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Intergovernmental Agreement Review Program
Over the past several years, the AMRRP Board of Trustees has engaged in discussions about the impact of intergovernmental agreements, including mutual and automatic aid agreements, on member liability. The topic gained significant focus in the aftermath of the Yarnell Hill tragedy. Early in 2014, the Board approved a project to assist in identifying the scope of the IGA issue, asking member cities and towns to submit their existing IGAs for a limited review of liability concerns, including indemnity language and insurance requirements. Part of the evaluation process included informational presentations at the Arizona City Attorneys’ Association annual conference, and at the 2014 Annual League of Cities and Towns conference. Out of the project came the structure for a new program to be added to the review and assistance programs already available to members (PAL, LUAL, PSAP) which was formally approved by the Board of Trustees in November. Lessons we learned in the review project that can be applied going forward:
For those IGAs where a city/town must indemnify another agency for that agency’s negligence (usually ADOT), changes in state law are necessary. In cooperation with the League, legislation has been prepared that will give cities and towns protection by making contracts illegal that require one party to an IGA to indemnify another party for that party’s negligence. The League is taking the lead in working to pass that legislation.
There is language that may already be in your ADOT IGAs that will take advantage of the new legislation, if passed. If not, attached is language that you should require going forward. ADOT has agreed to this language.
ADOT has already agreed to language for some cities and towns that all municipalities should require.
If ADOT requires your city/town to indemnify ADOT for its subcontractors’ negligence, your city/town should obtain indemnity protection from ADOT’s subcontractors. ADOT has agreed to language that will give you that protection. That language is attached and you should insist on it. Under this language, even though your city/town may have to indemnify ADOT for its subcontractors’ negligence, with this ADOT-approved language you can tender the defense to ADOT’s subcontractors.
ADOT has drafted indemnity provisions that greatly limit ADOT’s ability to enforce the indemnity. Attached is an example. This language should only be used in agreements where the city/town is seeking to avoid indemnity liability.
You likely have many other joint agreements with other agencies (often times called Mutual Aid or Automatic Aid Agreements). There are specific posting requirements under the workers’ compensation statutes that a city/town must satisfy to preserve protections afforded by the statutes (the language is specified in the statutes). Attached is language that you can use in these agreements.
The review also led to the development of a checklist that can be used by city/town attorneys to review existing IGAs. Ultimately, the checklist for existing agreements as well as the Key Provisions for future IGAs do not replace your city/town attorney, but rather provide additional resources for him/her to assist you in limiting potential liability and creating leverage when negotiating with other agencies that have a tendency to be unaccommodating when negotiating IGAs. Starting on January 1, 2015, member cities and towns will be able to submit proposed IGAs and Mutual and Automatic Aid Agreements for review prior to consideration and approval. The informational flyer for this new Program is also attached. We hope you will take advantage of all of the programs and value-added features of your membership in the Arizona Municipal Risk Retention Pool. And as always, you can contact our Pool Administrator, Southwest Risk Services, with any questions or assistance needs.
14902 North 73rd Street, Scottsdale, Arizona 85260
602-996-8810 / Toll Free: 888-309-4339 / FAX: 602-996-9045