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HomeMy WebLinkAbout06 - AirBorne Law Enforcement ABLE11 CITY OF NEWPORT BEACH POLICE DEPARTMENT October 25, 1999 October 25, 1999 Item No. 6 TO: Honorable Mayor, Members of the City Council and City Manager FROM: Bob McDonell, Chief of Police SUBJECT: AirBorne Law Enforcement (ABLE) Joint Powers Agreement Revision It is recommended the City Council approve the attached Joint Powers Agreement (JPA) between the Cities of Newport Beach and Costa Mesa continuing the existing ABLE program. DISCUSSION: O On September 9, 1996, the Newport Beach City Council approved the reorganization of ABLE, combining the Helicopter Units of the Newport Beach and Costa Mesa Police Departments. The ABLE program has proven to be very successful by increasing the level of service to both cities while realizing substantial cost savings and cost reimbursement through the existing subscriber agreements with the City of Santa Ana and other agencies. The reorganization was authorized via a Memorandum of Understanding and several MOU amendments. In July 1998, the City of Newport Beach agreed to hire the three mechanics for ABLE to achieve additional cost savings. This was a temporary move pending Cal PERS approval for ABLE to obtain recognition as a government entity and hire the mechanics directly. The application has been filed and is in progress with Cal PERS. One requirement of Cal PERS is any joint operation must be established through a Joint Powers Agreement. Therefore, the original MOU and amendments have been revised into a Joint Powers Agreement as attached. On August 23, 1999, the Newport Beach City Council approved the original Joint Powers Agreement. However, a subsequent detailed analysis by outside legal counsel in conjunction with the Costa Mesa City Attorney's Office after this City Council action recommended a number of minor additional changes. The changes are intended to bring the agreement into compliance with current law as it relates to JPA requirements in the Government Code. They are primarily technical in nature and do not alter any of the substantive issues already approved by Council on August 23rd. They also clarify Qsome of the operational characteristics of the Joint Powers entity created by the action. ABLE JPA Revision Page 2 The recommended changes are described in detail in the attached Memorandum to the ABLE Board of Directors from Edwin Richards of Haight, Brown & Bonesteel, L.L.P. In addition, a strike - out/underline version of the revised Joint Powers Agreement is attached to specifically identify the recommended changes to facilitate identification and understanding of the modifications. The ABLE Board of Directors approved this revised Joint Powers Agreement on September 16, 1999. These recommended changes have been reviewed and approved by the Newport Beach City Attorney's Office and the Costa Mesa City Attorney's Office. The Costa Mesa City Council approved the revised Joint Powers Agreement at their meeting on October 4, 1999. Approval of this agreement by the Newport Beach City Council will complete the final step in this process and allow ABLE to proceed with Cal PERS for recognition as a government entity. Respectfully Submitted, Paul " aptain Patrol/Traffic Division Commander Attachments Approved by, Bob McDonell CHIEF OF POLICE 1. Memorandum to ABLE Board from Edwin Richards dated September 9, 1999 2. Revised Joint Powers Agreement for AirBorne Law Enforcement Services 0 0 MEMO To: Board - Airborne Law Enforcement (ABLE) FROM: Edwin J. Richards IN RE: Revised Joint Powers Agreement CM10- 0000035 HAIGHT, BROWN & BONESTEEL, LI-P. SANTA MONICA, CALIFORNIA SANTA ANA, CALIFORNIA RIVERSIDE, CALIFORNIA SAN FRANCISCO, CALIFORNIA SAN DIEGO, CALIFORNIA September 9, 1999 As indicated at the last Board meeting, I have identified eight additional revisions that I recommend that you consider with regard to the final draft of the Joint Powers agreement (JPA). I apologize for any delay resulting from these additional recommendations. As I previously indicated, I previously reviewed the indemnity provisions of the JPA in detail but failed to complete a full analysis of the remaining provisions. Upon subsequently making that further analysis of the document, I find the following eight issues that should be considered. 1) Section 2.03 is in conflict with Government Code Section 6509., Government Code Section 6509 requires that the power of a JPA be subject to the restrictions on the manner of exercising power "of one of the contracting parties, which party shall be designated in the agreement." The existing Section 2.03 provides that the power of the JPA is subject to the restrictions of both the City of Newport Beach and Costa Mesa. That creates a potential problem in the event there should be a conflict between the provisions of the two cities, and technically, this provision currently conflicts with Section 6509 of the Government Code. I am therefore proposing that we adopt the language suggested by Chief Snowden at the last meeting. We will replace Section 2.03 in its entirety with the following language. "Said power shall be exercised in the manner provided in the California Joint Powers Act subject to the restrictions upon the manner of exercising the power of the city of the presiding officer. It is understood that the Chief of Police of the City of Costa Mesa and the Chief of Police of the City of Newport Beach shall alternate as the presiding officer on an annual basis." 