2. USE/CREATION OF JOINT POWERS AUTHORITIES TO SHARE
MUNICIPAL RESOURCES
California Contract Cities Association
52nd Annual Municipal Seminar
May 14, 2011
3. WHY FORM A JPA?
A Joint Powers Authority, by Agreement, may
create an entity which is separate from the parties
to the Agreement, but which can exercise the
powers which are common to its members
Can be more cost effective
Example: a city, a county and a Fire District form a JPA to provide
fire prevention services, but pool and share the costs of
administration and management
4. Can facilitate regional or political goals
WHY FORM A JPA?
Example: a local reuse authority where multiple
jurisdictions have an economic/job creation interest in
the reuse and redevelopment of a former military base
property
5. WHY FORM A JPA?
Can pool resources and assets
Example: a JPA can issue revenue bonds to help fund the
construction of improvements, even where the one or
more of the parties to the JPA may not have this
authority individually
The power to issue revenue bonds is additional to the powers
common to the parties to the JPA (Govt. C. Sec. 6547
A JPA’s issuance of revenue bonds is not subject to the 2/3 voter
requirement in order to incur indebtedness in excess of annual
income and revenue
The debt of JPA and the assets at risk are those of the JPA, not the
individual members (Govt. C. Sec. 6551)
6. WHY FORM A JPA?
Can limit liability of members of the JPA
Limitation of individual liability is contractual through
the terms of the Agreement
7. IMPORTANT COMPONENTS OF A JPA
AGREEMENT
Must state a Purpose (Govt. C. Sec. 6503)
Capture the exercise of the common powers of the
members in the statement of the purpose of the JPA
8. IMPORTANT COMPONENTS OF A JPA AGREEMENT
Must state the Powers of the JPA and/or how they
will be exercised
Consider stating the powers as broadly as possible, in
case you ever need them
Power to contract
to employ agents, officers and employees
to acquire, lease, construct, maintain, operate and dispose of real
property or improvements
power of eminent domain
power to incur debt, including bonding authority
power to sue or be sued
9. IMPORTANT COMPONENTS OF A JPA AGREEMENT
Manner of exercising power
Choose a member whose powers represent the lowest
common denominator of powers of the members—often a
general law city
Financing and Bonding authority?
Make sure to chose a member with the power to adopt an
ordinance when establishing the manner of exercising the
common powers
Describe as broadly as possible (e.g., “use any statutory
power available under the Joint Exercise of Powers Act or
any other applicable laws of the state whether heretofore
or hereinafter enacted or amended…”) the power to issue
10. IMPORTANT COMPONENTS OF A JPA AGREEMENT
Governance Issues
Appointment authority of each member to create Board
members of JPA
Can appoint alternate members in case of a absence of a Board
member
Removal of individual Board members—who has the
power?
Distribution of voting power among Board members
How are vacancies handled? Does the appointing
member use the same process to appoint a new member
or does an alternate step into that vacancy?
11. IMPORTANT COMPONENTS OF A JPA AGREEMENT
Organization of the JPA
Appointment of Officers
Chair
Vice-Chair
Secretary
Legal Advisor
The JPA may chose to appoint the City Attorney of one of the
members to act as General Counsel to the JPA
12. IMPORTANT COMPONENTS OF A JPA AGREEMENT
Treasurer
Must perform an annual audit
Will the JPA have employees or contract with a member
entity for employee services?
Personnel policies/procedures/compliance with Meyers, Milias,
Brown Act.
Discuss governance, organization and compliance with
Brown Act more particularly in separately drafted By-
laws
13. IMPORTANT COMPONENTS OF A JPA AGREEMENT
Liability of the JPA vs. liability of individual
members
Must specify that the liability of the JPA is not the
liability of any individual member—draft as broadly as
possible to pick up language in Govt. C. Sec 6508.1
This applies to contractual liability of the JPA, but may not apply
to tort liability of the JPA (See Govt. C. Sec. 895.2)
14. IMPORTANT COMPONENTS OF A JPA AGREEMENT
Indemnity Clause
Govt. C. Sec. 895.2 holds public entities who enter into
agreements with each other jointly and severally liable for
(tort) injuries caused by negligent acts of any member or
the entity created by the agreement
Consider having the JPA indemnify individual members from
claims and liabilities arising from performance of activities and
exercise of powers under the Agreement
Consider naming each member as an additional insured under the
JPA general liability insurance policy
Some Agreements provide cross-indemnity between members for
any negligent acts alleged—acts like a comparative negligence
15. IMPORTANT COMPONENTS OF A JPA AGREEMENT
Insurance
Can belong to a Risk Pool (itself a JPA)
Workers compensation insurance necessary if JPA has employees
General Liability insurance to back up indemnity obligations
Privileges and immunities
Gov. C. Sec. 6513 states that all privileges and immunities
from liability that apply to officers, agents, employees of a
public agency apply equally when they are performing
duties for the JPA—good to lift this statutory provision
and include it in the Agreement
16. IMPORTANT COMPONENTS OF A JPA AGREEMENT
Termination Rights of Individual Parties
Partial dissolution of assets pro rata or forfeiture?
Require terminating member to address its share of any
liability/debt service
17. IMPORTANT COMPONENTS OF A JPA AGREEMENT
Dissolution of Assets/Termination of JPA
JPA can have a set termination date
Can terminate by vote of members
Unanimous vote vs. simple or even super-majority?
Provide for distribution of assets depending on how those
assets were shared when JPA was formed—e.g., does a
member initially contributing a certain asset retain that
asset upon dissolution?
Dispute Resolution (for problems between
members)?
