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HomeMy WebLinkAboutItem 5.8 Dissolution of the San Mateo County Cities Insurance Group Joint Powers Authority STAFF REPORT CITY COUNCIL Page 1 of 5 Agenda Item 5.8 DATE: October 21, 2025 TO: Honorable Mayor and City Councilmembers FROM: Colleen Tribby, City Manager SUBJECT: Dissolution of the San Mateo County Cities Insurance Group Joint Powers Authority Prepared by: Sarah Monnastes, Human Resources Director EXECUTIVE SUMMARY: The City Council will consider approving a resolution consenting to the dissolution of the San Mateo County Cities Insurance Group Joint Powers Authority and authorizing execution of a Dissolution Agreement to govern the dissolution process. The Board of Directors for the JPA has determined that an orderly dissolution is the most effective means to transitioning the remaining Member Agencies to independent administration of their workers’ compensation programs. Approval of the resolution will allow the dissolution process to proceed in coordination with the other member Agencies, with operations anticipated to conclude by the end of 2026. STAFF RECOMMENDATION: Adopt the Resolution Consenting to the Dissolution of San Mateo County Cities Insurance Group Joint Powers Authority Pursuant to Section 5 of the San Mateo County Cities Insurance Group Joint Powers Agreement and Approving a Dissolution Agreement to Govern the Dissolution Process. FINANCIAL IMPACT: The City’s current annual payment for workers’ compensation coverage is approximately $3,000. With the dissolution of the San Mateo County Cities Insurance Group Joint Powers Authority (Cities Group), the City of Dublin will need to enroll in a new workers’ compensation program, which Staff anticipates will cost significantly more ($200,000 - $500,000 annually). Additionally, the City currently has about $187,000 in funds held by the Cities Group. As part of the dissolution process, member agencies, including the City, will be required to share in the costs associated with administrative closeout and legal obligations of the Joint Powers Authority. Following the completion of this process, the City expects to receive a portion of its contributed funds back, which may help offset some of the transition costs in the first year. 140 Page 2 of 5 DESCRIPTION: Background The San Mateo County Cities Insurance Group Joint Powers Authority (Cities Group) was formed on October 5, 1978, for the purpose of allowing its member agencies to pool resources to fund and administer their respective workers’ compensation programs. The Cities Group now also administers other benefits, such as life insurance, long-term disability, and dental programs, on behalf of some of the member agencies. However, the Cities Group’s primary purpose remains the administration of workers’ compensation programs. The founding members of the Cities Group were the Cities of Half Moon Bay, Foster City, and Brisbane, and the Towns of Atherton and Hillsborough. The City of San Carlos was added to the membership in 1989, and the City of Dublin was added to the membership in 2004. Although the City of Brisbane withdrew from membership in the early 2000s, th e Cities Group has enjoyed stable membership during its 47 -year history. However, in November 2024, the City of Foster City submitted a withdrawal notice to the Cities Group, indicating that it planned to withdraw from membership as of July 1, 2025. Pursu ant to Section 4 of the Joint Powers Agreement (JPA), as amended in 1997, any member agency that has completed at least three years of membership may unilaterally withdraw from the Cites Group on July 1 of any calendar year, after providing notice of its i ntent to withdraw on or before January 1 of that same year. Ultimately, Foster City’s membership was terminated August 1, 2025 pursuant to an agreed termination under Section VIII(B) of the Cities Group Bylaws, as amended in 2000. Under the Termination Agr eement with Foster City, Foster City assumed all liability for the past, current, and future claims it generated. The Cities Group, therefore, is no longer responsible for any claims generated by the City of Foster City. After receiving the withdrawal notice from the City of Foster City in November 2024, four of the five other member agencies also submitted withdrawal notices prior to the January 1, 2025 deadline. Unlike Foster City, however, those members indicated that they issued their notices in order to reserve their right to withdraw from the Cities Group but had not yet determined whether they intended to withdraw as of July 1, 2025. Ultimately none of the other members withdrew from the Cities Group, and the membership remains as follows: the Ci ty of San Carlos, the City of Half Moon Bay, the City of Dublin, the Town of Atherton, and the Town of Hillsborough. Although the Cities Group has continued to operate successfully after the departure of the City of Foster City, the future viability of the Cities Group is in question. Because Foster City represented a disproportionately large share of the total claims handled by the Cities Group, the Group will become financially less stable and will be less attractive on the reinsurance market. With this in mind, and at the Board’s direction, Cities Group staff worked with the Board President to conduct initial research into the possibility of merging the Cities Group with another Joint Powers Agency or other public agency administering workers’ compensat ion programs. However, each of the identified agencies indicated that Cities Group members wishing to move their workers’ compensation programs would have to do so individually, rather 141 Page 3 of 5 than moving all five Cities Group members as a unit. The Cities Group Board President and staff presented this finding to the Board of Directors in February 2025 and recommended that each member agency conduct its own due diligence to determine where it might take its claims should the Cities Group dissolve. The Board held several discussions in the following months about the future of the Cities Group and the prospect of dissolution. On June 10, 2025 the Cities Group Board of Directors approved a resolution which found that an orderly dissolution of the Cities Group was the preferable method of transitioning the member agencies out of the Cities Group, rather than having each member agency individually withdraw. That resolution directed Cities Group staff to create and present to the Board a dissolution plan under which the Cities Group would cease providing claims administration and all other benefit services on behalf of the members on or before December 31, 2025. In accordance with the Board’s direction, the Cities Group staff drafted a Dissolution Agreement that would govern the dissolution process and establish the ongoing rights and obligations of the members. The draft of that Dissolution Agreement was provided to the attorneys representing each of the member agencies, and Cities Group staff worked with representatives from each agency to address questions, concerns, and objections to the terms of the Dissolution Agreement. After completing that review process with representatives of each of the five member agencies, the Dissolution Agreement was presented to the Board at its meeting on September 9, 2025. Discussion At the September 9, 2025 meeting, the Board of Directors approved the resolution (Attachment 3), which formally recommends to the councils of the member agencies that they each consent to the dissolution of the Cities Group and approve the Dissolution Agreement. Pursuant to Section 5 of the JPA, the Cities Group cannot dissolve unless all Member Agencies consent to the dissolution. Therefore, each of the five councils must adopt resolutions providing that consent. A draft resolution consenting to the dissolution of the Cities Group and authorizing the City of Dublin to execute the Dissolution Agreement is included as Attachment 1, with the Dissolution Agreement included as Attachment 2, to this Staff Report. If approved by all five councils of the member agencies, the Dissolution Agreement will govern the dissolution process and set forth the rights and responsibilities of each agency during that process. Most notably, the Dissolution Agreement would require the following:  Each member agency must remain a member of the Cities Group for the duration of the dissolution process (Section 2);  Cities Group will cease all claims operations and the provision of other benefits as of the “Transfer Date” on January 1, 2026 (Section 4);  Each member agency must take responsibility for all of its past, current, and future 142 