2) The California Joint Powers Act requires that the Joint Powers agreement contain a clear statement that the intent of the agreement is to create a separate legal entity as opposed to simply constituting a combining of the two member agencies. This objective is accomplished in Section 2.02 of the JPA. However, there is no specific statement that the ABLE shall constitute a separate legal entity or that it will be obligated for its own debts and obligations. That language is important in order to fully comply with the intent of the California Joint Powers Act and also to ensure that the member agencies cannot be deemed vicariously liable for the debts and obligations of the ABLE. I therefore recommend that we add a subsection (I) to Section 2.02 to read as follows: "2.02(l) — It is the intent of the parties to this agreement that ABLE shall constitute a separate legal entity separate and apart from the member agencies, and that its debts, obligations and liabilities are its own and not that of the member cities." CM10 -0000035 80061.01 Memo to Board - Airborne Law Enforcement (ABLE) September 9, 1999 Page 2 3) The third item is an issue to which I simply want to alert the Board. The Board can then make a determination whether they wish to make a change. Section 3.07 requires a unanimous vote of the Board in order to undertake any action whatsoever. That means that a single dissenting vote can block any action on the part of the Board. It raises the possibility that a single dissenting vote could literally paralyze the Board from acting. Most agreements contain a provision such as a tiebreaker provision to ensure that the Board's ability to act is not paralyzed. My observation with the ABLE board makes it clear that the ABLE is a somewhat unique organization. The history of the organization suggests that the Board may specifically desire that all actions be based upon a unanimous vote. I suspect that may be the case in view of the fact that even the original MOU required a unanimous vote by the Board in order to initiate any action. I am further mindful of the excellent and cooperative working relationship that the members of the current Board have. That relationship certainly does not suggest the need for a modification to this provision at the present time. My concern is that the JPA that we are finalizing today will control the actions of all future boards which may consist of different personnel and perhaps even different member agencies. While the requirement of a unanimous vote may be appropriate for this board, the question remains whether that is a suitable provision for future boards. I simply raise the issue to ensure that the Board has the ability to make a conscious decision on this issue. If you are comfortable with requiring a unanimous vote for all actions, then no revision is required. If you desire to change the JPA to require less than a unanimous vote, I would recommend that the last three lines of Section 3.07 be changed to read as follows: "An affirmative majority vote of the full membership of the Board, or their alternate, may adopt any motion, resolution, or order and take any other action appropriate to carry forward the objectives of the ABLE pursuant to this agreement. In the event there should be a tie vote, then the presiding officer shall have the right to cast the deciding vote." 4) Section 3.15 contains an ambiguity with regard to who shall sign contracts on behalf of the ABLE. I am informed that at present the presiding officer signs all contracts, and that they are not countersigned by any individual. Assuming that procedure is satisfactory, then we need to modify the JPA. Currently, the JPA does not designate who shall sign contracts on behalf of the ABLE, and Section 3.07 requires that all contracts be countersigned by the secretary. CM10A000035 0.0 Memo to Board - Airborne Law Enforcement (ABLE) September 9, 1999 Page 3 In order to accomplish that task, we need to amend Section 3.15 to read as follows: "(a) — The presiding officer shall sign all contracts on behalf of the ABLE board." "(b) — The secretary shall perform such duties as assigned by the Board and shall keep minutes of the Board meetings." "(c) — The Treasurer /Controller shall be bonded in the amount to be determined by the Board and the bond fee shall be paid by the ABLE. The Treasurer /Controller shall perform the duties as set forth in Sections 3.12, 4.02, 4.03, 4.04, 4.05, 4.09 and 4.10." 5) Section 3.12 gives the treasurer the option to perform the annual audit himself or to contract it out to a CPA, whereas Section 4.05 requires that the audit be done by an independent CPA. I recommend that you require the annual audit to be conducted by a CPA We can accomplish that by simply amending Section 3.12 by removing the words, "make or" from line 6. Once we make that change, Section 3.12 will read as follows: "The board shall appoint an officer or employee of a Member Agency to hold the offices of Treasurer and Controller ( "Treasurer /Controller "), whose duties shall be in conformance with Government Code sections 6505 and 6505.5. In performing the duties of Treasurer /Controller, he/she shall follow the Member Agencies' policies and procedures. The Treasurer /Controller shall also administer all contracts subsequent to the Board's approval and shall contract with a certified public accountant to make an annual audit of the accounts and records of the ABLE as provided in Government Code section 6505. The annual audit shall be submitted to the Board and each Member Agency when completed. The annual budget shall be prepared by the Treasurer /Controller for the approval by the Board. The ABLE's investment policies shall be the Member Agencies' Investment policies as those may be modified by the Treasurers of the Member Agencies and approved by the Board of the ABLE. The cost of the Treasurer's services shall be reimbursed by the ABLE as provided in this Agreement." 