The URL can be used to link to this page

Home My Public Portal About7JAGENDA ITEM 7. J. MANAGEMENT SERVICES DEPARTMENT MEMORANDUM DATE: April 5, 2011 TO: The Honorable City Council FROM: Jose E. Pulido, City Manager t By: Eva Hauffen, Personnel Analyst SUBJECT: DELEGATION OF CLAIMS HANDLING AUTHORITY TO THE CALIFORNIA JPIA RECOMMENDATION: The City Council is requested to adopt Resolution No. 11-4741 to approve delegating liability claims handling responsibilities to the California Joint Powers Insurance Authority as authorized by California Government Code Sections 910, et. seq. BACKGROUND: 1. When the insurance industry abandoned cities in the mid -1970s, a group of 33 cities joined together to form the California JPIA (The Authority) for the purpose of providing liability protection for its members. As one of the largest municipal self - insured pools in the state, the California JPIA works with member cities to reduce the frequency and severity of general liability claims. 2. In 1978 the California JPIA contracted with Carl Warren & Company (Carl Warren) as their third party claims administrator. Carl Warren to work with member cities in the processing of claims. 3. The City of Temple City joined the California JPIA as one of the founding members on April 1, 1978. City Council April 5, 2011 Page 2 ANALYSIS: Under current practice, claims resulting from fallen tree limbs, trip and falls, etc., are presented to the office of the City Clerk for official date stamp. The City Clerk refers the claim to Management Services for review of timely filing and to secure the necessary information to investigate the incident (i.e., tree history, sidewalk inspection reports, incident photographs etc). The claim and pertinent information are sent to Carl Warren for adjusting and review of merit. Carl Warren renders a determination based on liability or staff recommendation. Staff initiates a plan of action outlined by the Authority that may include approval or rejection of a claim. CONCLUSION: In approving Resolution No. 11-4741 the City is granting the California JPIA to reject claims, return claims as insufficient, or return claims as untimely on behalf of Temple City. FISCAL IMPACT This item does not have an Impact on the 2010-2011 Fiscal Year City Budget. ATTACHMENT(S) A. Resolution No. 11-4741 B. Letter from Gibbons & Conley Re: Authority of JPIA to Reject or Return Claims on Behalf of Members RESOLUTION NO. 11-4741 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TEMPLE CITY ESTABLISHING A POLICY WHICH DELEGATES TORT LIABILITY CLAIMS HANDLING RESPONSIBILITIES TO THE CALIFORNIA JOINT POWERS INSURANCE AUTHORITY AS AUTHORIZED BY GOVERNMENT CODE SECTIONS 910, ET SEQ. THE CITY COUNCIL OF THE CITY OF TEMPLE CITY DOES HEREBY RESOLVE: Whereas, the City of Temple City is a member of the California Joint Powers Insurance Authority (California JPIA), and pursuant to Government code sections 990.4, et seq. and 6500 et seq. pools its self -insured liability claims and losses with other California JPIA members under a Memorandum of Coverage; and Whereas, the Joint Powers Agreement creating the California JPIA authorizes it to exercise powers common to members and appropriate to defend and indemnify members from liability claims under the Memorandum of Coverage; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TEMPLE CITY DOES HEREBY FIND, DETERMINE AND RESOLVE AS FOLLOWS: SECTION 1. The City of Temple City delegates to California JPIA authority to act on its behalf pursuant to Government Code sections 910, et seq. to accept, reject, return as insufficient, or return as untimely any claims against it, and to provide any notices authorized under those statutes on behalf of the City of Temple City. SECTION 2. This Resolution shall become effective immediately upon its adoption. SECTION 3. The City of Temple City Clerk shall certify to the adoption of this Resolution. PASSED, APPROVED AND ADOPTED ON THIS 5th day of April, 2011. Mayor ATTEST: City Clerk Resolution No. 01-3978 Page 2 I, City Clerk of the City of Temple City, do hereby certify that Resolution No. 11-4741 was adopted at a regular meeting of the City Council of the City of Temple City held on the 5 th day of April. It was duly passed, approved and adopted by said Council, approved and signed by the Mayor and attested by the City Clerk at a regular meeting held on the 51h of April, 2001 by the following vote: AYES: NOES: ABSENT: City Clerk Austin R. Gibbons A. Byrne Conley Peter A. Urhausen Sean C. Conley GIBBONS & CONLEY ATTORNEYS AT LAW September 6, 2005 Walnut Creek Office 1333 N. California Blvd., Suite 110 Walnut Creek, California 94596 Telephone: (925) 932-3600 Fax: (925) 932-1623 Indian Wells Office 74-900 Highway 111, Suite 216 Indian Wells, California 92211 Telephone: (760) 346-4633 Fax: (760) 322-1292 Please Respond to; Walnut Creek Office Jon Shull, Executive Director California JPIA 8081 Moody St. La Palma, CA 90623 Re: Authority of CJPJA to Reject or Return Claims on Behalf of Members Dear Jon: