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HomeMy WebLinkAboutAgenda Report - December 20, 1989 (76)C - 'UNCI L T0: THE CITY COUNCIL FROM: THE CITY MANAGER'S OFFICE C O M M U N I C A T I O N SUBJECT REVIEW OF CLAIMS MANAGEMENT SERVICES PREPARED BY: City Manager COUNCIL MEETING DATE DECEMBER 20, 1989 RECOMMENDED ACTION: That the City Council. review the staff recommendation concerning this matter and take action as deemed appropriate. BACKGROUND INFORMATION: The City presently contracts with the firm of ADJUSTCO, of Sacramento, for claims administraticn in the areas of liability. and workers' compensation. This relationship with ALISM and its predecessor, L. J. Russo, dates back approximately 10 years. The claims administration service in both areas was quite satisfactory until the recent few months during which time there has been a significant decline in performance. A &SM representatives acknowledged this in a meeting with the City Attorney, City Clerk, Assistant City Manager and ne in City Hall Wednesday morning. Claims administration is a most critical aspect of the City's oCeration. Errors and omissions in this area have the potential of exposing the ity to huge monetary losses. Staff members .expressed to the ALISM representatives disenchantment with the level of service presently being provided. The representatives were advised that as con'ditions stand at this time, staff would be recommending to the City Council at Wednesday night's meeting that the City's claims administration business be placed elsewhere. ALLSM was invited to attend the City Council meeting to offer whatever information it might in an effort to change the staff's recommendation or convince the City Council to the contrary. ALyCSM will in all probability be in attendance at Wednesday night's meeting. Staff members have contacted other claims administration firms and have received assurances that such a transition cold be accomplished with ma*mm disruption in the normal order of things. AL&SM has, within the recent past, lost some key personnel. W have been advised that this has occurred in at least one other branch office of this firm. The net result of this has been that some of the City's claims have not been handled properly and expeditiously. REVIEW OF CLAIMS MANA(1L; icNT SERVICES December 20, 1989 Page - 2 - Staff will be prepared at Wednesday night's meeting to present recommendations to the City Council regarding the providing of claims administration service. Specific proposal will be presented at that time. The City cannot afford the exposure of maintaining this relationship while A ISM restructures and re -staffs its organization, promises notwithstanding. Staff will be prepared to answer any questions Councilmembers may have regarding this most important issue. COUNC713 Respectfully submitted, Tboinas A. Peterson City Manager �kainal - For City's File SELF-INSURED CLAIMS MANAGEMENT AND LOSS CONTROL CONSULTING CONTRACT THIS CONTRACT is made and entered into this 20th day of Vecembelc , 1989, by and between the CITY OF LODI, hereinafter referred to as the CITY, and INSURANCE CONSULTING ASSOCIATES. INC., hereinafter referred to as the CLAIMS ADMINISTRATOR. INSURANCE CONSULTING ASSOCIATES, INC. is licensed in California to provide independent adjusting services. Its State License number is 0607524. It is a California Corporation with Home Office located at 1725 N. McDowell Boulevard, Petaluma, CA 9495.4; Telephone Number: 707/778-1118. The Corporate fficers are Ronald Blanquie, President: Michael Craig Patterson, Executive Vice President; and Daniel A. Blanquie, Senior Vice President. IT IS HEREBY AGREED by and between the parties signing this Contract, as follows: I. GENERAL The CITY desires to 'have a unified claims management and loss control consultfng service. INSURANCE CONSULTING ASSOCIATES, INC. is a Claims Management and Consulting firm experienced in providing the requested services and is ready and capable to perform such services for the CITY. K. SERVICES The CLAIMS ADMINISTRATOR will assist the CITY in the management of the CITY'S liability claims program. It will receive all claims and incident reports from the CITY. It will initiate prompt investigations and attempt to secure the cooperat.i confidence of claimants and their attorneys. It will provide rern^, the CITY with respect to issues of fact, damages, and liability. ;t will provide recommendations with respect to courses of action regarding settlement and/or defense. Utilizing settlement euthority as provided by the CITY, it will negotiate with claimants and their attorneys with the goal of securing a mutually—acceptable resolution to any claim. It will attempt to resolve cases without litigation. If assicjnment of a case to defense counsel 1s necessary, it will make the assignment on behalf of the CITY utilizing a panel of defense attorneys approved in advance by the CITY. It will receive and review all expense billings related to pending cases and, before approving such billings fcr payment, will secure any necessary supportive documentation. Absent direction from the CITY to the contrary, it will attempt to secure open or limited extensions of time on cases which it believes are likely to be resolved more quickly, efficiently, and economically in that manner. Releases of All Claims will be obtained from all claimants receiving settlements from the CITY s t through the CLAIMS ADMINISTRATOR. The CLAIMS ADMINISTRATOR will provide timely and appropriate reporting to the excess insurers of the CITY in a manner consistent with the reporting guidelines provided to it by the s carriers. The CLAIMS ADMJNISTRATOR will perform Loss Control Analysis ¢ s and Consulting services for the CITY in a manner and to an extent agreed upon. It will make itself avaflable to the City Councii for discussion of pending cases. Consistent with the expressed wishes of the CITY, it will make itself available for scheduled claim reviews