6) Section 5.02 is one of the indemnity provisions that we previously discussed. I recommend two further minor changes. The first is to add the word, "defend" to the first line, and the second is to include the phrase, "or employees in the performance of this agreement" at line 6. The purpose is to simply ensure that there is no ambiguity and that the duty to indemnify includes the duty to defend and that the obligation by the member cities to defend and indemnify is limited to actions undertaken in performance of the Joint Powers agreement. This latter CMIO-0000035 0.0 Memo to Board - Airborne Law Enforcement (ABLE) September 9, 1999 Page 4 provision simply ensures that there is no liability assumed by one member agency for the actions of another member agency that are not related to an ABLE operation. The recommended changes would result in Section 5.02 reading as follows: "Each Member Agency hereto agrees to defend, indemnify and hold harmless the ABLE and the other Member Agencies from any liability for damages, costs or attorney fees, actual or alleged, to persons or property arising out of or resulting from defective equipment owned or leased by the indemnifying Member Agency or from negligent acts or omissions of the indemnifying Member Agency or its officials or employees or employees in the performance of this agreement. In the event of liability imposed upon any of the Member Agencies, or upon the Board created by this Agreement, for injury which is caused by defective equipment or the negligent or wrongful act or omission of any of the Member Agencies in the performance of this Agreement, the Member Agency or Member Agencies that own or lease such defective equipment or are directly responsible for the negligent or wrongful acts or omissions shall indemnify, defend, and hold harmless the ABLE and all other Member Agencies from any liability for personal injury or property damage arising out of the performance of this Agreement." 7) Section 5.04 raises another issue that I want to simply submit to the Board for their consideration. Section 5.04 has the effect of each member agency giving up any claim that it may have against ABLE or any other member agency arising out of services undertaken pursuant to the agreement. That is a good provision in general, but it is important that the Board understand its effect under the following hypothetical situation. Assume that an ABLE helicopter is being flown by a Costa Mesa pilot who commits a negligent act, causing the helicopter to crash into the city of Newport Beach city hall. That would result in an enormous claim for damage most likely asserted against ABLE, the city of Costa Mesa, and the pilot. , Despite the fact that insurance is in place for all of those entities, I anticipate that the insurance carrier for ABLE and the City of Costa Mesa may well take the position that any claim against their insured (i.e., ABLE or city of Costa Mesa) is barred by the provisions of Section 5.04. Recall that Section 5.04 has the effect of the City of Newport Beach waiving any claims that it may have against ABLE or the City of Costa Mesa arising out of ABLE operations. Our hypothetical facts fall within that situation, and the provision could, indeed, void coverage otherwise available to ABLE and the City of Costa Mesa. The dilemma is that Section 5.04 has a good motive and objective in obtaining mutual waivers among ABLE, Newport Beach and Costa Mesa, but it presents a potential loophole to coverage by the insurance carriers that the Board may not want to exist. 0 CM10 -0000035 0.0 Memo to Board - Airborne Law Enforcement (ABLE) September 9, 1999 Page 5 My suggestion is that we modify Section 5.04 to apply only to losses that exceed existing insurance coverage. I propose that Section 5.04 be modified by inserting the words, "to the extent not covered by insurance" in line 5. Section 5.04 would therefore read as follow: "5.04 Except as provided herein, each Member Agency waives and gives up any claim against or right to sue the ABLE, any Member Agency, or any of their officers, employees or representatives, for any loss, damage or injury that arises out of, or is in any way related to the performance of services pursuant to this Agreement to the extent not covered by insurance. This waiver extends to liability for death, bodily injury, or property damage that may be sustained by the ABLE, any Member Agency, or its officers, employees, contractors, or agents and which was proximately caused, in whole or in part, by the negligent act, conduct, or omission of the ABLE, any Member Agency, and/or their respective officers, employees, agents, contractors, representatives, or any third party. This waiver does not extend to death, bodily injury or property damage caused by fraudulent or willful conduct, or any act which constitutes a violation of a penal statute, and to a Member Agency's right to bring a legal action against other Member Agencies who refuse or fail to honor its requirement to defend and/or indemnify Othe ABLE and other Member Agencies as set forth in Sections 5.02 and 5.06." 8) Simply because we are amending the JPA anyway, I recommend that we clean it up by removing the words "notwithstanding" at the beginning of Sections 1.02 and 1.03. The words add nothing to the meaning and are simply cumbersome. I therefore recommend that they simply be removed so that both sections will start, "Each Member Agency expressly retains ..." CONCLUSION I recommend that the Board make its decisions on the issues raised above, and we can then insert the revised language where appropriate based upon the Board's decisions. Once those changes are made, the JPA will be in final form and can be processed for submittal to the respective city councils for review and approval. fik CMIO-0000035 0.0 JOINT POWERS AGREEMENT FOR AIRBORNE LAW ENFORCEMENT SERVICES This Agreement is made and entered into this day of _ 1999, in the County of Orange, State of California, by and between the City of Costa Mesa ( "Costa Mesa ") and the City of Newport Beach ( "Newport Beach "), collectively referred to as "Member Agencies." RECITALS WHEREAS, the Member Agencies have and possess the power and authorization to finance, acquire and maintain a public law enforcement helicopter service and facilities for the benefit of the lands and inhabitants within their respective boundaries; and WHEREAS, the Member Agencies propose to join together to establish, operate and maintain a helicopter service for the benefit of their respective lands and inhabitants; and WHEREAS, it is in the public interest to provide a means by which other public agencies acquire helicopter service for the benefit of their lands and inhabitants. NOW, THEREFORE, for and in consideration of the mutual promises and covenants contained herein the parties hereto agree as follows: I PURPOSE 1.01 The purpose of this Agreement is to cooperate with each Member Agency in the exercise of some or all of their powers to establish a regional air support unit in the manner set forth in this Agreement. 