2.4. ERMUSR 05-10-2016 - Laserfiche WebLink

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To defend that same action by relying on the various cities' individual coverages would be immensely more complicated,particularly if different insurers were involved. Each city would report the action to its own respective liability carrier,who would then assign a defense attorney to defend the case. Each of those defense attorneys would in turn do two things. First, they would try to defend the case against the plaintiff. Second, they would try to show that if there was any negligence and liability, it belongs to one of the other defendants. This increases the cost of defending the case in several ways. Another reason LMCIT requires that cities take special steps to put coverage into place for joint powers is because there is the potential for conflict among the defendants, even if all the cities were LMCIT members. Each city may have an interest in making sure that any liability is charged against the other cities'policies to protect its own loss experience and dividend distribution. Putting all of the liability coverage for all defendants in one coverage document eliminates this problem among the defendants. 1. Definition Minn.Stat.§47.59. A joint powers entity is an operating entity created by two or more governmental units entering into an agreement as provided by statute for the joint exercise of governmental powers. The agreement is deemed to create a joint powers entity if it establishes a board with the effective power to do any of the following, regardless of what the specific consent of the constituent governmental units may also require: • To receive and expend funds. • To enter contracts. • To hire employees. • To purchase or otherwise acquire and hold real or personal property. • To sue or be sued. LMC information memo, In evaluating whether a joint powers agreement actually creates a joint powers Intergovernmental Cooperative Agreements. entity, it is important to review what the agreement actually does,not just what it is called. For example, most mutual aid agreements simply say that each city agrees to provide specified assistance to the other under specified circumstances. This situation does not usually involve a joint managing board with the kinds of powers to enter into contracts,hire employees, and so on. Thus, it would not be considered a joint powers entity for coverage purposes (keep in mind, though,that LMCIT has reviewed joint powers agreements that were titled mutual aid agreements,but which actually did create a joint powers entity). 75