Page 4 of 5 claims as of the Transfer Date and assume all liability associated with those claims (Section 5);  As of the Transfer Date, the costs of operating the Cities Group will be split equally among the five member agencies as “Shared Expenses”, rather than apportioned based on claim volume (Section 6);  At the direction of the Board of Directors, the Cities Group will conduct audits and/or other studies to determine the correct ending fund balances for each of the member agencies as of the Transfer Date, and those with negative balances will be required to bring those balances to $0 on or before August 1, 2026 (Section 7);  Member agencies with positive fund balances as of the Transfer Date that are not depleted through the assessment of Shared Expenses shall be refunded the balance of those funds prior to the final dissolution of the Cities Group (Section 7);  The Board shall select one or more member agencies to retain the records of the Cities Group for the periods required by statute (Section 12);  The member agencies agree to waive all potential claims related to the Cities Group that they may have against one another or against the Cities Group (Section 14); and  The dissolution will occur at the time that the Board finds by adoption of an “Ending Resolution” that all of the Cities Group’s outstanding obligations have been resolved. Several member agencies requested that Cities Group staff provide an estimated schedule for the dissolution process. A preliminary estimated schedule, which anticipates the completion of the dissolution process by the end of calendar year 2026, is included as Attachment 4 of this Staff Report. However, pursuant to Section 5 of the JPA, the Cities Group must resolve all of its outstanding obligations before it can complete the dissolution process. The actual timeline for the dissolution, therefore, will be dictated by the pace at which the outstanding obligations of the Cities Group can be resolved. Consent of the member agencies to the recommended dissolution will provide clarity to the agencies and the Cities Group staff and enable them to plan for the date on which claims will no longer be handled by the Cities Group. It is also important to allow enough time for Cities Group staff to work with the member agencies to transfer claims to new claims administrators. For those reasons, each agency must obtain council consent to the dissolution and approval of the Dissolution Agreement by October 31, 2025. For reference, the Cities Group Joint Powers Agreement and Bylaws, and the amendments to each, are attached here as Attachment 5. STRATEGIC PLAN INITIATIVE: None. 143 Page 5 of 5 NOTICING REQUIREMENTS/PUBLIC OUTREACH: The City Council Agenda was posted. ATTACHMENTS: 1) Resolution Consenting to the Dissolution of San Mateo County Cities Insurance Group Joint Powers Authority Pursuant to Section 5 of the San Mateo County Cities Insurance Group Joint Powers Agreement and Approving a Dissolution Agreement to Govern the Dissolution Process 2) Exhibit A to the Resolution – Agreement Dissolving the San Mateo County Cities Insurance Group Pursuant to Section 5 of the San Mateo County Cities Insurance Group Joint Powers Agreement 3) Exhibit B to the Resolution – A Resolution of the Cities Group Board of Directors of the San Mateo County Cities Insurance Group Joint Powers Authority Recommending that the Member Agencies Approve the Dissolution of the Joint Powers Authority Pursuant to the Terms of a Dissolution Agreement 4) Estimated Schedule for Dissolution 5) Cities Group Joint Powers Agreement, Bylaws and Amendments 144 Attachment 1 Reso. No. XX-25, Item X.X, Adopted 10/21/2025 Page 1 of 2 RESOLUTION NO. XX – 25 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DUBLIN CONSENTING TO THE DISSOLUTION OF SAN MATEO COUNTY CITIES INSURANCE GROUP JOINT POWERS AUTHORITY PURSUANT TO SECTION 5 OF THE SAN MATEO COUNTY CITIES INSURANCE GROUP JOINT POWERS AGREEMENT AND APPROVING A DISSOLUTION AGREEMENT TO GOVERN THE DISSOLUTION PROCESS WHEREAS, the San Mateo County Cities Insurance Group Joint Powers Authority, known as the “Cities Group”, is a Joint Powers Authority formed on October 5, 1978 for the purpose of allowing its membership agencies to pool resources to fund and administer their respective workers’ compensation programs; and WHEREAS, the governance of the Cities Group and the rights and obligations of the member agencies of the Cities Group are as described in the San Mateo County Cities Insurance Group Joint Powers Agreement (“JPA”), originally adopted on October 5, 1978 and as amende d, and the Bylaws of Cities Group (“Bylaws”), as amended from time to time; and WHEREAS, prior to January 1, 2025, five of the six members of the Cities Group issued withdrawal notices pursuant to Section 4 of the JPA, as amended in 1997, indicating either intents or interests in withdrawing from the Cities Group; and WHEREAS, on August 1, 2025, the City of Foster City withdrew from membership in the Cities Group pursuant to an Agreed Termination under Section VIII(B) of the Cities Group Bylaws; and WHEREAS, the five remaining members of the Cities Group are the City of San Carlos, the City of Half Moon Bay, the City of Dublin, the Town of Atherton, and the Town of Hillsborough (collectively, the “Member Agencies”); and WHEREAS, in anticipation of Foster City’s withdrawal and in light of the withdrawal notices issued by the majority of the Cities Group’s membership, on June 10, 2025, the Board of Directors adopted a resolution stating its intent to recommend the dissolution of the Cities Group to the Member Agencies; and WHEREAS, that June 10, 2025, resolution included the Board’s finding that an orderly dissolution of the Cities Group was the preferable method of transitioning the Member Agencies out of the Cities Group, rather than allowing each Member Agency to individually withdraw; and WHEREAS, Cities Group staff worked with representatives of each of the Member Agencies to draft the Dissolution Agreement attached hereto as Exhibit A (“Dissolution Agreement”); and WHEREAS, the Cities Group Board of Directors reviewed the Dissolution Agreement at its meeting of September 9, 2025, and, by a 4-0-1 vote (one member absent), adopted a resolution that formally recommended that the Council for each Member Agency consent to the dissolution of the Cities Group and approve the Dissolution Agreement attached hereto as Exhibit B; and 145 Reso. No. XX-25, Item X.X, Adopted 10/21/2025 Page 2 of 2 WHEREAS, Section 5 of the JPA requires that the Member Agencies remain members of the Cities Group and that the assets of the Group not be divided and returned to the Membe rs Agencies until all outstanding obligations of the Cities Group have been resolved and/or each member agency executes a contract with the Cities Group to either pay off its outstanding liabilities or accept responsibility for its outstanding claims; and WHEREAS, Cities Group shall continue to administer and adjust all pending claims until the time that they are transferred and accepted by the Member Agencies or their identified claims administrators on or before January 1, 2026; and WHEREAS, pursuant to Section 5 of the JPA, the Cities Group may not dissolve and the Dissolution Agreement shall not be operable unless and until each of the Member Agencies consents to the dissolution. NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Dublin consents to the dissolution of the Cities Group pursuant to Section 5 of the JPA and approves the Dissolution Agreement attached hereto as Exhibit A. BE IT FURTHER RESOLVED that the City Manager is authorized to execute the Dissolution Agreement, attached hereto as Exhibit A, and make any necessary, non-substantive changes to carry out the intent of this Resolution. PASSED, APPROVED AND ADOPTED this 21st day of October 2025, by the following vote: AYES: NOES: ABSENT: ABSTAIN: ______________________________ Mayor ATTEST: _________________________________ City Clerk 146 Attachment 2 Exhibit A to the Resolution AGREEMENT DISSOLVING THE SAN MATEO COUNTY CITIES INSURANCE GROUP PURSUANT TO SECTION 5 OF THE SAN MATEO COUNTY CITIES INSURANCE GROUP JOINT POWERS AGREEMENT (“JPA”) This DISSOLUTION AGREEMENT (the “Dissolution Agreement”) is hereby made and entered into by and among the members of the San Mateo County Cities Insurance Group, a California Joint Powers Authority (“Cities Group” or “Group”). Those “members” are the City of San Carlos, City of Dublin, City of Half Moon Bay, Town of Atherton, and Town of Hillsborough (collectively, the “Member Agencies” or “Parties”). RECITALS A. The Cities Group is a Joint Powers