with the CITY. It will provide to the CITY a -ionthly computerized Loss Run of pending and closed cases sorted in a format tc be approved by the CITY. The CLAIMS ADMINISTRATOR will assist the CITY with risk management and loss control services in a manner and to an extent agreed upon. It will encourage cooperative activity amongst the various other firms providing administration or consulting services to the CITY. 111. PAYMENT FOR SERVICES The annual Computer Services fee for the first year of this Contract is $2,400. That fee covers the cost of computer hardware, space on the system, and production of Loss Run Register, Graphic Summary, and Numeric (2) N Summary reports. The Fee is due in full at the inception of each year of the contract, though, for the convenience of the CITY, payments of $200.00 or one -twelfth of the annual fee, whichever is greater, may be made monthly toward any remaining balance. There will be no charge for the time and attention necessary to review and respond by phone to Incident Reports not requiring investigation, adjustment, or contact with claimants, witnesses, or counsel. Al? activities related to the handling of specific claims will be billed on a Time & Expense basis, as follows, fur the first year: Professional Services Claims Management: $50.00 per hour' Risk Management & Loss Control Consulting: $90.00 per hour* 3 # Based exclusively on time of investigative, supervisory, and management personnel. No additional charge, except as provided below, for routine secretarial, insurance, or office overhead. AVocated Costs Local Travel (billed from Fairfield) Photocopy Color Photography (35mm) Recording cassettes for statements Statement Transcription Video Cassettes Videotaping Long Distance Telephone FAX Services Initial File Set -Up Posting Costs (3) .40 per mile .30 per page 1.75 per print 1.75 each 5.00 per page As Incurred 75.00 per hour As Incurred First Page: 2.50 Each Additional Page: 1.75 25.00' As Incurred Posting Costs As Incurred Necessary Expenses As Incurred Special Computer Services and Reports As Incurred Travel Out of Area As Incurred * Applicable for claims management only. t Ib set-up charge on consulting projects. is Increases are authorized far the second and third years of this contract 3 t in an amount not to exceed 5% per year, plus a pro -rata share of any increase in liability insurance cost exceeding 250 of the previous year's .. premium. The CLAIMS ADMINISTRATOR shall submit Statements on a monthly basis showing an itemized breakdown by claim or by consulting activfty. t i Billings ars payable upon presentation, with any unpaid iters being g subject to a late charge of 1217 per month imposed on the next billing cycle. IV. One (T The term of this Contract shall be a period o�tex year beginning VecenbeA •20, 19'84 , and terminatio a t midnight. or h �t g g n omen. 19Aa u ^, 1 This Contract may be terminated by either party for any reason upon sixty (60) days' written notice. The Contract may be renewed subject to renegotiation of terms and conditions by the pzrties hereto. j:. V. INDEPENDENT CONTRACTOR , It is expressly agreed that the CLAIMS ADMINISTRATOR shall have the status of an Independent Contractor and shall not be deemed to be an officer, employee, or agent of the CITY. VI. OWNERSHIP OF FILES It is agreed that the claim files maintained in the CLAIMS ADMINISTRATOR'S office!: are the property of the CITY and may be reviewed upon reasonable notice. Upon termination, of this Contract, possession of the files will be transferred to the CITY which will pay the reasonable (4) costs of any activity assoc iat I with the transfer i ludin but t limited to, the cost of photocopying in whole or is part any and all claims files as required for the CLAIMS ADMINISTRATOR to be in compliance with any law pertaining to the maintenance of records by a licensed adjusting firm. The CLAIMS ADMINISTRATOR is authorized to destroy any claim file without notice to the CITY after seven years following the date of file closure. VII. M17TIjAT, HOLD NARMT,R..4 ANn TmT)-Fm 1TFTr ATTnnT Each party hereto agrees to indemnify, hold harmless and defend the other, its officers, agents, and employees from and against any and all claims, demands, liability, costs and expenses of whatever nature, including court costs and counsel fees arising out of injury, death, or loss to any person or persons, or loss of, or physical damage to, any property resulting in any manner from the sole negligence or willful acts of the responsible party, its agents, employees, licensees, or guests in the making or arising out of the performance of this agreement. In the event it 1s oetermined by settlement or litigation that there is a joint liability and/or responsibility of the parties for the settlement or judgment, the parties hereto agree that the responsibility for payment of such settlement or judgment shall be borne by the parties in proportion to the share of fault as determined by the court or jui,y in case of a judgment. and by agreement, or arbitration in the event that agreement cannot be reached, in the case of a settlement. The parties further agree hereunder that in tnose cases described under this paragraph, each party shall bear its own costs and attorney fees. YIII. INSURANCE The CLAIMS ADMINISTRATOR agrees to procure and maintai luring the life of this contract and to provide evidence to the CITY that it carries General Liability, Non—Owned Automobile Liability, and Errors & Omissions (5) i insurance in an amount not less than $1,000,000, plus statutory Workers Compensation coverages. 