1g SW Metro Joint Powers Agreement
CITY OF
CHANHASSEN
7700 Market Boulevard
PO Box 147
Chanhassen, MN 55317
Administration
Phone: 952.227.1100
Fax: 952.227.1110
Building Inspections
Phone: 952.227.1180
Fax: 952.227.1190
Engineering
Phone: 952.227.1160
Fax: 952.227.1170
Finance
Phone: 952.227.1140
Fax: 952.227.1110
Park & Recreation
Phone: 952.227.1120
Fax: 952.227.1110
Recreation Center
2310 Coulter Boulevard
Phone: 952.227.1400
Fax: 952.227.1404
Planning &
Natural Resources
Phone: 952.227.1130
Fax: 952.227.1110
Public Works
1591 Park Road
Phone: 952.227.1300
Fax: 952.227.1310
Senior Center
Phone: 952.227.1125
Fax: 952.227.1110
Web Site
www.ci.chanhassen.mn.us
~j
MEMORANDUM
TO:
Todd Gerhardt, City Manager
FROM:
Justin Miller, Assistant City Manager 0'^
o "<!I'
January 20,2006
DATE:
RE:
Southwest Metro Joint Powers Amendment
BACKGROUND
Staff has been approached by Southwest Metro Transit to amend the joint powers
agreement in light of recent court actions regarding liability exposure of parties
included in joint powers agreements. Basically, the court ruled that non-negligent
members of a joint powers agreement can be held liable for the acts of the
negligent member. This "Agreement to Limit Indemnification" and "First
Amendment to Third Restated Joint Powers Agreement" has been drafted to limit
the exposure of non-negligent parties in the event that a partner city is liable to a
third party. The City Attorney has reviewed these agreements, and is satisfied
with their form and intent.
RECOMMENDA TION
Staff recommends that the Chanhassen City Council approve the attached
"Agreement to Limit Indemnification" and "First Amendment to Third Restated
Joint Powers Agreement". Approval of this action requires a majority vote of the
city council.
The City of Chanhassen · A growing community with clean lakes, quality schools, a charming downtown, thriving businesses, winding trails, and beautiful parks. A great place to live, work, and play.
SOUTHWEST METRO TRANSIT
13500 Technology Drive, Eden Prairie, MN 55344
952-949-2BUS · www.swtransit.org
January 11, 2006
REceiVED
JAN 1 7 2006
CITY OF CHANHASSEN
Dear Mr. Todd Gerhardt,
At the SouthWest Metro Transit Commission (SMTC) meeting in December the
Commission approved submitting the following Joint Powers Agreement onto our
member cities for adoption.
SMTC recommends amending the Joint Powers Agreement and that member cities enter
into the Agreement to Limit Indemnification for the following reason; the documents
. attempt to limit each participating member's liability to indemnify another member to the
indemnifying member's statutory limit.
This is necessary in light of a recent court decision that not only stacked statutory limits
but also made a non negligent member of a joint powers entity liable for the acts of the
negligent member. By adopting the indemnification provision we attempt to limit the
indemnification liability of each member city, to the extent possible, to each member
city's statutory limit. A court will stil,l be able to stack coverage. This means the court
can award an injured party recovery against each member of the joint powers entity
regardless of fault.
For illustrative purposes, let's say that Chanhassen is liable to a third party for its
statutory limit of$300,000. Under the current contractual agreements, Chaska must
indemnify Chanhassen. Hypothetically, Chaska might be liable up to $600,000 - both its
statutory limit and that ofChanhassen. By amending the Joint Powers Agreement and
entering into the Agreement to Limit Indemnification, SMTC member cities will limit
their contractual obligation to indemnify only up to their individual statutory limits.
Therefore, in the illustration, Chaska would be liable to indemnify only up to its statutory
limit of $300,000.
Enclosed with this letter are the documents we would need to have signed by your City
Council in order to move forward. Please do not hesitate to call if you have questions or
would like to discuss the matter in more detail.