Authority formed on October 5, 1978 for the purpose of allowing its Membership Agencies to pool resources to fund and administer their respective workers’ compensation programs. B. The governance of the Cities Group and the rights and obligations of the Member Agencies are as described in the San Mateo County Cities Insurance Group Joint Powers Agreement (“JPA”), originally adopted on October 5, 1978 and as amended, and the Bylaws of Cities Group (“Bylaws”), as amended from time to time. C. The Cities Group Board of Directors has recommended, by resolution adopted September 9, 2025 that the Cities Group be dissolved. D. Section 5 of the JPA provides that the Cities Group may be dissolved upon the consent of all Member Agencies. E. Section 5 of the JPA requires that, upon the consent to dissolve the Cities Group, the assets of the Cities Group not be divided and returned to the Member Agencies until all outstanding obligations of the Group have been resolved and that the final disposition of assets will be made in proportion to the contributions of the then-participating Member Agencies. F. In July 2025, the Cities Group Board of Directors approved a Termination Agreement with the City of Foster City to remove Foster City as a Member Agency (the “FC Termination Agreement”). The FC Termination Agreement requires the Cities Group to return the balance of funds contributed by Foster City to the Group, less expenses. Pursuant to the FC Termination Agreement, those funds paid by Foster City to the Cities Group are available to pay continuing costs of the Group, but the Group must reimburse an amount equal to the ending balance(s) of those funds, less expenses, to Foster City within ten years of the termination of its membership or prior to dissolution of the Cities Group. 147 NOW THEREFORE, in consideration of the Recitals above and the mutual covenants contained herein, the Parties agree as follows: 1. The foregoing recitals are true and correct and incorporated herein as terms of this Dissolution Agreement. 2. Dissolution. The Member Agencies hereby agree to dissolve the Cities Group pursuant to Section 5 of the JPA. The Cities Group shall not dissolve and shall continue to operate until such time that the Board of Directors finds by adopted resolution that all obligations of the Group have been resolved (the “End ing Resolution”). Such Ending Resolution shall include a final accounting of the assets of the Group and indicate how those assets shall be divided and returned to the Member Agencies, in accordance with the JPA and this Dissolution Agreement. The Member Agencies each agree not to withdraw from nor terminate their membership in the Cities Group, until such time that the Board approves the Ending Resolution. 3. Operations During Dissolution Process. The operations and governance of the Cities Group shall continue to be governed by the provisions of the JPA and the Bylaws, except that the Cities Group’s powers shall be limited to winding up the affairs of the Group as of the Transfer Date defined in Section 4, below. The terms of this Dissolution Agreement shall also govern the operations and governance of the Cities Group and, when in conflict with the JPA and/or Bylaws, the provisions of this Dissolution Agreement shall control. 4. Transfer of Claims Operations to New Administrators or Agencies. The Cities Group shall cease all claims operations and the provision of all other benefits or services on behalf of the Member Agencies on or before January 1, 2026 (“Transfer Date”). Beginning on the Transfer Date, the Cities Group is expressly prohibited from administering claims or providing other benefits or services to the Members Agencies or others. Each Member Agency shall be responsible for, before the Transfer Date, taking all actions necessary to replace those services so that there is no interruption in claims operations or the provision of other benefits and services. Those actions will likely include but may not be limited to: retaining a new claims administrator; obtaining authorization from the Office of Self-Insurance Plans (OSIP) to accept responsibility for all existing, past, and future claims; and coordinating with Cities Group to transfer all closed and pending claims to the Member Agency or its identified claims administrator. The Member Agencies understand and agree that the Cities Group will not retain claims administration staff beyond December 31, 2025. Any Member Agency that is unable for any reason to administer its own pending and future claims as of the Transfer Date shall be responsible for any liability or assessed penalties arising out of that inability, and that Member Agency shall indemnify and defend 148 the Group, and the other Member Agencies, to the fullest extent allowed by law against any such liability or penalties. 5. Full Assumption of Claims Liability. On or before the Transfer Date, each Member Agency shall assume all liability for all claims generated by it, including without limitation all past, closed, pending, and future claims. Upon the transfer of claims data to the Member Agency or its designated administ rator, but in no case later than the Transfer Date, each Member Agency agrees to indemnify, release from liability, defend, and hold harmless Cities Group, its Directors, officers, contractors and agents or their employees, and the other Member Agencies and their officers, contractors, agents, and employees, from and against any and all claims, suits, actions, liability, loss, damage, expense, cost (including, without limitation, costs and fees of litigation) of every nature, kind or description, which may be brought against, or suffered or sustained by Cities Group, its Directors, officers, contractors, agents or their employees, or the other Member Agencies and their officers, contractors, agents, and employees, caused by, or alleged to have been caused by, any acts prior to the Transfer Date. 6. Shared Expenses. All claims costs and expenses shall continue to be paid out of each Member Agency’s existing reserve balances. In accordance with the JPA, the operational costs of the Cities Group shall, until the Transfer Date, continue to be apportioned to each Member Agency based on the proportional share of assessments for the provision of benefits. Upon the Transfer Date, all operational expenses incurred by the Cities Group shall be shared equally among the Member Agencies (“Shared Expenses”), except for those expenses attributable directly to a Member Agency or subset of the Member Agencies. 7. Final Accounting and Equity Balancing. After the Transfer Date, the Board of Directors shall commission studies necessary to substantiate an accurate final accounting of each Member Agency’s respective equity in or deficit to the Cities Group as of the Transfer Date. The costs associated with such studies shall be a Shared Expense of the Group. At the discretion of the Board of Directors, these studies will likely include an audit that examines: historical claims data; deposits and withdrawals; assessments paid by the Member Agencies; correspondence to the Member Agencies related to deposits and withdrawals; an d compliance with standard budget and accounting practices, the JPA, the Bylaws, and actions of the Board of Directors. Upon the conclusion of those studies, a final accounting shall be conducted to identify the fund balances of each respective Member Agency as of the Transfer Date Should it be determined that the sum of a Member Agency’s fund balance(s) is less than zero, that Member Agency shall, within 30 days of the final accounting, pay the Group the amount necessary to bring its equity in the Group to zero. The Member Agency may, however, elect to pay only $50,000 149 within 30 days if it is determined that the Member Agency must pay in excess of that amount to bring its equity in the Group to zero. If a Member Agency makes this election, it shall pay an additional $20,000 each subsequent month until its equity in the Group is zero. If the amount required to bring the Member Agency’s equity to zero has not been fully paid by August 1, 2026, the Member Agency shall pay the balance of that amount on that date. Any such Member Agency shall also be regularly assessed to cover its portion of the Shared Expenses through the dissolution of the Group. If it is determined that a Member Agency’s fund balance(s) cause that Member Agency to have positive equity in the Group, the Member Agency shall be reimbursed an amount calculated to bring its equity to zero, less any Shared Expenses paid from the remaining fund balance(s), which shall be identified in the Ending Resolution and paid immediately thereafter. Should the Shared Expenses attributed to a Member Agency ever exceed the Member Agency’s equity in the Group, that Member Agency shall be regularly assessed to cover its portion of the Shared Expenses through the dissolution of the Group. 