0 11 DENIAL, COMPROMISE OR SETTLEMENT OF CLAIMS Settlement authority will be obtained by the CLAIMS ADMINISTRATOR from the CITY or. in the event of an exposure piercing the CITY'S self—insured retention. jointly from the CITY and its Excess Insurer. Absent specific instructions to the contrary from the CITY, the CLAIMS ADMINISTRATOR is authorized to incur on behalf of the CITY defense costs including, but not limited to attorney fees, court costs, charges for court reporters, a experts, technical analyses and reviews, medical examinations. and A related items as are necessary or appropriate in the jrdgment of the CLAIMS ADMINISTRATOR or defense counsel for the proper defense of any t case. 8 S X. LIMITATION OF LIABILITY It is agreed that the CLAIMS ADMINISTRATOR wili provide services utilizing good faith efforts based upon its experience in claims management and consulting. The CLAIMS ADMINISTRATOR provides no warranty, i express nor implied, that its services will result in any specific outcome for any case nor any reduction in the frequency, severity. or cost of any liability claim(s) nor any incidents giving rise to claims, no matter how caused. ' XI, ARBITRATION 9 The CITY and the CLAIMS ADMINISTRATOR agree to submit any claims arising under this Contract to binding arbitration pursuant to the current provisions of the California Code of Civil Procedure and any successor statutes. In the event of any claim between the parties hereto arising out of the terms and conditions of this agreement, the prevailing party, whether (6) by way of arbitration or by judicial litigation, shall be entitled to reasonable attorney's fees and costs as determined either by the arbitrator or by a court of competent jurisdiction. XII. RESPONSIBILITY FOR CLAIMS ADMINISTRATION FEES It is agreed that the CITY is liable for payment for all services rendered in accord with this Contract. Should the self—insured retention, the deductible, or the annual aggregate applicable to a particular claim or policy year be exceeded, the CLAIMS ADMINISTRATOR'S billings remain the responsibility of the CITY, and the CLAIMS ADMINISTRATOR is expressly authorized to continue all claims management activities which it deems to be appropriate until it receives from the CITY express written instructions to terminate any involvement in the claim or grouping of claims. XIII. TERMINATION OF SERVICES The responsibility of the CLAIMS ADMINISTRATOR to provide any services terminates on the date that this Contract is terminated, whether or not that date is the scheduled date provided herein or is earlier or later. Should tt)is Contract be terminated for any reason and should the parties agree that the CLAIMS ADMINISTRATOR will continue to handle any aspect of any claim or grouping of claims, charges for services so rendered will be billed at the rates then in effect as established by the CLAIMS ADMINISTRATOR. Decembet, 20, '1989• Date t Date Tlwma.a A. P.�geu i� ' CManop ��-�i.� Attest: A ice M. Re.imc e. C.ftra CCak BY: / C •--L, MICHAEL CRA1 (7) PATTERSON..)Executive Vice Presi LL _, I E t=: — -_ tJ ha NS'IJ RANCE ONSULL k G !/!/ \\\\ SSOC A Emir INC. INTEGRATED CLAIMS MANAGEMENT DIVISION FAX TRANSMXSSION From: FAX # 415/751-9805 To: FAX 1: 209/333-6795-� Date: 12/ 18/89 ----- Time: ------------------- From: -------------------- From: Michael Patterson PLEASE DELIVER THE FOLLOWING PAGES T0: NAME: Al ice Reimche, City Clerk COMPANY/ORGANIZATION: — ----- CITY C— L DI ---- ADDRESS: _201 West Pine Street -- / -- Call Bbx 3006 _ -_- C I T Y : Lodi, CA 95240 R E : LIABILITY C IAU4S MANAG MEM SERVICES _—__------- --------- - HESSAGE / SPECIAL INSTRUCTIONS; --fes-give you a cal* arTL�_ -` afternoon_- Tf you have any questions, however, pl ase call me before - -_ then- If I'm out of the office, I'll call you back as cruicklV as ___- possible. Best regards, TOTAL NUMBER OF PAGES TRANSMITTED (INCLUDING THIS PAGE): 12 FAX CHARGES: 2.50 First Pages 11.75 Additional Pages Due: $ ( 3 Please forward Remittance ( ] Invoice to Follow PLEASE CALL 415/751--9801 IF ALL OF THE PAGES ARE NOT RECEIVED CLAWS MANAGEMENT Independent Adjusters Se161nsured Corporate Administration Public Entlry Administration Trial Preparation Cornputerhed Claims lnformsrion Service Bureau LK<nK A06i ,$i< CONSULTINGSERVICES Loss Control Claims Fraud Detection Claims Fraud Prevention Rts4 Mana¢cment Claims Audltinr fit( tAKF STREET. GARl;r� L �'FL s S,,N FRA,NCjSCO, CA 9311f ° (41 ) 751.9SDl DEC-'— 1 7— _ s C; s_ N 1 i: 43 P t?t 1! 1 1 +i IiI!IINSURANCE December 18. 1989 C C ONSULTING //1% � SSOCIATES. INC. INTEGRATED '_:..AIMS MANAGEMENT DIVISION CITY OF LODI Attention: Ms, Alice Reimche, City Clerk 201 West Pine Street Call Box 3006 Lodi, CA 95240 ORIGINAL VIA FEDERAL 'EXPRESS COPY VIA FAX - From: 415/751-9805 To: 209/333-6795 RE: LIABILITY CLAIMS MANAGEMENT SERVICES Dear Alice: W are very appreciative that the City's staff will be recommending to the Council on December 19th that our Firm manage your liability claims program. s a I have prepared the enclosed Contract for your review and am providing you with an Original for the City's records and a Duplicate Oriqinal for return to ICA. If you, the City Attorney. or the City Manager would like to discuss any of the Contract provisions, we could do so by ,phone between now and the Council meeting Wednesday. As I mentioned in my December 12th letter. i t i s important that we s i t down to discuss the details of the program. I want to make certain that every aspect of our administration reflects the City's wishes. In addition to basic philosophy and procedural issues, we will want to discuss whether or not the City wants ICA to issue expense and settlement payments through a Trustee Account or simply should issue vouchers to the City so that you can issue any payments. W* will also want to go over the various options that you have regardiny the format of loss runs and any particular cases which are currently pending and which the City regards as critical. I have left open within the text of the agreement the actual contract period dates. It is not yet clear to us whether or not the City would like us to begin immediately the management of new and pending cases or whether Adjustco will continue to handle matters for an interim period. A indicated previously, we are prepared to step in at any moment that the City selects. CLAIMS MANAGEMENT CONSULTWO SERVICES Indetppeendent Adjusters Lou Control SclOnsured Corporate Adminlrrnstion Clair -is Fraud Drre:rion Nblie Entiry Adminisrration Claims Froud Prevention Trial Preparation Riek Management Computerized Claims Information Claims Audiring Servke B:1n'0u License AW -7524 825 LAKE STRE T, GARDEN LEVEL • SAN'' FA ^.MCIS^G, C A 9911, TELEPH '4F 14151FACSIMILE: WS, 75'.