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BICEP - Oxnard - Pomona - San Bernardino - Santa Ana - 1988-11-21
1 j 'f I �. vHIG 1NDEPENI)ENT CITIES EXCESS POOL JOINT I'OWEItS AUTHORITY L,sj�`;��c �R+� •, c/o Gener2l Nlanug?r, Ken Slsl.ter And Assoclnics, Inc. I4156 Magnolia Blvd., Suite 103 i Sherman Oaks, Callrornln 91423 @ (818) 188.0406 - FAX No. (818) 7R4-1187 BOARD OF DIRECTORS ME c;TIIlG Thursday - October 7, 1993 10:00 A.M. Radiseon San Bernardino 295 North H Street rho Juniper Eoom San Eernardino, California 924:01 (909) 301-6181 110TICE TO TI F PUP1,11C REGARDTNG AGENDA ITEMS: Board of Directors action on the following items can be in this form of approval, modification, denial, referral to staff, no action or filing. BU IS NESS AGEIJDA I. Approval oil Minutes of BICEP Board of Directors Meeting Held on July 21., 1993 (Pages 6--10) . II. Comments from the Pubic. III. Approval of June 30, 1993, Financial Statements (Unaudited) (Pages 11-16). ICI. Discussion of BICEP Program Documents (Pages 17--38) . V. other Business. VT. Adjournment to Next Board of. Directors Meeting to be Held in the City of Hunti;,gton Beach on January 6, 1994. jiOTICR TO CITY CLr!,R2CS : PLFASE PflST,Y T,�iTS MEETING NOTIg 1 P�I I�.ri i�t•''J ��I DIY 1• T! W r , tip'• ' a,;`��' '',,��,, q r ty �id Jtti;r,,' , raj:! r ••4, A = aI, t:'7- Bit, INDEIIENDES I CITIES EXCESS POOL JOINT POWERS AUTIIORITV cio General h1ag-rger. Ken Spiker And Associates, Inc. 14156 Magnolla Blvd., Suite 103 Shcrman Oaks, California 91423 (HIS) 7RH.0406 FAX No. (810) 784-1187 E M OR A N P U Date: June 7, 1993 Members of the Liability Underwriting and Claims Committee From: Gordon R. Davis, ARM, General Manager Subject: LIABILITY UNDERWRITING AND craims COMMITTEE MEETING 0��` There will be a meeting of the Liability Underwriting and claims Committee at 20:00 a.m. an Tuesday, June 15, 1993, in the City of Santa Ana Chamber of Commerce Conference Room, Suite 110, located at Sol Civic Center Drive West, Santa Ana, California (714) 647-5470 (see :;?�' 'j attached directions). fi 4N, 4 The Agenda for the 4 meeting io as follows: I Closed Session To Discuss Potentip.1 LitigRtion. ;.4 t 11. Comments From The Public. 111. Adjournment. 64� The members o-9 the Committee are as follows: Jeff Stevens, Chairman Santa Ana Richard Bacio Pomona Tom Cain San Bernardino Karen Foster Hnntington Befich Frank Terry Oxnard cc: Board of Directors, Alteraata3 and City Clarks NOTICE TO CITY CLERKS: Please post this meeting notice (Agenda)- 7'- IRA -] !gyp LIABILITY UNDER.MI'a ING 1XD CLAIM- COMMITTEE MEETIMf; TUNE 15, 1993 - 7 0: 00 A.M. ,r 1 Directions to Chamber cc1. Comwereo Tha Santa Ana Chamber of Commerce is a reddish -colored building located at 801 Civic Center Drive West on the Northeast corner of Flower and Civic Center Drive Went (approximately 1--1/2 blocks from'Santa Ana City I Hull) . The Chamber parking lot is located at the front of the b!Ulding -and can -'be -entered from either street. Please Lake'sure to park in thin !at so your parking can be validated. The meeting fs being held in Suite, 110 located en the first floor. If you need assistance in locating the room, please see the reception. The phone number for the Chamber of Commerce 1::; (73.4) 647-6942. !` ' Ora, it 4 fk r , j 'A`� �i'1 ,1R,ir' � 1�'• - r li'.1Cri11; •1�,ir wl•1� • r9 !� 'r�•iti lPF.�'j I +} l7�• •'Mi a a, •P�r�y t' _ -�Mti�s�it�Mw�''�,��dJ�M%TA:C 1 .,�+'.... �ar;...;t:.ilo.•..�r.,,.,.,_- ...�,,,._;r•';r. ---- ---- ------.�..wq �,�;.+1'r� ""� 9..� •�•�' 1��. !� - . �' r lei+'" '�� 0 •ill ' , ,�,',._ ; �, i, v 1• J� 1 :I • ( rl l ,. , ��yy�y,R„�'• � T .. 1 . �1 ��� it , r ' , ,1'1 _^Ili':"R•..:__,..._,�.'. r'.-, ._11. ._.ii. .n,:•,•,•... ., ..lSu-.1.:'. ;�. :.1l. ........�.�: :-1,.uw.:....a•Y'..n r..e t'�`� • ''�' +�'r-i V VY 1 r E' 0, " ' 4 rr'• . f'. W i 1 r I , ',I. •'� � ,, _ slit. 4211'II:S EXCESS I'Onl. ,1011N1' 1101V►.2ti AU:'1101t1'fl' do Cv.eral Manager, Ken 5p':.cr And Inc. 14I56 Magnolia lilyd., Stifle 1 3 Sherman Oaks, Callfurnlis 91413 jhlH► 7118-01116 —,.X Not. Idles► 784-I IM7 �ft�•4 '� �r��r� ��'1,y,4., .'��Ir'� April 29, 1993 ;';• . +�.. 1 o- ' Ms. Connie Brockway, City Clerk "l4 City of Hunti�igton Beach 2000 Main Street' j' Huntington Beach., California 92648 • � I . �`. • � ' r.yw•' , ;;':fir 7. ' Dear Ms. Brockway: ;( iti Enclosed R ,;rti r please find a copy of the June 30, 199? Big �••'•N�,: ; Independent Cities Excess Pool (BICEP) Financial Statements �'' and Supplementary Information With Independent Auditor Is s Report for the years ended June 30, 1992 and 1991. The BICEP ` Joint Powers Agreement requires the resort to be filed as a `` I puolic record with each of the DICEF Member Cities. Please ;,� 771 x. r place the report in the appropriate file in your office. Thank you for your cooperation. i 4ti ,. Sincerely, '11 I r a v Gordon R. Davi1-, AR14 1:7� General Manager �- . � r�'• I r r .� GRD : s l ,. Enclo:3ure We f� rrr"r „7ti'"�"Tir"enx.,yl.y1'VC.•.�?«^.r"•'...—•T.-L is N.n.,L`^••�—�«�—.w.w..fM.�r..�.--..—...._.�«��..� '— .—. �� r� 17 �� y�,v. . v, • W' �• + A1'Itr I 1 1� I1f,�•� ,;1M 1Y -Nd • f 4U;� oly r r ,r I"DEPEHDOM CITIES EXCESS POOL IL t Table of contants y Emma Financial IStatemantas I Indepandent Auditora Ra a fo halanc� Sheetu J ., r Juno 30, 1992 apd June a0, 1991 '. i. Statesaants of Revenue, Expanses and Changes in Fund Halancoa for the year3 ondsd Juno 30, 1992 and June 30, 1991 � 3 Seatome:tta of Cash Flows fur the yearn endod June i0, 1992 and June 30, 1991 4y T'•�� Hates to Financial Stat„mants�'' t 5-9 PPle..iental Intormatton + •' � 4 1 4 J7 1k t .r -1 t 7 t• n f� t 1� Jj�t, � 1 �r• � '! � rFSt'ti�° � I 4 1 , „n �• 1 i ' `, •r11�T-r r'i.}., l,1 �ww.1�yMKVlyy�1{•.�%.l�CJ.kiMfS•! ; �'M�.�t Mw./:'•-,-....,-. .. :�lUl ..-•--..... .... -!f �, 1 �' t •r, •d•, Fhb S i ,•J1�Y 4 7 . - r 1 . . , ... �.-�.._ y �X •' r '1' r �",ftS r17.7L WI •� . � .1.,.w.r.w - , � { r i +� •; : • � S, Cyr ova ti., Jr�r 'r� S• k y.. ��' C �'Mj ti. ,., J I• - II��'. �'1,y .rl' �' ,.� a ,�. _ • �; + i � 'y � � r' � � •,'�,.' it i r 1r .,, ,,,• .1 .,�• !yldl►r ,��• � - f j11 , •.f [.11\% \IzfiI:I, A-- 131-1, •'.I IY V INDB^E' MENT AUDITOR'S P.EPORT Thu Board of Directors Big Independent Cities Excoon Pool I He have audited the accompanying balance sheets of the Big Indopendent Cities Excess Pool (BICEP) at Juno 30, 1992, and the related statements of revenue, expenses and changes in fund balance, and cash flown for the year than ended. These financial statements are the responsibility of BICEP'o management. Our responsibility is to express an opinicn or theao financial otrtementa based on our audit. The financial ctatementa a. BICEP as of Juno 30, 1991 were audited by other auditors whous rapos_-t dated October 24, 1991 exproosed an unqualifind opinion. We conducted our audit i.n accordance with generally accepted auditing standards. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are Eras of material misetatements. An audit '.nc?r'Jes examining, on a test banks, evidenve supporting the amounts and disclusures in the financial statements. An audit also includas sasessing the acuc.-nting principles used and significant. antimaton mKde by maaagement, as well as evaluating the overall financial statement presentation. We belielra that our audits provide a reasonable basis for our opinion. In our opinion, the 1992 financial statements referred to above present fairly, In all material ranriecta, the financial position of thn Dig lad..pardent Cities Excess Fcol at Juno 30, 1992, and the results of its operationa and Ita cast flows for the yeaz th9n ended in conformity with generally accepted accaun::ing principles. An discussed in Hate 1 to the !financial statements, BIMP hau limited historical data for use in its estimates of incurred but not reported claims and the corresponding premium adjustments. Although BICEP considers its experience and Industry data in determining ouch amounts, assumpticns and projections as to future events are nmcessary and ultimrts loauau may differ -significantly from amounts projected. Our audit wks conducted for the pu:pooa of Rorming an opinion on the basic financial otatements taken as a whole. The supplamentjtl information is presented for purpcses of ad.d;ticna?, analysis and is not a required part of the basic financial statements of `hw Big Independent Ci%iss Txcese Pool. Such information has been subjected to the Auditing procedures applied in the audit of the basic financial satatemants and, in our opinion, is fairly stated fist Lll material respects is rela•'.iun to t'.,e financial statements taken as a whole. Pasadena, California February 26, 1993 14 it , 1 Edwards, Eichel & 'aeranek Certified Public Accostrtauts RIO INDUMMENT CZTIL's EXCEBS POOL BALANCE BFUT Juno 30, 1992 and tlmav 30, 1991 i ASSETS Caah and cash aquivalenta, unrustrictsd $ 67,98.E $ 75.A17 Rentricted caah equ',valants ..j7yi13.257 _�.s20.- 512 Total cash and caah 1 aquivalenta 3,381,250 3,000,330 li _nvRst ante (at coat, which approximates markLt value) 13,506,300 13,521,706 Accrued intarast racaivaalo 149,289 153,501 Bond issuance coats, not 64.7,194 607,079 } Total ascots 917.6a3.M 5 L" t LIABILITIES F.vD rUM 3ALANCE �.iabilities z �,��,;,;;,'';.�•�'�+� Accounts paymbla $ 27,067 $ 29,599 unpaid losses and loea ;1 adjustment exp'enees 2,704,039 2,040,000 Bondu payable 14, 215, 000 14, 605, 000 Acc-und interest payable 303,671 392,772 % 1 Asbatable arbitrage earnings -- 10,261 1 , Estimated future premium adjustments ati4.15K 284, 94 ''� , E.at �• �•' Total liabilities 17,693,936 17,362,616'+��f;�k,`' Fund balance Total liabilities and fund balance S17.6 kz }nqa :; . xjJ r � 5•�ti�fl; ` The accomparfing notes are au integral part of these financial atatzmente. -, 1 10 \ I I l 1!i�Y �• (t • rf $4., w 2 �' .., ``':tie• �r 77 r� ��J! I �i ' i 1 • M .esss I ,1 i,j4j 1 BIG INDEPENDENT C1TIF1 EXCESS POOL " I STATEXENTS 07 itEVT.2.VE, L2PZHS;3 AND CHANGES IH FUN» PALANCE for the year endad Jur_• 30, 1993 end dus;e 30, 199! r revenues i i Depohit pramiuma earnad S 3,020,788 S 2,909,::3 Estimated future precnivo ad justraents L6, 17] 1 (2�2, 5441 Exponsoes Nat i.ncreaee in actuarially detormined unpaid .cuaou and Iona adjustment axpense■ 664,039 766,000 Purchased rminsurance 2,197,101 1,906,233 Cranera' and adminintrntive I expeneea 167' ?96 164 - S91 f1.02.3,91 )r_ 2-1331.r.125 I Prcaeu (deficiency) of I revenue over expenses, baforw not investmert t ; income Nnt invustwnt in Come s Investment income 1,280,701 1,323,183 I :,ita est expense r i "$ng i (t • 334.j.W2., EXCQQO of rGvaaue aver axyana,3a Fund balance, at beginning - 4 year — ..... .y'�. • Fund balance, aL and o:; gr•- � 5.�........��.� --�...v� 1`1 ' These &ccompanying vitas are an integral part of thane financial statementn. 3 ,•r " i }' ,L 1 ,..!a l ••": • - ✓r/ �I r G Ire' r_. .. OId XWOMENUENT CITIES EXCESS POOI, STATEMUTS or CASH MOWS Years ended June 30, 1992 and June 3n, 1991 1992 19h1 Canh ilon from operating activitios: Cxce.as (deficiency) of revanue r,vnr axperner before not LnvoctmPnt incomes $ (72,309) $ (130,676) hdjustmesnt to re+concil,p axcees (dufieienay) Of r3V0nUQ over expanses before nat irveetm9nt income to not cash provided by opr cations t Amortization of bond issuance coats 19,185 39,185 Increaso (decroase) in accounts payable (2,532) 22,173 Incroaau in unpaid looses and looc adjustwnt exptnosn 664,039 766,000 Decrease in unearnrad pranium --- --- (Decrr iae) incznr• ;io in ,;abatable arbitrage eaxslingo (10,261) (5,375) Increase (decrease) in estimated future prumium adjuntments 69,172 ___._22'::,.644.. Not cap.. provided by operating acti,vit,%es 6 7. 2 A 971,951 Cash flown from invasting acti.v'itiisss Receipts from male of investmonto (paymenti front purchAoe of invest- ments), net 16,206 (26,206) Interest wceived -254, 13_ t,,,'i?A au Iist cash provided by inventing activities _1,-301. 11g 1 - 310.1 : Cash flows from nonc&pital financing activttieas Brnd princilnal payments,, (390,000) (360,000) Interest paid Not cash used in noncapital financLn'.j acti•,Ltien ..i 1. �io7. d43 1 13��6Rs"sl. ! Ust increace in cash and eaah equivalents 3©0,9.0 721,S02 Cath and cash aquLvalents at beginning of year 's.0�{�.Ila. ' Cash and cash equivalents at mad of year The accompanying notes are an integral part of these financial statements. 4. f i l'' ' • .. ....r....•►M.a%Pi`r•. ;3 _ .. 1' M �.. 7. :.t Y.,, �.o �.—. ..� � .... v-...... .- , .. .. ,. � .... .._ . ,n ..v. �......�.---- M nr i14y,r:''w'' d 1 , I i- HiG LNPEPENDE T CITIES EXCE39 POOP. NOTES TO rINXICIAL STATEMENTS 1, SUMHAPY OF SIGNIFICAIr! ACCOUNTING POLICIES: ' organization and Ong;atiang BJ.g Inderendent Cities Excess Pool (L'ICEP) was created effectiv-e Soptember. 23, 191',8, by a joint pet..ers agrnement among five c1tiea a.ganizad and operating under the lawn of the State of California. BICr:i is orgauU,od pursuant to the proviaicns of the Cali•:orsaa Government CoCe for the purpose of providing ;oint 'neur.ance coverage and related rink -management 0arvices for member cities. The extension of jcint insurance coviArage to member citisa began October 1, 1988. HICEP's liability progrtin offers a cosabinatton of pocled aad co..nmercially purchased rur'.'c auto and general liability coverages, plus errors and omissions co'..raga, for lotaes in excess of tho member c{tiae' specified oalf-insurLr_ce rutention lavgls of one million dallarp. Individual and aggisgate clair.5 in excess of apucifiwd levels are covered by txcess insurance policies purchased from commonrcial insurance cLrriers which, combined ,pith the progvaen'o nolf-funded layers, offer a totrl of $15 million In coveraga limlto. BICEP is a nonprofit california public agancyr thas, it is tax-exempt. It �- is aino consi.derad w ";pocial District" by the O:fice of the atat• Controllor, Division of Local Gcvarnmant Fiscal Affairs, for, the purpoac of filing an Annual Report of Financial T.L�xnasctions of ereciai Uintricts. oasis OfAccountL II — !'ho accotsnring records of BICEP arm maintained on the accrual basis of I ccountir.g. Band Issuance Qgntr Bond Lauuance coots are amortized over the life of the bae;d issue using the stralght li,.e method. Cash an j ggsh EM4,ivalgnta BICEP considers money market funds and all highly liquid debt i.netruments 1 purchased with a maturity of three months or lens to be cash egquivalente. • I R�t��,ctMit cash Restricted rash ropresents funds held in trust for payment of band principal and intereac, future debt see -vice, and claims payment, RebatabIt ligbitoom Earnings Robatable arbitrage awnings represents the excess of the amount earned on all eauh erq tivalunts and investments over the amount whiea uruld have boon earnou 11 such cash equivalents and investments were invsntei at a rats r' equal to the band yield for activity through irabruiry 1, 1992. This axcsav is subject to change due to bond and invt)etment activity occur-Ing after February 1, 1992. The nctuul amount due to the Internal Revenue Sarvici will be payable no later than April 1, 1954. The interim calculation previously referred to indicates that three would be no arbitrage payable. 5 it 11 „r ^ r� I , • 3I0 INDCPQMM CITIES EXC933 POOL NOTES TO IFIMANCIAL O'lATEXEMTS Continued 1. SLIMARY OF SIGNIFICANT ACCOONTIH4 POLICIES (continued): n'ernos t P Le.nlum P v R Preeminme are recognized an earned over the parioda covered by .he po_'ci4e. Under the terms of the Linbility Rick Coverage Agreerr:ant, betweon BICEP and its monber ciicies, premium adjustments resultinG An additional prstmium aosensmants or refunda will commerce in February 1992, covering the experience of 310EP from inception. datim tom of ouch adjustments are recorded in the fincncial statements annually a,r est!srated future premium adjustmonts. Premium adjustments aria subject to change as the ultimate ccst o� claims becomos knowa, rnvostmont income and uxpeneen are realized, and HMP'i coatu are allocated to each Policy Year. pyp�id_Loeogs� aQ9 L14� iue�m�nt Exveneee Ist3r.oated unpai i loo3on and loaa ad juotmont exkansne include an aunounc for losses incurred but not repurtmd. Thnse estimates have not been discounted to their present value. At June 30, 1991 and 1990, DICEP had not pall any loseen or loon adjustment experosn. Subsequent to Jur- 30, 1992, two claims were submitted involving different: memter vitiec., which might penetrate their self-insu=ed retentiona. Liabilitian are bayed on the estimated ultimata cost of settling the claims, including tho off ecta of inflation and other mociatal and economic factors, The previous'. notar: claims and ultimata roc.+varias will be deducted form the groc. ,amount of unpaid longer. Claims which have been incurred but net repurtod to the claims administrator at June 30, 19U have been estimated through an independ-wit actuarial analysis based on loos development experience of BLCEP and the +� member cities and available industry loss develupmezt data- However,. since only U mited historical data is availably., and ciac,& aasumptionn and projections an to future events are nescebeary, ultimate losses may differ sigrAficant•ly from this estimate. BICBP'■ racognition of losses incurred but not reported is in conformity with Government Accounting St:andardo %card (CAS1310), Accountinq and Financial Reportiag for Mok Financing and Related Insurar,:a 13aues. 2. CASH AhM INVESTMENTS: Under provisions of the California Government Code (Code). B.:CEP is authorized to invont• in: �1. •, fir ,. 1 it variety of federal and state treasury obligations ( including local California agencies) 6 /'�{�r1,+� � •ma'►Kt•'fltirl+r4 ��.:.l,-t,,,• ±4,tM16.1_.. .. :,. .. ,. i...... ... ,r ... .. — ._.. ... _-__.�.....--....__+....�r �ry,�� �Y r, y op 001. 1'I! .�.rr urn IM"URPMOMM CITIr:S SYCF.S3 POOL I101E3 TO rINAYCIAL ST.ATEXENTS continuwd 2. CASFl AND INVESTMENTS (continuvd)i • Obligatiu:ne or uthar inatrumente it or !.anued by rn faydaval agency or government oponoored entorprioo • Bankers, accep'ances which ara eligible for pu•:chaoo by tht. federal reserve system (subject to certain limitat:ionn) a P;:ime quality now=orcial paper- (oub ject to certain li.m. tations ) • Negotiable c:ertificatoo ;jr deposit issued by nacicnAily oY state chartered banks, oavingo and lean Aaacciatea r u, cradit unions + Anpvrchaaie agroaments or reverse ropurchaso agruements of any oucuritiea authorized by the code cdt and Oagb,,,cZujy�lonhg, V�-oatria csi At June 30, 1992, the net carrying amount and ddrosi* balance was $0,183 of which $62,267 was invented in the Lars, 1. Agency Invn¢tnarit Funu, an investment fool maintained by the State 'Tt %surer. Re triah�•gcgh,,,�,cu:vnl®n�_�c�,.Inveatmaniy,� BICEP invest only in inventrents diet ere ins+ired or ragisterad, or far which the securLtinn are bold by BICEP or Ltj agent in EICEP's names Im►estmerta held by this Truatas at June 30, 1992, consiHt of: Cnrtificatnn of drLpoai': S 13, 505, 50J hapurchaas agraemento 3,211.261 Cash — BSr"BJ� hao an investment agr '.merit. with the Uitsui Trust and 8cnking Company for the Cortiticatee of depeuit. The agreeman`: rewtvLet.s withdrawals except for that provided c.ri the Tru►,t Indenture, for purposes of dent service claims payment. Tsrmn of the agreement preavide for a !Ixad rate of interest at 0.15 percent payable ssmi-annusLlly, with an expiration date of Kerch 1999. T.hn monies bald by the bank represent ara absolute a�)d unconditional c-bligat:.on of the Dank. �. UtIMI LOSSES AND LOSS P.PJ'USM-111 =MNSES: The folivwLng represents changes in the unpaid lvar'es and leas adjset—m-nt ar►pennen for HICEP fcr tho realr3 ended Sans 20: Itj i.' wy, . a, 1A �„tiJ � tip,"' ; � �; �\ 7 �'' ,1 ! • �' �!, , 7' d„• r54i r ,i tt , L hw "'pJd+ jt nin Ium:rmrni N•r cI=E5 iacEss Pocr. no,z n x�, irmammi r., STA'11:11ELTE C.u.tinua-1 '3. unpitio ros! •'S mm I.Us:1 hD.'JU5THrNT PXP:�USE:; (Cuntinucld): uopQ:c1 lonaoo tad loan nci�ui,tmunt r:xpcnnr3u at t-s,31nrsJ.nd ai year Proviniona fox inaurud avr,ntu of the c►:rront guar 37acroc,au in funding lt,volo for prcviaun Pali.~:, 1•uarc; Total uncaid loumea and l:,nu ad'untmant oxruntsaa at and at your -UM, ;2 , O.10, 00r, 303, -.00 Lh 9-1 657,000 In Janaary 19139, B1.CEI iaaund Rcl•unuu Aondn ;arica 1980A for the purpoa of acquiring worAln-.3 captt � and to fKnanc-i undar-writing uxpanoao. intarnat- un the bondo in payablu aemi-annually at ratoa ranging from 6.58 to 3.25%. 131 incipal ma':uriti,3n Tango Srcm $350, 000 to $710,000 and a.ra dun Annually an March 1, fLom 1991 through 2000. 'Term bcnda agg::ugating 59,77y,000 mat% -% in 2009 and are oubject to crandatory sinking fund radampt ion an M.- =h 1 in each your, on or after 21c,rch 1, 2001 by lot, at a icdemption ps:ica equal to the principal .unaunt theroof to be rodoorr-od, togctl,(3r with accrued intorout thereon to the ;'.r «,n 'i x_�d for redemption; without prcmiu.n. Tho bonds are collatoralirod by BICE1''a right to r-.coivo and collect all ,nrcmiuni paymantss and prtipaymonta. Each mun.ber city in abligr.ted to pay u.l premiums an anuenuud, until the narlier a! tormination of tho bond! term or rrapaymunt of the bend obligation. Paymanta required oa the bends dur.ing the next: Vivo yearn ar an follcwo: soar. ending •7��ne 3� Er�rirr'ik sIlt4 ?st —art. — 1993 425,000 1,161,007 1,576,CU7 1994 4SO,000 1,1Z0,4Oe 1,910,400 t99S 485,000 1,087;108 1,572,108 1996 S20, 000 1, 057,24A.7 1,570,247 1997 560,000 1,010,208 1,570,208 Tho bonds± mr.turing an or attar Harch 1, 1995 aLn uubject to optional redemption in whole or i:i part prier to maturity on any payment data on or after March 1, 1996, at the rodeniption pricro, axprousad sn perrentagea of tho principal amount c f nuch Sortaii 1908A Banda to he rudeomrad, met forth in the following t ible, togathar with ace--zc i int.,rcat to the redgt:nption data: 8 rr` ;;r 4 I' { :. y�r t 2 1310 I`II)Gi'L1illh.*IT CITIES EXC.I:SS POOL. 1IUTES TO ritmir-IhI. STATUMNITS Cuutiml ttd 4. PONDS PAYABLE r continuact) : nrlr.11 ic�t1 nr�r_r. m,l: 2-p-rit.rn Harch 1, t996 and Santanther 1, 1996 lu30 Ilarch 1, 1997 and Septumbar 1, 19SOI la2i March 1, 19941 and Saptumbor 1, 1r9G 101% Hach 1. 1959 and thuro iftar 10col 5. i11:IIf5U]','.'iC1':: DICEP raineurnu ccmd ii;o rinks under cx.co.ie of '_oun rainouranca agrnonanto for tho purpona of limiting ita m6ximum axporurn on any anu long or group of. loauoa. IIICEP iu conringantly liable "or xonuou and luau n:ijunrr..nnL nxpeneou rulatod to cadud huninaum to the extont thnt ito rainauror io unabla t•o fulfill itu co:m,itmonua. H:.rayamcnt boliuvao that itn ruinourar in and will Continua to bit r.blo to natiafy i}_r, obligatictic tinder the reinourinco agroz.mcnr. DIc:^P'a liabilitien for unpaid lauuea and lava adjustment uxpanaca as of Juno 30, 19921 and 1991, hava bean antimar_nd not of amountu that NGuld be rucovara,blo frcm tho ruinauror. G. RELA''RD-PLATY TRAHSACT101;ss Rallinn Hudig Flail, formerly Frank a. Hall, aot—a au DICE?'n insurance brokLz 4nA brokerud $2..1).7,101 in rainuuranco agroamunta during the pfsriod ended Jura 30, 1992. �+I�ar •. urn I3Q336PE mmrt CITIES VXCESS9 P00L CI41I143 nh'YrL0MXHT INl'OMIATIO:1 cuat:lativa frees incnptiou through .Tuna 30, 1992 ._.P'2i.cy ,lea t . Er1_i.�� Jur�c 30 19fin 9(1 la�)< 199? 1. Nat dopnoit premium rov.inuu ua,cned and invc:atmcnt ircoma 5799, 203 $2, 343., S?.4 52, 216, 499 $2, 13.1, 993 2. Ci:har costae 333,203 1,519.824 .1, 35 ), 499 133,993 J. Eatir:ated incurred claims and oxpannua, and of %alley year 543,000 772.00G 05-"Ono 003,00 4. Paid claims (cutaula- tivo) AD of: End of 1111l.cy year ---- ono year later -- -- -- Two yaaru lator Throe ynurn !..&tor S. Re-ost Urstad incurred claims anti axpencent End of policy year 543,000 778,30) £i571000 003,000 Ona year later 496,00(- 722,00) aG!.806 Two y idea later 461,000 657,39L - - - - Throu Yearn late:. 435,842 -- -- ! 6. Decruaaa in votlmatcd i tncur.rad claima and arpnnaea from and i of policy yea- 107,158 120,60� 49,149 •-- Tito table above ill ustraton hou BICEPIa carnnd rovenuna and invont1rMnt .incomo comaaro to rolztod costa of lain and uthor expennoa a,jni.med by BICEP as 01' tho end of eac?, policy yaar. Th.2 rows of the table are defined art follows: 1. This lino shown the tota.:, of each fiscal year's earned deposit promiumn and investment i»t:ome, not amounts earned for purchataad ruineuranco. 2. This lino ahotie each fiscal yea -'a other operating coats in:luding overhead and claima expense not allocable to individual cl7imn. 3. This lino nhowe the nstimatad incurred loaooa and allocated loss adjuntnant expenses as originally reportod at the itnd of the firnt: year in which the event that triggors: coverage unci cha zontract occurred (ho+:h paid and accrvad) not of lose assumed by exceon or reinsurers. 4. Thin line t,howe the =umulative wncunt:n paid as of the end of sucr,taeive years for each p.)Ucy your. S. Thin aecticm c. rowa ahowu hol+ each policy yuar'a incurred claLma and rnpenses incroaned or decreased as of the and of iucceasive yearn. This annual ro-antimation results from new information recelval an known claiun, re-evaluation of existing informatior, on known claims, as well as: emorgo,wo of now claims not previously knnt-•'t. 6. Thi.a line crnpitred the latest re-•aatinated incurred Aaima and ampanses anoint to the amount originally astabliahed (line 3) and nhowc whether this latest nstimat:o of claima and expenzas costa are greater or loan than originally thought. At data for individual policy yearn mature, the correlation betweeix original onti.r^atas and ru-ca-Imatod accountr is ccamtonly •icsed to avaluate Lhis •accuracy of incu_rad clzi.ma and exranao:t cu>:rontly raccgnized in lean n.at:uro policy (cars. 10 i j� DIG IN1)F.PE.N1)I'N C)T1):S 'r:�CE55 1'001 .101Nl' 1't1A1'1:11ti AUT[IORITI c/u Geni•rul Maintger, Ken Splktr And Associates. Iac. I4156 Mal;n:l,n 51%d•. Suitt! 103 Sherrniu Oak%, (:allfarnln 1)1.123 18141 7.'?H•0•I06 1'AX N tH18) 7H4.1'87 WARD OF DIRECTORS ME-EMIG Friday - Marra 19, 1993 10:00 A.M. i Itol=•day Inn 7667 Center Avonue Huntington Deac h, Cal l.forni.a 9* 647 (714) 891--0123 I LYC, rCM '.CO 'T' E PTHILTcC REGGA-PDT.. a AGENDA. ]'TI X y : Board of Directors action on the following items can be in the fore of approval., modification, denia', referral to staff, ra action or, citing. l"3tNJN SS AGENC)h I . Approval of Minutes of BICEP Booed of Directors Meeting Feld on January 22, 1993 (Paar' 6-10) . II. Commett'_s from the Public. { III. Appointment of Representatives to tt,e Finance Pp 1 and F*rsonnel ! Com_ni tee . � IV. Discussion of 1393-94 Liability Renewals (Pages 11-12). V. Approval of BICEP 1991-92 Financial Audit. VS. Discussion of 1310EP Marketing. �+ s VI1:. Ct-her Business. VT1I. Adjournment to Next Hoard of Directors Meeting to he Held in the City of Oxnard on April 16, 1993. �A- �TO`T'rCE TO CITY c I r cL$ : PLEASIs MST THIS, UF'I;' rlw NOTICE. I fr r F , 9 •y tt Ire LY • 11„ • • is i • rl r . t write �r f, ,"o, y_ J11.� r i1;V1'xi 4 'Yi A11S Ci(; 1N171rt'F,NOUST CITIF, F..XCI,SS 1'001. 301N-l' I'ON%'F.ItS AUTII0Iti'T1' c/a Gen traI Manager. Ken Spiker �n11 associates. Inc. 1-1156 Mapnnlla 111iod., •itilie lOJ 1 ° Sherrsan 0.ks, Ca IIUarnia ')1423 181%i 7AH•0•10t, r'.�!: Yn. IlII%) 784•I l%7 Cate. March 15, 1993 I Ta: Members of the Liah.ilit� UndFrwritinc, and C1aitns Committee i Gordan R. Davis, ARM, Gtanr.ra . V,-inager Subject: LIABILITY UNDERWRITING AND CUNIHS COMMIT`1'EE. MEETING There will be a lneef irg of the: Liability Underwriting and Claims ` Committee at 9:30 a.m. on Friday, Harch 19, 1993 at :,-hr. Voll.day Inn locatad at 76b7 Canter. Avenue, F;+intin(itan Beach, California, Phone: :10• j (71-1) 091-0123. The Adcnda for the zteet.ing is as follows: I. Cldz:ed Session To Discuss Pctential Litigation. _ E Ix. Comments Fron The Public. III. Adjournment. M. n• r ri The members of the committecar as fellows: 4 Jeff JeStevens, Chai.nnan Santa Ana Richard Bacio Pomona 1 Tom Cain San Bernardino Karen Foster Huntington Reach V. Frank Terry Oxnard cc: Boars: of Directors, Alter::ates and City Clerks NOTICE TO CITY CLEnF,S: Please post this Inecat_ing notice (Agenda) kit '•ail +� i �y { i lS 1 :I r L„ { MtMR'kM';�� 1 111r, INnHPF:.1DFNT CITIES EXCESS 11001. J 0 1 N T P0 VItS A11TH0ItITV � �+ '� c!u (:rn• ral Manager, tern S1,1krr And ,%swclale-i, Inc. 1^1156.%Iagnollu [Ilvd„ Salle 103 � S.iernian 1)aki. ca1lCornia 91413 • (8181 ~H.4-04116 - I -A\ No. ilil8) 784.11.47 1 i I3OhRD OF DIRFCTORS ME TEING Friday - Janiviry 22, 1993 10:00 A.M. Radi.:= Orl Iiote=. San 11arna.rdino 295 North .2. Street San Dernardino, California (90!:) 301-6181 ILQYLQL An 11H L1:RL.3c RIM�D-1HSsA(_LUU.ITZIT LC Lf' Loard of Directors action on the following itens can be its they form of approval, modification, denial, referral to staff , no action or filing. . 1+ 11Mj1 n rr ' Yri" 1 FS17S1 1(;S *-Qi-FiL I. Approval of Minutes of 13ICEP board of Direccors Meeting iiald on October 23, 1992 (Pages 6-11). II. Receive an! File Mertsng Notes of. the Llabiliaty Underwriting and i"laims Committee Meeting Hold October 19, 3.992 ( Pages 1 2--13) . II1. Comrlants from the Public. IV. Appointment of. Rep.o%ssntatives to the einance. and Personnel Committee. V. Discussion of 1993-94 llan ;wall. VI. Discussion of BTCZP Marketing. VII. Dijcussicn of New 12amber F'und;ng 'Ineting (Page 14-28N V111. Other Business. IX. Adjournment to Next Hoard of Directors Meeti j to be field i.n the City of Huntington Beach on March 19, 1993. NO'!`xCF. ^'O CTT _CLE�2�S_: �L 7'SE F4ST '!'FIBS �,M. TFG NOTICE. - 1 - R® 1 I C.I P' hlc� IN )EI'F N1)Nr PITIES EXCESS 11001. ,101NT r0WEItS AUTIf0ItITY Ct o General \tanager• lien Spiker an'l AlSQCIblt4'k. lac. 141S6 Magntillu Ph"t— Sk+ite 10.1 Sh•:rra•ia Oak%, Cali(ornla 9 142 3 INIR) 7116.0406 • F%N No. (y1.1) 784•IIti7 HGARD OF DYRECTQRS HEETIUG rViday - Octobar 23, 1992 10:00 A.M. Sheraton Suites yairpl.a>: 601 West McKinley 1)cmrna. California (71,1', 622-2220 N-M I citi-7--T—T-12TA J c► —Ur 13-Ec AR fill _UT .I S : Dcard of Directors action on the following items can be in the form of apprr, :►al, modification, denial, ra&-erral, to staff, no ac1-i.on or filing. c Usxryrs r. A C.ENiI 1 I- Approval of Minutes or BICEP Board of Directors Meetinq Held on Augeast 21, 1992 (Pages 10-17) . 11. Receive and File Meeting Notes at the finance ant.^ Personnel Coru7ittee Meeting field August 21, 1992 (Pages 18-191, . III . Comments from thc: Public. IV. Appointment of Representatives to the Finance and Personnel Cormitte•:" . V. Approval of %ctua.ial Services Agreement. , VI. Approval of liability Ccn. mittee By-L.nws and Excess Liabil:.ty Insurance Agreement ( Pages 20-28) . 411. Discussion of 1992-93 DICEP Marketing Plan. i VIII. Califor-ia Asscciation of Joint Powers Authorities (CAJPA) Legislative Committee Platfor-a for 1992 (Pages 29--43). j TX. Approval of Scope of Risk Management Audit (Page~ 44) . X. Presentation of June 30, 1092 BICEP operating Statements j (Unaudited). XI. other BI•_ n::ss. 0 i i 1 1 t f ' 1 1% 14 Al i� . 4, ' 1.1 ,A•,�a ,1 F'' I�,�+Arta••, t' �1 BIG INDETEMENT CITIES EXCESS IDOL 2loaXd of Clrector s Meeting � October 23, 1992 XIT_ . Adjournment to next Hoard of birectars Meeting to be held in the City of Stan Bernardino on January 15, 1993. •1 i f ! r• I ;I I, I i 140TTCE TO CITY CLFRKSL PLEASE POST 'MIS DfEF�TING NOTICE. , ITI I Irl Ct I Y � f 7 +1, t, A' r M".f. 0T ..� -+- JIG INVE:VENUEN7 r:ITIGS EXCESS POOL JOINT P0� EA(S A11THn1'+I1'ti' B 1 LSE }�� c/o General ,Manager, K rt 3pikrr And Assnciates, Inc. 111 titi 11 rgrtollu hied.. SLIte IU1 Sherman oaks. Culirurnia 91111 - (313) 738.0406 - VAN Nei. 181MI 't;•1.11:17 I Ja:h: October 9, 19n21 1 To: Members of the Liabili i v Un6or t iting and Claims Committee 1 From: Gordon R. Davis, APM, Ger•,eral Manager Subject: LIABILITY G'HD1rM-FRIT111C Mr, CLAIMS COMNITTEC MEET111-1 There will be a tnenting of th% Liability Underwritlrg and C.lains Committeu at 2:00 p.m. on Monday, October 19, 1992, in the City of Sa:1ta Tain Char,,bcr of Commerce.. Ci3nference Room located at 801 Cjvic Cent---r Drive Wast, Santa Ana, Californi-a (71.1) 647-5470. 'iho- Agenda for the meex:ing is as follows: I. Closed St.s:ion To Discuss Poteritia:- Litigation. II. Coinment:: From The Public. III. Adjournment. The members of the Committee are as follows: Jeff Stevens, Chairman Santa Ana Richard Pacio Yoinona Tom Cain San Bernardino Karen Foster Huntington Beach Frank Terry Oxnard cc: Board of Directors, Alternates and City Clerks NOTICE To CITY CLERKS: Please post this meeting notice (Agenda) A• ! 1, i �,�,� IFby �• .. t 1 n ICI (: Y ,�• 1't� F 1 v ,1 116 ot • ti .r� � • y;, r c•,•,t;l,�l'i+fL,�rtiry {'1 t {{ f f 1 J i11G INDl:PENA)F.NT crrIES EXCESS 11001 J(11N'i' i'<1\1'I:R:; AU1,110RITY ch► CIO of Santa Any _'0 Cir1r Ccrttrr 1'lara 11•:N tianta Ana, C,1 9?7111 %'/I4I617•5470 BOARD OF' DIRECTOnS MIrETING Friday - May 15, 1992 10:O0 A.H. 11olida7 Inn 76r7 Center Avenue;; lhintingLlou Beach, CalifokniF3 �-2647 (714) 891--01.23 �70T;�rl; TO THri'UBr:T rG1RnT11r, A-C; NI�TL�'_r!L`�. �- ra Board of Directors, action on the following. items. can be in the form of apr)rUVal, modification, Menial, referral tb :ztaff, no action or filing, US HUE L617MMA I. Approval :-)f Minut:e:a of DICEP hoard of Directors Venting Held on March 20, 1,192 (rages 7-13) . II. Comments from the Public. III. Receive and File Dieet.ing Notes of thn Liability Undo.L-writing and Claims r_ommitt,-� Meeting Held March 16, 1992 jPagas a4-16). IV. Discussion of Agreement: for Claims Admi.n:.stration Ser-Acc3. V. Discussion of Insuranoe Services Aqreement. VI. Discussion of AgreeEent for General Managemant Services. VII. Discussion of Membezehip Recruitment. V=1— Discussion of Commercial Excess Liability Program (Page 17)• Ili. Appointment of Nominating Coiwittee. X. Qther Business. XI. Adjournment•to next Board of Directors Meeting to be held in the City of Oxnard on June 19, 1992. •Zi OTTCF ,,J C "Y CLEZi:S _ r=,1 E ?OS-r rLR S jq-,EPIrtG ti0T3,CE. j I i i 6iil(i [NnEVENDGNT CITIES EXCESS11001, JOINT i'OWEIIS AUTHORITi A- c/a Cil, of Samu %nu 20 Chic Center "Liza 11-211 Sunta Ana, (:.\ 9-1701 (714)6.17-5470 • i i i r T. �? Li.. s; n t? �I i Data May 0, 1992 TO: Membor. ; of ':he BICEP Finance and Personnel Comm. tt: ec ' From: Gordon R. Davis, ARM, General Managr.r. Sub j ect : FIIIANCL z1WD PL•'fwOtlNrL COVIHITPB1✓ HEL• TrrIG 1 ; i' '•.� Thoro will be a meeting of the Finance and Personnel Colnmittur: at a : a0 I i a.m. oi: Friday, May 15, 3092 at the Holiday Inn located at 766" Center 4 Avenue, Huntington Beach, California 92647. ' The Agenda far the meeting is as follows: 1 (� • I. Discussion of Fees for Re1!ewitl to Agreement for Claims Administration Services. , Il. Discussion of Fees for Renewal to Insurance Services Agreement, Ill. Discussion of Fees for Second Year nf Agreement. for General y�c,:•',,y*. Mati -dement Scxvicets. ; ' 17. Comments From the Public. V. Ad;ournment. The members of the Cominittee are as follows: ; Rudy Muravez, Chaitperscn C4.ty of Oxnard Richard Bacio City of Pomona ` Andrew Green City of San Bernardino Jeff Stevens City of Santa Ara NOTICE TO CITY CLERKS: Please post this neeting notice (}agenda) - 1 - !I ���W,,�• • '.r ••44r .. •] ''ir:a•11dri•� A r::L 1 M lil(; INIIi;I'l:NUi:1'1 t'ITIES I�xCI.:SS 11001, .10INT 11UWFItS Al'T110ItIT%, c i, city of 5un(u An•, 16 (Avlc Center Plata M-29 5un1+. tu, CA 92701 (714),.47.5,176 February lit, 1.992 , Ida. Connie Brockway, city Cierk Ci-Y:y of Huntington Beach 2000 Main Street Unitington DeE l:, California 92648 Dear Its. Brockway: Enclosed please find a copy of the June J0, 1991 Pig I::idependent Cities Excess Pool (BICEP) Report on Audits of ' Financial Statements and Supplemental Information for the years ended June 30, 19-J1 and 1990. The BICEP Joint-. Powers ?lgree,nont requires the report to be filed a'; a public record with each of the 1+ICEP Member Cities. Please place the repot-`: in the appropriatrr file in your office. Thank you fai your { I cooperation. `1 Sincerely, F ;► i A Gorden R. Davis, AM General *tanager P a , yA,YY Y�: 1 qF dt ` •wf•,,N,X ti Y vn ! A. t„ •A y,, yp ,•. ti .. � - _ •� � - .' ,� I. a �f � err^- j '� ♦, r � � •% _ �•' M�. .` / .Af r� AT , �Yt I, l Y r r. T - ,' `.if . Avr w •I I -'. r ' - .. 1 1 P� 40`- Alt _ '• �yK '�a � r- a� p All ± • , � 1 �: IAA _ _ ,1 ++4. 41� ` 4 n � ��-.J•'[_ 'Si -ire. r Alt I ! ! * .. • t , • :-�ytij� � �T r r - 40, 7 ' f �_ � e t � • • 1 • I Ali. t wY ^, . � _ :Art• 1: f+• .'' - •� `, r JJ • w � - -ram u •�1 � • 1 �,•L,�' 1F.��(f �. ♦ .; -�ifY.. .. 41 alls N 1 y •' . • i• + I At 1;1 7 I i•W P , {1F:, Ito y" t r r � 'Jr�MY~ r • ,,,, r .,..,.Mona•w.,l..r.++,......,....'.:..' ��.. _... .: . " '' •. N Cp� � curlrl'c7 put,' ar.,cunlant; L'.� Cel,rl�l !.tell rt p IXIII.tl 7rpd, 0 Ir+c w3rlt' I 1,' oo err Say rarryMD, Celilarn`zj 9�NId I ,';a'r�'•a.' Lyrand ILInIJ+pric(0161 '41•4:):is tOC.'.,mllu IJII;! 444•t? if;t) Report of Inc]eeendont Accountants The Dcard of Director's nIndependent r Excess= Pool Santa California y h \ I 46 .,�' �/ ' )� .'� Y�� , y „ Tay a r,.91 , l • We have audited the accompanying balance ciheet>" of the Aig Indepen- ^, r , dent Cities Exc.uns Pool (BICEP) at ,Tuno 30, 1991 and 1990, and the „ related statements oil revenue expenses and changes in fund balance and rash flows for the years than ended. 'rhesu financial state- ment:s are the responsibility of AICEP's management. Our reepcn- sibility is to exr.