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THIRD AMENDMENT TO
LIABILITY RISK COVERAGE AGREEMENT
THIS THIRD AMENDMENT TO LIABILITY RISK COVERAGE AGREEMENT dated
for reference purposes as of November 1, 2003 (this "Third Amendment"), by and among the BIG
INDEPENDENT CITIES EXCESS POOL JOiNT POWERS AUTHORITY, a joint exercise of
powers agency duly organized and existing under the laws of the State of California (the "State"),
including, without limitation, Section 6500 et seq. of the Government Code of the State (the
"Authority"), and the CITY OF HUNTINGTON BEACH ("Huntington Beach"), the CITY OF
OXNARD ("Oxnard"), the CITY OF SAN BERNARD1NO ("San Bernardino"), the CITY OF
SANTA ANA ("Santa Ana"), and the CITY OF WEST COV1NA ("West Covina''), each a
municipal corporation duly organized and existing under the Constitution and taws of the State,
amends the Liability Risk Coverage Agreement dated as of October 1, 1988 (the "Original
Agreement"), by and among the Authority and Huntington Beach, Oxnard, San Bemardino, Santa
Ana, and the CITY OF POMONA ("Pomona"), a municipal corporation duly organized and
existing under the Constitution and laws of the State, as mnended by the First Amendment to
Liability Risk Coverage Agreement dated as of December 1, 1988 (the "First Amendment"), by
and among the Authority and Huntington Beach, Oxnard, San Bernardino, Santa Ana, and Pomona,
and by Resolution No. 95-1, adopted by the Board of Directors of the Authority on November 25,
1995 (the "Second Amendment") (the Original Agreement, as amended by the First Amendment
and the Second Amendment, is referred to herein as the "Agreement"). All capitalized terms used
but not defined herein shall have the respective meanings assigned to such terms in the Agreement.
RECITALS:
WHEREAS, Pomona has been expelled from Coverage as a Participant under the
Agreement, effective as of August 18, 2003; and
WHEREAS, West Covina, a municipal corporation having a population of at least 100,000,
has delivered to the Authority an application to be admitted as a new Participant under the
Agreement; and
WHEREAS, Section 6.1 of the Agreement sets forth the conditions under which the
Authority may admit and provide Coverage to a new Participant that is not currently a Participant
under the Agreement; and
WHEREAS, in connection with the admission of West Covina as a new Participant, certain
provisions of the Agreement and the Exhibits thereto are required to be amended, supplemented, or
waived, as applicable; and
WHEREAS, Section 9.3 of the Agreement sets forth the conditions under which and the
procedures pursuant to which the Agreement may be amended; and
WHEREAS, each of the Authority, Huntington Beach, Oxnard, San Bemardino, Santa Ana,
and West Covina desire to amend the Agreement in accordance with Section 9.3 and waive certain
other provisions of the Agreement, all as further set forth herein;
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NOW, THEREFORE, in consideration of the premises and of the mutual covenants
contained herein and for other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties hereto agree at follows:
1. Amendment of Exhibits. The Agreement is hereby amended by adding the
following Exhibits in substitution for the corresponding Exhibits attached to the Agreement:
Exlfibit A: Schedule of Basic Premium Payments
Exhibit B: Allocable Proportion for each Participant
Exhibit I: Notice Addresses
2. Adnfission of West Covina as a New Participant. West Covina is hereby admitted as
a Participant, effective as of the Effective Date (as defined in Section 5 hereof); provided, however,
that the Authority shall provide Coverage to West Covina, effective retroactively as of July 1, 2003.
In connection with the foregoing:
(a) Solely in connection with the admission of West Covina as a Participant, each of the
Authority, Huntington Beach, Oxnard, San Bemardino, and Santa Ana hereby (i) waives the
provisions of subsection (a) of Section 6.1 of the Agreement pertaining to the date by which West
Covina is required to have become a member of the Authority and (ii) agrees that, notwithstanding
such subsection (a), such membership shall instead be effective on or before the Effective Date.