- nk DEC- 1 :UN P CITY OF LODI Ms. Alice Reimche Oecember 18, 1989 Page 2 of 3 The fees quoted in the Contract have been our standard rates for the past year. Our claims management fees are based upon a professional services rate of $36.00 per hour, plus 40X (rounded down to $14.00) for unallocated expenses. You asked about the Time & Expense charges of other- firms. While our competitors do not generally disclose their rates to us, we have a copy of a 4/6/89 billing from the George Hills Company whicii shows billing rate of $53.20 per hour based upon $36.00 for professional services plus 40% for various unallocated expenses. tikewise, we understand that the billing rate for Pearce & Frankman is $67.50 per hour. V% believe that our rates are competitive and, in fact, every independent claims audit performed on behalf of our clients has confirmed the fairness of our billing practices. There are other formats than "Time & Expense" for calculating service charges, but for a relatively small program such as Lodi's (as contrasted with some larger organizations that have 1,500 to 5,000 claims per year), we believe that the Time & Expense, ethically applied, is the fairest for both parties. It assures the client that charges are made only when earned, and it protects both the client and the claims administrator in assuring that there is no economic disincen— tive to good service in the event that claims activity is substantially higher than originally predicted. I an taking the liberty of enclosing wfth the original of this letter which is being sent by federal, Express,a copy of each of the following items:' 4 California State Assembly Resolution of September 11, 1989 commending Insurance Consulting Associates, Inc. December., 1987, issue of Inc. Magazine which rates ICA as #207 in the "Inc. 500" roster of America's fastest growing, privately held small companies. December, 7988, issue of Inc. Magazine listing ICA as #225 in the 1987 "Inc. S00." Incidentally the Petaluma office address that I hava listed within the text of the Contract will be effective on January 1st. Vt will be moving on December 29th Into our new home office. I will attend the City Council meeting on blednesday evening and w 1 1 1 be available to respond to any questions from the Council members. The City's interest in our Firm., is both pleasing end grat.•ifying. We are looking forward with thanks to working on your behalf. DEC — 27 -0 -Bo S'UN 1 Z L 4!5 . r CITY OF LODI tis. Ali a Reimche December 18, 1989 Page 3 of 3 Warm personal regards, INMRANCE Wly-50-LIF" g ASSOCIATES, I" . Michael Craig Patterson Executive Vice President Enclosures with original via Federal Express: Original and Duplicate Original Contract Resolution of the California State Assembly Inc.. Magazine, December, 1987, and December, 1988, issues MCP: be P k3w/ 1 2 F' _ s_5 4 1 1 C A T, I F O R N J A Is F, G I S L A T U R R ©y are ftonorabie Bill Fitanle, M.D. Ninth A3ttlrady Distririt Relative to Cornrr.ending the INSURANCE CONSULTING ASW..IATV% INC. WHEPEAS, The Insurance nubs-, %ing itsroc,ates, Inc. was hnnved recently for appearing on the IM.. Mogarme 'S0y List at Fattest -Growing Companiri in %he United States' for the wmd year to a row, and, upon chis W"shon, the Company n dtservins Of 1�wrr y� Ho:x,rabte Fill Fllanhr, M.D. 9th Aihrn•blr Dome-, i Congrarilations and eomenrndations from the people 0 California; and ' WHEREAS. leis arhirvrmrnt is outster,Qingh as on!) the very smaltrit pertentage of `:uSirreSSti Can annually claim sW.A a dts•rinte,nn; and ' WHEREAS, Insurante Cir,adttng Associates, Inc. has picowercd in the fields of r insuraznce fraild dcV.101cn and preveoticx4 Ctairii administration and rick m;tnpgrment, and (fps tet ethical and batrrMss standards shah are emulated thrcai6h,NII the insurer. and self-insurance industry-, anti C•'HEREA'k, Rrw Blanq•,ie as 3'rt•sioeni and Ini,nrier of tr.•,.,nan-r Censullinb' ARariC'ialer. Inc., which was Is%mbed aS a or.t.man ?cp in 1979 and whlrh war, ranVed number 247 In the Inc. 300 IWIF-g of Amrricars lastca-growing rompanirs in 1921, has cprnrd recognition los his serviets to ht: profession, the inouftry, the carnr..i,nity, and the.stale; and WHEREAS. Shatepnce Con..;tdtinE Associates. Inc. is helping to Aevtlop and preserve Calilornia's tonkir•g as the twrntrcr Cne state In the natinn in enireprtncurtal growth; and L'HEKEA% lnturance Ce-i0ling Asu*sattt, Inr. it a model con,;ssny Cnrnhlning *w very beat in civKp9rtir,p-.unr., butinest wccrsa, jir-d frolesaonal earellencei rowp thertlpt, be It RESOLVED NY ASSEMOILY MEMpER BILL FILANTE. M.O., That he takes Feeat ate.• `) �• plrpuer In eonEretulatlits Ihr tnuranre Consuh,ng Aswime%, Inc. arson its appearing on the Ing. Maga7.IM •300 Lis; of Fosleat-Growing Cn""m,rs in th* I)nited States" few the .