HomeMy WebLinkAbout14-Risk Management
CITY OF SAN BERN48DINO -
REQUEST FOf' COUNCIL ACTION
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FrOm: Victor F. Lorch
Director, Risk Management
oept: Ri sk Management
Date: September 15, 1994
Subject: Con s u 1t i n g s e r vie e s for R i s k
Management - Third Party
Administrator Workers' Compensa~
tion.
Synopsis of Previous Council action:
Council adopted Resolution 89-376 on September 18, 1989 and Resolution
92-342 on August 17, 1992 authorizing the contract with Mr. Hamilton as
Third Party Administrator.
D141N. OFFICi'.
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Recommended motion:
DUN. .M-<iBb Re sol uti 0 n
) Sf? 9<, 7: 45
Signature
Antlct penon:
Victor F. Lorch
Phone: x5308
lupportlng utlllUlChed:
Wlrd:
:UNDINO REQUIREMENTS:
Amount: $55,000.00
$ 5,000.OU 678-452-55502 Consultant Services
Sourcl: (ACCT. NO.) 678-452-55177 Litigation Expense
(ACCT. DESCRIPTION)
Flnlncl: fJit~//l.. t/~~~\
lluna" Nobll:
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Agenda Item No / L/
CITY OF SAN BeRN~DINO - ReQUeST F~ COUNCIL ACTION
STAFF REPORT
An audit of the Workers' Compensation Department in May 1989 by the
state of California, Department of Industrial Relations, Self
Insurance Plans, fpund that the City'S claims were not being
administered properly. As a result, on July 24, 1989, the City's
permission to self administer its Workers' Compensation claims was
terminated. The State required that the City hire a Third Party
Administrator to oversee its operation. Non-compliance would have
resulted in the revocation of the city~s Certificate of Consent to
Self Insure, which meant that the city would have had to purchase
Workers' Compensation insurance from the State Fund. Approximate
cost would be $4,000,000 versus $2,800,500 under the present
program.
Based on State mandate, the city employed the services of Mr. Chuck
Hamilton, a State certified Third Party Administrator. Since the
hiring of Mr. Hamilton in August of 1989, it has been the goal of
this department to regain permission from the State to self
administer its Workers' Compensation program. Since 1990, we
have gradually made progress toward that goal. We increased the
number of Workers' compensation Specialists from one to two. The
dutiEis of Account Clerk II have been modified to comply with
insurance industry requirements for Workers' compensation Claims
Assistant. We have encouraged Workers' compensation staff to take
off duty education courses in this field. One Workers'
Compensation Specialist has passed the State test for
certification; the other is scheduled for November 1994.
In June 1994, we hired an independent auditor, Leo Heyenrath, to
review our Workers' Compensation Program. with proper staffing, as
outlined in the audit report conducted by Heyenrath and Associates,
we should be ready to self administer the City program as of Spring
1995. Implementation could save the city approximately $200,000
annually. -
In addition to assisting the City in its self administration, Mr.
Hamilton is recognized by the State of California, Department of
Industrial Relations, Self Insurance Plans as a qualified Hearing
Representative, to appear before any State Workers' Compensation
Appeals Board. This service can aid the City in the reduction of
its litigation expenses, which has increased over the last several
years. We anticipate a savings of $20,000 in litigation costs.
It is recommended that the Council adopt the contract for Mr.
Charles Hamilton.
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RESOLUTION NO.
RESOLUTION OF THE CITY OF SAN BERNARDINO AUTHORIZING THE
EXECUTION OF AN AGREEMENT WITH CHARLES E. HAMILTON TO PERFORM
CONSULTING SERVICES FOR THE RISK MANAGEMENT DEPARTMENT.
SECTION 1. The Mayor of the city of San Bernardino is hereby
authorized and directed to execute on behalf of said City. an
agreement with Charles E. Hamilton to perform consulting services
for the Risk Management Department, a copy of which is attached
hereto marked Exhibit "An and incorporated herein by reference as
fully as though set forth at length.
SECTION 2. The authorization to execute the above-referenced
agreement is rescinded if the parties to the agreement fail to
execute it within sixty (60) days of the passage of this
resolution.
I HEREBY CERTIFY that the foregoing resolution was duly
adopted by the Mayor and Common Council of the City of San
meeting thereof, held on the
, 1994, by the following vote to wit:
Bernardino at a
day of
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2 NEGRETE
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4 HERNANDEZ
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OBERHELMAN
DEVLIN
POPE-LUDLAM
MILLER
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ABSTAIN
ABSENT
city Clerk
The foregoing resolution is hereby approved this
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, 1994.