1.02 Each Member Agency expressly retains all rights and powers to finance, plan, develop, construct, equip, maintain, repair, manage, operate, and control equipment, facilities, properties, and projects that it deems in its sole discretion to be necessary or desirable and that are authorized by the laws governing it. This Agreement shall in no way impair any of the Member Agencies' respective rights, powers or title to such equipment, facilities, properties and projects. 1.03 N Elk i gr-eEach Member Agency expressly retains all rights and powers to use other funds or funding sources to finance, plan, develop, construct, equip, maintain, repair, manage, operate and control equipment and facilities for a law enforcement helicopter service system. B CREATION OF REGIONAL AIR SUPPORT UNIT 2.01 By this Agreement, Costa Mesa and Newport Beach agree to cooperate with each other in the provision of helicopter service in the manner and under the terms of this Agreement. The cooperative provision of helicopter services shall be known as the Airborne Law Enforcement Services ( "ABLE ") and the Member Agencies may agree on a different call name for ABLE. 2.02 The ABLE shall possess in its own name and the Member Agencies delegate to it the following enumerated powers: (a) To make and enter into contracts consistent with this Agreement; (b) To receive compensation, gifts, contributions and donations of property, funds, services and other forms of financial assistance from persons, firms, corporations, and any governmental entity; (c) To sue and be sued in its own name; (d) To apply for an appropriate grant or grants under any Federal, State, or local programs for assistance in O developing any of its programs or providing helicopter services to other public entities; (e) To adopt rules, regulations, policies, by -laws and procedures governing the operation of the ABLE; (f) To add Member Agencies to the ABLE which contribute flight crews and aircraft equipment and. execute agreements and resolutions consistent with the terms of this Agreement; (g) To contract with public entities to provide helicopter services to their land and residents; I(U „Wr---To appoint officers, employees or agents. (i) It is the intent of the parties to this agreement that ABLE shall constitute a separate legal entity separate and apart from the member agencies, and that its debts, obligations and liabilities are its own and not that of the member cities. 2.03 Said powers shall be exercised in the manner_ provided in the California Q Joint Powers Act subject to the restrictions upon the manner of 2 exercising the potiver ref the_city_of_l[ e�residin officer. It is understood that the chief of police of the city of Costa Mesa and the chief of olice of tile_citv of._Newooit Beach sh_jll_alteinate,_as the presiding _ officer on an annual basis, Ei i7iipi-ebsly , r ' ; 111 ORGANIZATION 3.01 The membership of the ABLE shall be the Member Agencies, public entities which contribute flight crews, funding for aircraft equipment, and ABLE employees and have executed or hereafter execute this Agreement, or any subsequent amendments thereto, and which have not withdrawn from the ABLE. 3.02 The ABLE shall be managed by a Board consisting of the Chiefs of Police of Costa Mesa and Newport Beach and one appointee for each Member Agency for a total of four (4) Board Members. The Chiefs of Police of Costa Mesa and Newport Beach shall each appoint one Board member and their alternate. Each Board member, or in the absence of a Board member, the alternate shall have one vote on all matters before the Board. The members of the Board may be supplemented or amended from time to time. 3.03 Each Board member and alternate shall hold office until a successor is selected, elected or appointed, as the case may be, under the powers of each Member Agency. The term of the Board member or alternate who is a public official or employee of a Member Agency shall terminate upon such Board Member or alternate leaving office and the vacancy 'shall be filled by selection, election or appointment, as the case may be, under the powers of each Member Agency. 3.04 Board members and alternates shall not receive additional compensation for the service on the ABLE Board, but may be reimbursed by the ABLE for reasonable expenses incurred in conducting the business of the ABLE, as provided in this Agreement, when the expenses are not paid by the employing Member Agencies. 3.05 The principal office of the ABLE shall be established by the Board and shall be located within the County of Orange. The Board may change the principal office from one location to another within the County of Orange. Any change of address shall be noted by the Board but shall not be considered an amendment to this Agreement. 3.06 The Board shall meet at a location as may be designated by the Board. The time and place of regular meetings of the Board shall be determined by resolution 3 adopted by the Board. A copy of such resolution shall be furnished to the Member O Agencies. All meetings of the Board, including regular, adjourned, and special meetings, shall be called and held in a manner as provided in the Ralph M. Brown Act, Chapter 9, Division 2, Title 5 of the California Government Code commencing with section 54950 et seq., as amended. 3.07 All of the powers and authority of the ABLE shall be exercised by the Board unless specifically delegated to the extent permitted by law or reserved to the Member Agencies under this Agreement. Unless otherwise provided herein, each Board Member shall be entitled to one (1) vote. Except as otherwise provided herein, cm-2- i'rr`r+G`cr4'c�.'rrcriirrtivv3--b FAR Af ;he c. iii v.