8. Executive Management. The Cities Group has no employees. Management of the Cities Group is currently provided on a contractual basis by Chrisman and Associates, with its principal, Paul Chrisman (“Chrisman”), serving as the Executive Director of the Cities Group. Chrisman shall continue to serve as the Executive Director beyond the Transfer Date unless and until the Board determines that such service is no longer necessary. As a means of reducing the cost of winding down the affairs of the Cities Group, the Board is authorized and expected to negotiate an amendment to the agreement with Chrisman and Associates to allow Chrisman to continue performing limited administrative functions on an hourly basis. At such time that the Board of Directors determines that the remaining obligations of the Cities Group are de minimis – meaning that the day-to-day operations of the Group have ceased – the Board may authorize the Board President or other Board member to act as the Executive Director of the Cities Group in lieu of retaining Chrisman or other contracted Executive Director. In such case, the Board of Directors shall also appoint the finance director, administrative services director, or similar employee of one of the Member Agencies to manage the finances of the Cities Group and support the Executive Director in performing administrative functions. The Board President or any Board member serving as Executive Director shall not be compensated or reimbursed for time dedicated to serving as Executive Director. However, any costs incurred by the Member Agency whose employee is appointed to manage the finances of and support the administrative functions of the Cities Group, 150 including the cost of the employee’s time, shall be reimbursed to that Member Agency and paid as a Shared Expense. Nothing in this section shall preclude the Board, in its discretion, from retaining outside contractors or consultants to perform the executive and administrative functions of the Group in the event that such need arises and none of the Member Agencies and/or Board members agree to perform those functions. Any cost associated with retaining those contractors or consu ltants shall be Shared Expenses. 9. Board and Board President. Each Member Agency shall appoint one Board member, who shall serve until that person is no longer a representative of the Member Agency and/or the Member Agency has appointed a new Board member. Each year in January, the Board will nominate and vote to select a Board President that shall serve in that role until a new President is selected the following January. If the President vacates their position, the Board shall meet within two weeks of the vacancy and appoint a new Board member as President for the remainder of the current term. 10. Regular Board Meetings. After the Transfer Date, the Board shall meet no less than four times a year to review the status of the outstanding obligations of the Cities Group and take other actions necessary to resolve those obligations. 11. Resolving Obligations and Liabilities. The Board of Directors shall take all actions necessary, in its discretion, to resolve all obligations and liabilities of the Group. Those acts may include, but are not necessarily limited to, executing and/or canceling contracts; authorizing the submission of claims and/or the initiation of litigation; and accepting, denying, defending against, and/or settling claims brought against the Group, including litigated claims. 12. Records Retention. Upon the transfer of all claim files to the respective Member Agencies or their identified claims administrators, the Cities Group shall have no further obligation to retain those records. The Cities Group shall retain all of its other records for statutorily required periods. At such time that the executive and administrative functions of the Group are no longer performed by Chrisman and Associates, the Board shall select at least one Member Agency to receive and retain the business and public records of the Cities Group for the statutorily required periods, even if those periods extend beyond the dissolution of the Cities Group. The Board shall review and approve an itemization of the records that are to be purged by Chrisman and Associates rather than transferred to one or more of the Member Agencies. 13. Ending Resolution. Upon finding that all obligations of the Cities Group have been resolved, the Board of Directors shall approve the Ending Resolution by 151 unanimous vote. Upon the approval of the Ending Resolution, the Cities Group shall be considered dissolved. 14. Mutual Waiver. As of the date that the Ending Resolution is adopted, each Member Agency waives all claims against the Cities Group and against one another with respect to the operation or governance of the Cities Group. The Councils of each of the Member Agencies have authorized, by adopted resolutions, the dissolution of the Cities Group pursuant to the terms of this Dissolution Agreement. The signatories below have each been authorized to bind their respective Member Agencies by executing this Dissolution Agreement on their behalf. _______________________________Dated:________________________________ Town of Atherton _______________________________Dated:________________________________ City of Dublin ________________________________Dated:________________________________ Town of Hillsborough ________________________________Dated:________________________________ City of Half Moon Bay ________________________________Dated:________________________________ City of San Carlos 152 Attachment 3 Exhibt B to Resolution 153 154 155 Action Sep-25 Oct-25 Nov-25 Dec-25 Jan-26 Feb-26 Mar-26 Apr-26 May-26 Jun-26 Jul-26 Aug-26 Sep-26 Oct-26 Nov-26 Dec-26 Board Recommends Dissolution Agreement (9/9/2025 Board Meeting) Member Agencies Approve Dissolution Plan (Council meetings through October 2025) Transition of claims files to new administrators (Deadline 12/31/2025) Cities Group stops handling claims and benefits Board of Directors Retains Consultant(s) to conduct costs studies Cost studies Conducted Equity balancing (must be balanced by August 1, 2026) Adopt repayment schedule for Foster City funds (must be complete by July 1, 2026) Identify Member Agency to retain records and transfer records Close out contract with Chrisman & Associates Adopt ending resolution and make closeout filings with State Payout Remaining Equity to Member Agencies (and payment to Foster City) Resolution of Cost Disputes (Unknown timeline) Attachment 4 156 A JOINT POWERS AGREEMENT AMONG Those public agencies signatory to this agreement for the purpose of establishing, operating and maintaining a Self-Insurance Program for Workers' Compensation. WHEREAS, this agreement is entered into pursuant to the pro~isions of Title 1, Division 7, Chapter 5, Article 1 (Section 6500, et seq.) of the California Government Code, relating to joint exercise of powers between the public agencies signatory hereto (and also those which may hereafter become signatory hereto) for the purpose of operating a program to be known and designated as THE SAN MATEO COUNTY CITIES INSURANCE GROUP hereinafter designated as the Group; and WHEREAS, it is to the mutual benefit of the parties herein subscribed and in the best public interest of said parties to join together to establish this Joint Powers Agreement to accomplish the purposes hereinafter set forth; and WHEREAS, the development, organization and implementation of such a program is of such magnitude that it is desirable for aforesaid parties to join together in this Joint Powers Agreement in order to accomplish the purposes hereinafter set forth; and WHEREAS, the signatories hereto have determined that there is a need by public agencies for a self-insurance system for Workers' Compensation; and WHEREAS, a feasibility study has been conducted which does recommend that the public agencies agree to self-insure under a Joint Powers Agree­ ment that provides that the cost will be apportioned by losses and administrative expense as determined by the Governing Board; and Attachment 5 157 ......... ·.·.··.·····.•-···-•···'·'--'····'-'·"'·""·"'"•'-'"'•""'·",.,.,,., •. •,•·•••·••,•·•••·•••••• ·············································-····· . ."s.