Staff Report - PLANJPA Final
PREPARED BY: ROBERT SCHULTZ
Town Attorney
Reviewed by: Town Manager, Assistant Town Manager, and Finance Director
110 E. Main Street Los Gatos, CA 95030 ● 408-354-6832
www.losgatosca.gov
TOWN OF LOS GATOS
COUNCIL AGENDA REPORT
MEETING DATE: 12/05/2017
ITEM NO: 5
DATE: NOVEMBER 27, 2017
TO: MAYOR AND TOWN COUNCIL
FROM: ROBERT SCHULTZ, TOWN ATTORNEY
SUBJECT: CREATION OF POOLED LIABILITY ASSURANCE NETWORK JOINT POWERS
AUTHORITY (PLAN JPA)
RECOMMENDATION:
Staff recommends that the Town Council adopt a Resolution authorizing the Town of Los Gatos
to participate in the Pooled Liability Assurance Network Joint Powers Authority (PLAN JPA).
BACKGROUND:
The Association of Bay Area Governments Pooled Liability Assurance Network (ABAG PLAN) was
established in 1986 as a non-profit corporation in order to establish a stable, cost-effective self-
insurance, risk sharing and risk management program option for ABAG members. The Town of
Los Gatos has participated in the ABAG PLAN for many years to obtain coverage and risk
management services related to liability, property, automobile physical damage and other
ancillary lines of coverage.
DISCUSSION:
As a result of the merger of ABAG and MTC, ABAG PLAN is now administered by the
Metropolitan Transportation Commission (MTC). Over the course of the last year, the Board of
Directors of ABAG PLAN has been exploring various options to disengage from MTC. The Board
of Directors of ABAG PLAN conducted an RFP during the past fiscal year which indicates
significant savings to the pool members as a result of contracting pool administration services
through another source. An independent consultant study revealed a savings in pool
administrative costs of approximately $3 million over the next five years for participating
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SUBJECT: CREATION OF POOLED LIABILITY ASSURANCE NETWORK JOINT POWERS
AUTHORITY (PLAN JPA)
November 27, 2017
DISCUSSION (cont’d):
member agencies. ABAG PLAN Board of Directors voted unanimously at their annual board
meeting in June to contract with Bickmore Risk Services. A transition plan has been developed
by ABAG PLAN and Bickmore to transfer pool administrative services to the new pool
administrator.
In order to complete the transition of pool administrative services from ABAG/MTC and achieve
the significant savings in administrative cost to the existing program, both ABAG General
Counsel and PLAN Counsel have recommended a separate Joint Powers Authority (JPA) be
formed to exclusively manage the existing and future risk management and coverage needs of
the members. The new JPA is required to act as fiscal agent and manage the transfer of all of
the current assets and liabilities from the ABAG PLAN non-profit corporation to the new PLAN
JPA. The new PLAN JPA will no longer be directly affiliated with MTC but will continue to
provide a stable, cost-effective self-insurance, risk sharing and risk management program for
the member participants (see Attachment 2).
This separate JPA model would align the Town of Los Gatos and other PLAN JPA members with
pooling industry best practices, allow for program continuity and provide for a seamless
transition to the new JPA post ABAG merger with MTC.
By adopting the attached Resolution, the Town of Los Gatos agrees to conditionally participate
in the newly established PLAN JPA. Once all current ABAG PLAN members have approved and
signed their respective resolutions, the PLAN JPA will officially become a going concern and all
assets and liabilities will be transferred from the prior ABAG PLAN to the new PLAN JPA.
There is a potential adverse outcome in not signing the proposed resolution. Any delay in
joining the JPA could jeopardize the Town of Los Gatos participation in the PLAN program and
would have an adverse impact on the PLAN members as it pertains to program costs. It would
also be problematic for the Town of Los Gatos in terms of finding an alternative solution for
insurance and risk management services.
CONCLUSION:
Staff recommends the Council adopt a Resolution (Attachment 1) authorizing the Town of Los
Gatos to participate in the PLAN JPA.
ENVIRONMENTAL ASSESSMENT:
It has been determined that there is no possibility that this project will have a significant impact
on the environment; therefore, the project is not subject to the California Environmental
Quality Act (Section 15061 (b)(3)).
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SUBJECT: CREATION OF POOLED LIABILITY ASSURANCE NETWORK JOINT POWERS
AUTHORITY (PLAN JPA)
November 27, 2017
FISCAL IMPACT:
There would be no direct fiscal impact on the Town related to the change to a new JPA. The
Town would derive savings from the reduction in ABAG PLAN administrative costs over time.
Attachments:
1. Resolution
2. JPA Model Agreement