Agenda Packets - 1994/02/28 - Laserfiche WebLink

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4 Mr. Donald Busch February 22, 1994 Page 3 The Fire Department shall hold the Cities harmless and will defend and indemnify the Cities for any claims, suits, demands or causes of action for any damages or injuries based on allegations of negligence or omissions by employees, officers, or agents of the Fire Department. The Fire Department's duty to indemnify will be limited to its applicable insurance coverage. This new language was suggested by LMCIT attorneys upon understanding the nature of the relationship between the Cities and the Fire Department. Very simply, the Fire Department as structured in the proposed contract has no independent source of funding other than from the Cities to whom it provides services. Thus, it has no financial ability to indemnify beyond the limits of its insurance coverage. On the other hand, no such limit exists for the Cities. If sued, the Fire Department has no independent source of funds to pay any award for negligence or omission on the part of agents of the Cities if the award goes beyond the Cities' insurance coverage. The concern is more academic than real, because in such instance the Cities would likely wind up paying such sum as a supplemental appropriation to the Fire Department budget under the contract. 5. We need a copy of the lease agreement which is Exhibit A of the contract before approving the contract. A copy of the lease agreement which is Exhibit A was transmitted on February 11, 1994 following some minor tune-ups in the document. Concerns were also expressed by the City Attorney and City Council that one city has the authority to make all decisions. We would like to see the joint powers agreement amended to require agreement by two Cities. The December 11, 1990 joint powers agreement for the provision of fire protection services between the Cities provides that "for purposes of determining majority consent at the Administrative Committee level, or at the City Council level, each City shall have voting rights which equal its percentage share under the formula at the time such decision is made, with each such decision being made on the basis of 50%plus approval". Blaine's share under the formula is nearly 67% and will continue to grow in the future. There are probably very few business persons in existence willing to make a two-thirds investment in an enterprise and yield two-thirds control to the minority shareholders of that enterprise. Regardless, however, the existing arrangement has worked well to the mutual benefit of all parties. The Cities have received excellent, cost-effective fire service and operations of the Fire Department in administrative and financial terms have been vastly improved, all without significant differences of opinion requiring a "vote" to resolve an issue. Thus, the advantages of a partnership ownership in the contract, albeit it weighted according to investment, seems far preferable to the alternatives available to each of us.