� Wand year in ■ tow, eomrr•erVu the Company for III Corrtritiutirria 10 the eomrnunlly Ano state, and mums brat vi. -hes for Continspe NK Cc3t. Iyi T- M1, A4 mLrrs Rc»lulion No, 7131 04,104 th,s I I It, e-ry of irplvmber, 1915 1�wrr y� Ho:x,rabte Fill Fllanhr, M.D. 9th Aihrn•blr Dome-, i UEC- 17_e9 _ Ut-a 1 -4-S PiS 1 Y 0 anal — For City's File SELF --INSURED CLAIMS M+IANAGEMFNT AND LOSS CONTROL CONSULTING CONTRACT THIS CONTRACT Is made and entered into this day of , 1989, by. and between the CITY OF LODI, hereinafter referred to as the CITY, and INSURANCE CONSULTING ASSOCIATES, IMiC` , hereinafter referred to as the CLAIMS ADMINISTRATOR. INSURANCE CONSULTING ASSOCIATES, INC. is licensed in California to provide independent adjusting services. Its State License number is 0607524. It is a California Corporation with Hare Office located at 1125 N. McDowell Boulevard, Petaluma, CA 94954; Telephone Number: 707/778--1118. The Corporate Officers are Ronald Blanquie, President: Michael Craig Patterson, Executive Vice President; and Daniel A. Blanquie, Senior Vice President. IT IS HEREBY AGREED by and between the parties signing this Contract, as follows: I. GENERAL The CITY desires to have a unified claims management and loss control corS"sultin g service. INSURANCE CONSULTING ASSOCIATES, INC, is a Claims Managemient and Consulting firm experienced in providing the requested services and is ready and capable to perform such services for the CITY. XI. SERVICES The CLAIMS ADMINISTRATOR will assist the CITY i n the management of the CITY'S liability claims program. It will receive all claims and incident reports from the CITY. It will initiate prompt investigations and attempt to secure the cooperation and confidence of claimants and their attorneys. It will provide reports to the CITY with respect to issues of fact, damages, and liability. It will provide recommendations with respect to courses of action regarding settlement and/or defense. (1) r,E G'- 1 ?- E: S4 SUFE 1 7 4 r _ P Ei E. I 1 Utilizing settlement authority as provided by the CITY, it will negotiate with claimants and their attorneys with the goal of securing a mutually- acceptable resolution to any claim, It will attempt to resolve cases without litigation. If assignment of a case to defense counsel is necessary, it will make the assignment on behalf of the CITY utilizing a panel of defense attorneys approved in advance by the CITY. It will receive and review all expense billings related to pending cases and, before approving such billings for payment, will secure any necessary supportive documentation. Absent direction from the CITY to the contrary, it will attempt to secure open or limited extensions of time on cases which it believes are likely to be resolved more quickly, efficiently, and economically in that manner, Releases of All Claims will he obtained from all claimants receiving settlements from the CITY through the CLAIMS ADMINISTRATOR. The CLAIMS ADMINISTRATOR will provide timely and appropriate reporting to the excess Insurers of the CITY in a manner consistent with the reporting guidelines provtded to it by the carriers. The CLAIMS A0P)1t4ISTRATQR will perform Loss Control Analysis and Consulting services for the CITY in a manner and to an extent agreed upon. It will make itself available to the City Council for discussion of pending 'cases. Consistent with the expressed wishes of the CITY, it will make itself available for scheduled claim reviews with the CITY. It will provide to the CITY a monthly computerized Loss Run of pending and closed cases sorted in a format to be approved by the CITY. The CLAIMS ADMINISTRATOR will assist the CITY with risk management and loss control services in a manner and to an extent agreed upon. It will encourage cooperative activity amongst the various other firms providing administration or consulting services to the CITY. III. PAYMENT FOR SERVICES The annual Computer Services fee for the first year of this Contract is X2,400. That fee covers the ccst of computer hardware. space on the system, and production of Loss Run Register, Graphic Summary, and Numeric (2) e so +r U N 1 e; Summary reports. The Fee is due in full at the inception of each year of the contract, though, for the conyunience of the CITY, payments of $200.00 or one -twelfth of the annual fee, whichever is Sreater, may be made monthly toward any remaining balance. There will; be no charge far the time and attention necessary to review and respond by phone to Incident Reports not requiring investigation, adjustment. or contact with claimants, witnesses. or counsel. All activities related to the handling of specific claims will be billed on a Time & Expense basis, a5 follows. for the first year: ProfgSsio ia_l Service - Claims Manaaement $50.00 per hour* Risk Manag ment & Loss Cdntrol Consulting: $90.00 per hour*' * Based exclusively or. time of investigatfve, supervisory, and management personnel. No additional charge. except as provided below, for routine secretariat, insurance, or office overhead. Allocated Costs Local Travel (billed from Fairfield) Photocopy Color Photography (35mm) Recording cassettes for statements Statement Transcription Video Cassettes Videotaping Long Distance Telephone FAX Services Initial File Set—Up Posting Costs (3) .40 per mile .30 per page 1.75 per print 1.75 each 5.00 per page As Incurred 75.00 per hour As Incurred First Page: 2.50 Each Additional Page: 1.75 25.00' As Incurred Local Travel (billed from Fairfield) .40 per mile Photocopy .30 per page Color Photography (35nm) Summary reports. The Fee is due in full at the inception of each year of i the contract, though, for the convenience of the CITY, payments of r ; $200.00 or one-twelfth of the annual fee, whichever is greater, may be per page made monthly toward any remaining balance. As i There will be no charge for the time and attentlon necessary to review per hour and respond by phone to Incident Reports not requiring investigation, Incurred adjustment, or contact with claimants, witnesses. or counsel. First Page: 2.50 3 All activities related to the handling of specific claims will be billed on a Time & Expense basis, as follows, for the first --ar: As Incurred Professional Services i ;. Claims Man5gement: $50.00 per hour* Risk 113nagenent & Loss Control Consulting: $90.00 per hour* Based exclusively on time of investigative, f' supervisory, and management personnel. No additional charge, except as provided below, for routine secretarial, insurance, or office overhead. Allocated Costs Local Travel (billed from Fairfield) .40 per mile Photocopy .30 per page Color Photography (35nm) 1.75 per print Recording cassettes