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HomeMy WebLinkAboutAgenda Report - July 1, 1987 (90)COUNCIL COMMUti P -1-.i i.' TO: THE CITY COIINCI� NO. FROR1. THE CITY MANAGER'S Or:F CE Ju_1 V i , 'L SUBJECT: R�:zewal o ��orkers'Co �ersat.ion 3r.� .arty Admi^istrater - 1 .7. ?tAss0 Fis,:al Year 1987-88. RECOMMENDED ACTION: That the City Council approve and authorize the execution of the renewal of an agreement with Leonard J. Russo Insurance Services, Inc. for Workers' Compensation claims administration for 1987-88. BACKGRCUND INFORMATION: Submitted for City Council review is the contract renewal for Leonard J. Russo Insurance Services Inc., Workers' Compensation Claims Administrator for the 1987-88 contract year. L.J. Russo is requesting a modest increase of 2% over the present cost of $25,599 and $149.80 per claim over 171. The 1987-88 proposed fee for the 1987-88 contract year is $26,110 for the first 171 claims witi, the excess claims to be billed at the rate of $152.69 per claim. The overall increase amounts to an additional $511.00 for 1987-88. It should be noted that there has been no renewal increase since July, 1985. As of June 12, 105 new claims have been filed for 1986-C7 in which 61 claims are medical only and 44 claims are for indemnity (lost time). We currently have a total of 129 open claims on file and being worked by L.J. Russo staff. The 1986-87 contract vear marks the close of the City's fourth year with L.J. Russo as the City's Third Parte Administrator for Workers' Compensation. I am pleased tD inform the City Council that the level of service from Russo has been excellen*. We have been successful in closing several old cases this year and we are currently working to improve the Claims Reporting and CAL-OSIiA computer reports. William M. Hinkle Personnel Officer i 1 i i y\ ?.A C):SC?N. h?ykc r DAVID M HINC;HMAN IA,"iS W PINKLRT0N. it FREE.` M REID CITY 61Y .:.ALL. 221 V.'L S! PiNL SiRi.. CALL BOX IW6 LODI. CALIFORNIA 95241-19iO (209) 334-4634 TELLCOPIER R. (209) 111-6795 JtR Y 2, 1987 (fit"c� `a:::tKt•r AIAC E .M hE i.44� HE RONAi1) -,t ST(!N Ctib At:ornev ;. Mera Rigel Client Service Representative 2200 Powell Street, Suite 400 P. 0. Box 8819 Emeryville, CA 94662 Dear Mara: Enclosed herewith please find a fully executed copy of the renewal of agreement with Leonard J. Russo Insurance Services, Inc for Workers` Compensation Claims administration for 1987-88. This agreement was approved by the Lodi City Council at its regular meeting of July 1, 1987. We look forward to. working with you during this contract year. Very truly yours, ALICE M. REIMCHE City Clerk City of Lodi, California Encl. cc: Mr. Bill Hinkle Administrative Assistant to the City Manager t A G R E E M E N T AGREEMENT, made and entered into this 1st day of July 1987, by and between LEONARD J. RUSSO INSURANCE SERVICES, INC., a CALIFORNIA Corporation with its principal place of business at 2200 Powell Street, Emeryville, CA 94608 (hereinafter referred to as "LJR, INC.)" City of Lodi with its principal place -%f business 211 West Pine Street, Lodi, California 95240. (hereinafter referred to as the "Client"). W_I_T _N E_S S E T H WHEREAS, t:.e Client maintains a self-insured plan to cover its worker's compensation responsibilities in the State of California, and LJR, INC. -has agreed to perform certain services in connection therewith, as herein set forth: NOW, THEREFORE, it is agreed as follows: 1. The term of this Agreement shall be for a period of one years(s) commencing July 1, 1987 and ending June 30, 1988 The Agreement may be terminated at any time during the term by either party giving not less than ninety (90) days prior written notice to the other party, but, at the end of the term, is automatically renewed for an additional 12 months if such 90 -day notice is not given. 2. During the period of this Agreement, L7R, INC. shall exclusively represent and act (in accordance with Section 3) Aareement -2- f fOr ~.-Ile Client in all matters pertaining to the liabilif.y of the Client for worker's compensation claims based on events which occur during the terra of this Agreement in the State of Californa. All actions taken pursuant to this Agreement by IJR, INC. are taken on behalf of the Client, with L1R, INC. acting as an agent of the Client. 