-re as an opinion on these - financial statementu �+ based on our audits, We conducted our audits in accordance with generally eccepted } 1; g . by the office of the State ' audi min standards and the minimum audit ro iirements for sa California Special D Districts, issued. I Controller. auda tatoohtastandards in reasonableas�.urtancealat e boutohplan nperform etherthefinancial. statements are tree of material misstatement. An Audit ircl:ades ' examining, on a test basis, evidence supporting the amounts and disclosures in the fi nrlincial statements. An audit also includes assessing the accounting principles used and significant estimate: made by management, as well as evaluating the overall financial �. statement presentation. We believe that our audits provide a f' reasonable basis for our opinion. �4,` , " `��¢� �,•: ' "''' w�'���+ ti!�•r' 1, In our opinion, the financial statements referred to above present fairly, in all naterial respects, the financial position of the Big ,.,,.�, 1 '1'r; Independent Cities Excess Pool at June 30, 1991 and 1990, and the . resultn of its operations and Its cash flows for the years tries; ;`{ r ,; ended in conformity with generally accepted accounting principles. r I its discussed in Note 1 to the financial statements, DICEP has i imited historical data for use: in Its estimates of incurred but not reported claims and the corresponding premium adjustments. r h Although SICEP considers .its experience and industry data in 's�',`. v determining such amounts, assumptions and projections as to future events are necessary and ultimata losses may differ significantly from amounts projected. � "?' 4tir�•': ?r'' " r sacranento, California I i October 24, 1991 r c i ".,•�r c • 1 ye- a r .,+ 4 v • 1' h , I • r IAA !� ` ,j%f� /" ,K� ' ti: ' IVA ]�y��1J 1, A f •;jar ��• p • T' 4 •" . r Lam, A. `,, � ,' ♦1'Sf ti ; �. , � �• -a-«] .I . yet '��. •�• � ..d � . �, �• ` J � A A Fs•,, I Y r{;` ffJJ 4 J Tal•ul cash and cash equivnlent-a 3,000,330 2,278,828 Investmejits (at cost, which approximates zr.arket value) 13, 521, 706 13,505,500 Accrued interest receivable 3.53,501 154,f£!1 Boni issuance costs. net 687,OLI) 7?._6 4 LIABILITIj'.> ANt; FUND BALANCE Liabilities: Accounts parable Unpaid lowses and l.osu adjustment expenses Hands payable Accrued it torast payable I.ebatable arbitrage earning: - Estimated future premium adjustments Total liabilities Fund balance S 29,59? $ 7,426 2,040,000 1.4, 605* 000 392, 7T72 10,2e 1 17,362,616 $17r 362,616 1,274,000 14,965,000 400,g71 15,626 15,665,273 $1 +:6 273 The accompanying notes are an integral part of these financial statements. -2- ,,.; !\may: ., '`-�{�1'J•,;,� �� fr BIG INDEPENDENT CIq IES EXCESS POOL STATEMENTS OV REVENUE, EXPENSES A?ID CUP11GES IN FUND 13ALAIICE for the years ended ,Tur c 30, 1991 arJ 1990 1a91. 10T Revenue: Deposit premiums cErned $ 21989,293 $ 2,372,111 Estimated future premium adjustu,3nt:: 242, 644) _,J15, 034 2,706,649 2,,667t7jl Expense3: Net: increase in actuarially determined unpaid losses and loss adjustment expenses 1661G00 731,000 Purchased reinsurance 1,906,333 11617,495 Generai and administrative expenses ._. 1_ -L-11`+J1 —128, 030 2J17 r 325 2, _I 75 Excess (deficiency) of revenue over expenses, befors net investment income _11 'i A . 67 6) z 21,226 investment income: Investment income 7,325,101 1,280,568 Interest expense (1�_194 ... ,0 J (] . 1••,_•7(-?4) 17301676 �(�11 2 Excui3s of revenue over expenses -- Fund balance, at beginning of year. Fund wa].311cC', at end of year The accompanying notes are an integral part of these financial statements. -3- .•/IM��'h~/a.rrwmr�+rh.r....�,,n':..'\ rL :Y 0 41 ,., fF.,.144. MV' .Kwifn.ilr;y/gff)Ii , 9 :firt' J' >' y, M x ti�*34 4. •' , r . - . , ; ,+, Fr }fir w / t - w DIG INDEPENDENT CITIES EXCESS FOOL STATEMENTS OF CASH PI/jWS '.N• '� ;or the years ended June 30, 1991 and 1190 Cash flows from operating activities: 1' Excess (dk-firie'ncy) of revenue over �,,,::,��a4� • •' � � expensc s before net investment ' income �) Adjustuents to reconcile excess (deficiency) of revenue over F expensoa before net inveatment income to net cash prcvided by „'',' ,'` `� • operations Decrease in prepaid insurance Amcrtizatiun of bond issuance costa increase in accounts payable increase in unpaid losses and loss adjustment expenseL +•' '�'?' '' Decrease in unearned premium (Decrease) increase in rebatab2e arbitrage ea; nings increase (decrease) in estimated �r`"+� i , t •;4 future premium adjv.,•:ments Nst cash provided by } a operating activitie•a Cash Flows from investing activities: Payments for purchases of invest— �,; ments, net Interest received i Net cash provided by �- investing activities •p. I• t Cash flows from noncapital financing activities: Bond principal paytnunts t Interest paid r r•;'i�'�':; I Net cash used in noncaoital financing activities Net increase in cash and cash equivalents Cash and cash equivalents at beginning of year ,w',r' Cash and cash ecraivalents nt end + .,fit. ' , of year 193 Ll $ (130,676) 39, �.85 22,173 766,000 (5,373) 52 .644 (16,206) 3.326,363 (360,000) (I .60b) ( 6 6oG) 721,502 7,,,_2- e 8 j•? Q 1`1 n $ 211, 226 404, 000 39, 18.9 7,426 '731, 000 375,742) 15, 636 717,097 (500) 1,306,184 1. 305,684 (90, 000) (3.. _6 00. 5 .1) 422,209 1 8-96 61q, The accompanying notes are an integral part of these financial statements. '.1. ,� , ,,h; -4-- WO y N-' = ni Yrq V1, "o " p, , f• , Y 41 13IG DIDEPENCENT CITIES EXCESS POGIJ NCTES TO FINANCIAL STATEMENTS 4Y,'v, r , 4 1 • S* 11pLn3�Y of S id►`1��rat�rL�.IL�i�c�,� �•�"•' � � 7"!�`„tF • r� r r : y lIl ' :Jt~� "3��JL►1.1C-}0� , Gig Independent Citles Excess Pool (BICEP) was created .�,. effective September 23, 1988, by a joint powerf> agreement amonq r. ,r five cities organized and operating under the laws of the State f of Ca`,iforni.u. DICEP is organized pltrsuant to the provisions of the California Government Code for the purpose of providing joint: i.nnurance coverage anreaes--ram nagaent services er1 • d related rikr r rq 'or mem,')pr cities. The extension of joint insurance coverage to member cities began October 1, 1903. DICEY' a .liability proyram offers a cc'mbination of pooled a,nd .' commercially purchased public auto and general liability �.� coverages, plus errors and omissions coverage, for louses in excess of the member cities' specified self-insurance retent:.on j lev:als of one million dollars. Individual and aggregate clahns y in exce:sc of specified lavels aro covered by excesu Insurance policies purchased from commercial insurance carrier£ which, combined with the program's calf -funded layers, offer a total 7 , f of $25 million in coverage limits. i BICEP is a nonprofit California public. agency; 'thus, it in tax-- � r" ( exempt. it is also considered a "Special Dit trict" by the Office of the State Controller, Division of Local. Government ` Fiscal Affairs, for thepurpose of filing an Annual. Report of Financial Trnnsactions of Special Districts. The accounting records of SICEP are nai.ntained .�n the accrual r basis of, accounting. Bond jLqnuance Costs Bond issuance costs are amortized over the life of the bond issue using the straight line method. ';. Cash and Cash Ecruivalents ,Y r BICPP considers money market funds and all highly liquid debt instruments purchased with a maturity of three ?nonths or less f � „. to be ouch equi�,alentE. , 1�: a'�^'I,�,' '•r�, i I idl•,t� '�IrhPi°•d"j � 'r r oh 'J A1> . 1 ,'�'+.wAIIRV`/.aryV,�{�4/,1i'S.H, , r '',r .. , . .. \ r '• ,., i• s ;y+a'��i4'l'4' s1 A \ �{ t , a:�n 1" •u JM J ,:, w •.!!•.; �'.r ,^ fir ' d I . • • p L 1; •f ',1, Ana; 4, �C 1. • � { , � �„ .� {�. 1' ,: `' i i .7: �•Z`,� v:r, o•: I , _ ','S.M ,, - ...,. I BIG 111DEPLNDENT CITIES EXCESS POOL NOTES TO FINANCIAL STATEMENTS, Continued 1. Summ,tiy► of Sign] fjc,%nt ncrount.inqL_#?ol icies, continued: pestri.ct:ed Cnsh Restricted cash represents funds hold in trust for payment of bond principal and interest, future debt service, and claims payment. Rea , ble Arh .tra a F:nXnip9A Rebatahle arbitrage earnings represent the aueass Of the amount earned on all cash equivalents and investments over the amount which would have been earned if such cash equivalents and investments were invested at a rate equal to the bond yield For activity through February 1, 1991. This excess is subjact to change due to bond and investment activity occurring after Fohruary 1, 3.991. The actual amount due to the Internal Revenue Service will be payable no later than November 1, 1993. epgoit P en.JuM Reveni;e Premiums are recognized as earned over the periods covered by the policies. Under the terms of the Liability Rislt Coverage Agreement, between DICEP and its member cities, premium adjustments resulting in additional premium assessr-,ents or refunds will commenco in February 1993, covering the experience of BICEP from inception. Estimate, of such (adjustments are recorded in the financial statements anrually as estimated future premium adjustments. Premium adjustments are subject to change as the ultimate cost of claims becomes hnohn, investment income and expenses are realized, and BICEP's costs are allocated to each Policy Yeaa_ . URaid Losses and Loss Adju! t:ment F.s; ses Estimated unpaid losses and loss adjustment expenses include an amount for losses incurred but not reported. These estimates have not betn discounted to their present value. At Juve 30, 1991 and 1990, BICEP had not paid any losses or loss adjustment expenses nor had it established case reserves as no claims had been reported. Liabilities are based on the estimated ultimate cast of settling the claims, including the effects of inflation and other societal and economic factors. -6- __. ', .rN�� I'ifKr,. ,., r1�� :K •� 77 . 1 •♦I - a ti ` 4- .ft W4 1� r�r� �r i��� �P ' r, �I�1 Mr'rv{r*'Ty�'Y�'''� � r�'.[ ••'��' � .;'� "1,'� ,� rT '1•'Ir��� i BIG INDEPENDENT CITIES UCESS POOL VOTES TO FI1 jUXIAL STATEMENTS, Continued 1. sunrary of S nnifican_t Acco>>nt.irig pol i.cie continued: z. Claims which have been Incurred but not reported to the r_la4N. adminiutrator at June 30, 1991 and 1990. 1:ave been estimated through an independent actuarial analysis bnoed on loss development experience of BICEP and the member cities and availablee industry loss development data. However, since only limited historical data is available, and since asoumptions and projections as to futurs events are necessany, ultimate losses may differ significantly from this estxiaate. �v�Xnttlenta lcco�t ng �tandards_j3. oxai• Effective with the Year ended June 30, 1991, DICEP adopted the financial reporting requiremantss of GASH 10, Accounting and Financial Reporting for Risk Financing and Related Insurance Issues. The adoption of this pronouncement caused the liability for unpaid losses and loss adjustment expenses and estimated future p: omium adjustments previously reported as "reserves for future claims and estimated prei-idum srd justment" to be reported separately on the balance sheet. Additionally, the net change in actuarially- determined unpaid losses and loss adjustment expenses and estimated future premium adjustments previously reported as "net additlon to reserve for future claims and estimated premium adjustment" are reported separately on the otatement of rev'-�nue, expenses and changes in fund balance. The adoption also rasulted in certain other additional reclassifications and disclosures. However, the adoption had no impact an the f nancial position as rnpc-tcd for the year ended June 30, 1990. Cash and Investments: Under provisions of the Call.forn!n Guv^rnment CoJe (Code:), DICEn is authorized 'to invest in- • A variety of federal and state treasury obligations (including local California agencies) • Obligations or other instruments of or issued federal agency or government sponsored enterprise • Bankers' acceptances which are eligible for purchase by the federal reserve system (subject to certain linita- tionc) • Prime quality commercial paper (subject to certail, limitations) • Negotiable cp -tificates of deposit .issued by nationally or state chartered banks, savings and loan associatione and credit unions • Repurchase agreements or reverse repurchase agreements of any securities authorized by the Code _7- •S '1' 1 y 11 r,: 4yy'r 'he't �1 A rr4/t� 67, .•.r• 1�,' .Jj 4 nt��r+,.{y1 r: r ,w, gy ' 11, �4 �� � £,'• � � ' 1 '" > k ]BIG INDEPENDENT CITIES EXCESS POOLly NOTES TO FIZIA14CIAL STATEMENT3, Continued .: car- c.n ve_.tvaita, continued: �, ote nsits - At June 10, 1991, the net carrying amount and f deposit balance wc,re $79,818 of which $75,000 is invested in the Local Agency Investment Fund, an investment pool na.i.ntained r by the State Treasurer. fit'! �� !�' � +�',,,;•.'a'�„^ z B4gtriated_ Cash Emijvnlar;ts nnu vestments -- BICEF invests 'y yrLL,,., ', ;, only in investments that are insured or registered, or for � which the occuritio.s are hold by BICEP or its agent in MCE;P's name. Invastments held by the Trustue at June 30, 1991, consist of: f'?''•:t' Certificates of deposit $13,505,500 Repurchase agreements 2,931,195 Federal treasury obligations rY g . 5,523 <,��. `+✓'�4•,.', l; . ``°�:�-, is, � $160442.2-113 BICEF has an investment agreument with the Mitsui Trust and Menking Company for the certii•icates of deposit. The agreement ?^'' *... restrict: withdrawals except for that provided in the Trust t h 7 r Indenture, for purposes of debt service or claim payment. L ' Term= of the agreement provide for a fixed rate of interest at 1'•6 6.15 percent payable semi-annually, with an expiration date of' March 1, 1999. The *ponies held by the Bank represent an,«.` r ab:,olute and unconditional obligation of the Dank. �rl 3. Unpaid Tosses n16 T.osr. Adjustment Exmenses: + The following represents changes in the unpaid losses and loss'+'�,I"' adjustment exnen_aes for ElICEP for the years". ended June 30; 9n�9c=n ' Unpaid losses and loss adjustment expens'_ !.; at beginning of year $1,274,000 $ 543,000 1 Provision for insured events of the current year 657,000 778,000 � Decrease in funding levels j for previous policy years00 Total unpaid losses and loss adjustment expenses at end of year 2 0 n i ::?'�� i,. y f a' 4 8 - t. 171, I L x. l ' yp� riy•7, Yl , 1 a y crt r a'A: � Q .. r I k ,^tA i D'IC I IDE PENDENT CITIES EXCESS POOL DOTES TO FI11ANGIAL STATEMENTS, Continucd 4 . I)oncis Pa y a1 b I :�: In January 1989, DICED issued Revenue Bonds Series 1988A for the purpc;oe of acgairinq working capital and to finance under- writing e••:penses. Interest on the bends in payable semi-annually at rates ranging from 6.54 to 8.254. Principal maturities range fru;r. $360,000 to $710,000 and are due annually on March 1, from 1991 through 2000. Term bonds aggregating $9, 775, 000 mature in 2009 and are sutject to mandatory sinking fund redemption on March 1 in each year, on or after March 1, 2001 by .lot, mt a redemption price equal to the principal amount thereof to be redeemed, together with accrued interest thereon to the data fixed for redemption, without premium. The bonds are collateralized by HICEP's right to receive and collect all prcmiura payments and prepa'-.-ments. Each member city is obligated to pay all premiums as assessed, until the earlier of termination of the bond term or prepaynant of the bond obligation. Payments required on the bonds during the roxt five years are as follows: Year ending June 30 ` Pr. nclpal znterest Totta1 1992 3900000 $1,178,300 $1,568,308 1993 425,000 1,151.007 11576,007 1994 45O,000 1,120,408 1,570,408 3.995 405,000 1,087,108 1,572,108 3996 520,000 1,057,247 1,570,247 ri The bonds maturing on or after March 1, 1997 are subject: to optional redemption in whols, or in part prier to maturity on any payment date on or after March 1, 1996, at the redemption pries, expressed as percentages of the principal amount of such Series 1983A Bonds to be redeemed, set forth in the following table, together wit.accrued interer`�t to the I redemption date: r r 1 Y tc�dp;n�tqp DatA edenbtion Prices March 1, 2996 and September 1, 1996 103% Plarch 1, 2997 and September 1, 1997 102% March 1, 1998 and September 1, 1998 101% :March 3., 1999 and thereafter 100% �7�►�iT7A1�VwT1 .O �Ah1 r r { AT 1.. r .. .. } rf . A '1Ui!{Ye�yli>til�y V ,,,4 ': :r4 �'•i�1`yii'' 'r..,.,.., ., .. ....1f ..•.,..^i'yr:h.f'tr 4„ M' r , n „t r � 1 2'R 1 .ram I&Mr.-Il W BIG INDEPENDENT CITIES EXCESS POOII 110r.VF!; TO FI1.1A11C1 L, STATEMENTS, Ccntinued 5. Reinsu:anco: DICED rhinsures some of its risks tinder excess of lo:3s reiri— uuresnce agreements for the purpose of ljmiting its maximum exposure on any one to as or group o,; losse3. DICEP is contingently liable for lorsen and los:a adjustment expense. related to ceded business to the extent that its reinsuzer is unable to fulfill its commitment:5. Management believes that its Leinsurer is and will continue to be able to satisfy its obligations under the reinsurance agreement. BICEP's liabilities for unpaid losgers and loss adjustment expenses as of June 30, 1991 and 1990, have been estimated net of amounts that would be recoverable from the reinaarer. G. Belated--Panty�Prnnsact.ions: Franl: B. Hall served as DICEP's program administrator through April 1991 and brokered $1,906,333 and $1,213,495 in rein- surance agreements during the. periodecSanded June 30, 1991 and 1990, respQctively. 4. , -.y, . r •..4 fib. '� ^" •�'-� Of , I r • c• � 1 r Y )h- f.� � � :i!� ' �.;.Vt __'Jaw; Ji' , .. �, .,••. j. . ' r y f , NMI qm" q- darv•C��,a . ..N r M 4 14, r • t+ } yV ) l a •r�'•r.• � r �� . I • e k � ^w '\!'. �J♦mil',( •.j +�w • J - ' " • J �J�-}dli ��' �� 'T ryyr �.• Y►.mac}4%�tr };.: , ♦ Y 1 I. - t� i. r+jQ• � l�f. f � �j �•fi. / 1 C.• 1 .. I Coo ers &Ly 4. I�' I 2, cc, r?, h -A ptj t; I . :: a — a u fila r 1!; :55 capini Mall La-wicnij. California 9"il I iaro (91C) 441 -4334 13 'c:. fil , "I 1 ""16 1 J 44 - "' Ai RLPORT OF TI-IDEIIE14DENT ACCOUNTANTS ON SUPPLERENTAL INFOMATION in n,icipil aft!,-, of itx world Cur audits here ere made primarily for the purpose of expressing an opinion on the basic financial statements taken as a whole for the -pag years ended June 30, 199-1 and 1930, as shown J.n our a eport on e 1. The supplemental information (pages 12 and 13) is presented for purposes cof additional analysis and is not a reTiired part of the basic financial statemantu. such supplemental information for the years ended LTune. 30,, 1991 and 1990, has been subjected to the auditing procedures, appliad in the audits of the basic financial statements and, in our opinion, is fairly ted in all naII-erial sta - respects In relation to the basic financial statements L zR v n as a whole. Sacramento, California October 24, 1991 ... ...... . f: U Ir 71� 7;1 KI �4 ro) , 4� "St 1. a 1'yi a N'h• � � 11 .,. Icy �w�tY x K 13IG 121UI'�PENDKIi11' CT L5 l::iCES; L C'Ol CLA I NS DDVZT-O I LINT I111'01:1t11TION cuwulative : rcjm inm ptic,i, thrr.%igh Jlire 30, 1091. 1. Not dc--pasit premium rev.-nue earrind and i'lVelstmfarlt JAMon-A $799,20:3 $2,341,C24 r2 .2161, 2. Ctlier cent-; 330,120.i 1., 619; 824 3. L• 1t :-matlad int7urr. ed Clain,.: and eapensc:s, end e.f pol;.cy year_ 513,000 '?•78 On 057,000 4. Paid Claims (c:ui^)tlti'- tive) as of: End of policy year one year I s t_'er --- -- - -- Twc, fears later 5. Re-e5tintatecl incurred claims and expenses: End of policy year 547,000 778,000 ,''Si,00O Crin year later 496, nOC 7:12, C•OO --- D-70 year ltiter 461,00() - - - 4 . .: _crea e In e ,tlmatc:d incurred claims and e,,pomcs from CtId of policy year 8?,000 56,0,:!3 The table above illusixate7, hov. 13LCEP's earmad re-ienucs and tivao+_ment iriccmc compare to rrl.ated costs of loss and other expenses assumed by DICEP as of the end of each policy year. Tile rowb of the iahle ��.rc clefincd as I. This line shows tht� total of each ri:.ca]. year's earned deposit prcmiumL-- a,16 investment incur e., let of iwaamn,:s earned for T?Ilrchilra^d rt::ir.: uranizi�. 2. 'rhi s Line s.iaws each fir,cal years other operating costs including; overhead and claim.; expense riot Izc i:n-?ividual cla.im:':. 3. "his JAne shows the estirvited incu17re3 losses, and allocato.d loss, radjiistnclnt• erpenses as ariginal.ly _rparted at the tend of the first feL:r in i.h ich the event that trigger:)d coverage under the r�rjnt:-oct occurred (girth paid ar:d ac:cmied) net df loss assumed by Qxcess or L'eirj:;UrerS. 4. This; line shows %the cumulative_ amounts paid as or the enc7 of successive years for !arh policy year. 5. '?'his sectLicm of t_ cw�; shows now ouch year's ; ncurred claims ,... �::++{Main:' �.tr- �,'�,{�►'•,� 1d,; -0. g r `V, 1 12 KNI'M 1.11 t + .a I C- I F _�•i _'� �' `� 1! ,� } err s •*It � . -� t r � U fCt v / 1 'J •1 _ . �•1 to a ad expenZ ,.. years. received a Y. )mown clal known. 6. claims an! w k•,T�expenses r rdata for original z reco• nixed v+ VM .���•' t t.1 � 1 �� w ihx A. w I,..' •'.1 l , `,i 4�i rig i. i-ll 46 a r YA ' .1► ;wy 1" 'All 'l 11`pt t 4 ri, ,i "'4•7t/ i x11�1�4' 4' �•1 - 11�1 10 INDEPENDENT CITI3S EXCESS POOL I5 IIEVELOPP ENT INFORAUTION, Continued .ve from inception through June 30, 1991 ceased or decreased as of the and of successive jual re-astimation restilts from new infirmati,)n claims, re-evaluation of existing information on well as evergence of now claims not previously llna compares the latest ra-astimated incurred sea amount tc the amount: originally established Ewa whatner this latest estimate of claims and less than thought. As re greater or originally iml mature, the corrnla::ion between policy years is and re -estimated accounts is commonly used to :uraoy,• of incurred claims and expenses currently s mature policy years. 1 is tiY'r.:1 Y.ywJ, /r 1•:Y. t,R'••„v-...._. ".a.Y•TwllrMiiiNr{I�� 17 } ,F! w4 „ ,,,;,�'. •t I;G INDEPFNDE%.IT CITIES FXCESS POOL JOINT PO ch City of Seats Ann 20 C1v1c Center Plus M-211 Santc Ana, C BOARD Or DIRECTORS METING 1%-46&v — nntah&vs 1-n- tool Mara me -4, A 14Z MI �o �1- 1 4 E R .9 AUTHORITY 92701 (714)647-3470 I *qP ;v 7j f k hs form 6-ion or ag held �4- Perice. &VA 40 meting kw jo UdMIL,' 34 tit* op VAW 0 ,�n „' Vj „i n,�„b , 1 � y • Ik. r �'�fa�'�•�t 1'� .'�k�'r'r �'w ,4 • /71 AX NEW v' ' $TkW of r.AL*0W*A- TK K&OUKU A004"w 11ETE wx O.r....Y CALIFORNIA COAVAL COMMISSION ante: 11/25/91 UMN COW ARIA 246 W. OWDWAY, M. 380 r.0 wn 1430 toNG NACK CA •7A0?44ie ;�IP�1 ,A (2111 !00.9071NT PUQ1-IC HEAR-11ft NOTICE/ . L�,c •+��� PERMIT NNRER: 5-91-777 APPLICANT: Calif. Dept. of Transpurtatinn PROJECT DESCRIPTION: Dune habitat restoration, and enhancement of approximately 7 acres as mitigation for the widening of Pacific Coast Highway between Brookhurst and Beach Blvd. PROJECT LOCATION; Adjacent to Pacific Coaat Highway between Brookhurst Street and Beach Blvd., Huntington Beach HURINS-06TE AAQ L C&TION: wrE: Friday, Otceaber 13, 1991 TIME: 9:00 a.m. PLACE: Stauffer Concourse Hotel $400 West Century Blvd. Los Angeles (213) 216-5858 FARING PROCEDU People wishing to testify an these mMtters may appear at the hearing or may present their cuncerns by letter to the Commission on or before the hearing date. Copies of all correspondence will he provided to the Commission if received a minimum of three forking days prior to •.he public hearing. Written convents may be of any length; oral testimony may be limited to 5 minutes or less for each speaker, depending on the number wishing to be heaml. No one can predict how quickly the Commission will ciaplate agenda items or how many will be postponed to a later date. Thw Commission begins each session at the time listed and considers each item in order, except in extraordinary circumstances. Staff at the appropriate commission office can give you more information prior to the hearing date and you can call the staff at the hearing location for last-minute information. Questions regarding the report or the hearing should be dirocted to Ne9 Y ii hn __.._... at the aGove address. to 28b5E 41 ., ly ? ,�{ '��• ''' ' `tit : i - •-. 'i. ' ±• i``: SAY_.} ,v.. _ � ` -:` 01 M. r , � r, ! , h h''�x'�• 1 sN } Y ti` F 5 /trR WKWK Dow~ • PAN GE rAl"W"--TW WSOu10E6 A004CV I CALIFORNIA COASTAL COMMISSION Date: 11 /25/91 WVM [OAST AREA + US W. IROAOWAY, SIX. 'VO P.O. !oK 14W t0F/O MACK, CA ICNICO-Wu AP_0KTANT PUB1,If- ! EAR19§ kpTICE (FIST, MWI PERMIT NUNBER: AS-9I-HNB-BOS APPLICANT: Cal Dept, of Trans PROJECT DESCRIPTION: Widening of Pacific Coast Highway from Brookhurst Street to Beach Boulevard. PROJECT LOCATION: Pacific Coast Highway between Brock.::rst Street and Beach Boulevard, Huntington Beach, Orange County - € pft, DAYS AND l CATIft. LATE: rriday, December 13, 1991 TIME: 9:00 a.m. PLACE: Stouffer Concourse Hotel 5400 West Century Blvd. Los Angeles (213) 216-5858 r'6 PR'JCE URE5: People wishing to testify op these natters may appear at the hearing w.a or may present their concerns by letter to the Commission on or before the hearing date. Copies of all correspondence will be provided to the Commission if received a minimum of three working a� • ,y ��: days prior to the public hearing. Written comments iky be of any k'.''Y,"..�: length; oral testimony my he limited to 5 minutes or lass for each • ^�` speaker, depending on the number wishing to be heard. Nn one can predict how quickly the Commission will complete agenda items or how Many will be postponed to a later date. The Commission F begins each session at the tinTe listed and considers each item in order, except in extraordinary circumstances. Staff at the appropriate commission office can give you more information prior to the hearing date and you can call the staff at the hearing location (►ir• for last-minute infcnaation. t� t• �• Jt �± r A", { {. .• t:rfly Questions regarding the repurt or the hearing should be directed to Leo Vaughn __ at the above address. tn 2867E �1 '1! T, e If ■i, • G'� 1 �,� . , c� .. ....fie .:•.•,_.: %—ay' I r» Coastal Commission Procedures for Permits and Atvaeals i Because the stare Caaataa CameissiDt Now issues all coastal permits for areas without t r1,j LCfst It has developed rjrwg stramlined procedures for considering these penults. Appli- G� ! cants shoold submit their permit applications at the appropriate office. 11ecaYat regional tomtoissions >ho longer exist, the state camission's workload has irereased ' ! tremendously. The fellwing procedures _are intanded to speed up the process without ne-locttag iseportant coastal issuer. ` • YOU ARE AR APPLY . : In most :ales ' ^_^ your appiicatian Mili be Yevi�•ved by Via d!s rrict !'N, f t , staffand placed on the state coem:ission aSenda for the aAtliest possible stetting. M:aff will determine If the application can be put on either the toaaant or administrative taieAdar or whether it ■upt recalve a full public hea>rinR. A�'rt:%i%9�9 ;Al�Rt 'Admiaistrative vomits may bit ?:-mteb by the executive director for rrojects which are toinor tnev devolopnonta, additions to existing structures root exceeding S100e0OO in cord single family residarees. or nultt-family projects of four units er 2020 . The Coastal Act requires that all administrative permits be repotted to tAe Cv«wrwet..n at its awAi abating before they tiake offeet. Administrative permits will be resorted cm the ao9miristrative calendar. xf #our os sore cotamissioners request that at iten be bald for public hearings the project will be >temovad from the adtatinistrativo calendar and scheduled for a public heatrinx and possible vote at the next regular cor- aisstot meeting. Conditions may be attached to an administrative perssit. Applicants and other interested parties may speak in opposition to the pr•Jj!ct or its conditions. Tasttoony to limited to 1 minutes for oath side. r , is : will to V:ated on the regular toloudar and vill be considered after a full pvl2ic bearittttg. ' F Yer1 cgs s �. .,.;.t•' ,,•. upporting or opposing the project ahvM1)ld RPll the casaiesioa vhl •them tbtok the project is or is w-t eftsiattnt with the Act. Testimony ,oust address coastal act policies and anviterr Mta1 iapacts of the project and aMuld not be raduudant. L h e !s allotted ]0 tainutaa with the a liters s eakin first and rhea the , o+ppe» poet. BPA= rebuttal is toot allowed, but written rebuttal or other pertinent suterisl any ba Submitted to the stair follovinp the heariap. Trolects an the regular talandar w111 sorM21y be scheduled for continued hearing and votlw lot the bazt regular todmiaki o a`"? s eo tin. fit, OA :rase projects. the staff tray have eawsgh iaformatiom to snake a prellaioary trecoss;ta- ; datton for approval after the public hasi ing bas bee-_• bell. Jr. that erase, %he commission 41,{, ;. Say well that dry and not postpone the deciaioa. it 1 i Vkn a staff recommendation is 1p'resente'd to the eoaeeission. •both the applicant and �+ egepotwetnts have live minutes each to ccuw:nt on the recamenda:9ons. Af!,er LM baarfOg U closed, the cosaiisslon grill discuss %'be natter Ma vote. • a�',r ti art a rf��, �. ' 1 � • � .ice I S r��,I{t''' ¢" . R r' 4i , r r't CONSM7 S&LM. ARt projects considered by staff to be enasistent ,smith the Coastal Act but %shIch do riot qualify for the administrative calosear spy be placed on the consent cslaadar. Projects on the consent calend&r will be approved by the commission with a single vote for the entire calendar. If three or mote covtissioners vish to pull an Stem off consent, that itam will normally be rescheduled for a regular public bearing and possible ♦cte at the next regular commission meeting. Conditions say be attached to consent calendar percitc. Applicants who accept Oats conditions need not speak. Opponents should tell the comission why the project is inconsistent with the Coastal Act. three ainutes will be allowed for each side to speak to the ca 2losian. If there are several •pRrsons >w•ss .ittg • to address an item, efforts shoo d be wade to consollZate pre- sentations in order to stay within the tilt -limits. Interested persons should cheek with the comiasion staff regarding subsequent hesrinngs. X M.- AR CALL1'DAR lERMIT APPLICATIONSt Projects pote>atir117 itacoasistent with the Coastal Act or which car, be approved only w th eoniitions for which there are ao clear precedents M W.," 644f A;' . 1 ° Uni-INT fOR11COSt11A_ J%g!1 An applicant may request that the eoeaoission reconsider Its- previous action on a permit. The applicant cyst show that there is relevant Nov evidente, vhich could meet have reasonably been presented at the original haarlmA or that an error of fact or law occurred. Only the applicant and persons who participated in the orig!asl procetAints are altgible to testily. losti>,ony is baited to three sieutl for oath aide. Should the commissioners vote to grant the :econeidetrstion request, the natter will be scheduled far a public bearial am if it were a twv application. M'_r 14+MXTIt M applicant: may apply for an amendment to a previoualy approved project, fibs aoendment will be scheduled for a public bearinX mad any person weir speal in support of or opposition to the ae,eadastet, rive minutts will be allotted to each side. 1,1'SL1 L_AL2WC TRDMMS: It the itaa you are Interested to speaking om is scheduled or a public hearing, you Must fill out a "Request to fpesk" fond and Igive it to a staff person before the hearttsa starts. Sign-up forms will be available va a table at the bsek of tht hearing room- Wat limits for spoken testimony vary according to the three iiffereet eslendars. Rstause of this limited time, mpplinants and opponents' are ermcouraged to submit written casements to the caoaaission ofilts at least ons week.So advance of the bearicS. Comments of cep to two pages will be copied avid forwarded to the comissionera by the staff. If you with to submit lengthy convents, you must submit 20 copies to the cncaission office at least On# week before the hearing. 21 it is convenient, you may also wish to bring 20 copies of your spoken testimony to the hearing for distribution to the eco=issionera. Speakers may use neaps, slides, photolraphs, models. and other visual materials to their presemtations to the co=ission. Since such materials become part of the public record an the perdu , reproductions of the materials shown must be submitted to the eomission staff before or during the comission meeting, or the originals will be retained by the tomznission for 60 days. A carousel slide projector and screen will be available at the seetingmt. hfif� t►':Z1. X AGi'N 1?'fM bl RU Wfortunstely, no one tan predict boo• mkuimtkly the CW=ission will complete alters stems. Each sessiQa be4128 at the time acted set the Meet - tog votica. Loth Item is considered in the 6rder listed, =cap& It extraordinary tir- eumstmatims. The Co:raission vAli consider an Item+ even though the intsirested persons are not proant. Staff at the appropriate tomission office can Rive you more infametion prior to the hearing date and you can call the staff at the bearing locaticm for last- sirata Infiers►atsots. 'Pip FREPAIVV CC0n7RIEY7tM: To :inure the ittegrity of the permit process, the Cwstal Com- '' 1.A' Vission has adopted regulations (Sections 13025.2 and DNS) prohibiting a Comeisaiaaer x• froth tiotfrtg an a permit matter if be or ache has received a empaign contribution from to Saternated party. If you intend to ap"k on a permit ratter, please iaditate Oft pour ,� ,,° speaker slip and/or in your testimuny, If To►• bave made compaign ec;ntributIDW its excess` of $100 to any Commiesioner witbia tine last year, axed if ao9 to which Coueiselotea pow can- tram Jl'Y =ESLYDES2� A*p1tOV&, MPLICATIM3 Sstb permit trust bCe approved by a ss.lority of the Rameiesiorea who are authorised to vote cad vho,aze r� t ie the roams. All paralra man the consent calendar will !e voted upon, at one tithe w1th just ate motion and one well tall _ -ML7C, RF_CO'AA�St Public: tatords an smatters before the tonnission w111 be arvallabit far Inspection at7 the nseetiag end at other timses in the eamsaission office. Extra copies of staff report& rill Salto be available at thR seettimlt. ACCFSa" Kai 7cCS: Commission meetings are in tentrallasd locations and are accessible • r.r q. to Persons Bich disabllit tea. �r ' rr -_.-_-.....M:bMf7,..1.1..N.Ps••_ .-. .. a.. . rr.. .V� 1= � 11. . � w.Y i,' °'�„ _.v 7.4VJ MU91 r: It 10 IT, Par Paf Ir 6ju INDEPENDENT CITIES EXCESS POOL JOINT POWERS At1THORITY c/o City or Sorts Ann 20 Civic Conker Plain M-20 Stints ARM, CA 92701 (714)647•5470 3M0!! 31lib � "yr.' bate: July 26, 1991 To: Members of the Liability Underwriting and Claims " Committee From: Cordon 11. David, ARM, General Xanager r, Stlb; eet: LIABILITY MFO IRWRITING ,AND CLhZXfi COMMITTEE XAZTIXQ ' ", �`"r�''"'"K 5r Thera will he a meating of the Liability Underwriting and Claimer Committee at 3:00 p.m. on Thursday, Auquot 1,•1991, in the 4th Floor Window Cvn1'arenca Room, City of Oxnard, 300 Street, Oxnard, California, Phone No. 984-4613. West Third (805) " U The Agenda for thota meeting is as follows: Closed sdesi.on to Discuss Potential Litigation. r 11. Discussion cot the Program Marketing Plan (gages 4-12) . „a III. Comments From The Publin. IV. Adjournment. •' ��'_' . ,. The members of that Committee are as fcllowe : Victor Lorch, Chad man San Bernavdino ° Xaran Foster Huntington Beach ' frank Tern; Oxnard Jeff Stevens. Santa Ana ,�";.ray.; • :.;, . p'' n cal: Board of Directors, Alternates and City Clerks NOTXCN TO CITY CLERXS 2 Plans* post this meeting notice (agenda) d; ;A' 1 �Ir �rur.wwwsulM M'�.I'il.{fYIM11•IiYY/ ..rl"�• . .._. u .. .r �....w �. ._ -. .. .. _... ._ _ PP ff I i e A 1j9 Ai• I ! „ly'�Jlir 1y. 1 9 r~ I�I/,�•tip 1 1•, y1v''iwvi, '� Fr DIG INDEPENDENT CITIES EXCESS POOL JOINT POWERS AUTHORITY c/o City of Santa Ana 20 CIVIC Cants? Plsta M•16 Santa Ana, CA 91701 (714)617.5470 DOOM Or DIRECTORS XZZTZKO .rriday - Auqust• Z, 1991 10300 A.K. RaW-Nson Suite Notal at Itiver Ridge 9101 West Vineyard River Ridge ZZ Roos Oxnard, California 93030 (405) 288-0130 Board of Directorm action on the following items oan be in the form of approval, modification, denial, refer.al to staff, no action or Y, filing. . (, 1,r .._h,�l �(i•=-I-_-_fie ��,,.. Y. trt h I. Approval of Minutes of BXCE? Hoard of Directors Meeting held on June 141 1991 (Pages 7-14). 11. Comments from the Public. 111. Approval of Revised BICEP Treasury Management Policies and Procedures. Iv. Approval of BICEP Marketing Plat . V. Discussion of BICEP Actuazfal Services. VI. Discussion of American Communities for Cleanup Equity. V11. Approval of BICEP Legislative Advocacy Policy (Page 15). VZ71- Appointment of Nominating Committee. IX. Discussion of Pool Operations. X. Other Business. XI. Adjournzent to October is, 1991 Hoard of Directors Meeting in Santa Ana. — 1 — v w i v on* eirp INDEPENDENT CITIES EXCESS POiGL JOINT POWI<RS AUTHORITY c/o City of Snntn Ann 20 Civic Centsr Plux M-31 Sonia Aos, CA 02701 (714)647•S471 Date: July Up 1991 To: Members of the Finance and Personnal Committee Fcan►s w"irdon R. Davis, ARM, General Manager Stab j ect t lX3rAXca A= PSIRBONNEL COMMITTEE KNITINGI There will be a meeting of the Finance and Personnel Committee at 900 a.m. on Friday, August 21 1991, in the River Ridq• 11 Room at '- the Radisson Suite Hotel at River Ridge, located at 2101 West Vineyard, Oxnard, California, "hone No. (805) 988-0130. The Agftnda for the meeting is as 'follows: P w'• 1 1. Discussion of (revision to BICEP Treasury Ma:aagemant Policies and Procedures. It. Comments from the patlie. • III , Adjournment. 2.'` The members of the Committee are as follows: r Richard Sacio Pomona Y Andrew Green San Bernardino Rudy Muravez Oxnard Jeff Stevens Santa Ana „ a r t ray GRD:sl cc: Board of Directors, Alternates and City Clerks NOTICE TO CITY CLERKS1 Please post this meeting notice (Agenda) 1 I �' a ' i „• • %fs ,.. f+�IM i ` GrJ'i•In sf 1 p y 1 1u r � 0 " 4 4 �f 1 MPA d 1 , (r f4 !`,i7 'r'r •.l't ,,.N.. 1, +l, a••,�r, W ry( I d•' , �. �� � G • /.. Kd+le�1l �aslrx HOARD of DIRECTORS XNETIN0 Friday - Ouae 14, 1991 10100 A.M. Waterfront Rilton 21100 Pacific Coast Highway pacific A Room NUAtington Beach, California 92648 (714) 960-7873 B To Tun PUHLZ" RXCA niNa AGZHRA _ Board of Directors a':tion on the following items can be in the form of approval, modification, denial, referral to staff, no action or. filing. BUSjHBSs_BS,FNDA I. Approval of Minutes of arCEP Board of Directors Meeting geld on March 201 1991 (Pagrrs 8-14) , IX. Comments from the Public. 