HomeMy WebLinkAbout24-Risk Management
CITY OF SAN BERNODINO - REQUEST OR COUNCIL ACTION
From:
Victor Lorch
Director of Risk Management
Risk Management
Subject: Agreement for consultant --- Charles
E. Hamilton
Dept:
Date:
July 3l, 1992
Synopsis of Previous Council action:
9-18-89 -- Resolution authorizing contract with Charles Hamilton
approved. (89-376)
10-15-90 -- Resolution approving contract with Charles Hamilton
approved. (90..415)
Resolution authorizing contract with Charles Hamilton
10/07/91 -- approved. (91-412)
Recommended motion:
Adopt resolution.
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Signature
Conta~ person: Victor Lorch
Phone: 5308
Supporting data attached:
yes
Ward:
FUNDING REQUIREMENTS:
Amount; $';5.000
Source: (Acct. No.)
Professional/Contractual
(Acct. Descriotion)
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Finance: 0,
Council Notes:
75.0262
Agenda Item No ~1
CITY OF SAN BERtCRDINO - REQUEST .oR COUNCIL ACTION
STAFF REPORT
In June 1989, the state of California Department of Self Insurance,
Workers Compensation Division, removed the City's right to self
administer their Workers Compensation claims. The State mandated
the City hire a Third Party Workers Compensation Administrator or
lose its right to self insure for Workers Compensation and transfer
all new claims to the California state Compensation Fund or TPA.
All claims in progress would be transferred to a Third Party
Administrator for conclusion in handling, subject to state
approval.
The Mayor and Common Council opted to hire a captive Third Party
Workers Compensation Administrator.
Under the Workers Reform Act of 1989, the following increases went
into effect:
l. Temporary Disability Benefits increased 33%.
2. Permanent Disability Ratings increased 6%.
3. Death Benefits increased 27%.
4. Mileage Reimbursement increased 13%.
5. Increased Medical Costs.
6. Costs associated with arbitrator now paid 100%
by Employer (City).
While costs have increased, the City's Loss Rate per $100 of
payroll has decreased for FY 91/92. In FY 88/89, the Loss Rate was
$5.46 per hundred of payroll, a decrease of $14%. In addition to
this decrease, the Workers Compensation Department has recovered
over $50,000 from third parties responsible for injuries to City
employees during the last 6 months.
During the next two years, Risk Management's goal is to establish
a new position of Workers Compensation Unit Manager, eliminating
the Third Party Administrator position. This is dependent upon the
state Department of California, Department of Self-Insurance
granting the right to self-administer again. We are going into our
fourth year of a Third Party Administrator. After reviewing all
our options, we feel renewing Chuck Hamilton's contract and his
continuing "on the job training" of staff would benefit the City.
We considered the option of contracting the entire Workers
Compensation operation to a Third Party Administrator such as a
Gates-McDonald, Hertz Claims Management or a Crawford and Company.
This would have eliminated 2 staff positions and Chuck Hamilton's
position. Based upon current pendings and new losses, the cost to
the City would have been an additional $300,000 per year.
The present system allows control of our claims as shown by a
decrease in Loss Rate per $100 in payroll, a decrease in time off
for 4850 and lower premiums for such large departments as Police
and Public Services. These decreases occurred while benefits and
other costs increased.
75-0264
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RESOLUTION NO.
3 RESOLUTION OF THE CITY OF SAN BERNARDINO AUTHORIZING THE
EXECUTION OF AN AGREEMENT WITH CHARLES E. HAMILTON TO PERFORM
4 CONSULTING SERVICES FOR THE RISK MANAGEMENT DEPARTMENT.
5 SECTION 1. The Mayor of the city of San Bernardino is hereby
6 authorized and directed to execute on behalf of said city an
7 agreement with Charles E. Hamilton to perform consulting services
8 for the Risk Management Department, a copy of which is attached
9 hereto marked Exhibit "A" and incorporated herein by reference as
10 fully as though set forth at length.
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12 SECTION 2. The authorization to execute the above-referenced
13 agreement is rescinded if the parties to the agreement fail to
14 execute it within sixty (60) days of the passage of this
15 resolution.
16 I HEREBY CERTIFY that the foregoing resolution was duly
17 adopted by the Mayor and Common Council of the City of San
18 Bernardino at a meeting thereof, held on the
19 day of , 1992, by the following vote to wit:
20 / / / / /
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25 / / / / /
26 / / / / /
27 / / / / /
28 / / / / /
RESOLUTION AUTHORIZING CONTRACT WITH CF~RLES E. HAMILTON
FOR CONSUL'{:.;T SERVICES.