You asked for our analysis of CJPIA's authority to reject claims, or return claims as insufficient, or return claims as untimely, on behalf of member agencies. We believe that the Government Code provisions relating to handling of tort claims, pooling of self -insured claims or losses, and joint powers authorities collectively stand for the proposition that a self-insurance JPA has the authority, when authorized by a member agency, to act on the member agency's behalf with respect to tort claims. Government Code section 900.2 defines "board" as the "governing body of the local public entity..." Government Code section 910.8, relating to notice of insufficiency of a claim, says that "[i]f in the opinion of the board or the person designated by it a claim as presented fails to comply substantially" with the requirements of the Tort Claims Act, "the board or the person" may send notice of insufficiency. (Emphasis added.) Government Code section 911.3, relating to the return of untimely claims, indicates that the "board or other person designated" may send notice of denial of a late claim. Section 911.6 (late claim applications) and 912.6 (action on claims) indicate that the governing board (there is no mention of a designated person) may reject, allow, allow in part or compromise a claim. Section 913.2 says that the board may reexamine its decision on a previously -rejected claim. Section 935.2 says that the board may by charter, ordinance or regulation, create a claims board or commission of not less than three members to perform such functions of the governing board as it may prescribe. Most importantly, section 935.4 says the board may authorize an employee of the local public agency to perform the board's functions, although this would not include settlement above $50,000, except by charter provision. Section 949 indicates that the board may delegate authority to compromise a claim to an employee or attorney of the agency after the board has considered the claim. The importance of these statutes for our discussion is that they establish the authority of the governing board of a local public agency to delegate authority exercised with respect to claims under the Tort Claims Act. This authority to delegate is further supported by reference to the Joint Powers Act, which generally permits public agencies to form separate agencies to share powers common to Jon Shull, CJPIA September 6, 2005 Page 2 the members, and the portions of the Tort Claims Act that permit the pooling of self -insured claims or losses. Section 990.4 of the Government Code provides that a public agency may maintain self insurance. Section 990.8 provides that two or more local public entities may, by a joint powers agreement (pursuant to section 6500, et seg.) provide insurance authorized by the Tort Claims Act by any of the methods specified in 990.4. In other words, two or more agencies may form a joint powers agreement in order to pool their self insurance. Section 990.8 refers to the pooling of "self-insurance claims or losses" which strongly infers that the power to handle "claims" is among the powers being pooled. Section 6502 of the Government Code provides that two or more public agencies by agreement may jointly exercise any power common to the contracting parties. Section 6508 provides that a joint powers agreement may create a separate public agency, and that said agency shall possess the common power specified in the agreement 'and may exercise it in the manner or according to the method provided in the agreement. When it comes to pooling self -insured claims or losses, we believe that this means the agency created to exercise the common power (here CJPIA) can thus be delegated the power to reject or accept tort claims, or return them as insufficient or untimely. Since CJPIA pools the self insurance against liability claims of its members, a necessary power exercised in the course of such pooling is the power to handle tort claims. Moreover, the Joint Powers Agreement at Article 6 expressly states that: The Authority shall have the powers common to its Members and is hereby authorized to do all acts necessary for the exercise of said common powers, including but not limited to, ... exercise all powers necessary and proper to carry out the terms and provisions of this Agreement, or otherwise authorized by law. There is no California case specifically on point, but we believe that this is because the matter is not controversial, and flows necessarily from the power to create a self-insurance pool in the first instance. We therefore reaffirm our earlier advice to you that, in our opinion, CJPIA has the authority under the Code sections cited above to exercise the power, on behalf of its public agency members, to reject tort claims, or return them as untimely or insufficient. In order to confirm this, the proper procedure would be for the member agencies to 'adopt resolutions affirming that this power is delegated to CJPIA. Very truly yours, GIBBONS & CONLEY A. BYRNE CONLEY /jh