1II. Approval of 1991-92 BICBP Budget (Page 15). IV. Approval of Quarterly Financial Statement for the Period Ending March 31, 1991 (Pages 16-26) . V. Discussion of Program Marketing (Pages 27-35). i vX. Discussion of 1991-92 BICEP Liability Renewals. V1I. Discussion of 1991-92 Workers' compensation Renewals. VIX1. Discussion of TULIP Coverage. ` IX. Discussion of Property Coverage. X. Discussion of California Institute for Public Risk Analysis (Pages 36-42). - 1 - ,F .w r A eo W w • 1 (f 1 • fie•;ry . • 1 ` r r. ./:11" .b .8OF 1 • 'Lava" `•_ • ; . r 1 I 1 V 1 � ,. ; ♦ Discussion • r�• I -� other Business. X111. Adjournment. 1 I r .A,�• M 1 1 i �,. Z r a K' t t ' t / �. ♦ T• M- - f ; tY ••r•�It i_ I 1.iT � , �� µ I r v ` , i�,t{ f > r , • WMT.ursrW"u "A 0 Pacific coae b_.-J *4 .. % u 4 P7 7'1 F t' r - '�• N -1- '4 n� _1 �! r i_^, ice' , .' I w a l 4•�y0 h`� � '• �� i ... I;' r � 1 �� a �K"M�� - . J; X ', ' yi .. 1 iL 17 ko ..�•- w \ •� �. jo r •ll � / F r • i • r ,' Iwr• fir., ••'.n•f 1 • F�. •' .., r, ti,_ .. , w da AIT •rl S 'w tj In Vol f ; - ! ti 1 • Sdq� 1 � fjyN, r.:'I' f r • I , : � : 1 'J IN 1�. S t1-�`k;cf�-.�+5.'IS�IM '�_if'� Si�i'Jj�(-",�:41,�t.I •'-'w�' ��'! _ !"_ ti^��J � ti 1� u• A a t. t • • v 1 t �,.. "n . h w Y , -.� Ay ,IY-_. 1• • ¢fib. 1�' t r L of � 4 ,@ .� \ •+��,� I rY��r4 r11'•1�1�!��11i IS C-c AtPROVED BY CITY COUNCIL - a, fib -' REQUE T FOR CITY COUNCIL "N rti• ex Date December 3, 1990 Submitted to: Hororable Mayor and City Council Michael T. Uberua a, rit Administrator ea�xcems Suumitted by: g' Y Prepared hy;P►obert J. Franz, Deputy City AdministratoSubject: Designation of Representative: Big Independent Ci\Pool oint Powers Autl: orlty (B10EP) Consistent with Council Policy? [Xj Yes [ j New Policy or Exception Statement of Issue, Recommendation, Analysis, Funding Soa!ree, Alternative Actions, Attachnwnb:��' Statement of Issue: ':. he attached rese;ution designates Karen Foster, Risk Manager, as the City's representative , o the BICEF Jr;nt Powers Authority. Rersmiaendatioil: Mop! attache Resolution G 2 Analysis: BICEP is a liability insurance pool' in which the City has been a participant since the incuptiun of the pool in 1988. The objective of BICEF is to shield member cities from financial and operational losses due to large cettlementi. This program provides coverage up to $25 million per occurrence less a self insured retention of wl million. Participation in AICEP enables the City to provide insurance coverage at a low stable cost regardless of the condition of the commercial insurance market. Edward H. Thompson was previously designated as the City's representative but has recently retired. Upon his retirement, Karen Foster was appointed as Flick manager after an open recruitment. The Authority By—laws require that the governing body designate the specific representatives. Robert J. Franz is currently designated as the alternate representative and would remain as the City's alternate. Fmmdirn. Saurce: Does not apply. JteMativg &qJJ is Designate anther City official as BICE? Representative. Astasbments: Resolution to accomplish the recommendation above. 5526j I J - -; 1 . � ,� ♦-. .. `. .•.��1 y�. a �7/ t 4, _. •11r'r y . -1 - .•� � o . 1 1 . l Ali � �I � •• i_ .K-, .t kd` d .•�'w , ��• Y _y�h�t �.z I /_ :1' , tl•r 1 -�• -, •� � `' ■ r ,. , •�. � , / � r /• � � IT 1 i} 5,"-�lll[ "'' • �`I � is ry I ' 'Ak'� AA • F rY i x: • 7 BIG INDEPENDENT CITIES EXCESS POOL JOINT POWERS AUTHORITY The Holiday Inn 7667 Center Avenue Hunrington Beach, CA 92647 ti BUSINESS AGENDA . ..- ` • • • . � ''7 a •: J- _ Y :. :.? �5,, • 1 .. - + _ Ii. DISCUSSION & APPROVAL OF CONTRACTS FOR MARSH III. REVIEW & APPROVAL OF PROPOSAL FROM COOPERS • 1 •• rAUDIT PREPARATION OF FINANCIAL STATEMENTS {, 1 • •RECOMMENDATION• + LIABILITY UNDERWRITING AND CLAIMS COMKLII • • • • r� r,�, • BOARD • •AUDITOR�. • " • ` V. RSPORT ON BOND FINANCING APPOINTMENT OF t* VII. APPOINTMENT OF MEMBER TO THE FINANCE AND PERSONNEL COD51ITTEE • �'«E • , �:''j • i 1 1 • ' • ' FINANCE AND PERSONNEL COMIITTEE FOR BOARD APPROVAL OF: (1) THE INVESTMZ-NT POLICY FOR THE ADMINISTRATIVE FUNDS & CLAIM PAYMENT ,r ♦ % 1 Ix. REPURT FROM FINANCIAL ADVISOR RELEVANT (2) TREASURER'S PINANCIAL REPORT FORMAT (3) POLICY FOR DISBURSEMENTS FOR ADMINISTRATIVE EXPENSES ' C': ':Y fit, • TO INVES MINTS �. f' AV X. STATUS REPORT ON REQUEST FOR PROPOSAL FOR GENERAL COUNSEL Xi. REPORT _. y _ �•. r OF GENERAL COUNSEL15- J� STRATEGIES FOR NEW MEMBER ENROLLMENT c REPORT ON TERMS AND CONDITIONS OF EZCESS LIABILITY POLICY Kf •1 '� ��'•,� S /r'� � �;�;;on'� P: toy ;ti . ;E�/x� ; • •t. _ I - . - .`, � 1 . -^r'� � y 1 1!! ,. t rt-1- •Y wr t, --P •V •,r." ., vN�` •,� 'r 3 t � r•war`'j il,• 1 i... 1 1 Y • 1 1 � 1 � �+ 11 ,_ _ • 1 f r� 1 r " Jr . Y I 41 vj W. � _ M Av- ~ /• :� t- • 1�,1 ,Y4�� -.t.�•• \* Y ,4i. r T..• - �• 1. �^, .J�. 0 J. 41 4 ' •` fir•;' f � } A I $ Irk' i !NTEH•DEPARTMENT COMMUNICATION y MUgi ON �lKM °I ik�. I' 'Y. !'ONNIE BROCKWAY From GAIL HUTTON To Clerk City Attorney SubJect Joint powers Liability InsuranceDate December 5, im Agreement In response to your November 30, 1988, communication regarding the above, only the resolution needs to be amended, not the agreement you sent to us. Accordingly, Art DeLaLoza's secretary, Karen S. Arnold, will retrieve your original resolution }594e and correct pages 4 and 6, then return the same to you for your files. Thank You, GAIL BUTTON City Attorney cc: Art DeLaLoza, Deputy City Attorney , r •1 \i 1 i r a'• (r''. �SCldYr. • 'i� � .r M I %.I l E I 1 •,II _ • 1 . 1 Woo t u Distributions i ties Requesting Department Yellows Office! Control F119 Pinks Assigned Staff Member AROURST FOR UWALL SERVICES POLLOW-OP i0409ANDpM ,lot Constio Drockwar Front office of the City Attorney City Attorney Subjects Your Request for Legal Services Date: 11/30/00 Thin will acknowledge receipt of your Request for Legal Berviees, ue;ow listed. fttedt 11/30/aa Type of Legal Service Requestadt C ] Ordinance C x ] Insurance C ] Resolution C ] Bonds C ] contract/Agreement C ] Opinion C ] Other: desoriptions Amend pages 4 & G Joint rowers Liability Ina Agre:camn%at This Request for Legal Services: ban been assi nod T to for handling. Belehe, can be reached throngextent: on 5555. The Control dumber assigned to this request ist _ Please reference this number whan maitiny any iagn r es in regard to tble scatter. Thank you. 0673L N � 4.. r►tY,Je�6w►'�'.:.0 PP .. .�1'. ' 'r ... S _ . _ '1) • - A (J cdlkb CITY CW HUNTINOT01M BEACH � INTER-DEEPQARTM yT COMMUNICATION HNViRICI MMKN 'to Gail Hutton, City Attorney From Connie Brockway, City eric k' • Subject JOINT POWERS LIABILITY INSURANCE Dace November 30, 1988 AGREEMENT Attached is the original agreement for the Joint Powers Liability Insurance Program which was approved by the City Council on November 21, 1988 - Resolution No. 5948. According to the attached memo from your office, it is necessary -to amend pages 4 and 6. Please male the necessary changes and return to our office. CB:bt CC: Ed Thompson, Insurance Bob Franz, Administrative S , ry i c;es • r::'. err'.'. V., ` r .. ,cy.�•1 ®r.1�r', OE AON j 0 'i 0 _I ! I A" PA I A., !Oz, Ito requirement. of law, to execute the First Amendment, to Li ail i I i t Risk Coverage, NOW, THEREFORCt BE IT RESOLVED BY THE COUNCIL OF THE CITY OF rt 11UNTINGTON HEACH AS FOLLOWS; SECTION 1. Declavatior of Council. This Council hereby speci f i-cally finds and declares that. the act forts authorized hereby constitute and are with respect. to public affairs, of the City, and that. the -stateinents, -fin'dinge and--def.erminat:ions of the Ci-ty set forth in the preambles above, in the First Program Resolution and• of the document approved herein are true and correct. .SECTION 2. Basic Premium Ohligation -Under First Amendment to j Subject to City Attortloy appiloval, Liability Risk- A!3reemenh.4PThe Mayor, Ct�y Manager -Coverage tor City hdministrator) and Finance Director are hereby authorized and 0 dLru-cted, for and in the name and on. behalf of the City to execute acknowledge and deliver. -to the Authority the First Amendment to Liability Risk Coverage Agreement in substantially the form approved by this City -Council by Resolution No. 5929 and on file S with the Clerk of the City Council, with such changes therein as such officer may require, or approve* such approval to be conclusively evidenced by the execution and delivery thereof; provided, however, that:. the m a): i mu m annual Basic Premium obligation of the Ci.t:y established thereunder shall not: exceed $540,000 and the aggregate principal component: of Basic Premitirn established thereunder shall not: exceed $4,80C,000. SECTION 3. Authorization of Re2res-ent.ati ves to Authorize Issuance of Authority Bonds. The representatives of the City to the Big independen,'. Cities Excess Pool Joint Powers Authority (t:he "Authority") are hereby authorized and directed• to authorize, as -:D , o:. -4- 0•A X A .15A . 11; I '1yr- 13 t A IL A� 1, 0 ilk Wa including approval of execution by the Authority of the First Amendment. to Liability Risk Coverage Agreement and First Amendment to Trust Indenture relating to the Bonds. SECTI011 7. Attestation and Seal. The Clitk of the Cf ty Council is hereby authorized and directed to attest the signature of the authorized signatory, and to affix and attest: the seal of the City,.as mny be required or appropriate in connect [on with the execution 'and delive'ri of said First Amendment to biability Risk Coverage Agreement. Subject to City Attorney approval, SECTION. 8 -Further. h. Acions. ,Of f i cers of the City Council and the 'Mayor , - City Manager and Finance Director and any other officer yl or official of the. Cihy authorized by the Mayor, are hereby 'authorized-' and directed, jointly and severally, to do any and all things' and —to e'Aecute And deliver any and all documents which they deeffi..:_'h 'cegsary:at.-or advisab�-e :in 'orde.r to consurmat: e the i ssuande'j.*L.'sale.,'And.: del.i.very of the ' Bonds -, by the Authority and ot.herwise%`ta!!,darry outt .-.gi:ve effect- %W and -comply with the terms and intenh':i oE.. :this- 'resol.ut.ion, t:he• i:-onds, the Joint Powers Agreemerft:e,'A I the:`U-abl-lity , 'Risk CoveragE Agieement including the t,! Amendment:, to %'Liability. Risk 'Coverage I Agreement) and the r. Trust Iddenture (including the First Amendment to Trust Indenture) relat'Lng* -ho. the Bonds. Such actions heretofore taken by such officers are hereby ratified, confirmed and approved. PAGE END ". ,6, 9 rqpitx+�L'' k c 1 . ON ; VL p � r a r. •4�ri° I S � r Jill I fin: y'i' i' • 1 awlso ti.. REQ UF. FOR CITY CCIJNC ACTION Doti Novamber 7, 19d8 Submitted to: Honorable Mayor and city Council Submitted by: Paul E. Cook, City Administrator��� r Prepared by: Robert Franz, Deputy City AdministraC Subject: Joint Powers Liability Insurance Program 1►t'8Y VZ1> CITY g p'if ' S/ Consistent with Council Policy? (XI yes ( ] Now Policy or Excepts �' a.sssssr Statement of Issue, Recommendation, Analysis, Funding Source, Alternetiya Actions, Attachments: STATEMENT % ISSUE: The attached Resolution neads to be approved by Council to complete the documents regarding the Joint Pourers Liability Insurance Program. RECOMMENDATION: Approve the attached Resolution to it ement th% revenue bond financing of the Big Independent Cities Excess Pool Joint powers Authority excess liability insurance program. ANALYSIS: The attached Resolution ar.thocizes maximum Basic Premium obligations (which correspond to debt service obligations) to be inserted in the First Amendment to Liability Risk Coverage Agreement. The maximum amounts are the highest possible anticipated amounts; it is anticipated that initial Base Premium amounts will be significantly lower. Very conservative high maximum amounts Were selected to avoid the risk of requiring another approving resolution. The attached Resolution does not approve the form of Purchase Cuntract or •Official Statement to be executed by the Authority, put does specifically authorize t`:e City's representatives to the Authority to approve such documents as members of the Authority. F UNDINC, SOURCE: Funds for participation in the Joint Polaers Authority are buugeted in the Liability Insurance Program. ALTERNATE ACTIONS: Fro 510E None practical, as City is already a member L-f the JPA. I it 44 0 Irk- fj Request for City Council ActiOn November 7, 1988 Page Two !,TTACHMENTS: Resolution Inc- 2. i'elling, Northcross Nobrigai PEC:RP:EHT:sp A * We. '5 77, I... V6 ki it 1k AD ' I ' � I •r, � l�lw '., LM.. 1 r fir;;• ,�;, � TT''t' ' '•'. ' ;': '.'apt-' , r4 a' P , I KELLINC, NORTNCROSS & NOMICA, INC. 11III011 St 11 I%YI t.,I 110V 1 a `7 M 109 Date: November 4, 1988 To: BICEP Member Ci.tias From: Dan Cox,f'"l� Re: Financing Resolution "Not--to-Exceed" Amounts By this time each City should have received the form of resolution for its Council to consider in order to approve the financing. Each resolution authorizes the Cityls BICEP representative to approve the execution of the bond purchase agreement at the time of the sale of the bonds. Since the par value of and interest rates on they bonds will not be known ur.til after the Councils take action, the authority of each rupr.santative to approve the execution of, the purchase agreement is valid provided than: the par value of the bond:, the City's share of thq bonds, the interest rates on the bands, the resulting Basic Premium of the City (before deducting the credit for investment earnings) and the underwriter's discount do not exceed this parameters stipulated in'the resolution. The resolution is set up in this manner so that the bond sale does not have to coincide with five City council meetings. In order to avoid the situation where one of the parameters has been exceeded after council action has taken place, we developed extremely conservative 11not-to -exceed" amounts for use in the resolutions. An explanation of how and why we derived these amounts and what the current estimates are as follows: Zg-t€l p," VaIM At this time we anticipate that the Claims Payment Fund will be funded at about $12 million dollars, and, with capitalized interest, reserve fund and program &::velopment and issuance costs added, a bond par value of about $15.:1 million. since Coopers & Lybrand is in the process of analyzing the recant data on thig cities and the final program structure for the purpose of rendering the actuarial opinion and may, as a result, require a higher initial funding level, we assumed a $15 million Claims Payment Fund in determining the not -to --exceed par value. With reserve fund, capitalized interest and costs added, an $18.8 million par value was derived. City share of PAr value. We anticipate that each City's Allocable Proportion (share of debt service and par valua) will be roughly the same percentages as the share of Pure P,'Aimiun paid for the first Coverage Period. Since these tic :. . ;��.�1114'�{;:• C' 7 �•:?5 „�,,��y��,l _ watt �7 shave, l�.r'111ti x � , r '1 1t t :�''w"• ��,'7+wT��..li'�(Mbi�Y'il'ii.d' "* ,' %'ri9 •;�ii., ...T�'n•;,v,�ih:,..lva5lic�: „ .'�OAJ�... A• xY� fir•%..�.:' r; i` _ i je i• 1 t , V t y� 1 r r r, 1 ` Ldel VA ' ,4'*t 1 , percentuges will be finalized after coopers has performed its analysis, we added five percentage points to each City's percentage tc determine each Clity's maximum share of the par value. The amount for ea^.h City is derived as follows: (1) (2) 18.8(million Of 1st Plus Roughly Times (2) City P-mla i' omin TIN Rtn E iagundedl Huntington Beach 20.58% 25.50% $4.8 million Oxnard 15.05 20.00 3.0 million Pninona 14.17 20.00 3.8 million San Bernardino 20.58 25.50 4.8 million Santry Ana 29.62 35.00 6.6 million We have provided for & maximum interest rate of 9.0% to allow for a major downturn in the bond markat between now and the bond sale. The market has been pretty stable lately and we do not expert such a downturn to occur. Had the bonds been sold this week, we conservatively estimate that thn interest rates would have ranged from 6:25% in the first maturity to 7.751 in twenty years. BasinPremium. The maximum interest rath .znd par value and a 20 year financing would result in a maxiiaum, annual groats debt service, of about $2.1 - - million. - Eaoh , City's maxi.num annual Basic Premium (before investment earnings credit) was derived in the same manner as the maximum share of par value. Discount. The maximum discount of 2.35% is the discount quoted in the Drexel/Stone proposal. This may be reduced depending upon how the bonds are marketed. Mark Northcross previously distributed a schedule for the October 27 BICEP meeting which reflects the estimated net debt a'3rviee for each City (Basic Premium with investment earnings credit). 'Based on our current expectations, these amounts are still pretty fair estimates. Prior to the time the bond purchase agreement is'signed, we will review the final numbers with each City. I hope you find this information helpful. Please do not hesitates to give Mark or me a call if you have any ti r �,,., • ',� ;;�,;; goes or.x F r r� 1. DWC: shp r�. r ,•x,, j lY '! �-.., a..•w.a.w , ry�N u.,.,.x'��..y.M�.�•:,ity.�•r'.,,..v-•. . �,•ti�,•�... �ra.•r•IY .D�rr1'.M,N,'I'>Iq Pr ••;n 1•a�.e...� ,� , {,i��"✓;S� aii ?D'�{.';kt `r f11NMJYK'WIRIgFCr. 7 r 1 • J V 1. / Ilk 1 dK [M�,a •+ w • t; , r y v 1 • �/ .,.. V 1:`A -t t•. a .,�" 1 , •ft� , . I, t ): ,• , ,+� • ,. ram■ • ; ti , � �•�','1• `(\ t +�' r.: ♦ I COPY 13 tr , .., • t lt. ._, .►-; it fir' ` _ 1 IK ,� T .��_ r� ♦ ie .�, I EXENT ♦ -.-� -,:. yr �. „��Vpi �. �Y�� t- Y_. y .f LIABILITY RISK •,y 1 1 w «�f _ e COVERAGE AGRE • •. 21 it l +'c �+ 1•Dated as of • • • + F er 23 77 25 among the. 27 POOL JOINT POWER6 AUTHORITY 29 fe 33 • C jell. `� 1 1 REACH,T14E CITIESr ::' :#•'. •..�_�",• Py�jF� • r 13MARD11 .S • •tom -(' Y 135 e .y' Wit. �i`rx 41 �,[r1 �►y a � 45 ' / r ;' r xyAt •, M 11r�;,__ - - -' -- - - -- -- '�*y�c� �� � tr � � r ALI •r JL ku IA F -i"fir"•--lt «i ? ` 1. A;+. 1 . t t f • :r r -�h, .,rr .L.t. .5 >.. /.• .1. +•., 'r� i �r� •P�wr _ •� r °1 ,1• ,+ �`'>Jll- 1 _ • M : F lt�,� _n _)��� r �I.aOV�.�1•tt-.J� S�i•,t • A ' .R •r ' •. ' 10 FP` I 3 �0 r) 1 7 TIABLE OF CONTENTS g Page 11 ARTICLE I 13 DEFINITIONS AND EXHIBITS 15 SECTION 1.1 Definitions and Rules of Construction ...... SECTION 1.2 Findings ................................... 10 17 SECTION 1.3 1EXII i b i t S .............. ................ ... 10 19 kRTICLE II 21 REPRESENTATIONS, COVENANTS AND WARRANTIES 23 SECTION 2.1 P,epresentations, Covenants and Warranties 25 cf the Participants .................. 11 SECTION 2.2 Representations, Covenants and Warranties 27 of the Authority .......................... 13 29 ARTICLE III 31 DEPOSIT OF MONEYS; COVERAGE: PA�SENT OF SETTLEMENTS; 33 PURCHASE OF COMMERCIAL INSURANCE 35 SECTION 3.1 Deposit of Moneys .......................... 15 SECTION 3.2 Coverage ................................... 15 37 SECTION 3.3 Payment of Costs of Issuance ............... 15 SECTION 3.4 Payment of Settlements ..................... 15 39 SECTION 3.5 Purchase of Commercial Insurance or Reinsurance ........................... 16 41 SECTION 3.6 Case Reserves and LossReserves ........... 11.1 43 ARTICLE IV 45 TERN OF AGREEMENT; PREMIUM 47 SECTION 4.1 Term of Agreement; Termination of a 49 Participant's obligations to Pay Participation Premium .................... 19 Iq 4,4, f 2658002/2 ar Yyk Az' i . . . . . ........ ..... 4 � I �j .r P I I V 1 SECTION 4.2 Budget and Appropriation of Premium 3 SECTION 4.3 PaymPn".cs .. ....... „ .................. Obligation to Fay Premiums ................. SECTION 4.4 Premiums .. .. ...........•...............I 5 SECTION 4.5 Pure Premium Adjustmer,tc ................... SECTION 4.6 Special Pure Premium Adjustments ........... 7 SECTION 4.7 Participants Making a Cash Deposit into the Claims Payment Fund ................. 9 SECTION 4.6 Credits for Withheld Refunds ...... ........ 11 ARTICLE V 13 RESERVE'S RELEASED FROM THE 15 PLEDGE OF THE INDENTURE 17 SECTION 5.1 Receipt of Reserves Upon Discharge of theTrust Indenture ...................... 19 SECTION 5.2 Receipt of a Participant's Allocable Share Upon Withdrawal or Expulsion .... 21 SECTION 5.3 Receipt of a Participant's Share of Debt Service Reserve Fund Upon Prepayment: ..... 23 25 ARTICLE VI 27 ADMISnION TO, WITHDRAWAL FROM AND EXPULSION PROM THE POOLED SELF --INSURANCE PROGRAM 29 SECTION 6.1 Conditions to Providing Coverage to a 31 New Participant . SECTION 6.2 Conditions to Permitting Withdrawal of 33 Participant from Coverage ................ SECTION 6.3 Conditions to Permitting Expulsion of a �. 35 Participant from Coverage ., 37 ARTICLE VII 39 ABATDIENT SECTION 1.1 Abatement of Participation Premium is 43 the Event of Failure to Pay Settlements . 45 2658002/2 J ay r Pr � I•+�rTP.K wt�i � M'4AlY�r'Fw a ••` ` f,/.� _. `+Iit,� }�. } J• �p , � rr�r�Js ,J 'ram: fn�r••-r �l ,I P a2 20 20 21 25 27 28 20 29 29 30 30 31. 34 34 ■: ';I f )■ Page i ARTICLE VIII 3 INDEMNI17ICATION AND RELEASE OF AUTHO•:ITY, TRUSTEE i0D PARTICIPANTS; DISCLAIMER 5 SECTION 8.1 Release and Indemnification Covenants ...... 35 7 SE'CTION 6.2 Disclaimer ................... .........A... 35 ARTICLE IX 11 ASSIGWIENT AND AMENDMENT 13 SECTION 9.1 Assignment by the Authority ................ 35 15 SECTION 9.2 No Assignmeat by the Participants .A........ 36 SECTION 9.3 Amendment .................................. 35 19 ARTICLE X 21 EVENTS OF DEFAULT AND REMEDIES 23 SECTION 10.1 "vents of Default ...................... 38 SECTION 10.2 Remedies on Default 39 25 SECTION 10.3 No Remedy Exclusive ..•....... ..... ...... 40 ,r, 6 SECTION 10.4 Agreement to Pay Attorneys' Fues and 27 Expenses ..... ........ ................. 40 SUCTION 10.5 No Additional Waiver Implied by 29 One Waver ........,.... . 40 SECTION 10.6 Trustee and Owners tcExerciseF.ights ..... 40 31 33 hRTICLE XI 35 SECURITY FOR OR PREPAYMENT OF BASIC PRDIIUM; TEPMINATIVN PREMIUM ,r 37 -• SECTION 11.1 Depocit of Security for Basic Premium 39 by a Participant ........................ 41 :y. .SECTION 11.2 Deposit of Security for Basic Premium or . �- 41 Optional Prepayment by All Participants .. 42 ' �• SECTION 11.3 Optional Redemption of Bonds ............... 43 41 SECTION 11.4 TQrniination Premium T ...... • A .. . . ........... 43 SECTION 11.5 Continuing Premium Obligations ............. 44 45 1 V 1 4, _ � •F�� �� '�• „T;�'�� 2658002/2 14 4J y r� ill J'• U I- I ti aM iI' r • ,I. 1r. ' • I Y nl ' I ' i • l; Fac 1 ARTICLE Xi: J 3 MISCELLANEOUS `�•.� 5 SECTION 12.1 Notices ... 45 ' SECTION 12.2 Binding' Effect .•......... 45 7 SECTION 12.3 Severability 45 SECT'%ON 12.4 Fuvther Assurances and Corrective 9 Instruments ,•„45 SECTION 12.5 Execution in Counterparts 4.5 11 SECTION 12.6 Applicable Law ............... 46 13 Exhibit A - Schedule of Ba:;ie Premium Payments ........... A-1 15 Exhibit B - Allocable Proportion for Each Participant ... B-1 Exhibit C - initial Participation Premium ................ C--1 17 Exhibit D - Special Pure Premium Adjustmer';s and Adjustment Proportions ..................... D-1 19 Exhibit E - Participants Making a Cash Deposit Into the Claims Pay.nent Fund .................... E-1 21 F.rhibit F - Memorandum of Liability Covera5e .. Y . • ... , r Y .. F--1 Exhibit G - ITaderwriting and Claims Administration 23 Standards and Liability Claims Conti;Dl Guidelines ......................... G-1 25 Exhibit H -- Form cf Written Requisition .................. H-1 Exhibit I - Notice Addresses ........... ...... .......... I-1 27 Schedule A - Methodology fur Calculating Total 29 Pure Premium . , . . . . . . . . . • . . . . . . . . . . . . Y . . SA-1 Schedule B - Formula for Calculating Pure Premium 3iadjustment ............................... SB-'1 , 4 (iT4lVij•V' I , '. 2.658002/2 .r i I' , , iv ,, ";. •'hL 'r ), ih Irpw7K 1 LIABILITY RISK COVFRAGE AGREEMENT 3 THIS LIABILITY RISK COVERAGE AGREEMENT, dated as of 5 October 1, 1988, by and among the BI? I"EPENDEYT CITIES EXCESS POOL MINT POWERS AUTHORITY, a joint exercise of powers agency 7 duly organized and existing under the laws of the State of California, including, without limitation, Section 6500 et qeg. 9 of tho Government Code of the State of California, as provider (the "Authority"), and the CITIES OF HUNTINGT014 BEACH, OYMAP.D, 11 POMONA, SAN BERNARDINO AND SA.NTA ANA! CALIFORNIA, each a municipal corporation duly organized and existing under the 13 Constitution and laws of said State, and, in the case of the cities of Huntington Beach, Pomona, San Bernardino and 15 Santa Ana, the respective charters of such citiez (each an "Initial Participant" and collectively, the "Initial 17 Participants"); 19 V, I T N E S S T H 21 WHEREAS, each Participant is authori.zed by Part G of 23 Division 3.6 of Title 1, Section 990 et sea., of the Califcrnia Government Code (the "Act") to insure itself against tort or 25 inverse condemnation liability, to insure its employees against injury resulting from an act or omission in the scope of his 27 employment and to insure against the costs of defending such claims; 29 WHEREAS, pursuant to Section 990.4 of the Act each 31 Part:-ipart is authorized to provide insurance by self-insurance which may be funded by appropriations and to 33 establish or maintain reserves for such purposes; 35 WHEREAS, pursuant to Section 990.6 Qf the Act, the cost to each Participant of such self-insurance is a proper charge 37 against the Participant and therefore the governing board of each Participant is aut-norized to pay premiums for Coverage in 39 an amount such gw-eraing board determines to be necVs,;aiL;� to provide such Coverage; 41 WHEREAS, pursuant to Section 990,8 of the Act, each t3 Participant is empowered to obtain Coverage through a joint powers agreement with other local public entities, anu such 45 pooling of self -insured claims and the risk sharing of losses ::Is not considered insurance subject to regulation under the 47 California Insurance Code; M1t r I WHEREAS, the Authority i5 a joint power--a-:--:y of which each Participant is a member; 3 WHEREAS, the Authority is authorized to exercise necessary 5 powers to implerrznt the purposes of the Authority as established by the Authority's Governing hoard; 7 WHERE''.S, the Authority has determined to assist each 9 Participant to obtain self-insurance for liability risks through this Agreement; 11 WHEREAS, the city council of each Parcicir-int has 12 authoriwLd the execution of this Agreement for the purpose of providing Coverage for the Participant for the benefit of the 15 Participant's resideuts and taxpayers and for the health and safety of the public who interact with thr Participant; 17 WHEREAS, the 4uthority proposes to aL_horize the issuance 19 sale a►:d delivery, pursuant to the Trust Indenture described herein, of Insurance Program Revenue Boa►:s (the "Bonds") in 21 order to initially fund reserves in an amount determined sufficient to pay Settlements when due an.] tr provide the 23 Coverage described in the terms set .;crth herein and in the Memorandum of Liability Covet:aue attached hereto as Exhibit H 25 (the "Memorandum"); 27 lt'HEREAS, the Authority and the Pdrticipent-,c have heretofore conclusively determin'ad following invest!g4t�.orj that either 29 public entity liability insurance i-, r:,t available- to the Participants from commercial insurers OL from any other source 31 or that such insurance ie not availab?o at a commercially reasonable cost; 33 WHEREAS, the Authority and the Participants have further 35 determined, based upon the advise of independent professional insurance consultant, familiar with the cyclical nature of the 37 reasonable availability of coverage in the cornmercirl insurance market, that it is uncertain wl:en such liability insurance is 39 expected to become available at a commercially reasonable cost, thereby in the interim exposing the Participants to 4' self -insuring from available revenues on a year -by -year basis with the attendant risks of fiscal instability and ruinous 43 burdens on its citizens in the event of large liability claims recoveries; 45 WHEREAS, the Authority and the Participants have further 47 determined that the periodic unwillingness of the commercial insurance market to provide primary or excess public entity 49 liability insurance to local governments at reasonable rates or, in certain cases as at rreaent, at any rate, mandates that 2658002/2 2 _ •'� .I .CALM �.' 1'.� `',,. Y I 1! I Vr :•I ;I 1 the Participants seek nct only an immediate solution but also a long-term permanent solution to this problem which will in 3 future years free them from exposure to the vagai•'es of conuttercial insurance cycles; J WHEREAS, the Authority and the Participants, in 7 consultation with independent professional inJuranc:e cot, .sultants, have formulated a joint task-sha!:ing insurance 9 program to be administered by the Authority to meet the public entity liability insurance needs of the Parti,:ipants which will 11 provide, the following advantages, among others, to the Participants: 13 (a) immediate funding of a claims payment fund (the 15 "Claims daymeat Fund") through an initial deposit from the me-lneds of the sale of the Bonds for the dual purposes of 17 providing immediate protection from large claims lost, and facilitating eventual access to the crm.-ncrcial reinsurance 19 market, 21 (b) mutual agr,)ement by the Participants to pay annual premiums decermi:ied on both a prospective end a 23 reti-.,)spective basis calculated actvarial?.y to spread and moderate the cost of liability losses to each Participant, 25 (c) relief ft:om the burden of paying premiums to 27 commercial insurers at levels reflecting the insurees' high costs of underwriting, administration and brokerage fees 29 since the Authority's costs will be limited to reasonable administrative costs, 31 (d) relief from the commercial i.nsurers' rights under 33 excess liability policies to force claim settlements which are Payable primarily in each case from the Participant's 35 self-insurance funds, and 37 (e) access to the commercial reinsurance market in futurj years when commercial reinsurance is available at 39 rates deemed favorable by th►-� Participar..rs. 41 WHEREAS, the Participants have further determined that the Participation Premium to be paid in each yee.r by each 43 Participant as provided for and upon the conditions set fortn in this Agreement will be payable only upon the cond;.tion of 45 the receipt of the consideration represented by the insurance protection and services to be provided in such year under this 47 Agreement, but in the event that such protection and services are so provided in any year such Participation Premium will be 49 a binding obligation oc each Participant payable from legally available mor.eys of each participant: 51 2F58002/2 3 r.� II ' 1 b, I nems 1 WHEREAS, the Participants have further determined that tha obtaining of the insurance protection and services provided fir 3 under this Agreement L. essential to the presert-ation and fostering of the health, safety and property rights of the 5 citizenn of each Participant and the l;,ck of availability of reasonable commercial public entity liability insurance to 7 local governments generally in the State and to the Participants in particular constitute a public emergency; 9 WHEREAS, each Participant has heretofore determined that it 11 is necessary and in the interest of the citizens of each such Participant to establish, through the issuance and sale of the 13 Bonds, and maintain through pro rata contributions of each Participant a debt service reserve fund therefor, in order tc, 15 establish adequate reserves to permit the bonds to be marketed at the lowest possible interest rates; 17 WHEREAS, the cost of funding and maintaining such reserve 19 fund han been determined by each Participant to he more than offset by the anticipated benefits and economies to be realized 21 by the pooling of risks and losses pursuant to this Agreement; 23 WHEREAS, Artic?e 16, Section 6 of the Constitution of the State of California, regarding lending of public credit or 25 funds, provides, in relevant Fart, that such Section "shall not prohibit any county, city and country, city, township, or other 27 political corporation or subdivision of tho State from joining with other such agencies in providinc; for the payment of 29 workers' compensation, unemployment compensation, tort liability, or public liability looses incurred by such 31 agencies, by entry Into an insuranc- pooling arrangement under a joint exercise of powers agreennen•., or by membership in such 33 publicly owned nonprofit corporation or ether public agency as may be authorized by the Legislature"; 35 WHEREAS, it is a matter for the city council of each 37 Participant to determine the amount of premiums which such Participant- shall pay for proper insurance coverage; 39 WHEMS, each Participant has heretofore determined and 41 does hereby confirm that, in view of the foregoing facts and circumstances, the premiums to be required hereunder are 43 reasonable and advantacreous and to the public benefit of the citizens oC sues, Participant; 45 WHEREAS, the Participants have determined to implement a 47 risk sharing program, by means of execution of this Agreement, prior to issuance of the Bonds; 49 NOW, THEREFOR', in cui,sidcLaeion of the above premises; acid 51 of the mutual covenants hereinafter contained and for other good and valuable consideration, the parties hereto agree as 53 follows: 4 2658002/2 �� � ,. +'rd•+f'�pii�. , i;by:;d- a ., ......, .,....---- ..- _. � ._.. .-...-._ .._ _...__ _.__ Iv 11 IV' ICJ �•r,l )t� > K I N 1 ARTICLE I i DEFINITIONS AND EX111SITS 5 SECTION 1.1 llr�fsnitinns and Rules of Construction. Unless the context otherwise requires, the capitaliwed tt�rm used 7 herein shall, for, all purp.,scs of this Agreement, have. the meanings specified ir. the Trust Indenture, dated as of the date 9 hereof (the I' Indenture") , by and between as Trustee thereunder, and 11 the Authority, togather w th� jn^- amendments thereof or cupplemeLts there :o permitted to be made thereuLider, , and L.-he 13 additional terms defined in this Section shall, for all .irposes of this agreement, have the meanings herein specified. Unless the context otherwise indicates, words importirg the singular number. -hall include the plural numbeL 17 and vice versa. The terms "he-.eby", "hereof", "horetze "herein", "here.►nder" and any similar terms, as used in this 19 Agreement. eefer to this Agreement as a whole. 21 "Actuary-" means a firm with at least one employee who is both a Fellow of the Casualty Actuarial. Society and x Member of 23 the American Academy of Actuaries, which firm is appointed by the FuthcriMy with the approval of at least a majority of the 25 .Authority's Governing Board. 27 "Adjustment Proportion" meens, with respee.t to the Coverage Periods ending on June 30. 1989, 1990 and 1991, in the event 29 th&t Special Pure Premium Adjustments are asaer,sable against any Participant with respect to any such Coverage Period 31 because ttie Pure Premium payable by such Participant is capped at $1,250,000, the proportion used to determine Pure Premium 33 Adjustments with respect to such Coverage Period. 35 "Administrative Premium" means, with vespect to each ,.. Pcrt.t�ripant, such Partic pant's Pu►e Premium Proportion of a13 Imp f` 37 administrative costs of the Authority relating to the Coverage or the Bonds, as further set forth in Sectior 4.4(d) hereof. a9 ' ; "Allocablo Proportion" moans i.he percentages set forth in _. "h`� 41 Exhibit B of This Agreement. 43 "Authority" means the Big Independent Cities Excess Pool Joint Powers Authority, a joint exercise of powers authority 45 duly organized and existing under the Constitution and the laws of the State. :• d "Basic Premium" means, with resperu. i:o each Particil.dnt, 49 the paynpnts set forth in Exhibit A hereto which correspond to CK'r�a' .: .CI ouch Part,-,cipant s Allocable Pruport.4,on of principal of IN I \t'; 'r'i 2658002/2 �'.,..,.y., + 1 r C J ',�pF3'+,,rr��pl6l17 _}. 1.. .." •.... , -...'. •.... . ... •- • r,.pry . it I I. 1`. , '3 l •, 1 (whether at maturity or upon mandatory sinking fund redemption) and i~ter.est on the Bonds, as set forth in Section 4.4(b) of 3 this Agreement. 9 "Basic Premium Payment Date" means August ! of each year during the period in which Sonds are Outstand` j; pro -tided t.iat 7 the first Basic Premium Payment Date shall La ;e dare of initial issuance and delivery of the Bon"is, 9 "Case Reserves" means amount' in the Claims Payment Fund 11 required to be designated as reserves for payment of Settlements pursuant to Section 3.6 hereof in accordance with 13 prudent insurance practice and in accordance with the recommendations of the Claims Review Committee of the Authority 15 and the annual report of. ;:he Qualified Claims Auditnr. CHse Reserves will be determined by the Qualified Claims Auditor 17 annually, on or prior to February 1 of each year. Case Reserves will be adjusted to reflect changed circumstances 19 subsequent to the year any Clain( is filed and to reflect the amount by which a Settlement exceeds reserves establlkshed for 21 any Claim; provided, however, that there shall be no Case Reserves established for a Claim or any portion thereof within 23 s Participant's Self -Insured Retention, as dcF�cribed in Exhibit F hereto, or which is covered b:y coriunercial insurance 25 or i,3insurance plrrrsuant to Section 5. v, hereof. 27 "Claim" means a demand against an Insured to recover for losses or dama,les within or alleged to be within► the scope of 29 the Memorandum. 