1 COUNCIL MEMBERS AYES NAYS ABSTAIN ABSENT
2 ESTRADA
3 REILLY
4 HERNANDEZ
5 MAUDSLEY
6 MINOR
7 POPE-LUDLAM
8 MILLER
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17 Approved as to form
and legal content:
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19
City Clerk
The foregoing resolution is hereby approved this ____ day of
, 1992.
W.R. HOLCOMB, Mayor
city of San Bernardino
JAMES F. PENMAN
City Attorney
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Exhibit "A"
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AGREEMENT FOR
WORKERS' COMPENSATION CONSULTANT
(Third Party Administrator)
THIS AGREEMENT, made and entered into this day of
, 1992, by and between the CITY OF SAN BERNARDINO, a
Charter city ("city"), and CHARLES E. HAMILTON, an individual
("Consultant").
WITNESSETH:
WHEREAS, City has need for the services of a Third Party
Administrator to advise, train - and help administer the City's
Workers' compensation program: and
WHEREAS, Consultant asserts that he is specially trained,
experienced and competent to perform such services: and
WHEREAS, City has authority to enter into this Agreement
pursuant to Section 40(aa) of the Charter of the City of San
Bernardino,
NOW THEREFORE, THE PARTIES HERETO AGREE AS FOLLOWS:
l. city hereby employs Consultant to perform representative
duties as follows:
Serve as Third Party Workers' Compensation Certified
Claims Administrator.
Review and set reserves for new Workers' compensation
claims.
Re-evaluate, increase or decrease reserves on existing
o
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1 Workers' Compensation claims.
2 Develop and implement procedures for tracking and
3 resolving Workers' Compensation claims.
4 Develop and implement procedures for processing of
5 indemnity and medical claims.
6 Recommend and assist in training of employees to properly
7 handle claims.
8 Assist Director in re-establishing a certifiable in-house
9 Workers' Compensation claims function.
10 In addition, Consultant shall train, advise and assist the staff of
11 Risk Management Division of the City in the completion of these
12 representative duties.
13 2. City shall compensate Consultant in the amount of Fifty-
14 Five Thousand Dollars ($55,000.00) over the term of this Agreement
15 payable bi-monthly.
16 3. The term of this Agreement is August l, 1992, up to and
17 including July 31, 1993. This Agreement may be extended on a
18 month-to-month basis for a maximum of twelve (12) additional months
19 upon the express written consent of Consultant to such extension
20 and the approval thereof by the City Administrator. Said extension
21 shall include cost of living increase, if any, granted to the
22 general employees. Either party may terminate this Agreement for
23 any reason upon fifteen (l5) days written notice to the other.
24 4. Consultant, in performing services under this Agreement,
25 shall not be considered as an employee of the city for any purpose,
26 but for all intents and purposes shall be considered as an
27 independent contractor.
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AGREEMENT W~ CHARLES HAMILTON FOR CO~TANT SERVICES
1 5. Consultant agrees to defend, indemnify, save and hold the
2 City, its officers, agents and employees harmless from any claim or
3 suits that may be brought by third persons on account of personal
4 injury, death, or damage to property, or a property or business or
5 personal interest, arising from any negligent act or omission by
6 Consultant while performing service under this Agreement.
7 6. All notices to be given pursuant to this Agreement shall
8 be deposited with the United States Postal Services postage prepaid
9 and addressed as follows:
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To city:
To Consultant:
city Administrator
300 North D Street
San Bernardino, CA
Charles E. Hamilton
967 Duke Street
Upland, CA 91786
92418
Nothing in this paragraph shall be construed to prevent the
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giving of notice by personal service.
7. This document contains the entire Agreement between the
parties.
IN WITNESS WHEREOF, parties hereto have executed this
Agreement on the day and date first above shown.
ATTEST:
CITY OF SAN BERNARDINO, a
Municipal corporation of
State of California
RACHEL KRASNEY
City Clerk
W.R. HOLCOMB, Mayor
City of San Bernardino
CHARLES E. HAMILTON
25 Approved as to form
26 a1legal ~ontent:
. l.~9. {;'It.'~
27 S F. PENMAN
ity Attorney
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