Sincerely,
.~:::;=
Len Simich
Executive Director
AGREEMENT TO LIMIT INDEMNIFICATION
SOUTHWEST METRO TRANSIT COMMISSION
This Agreement is made and entered . into as of the _ day, ~f
, 2005, by and between the Cities of Eden Prairie, Chanhassen and
Chaska, all being municipal corporations organized under the laws 'of the State of
Minnesota, pursuant to authority conferred upon the parties by Minnesota Statutes SS
174.265, 473.384, 473.388, and/or 471.59 (the "Member Cities") and Southwest Metro
Transit Commission, established pursuant to the 1;'hird Restated Joint Powers Agreement,
as amended ("Joint Powers Agreement") and prior agreements among Member Cities;
and
WHEREAS, the. parties desire to limit their liability with respect to certain
indemnification by a party of other parties, the parties agree as. follows: .
Indemnification Limitation. No party to this Agreement shall be required to pay
'on behalf of itself and to any other party or parties any amount as. indemnification to. a
party or parties, arising by operation of law or otherwise as a result of the relationships
created,' and enterprise conducted, pursuant to the Joint Powers Agreement, in. excess of
the limits of liability applicable to the party required to pay as established in Minnesota
Statut,es Chapter 466, or in the event that Minnesota Statutes Chapter 466 does not apply,
the maximum amount of insurance coverage available. to the party required to pay. The
limits of liability for some or all of the parties may not be added together to increase ' the
maximum amount of liability for any party. the intent of this section is to limit a party's
obligation to indemnify another party or parties. In those instances in which a party is
directly liable for damages as well as for indemnification to another party, the combined
liability of the party will not exceed the ,limits of liability under Minnesota Statutes
Chapter 466 applicable to the liable party or in the event that Minnesota Statutes Chapter
466 does not apply, the maximum amount of insurance coverage available to the liable
party.
IN WITNESS WHEREOF, the undersigned Governmental Units, by action of
their governing bodies, have caused this Agreement to be executed.
AGREEMENT TO LIMIT INDEMNIFICATION
SOUTHWEST METRO TRANSIT COMMISSION
CITY OF CHANHASSEN
By
Its
By
Its
Approved by the City Council of
Chanhassen this day of .
, 2005.
FIRST AMENDMENT TO
THIRD RESTATED JOINT POWERS AGREEMENT
This First Amendment to Third Restated Joint Powers Agreement is made and
entered into as of the day of , 2005, by and between the Cities
of Eden Prairie, ,Chanhassen and .Chaska,. all being municipal. corporations organized
under the laws of the State of Minnesota, pursuant to authority conferred upon the parties
by Minnesota Statutes SS 174.265, 473.384, 473.388, and/or 471.59 (the "Member
Cities").
WHEREAS, the Member Cities established. the Southwest Metro Transit
Commission pursuant to the. Third Restated Joint Powers Agreement ("Agreement") and
prior agreements; and
WHEREAS, the parties desire to 'amend the Agreement.
NOW THEREFORE, the Agreement is amended by adding subsection7.e. as
follows:
e. Indemnification Limitation. No party to this Agreement shall be required to pay
on behalf of itself and to any other party or parties any amount as indemnification to a
party or parties, arising pursuant to this Areement by operation of law or otherwise, in
excess of the limits of liability applicable to the party required to pay as established in
Minnesota Statutes Chapter 466, or in the event that Minnesota Statutes Chapter 466 does
not apply, the maximum amount of insurance coverage available to the party required to
pay. The limits of liability for some or all of the parties may not be added together to
increase the maximum amount of liability for any party. The intent of-this section is to
limit a party's obligation to indemnify another party or parties. In those instances in
which a party is directly liable for damages as well as for indemnification to another
party, the combined liability of the party will not exceed the limits of liability under
Minnesota Statutes Chapter 466 applicable to the liable, party' or in the event that
Minnesota, Statutes Chapter 466 does not apply, the maximum amount of insurance
coverage available to the liable party.
IN WITNESS WHEREOF, the undersigned Governmental Units, by action of
their governing bodies, have caused this Agreement to be executed in accordance with
the authority of Minnesota Statutes S 471.59.
Approved by the City Council of
Chanhassen this day of
, 2005.
FIRST AMENDMENT TO
THIRD RESTATED JOINT POWERS
AGREEMENT
CITY OF CHANHASSEN
By
Its
By
Its