(b) Solely in connection with the admission of West Covina as a Participant, each of the
Authority, Huntington Beach, Oxnard, San Bemardino, and Santa Ana hereby (i) waives the
provisions of subsection (b) of Section 6.1 of the' Agreement pertaining to the date by which West
Covina is required to have provided to the Authority a completed application for admission and
(ii) agrees that, notwithstanding such subsection (b), such application shall instead be provided on
or before the Effective Date.
(c) Solely in connection with the admission of West Covina as a Participant, each of the
Authority, Huntington Be/tch, Oxnard, San Bemardino, and Santa Ana hereby (i) waives the
provisions of subsection (c) of Section 6.1 of the Agreement pertaining to the date by which West
Covina is required to have approved an amendment to the Agreement pursuant to which West
Covina shall become subject to all of the terms thereof as a Participant and (ii) agrees that,
notwithstanding such subsection (c), such approval by West Covina may instead be provided on
any date on or prior to the Effective Date.
(d) Solely in connection with the admission of West Covina as a Participant, each of the
Authority, Huntington Beach, Oxnard, San Bemardino, and Santa Ana hereby (i) waives the
provisions of subsection (d) of Section 6.1 of the Agreement pertaining to the first date of the
Coverage Period for West Covina and (ii) agrees that, notwithstanding such subsection (d), such
Coverage Period shall instead commence retroactively as of July 1, 2003.
(e) Solely in connection with the admission of West Covina as a Participant, each of the
Authority, Huntington Beach, Oxnard, San Bemardino, and Santa Ana hereby (i) waives the
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provisions of subsection (e) of Section 6.1 of the Agreement pertaining to the date by which the
Authority's Governing Board shall have approved the admissi6n of West Covina as a Participant
and (ii) agrees that, notwithstanding such subsection (e), such approval by the Authority's
Governing Board may instead be provided on any date on or prior to the Effective Date.
3. Selected Premium Payments Payable by West Covina. In connection with its
admission as a new participant, West Covina shall be liable for the payment of 8.61% of the total
Administrative Premium and 8.61% of the total Pure Premium payable on the Basic Premium
Payment Date with respect to fiscal year 2003-04. West Covina shall be liable for the payment of a
portion of the total Administrative Premium and the total Pure Premium in future fiscal years, and
shall be assessed, credited, or refunded Pure Premium Adjustments, in accordance with and as
provided in the Agreement or other procedures or policies of the Authority.
West Covina and each of the other Participants shall be deemed to have an Allocable
Proportion for purposes of determining amounts to be allocated or distributed pursuant to Article V
of the Agreement. Each Participant's (including West Covina's) Allocable Proportion for such
purposes shall be the average of the Pure Premium Proportion determined by the Actuary for each
Participant for each Coverage Period that such Participant received Coverage under the Agreement.
follows:
Notices. Section 12.1 of the Agreement is hereby amended in its entirety to read as
Notices. All approvals, authorizations, consents, demands, designations, notices,
offers, requests, statements, or other communications hereunder (each, a "Notice")
from any party hereto to any other party shall be in writing and shall be deemed
sufficiently given and served upon the other party, if delivered via hand delivery, as
of the date and time of receipt of such delivery, or, if mailed, three days after deposit
in the United States mail as first-class mail, postage prepaid, at the addresses set
forth in Exhibit I hereto. Each party, by Notice given hereunder, may designate an
address to which subsequent Notices shall be sent.