for statements 1.75 each Statement Transcription 5.00 per page Video Cassettes As Incurred Videotaping 75.00 per hour Long Distance Telephone As Incurred FAX Services First Page: 2.50 Each Additional Page: 1.75 Initial File Set -Up 25.00* Posting Costs As Incurred (3) Dec- 1 r-__ _' U N 1 c _ .4 Post-Ing Costs As Incurred Necessary Expenses As Incurred Special C..mputer Services and Reports As Incurred Travel Out of Area As Incurred Applicable for claims management only. No set—up charge on consulting projects, Increases are autnorized for the second and third years of this contract in an amount not to exceed 5% per year. plus a pro—rata share of any increase in 'liability insurance cost exceeding 25% cf the previous year's premium. The CLAIMS ADMINISTRATOR shall submi. Statements on a monthly basis showing an itemized breakdown by claim or by consulting activity. Billings are payable upon presentation, with any unpaid item being subject to a late charge of 117. per month imposed on the next billing cycle. IV. TERM The term of this Contract shall be a period of three (3) years beginning 19 , and terminating at midnight, 19;^. This Contract may be terminat4d by edEW party for Any reason upon sixty (60) days' written notice. The Contract may be renewed subject to renegotiation of terns and conditions by the parties hereto. Y. INDEPENDENT CONTRACTOR It is expressly agreed that the CLAIMS ADMINISTRATOR shall have the status of an Independent Contractor and shall not be deemed to be an officer, employee, or agent of the CITY. VI. OWNERSHIP OF FILES It is that the claim files maintained In the CLAMS ADMINISTRATOR'S offices are the property of the CITY and may ue reviewed upon re2--onable notice. Upon termination of this Contract, possession of the files will be transferred to the C•TY which will pay the 'easonahle (4) !114N; costs of any activity associated with the transfer including, but not limited to, the cost of photocopying in whole or in part any and all claims files as required for the CLAIMS ADMINISTRATOR to be in compliance with any law por`aining to the maintenance of records by a licensed adjusting firm. The CLAIMS ADMI141STRATOR is authorized to destroy any claim file without notice to the CITY after seven years following the date of file closure. VII. MUTUAL HOLD HARMLESS A14D INDEMNIFICATION Each party hereto agrees to indemnify, hold harmless and. defend the other. its officers. agents, and employees from and against any and all claims, demands, fiabil ity, costs and expenses of whatever nature. including court costs and counsel fees arising out of injury, death, or loss to any person or persons, or loss of, or physical damage to, any property resulting in any manner from the sole negligence or willful actr of the responsible party, its agents. employees, licensees, or guests in the making or arising out of the performance of this agreement. In the event it is determined by settlement or litigation that there is a joint liability and/or responsibility of the parties for the settlement or judgment, the parties hereto agree that the responsibility for payment of such settlement or judgment shall be borne by the parties in proportion to the share of fault as determined by the court or jury in case of a judgment, and try agreement, or arbitration in the event that agreement cannot be reached. in the ccse of a settlement. The parties further agree hereunder that in those cases described under this paragraph, each party shall bear its own costs and attorney fees. VIII. INSURANCE T;ie CLAIMS ADMINISTRATOR agrees to procure and maintain during the life of this contract and to provide evidence to the CITY that it carries General tlability, Non -Owned Automobile Liability, and Errsrs ii Orissions S'' 1_I t-4 1 = 1 F _ 1 4. = 1 1 insurance in an amount not less than $1,000,000, plus statutory Workers Compensation coverages. IX. DENIAL, COSPROMISE OR SETTLEMENT OF CLAIMS Settlement authority will be obtained by the CLAIMS ADtdIF,"ISTRATOR from the CITY or. in the event of an exposure piercing the CITY'S self—insured retention, jointly from the r,ITY and its Excess Insurer, Absent specific instructions to the contrary from the CITY, the CLAIMS ADMINISTRATOR is authorized to incur on behalf of the CITY defense costs including, but not limited to .attorney fees, court costs, charges for court reporters. experts, technical analyses and reviews. medical examinations. and related items as are necessary or appropriate in the judgment of the CLAIMS ADM iUSTRATOR or defense counsel for the proper defense of any case. I LIMITATION OF LIABILITY I - It is agreed that the CLAIMS <ADMINISTRATOR will provide services utilizing good faith efforts based upon its experience in claims management and consulting, Tho CLAIMS ADMINISTRATOR provides no warranty, 1 express nor implied, that its services will result in any sped-fic outcome for any case nor any reduction in the frequency. severity, or cost of any liability claim(s) nor any incidents giving rise to claims. no matter how caused. XI. ARBITRATIOH The CITY and the CLAIMS AVHN i,TRATOR agree to submit any claims arising under this Contract to binding arbi .ration pursuant to the current provisions of the California Code of Civil Procedure and any successor statutes, In the event of any claim between the parties hereto arising out; of the terms and conditions of this 6greemet,t, the prevailing party, whether (6) nE:C- 1 7-v G S.