__i_,,.aiij3 -6ff ih6 $66rd, BF 848FF9&`r .,. E,... ,,.,, the abja,,,;, es of 4h Anu .scant !e this A...,,,.., eRt an affirmative maig ity__vote cf the full membership of the Board1 or_their alternate may adopt anv motion resolution, or, order _and take any_ other _action pRproeriatg to .carry forward the objectives of the ABLE_pursuant to this agreement. In the event there should be a tie vote, then the presiding officer shall have the right to cast the decidingvote. 3.08 The Board shall designate a recording secretary to keep the minutes of all open meetings of the Board, and shall cause a copy of such minutes to be forwarded to each Member Agency within a reasonable time after each meeting. 3.09 The Board may adopt from time to time policies, rules and regulations for the conduct of its affairs and that of the ABLE as may be required and consistent with this Agreement. 3.10 Where this Agreement requires an approval of a resolution by Member Agencies in any matter, the approval shall be evidenced by a certified copy of the resolution of the governing body of such Member Agency filed with the ABLE. It shall be the responsibility of the Board to obtain certified copies of said actions. 3.11 On an annual basis, the Board shall appoint a Board member to be the presiding officer for the purpose of conducting the Board meetings. . 3.12 The Board shall appoint an officer or employee of a Member Agency to hold the offices of Treasurer and Controller ( "Treasurer /Controller "), whose duties shall be in conformance with Government Code sections 6505 and 6505.5. In performing the duties of Treasurer /Controller, he /she shall follow the Member Agencies' policies and procedures. The Treasurer /Controller shall also administer all contracts subsequent to the Board's approval and shall of contract with a certified public accountant to make an annual audit of the accounts and records of the ABLE as provided in Government Code section 6505. The annual audit shall be submitted to the Board and each Member Agency when completed. The annual budget shall be prepared by the Treasurer /Controller for the approval by the Board. The ABLE's investment policies shall be the Member Agencies' investment policies as those may be modified by the Treasurers of the Member Agencies and approved by 4 the Board of the ABLE. The cost of the Treasurer's services shall be reimbursed by the ABLE as provided in this Agreement. 3.13 The Board shall have the power to appoint additional officers, employees, or agents. Any officer, employee or agent of the ABLE shall also be an officer, employee or agent of any of the Member Agencies, provided, however, that the ABLE may appoint employees of the ABLE that are subject to the personnel system of the ABLE and said employees would not be employees of the Member Agencies. The appointment by the Board of such a person from a Member Agency shall be evidence that the two positions are compatible. 3.14 The City Attorneys or their Deputies of the Member Agencies shall serve jointly as counsel to the ABLE, to the extent permitted by such waivers of conflict of interests to authorize such representation as may be executed by the Member Agencies and the ABLE Board. and: 3.15 The officers shall perform all duties normal to their respective offices taL _+ai —The presidirlc7__officer shall sici_ all contracts on behalf of the ABLE board. i-" perfeFm .eh ,.al -_V- .J. aieS 69 [�,... ed In.. tl% ..d -....J Shall IreeP ffikiHteS f. al (b) The secretary shall herfonn_ such duties as ass±cgned tvthe Board and shall keep minutes of the board meetings. ll(b) The Treasurer /Controller shall be bonded in the amount to be determined by the Board and the bond fee shall be paid by the ABLE. The Treasurer /Controller shall perform the duties as set forth in Sections 3.12, 4.02, 4.03, 4.04, 4.05, 4.09 and 4.10. 3.16 The Board shall appoint a Commander to manage and oversee day -to- day operations of the ABLE. The Commander shall be a sworn police officer of a Member Agency and of a rank of at least a sergeant. Each Member Agency shall appoint a liaison officer ( "LO ") to the ABLE and the LO shall be a sworn police officer and of a rank of at least a Captain. The LO's of each Member Agency shall meet collectively, as needed, to advise the Board on the levels of service and methods of operation of the ABLE, and supervision of the ABLE Commander. The Commander shall manage the daily operations of the ABLE and supervision of the other employees appointed by the ABLE Board, the helicopter crews and mechanics of the ABLE and mechanics of other Member Agencies as directed by the ABLE. 0 5 3.17 All of the privileges and immunities from liability, exemption from laws, ordinances and rules, all relief, pension, disability, worker's compensation, and other benefits which apply to the activity of officers, employees, or agents of any of the Member Agencies when performing their respective functions shall apply to them to the same degree and extent while they are engaged in the performance of any of the functions and other duties under this Agreement. None of the officers, agents or employees of a Member Agency appointed to the Board or performing services at the direction of the ABLE shall be deemed by reason of their appointment or service to be employed by any of the other Member Agencies or the ABLE or be subject to any of the requirements of the other Member Agencies. IV BUDGET AND DISBURSEMENTS 4.01 The Board shall adopt an annual budget for the ensuing fiscal year pursuant to procedures developed by the Board. 4.02 The Treasurer /Controller shall draw warrants upon the approval and written order of the Board or the Board's designated LO. The Board shall requisition the payment of funds only upon approval of such claims or disbursements and such requisition for payment in accordance with rules, regulations, policies, procedures, and by -laws adopted by the Board. 