··,•·,,..1.,,,,, •• , •••• ,,.,, WHEREAS, Title 1, Division 7, Chapter 5, of the Government Code of the State of California authorizes the joint exercise by two or more public agencies of any power conman to them; and WHEREAS, it is the desire of the signatories hereto to jointly provide for a Self-Insurance System for Workers' Compensation for their mutual advantage and concern; NOW, THEREFORE, FOR AND IN CONSIDERATION OF THE MUTUAL ADVANTAGES TO BE DERIVED THEREFROM, AND IN CONSIDERATION OF THE EXECUTION OF THIS AGREEMENT BY OTHER PUBLIC AGENCIES AS DEFINED, EACH OF THE PARTIES HERETO DOES HEREBY AGREE AS FOLLOWS: 1. CREATION OF THE SAN MATEO COUNTY CITIES INSURANCE GROUP -Pursuant to Section 6500 of Title 1, Division 7, Chapter 5, of the Government Code, there is hereby created a public entity, separate and apart from the parties hereto, to be known as the San Mateo County Cities Insurance Group, hereinafter designated as the Group. The debts, liabilities, or obligations of the Group do not constitute debts, liabilities or obligations of any party to this agreement. The Group shall have the powers conman to public agencies set forth in Section 1 of this agreement, and is hereby authorized to do all acts necessary for the exercise of said common powers, including, but not limited to, any or all of the following: to make and enter into contracts; to incur debts, liabilities or obligations which shall not constitute debts, liabilities or obligations to any party to this agreement; to acquire, hold or dispose of property; to receive gifts, contributions and donations of property, funds, services and other forms of assist­ ance from persons, firms, corporations and any governmental entity; and to sue and be sued in its own name. Said powers shall be exercised in the manner provided in the law, and except as expressly set forth herein, subject only to such restrictions upon the manner of exercising such powers as are imposed upon public agencies in the exercise of similar powers. -2-158 2. PURPOSE -The purpose of the Group shall be to provide to the members the capabilities of self-insurance, pooling, and joint purchases of insurance; establishment and maintenance of a fund to pay self-insured losses; establishment and maintenance of a fund to pay for desired insurance coverages; claims adjustment and administration, safety engineering, and other risk management services; and to provide a self-insurance plan and system for Workers 1 Compensation claims against members and as such, to perform, or contract for the performance of, the financial administration, policy formulation, claim service, legal representation, safety engineering, and other development as necessary for the payment and handling of all Workers' Compensation claims against members as required by State law, and be required to purchase and maintain a policy of excess insurance, said Fund being used to pay the deductible portion thereof. Said payment and handling for any member shall be for all Workers' Compensation claims filed under the laws of the State of California arising out of facts occurring during the period of membership in the Group. The Group shall not pay or handle for a member any Workers' Compensa­ tion claims which arise out of facts occurring before membership commences or after membership terminates. 3. MEMBERSHIP -Each party to this agreement must be eligible for member­ ship as defined in the Bylaws, and becomes a member on the effective date of this agreement, and is entitled to the rights and privileges, and is subject to the obligations of membership, all as are provided in this agreement. Public agencies desiring membership after initial operation has begun shall apply under the pro­ visions of the Bylaws. 4. WITHDRAWAL -Any member, having completed three (3) years as a party to this agreement, may withdraw as a party at the end of any fiscal year provided however that such withdrawing party has provided prior written notice of its intention to withdraw to the Board of Directors of the Group no later than March 1 prior to the fiscal year of withdrawal. The fiscal year of the parties -3- 159 to this agreement commences on the first day of July and terminates on the 30th day of June. Refunds of the unencumbered portion of the reserve fund contributed by a withdrawing member may be made on an incremental schedule as determined by the Board. Said schedule shall commence no sooner than five years following the date of withdrawal and be completed no later than ten years from the withdrawal date. The Group shall remain responsible only for those claims of withdrawing members which were incurred while a member of the Group. 5. DISSOLUTION OF THE GROUP -At any time the activities of the Group may be suspended or discontinued upon the consent of all the parties hereto. However, the Group shall continue to be responsible for all existing assets and liabilities. No assets may be divided or returned until all outstanding obliga­ tions of the Group have been resolved or a paid-up contract has been enacted which will remove any further obligation from the Group. Said contract may provide for the members to accept responsibility for any outstanding claims. Disposition of assets will be made in proportion to the contributions of the then participating public agencies. 6. BYLAWS -The Group shall be governed pursuant to those certain Bylaws, a copy of which is attached hereto as 11 Exhibit A11 , and by this reference made a part of this agreement as if fully set forth herein. Wherever in this agreement the Bylaws are referred to, said Bylaws shall be those set forth in Exhibit A. Each party to this agreement agrees to comply with and be bound by the provisions of said Bylaws, and further agrees that the Group shall be operated pursuant to this agreement and said Bylaws. A two-thirds vote of those entitled to vote shall be sufficient to amend the Bylaws, provided that a quorum is present. 7. GOVERNING BOARD -The Group shall be governed by a board composed of one person appointed by each member agency. Each such agency shall also appoint one alternate. The alternate appointed by an agency shall have the authority to attend, participate in, and vote at any meeting of the Board when the regular member for whom he is an alternate is absent from said meeting. Each member or -4-160 alternate of the Board shall serve at the pleasure of the agency by which he has been appointed. The successor in office of any member of the Board or alternate shall be appointed by the agency which appointed the predecessor of such member of the Board or alternate. Each member agency shall have one vote. A vote of the majority of those entitled to vote shall be sufficient to constitute action, provided that a quorum is present except as otherwise provided herein. 8. AFFIRMATIVE ACTION POLICY STATEMENT -It is the permanent and voluntary policy of this Board to practice fair and impartial employment, recognizing applicants and employees on the basis of personal and professional merit, thereby reaffirming the dignity o_f individuals without regard to race, color, creed, national origin, ancestry, age, sex, or physical handicap in every aspect of personnel policies, practices, and treatment of personnel. 9. POWERS OF THE BOARD OF DIRECTORS -The Board shall be responsible for the ongoing operations of the Group and is hereby empowered to implement and enforce these Bylaws and such other rules, regulations and procedures as the Board shall adopt. The Board shall study and determine the best method of processing Workers' Compensation claims, and whether claim administration should be contracted for or provided for by staff. The Board shall be empowered to determine contribution rates annually as provided in the Bylaws and the method by which contributions will be paid to the Self-Insurance Fund. The Board shall also be empowered to provide for additional assessments during the year, if necessary, to allow for increased cost due to changes in the law or excessive claim costs. The Board shall insure that a complete and accurate system of accounting of the fund shall be maintained at all times consistent with established accounting procedures. The Board shall determine the manner in which Workers' Compensation claims shall be processed. Such processing shall conform to all provisions of law now in effect or later enacted. -5-161 10. ADDITIONAL PARTIES -Additional parties to this agreement may be added as provided in the Bylaws. UPON EXECUTION BY ALL OF THE OFFICIALS DESIGNATED IN THE FOLLOWING, THIS AGREEMENT SHALL BECOME EFFECTIVE ON OCTOBER 5, 1978 AND SHALL CONTINUE UNTIL TERM INA TED AS HEREIN PROVIDED. INSURANCE PROTECTION UNDER THIS AGREEMENT SHALL COMMENCE EFFECTIVE 12:01 A.M. JANUARY l, 1979. -6- ~s•?