-iN 17. .12 ti F• 1 1 �" 1 1 by way of arbitration or by judicial litigation, shall be entitled to reasonable attorney's fees and costs as determined either by the arbitrator or by a court of competer:t jurisdiction. XII. RESPONSIBILITY FOR CLAIMS ADMINISTRATION FEES It is agreed that the CITY is liable for payment for all services rendered In accord with this Contract. Should the relf -insured retertion, the deductible. or the annual aggregate applicable to a particular claim or policy year be exceeded, the CLAIMS ADMINISTRATOR'S billings remain the respons.ibi 1 i ty of the CITY, and the CLAIMS ADMINISTRATOR is expressly authorized to continue all claims management activities • which it deems to be appropriate until it receives from the CITY express written instructions to terminate any involvement in the claim or grouping of claims. XIII. TERMINATION OF SERVICES The responsibility of the CLAIMS ADMINISTRATOR to provide any services terminates on the date that this Contract is terminated. whether or not that date is the scheduled date provided herein or is earlier or later. Should this Contract be terminated for any reason and should the parties agroe that the CLAIMS ADMINISTRATOR will continue to handle any aspect of any claim or grouping of claims, charges for services so rendered will he billed at the rates then in effect as established by the CLAIMS ADMINISTRATOR. By: Date CITY OF LODI Authorized Signature f INSURANCE CONSULTING ASSOCIATES INC. t�, flu Ey: .�(�.CA- Date MICHAEL CRAIG PATTERSOPf executive Vice Presider (7) I CITY OF LODI WGRKERS' COMPENSATION CLAIMS MANAGEMENT AND RISK C014TIZOL SERVICES AGREEMENT THIS AGREEMENT is made and entered into this day of 11 1989, by and between the CITY OF LODI ("CITY") and GREGORY B. BRAGG & ASSOCIATES, I11C. ; a California Corporation and general partner of BRAGG & 11ORSF: ("CLA111 ADMINISTRATOR") , and W I T 11 E S S E T H WHEREAS, CITY requires Workers' Compensation claims adjusting and administrative services, and CLAII-1 ADMINISTRATOR is agreeable to performing such services for CITY, NOtt, THEREFORE, the parties agree as follows: 1. CITY hereby retains CLAIM ADMIl*IISTRATOR, and CLAIM ADIIII41STRATOR accepts CITY'S retainer, to perform Workers' Compensation Claims Management and Risk Control Services. 2. CLAIM ADMINISTRATOR agrees to initiate prompt handling of all claims presented to the CLAIM ADMINISTRATOR upon notification in writing , facsimile transmission, or by telephone from CITY. CLAIM ADMINISTRATOR w i 1 1 not be responsible fur late reporting by CITY or claims not reported by CITY. Claim handling procedures and policies as outlined in the proposal will be complied with. 1 3. All original reports, documents, and claims data of every kind or description that are preparnd in whole or part by or for CLAIM ADMINISTRATOR in connection with this agreement shall be CITY'S property. Additional copies of original reports, documents, and data requested by CITY w i 11 be at CITY'S expense in accordance with this agreement. All such records shall be herd in strictest confidence by CLAIM ADMINISTRATOR. 4. For services pursuant to this Agreement, CITY shall pay CLAIM f.. ADMXNISTRATOR an annual administration fee of $1800.00, payable at: the inception of the Agreement. In addition to the administration l' fee, the CITY shall pay time and expense charges on each claim as incurred in the investigation and adjustment of claims, and risk control services as needed. Time and expense charges are as 5. folhows: a) Adjusting Services b) Risk Control Services C) Office over'iead d) Secretarial e) Claim Set Up f) Mileage g) Photocopies h) Photographs i) Audio Cassettes j) Video Cassettes $36.00 per hour $45.00 per hour 33%of services $ 5.00 per page/form $10.00 per claim $ .35 per mile $ .25 per copy $ 2.00 per photo $ 3.00 per tape $10.00 per tape 5. CLAIM ADMINISTRATOR will submit its bills on a monthly basis. Payment by CITY shall be made within a reasonable period of time, not to exceed thirty (30) days. 6. All attorney's fees and other allocated expenses shall be the 2 responsibility of the CITY. It is agreed and understood that, whenever practicable, any attorney's lees, WCAB or court costs; costs of outside experts, and other costs related to services to be performed by persons otlier tliari CLAIM ADMINISTRATOR should be billed directly to CITY and the bills will be paid from CITY'S trust account . 7. The term of this contract shall be from to and including . This agreement may be terminated by either party for any reason upon sixty (5C) days written notice. This agreement will be automatically renewed on a yearly basis subject to the same terms and conditions,. except Paragraph 4, herein, which may be renegotiated by the parties hereto. 8. In performing the services agreed upon, CLAIM ADMINISTRATOR (and its agents and employees) shall have the status of independent contractor, and shall not be deemed to be an officer, employee, or agent of CITY. 9. During the perz.ot. , '; Vies agree -,-ant, and for a period of one (1) year thereafter, CLAIM ADT1114ISTRATOR agrees not to solicit for employment, or employ any CITY employee contacted during the performance of this agreement; and CITY agrees not to solicit for employment or employ during the period of this agreement and for a period of one (1) year thereafter, any employee of CLAIM ADMINISTRATOR contacted during the performance of this agreement. 3 10. CLAIM AD14INISTRATOR shall defend, indemnify, and hold harmless CITY, its officers, agents, and employees from and against all damages, claims, penalties, demarids, actions, or causes of actions which may arise solely from the action, conduct, or failure to act by CLAIM ADMINISTRATOR or its officers and employees. CITY will defend , indemnify and hold harmless CLAIM ADMINISTRATOR, its officers, agents, and employees from and against all damages, claims, penalties, demands, actions, or cause of actions if not caused by the willful misconduct or negligent acts 1 -If CLAIM ADMINISTRATOR'S officers and employees. 11. CLAIM ADNMNISTRATOR shall provide CITY with a Certificate of Insurance duly executed by an insurance company or companies authorized to transact business in the State of California, and said Certificate shall certify the CLAIM ,ADMINISTRATOR has in full force and effect $1,000,000.00 coverage applying to bodily injury, personal injury, and property damage. CLAIM ADMINISTRATOR shall maintain errors and omissions coverage in the amount of $1,000,000.00 per occurrence. 