4.09 All funds received by the Treasurer /Controller for helicopter services provided by the ABLE, will be placed in object accounts, and the receipt, transfer, or disbursement of such funds during the term of this Agreement shall be accounted for in accordance with generally accepted accounting principles applicable to governmental entities. There shall be strict accountability of all funds. All revenues and expenditures shall be reported to the Board on a quarterly basis. 4.04 All expenditures within the approved annual budget shall be made upon the approval of the Treasurer /Controller in accordance with the rules, policies and procedures adopted by the Board. No expenditure in excess of those budgeted shall be made without the unanimous approval of the Board and the budget shall thereafter be revised and amended. 4.05 The records and accounts of the ABLE shall be audited annually by an independent certified public accountant and the cost of the audit shall be paid by the ABLE. The minimum requirements shall be those prescribed by the State Controller under California Government Code section 26909 and in conformance with generally accepted auditing standards. Copies of such audit report shall be filed with the County Auditor and each Member Agency no later than fifteen (15) days after receipt of said audit by the Board. 4.06 The Member Agencies have agreed by resolution through their respective City Councils to fund on an equal basis the ABLE helicopter operations 6 fund through annual budget appropriations. The subject resolutions shall not limit the authority of each Member Agency to crease appropriations for the ABLE helicopter operations as determined by their respective City Councils,_ provided, however, that a decision to cease appropriations shall be subiect to the terms of Section 6.2. below. 4.07 The Member Agencies acknowledge and agree that the ABLE will act as a conduit for the management, direction and provision of law enforcement helicopter services to the Member Agencies and to other public agencies that contract with the ABLE for such services. The Commander shall keep a written account of the actual flight hours of the services provided to each Member Agency, each contracting agency, and the Regional Narcotics Suppression Program ( "RNSP "). The written account of such flight hours shall be provided to the Board on a monthly basis. 4.08 Based on information provided by the Commander, the Treasurer /Controller shall keep a written account of services provided other public agencies by the Member Agencies at the direction of the ABLE. All revenues received from other public agencies contracting with the ABLE for helicopter services shall be shared equally on a monthly basis by each Member Agency. 4.09 In establishing rates for helicopter services to public agencies, the Board shall assure that the contracts for such services provide for the reimbursement of the actual expenses of providing the services, insurance coverage by the Member Agencies for their personnel and equipment, and administrative expenses of the ABLE. Payment for the ABLE helicopter services by contracting public agencies shall be made on a monthly basis to the Treasurer /Controller of the ABLE. The Treasurer /Controller shall provide a written monthly account of all revenues and expenses of the ABLE services to other public agencies to the Board. 4.10 Provided funds are available for appropriation, the Member Agencies agree to budget the necessary funds to purchase such aircraft for the ABLE as mutually agreed upon by the Member Agencies. V LIABILITIES 5.01 The Member Agencies acknowledge that each agency is contributing its own personnel and equipment to a cooperative pool of personnel and equipment to be managed by the ABLE. Each Member Agency shall retain all debts, liabilities, insurance, and other obligations for its personnel and the ABLE shall retain all debts, liabilities, insurance, and other obligations for the helicopter equipment and the ABLE appointed employees subject to the ABLE personnel system. Where necessary, and at the direction of the ABLE Board, each Member Agency agrees to add the ABLE as an additional insured on their respective insurance or self- 7 insurance coverage for their personnel and equipment. In the event that the costs of each Member Agency's personnel and equipment contributed to the ABLE for each fiscal year exceeds the amount of funds to be reimbursed by the ABLE for such costs, the Member Agencies agree to waive all rights to be reimbursed for such costs by the ABLE from funds received by the ABLE in subsequent fiscal years. Each Member Agency agrees to expressly waive any and all rights to be reimbursed by the other Member Agencies for personnel and equipment contributed to the ABLE to the extent that revenues received by the ABLE are not sufficient for the ABLE to reimburse the Member Agency for the costs of its personnel and equipment contributed to the ABLE. 5.02 Each Member Agency hereto agrees to defend, indemnify and hold harmless the ABLE and the other Member Agencies from any liability for damages, costs or attorney fees, actual or alleged, to persons or property arising out of or resulting from defective equipment owned or leased by the indemnifying Member Agency or from negligent acts or omissions of the indemnifying Member Agency or its officials or employees in the performance of this agreement. In the event of liability imposed upon any of the Member Agencies, or upon the Board created by this Agreement, for injury which is caused by defective equipment or the negligent or wrongful act or omission of any of the Member Agencies in the performance of this Agreement, the Member Agency or Member Agencies that own or lease such defective equipment or are directly responsible for the negligent or wrongful acts or omissions shall indemnify, defend, and hold harmless the ABLE and all other Member Agencies from any liability for personal injury or property damage arising out of the performance of this Agreement. 