The URL can be used to link to this page

Home My WebLink About1997-10-28 - AGENDA REPORTS - CLAIMS ADMIN CNTR (2)CITY OF SANTA CLARITA AGENDA REPORT UNFINISHED BUSINESS DATE: October 28, 1997 City Manager Appro, Item to be presented SUBJECT: CLAIMS ADMINISTRATION CONTRACT DEPARTMENT: City Manager City Council approve the renewal of a three year professional service contract for Claims Administration Services with Carl Warren & Co. at the rates quoted in the attached contract. The funds have been budgeted in FY 97/98 in account #1600-8001. Authorize the City Manager to execute and sign all documents, subject to City Attorney approval. =I offiffi-1814,01"I The City Council considered the renewal of this contract at the October 15, 1997 meeting. At that time, staff was asked to research the price history of this contract, compare it to the corresponding Consumer Price Index, and resubmit the item for Council consideration. Carl Warren & Co. has administered the self-insurance liability program for the City since December 15, 1987. These services include investigation, adjustment, processing, supervision and resolution of liability claims against the City. The following table illustrates their contract price compared to the Consumer Price Index (CPI) for the same period: Year Ending Hourly Rate Increase CPI June 1988 $32 n/a n/a June 1989 $34 6.3% 5.5% June 1990 $36 5.9% 4.9% June 1991 $36 0% 4.3% June 1992 $38 5.6% 3.8% June 1993 $38 0% 2.4% June 1994 $40 5.3% 1.1% June 1995 $40 0% 2.3% June 1996 $40 0% 1.2% June 1997 $42 5.0% 1.7% TOTAL + $1.11/year 31.3% 30.7% 13 Rg u, 4 4 Agenda Itemir The costs for their services over the past three years have been as follows: Fiscal Year Rate Total Cost 1994/95 $40/hour $39,937 1995/96 $41/hour $27,281 1996/97 $42/hour $32,458 Carl Warren & Co. is requesting a rate increase to $43/hour in FY 1997/98, $44/hour in FY 1998/99, and $45/hour in FY 1999/2000. The new rates represent less than a 2.4% per year increase. The CPI has averaged an increase of 3.4% per year over the life of the contract. Carl Warren & Co. is a large company with many government agencies as clients. Some of the agencies they serve, which are on a similar rate schedule as Santa Clarita, are Santa Monica, San Fernando, Lancaster, Palmdale, Los Angeles County, Gardena, South Gate, and Lynwood. ALTERNATIVE ACTIONS 1. Direct staff to solicit bids from other companies for claims administration services. 2. Other direction as determined by Council. FISCAL IMPACT The proposed rate increase represents an approximate annual increase of $500, which has been budgeted for in account #1600-8001. ATTACHMENTS Draft Copy of contract between City and Carl Warren & Co. pez.=wrpz.wpd AGREEMENT BETWEEN CITY OF SANTA CLARITA ®RAFT AND CARL WARREN & COMPANY FOR SELF-INSURANCE ADMINISTRATION SERVICES This AGREEMENT, entered into this day of 1997, by and between City of Santa Clarita, hereinafter called "PRINCIPAL", and Carl Warren & Company, Inc., hereinafter called "CONTRACTOR", for certain services as herein, and in connection with the duties and responsibilities of administering a program of self-insurance. WITNESSETH WHEREAS, PRINCIPAL has undertaken to self -insure; and WHEREAS, CONTRACTOR is engaged in the supervision, adjustment and administration of programs for self-insurance; NOW, THEREFORE, for and in consideration of the mutual obligations hereby assumed, and the performance of the acts hereinafter set forth, the parties hereto agree as follows: 1. GENERAL: CONTRACTOR agrees to supervise and administer the Self -Insurance Liability Program for PRINCIPAL, and shall act as their representative in connection with the investigation, adjustment, processing, supervision and resolution of liability claims by third parties against PRINCIPAL which are premised upon allegations of negligent or careless acts or omissions, or parties for whom PRINCIPAL is alleged to be legally responsible, and agrees further to provide to PRINCIPAL, during the term of this AGREEMENT, all services more particularly set forth hereinafter. Page 1 Page 2 2. INVESTIGATIVE SERVICES: A. CONTRACTOR agrees to provide complete investigative services, to include, but not limited to: (1) Receipt of and examination of all reports of accidents, incidents, claims or cases which are or may be the subject of such liability claims. (2) The investigation of such accidents, incidents, claims or cases where examination warrants such investigation, to include on-site investigation, photographs, interviewing