CC Resolution No. 6864 . ~ •
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RESOLUPICkT N0. 6864
A FiESOLU~I~t OF ~ QTY OOUNCIL OF THE CITY OF QJPEE~INO
AV~IZING 2~ E~X.TTl'IddJ AND I]ELIVERlC OF ABAG PIAN Z DOQIl~fIS
W~AS, the City of GUpertino (the ~'City~~) is a municipal cozporation
duly organized arrl existing urder the Constitution ard laws of the State
of California (the "State");
4d-~REAS, the City is authorized by Part 6 of Division 3.6 of Title 1,
Section 990, et seq., of the California Goverrmient Oode (the "Act") to
insure itself against tort or irnrerse condemnation liability, to insure
its e~loyees against injuzy resultirfg frcaa an act or anission in the
scope of his/her e~loyment ar~d to ir~su~.-e against the costs of defendir~g
such clair~;
Wi~E2EAS, pursuant to Section 990.4 of the Act the City is authorized
to provide insuzar~ce by self-insurance which may be i~u~ded by
i appropriations arid to establish or maintain reserves for such pu~OSes;
~ W~S, puYSUant to Section 990.6 of the Act, the c~osts to the City
~ of such selp-insurar~ce is a proper charge against the City and thexefore
the governing baaYrl of the City ia authorized to mak,e pre~niiun payments for
~ such caverage;
; Wf~REAS, puYSUant to Section 990.8 of the Act, the City is e~owered
, to provide insurance a~verage by a joint powers agreanent with other local
public entities, arxi such pooling of self-insured claims arid the risk
sharing of losses is not oonsiaerea insuiance ar,a is not subject to
regialation urxier the California lnsurance Code;
~EAS, the Association of Bay Area Goverrmpnts ("ABAG") is a joint
exercise of powe,rs agency of which the City is a manber;
' wt~REAS, I~G is authorized to exercise necessazy powers to i~lement
I the purposes of ABAG as established by ABAG's F~cecutive Haazd;
Wf~tEAS, ~ has determined to assist the City, and other men~bers of
ABAG e~awered to self-insure w~der the p~ct, (collectively the "Cities°)
~I to obtain self-insurarxz for liability risks;
WF~2EAS, ABAG and the Cities have heretofore conclusively determinecl
followir~g ext~austive irnrestigation that exoess general liability insurance
coverage is r~ot available to the Cities f~can ocmmiercial insurers or fz~n
I, any other souroe at a prioe which ie reasonably related to the expected
ir~curred losses of such Cities;
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I RFSOIUl'I~T N0. 6864
~ Fk~REAS, ABAG ar~d the Cities have Eurther determined, based upon the
advioa of indeperxiesit professiona]. ins~uar~ca consultants familiar with the
cyclical nature of the reaso~able availability of coverage in the
ccmm~ercial insurar~ce aarket, that such caverage is not anticipated to
beccana available until late in 1986 at the earliest, thex~el~ry in the
interim exposing the Cities to self-insuring frcan available reveriues on a
yeariby-year basis with the attendant ris.k of fiscal instability and
ruinous ~s on its citizens in the event of lan~e liability claims
z'eowexies;
WF~EAS, ABAG azri the Cities have f~rther determined that the periodic
w7willirx~ss of the ocamnercial insurar~e market to provide e~aoess general
~ liability insurar~ce coverage to local goverrm~ents at re~sonable rates or,
in certain cases as at present, at any rate ~ates tl~at the Cities seek
not only an iimnediate solution but also a lcmg-tpxm pern~anent solutiari to
this probleln which will in fl~ture years free them fn~an exposure to the
vagaries of camneroial ir~s~uance cycles;
Fh~AS, ABAG azri the Cities, in consultation with indepencient
professional. insurance consultants, have formulated a joint risk sharing
insurance progY-am to be achninistered by ABAG through the ABAG PIAN I
Cozporation arrl called the ABAG Pooled Liability Assurance Network ("ABAG
PLAN I") to meet the general liability ~ coverage needs of the
Cities;
i Wf~RFAS, the City staff has sukanitted an application for premitun
quotation fran ABAG for ABAG FI~AN I, atxi the City warrants that the
inforniation contained and representations made therein are true, caa~~lete
ar~d accurate to the best of its lax~wledge;
WF~RFAS, the City has Purther determined that the Total Premitmi to be
paid in each year by the City as provided for and upon the conditions set
forth in the Liability Ooverage Agreement (the "Agreement") which will be
payable only upon the corxiition of the receipt of the oonsideration
rePresented by the insuraix~e protection ar~d services to be pravided in
such year under the Agree~?nent, but in the event that such pratection and
sez.vices are so prwided in ariy year such 2btal Prezniinn will be a bindirq
d~ligation of the City payable fmm the ir~ne and revenue provided for
such Yea~';
Wf~2EAS, the City has flirther detez~mined that the obtaining of the
insur~nce protection and services prwided for wxler the Agre~nent is
essemial in the presetvati~ anl fostering of ttie health, safety and
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RFSOI~TPI~T N0. 6864
property rights of the citizens of the City and the lack of availability
of z+easonable coamnercial general liability insurance to local govezrm~ents
generally in the State of C~lifornia arxl to the Cities in particular
oomstitutes a public Ennergency;
WF~REAS, it is a matter for the governir~g baan~i of the City to
detexmine the amount of premiwns which such City shall pay for proper
insura~e c~verage;
4d-~RFAS, the City has heretofore determined arxi does hereby confirm
that the premiwns to be required tu~der the Agz~ee~nent are neasonable ar~d
advanta9eaus and to the public benefit of the citizens of such City;
NdW, 2~pRE, BE IT RFSOLUED, the Oow~cil of the City of Cupertino
hereby:
1. authorizes ar~d directs the City Manager to execute the deliver,
oai be2~alf of the City, tha Liability Risk Cavexage Agt~nent for the ABAG
PIAN I which shall be in substantially the forni attached hereto, minor
t.echnical revisions and oorrections e.~acepted, arid anY ~~Y
supporting doc.wnentation to effect the City~s participation in ABAG PLAN
I; ard
2. appoints the Assistant to the City Manager to serve as the City~s
appointee and the Fi.nanca Direc,~tor as his/her alternate to tha Boazd of
Directors of the ABAG PIAN I Corporation, and to exercise the City's vote
in setting premiwns, premi~un allocations, cancelling caverage, arri
actnitting or expellinq members to or from ABAG PiAN I;
3. elects o~mner~nent of caverage imder 1~BAG PIAN I on Jt~ly 1,
1986.
PASSID AND ADOFrED at a nec~tlar meetinq of the City Qau~cil of the
City of CUpe2tino this lOth day of June, 1986 by the following vote:
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' vate Membe~s of the City Qav~cil
AYFS: Gatto, Johnso¢~, Plurgy, RogeLs
NOES: Sparks
AffiFI~T: Naa~e
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i ABS'PAIN: N~e
APPAAVID:
I; -~/~~~I~ ~ 2
Mayor, City of
ATI~ST:
~Lr ~ CGc~.•
Ci Clerk ~
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