31 "Claims Payment Fund" means thri Cla-'.ns Payment Fund establ, shed for the payment•. of Settlements pursuant to 33 Section 3.4 hereof. Nothing ir. this Agreement is intended to prohibit the Authority from designating the Claims Payment Fund 3; as being comprised o: separate claims payment funds foi- the purpries of issuing anc: securing additio,-ial bonds issued by the 37 Authority a;r: secured by premium payments of new Participants. 39 "Code" means the Internal Revenue Code of 1936, as amended. 41 "Consumer Price Ir.der" means The Consumer Price tndex, Urban Wage=aLners and Clerical Workers, All Items, Base 43 1967-100, published by the Bureau of Labor Statistics, U.S. Department of Labor, or if said Index is not available Fur the 45 United States, then an available index for the geographical area within the United States most similar to the entire United 47 States, published by said buroau or its successor, or if, none, by any other instrumentality of the United States or of the 49 State of California, in the order mentioned. 0 2658002/2 `M fir,. 7 I 4 I. « faM . It 1 "Coverage" means the insurance provided purLuant to and in accordance wi,r_' and on the terms set forth in this Agreement 3 and in the Memorandum ati:acheO. as Exhibit F hereto, including, but not limited to, righto to payment of Settlements from funds 5 on deposit ir, the Claims Payment Fund Linder the terms of this Agreement, 7 "Coverage Period" means each year for which a Participant 9 pays Participation Premium; provided, however, that the first Coverage Period shall be the period of ]3:01 a.m, on October 1, 11 1988 through July 1, 1989 at 12:01 a.m. California time. 13 "Governing Board" meatus members of the Board of Directors of the Authority; provided that only members representing 15 Participants shall be entitled to •rote on any action with respect to the pooled self-insurance program of the 17 Participants established by this Agreement and tiny references in this Agreement to a majority or specified percentage of the 19 Go�,ery ing Board shall be cieeRiad to mean a majority or specified percentage of Participant Memhers cf the Governing Doard. 21 "Insured", as uuc,i in the Memorandum, means a Participant 23 and any cthar insured described therein. 25 "Loss Reserves" means the amounts in the Claims Payment Fund required to he designated as reserves for payment of 27 SettlF;cents pur."ant to Section 3.5 hereof. Lacs Reserves shall include Cane Reserves. Loss Reserves other than Case 29 Reserves are not required to be funded by any means other thug the Fayment of Pure Premium and are not required to be 31 established at any time for Coverage in excPs. of $10,n00,000 per occurrence, 33 Lo♦o Reserves mode means the occurrence and continuance of 35 one or more of the following events: 37 (1) the sum of the amounts in the Claims Payment Fund, the Debt Service Reserve Fund any any other funds 39 held by the "trustee which are ai,►ailabls to pay principal of i and interest on t:hc. Bonds is less than the greater of (a) 41 $10,000,000 or (b) sixty percent (GO$) of the outstanding principal amount of the Bonds; or 43 (2) the Local outstanding Case Reserves exceed 75% of 45 the amounts then on deposit in the Claims Payment Fund. 47 "Memorandum' means the Memcr.andum of Liability Coverage set forth in Exhibi _ F hereto. +'', r� 49 yr�41r , .Vf�l 7 ..�.J8002/2 I •1, d� F � �.{"l�i�.r��'��9f�+'a�/i'K4,U'r''• r+)::i1� �;:� ��.,:�,,.. .� ..,.. r-r_': •.: �-t.vyirtry,Ywvr�IrFvts,s -,; I. Y �1 IN f :r � yfn��, � lr:•,�"fylM, ,,,,�1 i� V \ I 1 . .___ter.. •..`1L ...... %� � i.) I "Particioation Premium" means, with respect to each Participant, A&in� trative Premium, Basis Premit.m, 3 Supplement3l Basic Premit+m and Pure Premium, payable by such Participant on each Basic Premium Payment Date. 5 "Payroll" means, with respect to a Participant, the 7 workers' compensation payroll of. such Participant as most recently repurved to the State of California, 9 "R.aIILci xnt" means each city which is a party to this 11 Agreement, as this Agreement may be amended trom time to time. 13 -'Pure Premium" means, with respect to each Participant, an amount equal to the amount necessary to fund estimated Loss 15 Reserves recpilreO to ba established to pay Settlements of the Participants fc+ Coverage Period as determined according to 17 the methcdolog} set forth in Section 4.4(e) of tt..is Agreement. 19 "Pure Premium Adjustment" r,.oans, with respect to each Participant, an amount payable by such P.trticipa►it or 21 refundable to such Participant, based on ;,he adjustments to Case Reserves required by :,-he report of the Qualified Claimc 23 Auditor pursuant to Section 3.6 hereof reflecting events In Coverage Periods preceding such report relating to C13ims with 25 respect to preceaing Coverage Periods, as set forth in Section 4.5 of this Agreement. Puce Premium Adjustments shall 27 be deeacd to include Special Pure Premium Adjustments fur all purposos of this AcTreeni.:nt except Section 4.5 hereof. 29 "Pure Premium Fro ortion" means, w'th respect to any 31 Partic part: and with respect to any Coverage Period, the percentage of Pure Premium required to be paid by such 33 Participant in such Coverage PL:riod as compared to the Total Pure Premium paid by all Participants in such Overage Period. 35 "Pure Premitun Rate" means the rate for $1,000 of payroll of 37 a Participant for a specified Risk Shoring Pool determined as provided in Section 4.t(e) hereof and the methodologies set 39 forth in Schedule A to this Agreement. !- 41 "Qualified Claims Auditor" means an individual or an organization experienced in he handling of public entity ` 43 liability claims, appointed by the Authority with the approval of a majority of the members of the Authority's Governing 45 Hoard, who shall be independent of any party who administers Claims on behalf cf the Authority throughout each Coverage 47 Period, 49 "Risk Sharing Poo?" means a specific layer of Ccverage per „�)�.�,, ;'• �� occurrence applicable to one or more Participants. Tniti_ally, 2653002/2 i 1 \•// 4 ��` 1 i1�,,•• ` . •7 A) .. f .... 1.�� •w�-,. .. Y:... ,�.., n1.. E._ r1t r.^14:, �; �...,.:. �,e- .. 1. '.,,".. -1 r•rnasi.ry e7•:a,u�n' A' r f -. rprel "F. rI S .I. •. t , Y y. + td } r • 1 there sha1: be two Ri3k Shazing Pools (i.e., fro.^m a c Partieipant's Self -Insured Retention to $5,000.000 and from ( 3 $5,000,000 to $25.000,000). The Authority may establish one or w more pools in Subsequent Coverage Periods in ccmpliance with 5 Section 9.3(b) hereof. , 7 "Settlement" means the settlement by the Authority or a f Particinant, in accor.dence with the Mmorandum, of a Claim 9 against: such Participant, or the adjudication of such Claim without fur;`ler right of appeal. The amount of any Settlement 11 may include any costs or expenses deemed appropriate by the Authority in connection therewith including Defense Ccsts as 13 do%cribid- in the Kemorandurn, 15 "Special Pure Premitun Adjustment•" means the Special Pure Premium 4d Eu tEu tnents payable pursuant to Section 4.6 hereof. 17 << r "Supplemental lemental Basic Premium" means, witn respect to Nach 19 Participant. ten percent (10%) of tho net Basic Premium oayabl3 ,' �, t by such Participft ant vn any Basic Premium Payment Date (aer 21 credit to Basic Premium has been made pursuant to Section , 4 . • 1,b) (2: hereof) 23 "Term of the lareem2nt" means the time during which thisw:,:r 25 Agreement is in effect, as provided in Section 4.1 of this �. Agreement. r. ,i 27 Termination Premium means the amcrint- required to be paid t ,; 29 by n Participant to voluntarily tL.,.minat.a Coverage for a ; '' +`°•' S Coverage Period and all future Coverage Periods, as set forth 31 in Sections 6,2 and 11.4 of thi3 Agreement, or the amount required to be paid to expel a Participant, as set rorth in 33 Sections 6.3 ant 11.4 hereof. F { lr 4 35 "Total Premium" or "Premium" means, with respect to each ?artici ant:, the sum of the Partici ation Prerrium and Pure ''' r;ry `� , P P l 37 'Pre-nium Adjustment payable by such Particirsdnt in any coverage t� by Period. �,' "Total Pure Premium" means the total amount of Pure Prernium 41 payable by all Participants in any Coverage Period determined .s provided in Section 4. a (e) hereof 43 •, "Trustee" means Seattle -First National Bank, a national 0 banking association, or any successor thereof. t 4, , 47 "Undes mated Reserves" means the aniuunt ir. .he Claima c Payment :tu:d 4n excess of the total amount tht;.t has teen 49 des, as boss Reserves pursuant to Section 3.6 hereof. �t j\4�• y � 1 r � r� � r'a �, 2658002/2 � � '''y'�OE��''jyit�.l'r'r[�`!!'t�iyit': ": l'... . .. ,». -:r -. .. - - ..- .... v+..._,., ,. ..x ...n r"'o�►li weer n�tF+Y MII � 1 . to f.�,�� fj -'•w�+M .. 1,1�� % '• '� ! f. �. I 1 r, 1 SECTION 1.2 Findiricl Fach Participant hereby finds and determines that. 3 (a) The recitals to this ?.gteertlent are t_uf, ind s correct. 7 (b) Public entity liahility insurance in the amount and scope described in the Memorandum is not co:nmercia3lf 9 available to such Paiticiparil: in the private marketplace at a commercially reasonable price. ll (c) The Participation Premium shall be paid by each Participant in consideration of the C:uvera,d offered hereby aad by the :Memorandum and the sharing of the risk of 15 liability for claims associated with the pooled self-insurance program during ea::n Coverage Pericd. The 17 parties hereto have agreed and determined that such Participation Prernium, togethor with any Pure Premium 19 Adjustments, represents the fair markat7 value of thy± Coverage. in making such determination, consideration has 21 beer, given to the initial costs of establishing the pooled insurar-cP program, the unavailability of cc-mmercial 23 13,abilitj insurance to such Participant and to other Pa*:ticipants, the anticipated future costs cf commeccial V., liahility insurance should such insur-►1c:e become available, the oblivations of Participants under this Agreemen-c 27 (including the agreement 6 share the risk of costs imposed by liability claims), the obligation of the Authority to 'r,9 provide insurance Goruices, the benefits; result:ir,g from the fundir.g of a pooled insurance proarant ( including the 31 prospect of access to the commercial liability reinsurance market) and the ether benefits therefrcm which will accrue 32 to such Participant and the general public. 35 (d) Such Participant receives benefit from the sharing of risk of costs i ;posed by liability claims under w� 37 the terms of this Agreen,eat during each Coverage Peri-ad. The assessment of Pure Premium and Pure Premium Adjuctment 39 is the means by which such risk sharing in implemented. The procedure establisa ed for tho calculation, adjustment 41 rind assessme:t of Pure Premium and Pure Premium Adjuntment :s C-ai.r, just and reasonable as a' means r,f imnle:r:enting 43 such risk shacing. ,- 45 SECTION 1.3 Exhibits. The following Fuhibkts and Schedule a �._. are zttached to, and by reference made a part of, this 47 Agreement: 49 Exhibit A: The schedule of Basic Premium to be paid by each Participant to the Authority, showing the date and 51 amount of such payments. 10 s 1+ j1 .w . Lo i iM 1 i(Mdiib: t 8: Allocable Proportion fur Ez--ch PaLt•icipant. :3 1:�11ibit C: Initial Participation Pre,aium. 5 Exhibit: D: initial ?vre Vr;-a:lll.l,m Adjustment PL•or)orrions for each PijL-,iCiT)c111t MI(i ST)�IU! •'1 C'IICG P'--0MiUnl 7 iiCl)1v'tmf?Ili: Ma:{imllm Amounts. ') F.,chibit E: Participints Making A Casl", Deposit Into tho Cl,:, i,ns Payment F111:il. 11 1 : Menlo:7r,ndum of Li.ihi l it-y Coverage. 13 Exhit) it 0: Undarl�xinng and Claim n Adm?nistration 15 St•alldaV'iS and I.iabi.1ity Claim:: C;uality f20l1t.r01 GLli.deIit;cs. 1.7 %hibit li: term Of' Requisition. 19 Exhibit: I : Notice Addrez:-es . 21 Schedule t1: Methodoir'gy for Calculating Pure Premium and Formula for Calcul at !? o-, ", re Premium Rates. 2.3 Schedule B: Formula for Calculat4-ng Pulse Premium 25 Adjustment:.. 2 *1 ARTICLE, I1 19 RX-PRESENTATIONS, COVElUOITS AND WAIRRA11TIES 31 SECTION 2,1 Representations_, .Ccven,,n_ts and [-Tarra7ti_e_a_ of 33 the Part i.ci anttss.�Each Participant rr-tK.)s t►,e following representations, covEnants and rar,•7lties to the Authority. 35 (a) Due Organization and Existence. Such Participant 37 is a municipal corporation t;f the State, duly organized and existing under the Constitm.tion aii6 laws of the State: and, 39 in the rase of each of the cities of Huntington Brach, Pomona, Oxnard, San Bernardino and Santa Ana, its 41 respective city c:larter. :3 (b) ''.uthori at_ion; Enfor._ceabilit•l Thy, Constitution the laws of the State and, in the case of the c i t; es of 45 Hunt•ingtcn Beach, Pomona, Oxnard, San Bernardino and Santa Ana, the respective city charter authorize such Participant 47 to enter into this Agreement and to eater into the tra.ncac_ions cunteriplared by and to carry out. its 49 obligations inde_• all of the aforesaid aareements, and the Participant has duly authorized and executed all of the 11 1-658002; 2 I A l" fh'J .r 11Ub�; ;s `r' f���•��4, ',gel � �"" y ,��e Pi (ON') 1 aLore ,:aid aareezient_ . This Agreement. con::titur.e:; the loc{al, valid, hindirg and enforceable obligation of suet 3 Participant in accordance with its terins , e::e opt to the: e,. tent limited by applicable bankruptcy, insolvcacy, 5 reorgani:.iet10n, mor..;tO rium or similar laws or equi!:able principles affecting the rights of creditors generally and 7 WZCOnr (t.; to the limitations on I:(?mo(llrs against public .. 1.1 13 17 ,9 i 21 i 3 I f 25 27 29 31 33 33 37 39 al 43 45 47 49 (c) ;To Viol a . ions . Nei thor the c:;ecut• icn and iielivery oI: this Aureemejit: by such Participant, nor the f u I f i I Imen t of or camp Ilaiic a with the torms anr' conditicn`: hereCL by such Par*i.':Iprant-, nor the ccInsuiwrat'.on of the transaction: contemp'.ated hereby by such Participant, conflicts with oY resulrL; in a breach of the terhIG . conditions ot• pcovi:;ioris of any restriction or any agreem,.-nt. or instrument t-o which :;uch Partir.ip�:2:r_ is now a party or by which such Participant :s bound, or the chartor of such Participant, iZ applicable, or constitutes a default under ony of che3 foregoing. (d) G,nlie.ra1 T,.:;_�-I;id :1:;-)itra0e Cuvei;ant . Such narticipant�hereby cc%ienaatts that, notwithstanding any ether provision of this Agreement, it will make no use CIE the proceeds of the Bonds of of any other amounts or property regardless of the source or take. any actin.n o_- rPfrain from taking .any action that may cause the, obligations of the Par::wcipants under this Agreement or the Bonds to be "arbitrage bonds" subject to federal income taxation by reascn of Section 148 of the Code. In addition, such Participant covenants that it will not make any use of the proceeds of the obligations provided herein or in the Indenture or any other funds of such Participant or take or emit to take any other action that would cause income on the Honda to he inclidable ir. gross income of the owners thereof for federal income tax purposes. To that end, sir long as an), Basic Prem:;am is unpz.id and any Bond is )utstanding, such Participant, wish respect to such pro,.Peds and such other funds, will comply with all requirement;: of Section 103 of tho Code and all related sections and all regulations of the United S•rates Devartinent of the Treasury issued thereunder and under Section 103 of the Internal Revenue Code of 195�, as amended, t:o the extent that such requirements are, at the time, ar:piicable and in effect. (e) Structuring Settlements, Such Participant hereby ..ovens; its to coaperdte with Lre Authority in settling z'.• Claims in excess oc the Participant's Self -Insured 2658002/2 I 12 I I � a VI MR l r� I' i I i; 1 Retention. a- described in E:thibit F hereto, and, in particular, ( i ) to the extent such Partin. inatlt has control 3 over any negot:aticn or str.ucturinq of a Settlement acid subject to the limitations in the Memorandum, not to effect i Settlern,--rit payment dates earlier than the date the Claims Payment Fund has been or will be fully funded to cover Loss 7 Reserver: established for the payment oc such Claim, and (ii) at any time durinq Viich the Low Reserves Mode is in 9 effect or when otherwise requested by the Authority, with respect to any judgment (as defines: in C,.lifornia 1) Government Code Section 970) in all amount of one aii l) _oIl dallars ($1,000,000) or more, a;su,kni.nq Such amount exceeds 13 such Partic_pant's Self Insured Retention, to pr-:►tinn the court for payment of such judgment in installments pursuant 15 to tho provisions of California Goverrmon: Code Sectiell 9 0.6. 17 (f) Compliance with Memorandum. Participant 19 hereby expressly covenants to comply with the tents and conditions set forth in the Memorandum arid with the 21 Underwriting and Claims Administration Standards and the Liability C"nins, Quality U--•ntrol Guideliiies set forts: in 23 E:thibit G hereto. 25 (g) Acknowledgment. of Security InteLeEt. Such Participant he; eby'expressly acknowledges the sec:ur it's 27 interest o: the Trustee on behalf of the Bond Owners in I: oneys to ine paid hor. e,inder and held by the Trustee. 29 SECTION 2.2 Renresent_ations, Covena,It•s and Warranties of 31 the Authority,. The Authority represents, covenants and warrants to eacil Participant as fol lows . 33 (a) Recitals Cor_r?ct. The recitals to this Agreement 35 are trt,e and correct. 37 (b) Due organization_and Existence: Enforceability, The Authority is a joint exercise of powers authority duly 39 organized, existing and in good standing under and by virtue of the laws of the State, authorized under than 41 Constitution and laws of the Site to enter into this Pgrerarr.ent and :hP,. Indenture; is possessed of full --ower to 43 pro�,i6e Self insurance to consenting public entities; and has duly authorized the t,::,--cuticn -ind delivery of all of 45 the aforesaid aareemonts. This Agreement and the Indenture constitute the iegr-,i, vat i.d, binding grid enforceable 10 obligatiolzs of the Atithoritv in accordance with their respective terms, except tc the e%tent limited by Ai9 applicable bankruptcy, insolvency, reorganization, 2658002/2 i 13 .1 y u'R •f 1 1 raoratorium or similar laws or equitable principles jaffectiiiq the rights of: creditors gener,illy. 3 (c� No Encumbrances, The Authority will not pledge 5 a .y Premium or its other rights under this Agreement e:,cept as }provided undo- tho term: of this Agroemocit and in they 7 Indenture. 9 (d) F_gui tt,ble Exercise_ of Re,00ns_ihi_1 ities . The Authority will exercise all r�iyhts and responslbilit "es 11 herounder reasonably and 9qui trebly for the benefit of a 11 Participants without: preforunco or discsrimination anic"g 13 Participants. i 15 (e) No Viol �t:ion s. Neither the. ex,ct>,tion and dol:,rery of rt:i ?gceement ar the Indenture, not the 17 fulfillment of car compliance with the tf,rms ana conditions j hereof or thert-of , nor the consummation of rho transaction., ( 19 contemplated hereby or thereby, conflicts with or results in a breach of the terms, conditions or provisir:,s of the 21 Bylaws of the Authority or any restriction or any ac3reement-" or in: ;trumant to ::hi ch the Authority is now i oar•.:y or by jf 23 which the Authority is bound, or coast i t-utes a default I under any of the foregoing. (>r ) General Tax and Arbi trace Covenant. The 27 Authority covenants that, notwithstanding any other provision c•i this Agreement, it will make no use of the 29 proceeds of the Bonds or of auy other amounts or property regardless of the source or take any action or refrain from 31 taking any action that: may cause the o:,liaatiors of the Participants under this Agreement or the Bonds tc be 33 .'arbitrage bonds" subject to federal income ta::ati.on by reason :.: Section 148 the Code, j 35 In addition, the Authority covenants that it will not ::7 make any use oz the proceeds of the obligations provided herein or in the Bonds or any other funds of the 39 Participants or take of ,omit to t,.Ke any other action that would cause interest on the E.►nds tc he includable in gross ' 41 income of the owners thereof for federal incorns, ta:c purposes. To that end, so .onq as any Basic Premium is 43 unpaid or any Bond is outstanding. the Authority, with respect to such o►iceeds and such other funds, will compiy 45 with all requirevents of Section 103 of the Code and all related sections and all .requlations of the United States 47 Department of the Treasury issued thereunder and under Section 103 of the Internal Revenue Code of 1954, as 1,9 amended, to the extent that such requi.renents are, at the: time, applicable and in effect-_. 51 1 14 2658002/2 i 1 -1 1t�'Sr rSriy��.- I r1. f.� �r � • Lh 4A,� t (g) Structurin Settlements. The Authority hereby covenants, to the extent that: it: has control over any 3 negotiation or str.ucturiag cf a Settr_lement, not to effect Sett]emen•c payment date, of earlier than the date the; 5 Claimr; Payment Fund has been or will be fully funded to cover' r,oss Reserves. establisheA for the. payment oC Such ? Claim. 9 (h) Compliance_ with biemoran�iuml 'Elie Authority hereby expressly covenants to Lompiy� wi Lh the towns anti conditions 11 set- forth ir, the Mcniorz,ndum. 13 ARTICLE III DEPOSIT OF MONEYS; COVERAGE; PAYMr,14T OF SETTLEMENTS; 17 PURCHASE OF COMMERCIAL iNSURAUCE 19 SL-:CTION 3.1 Up ositor Moneys. on the Closing Data, the Authority agrees to direct the Trustee to deposit t.ho proceeds 21 of the Series 1988A Sands in the following fends as ;vt forth in an amendment to ':)iis Agreement to be enter. tad into pr iol: to 23 the data: of issu-nce of the Series 1988A Bonds: (1) the Claims Payment fund, (2) the Costs of Issuance Fund, (3) the Deb' 25 Service Reserve Find and (4) the Principal and Interest Fund. All moneys held L•:der the Indenture sha?.1 be invested in 27 34ro'•dance with the restrictions set forth in Article VTII thereof and in the Letter of instructions to t:.e Trustee 29 attached 'thereto as Exhibit C. 31 SECTION 3.2 Coverage. The Authority hereby provides the Coverage to each Participant, and each Participant hereby 33 agrees ru accupt the Coverage, upon the terms and. conditions set Forth ir. this Agreement and the Memorandum. 31- SECTION 3.3 Pavnent of Costs of Issuance. Payment of 3" Costs of Issuance shall be made from the moneys deposited with the Trustee in the Costs of Issuance Fund established in 39 Article IV of the Indenture which shall be disbursed in accordance and upon compliance therewith. 41 SECTION 3.4 Pa ent of Settlements. The Authority shall 43 e-tablish a Claims Payment Fund for the payment of Settlements. Settlements shall be paid upon submission to the 45 Trustee of properly completed Requisitions executed by -he Authority requesting such payment in substantially the form 47 attached as Exhibit H to this Agreement: from moneys in the Claims Payment Fund held by the Tructee. Such Requisitions 49 will be submitted by the Authority to the Trustee in the 15 265800`/2 t r- 1 chronological order that the Authority receives --.bitten notice of Settlements. Requisitions shall be .:aid by t:hi: Trustee in 3 the soquen,:ial order received. 5 Payment of Settlements shall he made solely iron} any moneys in the Claims, Payment: Fund, inoluding Loss Reservers and 7 Undesignated Reserves as pcovlded in Section 3.6 hereof. Thy Authority shall not: enter into a settien-,ent agreement with 1) respect to a Claim unless ;:he amount of the Settloment is available in the C1 aims Pay lent Fund. All amounts paid £.: om 11 the? Claims Payment Fund as settlements or designated as Loss Ruz;ervus shell be deemed to bo paid or designated first from or 13 v'..th respect to amounts originally deposited from Bond proceeds. If at city time sufficient moneys are not on deposit: 15 44n the Ciain}s Payment Fund to Day in ful: any Settlement uron submission to t.'le Trustee of a properly completed Requisition 17 ai; described herein, such Requisition for Settlement payment: shall be paid in part to the extent of available moneys in the. 19 Claims Payment Fund and the Trustee shall promptly upon the occurrence of in e%,c.nt of abatement as described in Article VI I 21 give notice of such insufficiency to the Authority, who shall in turn give prompt notice tc all Part—k c i pant. s , that an C-:v?ti'- 23 of ,abatement, a% described further in Article VII hereof, shall have occurred. 25 In the event the Low Reserves Mode is in effect, the 27 Authority will not enter into a settlement: agreement- with respect to a Claim unless the amount of the Settlement has been 29 reserved as a Loss Reserve with respect to the Claim. 31 SECTION 3.5 Purchase of Commercial Insutince or Reinsurance. Tha ,'Authority may provAde'Coverage, or a portion 33 of Coverage, to the participants by purchase of liability insurance From a commercial insurer or reinsures, upon, the 35 ,approval of the Authority'q Governing Board by at least a majority vote. The Autho_ity may use Undesi.gnated Reserves to 37 purchase such commercial insurance or reinsurance; provided, however., that the Authority may use Loss Reserves to purchase 19 such commercial insurance or reinsurance if the policy of commercial insurance or reinsurance to be purchased covers the 41 Claims for which such Loss Reserves we;:e established, In either event, the. Authority shall submit a Raquisitien to the 43 Trustee requesting a disbursement from the Claims Payment Fund, attaching evidence of existence of the insurance policy heing 45 purchased and ce;:cifyinq that: such amount-- are to be used in compliance with this Section. The Authority shall continue to 41 be obligated to pay Settlements which are covered by such commercial excess insurance or reinsurance, purchased for 49 coverage within the mandatory 1.;inits provided by the Authority, from moneys in the Claims Payment Fund even iii the event suca 16 j 2653002/2 I� M. /� �•�� 3.1.E 14 y '9r; 4 L ' 91\ �Iy R M1lrr Y ✓I � / r ' :Ire. �,j�' • � sly IV'`:J� t •� /�\ . 10 ") 1 commercial excess insurance or reinsurance, purchased for coverage within the mandatory limits provided by Lhe Authority. 3 fails to pay such Settlement or is insuificlent for such Settlement; provided that the Authority shall have no 5 obligation igation to pay Settlement.-, which are covered by excess insurance purchased by tl,e Authority for a Participant orL an 7 optional br.sis in excess ar the mandatory limits provided by the Authority. In an event of dispute between the :Authority or 9 any Part'Cipant and any corr4merrcial excess insurer or reinsurer as to paSm ont of any Settlement, the:\ failure in good faich to 11 pay such Settlement snal;not result in abatement of ,any Participant's :\bl iga.tinn to maize \?n), 1•rem.ium payments. 13 In a Coverage Period for which the Authority ;ias purchased 15 conunercial insurance or reinsurance on behalf of each Participant, each such Participant: shall be ob?:vated t.) pay 17 its Pure Premium Proportior of the costa of such insurance in liou of all or a rortion of FuLe Premium, in addition to 19 Administrative Prernium, Baf,ic Premium, Supplemental Basic Premium and Pure Premium Adjustments. In suh,equent Coverage 21 Periods no Participant shall have any obligation to pay and no right to receive Pure PrL.-mit'•n Adjustments with respect to any 23 Coverage for which the Authority has purchased commercial excess ?.nsur'Ince or reinsurance on behalf of such Participant, 2.5 except such obligations or rights which may arise under such conULL''rcial excess insurance or reinsurance; provi.ded, however, 27 that, if such coverage is within the mandatory limits provided by the Authority, in the event that a commercial insurer 29 providing excess insurance or reinsurance fails to p•-,y a Settlement within the scope of such exc�:ss insurance or 31 reinsurance coverage, the Participants shall be obligated to pay Pure Premium Adjustments with respect to such e:tcelss 33 insurance or reinsurance co%erago. 35 SECTIO14 3.6 Case Reserves and Loss Reserves. O11 or prior to Febrddry 1 of eac17year, corrolEmcin3 February 1, 1989, t•he 37 Authority shall_ retain a Q+ja1ifi^3 Claims Auditor for the purpose of submitting an annual %eport on or prior to such date 3S to the., Authority and the Trustej setting forth (a) the amount of Case Reserves nucess: ry to :ie established with r•aspect to 41 each Claim arising during the r_roceding full Coverage Period and a breakdown of tare amount o%7 Casa Reserves applicable to 43 each Risk Sharing Pool, and (b) any adjustments (whether upward or dowliward) necessary to be made in the. amount of ea-:h Case 15 Reserve previously established pursuant to this Sect 'oil. In determining file amounts of Case Feserves necessary to be 47 established or adjusted as described above, the Qualified Claims A-iditor shall consider_ such facts ind circumstances 49 occurring during the period covered by suci, report as ih, in its independent judgment, deems necessary in accordance with 2658002/2 17 I I pry ill,; •..I` .\. /N111i m 1. ly s h:. 1P 1 i i 1 A4'Yi�; 1, ; J I -"t y: 1 prudent insurance practice. Notwithstanding the for.ecloing, tho Qualified Claims F .',ditc shall take into account Settiement:s of 3 Claims in accordance with the criteria set forth in this Section. 5 The Authority shall direct the Trustee to establ irh cr 1 adjust I.or?S Reserves in the Claims Paywenr. Fund. Loss R,. serves shall be in;.tially established for each Coverage Period at: the 7 time .,'a ic:ipat:ion Premium is due with r.espect to such Coverage Period in accordance with the report prepared by 7un `,ctuary on 11 or before February 1 of each year. Adjustments in subsequent Coverage Periods to Loss Reserves previously established shall 13 be based only upon establishment of and adjustments to Cash Reserves in accnr jarc u f. :h the repot'. of the f„ualified Claim^ 15 Auditor described above. Such repu;:t or the Qualified Claims Auditor shall be in a form sucn that: Pure Premium ad;;istments 17 can be determined for each Participant, Coverage Period and Risk Sharing Pool. Thu, Authority may direct the T~uc,?e to 19 establish Noss Reserves in excess of those designated ;n the r,eport•s of the Actuary and Qualificd Claims Aultor if the 21 Authority determines with the Qualified Claims Auditor the existence of such far,-- and circumstances occur:iny during th;- 23 period covered by such report which deem it necessary to establish excess reserves in "cc.,rc-ance with prudent insurance 25 practice. Such annual ad justmont shall be made orl the February 1 following receipt of the annual report of the 27 Qualified Claims Auditor. The parries acknowlSage that under certain circumstances it will be necessary to establish Case 29 Reserves in excess of the amounts then on deposit ir, the Claims Payment Fund. In such event, such Case Reserves w4.11 31 nevertheless be established as provided in this Section and funded, through the payment of Pure Premium Adjustmencs. as 33 provided in Section 4,3 hereof.. In the event that any such adjustment to Loss leserves result, in the Low Reserves Mode 35 being in effect, t:be Authority shall provide prompt written notice of such fact to the Participants and the Trustee. 37 Upon the Settlement of any claim and tha payment thereof 39 fro:fi amounts on deposit in p the Claims Pa r Payment Fund such amount,, °. shall be deemed reduced in the following order of priority; 41 first, from Case Reserves establisheu to pay such Claire;`"'`' second, frcm Loss Reserves other than Case Reserves; third. 43 from U,idesignated Reserves; and fourth, f►.•rm designated Case ReseLVOS established to pay Settlements of other Ciaimc (pro 45 rata ar(ong such other C�ise Reserves on the basis of the respective amounts of such Case Reserves). 47 Investment earnings retained in the Claims Payment Fund 49 shall be credited first to replenish designated Loss Reserves which have previously been reduced to pay Settlements of other +' 265aOO2/2 �1� �+VT •'^i�,1 11,E � i� 18 I 1 Claims, and then to Undesignat-ed Re: ervos , kmoi:nts designated as Loss Reserves ;hall not lie increased except ac; provided in 3 this Section. 5 7 ,i AR"'ICi�F: TV TEMM OF AGREE',MENT ; PREMIUM 11 Sy -!""'TON •1.1 Term of A�Jreemont; Termination of a ,participant's Obli ations to Pay.Part icivation Premium, I*.e 13 Term of this Agreement shall c nituaence on tide date of it,' execution and shall, subject to the following paragraph, and on 15 June 30, 2008, unless the IndLlture Shall not have i',een discharged by its terms by such date, in ghi.ch case the Term of 1.7 th; s Agreement s:,zl.l be extended until the indenture shall br: discharged by its terms unless terminated prior thereto in L9 accordance with the following paragrar:►. 21 Upoa the final iischarge of the indenture, the avai1&)i1ity of Coverage with t•espect to Claimer in Cover".tc3e 23 Periods provided by this Agreement shall terminate unless the parties agree to extend the Term beyond ach dare. In the 25 event the parties acrree r,o (.ctend the term of :;overage, the provisions of this Agreement relating to Coverage after su;h 27 date may be amended in ant► mutually agreeable fashion withoLl'- notici to or consent of any parties other than the parties to 29 this i greement at that tirr.P. 31 Further, vnon the tinai di.scha ge of the Indenture, the Trustee shai.t transferany remaining moneys in the Claims 33 Payment Fund to the Authority to be held as a claims payment fund pursuant-. to Section 5.1 hereof. The obligations of all 35 Participants to pay Pure Premium Adjustments and the rights to receive Pure Premium Adjustment ref -ands with respect to Claims 37 withir, the scope of Coverage prior to discharge cf the Trust .'agreement shall continue until all liability with respect to 39 such claims has been finally determined. 41 The obligation of any Participant to pay Participation Premium and, except as provided below; Pure Premium Adjustments i 3 under this Agreement will terminate upon the earliest of any of the following Events: 45 i 17 49 (a) upon t nation of this Agreement the >y:ent by such Pirticipant u� all of its Basic Premium payments speci'ied in Exhihi"_ A hereto, its Supplemental Basic Prem'.um, Administrative Premium and of all Pure Premium 19 5�. `'4rn+4 Y • 5- A 4: F I I ]. required to be paid by such Participant pursuant to Section 4.4 heroof; 3 (b) wl:hdrawal of such Participant from Coverage 5 pursuant to Section 6.2 nereof; and 7 (r; expulsion of Such i'articillant from C•ov[�r.ag0- nut Su'irlt toS' Qu t i cn 6.3 hereof; 9 L:L'OVidQd, however, th.1C rlont? or tj,c, fol-egoirsq shall extinguish 11 (i) he abliqauions of Such. Participant to pay Pure Premium Adjustments. assessed with recuact to Ccverage Periods of such 13 Participant prior to such payment :.ithdrawal or expulcion or (ii) tho r. iclht• to receive the benefit-,; of such Coverage with 15 respect to Coverage Periods of such Participant prior to such payment, withdrawal oi: Cnpilsion, except as otherl i,7? provided 17 in this A.greem nt:. 19 SECTION 4.2 Budget and Ainnrorr_iarion of Premium Pav-rents '_`he Authority covenants to oal:,ulate anal trail notice, no later. 21 than April 15 of each year, to each Parti.cipal:t C,E tho amount - of Tocal `premium to be payable by such Par.t:1cinant on the 23 following Dasic Premium Payment gate durinq the Term of this .Agreement (based on an estimate of investment earnings to be 25 credited to the Basic Premium Paytr,ent Fund pursuant to Sections 3.03 and 6.03 of the Indenture on the following June 15). Each 27 Participant covenants to take s+ich Faction as may be necessary to include Total Premium payments payable hereunder in its 29 annual budget and to make the necessary annual appropriations for all such Total Premium payments. During the Term of this 31 Agreement, each Participant will furnish to the Authority and the Trustee prompt written evidence of such budget or 33 appropriation (which may be evidence of payment of such amounts) in each such CoveragE Period no later than August i. 35 The covenants on the part of each Participant herein contained shall be deemed to be and shall be construed to be duties 37 imposed by laid and iL- shall be the duty of each and every public official of each Participant to take such action and do 39 such things as are required by law in the performance of the official duty of such officials to enabla each Participa'nc to 41 carry out and perform the covenants and agreements in this Agreement agreed to be carried out and performed by such 43 Participant. !` �5 SECTION 4.3 Obligation to Pass Premiums. 47 (a) No Withholding. Subject to the provisions of Article VII hereof, notwithstanding any dispute between the 49 Authority and a Farticipart, including a dispute as to the scope or nature of Coverage provided by the Authority or the 2658UG2/2 r, 20 a Rrd r, wr. Rr 1 „ �p it .1 •r",''�''Iddr:��,—�6 y.;,�?�.'•:ig. n M l 1 a.vailabillty of amount, in the Claims Paynerht Fund to pay Claim, niade against any Participant, or for .any other reason 3 (other tnan the termination of the obligation to pay Participation Premium ptir.suant to Section 1.1 he—o£) each 5 P.ar icinant shall anpr-onr.iate I:unds sufficient: to pill- and shall ma? e a 11 Pt curium pay merits when due and shall not withhold any 1 Premium payments pending t;h., final reEolution of such dispute. 9 (b) Pate on Overdue P-wt;.ent . In t!Ie event a Par ticiparit fails zo make any or the payments required in this Article, the 11 payment in default shill continue as an obl'.gatiura of zhe Participant until the amount in default shall have been E.11y 13 paid, and in additior r.o any remedies, available with respect to such default, the Participant ag.