5. Effective Date of this Third Amendment. Notwithstanding the first sentence of the
penultimate paragraph of Section 9.3 of the Agreement, this Third Amendment shall become
effective immediately at~er the last to occur of the following (the "Effective Date"): (i) each of
Huntington Beach, Oxnard, San Bemardino, Santa Ana, and West Covina, and all members of the
Governing Board of the Authority have approved and consented to the form and execution of this
Third Amendment, (ii) this Third Amendment has been executed and delivered by all of the parties
hereto, (iii) counsel for each of Huntington Beach, Oxnard, San Bemardino, Santa gna, and West
Covina has delivered an opinion substantially in the form of Appendix I attached hereto,
(iv) counsel for the Authority has delivered an opinion substantially in the form of Appendix II
attached hereto, (v) all of the conditions set forth in Section 6.1 of the Agreement, as amended or
waived, as applicable, by this Third Amendment, have been satisfied; (vi) Bond Counsel has
delivered an opinion in form and substance as required under Section 9.3 of the Agreement, (vii) an
Actuary has delivered a certificate in form and substance as required under Section 9.3 of the
Agreement, and (viii) West Covina shall have become a member of the Authority.
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6. Costs and Expenses. In accordance with the last sentence of the penultimate
paragraph of Section 9.3 of the Agreement, all costs, fees, and expenses incurred in connection with
this Third Amendment shall be borne pro rata by Huntington Beach, Oxnard, San Bernardino,
Santa Ana, and West Covina.
7. Incorporation of Terms; Reaffirmation of Agreement. From and after the Effective
Date, (a) all references to the "Agreement" shall mean and include the Original Agreement, as
amended by the First Amendment, the Second Amendment, and this Third Amendment, and (b) all
references to "Participant" or "Participants" shall mean and include each or all, as applicable, of
Huntington Beach, Oxnard, San Bernardino, Santa Ana, and West Covina. Each of the Authority,
Huntington Beach, Oxnard, San Bemardino, Santa Aha, and West Covina hereby reaffirms each of
the provisions of the Agreement and confirms that, as so amended, the Agreement is and remains in
full force and effect for the term thereof and is binding upon the parties hereto and their respective
successors or assigns (but only to the extent, if any, permitted under the Agreement).
8. Resolution of Conflicting Provisions. If any terms of this Third Amendment
conflict with terms of the Agreement that have not been explicitly amended or waived by this Third
Amendment, the tern~s of this Third Panendment shall control and the applicable terms of the
Agreement shall be deemed to have been amended or waived to conform to the terms hereof.
9. Severabilit¥. In the event any provision of this Third Amendment shall be held
invalid or unenforceable by any court of competent jurisdiction, such holding 5hall not invalidate or
render unenforceable any other provision hereof.
10. Applicable Law. This Third Amench~ent shall be governed by and construed solely
in accordance with the laws of the State of California.
11. Captions. The captions or headings in this Third Amendment are for convenience
only and in no way define, limit, or describe the scope or intent of any terms, provisions, or sections
of this Third Amendment.
12. Execution in Counterparts. This Third Amendment may be executed in several
counterparts, each of which shall be deemed an original, and all of which shall constitute but one
and the same instrument.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
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1N WITNESS WHEREOF, the undersigned have caused this Third Amendment to be
executed as of the date first written above, to be effective on and after the Effective Date.
APPROVED AS TO FORM:
By:
APPROVED AS TO FORM:
By:
APPROVED AS TO FORM:
By:
APPROVED AS TO FORM:
By:
ATTEST:
BIG INDEPENDENT CITIES EXCESS POOL
JOINT POWERS AUTHORITY
By:
CITY OF HUNTINGTON BEACH
By:
CITY OF OXNARD
By:
CITY OF SAN BERNARDINO
By:
CITY OF SANTA ANA
By: Davi~~..~
Clerk of the Council
AP 01~ )AS TO FORM:
~/~;'~/~ttomey
APPROVED AS TO FORM:
By:
City Manager
CITY OF WEST COVINA
By:
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APPENDIX I
FORM OF OPINION OF CITY ATTORNEY
[LETTERHEAD OF CITY ATTORNEY]
Big Independent Cities Excess Pool Joint Powers Authority
c/o Ken Spiker and Associates, Inc.
