SR-10-24-1978-6D14Santa Monica, Ca" fornia, October 10, 1978
TO: Mayor and City Council
FROM: City Staff
SUBJECT: Assumption of Liability Agreement with the
County of Los Angeles
Introduction
0 CT 2 4 1978
This report explains the proposed Assumption of Liability Agreement between
Los Angeles County and the City of Santa Monica for contract services pro-
vided to the City by the County
the Agreement.
Background
It recommends that the City Council approve
Santa Monica has contracted with Los Angeles County under its contract
services program for many years. Currently, these contracts include
agreements for Health Services, Tract and /or Parcel Map check, and General
Services (under which the County repairs and maintains the City's traffic
counters).
These contracts are covered by a blanket Assumption of Liability Agreement where-
in the County assumes liability and indemnifies the City against any loss arising
from the negligent or wrongful acts or omissions of County employees in the
performance of contract services. The Agreement also provides that the County
obtain commercial insurance to pay such losses, the cost of which is included
in the billing rate to cities for County services.
Self- Insurance for Contract Servi
Due to increased insurance costs, Los Angeles County has recently established
a self- insurance program for its contract services. This program will provide
GDay
OCT 2 4 1978
TO: Mayor and City Q° ncil -2- October 10, 1978
liability coverage which is more economical for both the County and con-
tracting cities. As before, the cost of coverage will be included in the
billing rate and be borne by contracting cities on a proportionate basis.
Proposed Assumption of Liability Agreement
The change from purchased coverage to self- insurance requires two major
changes in the existing Assumption of Liability Agreement. First, references
to purchased insurance are deleted and are replaced by provisions regarding
the establishment and operation of the self- insurance fund. Second, in
order that the County (and the self- insurance fund) not assume any unnecessary
liability for the actions of others, the Agreement contains a
clause wherein each contracting city agrees to hold the County harmless for
the negligent or wrongful acts and omissions of its own employees.
The proposed agreement was developed with the participation of the League of
California Cities and the Association of Independent Cities of Los Angeles
County. The City Attorney has reviewed it and has concluded that the terms
are reasonable. There is some concern that the contract language is not precise
and leaves some question as to which City- County contracts are covered.
However, the specific contracts which are covered are listed in a supple-
mental letter of clarification from the County.l The City of Santa Monica has
three contracts which are covered by the blanket Assumption of Liability Agree-
ment: Health Services; Tract and /or Parcel Map; and General Services.
1 Dated February 24, 1978 from Chief Administrative
Officer Harry L. Hufford.
T0: Mayor and City r -mcil -3- October 10, 1978
Alternatives
1. Approve the proposed Assumption of Liability Agreement with Los
Angeles County.
2. Disapprove the Assumption of Liability Agreement. Selection of this
alternative would result in the City assuming liability along with the
County for any losses resulting from the performance of contract services
.(Government Code Section 895.2). further, staff is advised by the County
that it would move to cancel existing service agreements.
Recommendation
Staff recommends Alternative #1 as the most reasonable means of limiting
the City's liability and providing economical insurance coverage for contract
services.
Prepared by: JEANNE KENNEDY
Administrative Assistant
JK:dar
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ASSUMPTION OF LIABILITY AGREDIENT
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THIS AGREEMENT, dated for reference purposes only, on the
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14th day of November, 1977, is made and entered into between
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the County of Los Angeles, sometimes hereinafter referred to as
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the "County," and the City of
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sometimes hereinafter referred to as the "City."
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RECITALS
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(a) City and County have heretofore contracted for the
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performance of services by County, its officers, agents and
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employees, and will in the future extend, renew and amend such
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contracts, and enter into other and further contracts for the
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performance of services; and
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(b) Such contracts are agreements defined under §895 of the
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Government Code, and pursuant to §895.2 thereof joint and several
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liability is imposed on the parties; and
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(c) Pursuant to §895.4 of the Government Code the parties
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as a part of the aforementioned agreements may provide for.con-
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tribution or indemnification upon any liability arising out of
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the performance of the agreement; and
(d) The County is willing to assume liability and defend
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and hold the City harmless from any loss, cost or expense caused
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by the negligent or wrongful acts or omissions of County officers,
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its agents and employees, occurring in the performance of said
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agreement; and .
