Vice President 01 The President and Vice President of the Authority shall be elected by a majority weighted vote of the Directors present at the Board of Directors meeting. (2) Elections shall take place at the last regularly scheduled Board of Directors' meeting of each fiscal year. Candidates for the offices shall be submitted at least thirty (30) days prior to the election by a Nominating Committee appointed by the Board of Directors. Representatives on the Board of Directors may make nominations of individuals who meet the requirements for the office at the time of election. If such nomination is seconded, the nominated individual shall be a candidate for that office for which the candidate was nominated. The candidate with the greatest number of weighted votes shall assume the office. (3) Any person elected or appointed as an officer may be removed at any time, by a majority of the weighted votes of the entire Board of Directors. (4) All vacancies, arising may be filled at any time by a majority of the weighted votes of the "Parties" present at a Board of Directors' meeting. 3. DUTIES OF THE OFFICERS A. The President shall be the chief executive officer and shall have general supervision and direction of the business of the Authority, shall see that all orders and resolutions of the Board of Directors are carried into effect, and shall be a member of all committees appointed by the Board of Directors. The President shall have other powers and perform such other duties as may be prescribed from time to time by the Board of Directors. B. The Vice President shall have such powers and perform such duties as may be prescribed from time to time by the Board of Directors or the President. In the absence of the President, the Vice President shall be vested with all the powers and authorized to perform all the duties of the President. C. The Secretary shall maintain records of all votes and the minutes of all meetings in a book to be kept for that purpose, shall assure that notice of all meetings of the Board of Directors is given when notice is required by law or these Bylaws, and shall have such other powers and perform such other duties as may be prescribed from time to time by the Board of Directors or the President. D. The Treasurer shall be the chief financial officer of the Authority and shall assume the duties described in Sections 6505.1 and 6505.5 of the California Government Code and the following duties: (1) Receive all money of the Authority and place it in investments approved by the Board of Directors to the credit of the Authority; LAWC %BYLAWS (3/10:02"dl Jrt 16.1092 A (2) Be responsible for the safekeeping and disbursement of all money held by the Authority; (3) Pay, when due, out of money of the Authority so held, all sums payable by the Authority. (4) Invest the Authority funds according to the Investment policy adopted by the Board of Directors; (5) Verify and report quarterly in writing to the Board of Directors, and to the "Parties" of the Authority, the amount of receipts since the last report, and the amount paid out since the last report; (6) Act as Custodian of the Authority's property. The Treasurer shall have such other powers and perform such other duties as may be prescribed from time to time by law or by the Board of Directors or the President. ARTICLE VI MANAGER 1. The Authority may be administered by a Manager, who may be an employee, an independent consultant, or a corporation. 2. DUTIES OF THE MANAGER A. General Administration The Manager shall: (1) Monitor the status of the Authority's programs and operations, the development of losses, the program's administrative and operational costs, service companies' performance, and brokers' performance; (2) Provide appropriate risk management counseling and information to the Board; 13) Assist the Board in selecting brokers, actuaries, claims auditors, and other service companies; (4) Design and implement new Risk Management and self- insurance programs as directed by the Board; (5) Promote and market the programs to prospective new "Parties ",, (6) Maintain the records of the Authority, including the preparation and distribution of the Agreement, the Bylaws, and the Memorandum of Coverage, as they may be revised, to all the "Parties "; (7) Prepare Certificates of Coverage as may be required by the "Parties" of the Authority; (8) Prepare and distribute notices of Board and Committee meetings with agendas, make the necessary arrangements for meeting facilities, and prepare and distribute minutes of such meetings; LAWCE BYLAWS I9 /19 192 e01 Jm 16.1992 6 (9) Prepare annual budgets for approval by the Board; (10) Obtain underwriting data from the "Parties" and determine the annual contributions of the "Parties" for Board approval. B. Financial Administration 111 Maintain the books of the Authority in a manner consistent with the generally accepted accounting principles and the standards established by the Government Accounting Standards Board; (2) Prepare quarterly financial statements, and distribute such statements to the "Parties "; 13) Prepare monthly warrants for approval by the Board or Executive Committee, if such exists; (4) Assist the auditors in collection of financial information and the operations of the Authority. ARTICLE VII CLAIMS ADMINISTRATOR 1 . The Authority claims shall be administered by a Claims Administrator, who may be an employee, an independent consultant, or a corporation. 