1100 South Flower Street, Suite 2100
Los 2M~geles, CA 90015-2115
Pillsbury Winthrop LLP
10100 Santa Monica Boulevard, 23rd Floor
Los Angeles, CA 90067
Re: Third Amendment to Liability Risk Coverage Agreement
Ladies and Gentlemen:
I am City Attorney for the City of (the "Citf'). This opinion is provided
pursuant to Section 5 of that certain Third Amendment to Liability Risk Coverage Agreement,
dated as of November 1, 2003 (the "Third Amendment"), by and among the Big Independent
Cities Excess Pool Joint Powers Authority, the City of Huntington Beach, the City of Oxnard, the
City of San Bemardino, the City of Santa Ana, and the City of West Covina. Capitalized terms
used herein and not otherwise defined shall have the meanings ascribed to them in the Third
Amendment.
(1) The City is duly organized and validly existing as a [charter/general law]
city under and by virtue of the laws of the State of California.
(2) The resolution adopted by the City Council of the City (the "City Council")
approving the execution and delivery of the Third Amendment was duly adopted at a meeting of
the City Council that was,called and held pursuant to law and with all public notice required by law
and at which a quorum was present and acting throughout; and such resolution is in full force and
effect and has not been modified, amended, or rescinded as of the date hereof.
(4) The City has full right and lawful authority to execute and deliver the Third
Amendment; the Third Amendment has been duly authorized, executed, and delivered by the City;
mad the Third Amendment is the legal, valid, and binding obligation of the City enforceable in
accordance with its terms, except as such enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium, and other similar laws relating to or limiting creditors' fights
generally and by the principles of equity if equitable remedies are sought.
(5) The execution and delivery of the Third Amendment and compliance by the
City with the provisions thereof, under the circumstances contemplated thereby, does not and will
not in any material respect conflict with or constitute on the part of the City a breach of or default
under any agreement or other instrument applicable to or binding upon the City, or any existing
law, regulation, court order, or consent decree to which the City is subject.
Third Amendment to LRCA.DOC
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(6) There is no action, suit, proceeding, or investigation before or by any court,
public board, or body pending with respect to which the City has been served with process or, to
my knowledge, threatened, wherein an unfavorable decision, ruling, or finding would: (a) affect
the creation, organization, existence, or powers of the City or the titles of their respective officers
or the City Council members to their respective offices; (b) in any way question or affect the
validity or enforceability of the Third Amendment; or (c) in any way question or affect the
transactions contemplated by the Third Amendment.
Respectfully submitted,
Third Amendment to I-RCA.DOC
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APPENDIX II
FORM OF OPINION OF AUTHORITY COUNSEL
City of Huntington Beach
2000 Main Street
Huntington Beach, CA 92648
[LETTERHEAD OF COUNSEL]
] City of Oxnard
305 West Th/rd Street
Oxnard, CA 93030
City of San Bemardino City of Santa Aha
300 North "D" Street 20 Civic Center Plaza
San Bemardino, CA 92418 Santa Aha, CA 92701
City of West Covina Pillsbury Winthrop LLP
1444 West Garvey Avenue 10100 Santa Monica Boulevard, 23rd Floor
West Covina, CA 91790 Los Angeles, CA 90067
Re: Third Amendment to Liability Risk Coverage Agreement
Ladies and Gentlemen:
I am special counsel to the Big Independent Cities Excess Pool Joint Powers
Authority (the "Authority"). This opinion is provided pursuant to Section 5 of that certain Third
Amendment to Liabil/ty Risk Coverage Agreement, dated as of November 1, 2003 (the "Third
Amendment"), by and among the Authority, the City of Huntington Beach, the City of Oxnard, the
City of San Bemardino, the City of Santa Ana, and the City of West Covina. Capitalized terms
used herein and not otherwise defined shall have the meanings ascribed to them in the Third
Amendment.
(I) The Authority is a joint exercise of powers agency duly organized and
existing under the laws of the State of California, including, without limitation, Section 6500 et
seq. of the Government Code of the State of California.
(2) The resolution adopted by the Governing Board of the Authority (the
"Governing Board") approving the execution and delivery of the Third Amendment was duly
adopted at a meeting of the Governing Board that was called and held pursuant to law and with all
public notice required by law and at wh/ch a quorum was present and acting throughout; and such
resolution is in full force and effect and has not been modified, amended, or rescinded as of the
date hereof.