3. During the term hereof, WR, INC. shall devote its due efforts in the conduct of its duties hereunder. Such duties shall only be the following, all of which shall be performed in a professional manner: a. Receive notice of and crpat-p filar. r,,, own►, r i n 4 . occurring within the term of this Agreement and maintain these files for the Client. All workers' compensation claim files will reflect the adjuster's activity and contain documentation supporting analysis, evaluation of injury and loss of earnings as well as negotiation and settlement activities between LTR, INC.'s claims representative and the employee or employee's attorney all in accordance with L7R, INC.'s standard policies as they exist from time to time. i b. Investigate all claims, to the extent deemed necessary in the judgment of IJR, INC. to determine their 9 validity and compensability. LJR, INC. is granted full power and authority to make full and final settlement, including releases, of all claims without prior r approval of the Client, where the aggregate amount of z Ag.eement W N e. f. a h. -3- the benefits paid to amine :porker involved 'excluding claims expenses, but including the full amount of all periodic payments) is not more than $5000. Make timely paymr!nt of benefits due from trust fundE. provided by the Client pursuant to Section 4 and in accordance with laws and regulations. Payments "ror the Trust Fund shall be made in accordance with LTR, INC. Is st-andard policies as they exist from time to time, subject to the terms of this Agreement and any written procedures established by the Client and L7R, INC. The Client will be wholly responsible for providing such funds as may be required for these payments. Evaluate and rate each compensable case from a medical permanent disability and lost time potential and reserve each case accordingly. File on behalf of the Client all statutory forms related to the specific claim in question. Appoint medicNl consultants to evaluate any specific disability in preparation of settlement. In case of severe traumatic injury or where the disability is of long duration, recommend to the Client a proper rehabilitation facility for the injured employee and monitor his or her progress. in continuing aisabil?ty cases, make periodic contact with the injured employee and determine his or her ' �z a C rren"- wor'- status an- -he pcss :i.bi l —i tv or y r iiii.i.z ii him or her to work. i. ` Recommend legal counsel :nd direct legal counsel to represent the Client before any Workers' Compensation Appeals Board. J. Develop and recommend a panel of physicians for initial treatment of injured employees. k. W,'ienever needed, coordinate the efforts of medical consultants and legal representatives with the objective of bringing a specific case to a prompt and equitabl& conclusion. 1. Make all required self-insured report filings. M. Client is responsible to the excess carrier for notification of all Workers' compensation cases identified by Client as having excess potential. L7R, t INC. will furnish reports to the carrier as specified by the Client. n. Provide basic computer data reports (in s form normally used by LJR, INC.) that give risk management statistical information monthly and year to date for budget and loss control purposes. o. Incur on behalf of the Client with respect to any single claim any claims expenses, without the prior approval of the Client. For this purpose claims expenses include Allocated Loss Expenses and any other expenses which in the opinion of LIR, INC. are Aareezae:�t -�,- necessary or appropriate to incur in order tc re -solve the claim in a fair and reasonable manner for all parties. p. Operate and control the Trust Fund (established pursuant to Section 4) in accordance with the procedures established herein, including payment of claims and claim expenses, including Allocated Loss Expenses. The Client recognizes that L -JR, INC. may be accountable for its actions to agencies in various states. As a result, any and all agreements herein are conditioned on and subject to the rules and regulations of any applicable state agencies. 