of witnesses, determination of losses, and other such investigative services necessary to determine liability losses, but not to include extraordinary professional services as set forth in subsection 'B" herein. (3) CONTRACTOR agrees to maintain service on a 24-hour, 7 -days - a -week basis, to receive telephone report of any incident or accident which may be the subject of a bona fide claim, and shall provide immediate investigative services, if the accident or inci- dent so requires. (4) CONTRACTOR will undertake items of special handling for PRINCIPAL at the discretion of the Principars officers or authorized representatives. B. ALLOCATED EXPENSES: PRINCIPAL agrees to pay the cost of all extraordinary investigative services where expert and Page 3 professional assistance is required, such as, but not limited to, service performed by other adjusting and/or investigating companies, professional photographs, independent medical examinations, pro- fessional engineering services, laboratory service, and legal services. CONTRACTOR shall order such services as may be required only with authorization from PRINCIPAL. 3. ADJUSTMENT SERVICES: CONTRACTOR agrees to provide complete adjustment services on each accident or incident which is or may be the subject of a claim. Such services will include: A. The maintenance of a claim file on each potential or actual claim reported to the CONTRACTOR. B. Whenever. its investigation results in a determination that PRINCIPAL has sustained liability to a third party, or other money damages, CONTRACTOR shall process any such claim or potential claim for settlement in accordance with instructions and policies established by PRINCIPAL for settlement of such claims. C. Notification of PRINCIPAL, primary and excess carriers of all claims that exceed PRINCIPAL's retention and maintenance of liaison between insurance carvers and PRINCIPAL on matters affecting the adjustment of such claims. Maintain records of any such claim, and notify PRINCIPAL when PRINCIPAL is entitled to reimbursement for loss in excess of retention. D. Rejection of claims when appropriate. Assist in handling Page 4 of first -party losses as assigned by PRINCIPAL and to pursue recovery. E. Obtain all Release Agreements upon settlement of any claim or potential claim. 4. ADMINISTRATIVE SERVICES: CONTRACTOR agrees to provide the following administrative services: A. Preparation and maintenance of current operating procedures for reporting claims to PRINCIPAL, and the proper procedures for completing accident or incident forms. B. Assignment of a Principal Account Adjuster to PRINCIPAL, to provide liaison between PRINCIPAL and CONTRACTOR, and - all other adjusting services required. C. Provide PRINCIPAL with tabulated Monthly Status Report of all reported claims during the term of this Agreement, indicating the status of each reported open claim assigned to CONTRACTOR, and the details of all claire payments during the month. The Status Report is forwarded to PRINCIPAL within twenty (20) days of the close of each calendar month. D. Periodic review and adjustment of reserves on all open claims. 5. C1 Page 5 LEGAL SUPPORT SERVICES: CONTRACTOR agrees to provide the following legal support services on each claim in which third -party claimant has commenced litigation. A. Upon notification that litigation has been Sled on an open claim, meet the trial attorney assigned to handle the case, and provide trial attorney with all of the information and files concerning claim. B. Maintain liaison with trial attorney assigned to litigation on open claim, and provide such investigative services as are required during pre-trial and trial stage. C. Assist trial attorney in answering any interrogatories filed by third parties pursuant to any litigation filed on an open claim. D. Assist PRINCIPAL in Small Claims actions filed against PRINCIPAL on claims handled by CONTRACTOR, by advising PRINCIPAL of names of witnesses to be subpoenaed, necessary evidence and appearance at the trial, to assist in the case and appear as a witness, if necessary. PERIOD OF AGREEMENT: This Agreement is for a period of thirty-six (36) months, for rate quotes, commencing at 12:01 A.M. on July 1st . 199 7. and ending at 12:01 A.M., July_ I st . 200_k_. Annual renewals will be subject to change in CONTRACTOR'S base rates. 