•ees to ray the same vith 15 interest thereon, at twelve percent: (12s,) per annum, biro not to exceed the highest rate permitted by law, from tta date such 17 amotin'.: was originally payable. 19 (c) Pledge to Bcndowners. Pursuant to the Indenture, the Authority wily pledge �.ts right- to receive and collect: all 21 Pr,-,mium payments and prepayments (but not Administrative Premi;im)�or any rights or obliga`ions with rc-spect thereto and 23 Tcrmir.atioa Premium payable with respect theretu to the TruS;:ee in ,:rust for the benefit of the Bond Own.e;::;. The Authority 25 hereby directs each Participant, and each Par.t.icinant hereL-y agrees co pay to the Trustee at the Trustoc,'s principal 27 ecrnorate trust office, or to the Trustee at such ether place as the Trustee shall direct in writing, all payments payable by 29 :he Participant: pursuant to this SeCtIon and Article XI hereof, 31 SECTION 4.4 Premiums. 33 (a) Participation Premium. The Participation Premium payment6 due in any Coverage Period shall be made in 35 consideration t. . Coverage for such Coverage Period. The entire amount of Participation Premium is due on the Basic 37 Premium; Payment Date; provided, that with respect to the first Coverage ^eriod, Participation Premiun shall be due on 39 October 25 (provided that Basic Premium shall be due on the date a- initial issuance and delivery of the Bonds) and shall 41 be payable in the respective amounts listed in Exhibit C hereto. 42 (b) Basic Premium. 45 47 i 49 :''•' 51 lot 1 1 3 Y � •� ! F �32� iN . (1) Time and Amournt. Notwirhstanding any provisioa of this Agreement to the contrary, no provision of this ;agreement relating to Basic Premium shall be effective prior to the Closing Date of the first Series of Bonds. Subject to the provisions of Article XI hereof (regarding prepayment of Basic Premium and payment of Termination Premium), Section 6.2 hereof (regarding withdrawal), 2658002/2 21 r .+ 1 Sectien 6.3 hereof (regarding expulsion) and Section ?.1 hereof (regarding abatement) eac.Y Part-cipant agrees to pay 3 to the Authority, its ruc•cessors and assigns, as a portion of its annual Participation Premiur Faym nt for the 5 Cov•-3r. age, Basic Premium in the a.,.otints specified in Exhibit A. to be due and payable on the Basic Premium 7 Pa}mienr. DntP, which correspond to amounts suf £ i clent : n both time and amount to pay when due such Participant's 9 Allocable proportion of the annual principal of (whether at maturity o� by mandatory sinkiing fund redemption) and i' intr.:. ost on the Bonds, 13 (2) credits. Notwithstanding the foregoing, any amot+nt held in —a-participant's orcotrit of the Principal and 15 Intore:;t Fund on any B,as: c Premium Payment Date ;other than amounts required for payment or past dui: principal of cr 17 interest on the Bonds not, presented for payment) shall be credited Coward^ the Basic Premium of such Participant then 19 due and pay:lble and no Basic "sEimium need be naid by ,a Participant on any Dasie Premium Payment ,')-.te if 11 -the arrou.lts then held in the Dart-'_ciplant' s accounL cf the 1 Pr incinal an.. Interest Fund are at least Paual to the U.-asic 23 Premiu•, tla n required to be paid. 25 27 79 f 31 3:3 0 .15 A rya. e V ,'�• 37 B r W 41 S � y u a o r y (3) Effect of Prepayment. In the evert that a anticipant prepays or provides for the paprment of all of is remaining Basic Premium purLuant to Article XI liet•eof uch Participant's obligations cinder this Am evert to pay urther Basic Premium shall. thereupon r•ease, and terminate. c) 5u )elemental Basic Premium. (1) Time and Amount. Notwithstanding ar,y pro%,4 s on f. this Agreement to the contrary, no provision of this areenicnt relating .o Supplemental Basic Premium shall be ifective prior to the Closing Date of the first Series of onds, 9ubj(;t to the provisions of Article XI hereof regarding prepayment of Bar,ic Premium and payment of erminat.ion Prem°.u►m), Section 6.2 hereof (regarding ithdrawal), Scotien 6.3 hereof (regarding expulsion) and ection 7..1 hereof (regarding abatement), each Participant grees to pay the Authcrity, its successors and assigns, as portion or its annual Participation Premium for Coverage, rn) emental Basic Premium, to be due and payable on the sic Premium Payment Datc. W Credi,ts, Notwithstanding the F':eceding sentence, Participant shall be obligated to pay jupplemert'_al Panic emi'ua in excess of its Allocable Proporti•;n of the amount whirr the amount held in the Debt Service Reserve Fund 22 •"ta Aid r• v tom: r,v!i9' C i lessthin the Reserve Requirementon the April 15 invwldiately preceding the Da:,ic Premil'Ya N,ymenc Drt•e. (d) Administrative: Premium. Each Participan�shall pay to5 the Autriorlt'y as Administrative Premium such amr)unts as shallbe required for the payment- of the Partir.ivant's Pura Premiumh7 11roportion of all administrative costs of te Authority relating to t:lie Coveiag^ or the Bond including wiuheut 9 limitation all expenses(including counsel fees but not In^ltidin L)r.f + r C d f' + h IL_ d ll g _ cn.�e .v,� t., a., e in�ci i,, L. e Iemorurl um, 11 compensation and indemnification of the Trustee under the Indenture, r.azou or fees of any sort whatsoever payable by the 13 Authority as Z, : E•sult of it: undertaking of the transacti-)ns contemplated herein or in the Indenture, fees of. any Actuary, 15 Qualified Claizis Auditor, auditors, accountants, insurance brokers, or «tn neys, and all other necesoary admitiist:'ative 17 co5 u of the Authr.)+: ivy or charges re',•ui red to be raid by it in order to admlrlistEr the self —innuronce program described in 19 this Agreement, or to comply with the terms of the, Bonds or of the I -denture or to defend the Authority and -it's members 21 age inst any actions or suits or sums in connection herewith. 13 (e) Pure Premium. Pure Premium shall be calculates in i:e following manner, Wish rQ,E;1) Ct: to each Coy .rage 11 e riod 25 coatmenciria cn or after July 1, 1989, the Authority slrall retain an Actuary to determine avid prepare a report to by deli, •►ere3 to 27 the Authority and the Trustee by the February 1 preceding the beginning of such Coverage Period, Such report shall set forth 29 the rates ("Pure Premium Rates") per $1000 of Payroll-egaired to fund the expected losses and allocated loss adjustment 31 expense for the layer of Coverage from each Participant's Self--Insu+:ed Retention to $5 rni.11ir;n per occurrence in the 33 first Ris:c Sharing Pool and from $5 million to $1.0 million per occurrence for Participants in the second Risk Snaring Poo? for 35 each of the next three Coverage Periods. Such Pure Premium Rates shall be determined by the Actuary in such a manner that 37 the resulting Total Pure Preinium shall be an estimate by Che Ac«uary of the amount of funds to be deposited in the Claims 39 ?ayment Fund such that the deposit, along w1th antir.ipated investment income not allocable to the Principal and Interest 41 Fund (pursuant to Section 3.03 of the Indi,nture), equals the expected value of all pooled losses tip to $10 million per 43 occurrence arising out of events that took place during the Coverage Period. Funding for expected losses above $10 million 43 will nct be included :n the Pure Premiums but will be funded by Pure Premium Adjustments as Case Reserves are established for 47 Claims. The %ctuary shall utilize the general methodologies set forth in Schedule A tc calculate Pure Premium Rates, using 49 such Acf_uary's best professional judgment, and shall certify that such methodologies werQ used. The methodologies set forth 2658002/2 ti AK y { .i6cyt,. ,.1 rhw L Y*t��'i' . 23 PLC , y; I , 1 in SchedO.e A. fat calr't'_ating Pure Premium may be amended cttic,r- than within the pararn^r?rs :;L:ated therein only by unanimou 3 consear of th.: meinbers of the ,'lrtthoritv's Governing Board. Tht? Authority shall be obligated to assess t:he Toral Pure Premium. 5 Notwithstanding the foregoing, ttie Pure Premium Rates determined in any C'overaq�) Period for the ne:rc: ti1ree Coverage 7 Periods with respect to a given Ri,k Sharing Pool (anti a given Self-Tn8ured Retention) sltall ne subiect to the f:c'llow?.ng 9 limitations on rate of increase.: the increase ne( (_oveviago Por ; od o,`. Pure Premium Rats f rc:n the rst; Coverage Period to 11 the second Coverage Period and from the second Coverage 11,ari oci to the third Coverage Period sha1: riot excee:il the ;,eater: of 13 z_ft-een percent (15%) per annum or the Consuwe:: Price: Liidey percentage increase Liuring the year preceding the date of the 15 determination: the increase of Pure:'=remium Rates from the Covt?raoe Puriod in which the .%ctu7iy makes such dutermina-1.ion 17 to the fir:at such Covprauc Period icy not subjoct to a lirni`.aLion on rate of increase. 19 tlotwirhst-anding tthe foregoing, the Pu;.n Premium Lar each o,: 21 the fir,t three Coverage Periods shall not exceed $1,250,000 for any Participant. Amounts in excess of such limit shall bon 23 ac:�eosable urairast such P,:,rt.lcipant as Spec -.al :lure Premium Adjustments• 25 With respect to the Coverage Period commencing July 1, 19B9 27 and all ;subsequent Coverage Periods, the Pure Premium Payable by each Participant shall be determined by multiplying its Pure 29 Premium Rates fer each Risk Sharinr, Pool in whi.c;fz it i , participating by its Payroll divideu by $1,000. 31 UotwiLhscand ing the foregoing, the Pure Premium for any Participant determine -'A' oy ipplicati.on of such formula :,lay be 33 changed upwards bl, tip to twenty-fivo percent (25%) of the PurE, Premium to reflent_ loss history or any significant changes in 35 Liak exposure, upon the direction and approval by a vote of two-thirds of the Governing Board of the Authority, or, with 37 respect to changes of grea*.er than twenty-five percent (25%), with unanimous consent of tht: Governing Board. In no event 39 will Pure Premium be payable to establish Lois Reserves far coverage in excess of $10,000,000 per occurrence. 41 Commenri'ng with the Coverage Period commencing on July 1, 43 1989, the determination of :'ctal Pure Premium, Pure Premium Rate and Pure Pro.,ium payable in each Coverage Period by each 45 Participant shall be made no later than thq April 15 preceding V. Cave: age ieriod, commencinq April 15, ].989, 47 As described above, prior to each Cc.,,erage Period the i 49 Actuary shall determine Pure Premium Rates for each of the nett three Coverage Periods. Notwithstanding anything herein to the 1rr!, 51 contrary, the Pure Premium Rates determined for the second and 24 Y : 2658002 /2 :J 11 161 r ii,Nylr�lY. , R �1; � ✓ .ry.yK'yr :,t MMSr1�t�'i�.:Tw i � . -. ., _...,:.. .. .. -. .. •, . ... ,, . . (n • Y r�, yIV,'' .. �4. al V�� A A as 1 h. a , 1 r . y S � ; on 1 third C'ove.r,age Periods in any Actuary' .3 rc,port: shall be c upnr :edoci by Actuary reaor, cs cover_ i nil sua:ti Cot-era(T Pcr ia)c:s her . az eci in :tubs)equent: years, e;cccpt dith respc :. to Partivi r:3nt,; wh-i have given notice of wit.hdrav ,, I pursuant to 5 Secticin 6.2 stereo£. With rospect to a P3rt.ciwant which ha given not.ir- of intent to withdraw: the pure Premium Rates 7 applicable for the two r,mnining coverage, Periods prior to the effuctAve date of withdrawal .,;hall be be.sed upon chu Pure 9 Pre-ium Rates which, were determined in t:!-,e Coverage Period precoding the Coverage Period in which :,Lich notice was given, 1t Absent computational error, the ualc:ularion of such PuLe 13 Premium shall bo =inal nd conclusive of the amounts due and owing under this subzeci ion. 15 SECT JOIT 4 .5 PureP,-emiuta Ad; tistment s . 1. '1 ------------ - -- - (a) Consideration. Pti:e Premium Adjustments due in any 19 Coverage Period shall be made in concide7ation for continuation of Coverage for prior Coverage Periods and for continued 21 eligibility to purcha..,: Coverage for the cuLret;r Coverage Period 23 (b) Time and Manner of Determination, on or prior to 25 February i of each year, commencing February 1 , 1989, upon receipt of tb3 annual report of the Qualified claims Auditor :.7 pursuant to Section. 3.6 hereof, the Authority shall determine the amount of Case .Reserves fot a,! Claims of -?ach Varticipent 29 L.o by established or adjusted with respect to all prior Coverage Periods anti for each Risk Sharing Pool as set forth in 3! the report of the Qualified Claims Auditor. on or prior to February 1 of each year, coratmenc:ng February ?., 1,:92, the 33 Authority s;iall determine, based upon the escablishment or adjuctment of such Case Reserves, the Pure Premium Adjustment 35 for each Participant, which may be ar. assessment of additional Puri: Premium Adjustments or a refund csf Pure premium or Pure 37 Premium AdjusLaients paid in prior Coverage Periods. Pure Premium Adjustment,- with respect to any subsequent Coverage 39 Perind will be first determined dur,iac- such Coverage Petiod and r� payable in the: succeeding Cove:age Period. Pure Premia,:.m Al Adjustments shall be determined in accocdance with Schedule B hereto, which in general provides as follows: 43 W Pure Premium Adjustments with respect to any 45 Coverage Period are intenaed to provide a matching, over a poriod not in excess of five years, of (a) the sur-t of r7 settlements paid and outstanding Case Reserve:, required with respect to such. Coverage Period versus (b) the stem of y9 amounts paid as Pure Premium, paid or refunded as Pure 2658002/: 25 a P-T 1 P r I• M fy� y , ,t • s,r 'r;iy,M ''' l•iw�1�• 'k'v.r, fati.�� gyY�..i' 4 IL ,��,, ,^ r,4, „, �(,'',. •41Or'. r Il;l�;1 `, .,;1��, �' 1 ,1 ..?�ri�,�i',}',j;il':,W ; �' ibF•'�'.', eo) 1 Premium Adjustments and Speciial Pure Premivat Adju sttnents and certair, investment: earIlings on amounts with respect to such 3 C ov.7rage Period; 5 (ii) the total Puri; Premium Adjustment determined with suspect to any Participant in any Coverage Period shall be. 7 equal to the sum of all Pure Premium Adjus':mants determined with respect to Coverage Periods in which such Participant 9 participated in Coverage; 11 (iii) the Pure Premium Adjustment determined with respect to any Participant with respect to any Coverage 13 Period shall be based upon such Participant's Pure Premium Proportion arpiicable for such prior Coverage Period; 1:3 invostment earnings cn the Claims Pa .rent Fund (not transferred to the Basic P;-(-.miurr. Payment Fund pursuant to 17 Section 3.0a of the indenture) shall be zllocated according to the ratlu of Pure Premium paid by such Participant in 19 all Coverage Periods to Pure Premit'•m paid by all Participants in all Coverage keriocis; 21 (iv) notwithstanding subparagraph (iii) above, with 23 respect tr any Coverage Peri.cd with respect•, to which Spacial Pure Premium Adjustments may be assessL:i pursuant 25 to Section 4.6 hereof, Pure Premium Rdjustments shall be based on thu „djustr:ient Proportions set £oLth .in Exhibit D 1. hereto instead of Pure Premium Proportiono; -9 (v) Pure Premium Adjustment refunds in any Coverage Period will not ir, the aggregate exceed 50 percent of the 31 Pure Premium paid and Pure Premium Adjustm::ant assessments scheduled to be paid in such Coverage Period; for such 33 purpose the Pure Premium of a Participant which has wirhdrawn pursuant to Section 6.2 hereof or has been 35 expe11'ed pursuant to Section 6.3 hereof shall be deemed to be the Pure Premium last paid by suoll Participant; and 37 (vi) Fure Premium Adjustment refunds with respect to 39 any Coverage Period shall not be made until after the second Coverage 1�eriad following such Coverage Period. 41 Any conflict between this description and Schedule B 43 hereto shall be res:)lved by following the formula set: forth in Schedule B. .15 (c) Time of Payalent. The Authurity shall give prompt 47 written notice to the Tructee and each Participant of thL_� determination of inure Premium Adjustments. Pure Premium 49 AdJustments ,hall be paid or refunded no later than the August 1 next following their date of determination. Pure 2658002/2 26 +Y�'ld ��:fr 41�r{,,:, a� �;.h',�Z•�,�'��'i ''1',��..� ;l �Y'•11'F'i��1�5 �:'t�'�� j . /. t' K� •���NT n�. k�y f,r J ! y„ �1L 1 'i a6 f 1�:r•� i `LL�1 �•P IN ti L4 .: F ',L -,r r �" 1,+•, _ _ Wit: ,A - ;,r .• t� • . • ''. JS'�� ' a i:.. . apt ^/: .t F iA - :ter.• lr 1, Mk•' I yRC M h Vqp6Wwv My4r. v ,ti,l W. i17 ,17 1 Premium Adjustments ,hallbe deposited 4ith, or requisiOnric- bv, the Authority and the Authority agrees to deposit such 3 amounts into or pay them from the Claims Payment Fund. ar, the case may be. 5 (d) Low Peserves M:)de. Hotwit:hstanding the foregoing, if 7 on the date or determination of Pure Premium Ad ust•.merts the Lora Reserves Mode is in effect, (1) the Pure Premium 9 Adjustments will be determined according to Schedule D hereto but without regard to t^,e provision!: of Schedule D hereto 11 providing ;for assessment of Frisk Premium Adjustments over five year period, and (2) any amounts of Pure Premium Adjustments 13 which would otherwise be refunded to Participants shall be retained by the Aurtiorlty in the Claims Payment Fund and no 15 rotund of such a.noants shall be made. 17 (e) Obligations After Withdrawal of Exnulsion• The obligation of Participants to pay Pure Premium Adjustments 19 shall in no event be discharged by prepayment of Basic Premiums. In the event of expulsion or withdrawal of a 1.1 Participant from Coverage, the obligation to pay Pure Premium Adjustments of such Participant with respect tc Coverage 23 Periods prior to expulsion or withdrawal snail not be discharged and suc- Pure Premium Adjustments shall be 25 determined ac if Lct. :le staves Mode were in effect; provided that such a Participant shall be deemed to have paid. and shall 27 not be obligated to pay, as Pure Premium Adjustments an amount-. .aqua l to the principal component of Basic Premium prepaid as 24 Termination Premium from a source other: than such Part icipant'^ Allceable Share of Undesignated Reserves. 31 SECTION 4.6 Special Pure Premium, Ar ilsi mcnt•s . 33 Nct.withstandin, ''ection 4.5 hereof 35 (a) Special Pure Premium Adjustments may be assessed against certair, P,trticipar_ts whose Pure Premium is capped as 37 set forth in Secticn 4.4 hereof in the amounts a.nd with respect to the Coverage Periods as set forth in or determined in 39 accord;ince with Exhibit D hereto; 41 (b) Special Pure Premium Adjustments with respect to any Coverage Period will first be determined prior to February 1 of 43 such Coverage Period, comr-.gncing February 1, 1989, and shall be paid no later than tee fcllot_,inc; August 1, commencing August 1. 45 1989; the Maximum Special Pure Premium Adjustment (determined in accordance with E.-.nibit D hereto) amount with respect to any 47 Coverage Period (expressed as a rate per $1,000 of payroll) will be determined prior to the February 1 preceding such 49 Coverage Period; 2658002/2 27 i A;. I Q A j) 'Wiry, 1 s r I• f t �a r. • • ...�::,�.�,��:'� yr! , F. .� >• - ,.a Ile 1 (c) Special Pure Premium Adjustments assessed in any Caverace Period shall be assessed before any Participant i:, 3 assessed in such Coverage Period for Pure Premiura Adjustments; 5 (d) the total Special Pure Premium ,adjustment- with re.pect- to any Coverage Period shall be the difference betwecri (i'i the 7 sum of Case Reserves required to be established with respect to such Coverage Period and Settlements paid with respect to such 9 Coverage Period and (ii) the sum of Pure Premium and Special Pure Premium Adjustments previously paid wish respect to such 11 Coverage Period; 13 (e) if more than one Participant is subject to Special Pure Premil-rn Adjustments with respect to any Coverage Period,. 15 the Special Pure Premium Adjustment with respect to any Participant with reapect to such Coverage Period .;hall be a 17 portion of the total special Pure Premium Adjustme,%t with respect to such Coverage Period determined according to the 19 proper.tion of the total Special Pure Prcmiu,•a Adjustment to which such Participant- is subject with respect to such Coverage 21 Period a: ccm, ar+ d to the total Special Pure Promitim Adjustment to which a? 1 Par.t:icipLrLts are subject with respect tc 23 Coverage Pe vicd; 25 (f) refunds of Special Pure Premium Adjustment assessments with respect to a Coverage Period shall be made only after all 27 Pure Prem.tum Adjustments with respect to Such Coverage Period which are scheduled to be paid have been paid in full; and 29 (q) °or all other purposes under this Agreement, Special 31 Pure Prt--ic,ium Adjustments shall be deemed to be Pure Premium Adiust rriencs . 33 SECTION 4.7 Participants Makiiia a Cash Deposit into the 35 Claims Pavment Fund. As a co%ditiun to eligibility to purchase Coverage hereander, each of the Participants listed in 37 Exhibit E hereto shall be S-equi red to make a cash deposit into the Claims Payment Fund in the respective amount shown in 39 Exhibit E on or prior to the Closing Late. Notwitlist;.zding &ny prevision herein to the contrary: 41 (a) no such Participant stial'_ bo obligated to pay •13 Basic Premium or Supplemental Basic Premium; provided that each such Participant shall be onligat:ed to pay Pure 45 Prer,,i.ur:t, Acuni.nistr. at ive Premium and Pure Premium ;%djustr.Erts in the same mann?r as other Particip�,nt-� in 47 order to purchase Coverage; and 49 (b) such cash deposit shall be deemed to be a prepayment of Basic Premium and shall be deemed to be Bond 51 proceeds. 2650002/2 h �l ,1 4; Y t �r I ti W 'Y r , .F7. r T �• y y * :1 P t? yt: 1 "SECTION -i . a Credits for Wit'lheld _R.efunr;s , Arnouiits that would be paid to Participants au Pure premium Adjustment A„ 3 refunds, but for the limitar_ioo. on such refunds to no more th�1n fifty percent of. the Pura Premium paid in a Cave raye 5 Period, may be cry sited against the amounts to become au. in the succeeding Coverage Period as Pure Premium Adjustment and 7 Pure Premium, in that order, until fully allocated. No such r � S \ I I� •r• j' ir1 rylry1 •. I�Y , r`";rhl credit may be made against Basic Premium, Supplemental Bas c 9 Premium oi: Administrative Premium. 11 ARTICLE V 13 RESERVES RELEASED FROM SHE 15 PLEDGE OF THE INDENTURE 17 SECTION 5.1 Receipt_of_Reser_ves :1p2n_D4-schar•-ie of the Trust indenture. All funds trans:erred by the Tri:stee t'? the 19 Authority upor. discharge of the Indenture pursuant to Section 3.04 of the Indenture will be held by the Authority as 21 a claims payment fund, to be applied to the payment of Settlements c` Claims within the scope of Coverage prior to the 23 termination of the Indenture, pursuant to the terms of this Agreement. Upon termination of all obligations to pay Pure 25 Premium adjustment and termination of this Agreement, the Authority will dis::ribute 27 (a) all Pure Premium Adjustment ref,.indc to the 29 Participants, 31 (b) all Undesignated Reserves held by it, up to an amount equal tc, deposits to the Claims Payment Fund from 33 Bond aroceeds or cash deposits made by new Participants in lieu of Bond proceeds, according to the Allocable 35 Proportion, and 37 (c) the Allccable Share, as defined in SeCti0-1 5.2 hereof, of each Participant which withdrew from o: was 39 expelled from Coverage which has not been distr%..ted to such Participant pursuant to Section 5.2 herooi. 41 Allocable Proportion for such purpose shall be 43 proportionally adjusted to compensate nondefaulting Particinants in the event that amounts in the Claims Payment 45 Fund or Debt Service Reserve Fund have been applied to pay the Basic Premium of any other defaulting Participant pursuant to 47 Sections 3.02 or 6.04 of the Indenture to the extent such defaulting Participant has not ultimately repaid such amount. 49 2658002/2 ew MC i. ., y fit" 1 •'A• l'( ',.•.. -'�.y: 1A41 ��i. i �- + ', - '. rye i� _t• _ } � r• ,.Al g N' l3li+'',�!4��;��''I�'LPi}11"�h�nr„ .Y ,;q .., •: � � ��� '��. rE��;�+;c �a.�''�y�',','�' � '• �,. ...- •��*Fw1I• eIN 1 SECTION 5.2 Receipt of a Participant's Allocable Share Upon Wi.thdrawal or ENDUE:ion_. In connection wit:hTperinit~ing 3 withdrawal of a Participant from Coverage pursuant to Section 6.2 hereof or expelling a Participant- pursuant to Section 6,3 5 hereof, a portion of Undesignated Reserves shall at: .ouch time be allocated to such Participant in accordance with Allocable 7 Proportion (as adjusted pursuant to Section 5.1 hereof) . in addition, a gor.tion of the Deht Service Reserva Fund shall be 9 allocated to such Particinant ir. accordance with Allocable Proportion (as adjusted pursuant to SecLion 5.1 hereof), The 11 sum of such amounts allocated to such Partici-nantlshall be applied. first to the payment of Termination Premium pursuant to 13 Sect ion 6.2 or Section 6.3 hereof. The Aut:hotity shall subratit a Requisition pursuant: to Section 3.02 of the Indenture for the 15 amount of ouch portion in excess of such Termination Premium .and all other obligations due from such Participant under the 17 terms of this Agreement (its "Allocable Share"). Th3 Authority will hold the Allocable Share of each such Participant and any 19 interest thereon in a segregated account for the benefit of such Participant, subject only to assessment for Pure Premium 21 Adjustment assessed against such 11crticinant. The Authority will transfer to such Participant its Allocable Share, less 23 assessments for P+:re Premium Adjustment, on the r.arliest practicable data when such Participant is no 'longer subject to 25 assessment for any obligations under the terms of this Agreement, i.e. when all Claims within the scope of Coverage 27 prior to withdrawal or expulsion of such Participant have been finally determined and/or paid as Settlements. 29 SECTION 5.3 Receipt of a Participant's Share of Debt_ 31 Service Reserve Fund Upon Pre_pavment. Upon any deposit of security or any prepayment by any Participant pursuant to 33 Sections 11.1 or 11.3 of this Agreement, such Participant shall receive its share of amounts on deposit in the Debt Service 35 Resei ve Fund, determined sing the ratio set forth in Section 5^1(bi(i) above. 37 39 ARTICLE VI 41 AL.ZISSION TO, WITHDRAWAL FROM AND EXPULSIOr1 FROM THE POOLED SELF— T'NSURANCIE PROGRAM 43 SECTION 6.1. Conditions to Prr.-iidinq Covers a to a New 45 Participant. Commencing July 1, 1989, the Authority may provide Coverage to a new Participant which is not currently a 47 Participant i►nder this Agreement, subject to the following conditions: 49 2658On2/2 30 f F, a WAI a Guch new Participant shall be a municipal OC. corporation in the State, or a joint po;iers authority 3 comprised of such municipal ccrporations, and a member of the authority; 5 (b) not later than the January 1, next preceding the 7 first Coverage Period for which the Authority provides Coveraae to such Participant, such new Participant shall 9 have submitted a completed application for admission to the Authority; (c) later than February not the 15 next-. preceding thu 13 first Coverage Period for which the Authority provides Coverage to such Participant, such new Participant shall 15 have duly approved an amendment to this Agreement pursuant L t� whim it shall become subject to all of the terms ot 17 this Agreement as a Participant; 19 (d) Coverage of such now Participant shall be effective on tkie first day of the Coverage Period next 21 succeEding the date of execution of the amendments referred L.o in paragraph (c) above; 23 (e) not later than the March 1 next preceding the 25 first Coverage Period for which the Participant provides Coverage to such Participant, the Authority's Governing 27 Board shall have approved admission of such Participant; 29 (f) the Autriority's Governing Board by at least two-thirds' vote shall leave consented to the amendment to 31 the Indenture and this Agreement nermitting such new Participant to become a Participant; provided that, prior 33 to July 1, 1991, such consent must be unanimous; 35 (g) the Authority and the Trustee shall have receive.d a report of an independe-.t financial consultant that 37 providing such Coverage to such new Participant %q i 11 not adversely affect the credit or financial position of the 39 pooled self -.insurance program due to the financial position Y or credit standing of such new Participant; 41 (h) the Authority and the Trustee shall have received 43 an opinion of Bond Counsel that the amendments referred to in paragraph (c) above are valid and binding against all of 101. 45 the parties thereto and will not adversely affect the tax-exempt status of interest paid on the Bonds; 47 (i) the Authority ant the Trustee shall have received 49 a certificate from an Actuary that such admission of such new Participant will not adversely affect the actuarial 51 soundness of the pooled self-insurance program; and 31 2658002/2 . .. . . I ... :.., ?1 OT.3 44. "A 7, L 4� .f. r I� a• A :h r> , ' Vr, " `4�4 .w. r!� 1 (j) ehe Authority and the Trustee shall have received t an opinion of the insurance consultant -broker. of record to S the Authority and the underwriting committee of the Authority to the effect that providing Coverage to such new " 5 Participant will not constitute: a hazardous or unacceptable :oss exposure to the Authority. The amendments to this Agreement ana tcie _ndenture PJ permitting such a new Participant to beccme a Participant shall not reduce or diminish the Basic Premium or Supplemental Basic 11 Premium obligations rf the existing Participants. Any new Par.ticivant-dill hp ibligated to pay a mutually agreeable 13 portion of the total Administrative Premium ant Pure Premium payable on each Basic Premium Payment Date and will be assessed 15 Pure Premium Adjustments as provided in this Agreement, as amended. Any such new Participant may be obligated to pay 17 amounts equivalent to Basic Premium or Supplemental Basic Premium, or may be assps:sed an annual surcharge or fee or be 19 rewired to make a deposit into the Claims Payment Fund by the Authority to participate in the self-insurance program. The 21 amendment to this Agreement may set forth a method by which the new Participant shall be deemed to have paid Basic Premium for 23 purreses of determining amounts to be allocated or distributed to it our ,uant to Article V hereof. 25 Subject to the provisions of tiie Indenture, the Authority 27 may issue additional insurance program bonds on behalf of a new Participant or Participants to finance a required deposit to 29 the Claims Payment Fund by such a new Participant or Pprticipants. To the extent permitted in the Indenture. such 31 additional insurance program kends ccuid be secured by Premium paid by such riew Participant or Participants and by amcunrs in 33 the Claims Payment Fund deemed to be derived frcm such Premium payments and from the proceeds of such additional insurance 35 program bonds, but could not be secured by Premium paid by the initial Participants under this Agreement: or by amounts in the 37 Claims Payment Fund deemed to be derived from Prem:.a:n payment: of the initial Participants or from the proceeds of the Bonds 39 issued on 1:ehalf of the Initial Participants. Notwithstanding any provision of this Agreement to the contrary, this Agreement 41 may he amended to accomplish and reflect the issuance of such additional insurance program bonds by -the Authcrity. Such 43 3men(L-cents may include, but shall not be limited to, amendment to references in this Agreement to the Indenture, the Bonds and 45 funds created under the IndentuL,e to include, or refer to, as appropriate, the indenture pursuant to which the additional 47 program bonds are issued, the additional a ogr-am bonds and °un-s created under such indenture. 255I3UO2/2 32 �r r ,w 1 •, ' I' •...4r 91A s, t ME y 7:'�'I�'yF.i r �• y � yry, � �. � l�yl{�, 1•: {Y�:Jl,'�/,'� i-i � � •I r, , ''1 y�r�'�, III "ZT, XAklff, 7 A! � i � � wq�'�Mh„' : �A�A i�T'y�' I"lrT,♦ , �.r �� � �:r rr: Y•�,, � ��,.r r � ., . ., ��1'w' 1G'c��'y�y°. ��'���� .. � ` 1,r,. u., rF. a; �� ,. i.yq•,;,: ',{� ram':;':', !•'�.�.I IAA (00,VA 1 SECTION 6.2 Condition_ s to Permit_tinq W r_hdravial of a Particioant from Coverall- .Commencing July 1, 1991, the 3 Authority shall permit a Participant to withdraw from Coverage. under this Agreement, provided that the following are satisfied; 5 (a) s+1c:h Participant shall not be in default of any 7 of its obligations to pay Premium hereunder; ° (b) not later than the April 1 r.e:{t preceding ::he date which is two years prior to the effective date of such 11 withdrawal, such Participant shall havo provided written notice to the Authority of its intent to withdraw; provided 13 that, in the event that the Governing 13aard of the Authority or the Participants, by less r.han unanimous 15 consent, agree: to a revision of this Agreement which materially alters the rights and obligations of the 17 Participants under the terms of this Agreement, including admission of a new Participant or revision of the 19 methodology for determining Pore Premium Rates, a Participanr which did not consent to such amendment shall 21 be entitled to withdraw from Coverage by providing written notice to the Authority of its intent to withdraw not later: 23 than the April 1 next preceding the effective dare cf such withdrawal, conunenr.ing July 1, 1991; 25 (c) such Participant shall have raid (or there shall 27 have been applied on its behalf certain moneys as described in Section 5.2 heren ) the full amount of Termination 29 Premi= pursuant to Section 11.4(a) hereof and all fees and sxpenscs incurrea3 by tiie Authority as a result of complying 31 with the, prccedur?n for withdrawal requi.Led herein to the :-Authority; 33 (d) such withdrawal from Coverage shall be effective 35 on the first day of ,a Coverage Period; and 37 (e) such •,oithrirawal shall not result in the number of Participants becoming newer than Five; provided that, in 39 the eve,-,t that deposit of security for Basic Premium or optional prepayment by all is provided for 41 pursuant to Section 11.2 hereof, a Participant may withdra•,a regardless of the remaining niunber of Participants. 43 In no event shall withdrawal from Coverage release 45 Participant from i.ts obligation to rjay damages resultirig Irom default under thr, terms o£ this; Agreement which is not remedied 47 by payment of Termination Premium oL from its obligation to pay Pure Premium Adjustments with respect to Claims within the 49 scope of Coverace prior to such withdrawa:. The Authority shall continue to pal Settlements of Claims relating tc the 33 2658002/2 - Hs," v - • /f, y S t� � r� - v " fir 4 ,•�Y;, .y Y- F •t r J_ , ',• r�`d.� r . 1, .A,., .1 Yr A!" : �� 'fir �+ , '•tij ri " fV , a' v , i ..,'I�*', 1 ,y „Y A,1 �y n 'tt dl' -. � �•' "' � � „�„ � , � rx.• L•r. ; ..'m r , J� f ,�14 A1,�•J .,1ti .� � 1 withdrawn Participant within the ::crape of Cover«g� ;?riot to y ,.. the • ',�,' withdrawal a.. provir,eci tterEin and in the Indenturc. e.., nl 3 Part i.cipant defaults in the payment of its continuing obligations de-3criLed in the preceding sentence. Notice to "', 4, withdraw shall be rcvc.c�►ble L-iy tho: Participant only with the cous,en.: of the Authority. N 7 'i SECTION 6.3 Conditions to Ferntit-incr Exuulsion of a 9 Participant from Ccverace. The Authority may expel a r•,� �., .:, 11 Participant from Coverage subject to the followinq conditions: (a) such Participant shall be in de,.ault ender this , 13 Agreement; IN 4 15 (b) not later than sixty (60) days next preceding the effective date of such expulsion, the Authority':. Governing 17 Board, by at least two-thirds vote, shall have approved such 9xpulsion by written notice filed with the Trustee and 19 writt'an notice of such action shall have bean given to tho Participant to be exne.11nd; 21 (c) an amount equal to Termination Premium for such 23 Participant shall have been deposited in a special account by the Trustee at the direction of the Authority, as 25 nrovided in Section 5.2 hereof from Undesiqnated Rezerves in the Claims Payment Fund, the Debt Service Reserve Fund 27 or from voluntary premium payments by Participants; and 29 (d) such expulsinn shall be effective sixty (60) days after written notice shall have been given to the 11 Partic:pant to be expelled; provided, however, that only ten (10) days' written notice need be given to any 33 Participant in payment default-. 35 In no event shall expulsion from Coverage release a Participant of its obligation to pay damage- re"ulting from 37 default under the terms of this Agreement which is not remedied by payment of Termination Premium or from its obligation to pay 39 Pure Premium Adjustments with respect to Claims within the scope of Coverage prior to such expulsion. 41 I3 A.RTICLE VI 45 ABATEMENT 47 SECTI( 7.1 Abaterrr;nt of Partic_1 ►"tion Premium in the Event of Failure to Pay Settlements. in the event that the 49 Authority *ails, and s;.ch failure continues for a period of sixty (60) days, to pay a Settlement of a Participant pursuant 34 2658002/2 �1'��+�T`� '.4.y ,J,� ., 11 q.,. J,��,�., (i� , �� ,:i•,'o'�4,�,,r��dlr•�� • r . Ash• f - i :� ' , a N :r . 'a - r a ib"A'r'• a:f 1 _ l ok) r) 1 �•JI, , r. ,t1 , r i' : 4 ors., {u., "tt„ I+'qrf 1 to the terms or this Agreement, other than by re<<son of good )aith dispute as to the scope of Coverage, the obliga*ions of 3 all Participants to pay Participation Premium and Pure Premium AdjusLment hereunder shall automatira.ly be abated in full. 5 The obligation of a Participant to pay Participation Premium ::hall otherwise be discharged only as provided in Section 4.1. 