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(e) The City is willing to assume liability and defend and
hold the.County harmless from loss, cost or expenses caused by
the negligent or wrongful act or omission of city officers, agents
or employees occurring in the performance of agreements between.
the parties, except as hereinafter provided,
NOW, THEREFORE, IT IS AGREED AS FOLLOWS:
1. The County will assume liability and defend and
hold the -city harmless from loss, costs or expenses caused
by the negligent or wrongful act or omission of County
officers, agents and employees occurring in the performance
of agreements between the parties hereto to the extent that
such liability is imposed on the City by the provisions of
§895.2 of the Government Code of the State of California.
2. The City will assume liability and defend and hold
the County harmless from loss, costs or expenses caused by I
the negligent or wrongful act or omission of City officers,
agents and employees occurring in the performance of agree-
ments between the parties hereto to the extent that such
liability is imposed on the County by the provisions of
§895.2 of the Government Code of the _State of California. In
addition, when liability arises pursuant- to § §830, et seq.,
of the.Government Code,'by reason of a dangerous condition
of public property of the City, the City shall assume
liability and defend and hold the County harmless from loss,
costs or expenses caused by the negligent or wrongful act or
omission of City officers, agents and employees, whether
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arising in the performance of an agreement between the
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parties hereto, with the exception that the County shall
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assume liability and defend and hold the City harmless from
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loss, costs or expenses caused by the negligent or_wrongfu.l
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act or omission of County officers, agents and employees,
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occurring in the performance of any agreement between the
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parties hereto where a duty is imposed on the County pursuant
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to such agreement to provide maintenance or inspection
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services pertaining to said property. Where such an-agree-
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went between a City and County provides that the County will
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provide at least the same level of maintenance or inspection
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services that the County provides to unincorporated areas,
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-the County will assume liability and defend and hold the City
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harmless from loss, costs or expense caused by the negligent
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or wrongful act or omission of County officers, agents and
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employees in failing to provide said services in accordance
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with said agreement.
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3. The parties further agree that the Auditor-
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Controller of the County shall establish a fund for the pay -
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ment of losses for which the County,may.be liable under the
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terms of this agreement, and the County agrees to maintain
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the fund for the purpose of paying such losses which may
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occur through its performance under agreements to provide
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city services to the cities within the County.
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' 4. It is understood by the parties that the fund
referred to in paragraph 3 above is under the full control
of the Board of Supervisors and reappropriation of unen
cumbered year -end balances in this fund is discretionary
with the Board of Supervisors.
5. The City agrees to make payment to the fund, and
the County agrees to.require each city receiving services
under City Service Agreements to also contribute to the fund.
Payments towards the total amount of the fund shall be made
by the City in such amounts as may be established by the
Auditor - Controller according to the policy and procedure
established by the Board of Supervisors, and in the same
-ratio as the cost of services received by the City is to the I
total cost to the County for its performance of City Service
Agreements during each fiscal year. In the event that City
should elect to terminate its Service Agreement with the
County, its responsibility to contribute to the fund pursuant
to this agreement shall be limited.to payment of amounts
which accrue prior to the effective date of said termination.
6. Each party agrees to fully "cooperate with the other
and assist the other party hereto in all matters relating to
losses covered by the terms of this agreement, and more
-specifically but not being limited thereby, each party will:
(a) Give prompt notification of all occurrences
covered or likely to be covered by the terms hereof,
together with the particulars thereof to the other party
hereto;
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(b) if claim is made, or suit is brought against
a party on occurrences covered or likely to be covered
by the terms hereof, such party shall immediately
forward every claim, demand, notice, summons or other
process received by it to the other party hereto.