~$ Mr. Melvin A?i1eo, Mayor City of Half Moon Bay I b-~ ,,,.~-,,,, ~ ~·· .// .,. .. :~·~r./ 1/?l .~c~<-"'--Y~ Mr. Robert Davidson, City Manager Town of Hillsborough 162 AGREEMENT AMENDING THE JOINT POWERS AGREEMENT CREATING A SELF-INSURANCE PROGRAM FOR WORKERS' COMPENSATION CALLED THE SAN MATEO COUNTY CITIES INSURANCE GROUP. It is hereby agreed by the undersigned cities that the Joint Powers Agreement creating The San Mateo County Cities Insurance Group as executed on October 5, 1978, be amended as follows: Page six, lines five and six of said Joint Powers Agreement which read: "INSURANCE PROTECTION UNDER THIS AGREEMENT SHALL COMMENCE EFFECTIVE 12:01 A.M. JANUARY 1, 1979 11 shall be amended to read as follows: "INSURANCE PROTECTION UNDER THIS AGREEMENT SHAbl. COMMENCE EFFECTIVE 12:01 A.M. DECEMBER 30, 1978 11 • Date November 13!1 1978 . . ert, Mayor City of Foster City City of Half Moon ~ay u.??.~~,tS)~ Mr. Robert Davidson, City Manager Date Town of Hillsborough 163 AGREEMENT ADDING ADDITIONAL PARTY TO SAN MATEO COUNTY CITIES JOINT POWERS AGREEMENT THIS AGREEMENT is entered into pursuant to San Mateo County Cities Insurance Group By-Laws Section VI. By execution of this Agreement the City of San Carlos shall, and hereby does, become a party to that certain Joint Powers Agreement and By-Laws dated October 5, 1978 and Amended on November 20, 1978, and agrees to, and shall on and after May 1, 1989, be bound by all of the terms and conditions thereof. DATED: ~ -l '2.-g4 DATED: 'J -/ 'j.. -?1 CITY OF FOSTER CITY By~~~ CITY OF HALFj~OQN BAY By )/\,\.evls, .~ DATED: 1ol-s1/ar I , TOWN OF HILLSBOROUGH . Br~@_//~ DATED: :ili1fs1 I I 164 AGREEMENT AMENDING THE JOINT POWERS AGREEMENT CREATING THE SAN MATEO COUNTY CITIES INSURANCE GROUP It is hereby agreed by the undersigned that the Joint Powers Agreement creating the San Mateo County cities Insurance Group as executed on October 5, 197 8, and as amended from time to time thereafter, shall be further amended and shall provide as follows: 1. The Joint Powers Authority shall henceforth be known as the "Cities Group". All references in the Joint Powers Agreement and amendments thereto to "San Mateo County Ci ties. Insurance Group" shall henceforth refer to and be construed to mean the "Cities Group". 2. Page one, lines eighteen and nineteen shall be amended and henceforth provide: "WHEREAS, the signatories hereto have determined that there is a need by public entities for self­ insurance procedures and the purchase of insurance for the benefit of the parties hereto pertaining to employee benefit and liability programs of every kind and nature; and" 3. Page two, lines four, five, and six shall be amended and henceforth provide: "WHEREAS, it is the desire of the signatories hereto to jointly provide for self-insurance and insurance for employee benefit and liability programs of every kind and nature for their mutual benefit and advantage;" 4. Page three, lines one through seventeen shall be amended and henceforth provide: "PURPOSE -The purpose of the cities Group shall be to provide to its members the capabilities of self­ insurance, pooling, and joint purchases of insurance including but not limited to employee benefit programs of every kind and nature, as for example Workers' Compensation, long term disability, life, health, dental, vision, accidental death and dismemberment and retirement benefits. The Cities Group shall also have authority to provide general liability, property, auto liability, fidelity, crime and other insurance programs on a joint purchase or pooled self insurance basis. The Cities Group shall arrange establishment and maintenance of a fund to pay self-insured losses; establishment and maintenance of a fund to pay for desired insurance coverages; claims adjustment and administration, safety engineering, and other risk management services; and to provide a self-insurance plan and system for Workers' compensation and other benefit program claims against members and as such, to perform, or contract for the performance of, the financial administration, policy formulation, claim service, legal representation, safety engineering, and other development as necessary for the payment and handling of all employee benefit program claims against members, and be required to purchase and maintain a policy of excess insurance, said Fund being used to pay the deductible portion thereof. Said payment and -1- 165 handling for any· member shall 1:le for all employee l::lenefit or liability programs estahlished by the Cities Group's Board of Directors arising out of facts occurring during the period of membership in the cities Group. The cities Group shall not pay or·. handle for a member' s··employee benefit or liability program claim which arises cut of facts occurring before membership commences or after membership terminates. DATED: a~ /1_,, /'/tf2,, TOWN OF ATHERTON By:~f:-~ DATED: July 30, 1992 _;2/~lt;3 DATED: _ __.:.I_~/_'., __ _ CITY" OF' FOSTER CITY DATED: Juna 15. 1993 CITY OE' HALF MOON BAY By: ~~kJ~ ---------------- T0iili OF BILLSEOROOGE .....--;:::-__ _ DATED: __ JU_L_Y_1_3~,-·~19~9~2-CI~Y OF SAN CA.'tUtCS By:=:5 ~~· MAYOR -2- 166 Acrreement Amending The Joint l?owe.rs Agreement Creating the Cities G.rouo :rt is hereby agreed by the undersigned that the Joint Powers Agreement creating the Cities Group as e:~ecuted on October 5, 1978, and as amended from time to tL~e thereafter, shall be further •amended and shall provide as follows: 1. Page 3, Section 4. WITHDR.~WAL -P...ny member, having completed thre·e (3) years as a party to this agreement, may withdraw as a party at the end of any fiscal year provided however that such withdrawing party has a total. fund bal.a.nce in the Group exceed±:ng .its .liabi.lities val.ued on the .last day of its membership .in the ·'"same ratio as the remaining members in total, bu.t in no case :Less than 1. 5 : 1. Such w.ithdrawing party must provide aa.s 1=1re~,~:.dee prior written notice of its intention to withdraw to the Board of Directors o! the Group no later than Harah :.. th~ Janua._'7 l prior to the fisca.l year of withdrawal. The fiscal year of the parties to this agreement commences on the first day of July and tei;-minates on the 30th day of June .. Refunds of the unencumbered portion of the reserve fund contributed by a withdrawing member may be made on an incremental schedule as determined by the Board. Said schedule shall commence no sooner than five years following the date of withdrawal and be completed no later than ten years from the withdrawal date. The Group sh.all remain responsible only for those claims of withdrawing members which were incurred while a member of the Group. DATED: ~,pj' «S: I tr1 DP..TED :-4---~~P:-1-+-r­ ::'" .. ~ Jr/ct 7 DATED: __ lS--~1/ _____ _ TOWN OF ATEZR1'0N By )<,~,-'d QJ a: hJi~ CITY OF Et,,-/:wz ~'! Bt: .di&klfi!~-(~ CITY~F ,..,.:a~rn:: Bv: ~ .. (V CITY OF EAU" MOON BAY 167 B Y L A W S OF THE SAN MATEO COUNTY CITIES INSURANCE GROUP I OFFICERS OF THE BOARD OF DIRECTORS The Board shall elect a president, vice-president and secretary/ treasurer at its first meeting; and thereafter at the first meeting held in each succeeding calendar year, the Board shall elect or re-elect its president, vice-president and secretary/treasurer. In the event that the president, vice-president or secretary/ treasurer so elected ceases to be a member, the resulting vacancy shall be filled at the next regular meeting of the Board held after such vacancy occurs. In the absence or inability of the president to act, the vice-president shall act as president. The president, or in his absence the vice-president, shall preside at and conduct all meetings of the Board and of the Governing Board. II MEETINGS OF THE BOARD A. Regular Meetings The Board shall provide for its regular, adjourned regular, and special meetings as needed provided, however, that it shall hold at least one regular meeting in each calendar quarter. The dates upon which and the hour and place at which any regular meeting shall be held shall be fixed by resolution of the Board and a copy of such resolution shall be filed with each member agency. The place of the regular meetings shall be such public building or other place as may be designated by the Board. 