7 This provision shall not be construed to liar any Participant from making voluntary payments of any amounts of. any premium 9 following ar event of abatement-., On the occurnance of any event causing abatement, all moneys on hand (i) in the Debt 11 Service Reserve Fund, the Redemption Fund and the Prepayment Fund held by the Trustee shall to available for use by the 1;. Trustee to make paymentE of principal of and interest on the Bonds, (ii) in the Principal and interest Fund held by th-e 15 Trustee, to the extent of the proportional amount represented by the Portion of the Coverage Period which had occurred prior 17 to the event causing abatement, shall be used as in (i) hereof, and amounts in excess of such amount snall be transferred to 19 the Claims Payment Fund and shall be available to pay Settlements. 21 23 ARTICLE VI11 25 INDEMNIFICATION AND RELEASE OF AUTHORITY, TRUSTEE AIMI PARTICIPANTS; DISCLAIMER 27 SECTION 8.1 Release and Indemnification Covenants. Each 29 Participant shall and hereby agrees to indemnify and save the Authority, the Trustee and all other Participants and their 31 respective officers harmless from and against all claims, losses and damages, including .legal fees and expenses, arising 33 out of (i) such Participant's breach or default in the performance of any of its obligations under this Agreement or 35 (ii) such Parciclpant's act or negligence or that of a,,7 of its agents, contractors, servants, employees or licensees with 37 resuect to the Coverage, but not including Claims. No indemnification is made under this Section or elsewhere in this 39 Agreement for claims, lasses or damages, including legal fears and expenses arising out of the willful misconduct, negligence, 41 or breach of duty under this Agreement by the Author-_ty, Trustee, or any other Participant, or their respective, 43 officers, agents, employees, successors cr assigns. 45 SECTION 8.2 Disclaimer. THE AUTHORITY AND THE TRUSTEE PUk!<E NO WARRVITY OIt REPRESENTATION, EITHER EXPRESS OR IbIPI,IED, 47 AS TO THE ADEQUACY OF THE COVERAGE FOR, THE NEEDS GP THE PARTICIPANTS. 49 2558402,'2 35 M, 1 "J': I ' •e rjl A,t 111 ':•R, A M ' r I , AP' n w gyp/ , ARTICLE, IX 3 e,SS IGNMENT XID AMENDMENT ,';, �t• . , SECTInN 9.1 Assignment h� the Authority. Certain of the�- "��`' Authority's rights under this Agreen;cnt,including the right to N 7 receive and enforce payinent of Premium (other than ., , w� Administrative Preni:•sm) to 1,e paid by each Participant under } 9 this Agreement, have been assigned to the Trustee, subject to ' certain exceptions, Pursuant, to the Indenture. Except as rM,� s�� 11 provided herein and in the Indenture, the Authority will not r ! assign this Agreement its right to receive Basic Premium from + %., c r 13 any Farticipant, or ic.. duties and obligations hereunder to any r ire .�, • person, firm or corporation so as to impair or violate the ; 15 repr,entations, covenants and warranties contained in .section e_; 5 2,2; provided, however, that nothing in this Section shall .l7 limit the right o�L the Authority to purchase commercial insurance or reinsurance on behalf of the P;trtir, ipan Pursuant 19 to Section 3.5 heraof. The 'Trustee shall be considered a third party beneficiary under this Agreement in regard to the 21 enforcement of the Trun tee' s rights hereunder. a 23 SECTION 9.2 No Assignment by the ParticlrJatltS. This f --- "' ' 4Agreement may not be assignee by any Participant. }. 25 SECTION 9.3 Amendment. Except as provided below, this, 27 Agreement may only be amended by a written instrument duly authorized and executed by the Authority and all of the 29 Pa.rticipanto in accordance with Article X of the Indenture. This P.greement, including the Exhibits anti Schedules hereto, 31 may be amended, with the consent of two-thirds of the Participants and two-thirds of the Gover-ning Board of the 33 Authority without notice to or thy_ consent of any of the Cwnert-, °k of the bonds and without complying with Article X of the�.�r, 35 Indenture, in connection with (1) any provision of this ti"'�,��'�, Agreement after the discharge of. the Indenture, (2) any change 37 requited or permitted to be made pursuant to Article VI hereof �,� r•Y,_' upon the admission, withdraw.l or expulsica or a Participant, 39 except as otherwise provided in Ar'�icle VI or (3) any provision � of thio Agreement relating to: 41 (a) the methodology and formu..ae for determinaticn of r K 43 Total Piire Premium, Pure Premium, Pure Premium Rates, Administrative Premium and Pure Premium AdIiustmen s payable 4-by or to each Participant, including any changes to Schedule rA; provided that, prior to the Ccver. age Period s ;joi47 commencing July 1, t991, any Such ?mendment must be > approved by unanimous vote of the participants; and £urthec�" :l 49 provided that no such :amendment shall reduce the level for the astablistuzlent of Total Pure Premium or Pure Premium 51 Adiustment•s to less t'oan that initially set forth herein; , 36 2659002/2 ��f k i , C 7, Y h 1 I W. III' '�W RI`' •� r• 1. (b) r alld th :;cnp,: and of Cova provided in this :\greement and L:,—llibit: G here:oi 3 that_, pt:ic)r t- ;.he Coverage Period commencing July 1, 1991, any amendment which materially increases the types of S exposures included in Cuveracro must be apor'jvFd by unanimous vote of the PartiCIPM-Its; 4' (c) a Particican s AllocablF^ Share as provided in 9 Section 5.2 hereof; and ` 11 (d) coi,mercial insurance pursuant to Section 3.5 hereof. In addition, in the event Bonds are ref.I!nded pursuant to 15 .Section 2.13 of the Indenture so that aggregate principal and interest due on the reiundiny bonds on each Pa}.rent 'Date- is 17 less than or equal to aggregate principal and interest on such Bonds and final maturity of the 13ords is not extended; this 19 Agreement may be amended by majority vote of the Govarning Body to correspondingly and proportionately r':duce Basic Premium 21 payments of Participants without notice to or consent- of any of the owners of the Bonds and without complying with Article X of 23 the Indenture. 25 Ail amendments hereto other than amendments to be made following the discharge of the Indenture and amendments 27 authorized by all of the Participants shall be effective only as of the beginning of a Coverage Period ;,nd any such amendment 29 shall be further conditioned on the givilig of notice by the Authority of such proposed amendment to all. non -consenting 31 Participants not later than the May 1 pLeceding the effective date of such amendment. All amendments hereto other than 33 amendments to be made following the discharrgp if the Indenture Shall be further conditioned on the receipt by the Authority 35 and the Trustee of U.) as opinion of Bond Counsel to the effect that such amerdrnent: does not affect the validity or enforceability of this Agree:i-,ent and does not adversely affect the tan-e:cempt :_tatus of interest on the Bonds, and (ii) in the 39 case of any amendynent to the methodology and formulae £cr determination of 'Total Pure Premium, Pure Premium, Pure Premium 41 Rates or Pure Premium Adjustments, or any amendment eiffocting the Coverage or any amendment to Sections 2.1(e), 7.2,(g;, 3.4, 43 3.5, 3.6 or Article VI hereof a certificate of an Actuary to the effect that such amendment does not adversely affect the 45 actuarial soundnes•_, of i_he -ooled self--insuranr-2 program. All costs and expenses incurred in connection with any amendment to 47 this Agreement shall be borne pro rata by the Participants. 49 Notwithstandi:;, the foregoing, in the event that the number. of Participants is five or less and cht3 amounts in the Claims 37 +h'+a'B ' ' ' `' ''''??(!' rJ�A.�A;�ii�',;1+.�1, a'+1�"�', �s+"�?r��5ia' • 11 ' q 4 A 4 9 4 r 14 lop, 1. ,71 FII�t a -1,IL nt Fimd and Debt ,c-cvic-.r re 'C) S i L L� "EVUl'i ',:y I 2rovil.i.., (i r d C.T. for Prclm;,::;l 0C 3 (,�+t:Lona nrepawiv%nt: of all Par,,�icipaw.:,,* rcrcliant 11,2 1101:!:(.;l th Aq r 2 .,it m.i,,- be .;�ioride(i onlx- with N , J 7 �` � ' 'ri* EVE*N`�!; OF 917FAULT Rt:';__,'DfFS bECTM! 10.1 Events of Default, The o', n c,, I L;(- "s--vents of defaul.'L undo , this A%ireement Fal'd the tEMS L t1ley aLe U-(-.d in of uufault" and "default' shall ni., an, AienOver ir, 15 this Acgr:u.-rile, resPect: to a Par'..iclpant, -it 1 r, 4-t uTio ar more of the -co 1 lowl.:7,i ovent :i I failure _1)y such Pai:ticip-Lirit to I -ay any E-asic 19 Premium or Supplo, romtril Risii, Prerniu-m requirf.-,o to be pc: d herwmidm- c_i th%, Basic P�yra.,nir rate; 21 Pal i failure hv suet: -tiCipaW: LC) ;ind 273 e r f: a i any c: Pv e na n t c o n d t o r or a (g i: e e;. .:? ri t. c n s i), z t tit be observed or rerformee herein cr hereto, other than as refeme-1 to in clau e 7 1 i 5 "4 &. - uy (30) days a-:tur writ-o-.1-1 Geci:ian, a for neriod of thir 27 notice specifying su-h failure and req,+,e-st.i.-ic that it bt;- remedied liar, bean given to such Partic:oant by r1-1 Aut'l-Lority, tiie Trustee tJr LAhe Cv.,ners of n.cit ltasF t:),.aii 1 fly 1 w terity-five percent (25%) irL aggregate vi-irv: --)a,'. zinnovw_ of 31 Dorris outEtand-_ ng; L)rovided, hmo�rer, if fallura in the notice cannot be corrected %-.,ithin '--he au P 1 a, b -1. c 33 veriod, the Authority, th,; Truoteo or such .'-wnersi, as 'Ae 'tc!, rase: mat, ohall not- unrr:i�smo,_ably thei 7: c n i , .7 L, -,I 35 to -2n e:�tpnsioa of such I-Acin if corrective iw;titiitt:d by the Participant withir. the apj)iic,?b1r_- -:,2Liuu '17 ' ', tht: default s- cot :ectecj; or z-mo di I i(jenL 11, Pursuc"k-1 unt L. 39 (iii) the filing by such Participant of a case in r.' ba -.ruw.t. Y, ar the subi cc t -i c, , 1 c f` any rigllt or inizer,32-t of -11 1 11. P,ar -,..Lcir)Fnt under this A -gree:,,,,ent to any C-.-cecuticrl, 'int c r attachment, or. adjiuoicaL).011 0.-such ol inant G a 1: a n k r u r t , or 5 1 g r r --. n'. _- by such h i?,% rt i c iparitor e henolit of creditc::-s, or the c,.,i�:ry t 45 . such P�irticipant �nto an aqrf::Gwment of cwaposi; iov. %.-itil credi-tors, or the acmmval by al court of. cor,,metont 47 llirisflictioli of a i,tiaii appli:_*ahtic to the artici0ant any procect:ngs ir.SLituted ladder tho r)rc_vj.sior,-1!,-- .-�f the federal b,7.varun�:-_v code, as amended, or untie:: otly :zii-Alar c cat w,aicci :7-ay- nereaftcr hi: cmact-cd. V tQ 26L59002/2 A .fit' u •r 1 �� 1' , Y ' J� ' , r k r��� � IJ ,�� •' 1i � del 1 Notwi,-hstanding the foregoing, failure by a Participant to ►.omply with the Underwriting and Claims Administration 3 Standards (including the Liability Claims Quality Control Guidelines) referred to in Exhibit G shall be an event o! 5 default only after following the procedures described the:.ei.n. } 7 SECTION 10.2 Remedies on Default. Whenever any event of default referred to in section 10.1 hereof shall have happened 9 uid be :ontinuing, it shall be lawful for the Authority to exercise any and all remedies available pursuant to law or 11 granted pursuant to this Agreement. Upon the occurrence of any event of default with respect to she obligation to pay 1-3 Premiums, the Authority may and, upon an Event of Default described in Section 10.1(i) or upon the writte!. direction of 15 owners of a majority in aggregate principal amount of Bonds then,tutstanding, shall cancel all Coverage rights of; the 17 defaulting Participant for the portion of the then --current Coverage Period commencing with the event of default and ending 19 Witt its cure. Despite the cancellation of Coverage of a defaulting Participant for a given Coverage Period, the 21 Participant nonetheless agrees to pay to the Authority all costs, losses and damages howsoever arising or occurring as a 23 result of such default and cancellation. No such cancellation shall be or become effective by operation of law or otherwise, 25 unless and until the Authority shall have given at least sixty �. (60) days, or in the case of an Event of Default described in 27 Section 10.1(i), at least ten (10) days' written notice of such Cancellation to the Participant; no such cancellation shall be 29 effected by operation of lair or acts of the parties hereto, except in the manner herein expressly provided; and no such 31 cancellation shall terminate the obligation of the cancelled Participant to pay Pure Premium Adjustments relating to 33 Coverage Periods prior to such cancellation or to a Premium g pay ,,..; for subsequent Coverage Periods for which Coverage is made 35 available to such defaulting Participant; provided, however, r','.�•i', that notwithstandinq any':hing herein or in the Indenture to the 37 contrary, there shall be no right under any circumstances to ?` accelerate the Basic Premium or otherwise declare any Basic 39 Premium not then in default to be immediately due and payable. 41 in the even that the Authority elects to expel any defaulting Participant, subject to the conditions described and 43 ;n the manner provided in Section 6.3 hereof, the Participant nevertheless agrees to pay to the Authority all costs, losses 45 or damages howsoever arising or occurring as a result of such default. No such expulsion shall be or become effective by 47 operation of law or otherwise. unless and until the Authority c_.all have given at least sixty (60) days' written notice, or 49 in the case of an Event of. Default described in Section 10.1(i), at least. ten (10) days' written notice of such 39 26S00O2/2 � ��i•{''/����1ir:��'i���.i •'�f.M'li..N�t/•, it .jr r+•.?II♦ env r.•. -1.�.r n: r*i:ttlM7Mil:r n.: r1t W5�1`j��L1�I ! F* 1� , y ro {yyy. 1 1 (((�j • I M Ft, ' aye' '' • u,M� F �1 r r. C bib• �1+r _ 0 1 expulsion to the Participant; no such expulsion shall be effected either by operation of law or acts of the parties 3 hereto, except only in the manner herein expressly provided; and no such expulsion shall terminate the obligation of the 5 expelled Participant to pay Pure Premium Adjustment relating to Coverage Periods prior to such expulsion. SECTION 10.3 No Remedy Exclusive. No remedy conferred 9 heroin lipdn or reserved to the Authority is intended to be §} exc'.usive and every such remedy shall be cumulative and shall 11 be �n addition to every other remedy given under this Agreement or now or hereafter existing at law or in equity, including, 13 but not limited to the right of any Owner by mandamus or other suit or proceeding at law or in equity to enforce h:s rights 15 against the Participant and to compel the Participant to perform and carry out its duties under this Agreement, subject 17 to Section 13.u8 of the Indenture. No delay or omission to exercise any right or power accruing upon any default: shall 19 impair any such right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised 21 from time to time and as often as may be deemed expedient. in order to entitle the Authority to exercise any remedy reserved 23 to it in this Article it shall not be necessary to give any notice other than such notice 4s may be required in this 25 Article or by law. 21 SECTION 10.4 Agreement to Pay Attorneys' Fees and ens�es. In the event any party to this Agreement should `,�'• 29 efd cult under any of the provisions hereof and the ti nondefaulting parties should employ attorneys or Incur other ,:`_'° 31 expenses for the collection of moneys or the enforcement of `�,i; performance or observance of any obligation or agreement on the 33 part of the defaulting party contained herein, the defaulting party agrees that it will on demand therefor pay to the, 35 nondefaulting parties the reasonable fees of such attorneys and such other expenses 3o incurred by the nondefaulting parties 37 awarded to the nondefaulting parties by a court of competent jurisdiction. kNe I SECTION 10.5 No Additional Waiver Im iied by One Waiver. •„ �,.,���;��..+ 41 In the event any agreement contained n this Agreement should r be breached by any party and thereafter waived by the other 43 P"rties, such waiver shall be limited to the particular breach F rhk so waived and shall not be a waiver of any other breach 45 hereunder. I '47 SECTION 10.6 Trustee and Owners to Exercise Rights Certain of the rights and remedies given to the Authority under 49 this Article X have been assigned by the tuthority to the x 40 �i 1 i 2658002/2 V1 rl` Y!IT• ' • yfik ,l"Yj.�ir I P P' l l- . r « t • r V• I 4 t +, .1 f. I ` .1 ♦f I • II I' lr . � y �'� ,�,r�„�{• r��l � III Fp F, 4r w''' r•��• yy� 1 Y 1 Trustee under the Indenture. Such rights and remediR:. shall be exercised by the Trustee and the Owner:. as provirdQd in the 3 Indenture. 5 ARTICLE XI 7 SECURITY '-?OR OR PREPAYMENT OF BASIC PREMIUM; 9 TERMINATION PREMIUM +l' 11 SECTION 11.1 Deposit of Security for Basic Premium by a Participant. NotwTthatanding any other provision of this 13 Agreement, any Participant may an any date secure the payment of all of its unpaid Basic Premium by an irrevocable deposit by 15 it with the Trustee of (i) an amount of cash which, together with amounts an deposit in such Participant's Account in the 17 Principal and Interest fund which are not required to satisfy the Rebate Requirement (as defined in Exhibit C to the 19 Indenture), is sufficient to pay all its unpaid Basic Premium in accordance with the Basic Premium payment schedule set forth 21 in Exhibit A hereto, or by prepayment thereof pursuant to Section 11.3 hereof, as the Participant shall instruct at the 23 time of said deposit, or (ii) Federal securities together with `r cash, if required, in such amount as will, in the opinion of an 25 independent certified public accountant, together with interest to accrue thereon and money y_ theon deposit in such 2" c' c f the Principal and Interest Fund � Participant's s A co tnt o P together with interest thereon but net of any amounts which may 29 be required to eatisey the Rebate Requirement, be fully sufficient to pay all unpaid Basic Premium nn their. respective 32 Basic Premium Payment Dates in :^ordance with Schedule A or by prepayment thereof pursuant to Co:-" -ion 11.3 hereof, as the 33 Participant shall instruct at the time of said deposit. Any funds oL Federal Securities so deposited shall be deposited by 35 the Trustee in such Participant's acco;,:nt of 'the Prepayment Fund pursuant to the indenture. 37 In the event of a deposit pursuant to this Section, all 39 Basic Premium obligations of such Participant under this Agreement, and all security provided by this Agreement for said 41 obligatione, shall cease and terminate, excepting only the obligation of such Participant to make, or*cause to be made, 43 payments of such Participant's Basic Premium from the deposit made by the Participant pursuant to this Section. Any such 45 deposit shall be deemed to be and shall constitute a special i` fund for the payment of such Participant's Basic Premium in, 47 accordance with the provisions of this Agreement. 49 Notwithstanding the foregoing, in the event the Participant deposits cash or Federal Securities sufficient to pay all its 2653002/2 411 pn v" r . .. • .. QAt rj �; '� 7T'; � I i •? Ji'` r •AV . - A e 41 i m A ''Y ,i,J�r 1 1 j... ., ', ., , I �„ i '. 1 •rx?'f� r �a� 9�r +! I w d AIT �yy , ,. Ho 5 6-1- 1 unpaid Basic Premium to and including a specified redemption date pursuant to Section 11.3 hereof, such deposit will not 3 ascure the payment of all of such Participant's Basic Premium until proper notice of redemption of Bonds (corresponding in 5 total amount to thn Basic Premium being prepaid) shall have been given in accordance with Article V of the Indenture, 7 ©xcept ac provided below. In the event the Bonds are not by thoir terms subject to redemption within the next succeeaing 9 sixty (60) days, such deposit will. not secure the payment of all such Participant's Basic Pr.>mium until the Participant 11 shall have given the Trustee, in form satisfactory to the Trustee, irrevocable instructiuns �o give, as soon as 13 practicable, in the manner prescribed by Article V of the Indenture, a notice to the owners of, such Bonds that the 15 deposit described above has been made with the Trustee and that a corresponding principal amount of Borids are deemed to have 1r7 been paid in aecordanco with this Article and stating such maturity or redemption date upon which moneys are to be 19 available for the payment of the principal of said Bonds or redemption price, if applicable, of said Bonds. 23 In making any such deposit, the Participants shall comply 23 with all restrictions and vrovisions contained in the No -Arbitrage Certificate signed by the Authority relating to 25 the Bonds, :117 SECTION 11.2 DeDoait of Security for Basic premium or fgtional PrepayMent by All Participants. The Participants may 29 ac a group, by at least two-thirds approval of all members of the Governing Board of the Authority, secure the payment of all 31 remaining unpaid Basic Premium of all Participants in the manner set forth in Section 11.1 hereof, In the event of a 33 deposit pursuant to this Section, all Basic Premium obligations of the Participants under this Agreement, and all security 35 provided by this Agreement for said ubligavions, shall cease and terminate, excepting only the obligation of the 37 Participants to make, or cause to be made, payments of Basic Premium from the deposit made by the Participants pursuant to 39 this Section. Said deposit shall be deemed to be and shall constitute a special fund for -the payment of B&FiC Premium in 41 accordance with the provisions of this Agreement. 43 In making any such deposit; the Participants shall comply with all restrictions and provisions contained in the 45 No -Arbitrage Certificate signrd by the Authority relating to the Bonds. 47 The Participants may also, by at least two-thirds' vote of 49 the Governing Board of the Authority, exercise as a group the 42 2658002/2 ,1 g r rr� yl: � r �vI11 I rf 1� 1 f r $ 9 (n ll`• t • j7?T1 `y Ail �i 0.0. � I I 1 option to prepay Basic Premium of all Partioipanta pursuant to Section 11,3 hereof in the manner and upon the terms set forth 3 in such Section. 5 The Participants may use Undesiqnated Reserves in tho Claims Payment Fund, moneys in the Debt Service Reserve Fund or 7 any other lawfully available moneys to del.nsit or prepay the amounts described in this Section. 9 Notwithstanding the foregoing, in the event that the number 11 of Participants is five (5) or less, so that a Participanr is unable to 'withdraw pursuant to Section 6.3 hereof unless 13 deposit of security for Basic Premium or optional prepayment by all Participants is provided for pursuant to this Section 11,2, 15 any Participant may cause the Authority to use any amounts in the Claims Payment Fund and moneys in the Debt Service Reserve 17 Yund to deposit or prepay the amounts described in this Section, 19 Unless the Participents elect otherwise by vote of at least a majority of the Participant members of the Governing" Board of 21 the Authority, the pooled self-insurance program shall terminate by virtue of such deposit or prepayment, except for 23 the obligations of each Participalit to Fay Pure Premium Adjustments, as provided in Secb.on 4.1 hereof. 25 SECT;ON 11.3 Optional Redemption of Bonds. Subject to the 27 terms and condition-s of this Section, the Authority hereby grants an option to each Participant to prepay in whole, the 29 unpaid principal amount of such Participant's Basic Premium, on the dates specified below. Said option shall be exercised by a 31 Participant by giving written notice to the Trustee of the exercise of such option at least forty-five (45) days prior to 3.1 this date of prepayment. Such option shall be exercised by depositing with said notice cash in an amount equal to the 35 corresponding outstanding principal of Bonds to be redeemed, plus accrued interest on the principal amount to be prepaid to 37 the date of redemption, together with any Das'Lc Premium then due but unpaid, and said cash deposit shall be accompanied by 39 an. amount equal to the amount expressed as a percentage of the principal amount prepaid constituting a prepayment price which 41 is designated in an amendment to this Agreement entered into on or prior to the date of issuance of the first Series of the 43 Bonds. 45 SECTION 11,4 Termination Premium. 47 (a) A Participant may withdraw from Coverage pursuant to Section 6.2 hereof or be expelled from Coverage pursuant 49 to Section 6.3 hereof when the full amount of Termination Premium shall have been deemed to have been paid to the 2658002/2 r 4, w 43 T� t.`-� • ,lei }� • - '�!,,: ;i,t•, , 1 �' N .# 4 M N. C 14 3. 1 Authority. The Termination Premium for a Participant shall be determined by the Authority in an amount equal to the 3 sun of the following at the time of such expulsion or withdrawal: M the amount that would be required to (1) 5 secure the payment of such Participant's Basic Premium pursuant to Section 11.1 hereof or (2) prepay such 7 Participant's Basic Premium pursuant to Section 11.3 hersuf on the noxt date on which such prepayment may be made, as 9 the case may be. (ii) an amount equal to such Participant's Allocable Proportion of the amount, if any, by which the 11 amount in the Debt Service Reserve Fund is less than the Reserve Requirement and (iii) are amount equal to all. Pure 13 Premium Adjustments scheduled to 'he paid by such Participant. Termiriation Premium shall be paid from, to is the extent available: W such Participant's Allocable Proportion of the Debt Service Reserve Fund, and its 17 Allocable Proportion of Undesignated Reserves in the Claims Payment Fund not to exceed its Allocable Proportion of 19 deposits made to the Claims Payment Fund from Bond proceeds or its cash deposit into the Claims Payment Fund in lieu of 21 Bond proceeds hereof and (y) in the event of withdrawal, from voluntary premium payments by , � withdrawing 23 Participant and, in the event of ex,. Ision, from voluntary premium payments by other Participants. If Undesignated 25 Reserves are less than a withdrawing Participant's Allocable Proportion of deposits made to the Claims Payment 27 Fund from Bond proceeds or its cash deposit into the Claims Payment Fund, such withdrawing Participant shall receive a 29 nredit to subsequent Pure Premium Adjustments in accordance with Schedule B hereto, 31 own (b) The Authority, at the direction of the Governing 33 Board of the Authority by majority vote, will direct the Trustee by written instruction to use the components of 35 Termination Premium described in clause M of the preceding paragraph to either (i) make an irrevocable? 37 deposit pursuant to Eection 11.1 hareaf or (ii) redeem a corresponding principal amount of Bonds then redeemable. 39 The portion of Termination Premium not required for such deposit or prepayment will be dnpcsited in the Dect Service 41 Reserve Fund or the Claims Payment Fund, as the Cast? May be. 43 SECTION 11.5 Continuing Premium Obligations. In the event of irrevocable deposit by a Participint pursuant to Section 45 11.1 hereof or prepayment (except in connection with voluntary withdrawal or expulsion) pursuant to Section 11.3 hereof, such 47 Participant shall remain liable in each Coverage Period to pay Supplemental Basic Premium, Administrative Premium, Pure 49 Premium and Pure Premium Adjustment. In the event that an irrevocabli deposit or prepayment by all Participants pursuant 44 2658002/2 o N r A, 4 .W a ca 1 to Section 11.2 hereof is made and the Participants elect to continue the Tw%nled self-insurance program, each Participant 3 shall remain liable in each Coverage Period to pay Administrative Premium, Pure Premium and Pure Premium 5 Adjustment. In the event of payment of Termination Premium by or on behalf of a Participant pursuant to Section 11.4 hereof, 7 such Participant shall remain liable to pay Pure Premium Adjustment assessed with rospect to Coverage Periods prior to 9 withdrawal or expulsion, as provided in this Agreement. 11 ARTICLE XII 13 MISCELLANEOUS 15 SECTION 12.1 Notices. All notices, certificates or other de 17 communications hereunr shall be sufficiently given and shall be deemed to have been received five business days after 19 deposit in the United States mail in certified form, postage prepaid, to the Participants, the Authority or the Trustee at 21 the addrosces set forth in Exhibit I hereto. The Authority and the Participants, by notice given hereunder, may designate 23 different addresses to which. subsequent notices, certificates or other communications will be sent. 25 SECTION 12.2 Binding Effect, This Agreement shall inure " f; 27 to the benefit of and shall be binding upon the Authority and the Participants and their respective successors and assigns. 29 SECTION 12.3 Severabilit . In the event any provision cf °31 this Agreement shall be e d nvalid or unenforceable by a court of competent jurisdiction, such holding shall not 33 invalidate or render unenforceable any other provision hereof. 35 SECTION 12.4 Further Assur;inces and Corrective Instruments. The Authority and the Participants agree that 37 they will, from time to time, execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered, such 39 supplements hereto and such further instruments as may reasonably be required for correcting any inadequate or 41 incorrect description of the Coverage hereby provided or intended so to be or for car -Lying out the expressed intention 43 of this Agreement. 45 SECTION 12.5 Execution in Counterparts. This Agreement may be executed in any number of counterparts, each of which 47 shall be an original and all of which shall constitute but one and the same instrument; provided that for purposes of 49 perfecting the pledge and assignment of certain rights under this Agreement to the Trustee, the counterpart of this 51 Agreement delivered to the Trustee shall be deemed the original. 45 2658002/2 T + �yi�lojr� v ems: r �f � � •t• •. i���'' • Y,r }'9` .. L y for ;�t � -' _ hZ�: �' fM r .. - �,: 1- -fir ��;:- �� � - .�"� }?t.� i -� r'r k��,• � ' r - r Lk IV ow 4/. _. * . 1 .Applicable Law. Thin Agreementahall • = SECTION 12.6 of the ac3ordance with the laws governed by and construed In r,3 state. IN wItMSFj WHEREOF, the Authority has caused this Agreement lo to be executed in its name by its duly au xecuted irt 7 the Particiipants have caused this Agrelmelit to be e authorized theit respective names by their respective duly date f1rst above written, and such r'9 officers,• f the on shown Ac ffective from the date of executi Ireement shall be e 11 below.POOL JOINT POWERS AUTHORITY BIG INDEPENDENT C ITIES EXCESS 17 By_ dr 19 21 CITY OF HUNTINGTON BEACH 23 Approved as to form: 25 29 �. 27 ,• Approved asto form: 31 321 • . + ► .CITY OF POMONA 2.7 Approved zs to form: BY- 41 V� W.17. t46i :k2658002/2 ' 0'/(, � 1(• ., .rf` , c _[� - ' •� ,.n•. .:I •.fir;- �. _II Lry!Y'[' `•r. , , .,.. _ .. .. ..1 •1 f �y �� c I��y�tl I V NAV %4 ;� U•_.f �• 'j{-is r-r J 1 • - _ ' /Al_ • � t �., r v 9 a r� t'_+iI"/K � y� ti J `+, j ;. �� - y ".'bit," w ., � - f • i' '`� '. '. r �.� •1 ,r , +.�, �k• -a �' a 't+�- +�s \,1 < / t t, 1�� . -'' - • . • .. , � . \ , r ` •I � 1 /. I . ,. � i • . w '•! r'r � r ;V J r� •4`;� P?si td•, f '-1 i' ;' , ��'�� l�4+� It t •J�1 p��•4I w.. ` '. •. ; �• . 4 ", r •1' M � 1'• /J I �, 1 �g. Irk• ) SECTION 12.6 Ap2licable Law, This Agreement shall be sqoverned by and construed 3 State, i, 5 IN WITNESS WHE.UOF, the Authority has caumadAgreementi _to be executed- 'i 7 the Participants have caused this Agreement their respective names by their respective duly authorized 9 officers, as of the date first above written, and such Agreement shall be effective from the date of execution shown 11 below. 13 BIG INDEPENDENT CITIES EX0-SS POOL JOINTPOKERS } t,15 By 21 CITY OF HUNTINGTON BEACH • r t f d •� Approved form: , 25 ayor t r 33 By_ Mayor (9/30/B8) 35 ft�io)-YQ (9/30/88) CITY OF POMONA k.. 37 Approved as to form. 39 BY 41 Xx 46 Y •+ . _ 1 1 - J Yi r • T w �� is ,� ' , • � %t 1 1 1 �.• 1. • - _r L i•�t +!i'�r--'1�1, f.�'. t. �� `>�• �,.`y a �+t ._x f h. .1� -� t • . �,. r f ... I�� A• f, - t '�'' � a s � • ;<! � �7r�� Alt,+ �! ..i r • . _ ' •' f . i Ar. . i �40 SECTION 12.6 ARplicable governed by and construed in accord .. i •, `• `I State. 5 IN WITNESS WHEREOF, the Authori to be executed in its name by its d 7 the Participants have caused this A la: •• 11 �, • i. .. their respective names b their res officers, asof • -first_ • • Agreemen, shall be effective from t 11 below, 15 17 is KI "• . 'rB. 21 23 Approved as to form: 44 25 27 Approved an to form: 35 37 Approved as to form: r ' l ' , f • .- tit .a•f� ` - p,. ` r_ 41 ' 46 2658002/2 low •J • It :C h,1,�t���jf.i�h,�.'•;for?� ;� ., r ♦ pt r_ ,I ,r *'*' .'4. ` J. M � �. .: t'} '�^,-Ids- . - � .. ♦-. t yy��, _ - - t .. ' 1 P7 •r i 4 y . • R r� - � R r. 10feement shall + • --.h the laws of Ause • this Agreement r t 1 • • of f • to be - • in duly authorized .. -• M, and such of * , A. - V - • ,'ENDMIT CITISS MCCESS r ' POWERS AUTHORITY ,UlTrINGTON BEACH ,X • • f , '.(t '- +t ' 1 d s y � ,ti ,IMG ql' �1 y. rP.., �•� �, � �� ^' ,+� -_• / ,,„ \ • -. �t �' .i - � -_-r•r f,�h t'.. I►,?-,,',� f �i`�M /+ 1- y�~I / �t �. .1� _ -t •. .. ,-, � I ; . . � - r �/ � �. ' � P � i . •LV'F �` y�174 � � � �1fw`.Tr1�s ' ;dr;•.yt , � � p ; / ' . �- " { , Ijti y 1 -- - '_ . �-" Y. • : Y a � _ - � «' . �,+- Y f t - CRY. r�r •y I - � �� " L 1• •'[. •- 1 • • - � • - � � •r , • � i _�- -r. t 1.4 . t t_ . � .. "' ; .� !••' t}. �'ti�.Vry_ �� �di�'I • �s Q F.i 1 A, "! fi - - I _ f .� -{ 01 1]1 - •' ,' � I'^. +1'�!���,� k?���1'�!y+ ,rt� ,yC`. °�,�-,r n,. "�<�n� � �.�' _ 11 / �+ + I fT wI l .�t,�,�IsYy1• 1x ^I \TA ,�.d. If% v 1 .0 CITY OF BAN BERHAYDINO 4 Approved an to form: By • " l ♦, t k (." >• ! �' �}.. l , • r I • ' - •'• , •'J - By, J r. + 47 2658002/2 ff w + ��{ i• ,-. •+ •t a a� + 6 1 • •= t' ' "ram 3 t e- or ie&41 � 1 r •' 1, � to � 5.," � 4'�•�L �"" f.,yl;t! .• Li � � ?•,/ ' !, - �t ' ! •-t i�p.• pr �r t t tied .•' 2 %t ° I ♦ ;1 -. v :, • .. .. ••" r.��' 4.-rS4� - ''•ki ri'• 'If�� l,,.jJ�-rk; ..'._ '- ,- by{... { 1 X' h t � 1,(t�.. \.. �, n11. >� r r•1•� � y �I . %+ I f _ i� - � ' - {, ' � .� r i• ,� �, , r 1 , ' r � k. r 4N f, ' 'J"' ° °;ice ,.� _1_ .. ;� ,:• .4 - ''� � ,. :( �:� •• , �.•'rT 1 ` 1 rt•�F�-I�p'��', 1_ �. , r I ,1J .. '` • I , ' •� � - \ + � h. •+�t • Y�P� ! w% - y, f• �M ft�I' ~ ',+ I� �Y11-t l �4r�~��? �-• 1 � . - I • - r , � l .� CITY OF SAN . � ► � ..'rye �. �-�. '�7y� 1f' °`C4'M',�*„ I�.. + y", �" �+J��S•. r E + � y;: ) Y ; �_ ' \ ' � � y.j /:-�F � S�J.-� '±'� T�"4�1�'�l �.�'��tV� 1 /. r t. �ll�..�•1 y(�� ., '�� � F - .. _ - � ' • i IJ • /• - "� � � 'r " �. tag -, 9 A- . -• �'. / - � � .. } , -. 1 • Approved By ACITY OF GMTA AWA t� 1" 9 Approved as to form: By tift 47 2658002/2 f. .°. ♦�.��. I 1• r I• � r - / ,aalpp•; � - -'L'ir. i ,L 1 !. �.�,•� .i I l . - ,S •y�.•♦i';jr••r�'• .: -,-,� .� 4 - - '.�• -71 , 'r ' � � + P ` yr • ' . ' ;,;�_ `•. r � Sk •, i + ::•1 °�r T Oki OA •\ I 3 SCHE flu Date 13 J F I _ •1 .� l 17 19 21 23 25 27 a F 29 ` - • :, - 31 , + r, 35 37 39 43 45 The obligation to effectiVe until the t � � '147 No series of 6 • Closing 1 respective 49 schedule of Basic P1 -.' . ,�. • � �tyf1 1 4t 1. • 1 li _ iF i.t "•� � � ! ' i F t t at > + r 1 ). f7V-It r-1 • �q ! r. ! � 1 ` _ • `a 771 EXHIBIT A OF BASIC PREMIUM PA Interest t 1 1 _ _ 1 Principal \ `1 • ••Component I r r • ` � w� a • 1 h 1 - . al R' II ,y Basic Premiun will not arise • be this Exhibit A is amended to insert a - a� .csing Date of the first series of Bonds. an or prior to the .1 be issued unless, Y nium. payments 4. '77— •It,.I , t s f r f y w r ow ' 7 , v , ! 4;� 1 `�.r i ' ^, •rb :, ,� * r 1,1�` t , � �•: .� . , r Y� , � "i s 4.4 -41 Of., Y' - r ,_ - 1�� • .- TC ;• !� r � '+.. -t .�y.t` ` �� `. � r r!'� •1i �f / I- } ,-1 _ It % c , r p,. v. ,..b. '�-,�F- �' , •�,•�r,�� _ "�P ' 1��-{�-,Y" R. ➢ .�J"';.. � t. i :•M . �-: � 1.-. (1 lwi 1. + , r ,. � r .. rA ..c j,�•r r ..► ±•,/�`.}i.i �• •:��y a-Y� }r•) d. _"� t��~ - �� �r•r �, •mot-�•�7•��_�''�•� •._.'� e � > / , Jf ' • � �, , .' r . _ - �Y9;4+J�p���,- � , � �. rr ' t,, "r' Y'� 1 ��� , �,� , •� � � �� w I �• + •- _ • . I.1 ' nl,r�,V\ � \�••,:/� .` �''' •'+ 4�, r 1 -, . y 1• ,l ,'r . • r •, ' •/ • - - • , Y .,Mt, `w •r�T'�}� /�1 I / -r 1 ? �� ._+,�♦ Iilr"r 7•�� �,q+,. 1� � 4 r��rl • • - N'l ''• �•rjl.�� - .�� , • ` _ I / I'1 •` 'M'41 1f '},.•,e!r wt. Ft • �,h. aw!' `YY�fS1;rM - , `{I^•^Y (7°" F.y��, .•w .do "�'• �/. 3 ALLOCABLE PROPORTION _ { EACH PARTICIP.kNT 1 . CITY OF HUNTINGTON BEACH \ • * �•.' .IMF • .NARD t.. CITY OF POMONA <ft • ;. ; All CITY OF S.%NTA ANLA 111114 + F '\t t I r- '�,,' -' Via' �`'• y - .1 , i 1 1 . 1{ vw fit. � .•.� -r•. � a•. .w-' c�' 14 ` •y �•'7 r.', -' � _ •r � v_- `'� `' �►". . - - . '% � .�. - �• ` - �- •.� ,Y,.jll f • . +.. ..4 - , :, r,. !4 -H..•.. ';� fti •.'. 'i' ,�'. _ _ - • r•. - v ` .! - I _..�J - *� r . � ,': l r .� r �. � ♦ � 1 _A"• r • ' r �u •'1 \ . �{v �.. IY� r 1 t xr- • 41. �. 't -' - ♦' � Y 4, - ► � 'rid � `'• r __ ,i 40 -'^'' R •` �•' •fit _ - , .+ p `-'^ .� ItA 1'._ q �4 ♦rn 1 o Pr•� � r �� % `�t f ~ �, tY r ` ♦ O y .µ - �• •■ � C'� t t a1r'rx � �rffl " y 1• ,�, , 4J� `�,, r. � 1�"' f � +}� � �* .� / Y J'' 3. i 4%. ' .♦, -• '.•,.♦- � ,,,. -I � y.. -� .r �-�1�.,..t '«(p�}_ •yl,,, �Y°l�b♦ ' f �! ,�•r• I,. ��� ,�I - �}`, =r}L L. - 'y. .s %'i', F ,^ ♦ ; r .r • - . r0 •. '.` _ - � - r�ltl `�.� a 4� - 'i�"_ iffM'r7 f ti- `.t ~ . y -•' , r• � ��+� . Nl IIJITIAL PARTICIPATION • 1, _ �� _ ♦ -t,__ _ _ PREMIUM Adminir- Total Premium g—ramilun—1 cH CI + p 1 / • 1 . •. L760 316,050 1 1 or OWUD 11 CITY 311,740 1y' 1 1 1 13 CITY OF SAN 1 t`: / • + 1 651,640 • ?„4 622,020 CITY OFt • r TOTALS 17 t' ok 4. TA 44. Ll •r �. ♦+ _ ♦� t I • _ Ic Y. 1 i �•i`-J 7+ ...¢•). .� -. - •R. �'i 1. • �, p � F : ; � -"�# :�I' � � .. (�fK 'N ��} + ♦ •�; ., � . w♦f may, � -� - . a 'lpi 1 •`;�°�r 1'�0 ,•fit; �' ? _• • '•'•' �` is . ¢ a'+ - - A � f r. %y w 4. �1 1� c- L ^ . .. , , .. �; � ,yp►� - � : 1 y; ,.�`•♦� � � --.' �, t f pew '_ ' ;:•* " `- ... � . ; � ,.• y i% . -� •• ti - •.< . y �`r � G j ; � f - It dl• , ry. _ M+�;"- CMS ay -' 4i '• ., � _ -'�' •,- r. •' ,;' '�, ,(f,• , dr p� �• � ':., ;t�" � �w{'� ,., •r• � r .% �� s �,>'• F11 a i _, -' '"' j •� .. %,. , - � � i 1 dW EXHIBIT D 3 SPECIAL PURE PREMIUM ADJUSTMENTS AND ADJUSTMENT PROPORTIONS9 and 1991 to a Participant to - w 7 Specirl Pure Premium Adjustments may be assessed with respect to the Coverage Periods ending on July 1, 1989, 1990 • 1. ..