2. DUTIES OF THE CLAIM ADMINISTRATOR The Claims Administrator shall: A. Receive Claims Notification from the "Parties "; B. Establish and maintain claims files, whether such claims are open or closed; C. Coordinate settlement and defense policy with the "Member" and /or "Party" involved in the loss if such settlement may include pooled funds of the Authority; D. Appoint defense counsel to claims where appropriate; E. Monitor and control claims activities, including the activities of defense counsel; F. Establish and monitor claims reserves; G. Monitor settlement negotiations and request settlement authority where appropriate; H. Pursue recovery from third parties where appropriate; I. Report losses to excess insurers or reinsurers where appropriate; J. Provide monthly loss reports; K. Monitor loss trends; L. Manage a trust account, if established, and prepare monthly a list of activities in such account; LAWCX BYLAWS 13/16/62 "d) J m 16. 1992 6 M. Prepare 1O99s in accordance with the requirements of the Internal Revenue Service; N. Cooperate with independent claims auditors. ARTICLE Vlll 1. POOL FOR AMOUNTS OF ANY CLAIM IN EXCESS OF $250,000 A. All "Parties" of the Authority shall participate in the pool from which the amount of any covered claim exceeding $250,000 any one occurrence shall be paid and every "Party" shall have an interest in the assets and liabilities of that pool in proportion to the deposit contributions made by the "Parties ". B. The pool shall maintain the accounts and records for each program year of the pool separate from any other program year. 2. POOL FOR AMOUNTS OF ANY CLAIM IN EXCESS OF $150,000 BUT LESS THAN OR EQUAL TO $250,000 A. "Parties" who choose a retention level of $150,000 shall participate in a pool, separate and distinct from the pool for claims in excess of $250,000. Each "Party" shall be charged a deposit premium based in part by the actuarially determined anticipated losses affecting this pool. B. Only those 'Parties" participating in this pool shall have an interest in the assets and liabilities of the pool and such interest shall be in proportion to the deposit contributions of the participants as a whole. C. The pool shall maintain the accounts and records for each program year of the pool separate from any other program year. ARTICLE IX FINANCE 1. The Authority shall operate on a fiscal year from July 1 st through June 30th. 2. The Board of Directors shall annually, on or before April 1 st, adopt a budget showing each of the purposes for which the Authority will need money and the estimated amount of money that will be needed for each such purpose for the next fiscal year. A copy of the budget shall be transmitted to each of the "Parties ". 3. Each "Party" shall pay to the Authority each fiscal year an annual contribution. Contributions are due and payable upon receipt of invoice and shall be considered past due if not received by the Authority after thirty 1301 days from the due date. 4. Each Party's annual "contributions" for each fiscal year shall be determined by the Manager and approved by the Board of Directors no later than May 1 immediately preceding the fiscal year. Each "Party" shall receive, as soon as practicable after adoption, a list of the contributions by "Party ". Each "Party's" contribution shall be determined as follows: A. The "Party "'s applicable share of the cost of the Authority's joint program, including the cost of actuarially expected claims for the pool or pools in which the "Party" participates. LAWC% BYLAWS 13/10/92 "dl J m 16. 1092 B. The "Party's" applicable share of the General Fund requirements of the Authority. C. The "Party's" applicable share of all other costs. D. The "Party's" applicable share shall be based on the "Party's" payroll and /or its claims experience as these factors relate to the total payroll and experience of all "Parties ". 5. Each pool year and each fiscal year shall operate separately from every other pool and fiscal year in regard to its assets and obligations. A. Should the total obligations, including actuarially expected claims costs, for any program year of a pool exceed the total assets of that year, the Board of Directors may assess the "Parties" participating in that pool's program year for any or all of such deficiency. If an assessment is made, it shall be borne by the "Parties" in the same relationship as their contributions for that pool's program year relates to the total of all the "Parties'" contributions for that pool's program year. B. Should the total assets of any pool's program year exceed the obligations of that year, including actuarially expected claims costs of that year, the Board of Directors may return any or all of the excess assets to the "Parties" in the same relationship as each "Party's" contribution for that pool's program year relates to the total of all the "Parties'" contributions for that program year, 6. All amounts not paid after thirty (30) days past the due date shall be considered delinquent. At the Board of Directors discretion, the Authority may establish interest charges and /or penalties for any and all delinquent amounts due from its "Parties ". 