4. The Client agrees: a. To pay LJR, INC. the fees for set -vices rendered in accordance with the terms and provisions of Exhibit A attached hereto and made a part hereof. b. To pay all Allocated Loss Expenses, as hereinafter i defined, in addition to the fees to be paid to L R, INC. "Allocated Loss Expenses" shall mean all court costs, fees, and expenses; fees for service of process; y' a fees to attorneys; costs of undercover operative and detective services; cost of employing experts for preparation of maps, photographs, diagrams, chemicals or physical analysis or for advice, opinion or a- testimony concerning claims under investigation or in litigation or for which a declaratory judgment is E C"' Agreement -6- sought; costs for legal transcripts of testimony taken at coroner's inquests, criminal or civil proceedings; cost for copies of any public records; costs of depositions and court reported or recorded statements; costs and fees of medical consultants and any other similar fee, cost or expense reasonably chargeable to the investigation, negotiation, settlement, or defense of a claim or loss or to the protection and perfection of the subrogation rights of the Client. C. A trust fund (the "Trust Fund") will be established and maintained by Client with appropriate checks being provided to LIR, INC. LJR, INC. shall use this Trust Fund solely to pay claims, claim expenses including Allocated Loss Expenses and LTR, INC. fees. LJR, INC. shall have complete control of disbursement of moneys from ::he Trust Fund during the term of this Agreement. The Client shall be notified by LIR, INC. as to which personnel of LTR, INC. shall have signature authority. LTR, INC. shall provide the Client a monthly register of all payments made from Trust Fund.` The Client agrees to maintain an agreed upon amount in the Trust Fund as long as LTR, IiTC. is responsible to make payments; provided, that, if the Trust Fund falls_ below $N/A, LJR, INC. may suspend payments of any or all claims and claim expenses until the Client the Trust Fund to level which IJR, INC. replenishes t Agreement. _7_ deems appropriate to pay claims, claims expenses and LTR, INC. fees, both at the time and in the future. Payment of any amount following the arising of a right to suspend payments will not be deemed a waiver of LTR, INC.'s right to suspend any other payments. 5. All claims and related files generated by LIR, INC. as a result of activity under this Agreement shall remain at all times the property of the Client with the exception of any supporting data required by LTR, INC. to make such accountings to the Client or excess insurers as are required in this Agreement. LTR, INC. may retain copies of such Client material, with all expenses for copying (including copying of electronic data) chargeable to the Client. 6. LTR, INC. at all times shall be an independent contractor and not an employee of the Client. LTR, INC. reserves the right in its sole discretion to delegate performance of activities under this Agreement to any of its personnel and to subcontract to third parties approved in advance in writing by the Client any part or all of LTR, INC. duties. LTR, INC. may assign this Agreement and delegate its duties hereunder to any parent, subsidiary or affiliate of IJR, INC. without the Clie:-it's consent. Any subcontracting or assignment by LTR, INC. shall not relieve LTR, INC. of its obligations to the Client under this Agreement. 7. The Client recognizes that the employees of LTR, INC: have substantial information regarding the rates, customer Agreement !-,01 and preced Tures of 1 �T � iY -. IC. which ars wnr, %C.'s trade secrets and are very valuable to LTR, INC. and its other clients. The Client also recognizes that, if an employee of LTR, INC. leaves LTR, INC. to work for the Client, LTR, INC. may be substantially damaged by the employee's use of those trade secrets. Furthermore, the Client recognizes that proof of the misuse of trade secrets is difficult, even in the most egregious cases, and is always expensive. Therefore, to avoid any potential misuse of those trade secrets, the Client agrees during the term of this Agreement and for a period of one (1) year following its termination it will not employ any person employed by LTR, INC. during the term of this Agreement without the prior written consent of LTR, INC. a. Any notice required or permitted to be given under this Agreement small be sufficient if given in writing and by either personal delivery, registered or certified mail, or overnight delivery service to the Client or to LTR, INC. at, the addresses first set forth above or to any other address of which written notice of change is given. Notice is deemed given upon delivery (in person or by overnight delivery service) or two days following mailing. 