(4) The Authority has full right and lawful authority to execute and deliver the
Third Amendment; the Third Amendment has been duly author/zed, executed, and delivered by
the Authority; and the Third Amendment is the legal, valid, and binding obligation of the
Authority enfomeable in accordance with its terms, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium, and other similar laws relating to or limiting
creditors' fights generally and by the principles of equity if equitable remedies are sought.
T~ird Amendn~t to LRCA.DOC
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(5) The execution and delivery of the Third Amendment and compliance by the
Authority with the provisions thereof, under the circumstances contemplated thereby, does not and
will not in any material respect conflict with or constitute on the part of the Authority a breach of
or default under any agreement or other instrument applicable to or binding upon the Authority, or
any existing law, regulation, court order, or consent decree to which the Authority is subject.
(6) There is no action, suit, proceeding, or investigation before or by any court,
public board, or body pending with respect to which the Authority has been served w/th process or,
to my knowledge, threatened, wherein an unfavorable decision, ruling, or finding would: (a) affect
the creation, organization, existence, or powers of the Authority or the titles of their respective
officers or the Governing Board members to their respective offices; (b) in any way question or
affect the validity or enforceability of the Third Amendment; or (c) in any way question or affect
the transactions contemplated by the Third Amendment.
Respectfully submitted,
Third Amendment to LRCA.DOC
EXHIBIT A
SCHEDULE OF BASIC PREMIUM PAYMENTS
Period Ending Principal Interest Rate Interest Total Debt Service Annual Debt Service
March I, 2004 $ 865,000.00 6. I00% $ 189,299.06 $1,054,299.96 $1,054,299.96
September I, 2004 163,975.00 163,975.00
March 1,2005 925,000.00 6.300 163,975.00 1,088,975.00 1,252,950.00
September 1, 2005 134,837.50 134,837.50
March 1,2006 980,000.00 6.400 134,837.50 1,114,837.50 1,2A9,675.00
September 1, 2006 103,477.50 103,477.50
March l, 2007 1,045,000.00 6.400 103,477.50 1,148,477.50 1,251,955.00
September I, 2007 70,037.50 70,037.50
March 1,2008 1,I 05,000.00 6.500 70,037.50 I,I 75,037.50 1,245,075.00
September 1, 2008 34,125.00 34,125.00
March 1,2009 1,050.000.00 6.500 34.125.00 1.084.125.00 I,I I ~,250.00
Total 5,970,000.00 $ 1,202,204.96 $7,172,204.96 $7,172,204.96
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EXHIBIT B
ALLOCABLE PROPORTION FOR EACH PARTICIPANT
City of Huntington Beach
City of Oxnard
City of San Bemardino
City of Santa Aha
24.80%
18.08%
22.09%
35.03%
Notwithstanding the foregoing table, the Allocable Proportion of each of above Participants and
West Covina, for purposes of determining mounts to be allocated or distributed pursuant to
A.rticle V of the Agreement, shall be determined as set forth in Section 3 of the Third Amendment
and in Article V of the Agreement.
Third Amendment to [RCA.DOC
EXHIBIT I
NOTICE ADDRESSES
If to the Authority:
Big Independent Cities Excess Pool Joint Powers Authority
c/o Ken Spiker and Associates, Inc.
1100 South Flower Street, Suite 2100
Los Angeles, CA 90015-2115
Attention: General Manager
If to the Participants:
City of Huntington Beach
2000 Main Street
Huntington Beach, CA 92648
Attention: Risk Manager
City of Oxnard
305 West Third Street
Oxnard, CA 93030
Attention: Risk Manager
City of San Bemardino
300 North "D" Street
San Bemardino, CA 92418
Attention: Risk Manager
City of Santa Aha
20 Civic Center Plaza
Santa Ana, CA 92701
Attention: Risk Manager
City of West Covina
1444 West Garvey Avenue
West Covina, CA 91790
Attention: Risk Manager
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