18 Approved as to form and
legal content:
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JAMES F. PENMAN
20 City Attorney
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By:
TOM MINOR, MAYOR
city of San Bernardino
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6 THIS AGREEMENT, made and entered into this day of
7 , 1994, by and between the CITY OF SAN BERNARDINO,
8 a Charter City ("city"), and CHARLES E. HAMILTON, an individual
9 ("Consultant").
10 WITNESSETH:
11 WHEREAS, the city has need for the services of a Third Party
12 Administrator to advise, train and help administer the city's
13 Workers' compensation program; and
14 WHEREAS, the city has need for the services of a Hearing
15 Representative to assist with the controlling of litigation
16 expenses in the area of Workers' Compensation; and
17 WHEREAS, consultant asserts that he is specially trained,
18 experienced and competent and licensed by the State of California,
19 Department of Industrial Relations, Self Insurance Plans, to
20 perform such services; and
21 WHEREAS, the City has authority to enter into this Agreement
22 pursuant to Section 40(aa) of the Charter of the City of San
23 Bernardino,
24 NOW THEREFORE, THE PARTIES HERETO AGREE AS FOLLOWS:
25 1. City hereby employs Consultant to perform representative
26 duties as follows:
27 Serve as Third Party Workers' compensation Certified
28 September 15. 1994
AGREEMENT FOR WORKERS' COMPENSATION CONSULTANT
(Third Party Administrator and City of San Bernardino
Hearing Representative to San Bernardino
Workers' compensation Appeals Board)
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1 Claims ~nm;n;strator.
2 Review and set reserves for new Workers' Compensation
3 claims.
4 Re-evaluate, increase or decrease reserves on existing
5 Workers' Compensation claims.
6 Develop and implement procedures for tracking and
7 resolving Workers' Compensation claims.
8 Develop and implement procedures for processing of
9 indemnity and medical claims.
10 Recommend and assist in training of employees to properly
11 handle claims.
12 Assist Director in re-establishing a certifiable in-house
13 Workers' Compensation claims function.
14 In addition, Consultant shall train, advise and assist the staff of
15 Risk Management Division of the City in the completion of these
16 representative duties.
17 2. The City shall compensate Consultant in the amount of
18 Fifty-Five Thousand Dollars ($55,000.00) over the term of this
19 Agreement payable bi-monthly.
20 3. In addition to serving as a consultant, Mr. Hamilton will
21 also serve as the City of San Bernardino's Hearing Representative
22 to the San Bernardino Workers' compensation Appeals Board. This
23 will be over and above his duties as a Consultant. The hourly rate
24 will be $75.00 plus expenses, not to exceed $5,000 for the duration
25 of this Agreement.
26 4. The term of this Agreement is August 1, 1994, up to and
27 including July 31, 1995. This Agreement may be extended on a
28 September 15, 1994
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month-to-month basis for a maximum of twelve (12) additional months
upon the express written consent of Consultant to such extension
and the approval thereof by the city Administrator. Either party
may terminate this Agreement for any reason upon fifteen (15) days
written notice to the other.
5. Consultant, in performing services under this Agreement,
shall not be considered as an employee of the city for any purpose,
but for all intents and purposes shall be considered as an
independent contractor.
6. Consultant agrees to defend, indemnify, save and hold the
city, its officers, agents and employees harmless from any claim or
suits that may be brought by third persons on account of personal
injury, death, or damage to property, or a property or business or
personal interest, arising from any negligent act or omission by
consultant while performing service under this Agreement.
7. All notices to be given pursuant to this Agreement shall
be deposited with the united states postal services postage prepaid
and addressed as follows:
To Consultant:
To City:
City Administrator
300 North 0 street
San Bernardino, CA 92418
Charles E. Hamilton
967 Duke Street
Upland, CA 91786
Nothing in this paragraph shall be construed in prevent the
giving of notice by personal service.
8. This document contains the entire Agreement between the
parties.
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September 15, 1994
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AGREEMENT BETON THE CITY OF SAN BERNARDJlNO AND CHARLES E.
HAMILTON TO . . ORM SERVICES FOR THE WOR~)S' COMPENSATION
PROGRAM. ~~
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IN WITNESS WHEREOF, this Agreement has been executed by the
parties effective as of the date and year first above written.
ATTEST:
CITY OF SAN BERNARDINO
Municipal Corporation of
the State of California
Rachel Clark, City Clerk
TOM MINOR, MAYOR
Consultant:
By:
CHARLES E. HAMILTON
Approved as to form
and legal content:
JAMES F. PENMAN
city Attorney
By:
September 15, 1994
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