7. CONSIDERATION: A. All CONTRACTOR'S services and processing as directed by Page 6 good and professional claims handling, will be billed as follows: 1 st Year Services: $43.00 per hour Telephone: 8% of services Photographs: $2.00 per print Mileage: $.40 per mile Photocopy: $.20 per page Stenographic: $4.50 per page 2nd Year 3rd Year $44.00 per hour $45.00 per hour 8% of services $2.00 per print $.40 per mile $.20 per page $4.50 per page 8% of services $2.00 per print $.40 per mile $.20 per page $4.50 per page Office Expense:. $21.50 one-time file $22.00 one-time $22.50 one-time set-up fee, plus 15% file set-up fee, file set-up fee, of each service plus 15% of each plus 15% of each billing service billing service billing Compute $100.00 per month $100.00 per month $100.00 per month B. All administrative and management services, duties and obligations are on a time -and -expense basis at the CONTRACTOR'S base rate. C. PRINCIPAL agrees to reimburse CONTRACTOR for all allocated expenses incurred pursuant to Section 2.13 herein which are supported with proper invoices. 8. TIME PERIOD OF PAYMENT: Payments on invoices shall be transmitted to CONTRACTOR at P.O.Box 25161, Santa Ana, CA 92799-5161, within thirty (30) days of date received. CONTRACTOR agrees to bill PRINCIPAL on a regular basis for each claim file and/or services rendered as described in 7.A and 7.13 herein. 9. PRINCIPAL RESPONSIBILITIES: PRINCIPAL shall provide CONTRACTOR with copies of all relevant documents upon request Page 7 and without charge, and shall make available any employee or insured party for interviews by CONTRACTOR, or CONTRACTOR'S designee, at a reasonable time, concerning any investigation of a claim or incident pursuant to this Agreement. 10. In the event a claim or incident is reported to CONTRACTOR by PRIN- CIPAL, involving clients of CONTRACTOR to whom CONTRACTOR is committed to serve in preference to PRINCIPAL, and there is a dispute as to the liability of the parties, or as to the amount of loss, CONTRACT- OR shall notify the PRINCIPAL of the conflict of interest. If PRINCI- PAL elects to have another independent investigation and adjuster, CON- TRACTOR shall assist PRINCIPAL in obtaining such services. 11. CANCELLATION OF SERVICES. A. This Agreement may be terminated by PRINCIPAL with or without cause, upon giving CONTRACTOR written notice at least thirty (3 0) days prior to termination. B. CONTRACTOR will continue to serve PRINCIPAL if PRINCIPAL directs, following subject contract period, at the rates then in effect, for the handling of open files and new claims submitted, pending finalization of new contract rates. CONTRACTOR will terminate services only after a sixty (60) day written notice to PRINCIPAL. 12. DISPOSITION OF FILES ON TERMINATION OF AGREEMENT: A. Investigative materials on each claim shall be the property of the PRINCIPAL. B. In the event of expiration of the Agreement, and the Agreement Page 8 is not renewed, PRINCIPAL will require CONTRACTOR to bill PRINCIPAL for the work completed and unbilled on each claim file, and CONTRACTOR will promptly return requested claim files to PRINCIPAL, unless PRINCIPAL requests CONTRACTOR to continue to process files, which files CONTRACTOR will continue to process on a time -and -expense basis, as is provided in the CONTRACTOR'S Rate Manual at the time such services are rendered. 13. HOLD HARMLESS: A. PRINCIPAL agrees to defend any legal action commenced against CONTRACTOR caused directly or indirectly by the wrongfid or negligent acts of PRINCIPAL's officers, employees, agents or other engaged by PRINCIPAL, and indemnify CONTRACTOR against any liability, loss, cost or damage, including attorney's fees resulting therefrom. B. CONTRACTOR agrees to defend any legal action commenced against PRINCIPAL caused directly or indirectly by the wrongful or negligent acts of CONTRACTOR'S officers or employees, and will indemnify PRINCIPAL against any liability, loss; cost or damage, including attorney's fees resulting therefrom. 14. SERVICES TO BE IN CONJUNCTION WITH PRINCIPAL REPRE- SENTATIVE: All investigations done shall be on behalf of PRINCIPAL, designated Page 9 counsel, or such attorneys as PRINCIPAL may from time to time designate, for the purpose of ensuring that PRINCIPAL is properly and adequately protected and represented in litigative matters in which it is or may become engaged. IN WITNESS WHEREOF, the parties hereto have caused these presents to be signed by their duly -authorized officers as of the day and year first above written. /v CITY OF SANTA CLARITA M George Caravalho Title: City Manager CARL WARREN & COMPANY A California Corporation By:-—'�� L G. Hunt Executive Vice President