.7. Should City agree, stipulate, consent to, or other-
wise suffer the granting of any claim, the making of any
judgment, order, 'or other award for damages or other relief
against itself or any of its or the County's officers,
agents, or employees in any proceeding or action authorized
by law involving a matter arising out of the performance by
the County of services affected hereby without the prior
written consent thereto of the County, the City agrees to
indemnify, hold harmless, and defend the County from any
loss, cost or expense to it arising from such claim, judgment,
or other award irrespective of the legal basis upon which
liability may be imposed by such action including liability
of the County under the provisions., of Section 895.2 of the
Government Code.
8. Any party may at its own cost participate in the I.
defense of any suit, or in the prosecution of any appeal
affecting matters herein involved where the duty of defense
or prosecution is imposed on the other party, and where the
other party has consented thereto. i
9. This agreement shall apply to and shall be deemed
to be a part of all agreements now existing or hereafter
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entered into, including amendments, renewals, or other:
extensions thereof, wherein the City and County have con-
tracted under circumstances wherein the liability of the City)
and County is joint and several under §895.2 of* the Govern
.ment Code of the State of California. The provisions of this
agreement shall supersede and control over any other provi-
sions inconsistent therewith in any such contract, heretofore'
or hereafter entered into by and between the parties hereto,
unless by specific reference therein this Assumption of
Liability Agreement is inapplicable.
10. On the effective date of this agreement that cer-
tain agreement entitled "Assumption of Liability Amendment,"
if any between the parties, is terminated. The effective
date of this agreement is the date executed by the parties,
but in no event sooner than 12:00 A.M., March 15, 1978,
unless the aforementioned Assumption of Liability Amendment
should be sooner terminated by 'the parties, in which event
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the date of such termination shall, be the effective date of I
this agreement. Upon the effective date of this agreement the
same'shall continue during the term of any agreement for I
services to which the same is applicable, unless the County
shall sooner elect to terminate this agreement upon thirty
days written notice to the City. The County further agrees
that this agreement shall be only terminated upon the occur -
rence of the foregoing, or any one or more of the following
events:
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(a) Failure of the City to cooperate with the
County, as required by this agreement.
(b) Upon the City authorizing any judgment, order
or other award for damages without the consent of the
County in violation of the terms and provisions of this
agreement.
(c) Upon the County's election in its absolute
discretion to terminate this Assumption of Liability
Agreement as to all cities having such service agree-
ments with the County -.
11. To the extent that the County has agreed to indem-
nify, defend and waive harmless a city, its officers, agents
and employees under this agreement, said obligation shall
continue to exist.during the term of this agreement whether I
or not there are sufficient funds for such indemnity, defense!
or hold harmless in the fund established by the Auditor -
Controller. It is further understood that the County may I
also utilize said fund for the purchase of commercial
insuraneg and claims management services and for the payment I,
of other costs to cover the exposure's of the County hereunder
in whole or in part.
12. On termination by the City of service contract with
the County, or upon termination by the County for any cause,
the County shall continue to indemnify, defend and hold harm-"I
less the City for all claims. and losses for which liability i
is imposed on the County by the terms of this agreement, and
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I where arising ut of the County's negligent or wrongful :act
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2 or omission, prior to the effective date of said termination.!
_. 3 Said City shall not be- entitled to return of any considera-
4 tion paid by it towards the fund established by the Auditor -
5 Controller on the termination of this agreement.
6 IN WITNESS WHEREOF, the parties hereto have caused this
_.7 agreement to be executed by their duly authorized officers the
8 day and year hereinafter set forth.
9 CITY OF
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BY
11 Mayor
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ATTEST this day of ,I
13 1977.
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15 City er c I �I
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17 COUNTY OF LOS ANGELES
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By •
19 ; C iairman, Boar o - Supervisors
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ATTEST this day of ,!
21 1977.
,2 JAMES S. MIZE, Executive Officer-
Clerk of the Board of Supervisors
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APPR AS 0 FORM I
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eputy . I
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Ri chard n , ker er, City t i°rre j
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