5.03 Member Agencies agree that the ABLE and Member Agencies should be fully protected from any loss, injury, liability, damage, claim, lawsuit, cost or expense arising out of, or in any way related to, the performance of services pursuant to this Agreement. Accordingly, the provisions of this Agreement should be construed and interpreted to provide the fullest possible protection to the ABLE, Member Agencies and Member Agency's officers and employees. Member Agencies acknowledge that the ABLE would not provide services pursuant to this Agreement or related agreements in the absence of the commitments of each Member Agency as specified in this section. Member Agencies acknowledge that the ABLE Board, Commander and LO may be subject to liability for decisions, management and actions in the supervision and direction of the ABLE. In this regard, Member Agencies agree that the ABLE shall obtain directors and officers insurance for the ABLE directors and officers, and that the cost of such insurance coverage shall be deducted from funds distributed by the ABLE to the Member Agencies on a pro rata basis equal to the number of Member Agencies, i.e., fifty percent (50 %) for two (2) Member Agencies, etc. 5.04 Except as provided herein, each Member Agency waives and gives up any claim against or right to sue the ABLE, any Member Agency, or any of their officers, employees or representatives, for any loss, damage or injury that arises 8 out of, or is in any way related to the performance of services pursuant to this Agreement to the extent_fhat said cla.ii._ur_right is_n�t_ covered by_insurance. This waiver extends to liability for death, bodily injury, or property damage that may be sustained by the ABLE, any Member Agency, or its officers, employees, contractors, or agents and which was proximately caused, in whole or in part, by the negligent act, conduct, or omission of the ABLE, any Member Agency, and /or their respective officers, employees, agents, contractors, representatives, or any third party. This waiver does not extend to death, bodily injury or property damage caused by fraudulent or willful conduct, or any act which constitutes a violation of a penal statute, and to a Member Agency's right to bring a legal action against other Member Agencies who refuse or fail to honor its requirement to defend and /or indemnify the ABLE and other Member Agencies as set forth in Sections 5.02 and 5.06. 5.05 Any public agency, other than the Member Agencies, receiving services pursuant to this Agreement, and /or any other contract with the ABLE, shall be required to agree as follows: AGENCY and ABLE (including its member agencies and their respective officers, employees, contractors, agents and representatives) shall mutually defend and indemnify the other in an amount equal to its proportionate share of liability on a comparative fault basis. This indemnity obligation shall exist with respect to any claim, loss, liability, damage, lawsuit, cost, or expense that arises out of, or is in any way related to the performance of services by ABLE within the public agency's jurisdiction. The obligation of each public agency pursuant to his section extends, without limitation, to an injury, death, loss or damage which occurs within that public agency's jurisdiction and which is sustained by any third party, any employee or contractor of the public agency, or the contractor's employees. The terms of this section shall be contained in any agreement by ABLE with non - member public agencies. 5.06 Member Agencies shall be responsible for the continued provisions of worker's compensation for the officers or agents of the Member Agencies that serve as officers or employees of the ABLE. In this regard, each Member Agency shall defend, indemnify and hold harmless the ABLE and any other Member Agencies, and their respective officers, employees, contractors, agents and representatives with respect to any claim, loss, liability, damage, lawsuit, cost or expense that arises out of, or is in any way related, to any industrial /worker compensation injury sustained by an employee of the indemnifying Member Agency during the performance of service by the ABLE or the responding Member Agencies under this Agreement. VI ADMISSION AND WITHDRAWAL OF PARTIES 6.1 Additional public agencies that contribute personnel and aircraft equipment may become Member Agencies to the ABLE upon such terms and conditions as provided by the Board and upon the unanimous consent of the 9 existing Member Agencies as evidenced by approval of resolutions therefore and the execution of a written amendment to this Agreement by all of the Member Agencies, including the additional Member Agency. 6.2 The withdrawal of any Member Agency, either voluntarily or involuntarily shall, unless otherwise provided for by the Board, be conditioned as follows: (a) Involuntary withdrawal shall mean those circumstances where a Member Agency must withdraw due to fiscal or budgetary impacts which discontinue the funding of flight crews or aircraft; (b) In the case of a voluntary withdrawal, written notice shall be given one hundred twenty (120) days prior to the end of a fiscal year except that such notice may be shortened by unanimous approval of the Board; (c) Neither voluntary or involuntary withdrawal shall relieve the withdrawing Member Agency of its proportionate share of any debts or other liabilities incurred by the ABLE prior to the effective date of the Member Agency's withdrawal, nor any liabilities imposed upon or incurred by the Member Agency pursuant to this Agreement prior to the effective date of the Member Agency's withdrawal; (d) Withdrawal shall not result in the forfeiture of that Member Agency's rights and claims relating to revenues received by the ABLE during the time period that the Member Agency provided services under the ABLE direction; and (e) The withdrawing Member