12. The provisions set out Herein constitute the whole and entire agreement between the parties Hereto and may be altered only by mutual agreement, reduced to writing and executed by authorized officers of both parties. i oak CITY OF LUDI BY DATE GREGORY B. BRAGG & ASSOCIATES, INC. o BY %�• DATE Pi � l•ST�C 1411 Ri�cr Nark I)r. •Saito 212 ■ Sa r�mrntn, CA `>�? 1 i`_i lfi) 92f1-Si81 • FAX 0; 6) 922-4 521) December 20, 1989 TO: Ci- f Lodi John R. Snider, Mayor Evelyn Olson David M. Hinchman James W, Pinkerton, Jr. Fred M. Raid Thomas A. Peterson, City Manager Alice M. Reimche, City Clerk Bob McHatt. City Attorney Dear Respected members of the Lodi City Council and City of Lodi Executives: On behalf of ADJUSTCO, INC. please allow the writer to establish the organizational plan for the administration of the Workers' Compensation program and Liability program for the City of Lodi. Management of the Sacramento Claims Administration office changed in the first part of October 1989 under the direction. of Dean Kirschner. Mr. Kirschner came to ADJUSTCO with twenty (26) years of background in the claims industry; the last fourteen (14) as Corporate Claims Manager of Amfac, Inc, , a major self-ins!irr�d in the industry. While private sector entities are deemed to be different fros the Municipalities in the way that claims activity is treated, the fact remains that they are for the most part represented by Third -Party Administrators (TPA) whose duty and obligation is to represent the entity as per agreement and in the finest way possible in order to mitigate the dollar exposures and payout, whether ultimately under the scrutiny of tax paying residents of the City of Lodi, or stockholders of a private sector entity. Upon assuming the management dutias of the Sacramento Office of ADJUSTCO, under close supervision of the ADJUSTCO, INC. Management Council, and at the direction of same, we concentrated on focusing our attention on staffing, or those individuals charged wi•Clh handling and repre3enting the City of Lodi as well as other clients. Bluntly, we cleaned house. Rather than utilize the resources at hand and work with the staff that the writer inherited, in order to bring service up to speed at the possible cost of the clients, we recruited individuals who bring experience and desire to please the clients in accordance with the agreements which brought us all together in the first place. City of Lodi Page Two The first issue to be addressed was Workers' Compensation, Effective January 2, 1990, our Workers' Compensation Unit will consist and operate per the attached restructuring operational plan. Without belaboring the issues, while we believe that the level of quality in our physical handling of your claims was very good, the restructure will ensure an even better quality of claims administration which You expect and which we stri,re to give at a minimum. The other area of claims administration, General Liability, needed restructuring as well. At the present time, we have added two (2).seasoned claims technicians, plus the writer who, as Manager, is taking a focused and active participatory role in your claims program. You may rest assured that, the relationship between the City of Lodi and its residents, and particularly when there is a complaint, warranted, or not, is looked upon by this organization as critically and vitally important. We recognize that while we handle the claims for the City of Lodi, we further recognize that we had better represent the City of Lodi as if it was our own. More importantly, while we can all make promises and commitments, the proof is what is fact. To begin with, should we (ADJ(ISTCO) be fortunate to retain the City of Lodi, it is strongly urged that we schedule a monthly meeting to review the account, its claims activity and our performance. Coming frbm this writer's background as a client and a demanding client, it is strongly felt that ADJUSTCO is the quality organization that you deserve as a client, and in particular, the Sacramento Branch Office is committed to giving You the best service possible. While the proof has to be ,hown, we respectfully submit that for as long as our relationship existed, the level of service was, by our own admittance, worthy. We have taken a proactive position in restructuring ourselves to ensure an even higher quality of service. You cannot, and should not have anything less, and we will give you the best. Respectfully, ADJUSTCO, INC. Elliott Dean Kirschner Branch Manager EDK :ntf cc: A. Yobs, President and CEO, ADJUSTCO, INC. 1451 Rivrr Park Dr. • Suite 213 r Sacramento, CA 95915 (91G)920-5381 • fAX (910) 922-452'.► Pursuant to California Workers' Compensation Reform Act Effective January 1, 1990 Additional Staff: ;until pormanent examiners can be hired, 2 temporary examiners with 25 years experience between them will come onboard January 2, 1990) 2 Claims Examiners 1 in place at this tir•e . 1 hired to begin Ja:.uary 2, 1990. experience. Claims assistant has 7 years To be hired. Should be in place by January 15, 1990. Supervisor Hir,sd, Began December 18, 1989. Fourteen years experience, with 7 years administering Public Entities. Each Examiner will be responsible for 2 accounts and will supervise the work of the claims assistants with regard to MO's (Medical 9nly's) , Sash Examiner will handle no morn than 180 indemnity files, Each Examiner will have a dedicated Claims Assistant who will handle all of the first calls, make all medical appointments, pay bills, pay disability payments, handle MO's for the accounts, handle bill calls, etc. Typist/File Clerk will be responsible for opening mail, transcribing for Examiners and Claims Assistants and do any photocopying. Each Examiner will be responsible for all indemnity files, will attend hearings, rehab conferences and do files reviews for their respective clients at least 4 times a year or more per the client's request.