7. The General Fund shall be established and maintained to receive monies of the Authority. The Authority shall accept and deposit in the General Fund all monies received. 8. A Claim Expense Account shall be established, if necessary, and maintained out of monies received by and deposited in the General Fund for the purpose of paying investigation, defense, related claim cost and losses for "Workers' Compensation Excess" claims. 9. A Reserve Account shall be established, if necessary, and maintained out of monies received by and deposited in the General Fund for the purpose of funding the General Reserves, i.e., monies for claims which have been incurred by the "Parties" but remain unpaid, and the Catastrophe Reserves, i.e., monies for claims which have not been incurred. ARTICLE X MEMORANDUM OF COVERAGE 1. A Memorandum of Coverage for each program year shall be adopted by a majority of the weighted votes of the representatives present at the Board meeting prior to the inception of that program year. A. As soon as practicable following the adoption of the Memorandum of Coverage, the Manager shall distribute to the "Parties" a Memorandum of Coverage. B. The Memorandum of Coverage shall contain: (1) The scope of protection provided for "Workers' Compensation Excess" claims; (2) Other terms and conditions which the Board of Directors may consider necessary; LAWCX BYLAWS 13/18192 eCl Ju 18, 1992 t 13) The names of the "Parties" which the Memorandum of Coverage is intended to cover. 2. The Agreement and /or these Bylaws shall supersede any provisions in the Memorandum of Coverage which is in conflict with the Memorandum of Coverage. ARTICLE XI ACCOUNTS AND RECORDS 1. The Treasurer will be designated a depository for the Authority as approved by the Authority in compliance with California Government Code 6505.5. 2. The Authority is strictly accountable for all funds received and dispersed by it and, to that end, shall establish and maintain such funds and accounts as may be required by generally accepted accounting practices or by any provision of law or any resolution of the Authority. Books and records of the Authority in the hands of the Treasurer shall be open to inspection at all reasonable times by representatives of the "Parties ". The Manager, as soon as practical after the close of each fiscal quarter, shall give a complete written report of all financial activities for such fiscal quarter and fiscal year to date, to each "Party" of the Authority. 3. AUDITS A. The Board of Directors shall contract with a Certified Public Accountant to make an annual audit of the accounts, records, and financial affairs of the Authority and shall conform to generally accepted auditing standards and accounting principles. B. When such an audit of accounts, records, and financial affairs is made by a Certified Public Accountant, a report thereof shall be filed as a public record with each of the "Parties" of the Authority, and also with the Auditor - Controller of the State of California. C. Such reports shall be filed within six (6) months of the end of the fiscal year under examination. Any costs of the audit, including contracts with, or employment of, Certified Public Accountants in making the audit(s) provided for herein, shall be appropriate administrative charges against the funds of the Authority. ARTICLE XII RISK MANAGEMENT The Board of Directors of the Authority shall adopt procedures for risk management practices. Each of the "Parties" hereby agrees to implement in its agency the required procedures for risk management practices adopted by the Board of Directors. ARTICLE XIII PROCEDURES FOR PROSPECTIVE NEW PARTIES 1. Prospective New "Party" Application Procedure A. Prospective new "Party" will fully complete the Authority's application survey and return it to the Manager. LAWCX BYLAWS 13119192 adl Jura 16, 1092 0 B. The Manager will review the submission and make a recommendation to the Board of Directors for approval or non - approval. C. The Manager will review, in addition to any other factors pertinent to the decision to accept the prospective new "Party ", the following: Five (5) year loss history Loss problem areas and corrections taken Political climate Administration's attitude on commitment to good Risk Management Claims administrator Unusual exposures 2. Board Review and Approval