Agency shall retain all rights and title to its personnel and shall remove such personnel from the direction of the ABLE. The helicopter equipment shall be held in title by the ABLE and subject to reasonable sale upon termination of the ABLE. VII TERMINATION AND DISPOSITION OF ASSETS 7.01 The ABLE shall continue to exercise the powers herein until the termination of this Agreement and any extension thereof as provided in this paragraph or until the Member Agencies have mutually rescinded this Agreement; provided, however, that the ABLE shall continue to exist for the purposed of 10 disposing of all claims, distribution of assets and all other functions necessary to conclude the affairs of the ABLE. 0 7.02 Termination shall occur upon the written consent of all Member Agencies, upon the withdrawal from the ABLE of a sufficient number of the Member Agencies to leave fewer than two (2) Member Agencies remaining in the ABLE and full satisfaction of all outstanding financial obligations of the ABLE. However, no such termination shall occur until all other contractual obligations of the ABLE have been satisfied. 7.03 In the event of the termination of this Agreement, any funds remaining following the discharge of all obligations shall be disposed of by returning to each current Member Agency of the ABLE immediately prior to the termination of this Agreement, a share of such funds proportionate to the contribution made to the ABLE by said Member Agency, to the extent legally possible. 7.04 Notwithstanding other provisions in the Agreement, the Member Agencies Costa Mesa and Newport Beach agree to follow a procedure for selling of equipment and aircraft in the event the Agreement is terminated. The equipment and aircraft shall be given a fair market value by an appraiser mutually agreed upon by Costa Mesa and Newport Beach. Before the equipment and aircraft are sold on the open market, Costa Mesa and Newport Beach each shall have the right to purchase the equipment and aircraft at a price and under terms as mutually agreed upon by Costa Mesa and Newport Beach which may include a financing arrangement for the purchaser and a leasing arrangement for the non - purchasing Member Agency to allow for a transition period after the termination of the Agreement. Proceeds from the sale of equipment and aircraft upon termination of the Agreement shall be equally distributed (50/50) to Costa Mesa and Newport Beach. VIII MISCELLANEOUS 8.01 Amendments. This Agreement may be amended with the unanimous approval of all Member Agencies; provided, however, that no amendment may be made which would adversely affect the interests of the owners of bonds, letters of credit or other financial obligations of the ABLE. 8.02 Notices. Any notice or instrument required to be given or delivered by depositing the same in any United States Post Office, registered or certified, postage prepaid, addressed to the Member Agencies, shall be deemed to have been received by the Member Agency to whom the same is addressed at the expiration of seventy -two 11 (72) hours after deposit of the same in the United States Post Office for transmission by registered or certified mail as aforesaid. 8.03 Effective Date. This Agreement shall be effective at such time as this Agreement has been executed by any two or more of the Member Agencies enumerated in the introduction of this Agreement. 8.04 Conflicts of Interest. No officer or employee of the ABLE or any Member Agency shall have any financial interest, direct or indirect, in the ABLE. Nor shall any such officer or employee participate in any decision relating to the ABLE which affects his or her financial interests or those of a corporation, partnership, or association in which he or she is directly or indirectly interested, in violation of any State law or regulation. 8.05 Arbitration. (a) Any controversy or claim between any two or more Member Agencies, or between any such Member Agency or Member Agencies and the ABLE, with respect to the ABLE's operations, or to any claims, disputes, demands, differences, controversies, or misunderstandings arising under, out of, or in relation to this Agreement, shall be O submitted to and determined by arbitration. To the extent not inconsistent herewith, the rules of the American Arbitration Association shall apply. (b) The Member Agency desiring to initiate arbitration shall give notice of its intention to arbitrate to every other Member Agency and the ABLE. Such notice shall designate such other Member Agencies as the initiating Member Agency intends to have bound by any award made therein. (c). The decision of the arbitrator shall be binding upon all Member Agencies involved in the arbitration. Each Member Agency to the arbitration shall bear its own legal costs, including attorney fees. 8.06 Partial Invalidity. If any one or more of the terms, provisions, sections, promises, covenants or conditions of this Agreement shall to any extent be adjudged invalid, unenforceable or void for any reason whatsoever by a court of competent jurisdiction, each and all of the remaining terms, provisions, sections, promises, covenants and conditions of 12 this Agreement shall not be affected thereby and shall be valid and enforceable to the fullest extent permitted by law. 8.07 Successors. This Agreement shall be binding upon and shall inure to the benefit of the successors of the Member Agencies hereto. 8.08 Assignment. A Member Agency shall not assign any rights or obligations under this Agreement without the written consent of all other Member Agencies. 8.09 Execution. The legislative bodies of the Member Agencies enumerated herein have each authorized execution of this Agreement, as evidenced by the authorized signatures below, respectively. Dated: CITY OF COSTA MESA By: Mayor ATTEST: APPROVED AS TO FORM: Deputy City Clerk City Attorney of the City of Costa Mesa Dated: CITY OF NEWPORT BEACH By: ATTEST: APPROVED AS TO FORM: City Clerk of the City of Newport Beach 13 City Attorney JPA AGR 090999 9