- , .'� r` - eztentsuch Pure (' ♦ 1 S4•Premium paid in aryl such coveragehad the Pure Premium not been capped at $1.25 million with . 1r 11 Pure Premium which would have been paid in such Coverage Period 13 respect to each of such Coverage Periods as provided in Schedule A. -VIjustnent Proportion for a given The corresponding 17 Particl ant will be equal to the Pure Premium which would have been pa d by such Participant had Pure Premium not been capped 19 at $1.25 million divided by the total Pure Premium which would have been paid by all Participants had Pure Premium not been 21 capped • .� t, '• +. ti. i` r1 A �'• r _ fl ,r 1J r{x., A: y VO 41 49. •" s. i. '. , ' t 11, +%1 ♦ •: J' ♦ ♦ - :. J /,' . rff�� y9 v l ' - .� t 'G r i. .r ._ � ♦ i _ .•' ` - ' 1. r * h, ,•'4 `�/y� M�V �' l %, �` /• ,. '� ti ,. , - ,- ' � .. r •'i ��•- t 1 R * r ti i.r.! j • r '�: ;r , 'tfl*rilr'r. ,.,, y ttiy • • , + - W-O2 nl• 41 'ice. -, .l � _ • � � .. _..f ,. . 41, - 1 L � • , 4 '• 4Y _li(e , , ; •' ,�' : � �; �1 r 52�-,• -,. f PPS t �•�9 _ ,' N .. �, , L j.. �y1�7 � • t y' , ' j x r + r�. r.: r , ' �'� N f' • ', r'� }y 1 ` ! 1, r - / r.AA�!� ' �'M , ,I• yAM'• I ` - • M, eb' , / ti I r, , A.fwVl T e1-� ,y �,�1 Ir. � , ,� ,rH ail I �• r � L � . ., 1 r'f R 1• a Riff `@ �• ' �// i ' •, �, ". . �'� 11 a ! � ',: E 0 EXIIIBI:' F MASTER MEMORANDUM OF LIABILITY COVERAGE FOR THE BIG INDEPENDENT CITIES EXCESS POOL JOINT POWERS AUTHORITY Throughout this AGREEMENT, words and phrases that appear capitalized have special meaning. They are defined In Section II — Definitions, In consideration of payment of the premium. the Big Independent Cities Excess Pool Joint Powers Authority, ISICEP) herftinatter known as the Authority agrees with the tetpective member CITY of BICEP as follows: SECTION I — COVERAGES The Authority will pay, those sums on behalf of the CITY for ULTIMATE NET LOSS In excess of the Retained Limit stated in Item 5 of the Declaratinni that the CITY becomes legally obligated to pay as damages by reason of Liability Imposed by law or Liability assumed by contract because of: A. BODILY INJURY ar PROPERTY DAMAGE: and/or S. PERSONAL INJURY: and/or C. PUBLIC OFFICIALS ERRORS AND OMISSIONS as those terms are herein defined and to which this AGREEMENT applien. included in Autho(ity's 0ligation to pay are DEFENSE COSTS falling within the definition of COVERED ULTIMATE MET LOSS. SECTION It — DEFINITIONS A. AGREEMENT — means the Memorandum of Liability Coverage for the Authority. S. AIRCRAFT — means a vehicle designed for the transport of persona or propeny principally in the air. C. AUTOMOBILE — means a land motor vehicle, trailer or comi•trailer. D. SODILY INJURY -- means bodily injury, sickness or disease sustained by a person, Including death resulting from any of these at any time. E. CITY —means the entity named in the Declarations, Including any and ail commis- sions, agencies, districts, Authorities, Councils /including the governing councils) or similar entities coming under the CITY's direction or control or for which the CITY's council membe►s sit as the governing body. BICEP 313138 F— 1 V r �^ cti � �r;,•r {• .d � • r jl/ r r Jj fr,, cv + • r j�r r t _7i _ � k �h :Mk fy 4 ` T•� LJ +1� 4. UA .r ." � ±' � Yeti �;,'+�. 9•i�r • +!'4 x !r S? A F. CLAIM — means a demand against an Insured (as defined in Section IV hereof i to recover for losses or damages within or alleged to be within the scope of this AGREEMENT. G. COVE3Ev INDIVIDUALS — means persons who are past or -present eiected or ap- pointed officials, employees or volunteers of the CITY whether or not compen- sated, while acting for or on behalf of the CITY, including while acting on outside committees, commissions, agencies, districts, outhorltlea, councils, commissions or boards at the direction of the CITY. H. COVERED ULTIMATE NET LOSS -- means an amount by which ULTIMATE NET LOSS not covered by ether avallable Irsurance or self-insurance exceeds the Re- tained Limit stated In Item (6), of the Declaration. such amount not In any event however to exceed the Limit of Liability stated in Item (4) of the Declarations. I.- DEFENSE COSTS — means foes and expenses incurred by ilia Authority or an In- sured caused by and relating to the adjustment, investigation, defense or appeal of a claim including attorney's fees, court costs and interest on judgements acetuing of ter entry of judgement all within the scope of coverage afforded by this agree. ment. DEFENSE COSTS shall not Include the of ficq expense of the Authority or any Insured not expenses of a claims administrator engaged by any CITY or the Authority, except CITY DEFENSE COSTS which will be reimbursed on an agreed fiat fee per day of service to CLAIM. J. INVERSE CONDEMNATION —means a clrilm by anyone other that an Insured that r an Insured tins taken or diminished the value of land through land use restrictions on such land or use of adjacent land or air space by an Insured, or otherwise. K. MEMORANDUM PERIOD — means the period stated In Item (3) of the Declara• tions. L. NUCLEAR MATERIALS — means source material. special nuclear material, or byproduct material. Source Material, Special NUCLEAR MATERIAL and Byproduct Material have the meanings given to them by the Atomic Energy Act o. 1954 or in any law amendatory thereto. ; ; M. OCCURRENCE — means: 1. With respect to BODILY INJURY or PROPERTY DAMAGE: an accident or event, including injurious or repeated exposure to substantially the sarre con- ditions, which results, rJuring the memorandum period, In BODILY INJURY or PROPERTY DAMAGE neither expected nor intended from the standpoi;it of the Insured. 2. With respect to PERSONAL INJURY and PUBLIC OFFICIALS ERRORS AND OMMISSIONS respectively: an offense described in the definitions of those terms In this section. N. PERSONAL INJURY —means injury caused by or arising out of one or more of ilia following offenses: 1. False arrest, detention or imprisonment, or malicious prosectuion; 2. Wtongfu, entry or eviction or other invasion of the right of private occupancy; BICEP 3/9183 F- 2 ���ryyyy 4' i F7., �, 1, J.•u hr '. �, f� �•'r �'r ,yi, fFry�rr + r � L 4 t !��'1 �wr '•�i�+w.i¢�'} ,i, ,� I �Gt, i �, �'�1"S 'P'r � •�ti����g ,r 1? , °�h •!,�i1�{ % r�k f•�.• � c � �[ '� 2 1 i� �Ml �'h ',.rid "F� �' 0* , 4, ei 1 }''� �kl I�f1 �,•d•'=yl��� ti i,� trY«•tiM., 1 i�tljt' ,',.Rfli 1''� ,1�tir Y- •M?�4 6 vh,:,11'� f/`', .' y+ wy! •r y'/ r� SP A w S t 1 '� 1 � r x �." v - • r�.. �+ i,°' 3. Publication or utterance of material that slanders or libels a person or organiza- tion or disparages a petson's or orgeni:atioa's goods, products or services, or oral or written publication of material that violates a person's right of privacy; and 4. Discrimination basad upon race, religion, nationality,' national origin, color, creed, aex, sexual preference, age or empluyrrrent; 5. Assault and battery. O. POLLUTANTS -- means any solid, liquid, gaseous, or thermal irritant or contami- nant. including smoko, vapor, soot, fumes, acids, alkalis, chemicals, and waste. Waste includes materials to be recycled, reconditioned or reclaimed. The term POLLUTANTS so used herein is not defined to mean potable water or agricultural water or water furnished to commercial urtars or water used for fire sunpression. V. PROPERTY DAMAGE —means: t. Physical injury to tangible property, including all resulting loss of use to that property; or Z. Loss of use of tangible property that is not physically Injured. O. F 'SLIC OFFICIALS ERRCRS AND OMISSIONS — means an offense cons;a.aig of any e.ctual or alleged missteternent or misleading statemant Jr ect or omission by neglect or breach of duty inriuding misfeasance, malfeasance, or nonfeasance by COVEF;ED INDIVIDUALS individually or collectively in the discharge of their duties with the CITY, cr any matter claimed against them solely by reason of their beinp or havinc,; been public officials. R. ULTIMATE NET LOSS —means the sum for which the Insured Is liable either by ad• judication or by comnroml!e Ater mskI,%,j proper deduction for all recoveries and salvages, and also includes DEFENSE :,nSTS. SECTION III — DEFENSE AND SETTLEMENT The Authority shall have the right and duty to participete in the clef ense of any suit against or, Insured, where such suit Is likely to involve a COVERED ULTIMATE NET I.OSS even it any allegations are groundless, false or fraudulent. Af ter the amount of thr• CITY's Retained Limit has been exhausted by payment of judgements, senlaments and DEFENSE GOS't'S, the Authority shall pay any exces- within Its Limit of Liability. The Authority shell at its own expense. have the right to panIcipat^ in tha Investigation, negotiation, settlement or defense of ary C! AIM or suit against any Insured when the final, In the opinion or the Authority, such claim may result Ina COVERED ULTIMATE NET LOSS. The Insured shad fully cooperate in all matters pertaining to such claims or proceeding. No CLAIiA shall be settled for an amount in excess of the Insured's Retained Limit without the prior consent of the Authority, 610EP 319188 1:— 3 :• NIP* Isar 'r la'a �yl 1 17 ''y A' � Ask. 1Y '�• �_ - �•1; A �•- 1� r Ar r r l r b r 1 ..:air • '� IT t' J•Mih % �.. Y I� I � Y► SECTION IV RETAINED LIMIT -- THE AUTHORITIES LIMIT OF LIABILITY The Authorities Liability as the result of any one OCCURRENCE shall be only the ULTIMATE NET LOSS in excess of the CITY'* Retained Limit as specified in Item 5 of the Doelaratinns; and then for an amount not exceeding the amount specified In Item lal of the Declarations. For the purpose of determining the Authorities Limit of Liability and the CITY'a Rotained Limit, all damages aris!ng out of continous or repeated exposure to substantially the some genmral conditions shall be considered as arising out of one OCCURRENCE. SECTION V COVERAGE PERIOD AND TERRITORY Each Insured shall have coverage for all BODILY INJURY, PROPERTY DAMAGE, PUBLIC OFFICIALS ERRORS AND OMISSIONS and PERSONAL INJURY which occur anywhere In ►he world during the MEMORANDUM PERIOD. SECTION VI — ENTITIS'.v OR PERSONS INSURED The Insui eas covered by this agreement are: A. The CITY; B. COVERED INDIVIDUALS; C. With respect to any AUTOMOBILE usega, Insured does not include: i. Any person or organization, or any agent or employee thereof, operating an AUTOMOBILE sales agency, commercial repair shop, commercial service sta. tion, commercial storage garage ur commercial public parking place, with respect to an OCCURRENCE arising out of the operation thereof. This does not apply to publicly owned, operated, at publicly owned and leased parking garages or lots: or . . 2. The owner or any lessee, other then the CITY o • COVERED INDIVIDUAL, of a hired AUTOMOBILE or any agent of employee of such owner or lessee. SECTION V;I — EXCLUSIONS A. This AGREEMENT does not apply to: i . Any claims arising out of the contamination o the environment by POLLUTANTS introduced at anytime into or upon land, the atmosphere or any watercourse or body of water or aquifer. This exclusion applies whether or not the contamination is introduced Into the environment intai.tionslly or accidentally or gradually or suddenly and whether or not the insured or any other person or organization Is responsible for the contamination. This exclusion does not apply, however, to BODILY INJURY OR PROPERTY DAMAGE caused by heat, smoke or fumes from s hostile fire. As used in this exclusion. a hostile fire means one which becomes un• controllable or breaks out where It was not intended to be. 910EP 3/9/Er3 F- q sd 1 rr9t A • 1 .''ra .1r •Mkt r ,. � ' �l,.'� hi � i1'; ^. 'rO'�YJF�i J r •w +�-1 •t r., r r L y, RM. IF 1 Y 1' i �✓ r � l d� , �„ ar avr ' 3d�^y�('j��` �,� rt � iq ' " �:. ?�o •' f,5 ', { `i �'^,�:> fi hYl JA A '� 4ldl ' ,,i�$i•it' 'j� r� o Contamination Includes any unclean, unsafe orunhealthtu) condition either actual or potential, whi ;h arises out of the presence in the environment of any POLLU- TANT. whether or transient. • Environment Includes land, bodies of wager, underground avatar or water table at aquifer, the atmosphere and any other natural feature of the earth, whether or not altered, developed or cultivated. 2. Any lost, coat or expense ensing out of any governmental diractlnne r•r request that the CITY test for, monitor, clean up, remove, contain, treat, detoxify or neutralise POLLUTANTS, :. Any CLAIM for past salary or wages due because of discrimination or because of wrongful termination or violation of civil rights of any employee or official of the CITY; 4, BODILY INJURY in: e. An employee of the CITY arlsinp out of and in the course of employment by the CITY; or , b. the spouse, child, parent, brother or stater of that -amployea as a comer queries of actions at the employee arising out of and in the course of his/her employment by the C11Y. This exclusion et+plios whether the CITY may be itatMle as an employer of to ary other capacity, except with respect to Liability of othtrm assumed under contract; Any obligation for which the CITY or any insurance company as its Inaurat may be held liable under any warkdrs' compensntir;li or disability benefits law r any similar law; it Liability arising out of the ownership or operation of any hospital or airport; 7, BODILY INJURY or PROPERTY DAMAGE arising out of or in connection with the operation of any hospital, clinic, or established health coca facilities owned or operated by the CITY due to: 1. The rendering of or failure to tender A. Medical, surgical, dental, X-ray or nursing service or treatment, or the furnishing of food or beverages in connection therewith; B. Any service ar treatment conductive to health, or of a proles• eional nature or; C. Any cosmetic or tonsorial service or treatment. 2. The furnishing of or dispensing of drugs or medical, dental, or surgical sup- Plies or appllancea. This exclusion shall not apply, however, to BODILY INJURY or PROPERTY DAMAGE arising out of the performance of occupational physical a:amin3tions, Paramedics ; :rvices, emergency care, or T.B. testing clinics; S. Liability arising out at the rupture, busting, overflow, or release of water from any demist, etc. 9. Fines, punitive da:nagea, or damage multiples such as treble damages awardable Pursuant to statute; or other applicable law. i?It:EP 319/813 F- 5 ✓tic .)'{� F q .' tl ih,' e• a tyre r b .:A A1'^�M a. "; �y � � .7 A, \J + Ir ^, e� 'F� r'� ifs fir, ` 1+''' '�� � 0,•+(�+J�' V,R 10. PROPERTY DAMAGE to: a. Property owned by the Insured; of b. Property rented to, leased or in the care, custody and r ttrol of the lasured where it ties assumed the Liability for damage toot des .ction of such prup- c,ty. unless the Insured would have been liable In the absence of such assumption of Liability; c. Watercraft exceeding 26 feet in length, in the CI'TY'3 care, custody or con. trol; d. AIRCRAFT' 11. Any Liability arising o%it of the ownership, operation, use or maintenance of any AIRCRAFT; 12. Any Liability arising out of the operation of any transit authority, transit system, or public trinsponation system owned or operated by tin insured, except a transit system operating over non -fixed route systems such as dial-s-rida. senior eiti:en transportation. or handicapped transponotion; end 13. Any Liability arising out of the failure to supply or provide an adequate supply of gas, water or electricity when such failure Is a result of the inadequacy of the In. suied's facilities to supply or produce sufficient gas, water or electricity to meet the reasonable demand. 14. Any Liability arising out of, or in connection with the, principles of eminent do- main, condemnation proceedings or INVERSE C,ONDEMNATIGIN by whatever name called. and whether or not Liability accrues directly against the Insured by virtue of any agreement entered Into by or on behalf of the Insured. This exciuslon shell not apply to PROPERTY DAMAGE caused by the negligence or other fault of the Insured even though a legal theory upon which a claimant seeks recovery is the principle of INVERSE CONDEMNATION. .8. This agreement does not apply under Coverage C (PUBLIC OFFICIALS ERRORS AND OMISSIONSI: - 'I. BODILY INJURY; 2. PROPERTY DAMAGE; 3. PERSONAL INJURY; 4. Benefits payable under any employee benefit plan (whether the plan is negotia- ted, or vol-intarily established by the CITY or mandated by law because of unlaw- ful discrimination: S. Refund of taxes, fees or assessments; ri DirCp 319188 F_ 6 rrr fJ Hff rta. r 1 t f i 7 ., V. ' � i 'nl A + X'.. I, �, � .. _ r�• ,1y 1 yf, \io �j 1i 1y �'', �\P LI"l\��.•,+.�iY,u�s,i, )/Ywyt r, .: �J r� l/'\Lf.'�r l "� e / 1 I; l �y,+J �1 L� �J 'v 1, 'v •� �' i! � ���'' �}i�•M,,�����+i .OY +pr�i ibyr S�r•ii'J ,. . • r r l a .� ♦ r '�• �- _ �t> ��t� � �# 11�iC..�NtA'�.: {�, � ..�1 tM -1 1 .,{, � * 'J \ ,- •- . „9c y ,, 9 i 4 tip"•' •� l R' r f r I -. �_ "_ w. -y �'�In�LL jh ly: , rp �.-� , D '� / '`4 • At' r ' � r �� �. '. J Y ! � - � �#Y R ' ` � �-i ,h�r��• '� ,��' :« i►f •,�1y �+�?ter �+ , < , t.... -s ,. " }_ 1 01 ,.i 1 ..I♦ .. - �'. t�' lkur�r/ I �.• S� tf �'.'r��� �'t'•t .•��` �- ;� , �'} ♦• � • • f / r • \ rq 1 . / .. - - , ,l iS�t � � t,.. f . ���1� f , �• ^, �C ,� ✓�ir. Si. � • r•1. •I _ ••�-' • f , i � � ti � i d . .. . :,f t �.- . � - J�, � 14��}a11" .1�t d�n•v','�'e. • ,� ' } - •A -r ,� ' '4r J as Liabilityof a COVERED INDIVIDUAL (a) arising In whole . COVERED INDIVIDUAVS obtaining famunerat!on or financial gain to which the Iknow- COVERED • • ;.r lotion of any applicable Iavv or othei regulation cominitted.by, of ledge at of any Insured. •. 4 7. To any Liability arlsIng out of estimates of probable costs or cost estimates bei g rrexceeded or faulty preparation of• . specifications , ,f - , • v i . f 1974 f •- 10. Usbility, Imposed under the Cons,511dited Omnibus Budget Reconciliation A 41W (EpISA), as may be nmen0ad from atime to time. *. 1IS 8 5 MCBRAII. - i r ,. ♦ 46 a s r x ►�, t -_� / �j" - ✓• f4 - j, r r i`(.' •;L rti .�itt 7� _- ♦• � ar. I ' , -' '� 1 - .i. - !r t t�•Z•o _` y a is � t �.µ-yft. �,, � 1,•k / ,�5 s•,.�• ? r .!�' , FQ'+,'..}1� �; ".n• , � , .. �d f t -- ._�y,, 1 - � ` `"-�f+.'• ' (y� s, 1. _, � ♦ .� 1 ' . I rl•- �" �:5��• �ili:' `5" �I _'��'; • J �y. �' 1 ` � , \ p ,i 2 a - it - L�,* v'`nw. In ~' 71 ti. � I �L 14 61 SECTION Vlll -- CONDITIONS A. PREMIUM AND AUDIT The premium designated in the Declaration as "Deposit Premium" is a oeposlt premium only. The Authority shall be permitted but not obligated to Inspect the Insured's property and operations at any reasonable time. Neither the Insured's rights to make Inspections nor the making thereof nor any rapon thereon shall constitute an undertaking, on behalf of or for the benefit of the Insured or others, to determine or warrant that such property or operations are safe. The Authoritymay examine the Insured's books end records at any reasonablo time during the MEMORANDUM PERIOD and extensions thereof and within three years after the final termination of this memorandum, as for as they relate to the subject matter of this AGREEMENT. B. DUTIES IN THE EVENT OF AN OCCURRENCE CITY': duty in :he event of an OCCURRENCE, claim or suit: 1. In the event of an CCCURRENCf reasonably likely to involve a COVERED ULTI. MATE NET LOSS written notice containing paniculars sufficient to Identify the entity ind also reasonably obtainable information with respect to the time, place and circumstawas thereof, and the names and addresses of the entitylal and of available witnesses shall be given by or for the Insured to the Authority or any of Its authorized agents as soon as practicable. 2. It a claim is mrde or suit brought against the Insured. the Insured shall be obligated t~pnn d"and to forward to the Authority every demand, notice, summona or other process received by the insured or the Insured's representative. 3. The Insured shall cooperate with the Authority and upon its request assist in en- forcing any right of contribution or indemnity against any person or organization who may be liable to the !nsured because of an OCCURRENCE with respect to which coverage is afforded wider this AGREEMENT: and the Insured shall attend hearings and vials and assist In securing and giving evide,%ce and obtaining the at- terdence. of witnesses. The Insured shall not, except at its own cost. voluntarily make any payment, assume any obligation or incur any expense which Is likely to result In an ULTIMATE NET LOSS that exceeds the Retained Limit stated in Item iS) of the Declarations. In the event that the amount of ULTIMATE NET LOSS be- comes certain either through final court jidgement of agreement strong the In- sured, the claimant and th•3 Authority shall then pay on behalf of the Insured the COVERED ULTIMATE NE: LOSS. C. BAr:KRUPTCY AND INSOLVENCY PROVISION Bankruptcy or insolvency of the CiTY shall not relieve tho Authority of a•iy of its obliga- tions hereunder. D. OTHER INSURANCE If collectible insurance or other coverages with any joint powers Authority or other sell- funcling mechanism is available to the Insured covering a lass also covered hereunder (whe!her on a primary. exce;:s or contingent basis). Ouch contribution stroll apply to- wards the satisfaction of the Insured's Retained Limit. The coverage hereunder shall contributo with, such other. insurance, provided that this clause does not apply with respect to excess insurance purchased specifically to be in ex :ess of this AGREEMENT. IZICEP 319/88 q, •y� i Air r{ r ^a • �'�' 1 { r i 'r lr L r1 4'I V/.r�• r C_8 • • r i4 i 0.14. R 1, 1 1y, 1 . k 4 y••• r�F S {! Y 11 , V , I rti �'' r rh ' 'CI+ a'• •+ �,�r wr ' f- r� , r�, '• �� 11,�'� , '{iF • y �; +A�c'k r a t l � i r ,.,�� �.�., ,.r �P f �,4� h , ,yt r4`'1 �t•k� r.} � I 4 ";+r � ••�e� ,,b;r � ifs ,+r• � '' r����''� 0�'�''� ,� ..ra..�1 ... Ali,."F,.� � :� .�+,. � �.,. � „i �.�ti_, _�'.•'4'•.itifkte-rw',.- ..4�=�: E. DURATION (IF AN OCCURENCE An OCCURRENCE with a duration of more than one coverage period shall be treated as t si%lo OCCURENCE arising during the ooverage period when the t'1CCURRENC`: begins. F. ENDORSEMENT CONDITIONS Notice to any agent or knowledge possessed by any agent or by any person shell not of - fact a waiver or change in arty part of this AGREEMENT or st" the Authority from asserting any right under the terms of this memorandum, nor shall the tears of this AGREEMENT be waived or changed, except by endorsers, -at issued to form i pan of this memorandum. G. ACTION AGAINST THE AUTHORITY No actions shall lie Against the Authority with rsspect to the coverages and related pro• iisians defined in this AGREEMENT unless. as a condition precedent thereto, theft shall have been fu41 compliance with sN the terms of this AGREEMENT, nor until the amount of the Insumd's obligations to pay shall haw been finally determined either by Judgement against the Insured after actual trial or by written egreement of the Insured, the claimant and the Authority. Any person or organization or the representative there- of who his secured such judgeateuit or written agreement s+,eN thereafter be entitled to recovery under this AGREEMENT to the extent of the coverage afforded by this AGREEMENT. No person or entity shrill have any right under this AGREEMENT to join the Authority as a party to any action against the Covered Party to determine the insured's Liability. nor shall the Authority be implesded by the Insured's or Its legal representative, • H. SUBROOAMON The Authority shall be subrogated to the extent of any payment hereunder to all the In- sured's rights of recovery thereof, and the Insured shall do nothing attar loss to pre- judice such right and shall du everything necessary to secure such right. At ty;moetnt so recovered shall be apportioned as follows: 1- Toe expenses of all such recovery proceedings shall be pai.4 before any reimb, itse- ments are mode for We highest layer of coverage. If there r s no recovery in the pro- ceedings conducted by the Authority, it shah beer the expense thereof. 2. The highest layer of coverage shall be reimbursed first and if there be sufficient to. cov'eries then the next highest layer untie all recoveries are used up.• f. ASSIGNMENT OF INTEREST Assignment of interest under this memorandum shall not bind the Authority unless and ,anti its consent is endorsed hereon. J. CROSS I-IASILITY In the event of ULTIMATE NET LOSS to one or more Insureds for which another Insured is or may be held liable, then this poliry shall cover such entity or person against whom Claim is made or may be unade, the same as if separate memorandums of coverage had been issued to each leisured, except that the Limits of Liability for all such Insureds shall ncz exceed the Limits of Ur-bility set forth in the memorandum declarations. 11 BICEP 319188 w >` - 9 +. •� . - s• to -: r• �- . b •. 1.y •� Tr, :. / ' t ,.. r rr "i _` :J, '<�r- ems,, - t � •ai yJ -♦ +' J - M •_r •��, i% 441 '. t • . h'`.,4 M'7d` ram• a. *,.-t•.M�.: -- _ 4� . f ` by ',� +.�,l Z r•'„1•. Y "Kaf�S a -.•t " •r_,. r' '` A. '� a _ •M r-/l_ r _ i� L +r• , 1� r T ` � I -'� � �,ix' tb�• •1.; � JAR,. � �S. z,� a� ` • Y , = - .I t!rN :,{''/�i `''.`,+H Y-`� 1, y.'. 1 •,T �a��+�af'`' ��'1 a r,��.- �� -•�� + - ♦ 1I1 J y L !' • r -' 1- • - I - a# _�_ S.' nr��,'T�.,.-'I'. �'�+ /� .. 31 1 .a -• � i K. CANCELLATION This AGREEMENTrmy be cancalWJ by the Authority In accurdance with AnIcle VI Sec- tion 0.3 W the Liability Nsk Coverage Agreement by recelpted delivery to the Insured CITY at the address fS a V I • t shownstating wheii riot less ' O ,., •than sixty days thereafter such cancellation •i off provided that, If - SUred falls tc dischargis when due anyof Its obligations In connection withthapsymant f . . 1 y *r • fcx this AGREEMENT or stsy Installment thereof, extension kn credit, this AGREEMENT may be cancelled by the Authority In accordatice with Artlulg VI Soulon 8.3 of the • , t'� y a°'• r r . _ .• dress shown In the AGREEMENT. writlen notice when not lose than ton days therelfter such cancellation shall be of lective. The time of surrender or theaffective date andhour of cancellation statad In thencilco shall becorne the and of the coverage period. 01 tirr �� •i fir ' Y 1. `. � �' �+ tiF - _ �• •�� , � L Y. Y r' •r '� 1`' 611. , t �� •. ). r it �." - 1p,•- _ �♦ r _ � - : ` �, 1. 04, Vo for •� '' r y 1 - r r 1 . -_,4 '.,[- ► - '.~'''���#+ �;+;J till roh \ - •4• +t h� "WI' �r,`r r-'7• - r i ' Att.Y,!y�p�� ,�� - t. x, 1 p -7 , •"•+R t�.p. i 1. 1 �. �-r��?S_i:'yf . *-'•A-_ • .l' /r rY:- ,7•N ��'+ Ir `_ r.. r •- [-11, 1'w �-r•-.tl �'.. /�� 14 .. i • -. � -i� �(-r �. _ t t i�r e• 1•.1♦f �14�-:,a ./. � z '�►. _ ., . +`� i y. f r m b 11r'af w S t�v •* e l }' •. v •'4 •� ' , ,1y• A ,. v" 17 AVIA i. ._w Ar 01, ,.# ir 44 A;+ tl7-0, -P !L I 114 01. 41i AW,.6 2 can- ... ... EPEN- 4, p • A TimEt MATE "ENCE 1,GE or iRORS dufinp :CUR_ 'ONAL mmis- ,GREE- 'A. IT -Inv. lip V Z, 00, 1 '7 ?1 7 46 0; X I 04 01 010 INDEPENDENT CITIES ,:XCESS POOL LIADILITY RISK (MANAGEMENT REOUIREMENTS I C 49 4 I 1. Each Participant shall maintain a full time risk management emoloyea or other riskman. agement professional or otherwise must be able to demonstrate n round professionally ' administered risk managemant program. It there is no risk manager than approval Is sub;act to unanimous consent of the membership. The person so desionated will servo as liuson for the Participant to tho Authority for all matters ralating to risk management. (Risk management means the process of Identifying, ovaiunting, reducing, controlling, transfering and eliminating risks dirough various methods such as purchasiio Insur- ance, funding claims p3-ymonts, legal defense of clalme, controlling locsos and claims + reserves.) i, 2. Each Participant shall maintain a loss prevention progrr .v, and shall corrldcr and act upon all recommendations of the Authority concerning the reduction of unsafe condi- tions. (Loss prevention means developing tochniquo ► for changing or removing condl• tions wh'-ch would be likaly to cause loss.) 3. Each Participant shall maintain records of claims which pmvido at a minimura, the following information by fiscal year: number of claims !open and closed); amounts paid; amounts reserved; and the total amount Inaurred (allocated expenses -; all be In- cluded). If losses era capped the potential excess amount provided for all los. >s Incur- red in excess of 501A of the Retained Limit or $ 500,00 wh(cha,6ar Iz less. Los:. +ocords will be provided for the procedhig fi.e years, i Copies of records maintained shall be submitted to the Authority as directed by the General M,onager, Liability Risk Committee, Claims Rayiew Committee or other duly ' constituted committees. �. The Participant shall use only qualified ¢ersonnal to administer Its Liability claims. The Participant shall litigate suits using qualified defense counsel experienced In tort Liability. Authority retains the right to associate with the defense counsel for cases like- ly to exceed the Paiticipontlo retained limit. 6. The Participant shaii use, as guideiines, the Autliorltie's liability Claims Audit Control x : ► " Guidelines and shall advise its claims administrator that these standards are to be utili• 4 ;�;• ' s;y zed in the Authoritie's Liability claims audits. 7, Tha Participant Shall furnish to the Authority written notice as soon as practicable of any potential or actual claims to recover losses or damages within or alleged to be with- in the 'scope of the Memorandum in accordanco with the following requirements: ?,• A. A claim or occurrence which is, or is reserved a:, an amount atleast equal to, 50% of the Participant's retained limit or $ 500,000 whichever is less; �';,#4.. •^�;, . r ` B. A claim or occurrence which Is tho resull of an incident involving potential joint and saveral •tlahility, if reserved at 50% of the Participant's retained limit or b ' $500.000 whichever is loss; BICEP 319188 � i;'I �•;4 *e�l'� XIIIBIT 2 jam.. 1 J ffi rr 'W. + i; err,: 4.- i; I1 { 4 7 t• , J 4, f - Rr• a .. C. A claim or occurreacn which Is the resulf of incidents Involving paralysis, or brain damage, dismembcrrnont or death; D. An occurrence which results In two or more claims from the some Incident if f reserved in total at 50% of the Participan:'s ratained limit or $500,000 which- ever W less. B. A claims adminl.stration audit utilizing the Authoritie's Liability Claims Quality Control Guidelines shall bo performed, at a minimum, of once every three years, or more often •: at the sole discretion of the Authority, particularly If: i M' ti 4 , +r4 0 f i gt Yr'. A. There Is an unusual fluctuation or Inemnso in ilia Participant s coa5rris oxperlenca or number of claims; 0. Thole is a change of Liability clairni ndministratiun firms; ar In-house claims/litiga• tlon management; C. The Participant Is a now Participant, In most cases an audit will be pciformed on an "as needed" basis, but at least within twelve months of tho above mentioned events?. The claims audit shall be performed by a firm selected by the Authority, flocornmenda. tions made in the claims audit shall be addressed by the Participant and a written re- sponso ortlining a program for corrective action shall be furnished to the Authority within sixty days of receipt of the audit. 9. The Participant shall obtain an actuarial study performed by a Feilow of the Casualty Actuarial Society (FCASI once every three years, or more often if Indicated. Based upon the Actuarial recommendations, the Participant sha!l maintain reserves and make funding contributions eoual to or exceeding the "Marginally Acceptable" ranges of the aciviriel report. 10. Tha Participant shall furnish an annual audited financial sta,ament to the Authority. NOTICES 1. The Authority Mialf furnish the Participant written notification of the Participant's failure to mcat any of the above mentioned guidelines. 2. The Participant shall furnish a written response outlining a program for corrective ac• lion. within thirty days of roceipt of the Authoritie's notification. Extensions rttay be granted under extenuating circumstances, at the discretion of the Authority. 3. After approval by the Authority of the Participant's correcti':•a program, the Participant shall implement the approved program within sixty days. The Participant may request an additional sixty days from the Authority. • U �yT,TTtt% f, F, h. • , 4 � r ♦ i�Y �"y�r• �-i f ,A F, SANCTIONS 1. Follure to comely wi:11 those guJalines and a'ai!uro to cure such noncompliance as described In NOTICES Section 2 or 3 above (after notice a- described In (11 above) shall constitute an event of default In dotnult accordwv with the Liabil!ty Risk Coverage Agreement. LIABILITY CLAIMS CUALITY CONTROL GUIDELINES I. CLfiIMS INVESTIGATION A. Factual Investigation within thirty days of the Participant's knowledge of the Claim, Including statements front participants and witnesses. (Answer questions who, whm, wilure, when and why.) 15. Develop informatics regsrding Liability issues, Including Immunhics, corr,parat!vn neg!iguncr. joint tortfeasors, and joint and several liability. C. Begin to dovelor, information a•1 dnmagus. 1 . Property damr-ge. 2. Nature arr., oxtent of injuries. 3• Wdical costs:. 4. Lost wages. 5. Other damages. D.' Obtain and review contmets that may be in offect relating to spac:fic accidents. 1. Hold harmless Ind:rrinity ugreements. 2. Additional insured requiremet ;. 3. Other applicable insurance. E. Obtain defective products Pndlor other evidence, and Hold if at PH poi tible, or tt leant lucate where it is being held. Obtain product information for the file. F. Utilize experts apnropriatety in cases. G. Maii,tain mambership In Claims Index Bureau. 1. Report all clairr.;i to the Claims Index Huraou. 2. Follow up on Claims Index Bureau Informctiun. H. Arrange appraisals for damaged property. I. Timely !eport to Authority and/or excess carrier. 11. TORT CLAIM REQUIREMENTS All no ,tices (pe•rtaining to claims insufficiency. retunting late claims, claims rejections, etc,) shall be timely diver. in accordance with the relevant provisions of applicable law. BICEF 3/9/88 G-3 i erg r. ;M ,rl yyyr,��n •mot' r 7,1 w r 'fir 's'.a'.�►;?�' r J.� rid N d iP4 4Fi 'A 1' 1, t III, DOCUMENTATION �''•� �' J A. Coascnable resurve:s sha!f be establishad based upon facts known, whhia thirty 1; dayu of receipt of investigative report. Expensas:;hall be Included. w ©. Pile shall contain documentation necessary to Ltipport the decisions made with respact to claims 6sposltion, C. Photos, diagrams, plans. ccntracts, medical and law enforcement reports, and other re!evant documents snal! be deposited in the claims file in a timely fashion, r: 1 1 1 1 I,•• I,� It +r , i i. �2 1 1< M,• ; 7 f. t } j �i i ��r,• ,�lzy , �' Y w`IY� ' ' ✓ IV. CASE SETTI EMENT FACTORS A. Reasonable settlement considering value of damages, Injury, end Ilc.hility. 11. Timeliness of set- lemant. C. Contributions from joint tortleasors considered. D. Documents evaluating and authoriking ssettle%nents. E. Appropriate releases secured, V, LiTIQATED HLE3 A. Defense attorney evalustio,i In file. B. Propnr follow-up for invesrigatim, requested by defense attorney. C. Actions to mr )nitor claim -13fonse expenses. D. Timely rocornmei.dations from defens-3 firms regarding seitlements and trial preparation, E. Results and !eta) expenses clo•.umented. J� • BICEP 319/88 C-4 . •y ANµ . �Sl1;i '•'� 'fie :,r A � r 1, •� 1' T •r M a { ;� �1 4 T-' 7 �' L •- t I • t`� / iaw, • �: .• ram• •"r i •y r '�,•• 11 Ail • •- r - 1. r• T 1 � y{. - ! K�. �: •r �. *'.,fir , 1 - �,�t +�5"i�'. - �..Iq Yy�=ten.-� • ' _,� A r' i�i , `!" -., .Y' �} - 1 - J.. � ,yam }4-y •� � -.. n1 F 1 .,b.{M1-(,.1,� :l art' ; '�" � C•"�•1'�, t• ' • � . ,; � ���� �" d•'+'' It 11 y • r. 1 a , y rw A, • y a.. 1,6 At • 1':. A If '. .y '-Ill• 44: ,•. � 1 _ - • , sly v � -c• . 4 ,1���• ••r � 1 '/r< �y '•, '.� dam• / 4A tt- s 1 r �riti A (� . '` ••ri:�• '�r_,f �. v�3A:!•�jtl �`�:--,tttj. r �. ^i.r 11. •,Yv'�F� .liV _ /�'�..� j- !nt 'a 1531 1� ��I'\ 1-�J��.14� `�) a-. 1.� `�fr � .`�� • ' '_ I ,l. _' - .,, l,.` :�: �i- :r;- ;\-, '.y._ ,• r• -. Y�- - ti. 'tJ ti- :��F. � i �l `� -1. • is - •� rK x l . �3.�i; t • - 14 P M Pli kT ;;Vk; on log EXHIEIT H : I FORM OF WRITTFNJqE" ERT NAKE AND ADDRESS OF TRUSTEE) JJ18Wt;,SeMent from the Claims Payment Fund pursuant to Section 3.02 of t�:e Trust Indenture, dated as of 1, 1980 (the "Indenture"), by and between I as Trust:: (the "Trustee") and Big T n A n r% ga n A n f- rN Ities rV gnvc- Pool Joint U nVin r 0 Authority, .1 joint exercise of powers authority organized under 13 California ix-i (the "Authority") 15 REQUISITION NO. 17 You are hereby instructed to pay to tne undersigned Participant, or to at - 01 19 $ as a Settlement from the Claims Payment Nat as providee in Section 3.4 of the Liability Risk Covers-; 21 Agreement dated as of 1, 1988, among the Participante named therein and the Authority (the "Coverage 2n Agreement"). Th i a amount has beer. incurred within the scope of Coverage (as defined in the Coveraga Aar-jement), has been 25 settled cr finally adjudicated in accordance with the terms of the Coverage Agreement and the Meworai,.dum of Covetnap appended 27 thereto and has not been the basis of any previous disbursements. 29 Attached hereto is a cer-ified -:LpVGf the 31 (settlement/judgment) and 1te-,i1z.'1 list of costs and expenses in conne-7tion with the Settlement. 