of Membership A. New "Parties" must be reviewed and approved for membership at a regular or special meeting of the Authority's Board, prior to binding coverage. B. After the Prospective new "Party" has been reviewed and approved for membership the Authority will instruct the Manager to bind the required coverage, but coverage shall not commence until the date requested on the survey. C. New "Party's" contribution will be pro -rated from date of binding of coverage to the end of the program year (June 30th). ARTICLE XIV WITHDRAWAL FROM OR TERMINATION OF MEMBERSHIP 1. Any "Party" having met the requirements for withdrawal as defined in the Agreement may withdraw from its status as a "Party" of the Joint Powers Agreement at the end of any fiscal year by notifying the Board of Directors of the Authority in writing at least sixty (60) days prior to withdrawal. 2. A "Party" may be involuntarily terminated from the Authority upon a two - thirds (2/3) weighted vote of the "Parties" to the Agreement. Involuntary termination shall have the effect of eliminating the "Party" as a signatory of the Joint Powers Agreement and as a "Party" of the Authority, effective at the end of the fiscal year in which the action is taken or upon such other date as the Board of Directors may specify, but, except for Clause F below, not less than sixty (60) days after notice of involuntary termination is given. Termination under Clause F below shall be automatic and concurrent with the failure to maintain qualification for self insurance. 3. Grounds for involuntary termination include, but are not limited to, the following: A. Failure or refusal to abide by the Agreement, these Bylaws, the Memorandum of Coverage, or any amendment to such documents which has been adopted by the Authority. B. Failure or refusal to abide by a Resolution adopted by the Authority. C. Failure or refusal to pay contributions or assessments to the Authority as provided in the Agreement or Bylaws. D. Failure to comply with risk management or safety programs implemented by the Board of Directors. LAWC%BYLAWS 13119;92 <dl Jw 16, 1892 10 E. Failure to disclose a material fact to the Authority or its Manager, whereby said material fact constitutes fraud, misrepresentation, or concealment for the purposes of obtaining coverage with the Authority. F. Failure to maintain certification for self insurance. G. Any "Party" which withdraws its membership or whose membership is involuntarily terminated shall continue to be responsible for the amount of any costs, liabilities, assessments, or contingencies arising out of those program years in which such "Party" participated. ARTICLE XV DISPOSITION OF PROPERTY AND FUNDS In the event of the dissolution of the Authority, the complete recision, or other final termination of Joint Powers Agreement by all "Parties" to the Agreement, any property interest remaining in the Authority following a discharge of all obligations shall be disposed of pursuant to a plan adopted by the Board of Directors, with the objective of returning to each "Party" or other agency which is then or was theretofore a party during the six -month period immediately preceding the termination of the Agreement, a proportionate return on the contributions made to such properties by such "Parties" or agency. The plan adopted by the Board of Directors shall include, but not be limited to, the following: A. Claims outstanding against, and incurred but not reported to, the Authority shall be audited and calculated, by an independent auditor and actuary selected by the Board of Directors, for a determination of future liabilities for expenses and costs to bring these claims to a conclusion. B. The current fair market value of the Authority's properties shall be determined by the Board of Directors. If a "Party" disagrees with the current fair value of the Authority's properties as determined by the Board of Directors, the current fair value of said properties shall be determined by an independent appraiser selected by the Board of Directors. C. If the Board of Directors determines a dividend or return of contributions is to be declared, such dividend or return of contribution shall be computed pursuant to a plan adopted by a majority of the weighted votes of the entire Board of Directors. D. Any claim Subrogation recoveries by the Authority, or its "Parties ", shall first be credited to the amounts paid on the claim by the Authority with the remainder, if any, remitted to the "Party ". ARTICLE XVI INVESTMENT OF FUNDS The Board of Directors shall have the power to invest or cause to be invested in compliance with Section 6509.5 of the California Government Code, such funds as are not necessary for the immediate operation of the Authority in such securities as allowed by Section 53601 of the California Government Code. 2. The level of cash to be retained for the actual operation of the Authority shall be determined by the Board of Directors. LAWC %BYLAWS 13119192 ed1 lone 1 C 1992