9. The waiver by LTR, INC. or the Client of the breach of provision of this Agreement by the other party shall not operate or be construed as a waiver of any subsequent breach by either party or prevent either party hereafter enforcing f.. any such provision. 10. This Agreement is for the period provided for in Section_ 1. At least 10 days prior to the effective date of termination of this Agreement, Client shall have the option to: a. Self -handle to conclusion any or all open claims pending as of the effective date of termination; provided, however, that LJR, INC. shad be entitled to receive its full fee far all claims received prior to the effective date of termination; in such event, all obligations of LJR, INC. with respect to said claims shall be terminated upon, the effective date; or b. Require LJR, INC. to handle to conclusion any or all open claims as of the effective date of termination at a rate of compensation based on a time and expense formula at the then prevailing rate in such event; unless the Client and LJR, INC. agree on the amount of the Trust Fu -d which shall be retained and other terms and conditions of handling such claims, 1JR, INC. may choose not to handle any or all of such claims. In the event of termination, the Client shall make arrangements for the return to it of all of its records as soon as possible, with all associated costa and expenses including any storage and moving charges to be paid by the Client. 11. This Agreement sets forth all of the terms, conditions, and agreements of the parties relative to the subject matter .. l Agreement -1(1- hereof and supersedes any and all such former agreement. Such former agreements are hereby declared terminated and of no further force and effect upon the execution and delivery hereof. There are no terra, conditions, or agreements with respect thereto, except as herein provided, and no amendment or modification of this Agreement shall be effective unless reluced to writing and executed by the parties. 12. The Client agrees to indemnify, protect, defend and held LJR, INC. (and its employees, agents, successors and assigns) harmless from and against any and all loss, damage or liabilities (including costs and attorneys' fees) arising out of or resulting from (a) any and all of LTR, INC. Is activities or omissions to act pursuant to this Agreement (except to the extent of LJR, INC.'s gross negligence, recklessness, or willful misconduct) and (b) any actici, or omission to act relating to the Client's worker`s compensation claims, which actions or omissions were either not within the control of LJR, INC. or not within the scope Of its activities described in this Agreement. 13. This Agreement shall be governed by and construed in accordance with the internal laws of the State of California applicable to contracts .nade and to be performed within that State. The parties aarPe that (federal and state) of or relating to Alameda County, California shall have the sole and exclusive jurisdiction and venue over such action; provided that where a party is "EXHIBIT All The fees for claims administration service commencing 7/1/87 will be: A flat fee of $26,110 for the first 171 claims. Claims in excess of 171 will be billed at a rate $152.69 per claim. A a sued by a third party and asserts a cross-com.p la int, counterclaim, interpleader or other similar action against the other party, such action may be filed with the court in which such third party suit is filed. In all cases, the parties consent to the jurisdiction of the courts selected above. 14. IF any legal action is brought for the enforcement of this Agreement or because of an alleged dispute, breach, default or misrepresentation in connection with this Agreement, the prevailing party shall be entitled to recover reasonable attorneys' fees and other costs incurred in addition to any other relief to which it may be entitled. 15. The Client recognizes that LJR, INC. is not providing any legal advice with respect to its activities hereunder. 15. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of such together shall constitute one and the same instrument. IN WITNESS WHEREOF, the parties hereto have executed this Agreement in duplicate counterparts as of the date first above written. Attest Date Signed 62'3�� Attest iloi, % ` - ,Y z� Alice M. Reimche, City Clerk Date Signed 7/1/87 LEONARD J. RUSSO INSURANCE SERVICES, INC., a California corpoZA"Dir ti By_ �� Name & Titlep�� �fd � T orrias A. --Peterson Name & Title City Manager