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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 i ASSUMPTION OF LIABILITY AGREDIENT 2 3. THIS AGREEMENT, dated for reference purposes only, on the 4 14th day of November, 1977, is made and entered into between 5 the County of Los Angeles, sometimes hereinafter referred to as 6 the "County," and the City of 7. sometimes hereinafter referred to as the "City." 9 RECITALS 10 (a) City and County have heretofore contracted for the II performance of services by County, its officers, agents and 12 employees, and will in the future extend, renew and amend such 13 contracts, and enter into other and further contracts for the 14 performance of services; and 15 (b) Such contracts are agreements defined under §895 of the 16 Government Code, and pursuant to §895.2 thereof joint and several 17 liability is imposed on the parties; and 18 (c) Pursuant to §895.4 of the Government Code the parties 19 as a part of the aforementioned agreements may provide for.con- 70 tribution or indemnification upon any liability arising out of 21 the performance of the agreement; and (d) The County is willing to assume liability and defend 22 23 and hold the City harmless from any loss, cost or expense caused 24 by the negligent or wrongful acts or omissions of County officers, 25 its agents and employees, occurring in the performance of said 26 agreement; and . 27 1 _ 28 iii Ib i 2 3 .4 5 6 7 8 9 10 I1 12 13 14' 15 16 17 18 19 20 21 22 23 24 25 26 27 28 (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 -2- ,_j „ > - I -3- I arising in the performance of an agreement between the 2 parties hereto, with the exception that the County shall -3 assume liability and defend and hold the City harmless from 4 loss, costs or expenses caused by the negligent or_wrongfu.l 5 act or omission of County officers, agents and employees, G occurring in the performance of any agreement between the 7 parties hereto where a duty is imposed on the County pursuant 8 to such agreement to provide maintenance or inspection 9 services pertaining to said property. Where such an-agree- 10 went between a City and County provides that the County will 11 provide at least the same level of maintenance or inspection _.. 12 services that the County provides to unincorporated areas, 13 -the County will assume liability and defend and hold the City 14 harmless from loss, costs or expense caused by the negligent 15 or wrongful act or omission of County officers, agents and 16 employees in failing to provide said services in accordance 17 with said agreement. 18 3. The parties further agree that the Auditor- 19 Controller of the County shall establish a fund for the pay - 20 ment of losses for which the County,may.be liable under the 21 terms of this agreement, and the County agrees to maintain 22 the fund for the purpose of paying such losses which may 23 occur through its performance under agreements to provide 24 city services to the cities within the County. 25 27 .2s -3- 16 1 1 2 3 ,4 5 6 7 8 9 10 it 12 13 14' 15 16 17 18 19 20 21 22 23 24 25 26 27 28 V ' 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; -4- i I 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 (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 -5- N 157LN- WO/ 1.1 11 76 I 2 3 4 5 G 7 8 9 10 11 12 13 14 15 16- 17 18 19 'u 21 22 23 24 25 26 27 28 ij 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 i i i I 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: -.6 - i ]6 l 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 ' 27 28 (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 -7- ]6 I where arising ut of the County's negligent or wrongful :act g Y 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 i 10 BY 11 Mayor 12 ATTEST this day of ,I 13 1977. 14 15 City er c I �I 16 17 COUNTY OF LOS ANGELES 18 By • 19 ; C iairman, Boar o - Supervisors 20 ATTEST this day of ,! 21 1977. ,2 JAMES S. MIZE, Executive Officer- Clerk of the Board of Supervisors 23 APPR AS 0 FORM I 24 BY_ eputy . I 25 Ri chard n , ker er, City t i°rre j 28