168 B. Ralph M. Brown Act The Board shall adopt rules for conducting its meetings and other business. All meetings of the Board including without limitation regular, adjourned regular, and special meetings shall be called, noticed, held and conducted in accordance with the provisions of the Ralph M. Brown Act (comnencing with Section 54950 of the California Government Code). C. Minutes The secretary of the Board shall cause minutes of all meetings to be kept and shall, as soon as possible after each meeting, cause a copy of the minutes to be forwarded to each member of the Board and to each member agency. D. Quorum A majority of the members of the Board shall constitute a quorum for the transaction of business, except that less than a quorum may adjourn from time to time. III MEMBERSHIP Any City or Special District located within the political jurisdiction of San Mateo County is eligible to apply for membership; said membership shall be subject to the limitations contained in the Bylaws, including Section VI. IV ACCOUNTS AND RECORDS The Group shall establish and maintain such funds and accounts as may be required by good accounting practice or by any provision of law or -2- 169 any resolution of the Group. Books and records of the Group in the hands of the treasurer shall be open to inspection at all reasonable times by representatives of the parties. The Board, as soon as practical after the close of each fiscal year, shall give a complete written report of all financial activities for such fiscal year to each of the parties. The signature of two of the three officers shall be required to expend funds. The Group shall either make or contract with a Certified Public Accountant, or Public Accountant, to make an annual audit of the accounts and records of the Group. In each case, the minimum requirements of the audit shall be those prescribed by the State Controller for special districts under Section 26909 of the Government Code of the State of California and shall conform to generally accepted auditing standards. When such an audit of accounts and records if made by a Certified Public Accountant, or Public Account­ ant, a report thereof shall be filed as public record with each of the parties hereto, and also with the County Auditor of San Mateo. Such report shall be filed within twelve (12) months of the end of the fiscal year under examination. Any costs of the audit including contracts with or employment of Certified Public Accountants, or Public Accountants, in making an audit pursuant to this section, shall be borne by the Group and shall be a charge against any unencumbered funds of the Group available for this purpose. Additionally, the treasurer of the Group shall assume the duties described in California Govenment Code Section 6505.5 to wit: 1. Receive and receipt for all monies of the Group and place them 1n the separate bank account as designated -3-170 by the Board to the credit of the Group. 2. Be responsible upon his bond for the safe-keeping and disbursement of all Group money so held by him. 3. Pay, when due, out of money of the Group so held by him all sums payable by the Group. 4. Verify and report in writing on the first day of July, October, January, and April of each year to the Board and to the parties to this agreement the amount of money he holds for the Group, the amount of receipts since his last report, and the amount paid out since his last report. V LOSS RECORDS The Board shall maintain or cause to be maintained accurate loss records for all risks insured against, and all claims paid. Loss reports shall be forwarded to member agencies on, at least, a quarterly basis. VI ADDITIONAL PARTIES Any other public agency within the political jurisdiction of San Mateo County may become a party to this agreement upon execution of an agree­ ment between such public agency and the Group, the terms of which agreement shall be identical to the terms of this agreement. Any public agency desiring to join the Group shall submit a properly executed copy of the Joint Powers Agreement to the Board prior to March 1. A two-thirds vote of the Joint Powers Board shall be required for acceptance of such additional member. Such participation shall begin the following July l, unless the Board shall authorize another date. -4- 171 Such additional public agencies shall forthwith pay to the Group its current contribution as determined by the Board. Thereafter, such additional party shall be considered a party to the agreement to the same extent as all of the original parties and for all purposes. VII AMENDMENTS Amendments to these Bylaws may be proposed by the designated representa­ tive of any member agency. The proposed amendment shall be referred to the Board for its consideration. A copy of the proposed amendment, with the Board's recommendations and reasons therefore shall be forwarded to each member agency. The Bylaws may then be amended by written agree­ ment signed by all the parties to the Joint Powers Agreement. If two­ thirds of the parties to this agreement agree to an amendment, the other parties must also agree to said amendment, or they may be involun­ tarily terminated as parties to this agreement by using the procedure set forth in Section VIII of the Bylaws. VI II INVOLUNTARY TERMINATION Upon good cause being established, two-thirds of the Board shall vote for involuntary termination of a member agency. Such involuntary termination shall be effective at the end of that fiscal year, unless the Board specifies otherwise. IX ENFORCEMENT The Board is hereby given authorfty to enforce· this agreement. If suit 1s necessary therefore, a defaulting member shall pay reasonable attorney fees to the Group as adjudicated by the Court. -5- 172 X INVALIDITY Should any portion, tenn, condition, or provision of this agreement be determined by a court of competent jurisdiction to be illegal or in conflict with any law of the State of California, or be otherwise rendered unenforceable or ineffectual, the validity of the remaining portions, terms, conditions, and provisions shall not be affected thereby. XI FINANCE A. Each member agency shall pay to the Group each fiscal year the annual contribution calculated pursuant to Paragraphs Band C. For the first six months of operation beginning January 1, 1979, the sums appearing in the schedule below will be paid on January 1, 1979. In subsequent years, partial payments shall be made in advance based on an estimated annual cost calculated by the Board. Said partial payments shall be made in the first year or partial fiscal year as follows: Fifty percent (50%) in July or the first month of operation; Twenty-five percent {25%) in December or the middle month of operation; Twenty-five percent (25%) in March or three-quarters through the partial fiscal year, as determined by the Board. Partial payments for subsequent years shall be made in July, December and March at a percentage to be determined by the Board. -6- 173 --------~-, .. ,,,., ...... •••••••••--••••••••••••••••••••"••"•••••••••••••••~•'••••••••••••••••••••••••.'••••>•••••••••••••'"•'"~v•.•.-,•.•••••••• B. The member contribution schedule for the period of January 1, 1979 to June 30, 1979 shall be approximately*: City Amount Atherton $ 20,250 Brisbane 22,500 Foster City 60,000 Half Moon Bay 11,250 Hillsborough 30,000 The Joint Powers Authority shall have no responsibility to pay the State Fund premiums or other liabilities incurred by the member agencies before the effective date of the insurance under this agreement. C. The yearly premium paid to the Joint Powers Authority by the member agency for the two years following the initial one-half year shall be based upon a percentage of the manual premium according to the applicable WCIRB rate as determined by the Board of the Joint Powers Authority. Thereafter each member agency's premium may be modified by decision of the Board according to the loss experience of each member defined by the WCIRB rating plan. This loss experience mechanism shall operate to ensure that each mem~er returns over a period of time to the Joint Powers Authority the funds paid out on its behalf as paid losses. D. The Group shall operate on a fiscal year from July 1 to June 30. *To be adjusted according to actual payroll figures. -7- 174 E. Handling Funds The Group shall have the power, authority and duty to handle all aspects of Workers' Compensation claims against members arising out of facts occurring during membership in the Group. F. Contributions Without in any way limiting the powers otherwise provided for in this agreement or by statute, the Group shall have the power and authority to receive, accept, and utilize property, real or personal, from any member or its agents or representatives; to receive, hold, dispose of, to construct, operate and maintain buildings and other improvements; and to receive, accept, expend and disburse funds by contract or otherwise, for purposes consistent with the provisions of the Group, which funds may be provided by any member or their agents or representatives. G. Additional Income The Group shall accept and deposit monies from any of the following sources earned after the date of this agreement: 1. Interest Income 2, Refund of the Group's Excess Workers' Compensation Insurance Premiums 3. Workers' Compensation Subrogation Recoveries 4. Payments by the State of California under State Mandated Reimbursement for Workers• Compensation Legislation 5. Grants from any Agency or Private Company (provided that no conflict of interest is created) -8- 175 -~~---.... -....... -.. -................ · .... •.-.... , .... , .......... . H. Debts Should the projected expenses for a given year exceed the given assets of the pool for that year, each member shall be assessed by the Board an additional amount based upon the percentage of yearly premiums paid by each member relative to the total yearly premiums paid by all members. I. Disposition of Property and Funds In the event of the dissolution, complete rescission or other final termination of this agreement by all agencies then a party hereto, any property interest remaining in the Group following a discharge of all obligations, shall be returned to the current members. J. Operating Fund This fund shall be established and maintained out of the member contributions, and shall be for the purpose of paying for the following: 1. Insurance Premiums 2. Claims Management Expenses 3. Salaries of Administrators, if any 4. Safety Engineering 5. Data Processing Costs 6. Investigative Costs 7. Legal Costs 8. Miscellaneous -9- 176 K. Claim Fund This fund shall be established and maintained out of the member contributions, and shall be solely for the purpose of paying Workers' Compensation claims, except that the Board may authorize a transfer from this fund to the operating fund to cover unexpected expenses. The Claim Fund shall be the repository of the •11 reserves 11 to be used for future Workers' Compensation payments, averaging up to eleven (ll) years. L. The Group shall have authority to seek and recover subrogation monies wherever possible. Such monies shall be deposited in the Claim Fund. XII LIABILITIY Except as otherwise provided by individual contract, pursuant to the provisions of Section 895, et seq., of 'the Government Code of the State of California, each member of the Group shall be liable for its pro rata share of all debts and liabilities of the Group, and its pro rata share of all debts and liabilities for Workers' Compensation claims against members arising out of facts occurring while a member of the Group. To achieve such purpose, each member indemnifies and holds harmless the other members for any loss, cost or expense that may be imposed upon such member in excess of such pro rata liability. (The rules therefor, as set forth in Civil Code Section 2788 are hereby made a part of these Bylaws.) -10- 177 XIII EFFECTIVE DATE These Bylaws shall go into effect immediately upon the effective date of the Joint Powers Agreement. XIV INVESTING OF RESERVES (Claim Fund) The Board shall invest or cause to be invested such reserves as are not necessary for ilffllediate operation of the Claim Fund in such securities as are prudent and legal for public agencies. The level of cash to be retained in the Operating and Claim Funds shall be determined by the Governing Board. XV GLOSSARY Unless the context otherwise requires, the terms used herein shall have the following meanings: BOARD --shall mean the governing board of the Group. BROKER --shall mean the broker engaged by the Board for the purpose of acquiring an insurance policy. W.C.I.R.B. --shall mean Workers' Compensation Insurance Rating Bureau. CLAIM FUND --shall mean the fund established for the purpose of paying the cost of the deductible portion of Workers' Compensation claims. CLAIMS ADJUSTER --shall mean the claims adjuster engaged by the Board for the purpose of determining losses and payments with respect to the Claim Fund. CONTRIBUTION --shall mean money paid by a member agency to the Group in return for the handling of Workers' Compensation claims. EXPERIENCE MODIFICATION FACTOR·-shall mean a factor used in determining individual member contributions, derived from the claim activity of the member over the previous three years. -11- 178 GROUP --shall mean the San Mateo County Cities Insurance Group created by this agreement. LOSS REPORTS --shall mean a Report showing a member's Workers' Compensa­ tion claims in detail including current status. MEMBER --shall mean an individual member agency which belongs to the San Mateo County Cities Insurance Group. OPERATING FUND --shall mean the fund established by the Group for the purpose of paying insurance premiums and administrative and other costs. RESERVES --shall mean that part of the member's contribution held by the Group to make future Workers' Compensation payments. SELF-INSURANCE (Permissively Uninsured) --shall mean setting aside funds to pay for losses not covered by insurance. -12- 179 Amendment to the Cities Group By-Laws as enacted by unanimous Vote of the Board of Directors at its duly noticed meeting On June 28, 2000 VIII A. Involuntary Termination Upon the unanimous vote of all of the Board of Directors except the Director representing the member agency being terminated, a member agency may be involuntarily terminated. Upon the effective date of termination, the terminated member shall be subject to the following: 1. The terminated member shall assume full financial and administrative responsibilities for all pending and future claims against the Group or its programs which are in any way associated with the terminated member's past membership in the Group. 2. The terminated member's equity in the Group shall be reduced by all claim payments and other expenses as of the day termination becomes effective. If following the terminated member's assumption of all claim liabilities valued as of the effective day of termination the member's remaining equity is less than zero, the terminated member shall pay to the Group an amount sufficient to bring its total equity to zero. If the member's final equity is greater than zero, it shall be returned to the member in accordance with section 4. of the Joint Powers Agreement. VIII B. Agreed Termination Upon unanimous vote of the full Board of Directors, a member agency may be terminated by agreement. Such termination shall be conditioned upon the terminated member's duly authorized agreement to comply with the provisions of Sections VIII A. 1. and 2. hereof. In addition, the terminated member shall agree to indemnify, release from liability and hold harmless the Cities Group, its Directors, member agencies, officers, agents and their employees from liability for acts prior to the effective date of termination. In the case of either involuntary or agreed termination, the effective date will be July 1 of each year unless the Board specifies otherwise. 180 Amendment to the Ci ties Group Bylaws enacted by V:ne,,J'J1n?&!:!§Ote of the Board of Directors at its duly noticed meeting on /l/w. <? / 2004. 1. Section III is amended, and shall henceforth provide: Any City, Special District, or other public agency located within the State of California is eligible to apply for membership; said membership shall be subject to the limitations contained in the Bylaws, including Section VI. 2. The first paragraph of Section VI is amended, and shall henceforth provide: Town by: Any other City, Special District, or public agency within the State of California may become a party to this agreement upon execution of an agreement between such public agency and the Group, the terms of which agreement shall be identical to the terms of this agreement. of Atherton Wn~, Date: 0 Date: I I ' I Date: Date: I I City of San Carlos by, f2L Gwr, Date: 181 AGREEMENT ADDING ADDITIONAL PARTY TO CITIES GROUP JOINT POWERS AGREEMENT THIS AGREEMENT is entered into pursuant to the Cities Groq.p By-Laws Section VI. By execution of this Agreement the City of Dublin shall, and hereby does, become a Party to that certain Joint Powers Agreement and By-Laws dated October 5, 1978 and Amended November 20, 1978, May 1, 1989, July 1, 1993 and June 30, 1997, and agrees to, and shall on and after January 1, 2005, be bound by all of the terms and conditions thereof. Town of Atherton By tjtrulildtf City of Half Moon Bay By clllw rYjxnv Town of Hillsborough By4fadl ~ City of San Carlos By /{J,ri..., 8w ,k 1 / ~ City of Dublin e;-,~c.~ l/1 y.-ocl Date _____ ..... f..----- Date __ /_1_/2_t+-/_z_£_.v----'-·cj_._· , l Date~/~1-+-/~R-'---,)~(l'--L-+-{ __ I I I Date _1_,_1/ __ 1(_o ____ y_· ---- Date ___ 1 .... 0 ...... /'-','--'e=----/....c..o_Y~-- 182