33 (In the vase of disbursement pay a Pure Premium 3� Adjustment refund, the following form shall be used: You are hereby instructed to pay to the Authority the amount of 37 * to be paid %o one or more of the Participants as a Pure PremTu-m ;WJustment refund. Such amount h,-,s been :49 computed in accordance with Section 4.5 of the Liability uisR Coverage Agreement dated as of 1, 1988 among the 41 ParticipantH namea therein and tIie Authority and is proper)y payable at this time.] 43 [In the case of withdrawal or expulsion of a Participant, 45 the following form snail be used: You are hereby instructed to pay to the undersigned Authority the Allocable Share of 47 r z,.j Participant, ab determined In accordance with Section 5.2 of the Liability Risk Coverage Agreement dated as 49 of 1, 1988 among the Participants named therein ai,,d the Authority, for safekeepincr in a segregated account by q-1 (�V . J Ak �_ 1 . • • . • t 4 f� Aviv - Y�y, t 4r •" ►' "• •4 �X�: �"�.Y is /Y ` •~ -�Jy�. � y: - - �".� ':� ➢ •� . i V 71, • r � Y • i n ♦ •' ti _ Yta c, • t � �� » AM �' r,.r'';'F�1; -3a' F 7�����, Y";><"♦i'�/aS•L`> .S ..'�, .` ,11�� ticA l - 11/- • I OL jo ' 4 y , 'r p1 1 rS • j 1 � • ti ^ _ - r - .` •-.^r, --_f ,'lam-..y -;�"p _^ ,• •Q(;_ _. - _ - - :,_t_ h_ >, , - '«• �r. i� ...� •. • t`•� r •. � V - • - �/ VY` f '44 ➢i .• '.IT ` -'�{N. � �.1 �d! - ,' I •`�6 ' , kj- 14 _ 7! _ � •� ; •G `,,1 'r 't' IqT�Y � l',�T ;� f l t to t Q 4 t,��'�yyf �� ,-c • ^� Y "�P T• � Y ,1 t _. . . 1 ar • Y / A or14.4 r t,+ .y + _ � •.. A� 1, ` . S -wlot.,r, .. ti ;may . • _ • �4,,. `_�,•1M- ,:�,.,,•. - _ .,, OL ' /- .� ' _�• .ire • I ♦ • _ � !• -� •{ t � 2 �I F Fx-T �`' 'I -•- ,.!':Z .gyp r-- tC : - ', :..� �. ♦ •+w •'fit , ' K , � 4 * ' • ,'. rj rK71Nir i + vr or IN 17 41 % �/• Yl.• ,ill: �_"��/+ - I- �, r T \� ' r' , . . fig' .�y: ftj.ra f i•.. , w,�� r �•( f j� :M =.r �. t�, r 7 +N .fil'-,'� r1� I _tIr'*••r'� f tw` •f{f ••'. i • �• i 4 , 44 • 1 7 - 1 .\ . � 1',. �f_ .� - •), f ' �r , -1r1 3`r7L3 ,' ! 04 i SCHEDULE A 3 METHODOLOGY FOR CALCULATING TOTAL PU:lF PREK111M r� 7'he Actuary should consider the loss experience and 7 exposures• of. the Participants as well as the experience of other California c'ties, )ther public agencies, and other 9 r1sks, as appropriate, The Actuary should consider, as appropriate, the experience of tho great many claims fc:: small 11 amount„ the less frequent claims for large amounts, and tha highly inf':equent claims for very large amounts, 13 The Actuary should estimate the frequency and average Cost 15 of claims, unless it is more appropriate to deal directly with the loss rate itEelf. . Additional analyses should bo sons idered 17 when appropriate. 19 In tiarticular the Actuary should use models of the loss process whenever doing so would improve the accuracy of the 21 result in a meaningful way. 23 The Actuary should clearly state the assumptions regarding loss development, the trend in frequency of claims rind the 25 average cost per claim, the payout of losses, the interest rate to be earned or, the Ih,re Premiums, and other app+ropr. iate 27 factors that underlie t;ie calculations. 29 The Actuary should consider the impact of changes .'n the claim environment, iticluding, ht�t not limited to, what the data 31 indicates about loss cosy: inflation; changer, in the cost of living (e.g., CPI); changes in the observ•-d frequency of 33 claims; changes in litigation rates; changes in court precedents; changes in the legislative environment; and changes 35 in exposures or hazards. 37 The Actuary shall receffanend a Total Pure Premium ;hat meets the criteria set forth in hrticle IV, Section 4.4(e) of this 39 Agreement. SA-1 PSIW %^•. !�Yi• -�;M1 I y I •r+ a, 1 y. �1Iy�. wY��r4 In ,1 ,1 1 it rl�rkn�nMFn� .�'���r.w",..1_,1,,, „ .,�,. ;a.!'�'r '' t �'�'wr'�lIM�b4!�,.►� 1 SCHEDULE 5 3 FORMULA FOR CALCULATING PURE PREMIUM ADJUSTMENT 5 s EF' 1 DAvelop Data I pit s 7 A n Cdse Reserves ana Scittlemerit; paid to date. 9 H = Pure Pr. emi,im, 11 I = Puro Premium Proportion or Adjustment Proportion (2E applicable pursuant to Section 4.5(P)). 13 =� Special Pure Premium Adjustments. 15 Z = Pure premium Adjustments. 17 G = Totil investment income (including any profit or :.;us 19 under an interest: rate swap aureement) for all Coverage Periods on the Claims Payment Fund not 21 transferred to the Basic Premium Payment Fund. :3 x = a given Coverage Period; x' = the current and two preceding Coverage Periods. 25 y m a given Participant. 27 p = a given risk sharing Fool (e.a, SIR to $'J,0G0,j00; 29 3,000,OG0 to 25,000,000); provided that whon all Participant are in all poole, p - one -fool. al PxD Case Reserves and Settlements paid to date (A) for a 33 given Coverage Period (x) for a given pool (p). 35 Bxyp Pure Premitun (H) Car a given Participant (y) for a given Coverage Per itid (x) for a given pool (p) ; Hvp is 37 the sum of exyp over ail Coverage Periods. 39 Ixyp d Pure Premium Proportion or Adjustment Proportion (as appl ic:able pursuant to Section 4 , 5' A)) , (1) , for a 41 giiven Coverage Perind (x) (which must be a Covere.ge Period in which a given Participant-, participated in 43 the Program), for a given Participant (y), fcr a given pool (p). 45 Tye Special Pure Premium Adjustments collected, refurJnd 47 or scheduled to be ccllected M for a given Participant ►y) for a given pool; Txyp means Typ 49 allocated to a given Coverage Period (x), SB--1 :t 1 , 7r� - � `•R�?,�; � ire•::- r'� FY � ! . 2ro _ �i*' ii . i � S 5 1 N 0 -i0J _ t•Y • l4-; r �� 74 •1 ..0 .. '4 1 Z;rpm Pure Pcemium Adjustments collected, refunden or scheduled to be collected (Z) Lor a given Participant 3 (y) for it given pool (p); Zxyp means Zyp blloc&ted to a given coverage Period (xi. 5 Cy C times (the sum of By divided by the sum of B). 7 STEP 2 9 W Determine Incremental Increase in Amcunt of Pure Pres;tium 11 Adjustment Required for a given Participant (y), 13 Qsyp Incremental increase to Pure Premium Adjustment: for current Coverage Period (s) for a given pool (p) for a 15 giver. Participant (y), 17 Dxyp = AxF times (Ixyp); Dyp is equal to the sum of'Dxyp for all Coverage Periods; Dx'yp is equal to the sum of 19 Dxyp foe: tiie current and two preceding Coverage Periods, 21 s am curr .t- Coverage Period. 2; Eyp (Dyp minus Dx'yp) minus (Hyp minus Px'}rp plus Typ plus 29 Zyp minus Zx'yp plug Cy). 27 Ex'yp ;f Dxyp Is more than Hxyp plus Txyp plus lxyp in any of the current or two preceding Coverage Periods, then 29 3x' yp is equal to the surr, of Dh�rp minus Bxyp minus i`xyp minu3 Zxyp for those years in which Pxyp is more �i than B:cyp plus Txyp plus ?,xyp. 33 TEV 1 35, If Eyp 'Plus Ex' yp is: greater' than or equal to 0, then Qsyn .37 is equal to the sum of Eyp plus Ex'yp divided by five for next five succeeding Coverage Periods (nxcept as provided in 39 Sections 4.05(d) and 4.6 hereof) • 41 TEST 2 43 if Eyp Plus FX'y! iS less than or equal to U, the i Qsyp is 45 equal to o. Skip to Test 2 of Step 3. STEP 3 47 Calculate Pure Premium Adjustment fot current Coverage 49 Period (ni) SD-2 M1•' /�'Mr1�+�1,1rw�wrwra.�rtnwwaaas �•uw+wvn. a►na,rgo, r-ar n.r>•ru •� w'. j} ,,•i - ': �' 1, • 7� ki r � �{.�{LF,�i i�r t. �' .�, i 1 ,�� 'Y�.- r}J�•��{yM�rr �v ,� 1 � d Jt h',�1•'�e ✓7/ Y x 1 d c►� t rst e r t rY. t� •i 1 it (rl ' 'w. '� 'fix .1 f�l•1. •t � O:V, f I A E I 1IF t logo •tr,r � 'i' ' A v i 1 RsyP - Pure Premium Adjustment: (R) assessmeot fur the current t Coverage Pericd ;s) fot a given pool (p), for a given I v1 '1 i 3 Par ticipnnt (y) . This oquals the sum of Q;gyp For last .> ( four Coverage Periodo plus QsyF, (, ,• Rsy� Total Pure Premium Adjustment to be levied for a given � 0, : 1 Partic+pant for the cu, rent Cc3• ,;_..ge Pericd. I 9 =EST 1 11 if the sum of Rsyp for all pools for a given Participant !.s more than or equal to zero, then Rsy is equ31 to the sum of 1 {, •���. ' A 13 Rsyp for all pools for a given Participant. 15 TEST 17 if ',:yp pluc Ex'yp was less than zero in Test 2 of Step 2, above, I.;hen Rsy is equal to Eyp plus Ex'yp plus the sum of Qsyp 1.9 for the last four Coverage Period, provided, as fellows: 21 1) The traximum Pare Prendum Adjustment refund paid in any Coverage Period shall not exceed 50% of 23 the Pure Premium anti Pure Premium Adjustment assessments to be paid by the Pi. '-ticipant in such 23 Overage Period (or, with respect withdrawn Participants, the last Coverage Yetr of 27 participation), 29 2) To the extent Eyp plus Ex'yp includes payment of Special Pure Premitun Ad j►tstmentE (Typ) , refunds .1 of such Special Pure Premium Adjustments shall be further governed by Section 4.F., 33 With respect to a Participant which has previ,)usly 35 withdrawn from the Program, i credit to or refund of Pure Premium Adjustments will be provided in an amount equal to the 37 amount by which such Participanc's Allocable Proportion of the initial deposits Ift-om Band proceeds (or its cash deposit) to 39 the Claims Payment Fund and Debt Service Reserve Fand exceeded its Allocable Proportion of the Undesignated Reserves ir, the 41 Claims Payment Fund and the Debt Service Reserve Fund at the time of withdrawal. Such credit will be made on a pro rata 43 basis from the Pure Premium Adjustment assessment installments as scheduled at the time of withdrawal. Sa--3 X 4 I t 41•ty� - � v � - i. 1• 41 ''ram••- -<_ :x: f - ,. p:rlr M 1 REQUE3 • FOR CITY COUNG •�` ACYION .. �, L September 1, 1986 t,. (, : • i` t Date �.. 071:1) BY CITY Cut,1HO Submitted to. iionorahle Mayor and City Council •r R ^.a¢WanN Submitted by: Paul F. Cool:, City Administrator •� , �: C' � ` ��� ` Preaaradb Robert Franz, Deputy City Administratot rt Subject: Joint Powers Liability Insurnnce Program .�•- � f� 7V Consistent �*ithtCouncil Policy? Yes (J New Paiicy or Exception Statament of Issue, Rt romrnendation, Analysis, Fun►'!nq Source, Aliarroti! a .�et!on:, Attachments: r 3tatemenr of Issue: The City has been without liability insuran»e acvet:are since April 7, I906 ', and should consider some mechanism to protect itse� f from catastroph_c tt• , Recomm4ndat•ion: ' Approve the a:ttac:hed four documents: RESOLUTION APPROVING JOI*J^ POWERS ACRFEMEN2', FILING A4 ''ALIDATION PROCEEDING Aha CERTAIV OTHER ACTIONS. 2. JOINT FO{)ERS AGREEi:ENT. (JPA ) 01. ``'+l'r"+ xY''• "{'' 3. LIABILITY RISK ."OVERAGE AGREEMENT. fi `fir v 4. TRUST INDENTURE. Aral}sis: r, The City Council, by a 7-0 vote at the stay 2, 1988 meeting, approvec # the Cit•'s participation in a Joint Powers Agreement to provide r p P 9 liability insurance protection to the City through a bond funded mechanism. The Joint Powers Authority se created will be known as the Dig lndepgndeat Cities Exceaa Pool Joint Pol4ers Authority, "1 or iiICEP-CPA g g- `PA in short. The original ►ire "rim incluued the cities '', .�• � r��� ,�' - 4�'•• � ;; ,� of Huntington Beach, Fullerton, Oxnard, Pocaona, Santa Ana, San Bernardino and Sacramento. Fullerton and Sacramento have chosen ►' not to participate at this time, and the remaining five cities are proceeding to impl•*me►it the Joiner Powers-pproach, :caking the Joint flowers Authority effective October 1, 1986. The difference ',;.. between the present reco4mendation and the action taken on May 2► IS88 = � �II�r7gppy f • r r - , - J C t �� + ♦ _ � • ♦ .••,aK J ti r !� l . i y ♦' � ' ID • , • Y�. •! � •v •f ,,, ' 1 r ;ft � , t r : Ati}y _ N iY• 1 - ., ERR, ••i' -,. �. �; 7 16 • ♦ , � �-T , ,*.-r. .��• fir_ !. , j + b y - '� 1 OkI Jr i\;t r _ . ♦ I • f [.#rF' Ji„ it !. . `�t: ,">F�i�. taai•1,�': 'i ' p ,iR 1. `► , ? • ' + �1 64.WM KS y. . 41 r • i y, .�. • - ♦ ���y,, Wry �A�.a:1 '�> , - • i • a a • • � rS� a,tti •t r • • 1 •, _ • , '• R �`" Y f . dam. ` • , • •. raj •k •v- . +,> -f �.,5 r - AJ ♦ A f tO ILI `!•:ice f. -.♦ a'ey..•.,. Yr� ' •' t1}'` :a x _ • .: c _ ♦ � .`i'�Q�jfAy. Y _-}. y �• �'.• 1• _ * ram~ -.,r.� .• ><i :6��"t J4�,i�'ue, � '�: I ' � �I y t �n,/j ' K * � r i f/ r.,r� 1 t Y,'t'1 :T - t. r • �' rf �•' r y'rr.~+ •_r}! 9CJ + � •V - ! - • • • � r' �.�}b'im 7~�. 4 �• � <I ♦ ,�t•{ �j'' + 4\ Yw py]y t � >.I- r't �� �i ♦_t r - Y • • - F, � •.:M"' 1'al�t i`i '7f:�TT �i • • • - • • ,1 • ♦ _ r , _ �r , rtW♦` _ • ' s T-.�! fit! ��•. •jY• J,. • • • f%�`�}r �.''•j+^ ,'�f� �A[,��" �•<a e4 _ 'ti j►'R •,•. R l,S;��'h`-���lS^� :-F • • -� i • ��4,�t��-�•��tt�; }�- .'+ 1�';' , ' :.rrS � ~r t•T, MI _, - - s `"'fgtiT^1,�7 r°- �M � T• S • d 1 � , J' � � �r . � Y 1{� t+ D • Y 'tT.1' � i I.'kr _ t,1 \ y"t� J LL �D+r .. t'J'• . Y n „ ♦M �"ir -`' 1DN. ♦ , ' t • Y, ��i' b, - , t► � yr,N, r�- � \ !,� �} 1 ! �'i s T�'• +Y�;L1�4„��.» j lr 1.. • , _ ♦ i t7A . 4i i*JO dy5 , i:c Ypr ,11,}a r • L , T *�•_,, - yh'- J~ .i� - r I _r ! :. .J r t,.. ,.,r:•' r �- `-•e.�. .♦ _ '- a!/, a5�- r D L _ �.1 � 1i- -.'{' � i }�'r!r kr�W ' • /r•'}1'• f' : ,t ,•�'�MT`. 1c,. � , 44 _ _I: S K, p ♦-r.v e,�f •..-� Jf�• e r Y. _% �►_!f'_ J' y y f .�._ - `� n•,v �1 'r •+ ,i i'Y Yt ,�? a. rr•i '•�• �' f vet. i' d 74 r.1 ' �� 7 �l � _ A Y.• `t ` ,'•a :.rr ♦ r%'� {+ WLI 1d' rca' y'' .y' _ .� -i f V f r 7 - -:. J.� ,, l A t i� , 1 't. r A. �•.w{.yJ•.:. �.A ��L ^, M - ia.: s - a \ -a _ i- A' "• ~Z. , ��,r� �l�.l- �. y 91.,,' ` k ��.y ♦. \_ ,'.TJ *�.• •'jr,,•• >,r ��.,,• �'; jr. *• • :Si: �t'�� ;o �'`Vr �b--� /tir' +- 11t'^ iT, �.t tr�t'tw��a �t �v +T_1 .�•a.w�. i{ .pqJ :�+,. - v:' 1 'Y • �. %$�..\ 11 :r� t Z?Mr-0h,uTir ,-r _r. 7� ;•t •t. .. f ♦ h. >. -- V T - :.+: , • �,: t V •k i !'� A.t4yyyYYY r • .37ht,\' r(,: 'R � •{}i-,'r, �.•.. '~1,'. T •. r� ( v` _ T , , .. , • Y -D. + � •: �- ♦ u •S.. �,�r - 1���� +r ,1�1 • ,.'! - • %rr_'•4 ` jN,yi ,Y� -! . 1 a ♦r • rJ�rr ,(r�l t} AL► F ,A 'S",' T •• r 4. ...., « •.- �• � ♦1 �, rYr• �LYr 1. fir, - t rri rJf �([i r'�- +_. ;-.T 5 Y. .. ♦ �'. _ � .r ' � '•r t � �ww a�' • . F`r t * ;r ` {v",'Y 4 r�Jd � v ` ♦ 9Y ,f► � t.M •,. ,r� �t:y-.�j•'� -�,� �-V4+.ryr• x ♦ , ~ ,'�,+� %�..'Z' > Y\'�`'i �,4W*''� -.j S'- _ . +� ; . - • +f'•L`• Dr-.I.AY '.�� ,•� ,�-'� • ,♦. jjti.JA1 R • .. , ,yt J +• +. j ( •� �' i r y 1 1. ' yy . �" ,• J('�C; • -, / ,�1t .dr,.. ;a• 'f(j • ,�-s: +.NY,�r J+r r, r . "C_ ,�r - e H ii (, �';'�h R•^�� t 't`.•7; �'�-� r J _f .� J r Y � Ll.k. fx 11QI' • R f ) • . 4;' / ♦ �4, zp f. vol) It i.,3 a i c i p a 1: e d t ha t ocher ritieo will ioi:ih to join: L110EP at some futuv% Limn, and their acco-ptan.--o vill be cip.Lerinined by Lho DICED Eloar(i of DIrcetor-9. Fund:j Ccr patictpation T.ii the BICEP-Ji',% :!t:c included ir thii tiabilitv Inauranre P,-,og ram . a fig, AlLorwit-e Act i onn 7 Coo a3e ol. the 13ICEP Concopt.. 2. Cantinun :-,00kiny oth,2v illternatives. 3. CrnLtntla unir-gured atal.on. Attachmont-3. Focn pagas ot the following '_")c),-unientz3: RESOLUTION A-,' riNok1ING JOINT POWER AGREEMENT, F I r, r N G VAT,!';AT10:4 !1!10-';CLLc,DIHG AND CERTAIIIT OTHER AC7.'Y011.1:3- 2. JOINT POWERS AGREEMENT. (JPA) 3. LIABILITY RISK COVERAGE AGREENEINT. 4. TRUST INDENTURE. 'Phose Documents, which consint (I' about 100 page, are avallable for reviiw in the City Clerk :j Off ic,z!. PEC:RF:EIIT/3:) 0� A & ; q(^Ofw, ! - : . - r-.,M Cr . 1. 1 1-1 —1 - . — ..... I - . . . .. . I .. — . . . . , -Aii WF-4�kw- 6 71, �4-71r- Y , 4 t :w,� •�ti. 0 t• W - -%. ���' :I�.1 '�� 1bo. 'b'�' A�4n � iF':,4y' ' , i ' ��,'� � � ;,� , � �� � rY ''f{•;, V � r;7�: �''`� I 1 � 1 I Data —April 14, _19MI - - Strhmitt•cito: IIonorable Mayo and City r0Uf1Ci1 Suhntitted hy: Pau) E.. Cook, 1-2i ty :',dr* ;tratof'�,� i'rrp:!rrjd by: Fbvrt ['::an�!, Deputy City lldrnini.rtr,7tor?` !aihiva: ,joint: Powur:: [Aahi I lty Insurance hroorain Conskt,snt with £'ncincil foiicy7 fX) Ye- ( Nwa Policy or Erca)stien Statonc:nt (if issun, Rcrnmmnaclntinn, Analysis, Funclin.15,:urce, Ak.irnutivn A:tions, Attrchcnunty i; 5tatemont of _Is.,iue: The City ha:, been wltthout liability insurance coverage :since April 7; _ 1966 and r+hould con iidor :spume mechanism to proL'gc' E;rilc3't=1.i ,,TT(; ,:VTr_tit`'. 'Tiip I is loss. I El commendation: — �...7___r:.__. Approvo the attached four documents: "CITY c•L.,u 1. Res o1ution approving .joint Pourers Agreement, filing validation proceeding and c�rcain other actions. 2. Joint Poarers Agreement. (JFIA ) 3. Liability Risk Cnvarage Agreement. 4. Truse Indenture. Anal•j3i3: No liability insurance with realistic_ pretnianis and coverage has been avai)able to the City since the City determined not to accept an offer of exttentely limited coverage and high premium on April 7, 1986. Staff aaa cortaidered alternatives to insurance for the p,rst two (2) years. One of the alternati.vea is a group of eleven (11) California cities, each of which has a population in excess of 100,000, joining together to develop an alternative :o purchasing commerical liability insurance; namely, forming the big Independent Cities Excess Pool (BICCP). We have been me2t.:ng with thin group since I -larch, 1987. The objective is to protect each pa;:zicipating city's funds anc: operat.iona from impairment due to large liability cle.iin judgments ;and settlements. The goal is to smooth out the ups and downs of the insurance industry by iscuing $60M in bonds upon Formation and purchasing insurance when it is available an6 reasonably priced. The $25M risk sharing cove,cacle would apply to each participating city less the Self Insured Retention (SIR), which is similar to a deductible. Our SIR would be $1M per occurrence. Our estimated annual premium would be $424,000, Funds are budgetod fogy the premium. 1310EP should be formed on or about .-July 1, 1988. P10 4/84 1k aj.,1JY is Y / ; .r J• j T4. "A� l rIN,, � A,y,,r.5i_{{� `� �'' A fi • _ _ 1 i 'p�Ji+r , 11 +j a' �'' t t� / f1� / .(r!' ,, 1 h� i ��u i1 L �Yp'� j, i, • :',' r 1 , 1 � :1 S ^' j���,1��� +F� Mr .,� ' +' •, 1 4+�".0 , \ !r a ?: '' day:. I�vr.•� • , gr�Hr- �'. -,�_.:rat. �.�•r:,; .,.• e�- iol '; r+ ^T r ; , ! 3. �!� 'Y•. � ITT, , 1 SI w it 1 iloncir,-.-able Mayor and �.i Council Anil. 14, 198B Page 2 The Cit}'s S30,OQ0,OGU liability Insurance program expired on April 7, 1986 and no insurance company has offered to loll the City liability insurance with nufficient coverage and premium since chat time. The t:ollowing ele,ren (11) ct.:ieti are potential char.tcr moinber. of the 111cr•.1', J13A: car _den Grove Loa Angeles Pomona San Diego Fullerton O,-akleind Sacramento Santa Anrc iuntin Lon bo ca Oxnard San ]crnar•Iino Each city'cl premium level.,3 were developed actuarially by Cooper & Lvbrand, vori:ing in con':•crt with March i4' Mclennan Coopc.- & Lybrand is a well. known and hl.ghly regarded international achuari.L.l and consulting firn., which does actua)".,J, work for many public cn_it.ie c in California. Marsh & McLennan is th,_ largest insurance broker: in che. ::ountry and serves a' broker for many public entities in California. The attached documents are at various staged of cursideratior. by City Councils :and :ata; f membt-.•-s of the abovr. cities. The City's final commitment will need to be made around Jul; L, 1988, just prior to the bond issue. A final Request fou Couccc_il Action will be nubmi.tted in June for final consideration. The approach to Liability► Insurance outlined above han been reviewed extensively by cur outsi'le independoot consultant, Don Voller of Tillinghast, and he recommenda it ao a viable approach for. the City to take. Staff will continue to investigate any other options that may be available. An arld,'tional d talled analysis is attached. i_undinCJ Source: Funds for participation in the pool would be included 4.n the Liability ln;�urance account, No. a 50.183. Alternate Actions: 1. Ceese exploration of the BICEP Concept. 2, Continue seeking other, alternatives. 3. Continue uninsured .-, atlas . Attachments: Face pages of the following Documents: 1. Resolution approving Joint Power Agreement, filing validation prc^ceding and certain other actions. 2. Joint Powers Agreprnent. (JPA) 3. Liability Risk Coverage Agreement. 4. T,.-ust Indenture. Theee Documents, which extend to over 200 pages, are available for review ir! the City Clerk's office. 41,AAOMAN NY��Y1. ' �ry1r4 '�.i � �µ�f � d�� : i .. _ - 7,y' i',�j,r �: /bqd•.� �: R GIs ,.���•'...,) -0ew • .r 1S�r: N;1 y. am d4i ALA, IIKK Y,' VIVO W, � v V Or- �,-&JI1��°"I�"�(�;.�"�`ON B � : Y�� 2t1d0 MAIN STREETCAL;FORN1A 9?649 RISK MANAGEMENT DIVISION (71 A) 5.16.5990 April. 14, 198E1 To: llono+:able Mayor and City COLUIC:il Plembors Subject : Liability I nMirance Joint Powers Authority Big Independent Cities Excoos Pool (BICEP) Supnloment;e ! Analy s i s BACKGROUND For the past 2 y,+ars, staff has rc_•gular.iy advised that the shy rocketing coat: and non -availability of t1unicipa. Liability Insurance has forced the City into a pooition of total se.'lf-insurance, thereby exposing itselt to retaining unlimited 1iibility for an "Claim for Dai.;.ae" received. In March of .list year the City received correspondence from the Independent Cities Risk Management Authority (ICRMA) inviting large California cities to parr=.cipate in discussions relative to forming a second capitalized risk :haring pool within the ICRMA pcc,grain. ICRMA is a large Southern California Joint Powers Authority consimting of 26 cities in Los Angeles and Riverside C'outrty. Working with ICRMA and its team of con:,ultarrts, we nave shaped an effective program st acture, and to date, it appears to bz a viable long tevm liabili+y insurance solution. This program has already proven effective for the 26 cities of ICRMA and the :,5 counties of the County Supervisors Association of California - Excess Insurance Aat`eority (I.SAC-EIA). it is anticipated that this proposed BICEP pool will be fully operative no lat-ir their ^,eptember 1, 1980. The : hrusc of this report is to provide a proelrain description and to seek an approval for the City's participation in the BICEP Proeeram, which evolved from the meetings sponsored by ICRMA. DISCUSSION I. The Prugram ' Insurance pooling in California has proven thus far: to be cost effective and administratively efficient. Tile ICRMA program contains the advantages of (1) risk sharing and (2) a ?ended Liability Reserve, (designed to creat a pool of capital necessary to underi;rit,s a Comprehensive General Liability li"tiit of $25 ,nillion per occurrence). The program's concept mal;es sense and has attracted the potential. a'. i,�rticipation of the following large California CitieL. I � � I Il l 41 i Ar • { , y, ", ,1, i I �h r � 4Y PA AI - In ,N.4. 1•,F 1 r:W fi `'► V. yI` f Flcnorable Mayor and Council Mombera April 14, 1980 Paq c 7 Pulle,`ton Pomona Garden Grove Santa Ana "untinot.on heath San Diego Los Angelea San Lornardino Oakland aac r-amc'rtto Oxnard 1311 o' th,:-so r.iLi :s have populations of over 100,000 and arc homogoneous in their risk exposure. Each city has a comprehennive 11is1: Management program► and will bo pooling virtually all major perils of loan at salf-insured retention levels of: between one and rive million dollars. The program offers a policy lira t of $25 million anel ha_: the expr.esaed intention of r-ein:3uring i.t:ir_lf wrion economically fEeasib!e to do so. The Advantage of Risk-Sharin(i The ability of a group insurance pool to ghar.r, risk is one o; the primary be:neF.i:3 of the program. Risk-nhar ing icy a pool hay, Lk number of av,,.liary benefits: 1. Rink-aharing ininlinizes the fluctuation in cost of insur-a: c:e: or, sel ! LASUr ance uxpet: it:need by municipalities. 2. ;ti9k-sharing allow: the members of the Pool to set the term3 and conditions sf their insurance coverage; and 3. Risk -sharing alluws the memtaers of the Pooi to directly control both administrative costs and loss adjustment. The Pool, by achi9viny a risk -sharing balance, reduces the burden of catastrophic loss each city bears when it self insures. On the other hand, when a city joins the Pool it belong:: to a group which limits the number and sets the eligibility standatds for its membership. This reduces the city'a risk of buying conventional insurance from national firms with no membProhin requirements or ability to control losses except through cancellation, The Advantage of Cundad Liability Resnrves A funded liability reserve is designee_ to create an ability for sslz-•insured cities to Lund their Incurred But Nap Reported (IDNR) liabilities over a period of years thereby reducing General Fund cashflow for this purpose. rt also provides a pool of capital to cover loss payments %ihich may arrive in early years. The advantages of this apprcack include; 1. A group insurance pool with a funded reserve has better access to and greater bargaining otrength with the reinsurance ma ket. ICRMA was apparp^tly one of the first pools to obtain a reinsurance quote. ,y � 7• C 'V*Mw�w i ,w z Yp;ldV''!MV r ` A� Honorable Mayor ar,J City Council I ,-�.rn ;ern April 1'1, 1 q8i, Page 3 2. A r-ool with a funded reserve: reducos the• co:.rt of reinsurance becau3e it rrecgotiaten directly with the reinsur, or, reduciiiq th-. co:icc3 of intermediarics. -3. A pool with e. funded rt sorv,� has a greater control over t.ot'nra(jv te:r-rr:3 •-ind cletimn :td ju:3t nient nr,licy whon it �.rrrcha;;es reinl'ur.anco. An "unf.undod" insur'nce pool Lhat gradually build:i i.t:e reserves Uver.��E157 rather Lita.n fully funds from the outset, fa�a:3 a potential rink that it will. be underfunded in t.hc initial yoars and rr'quiri, asse:35rnent:3 of it:: nembe'r53 in the case of a catastronhi c 1.oar3. Thi.3 r. ink in suhatan It. ia11y r.cdur_Od fnr. the fu11y funded pool. II. Program Structure Incorporating the principles of Risk -sharing and a Funded Liability Resiarve, L•il'' pLoposed progr.ain is st:r.u; tuned In the following manner. 1. In order to ciener:ite neces:aary fund!3 to c apital is c the prograir„ thereby malting it financially sound from an actuarial and insurance industry standpoint, the BICEP Progra!n, as a Joint Powers Authurity, would arrange for the sale of Tar. Vxympt 3onds which represent interests in prominal payment, made by the member citi^s of BICEP. The Size of the reserve and each member'o :•;hare is determiner] t_s;nC an actuarily developed risk - sharing formula. 2. BICEP would pay all debt service: on thr bonds issued by its members to fund the los,2 payment reserve. BICEP pays the debt service primarily from interest earnings on the reserve and secondaLily from annual premium payment: of it.3 members. Legally, of course each city member is liable for titr. debt whictr it incurs for this purpose. 3. As the i..00led bind proceeds are drawn down to pay insurance claim•;, they are replenished from premiums, over time funds identified as bond %proceeds (therefore invested at a restricted yield) are expended and reserves drawn from premiums form the loas payment pool. These reserves cen be invested at err unrestricted yield which reduces premiums for Pool members and aria_' grates the defeasance of bonded debt. For ea-::h member city, its annual premium payment to tt•e 13ICE:P Pool i:oald consist of three parrs: 1. Debt Service on t!le Bonds. ' 4 2. Administrdt.ive Charge - The Pool will have the normal cost of administering its insurance program. It is expected that A BICEP will hire c.n experienced General Manager to administer the poor f%r its members, and the premium will also coven this expense. A. W ` .�.AL'k ti n3' 4 "I Xg`• t r f { t, , 'r 'A Y"',"�' �"�y .air �,�:�I,r,a,h;yR11I1i�f�,B►"�IY"','�'„�r.i�.M.,no� ��,�, 4� .�•,i.,��;1;,.�'�, •��'�M��:1'w'?,,,�'�;'�'N? Flonorable Mayer and Ci ty Ct•url:'il Merahors Apvil 14, 1988 1)arja 4 3. Losc3 A., sumption/Ri.3k Prf.-niium Component -- The total ,lot: Risk Premium will be determined by it qualif1ed actuary and s:i11. be :set for the first yaar prior to the Hond sale clotling. 'I';li:s premium calrulat•.ion will be undortake.n annually, subject. to �, maximum. allowable increa:e in any one year of 10%. At the end of tho first throe years of Fool operation, the actuary will detr.rminu ,A new ficlure for tho maximum allowable increase. After the third year, any change c�aL'er: than 25% upwE ''- i;-, or: downwards of a city' :s R.131c Prem i unl Froporti onus t be .appr.ovud ny a un. niriotin vote of the pool's Governing Board: any change less than 25% requir.ea a rna jOri ty vote of the entire Board. This means that -'the C; t ilzs vel:o power over harsh increases. [:acts participating c',ty is responsible for itn annual premium payment. These arc: secticerl by an insurance purchase agreement betwne-1 the City and BICE:P pursuant to which PICEP agrees to provide liability i nc71Ji:,Ir1U(' in ox , lanrjC Ur G ]C:I1 C i i 1'' J II)L' 71I1iL-e CO [)Ov l)Z:QI;II UILL3. SEttinci Premiums and -ti3h Sharing Formula The premium is used primarily to brlild up '..he, Pool's own resorven. Eaa:h city pays its share of: debt: storvice 3n part of its annual premium payment. Becuase of earningn or. bond fl:-oceeds, actual not debt Service r.equi.rament.3 .:or member cities should be comparatively small, and the balance of: the premium payment will be used t-o establish the Poolla own loss reserves. Debt eervice oromiurn Fercent%.1cirun always remain the same. Act�ral premium levies are adjusted annually to reflect changes in incurred lo:3n estim:iLe:s,actual loss.as paid, and the purchase of reinsurance so that premium levels remain actuarially so►lnd, and incurred lc-css ro.serves remain at rcalisti-- le-inlc. Premium lavi-es are allocatL,6 according to a risk --sharing formula which refle,:ts a conlbinat.i`�,n of exposure and loss history, but with protective features co spread incurred lr%,,se:3 omono members. Allocations based on loss history will be pane! on multi -year moving averages in order:- to swcot.h the shock of any catastrophic losses;. Ad justmertta will take the .'orm of automatic reft:nds and would in no way perm; neatly alter a membc+•. 's risk allocation or risk premium r,roportion. Refunds shall a130 include interest from the titne thc• reserve was set up. For a catastrophic loss,. member:; may draw down reserves from the capstal base provided by .-•ond proceec.:: and amortize the loss. A catastrophic lrr�ss liability will be allocated among members on the same basis as any other major loss. This will allow members to spread risk among participants and spread risk over time. Le-aving the Liability Insurance Pool Members may leave the Pool after an initial 3 year commitment period by allocating a suffi•• ent amount of their equity in the bond proce%tds and reserves to cov•-r outstanding principal 1. t"r it I �rh r'• q�r'�' �.YL. �; k,h� 7. ,. w��; �� � •'����•, �rY:'% •Mf 11r .�=p%,; ;F: �-�:',+,�� air'• Honorable Mayor and Ci ty Counci 1 hsemb�,!rs April 1-1, 1908 P-1rje 's on the bonds. It is expected that a part:icipant's :shard of uquity in the program will �-•e proportional to what it has ..onLr ibuted. With0raving cities •irr? al -,so responsible ioz' any lonnes incurrod Jurin,l thy' poriod of their tnembernhip in the I'no' . If. a city's ',Jithdravial from t'ho program fundamentally iltur:j the Pool's actuarial :joundne sn- t_hort additional coedit l(-Jrs:s nicty have to be set. 111. Other Condic:onn I-oqa] The law fires of. IIriv-i and Wood, a nationally kriu,-,r, and respected law Firm, well experlorced in bond cuunsc l work and acting as bond c:olinsel to ICRMA, is providing the legal work for this program. They have succeni-fully put into raper. a t i un throe :'ended 'curs i c ipa i Gigability Insu._►lce P001s in California and one in Mont�ina. They have rendered tho nece:at,ary legal opinions and have successfully validated the insc''? Of the sale of Bonds Lor insurance purpose-3 in numerous counties in California. Insurance The program, which is insurance driven, is do-gigned and fully supported by Marsh & McLennan, Inc., the country's largest insurance broker. :":ia Public Entity Division of. Marsh & ticLennan'n San Franciso office is ICRMA$q Insur.ancc. Cunsultant for their program. Tile program's coverage document is very comprenencsive and has been specifically tailored for large California cities_ The coverage is wz itten on an "occurrence" form which is very desirable. Additionally, very strong Rink Management and Claims Handling 9uideline;a have been built into the program so aq to ensure the responsible management of liability from each Member Cic.y. Financial Tile financial aspects have been previously discussed in describing the program structure. The program's financial advisor- is Kelling Northcroso and hlobriga who have successfully wnrked with Marsh & McLennan and Brown and hood in structuring th•a prev.'';,usly mentioned funded insurance pools. IV. 1-'rogram Benefits 1. The primacy benefit at this time is that no conalerical insurance is ava.lable, and the C`ty is desivou!3 of transfercing risk if ELonomical ,y feasible tr: do so. F+�„�-..�,,�y:'.�:'r-'ry,pl',��,igi�l�r3.rl�':'v�:i1i14i•: P,,'i;;Jl' '; f jr,,r it t. c ai' I yp ��y ��(� y� 1. l• 11 `iS* 9 r •I 1. �h ^N � rev, 1� •, } ': ^ R; 47 K Virs T_ JI o 7— '01 11onuJ7Z,b1 C' t 'i , ayar and City Council f1emb,�r.-3 P.Pri 1 14 1 988 -A q el 2. s);-sharing through B.-..CFLI shou Id allow the City to mi n imi :e _'IPVerQ Cont f luctuation,,. in the in.-jivance, warket place in avin(j oii undervc1ting �,nd jjj3L!r.-;lijkCr.- coinparly 'Q61- addition to adin i n i it t it t i on fees; n e e2 ter inir,f, co,v raje tr11"itnd, VX5VCEi Ii policy co?itions i.-s Lhe pool in.,3ues rh._pcliio!; and tc.ais, oC coveralt,ic. The pool %jil I h,- -3et up with ntrict Rink Management tc�quiremerit.� fc- inember c;tiej. However, iL a cata*%rophic losn occur, ri Lner than being it the inercy of an lrirurarice 4 corr-p-iny for increased prerni urn or cancil I it t ion , Lite risk -sharing p?:1(Ic1 ple of the pool spreads this rlik no that Lite City'S f inancial %riabi I ity wcul.j not be levastated arid i t woiila be able Lo amorti.-e its lons over a reasonable periot5i of time, A I 5. Thz! use of bond financing for Lh-", insurance; pool program enable-5 citioi to restructure their own nelf-itisuranco reselve!)I and ni ricairi thern , - n t oignif c, antlw y lower level. ri thif they i rely on self - insurance re�erves only. 6. C o it s i d t� r i rt r the fact that thin is strictly an excens loss pool, with reasor.-':)le -_%pected lots expecience, the pool can become self-amort i zing over a period of ten to twelve years with the City maintaining proportionate equity at all timeq. 1. 7. .'Oe acnibilidtion of r-voceeds arid reserves is expected to exceed outstanding principal at all times, proving greater security fur the bondholders, and thus redULing debt asarvice expenne ....... the . . . . . . X 4" to e 1,14 Cities. N. in the event that reinsurance beconng.9 available in the "uture from outside carriers at competitive rates, the Pool will be in at, ideal. posit;.on to negotiate directly with the reinsurance industry and obtain the lowest-- rates possiblu foi: its members. The proceeis and re3erves of the pool can then be 6cawn, down -amortizing. to pay debt bervice, and the bonds will become self V. Program Risks Jj�" c':1.tV As with ary gram, there are advantages a.11 sadvantagen. Naturally, -true claim against one city wouL6, as is the case fr Cll in any risk -sharing pool be financed it, part by the other cities in the pool. The fundinu plan has been deemed actuarily sound and has been ' loaded to -.0,sorb a number oL" "big -hitting claims." However, if numfirou:3 '0. and staggering losses are experienced, particularly in the early years, and all the proceeds are drawn down to pay claims, cities conceivably could be paying debt service for innuranc- coverage_ which may no longer te available. V. i A 'k, ^ ;*s.4" I, - 0 53 I 0 I y • F r : a^ J ; e ti + - 1" LO • Y � t. y r' t 4'a+ I�f A ,p • r . Yl iti- %f+t ..1 •. i ` r I riff) • � a 1. 71. 'f 1 •l ; . 9 *� ' ' I -. T. r 1� � A -' •Au � ^ tom. a A /✓A- ,. i 1p c �: 'r�. i �I•trAr ykF. - 1�r-..;�`'- r- • - � �y;� ". . . •ft •• '.y { , � !•�r�i.J ,t, ..K�A tt .� Co Y`L k; f'�',� r .. I" `, . t . r y r jr• f,!,�+r f�� w' A I t 1 ' • r • ' . ..• - Y-i.•��1 ♦t.a y- _)�➢1 ,Y V .�, itl. '• r:. - ,h 14 ? . rY� .q i,l . fi r _ ` Y, i r, t♦; M' 1 1 .. �t ,iti • +. �.• . � - - . � a •1• v' t �g•1y1 ;PStC/ �• �• t -Ao _. � � ._ .+ t ! SFr .: 1 �Y�A„f+. 5• aZi�r•'�- .rr•,/t nr•?;�..yj, t'ti r �, _ t- t�- .•,• j �fi• � • ;�J- � T A� ' ,+il�,��b,A� �r 4r-%,: t` 1 �_ z. - yt � �; r yy � ry • _ t _� �, ,•t - t r�.r LI•lr: G•yh- • t1,7'W.{ A •.�� �i, ..•-f \ ti t �� } * �•, cy. Ilt6A� 1111 t �01 1C i \i' `t^! ', • i ,• 0 � 1 1 JA 5 ,,•'� , r JOINT POPPERS AGREEME:ZIT CItEMI'ING THE BIG, INDEPENDENT CITIES EXCESS POOL JOINT POWERS AUTHORITY This Agreement is exec-,:ted in the S;:ate of California acid amonq those cities organized. ar,ca existing under the Constitution oi: the Stare of California which are parties signatory tc this Aq •)ement. All such cities, herei.naftec c::lled Members, shall be listed in Appendi:c A, wh:tch shall be attached hereto and made a part hereof • RECI7.ALS WHEREAS, Articles 1 and 2, Chapter 5, Divi.siun 7, Title 1 of the California Government Code (Section 6500 et seq.) perrr,i�_s two or mote public agencies by agreement to e::ercioe: joi:ti.1y powers common to the contracting parties; and ',ft;EUI AS, California Government Cade Section 990.4 provides that a local public entity may self -insure, purchase insurance through an authorized carrier, or purchaso insurance tiirough a surplus liaa broke., or any corrhination of these; a;.d WHEREAS, Article 16, Section 6 of the California Constit5.ktion provides that insurance pooling arranqementr, under joint exercise -of power agreements shall not be considered the giving or lending e:f credit as prohibited tharein; and WHEREAS, California Government Code Section 990.R provides that two or more local entities may, by a joint powers agreen.,nt, provide insurance For anv purpose by an-,, one or more of the +.:ethods specified in Government Code Section F,90.4; and WHEPLvAS, the cities executing this Agr^ement desire to join together for the purpose of jointly f+anding programs of excess insurance for comprehensive liability and other coverages to 1— determined; 60W, THEREFORE, the parties agree as follows: 2658002i 25 7 A'•. r 40 Z � / w i �. . • h / A '44 t r . la ' "i •-« a ,, . � i . 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