HomeMy WebLinkAbout05.E- Human Resources RESOLUTION (ID #2664) DOC ID: 2664 B
CITY OF SAN BERNARDINO—REQUEST FOR COUNCIL ACTION
Personnel
From: Allen Parker M/CC Meeting Date: 09/16/2013
Prepared by: Linda Wynn, (909) 384-5161
Dept: Human Resources Ward(s): All
Subject:
Resolution of the Mayor and Common Council of the City of San Bernardino Authorizing the
Issuance of a Request for Proposal for Liability and Property Claims Administration Services.
(At Meeting of September 3, 2013,Item Continued to September 16, 2013) (#2664)
Current Business Registration Certificate: Not Applicable
Financial Impact:
Request for bid only.
Motion: Adopt the Resolution.
Synopsis of Previous Council Action:
None.
Background:
The Pre-Pendency Plan included the outsourcing of Workers' Compensation and Risk
Management functions to a third party administrator to reduce costs and enhance efficiencies.
The City's Workers' Compensation Program was outsourced effective May 15, 2013.
Within any organization, the effective use of resources are paramount to the improvement of
cost-containment.Third-party administrators are prominent players with local governments and
have the expertise and capability to administer all or a portion of the claims process. Claims
administration can be cost effectively outsourced by cities or self-insuring companies to
administer services, including claims administration, premium collection, enrollment and other
administrative activities.
Much like the workers' compensation administration, liability claims administration services are
a specialized area of risk management. Challenges to the City include the need for ongoing
training to remain current with industry standards,higher claim volumes decrease claim accuracy
and frustrate claim settlement and ultimately increase claim compensability. Staffing to provide
effective claims management that focuses on services and cost containment is difficult and
expensive.
Inquiry has indicated that many cities typically outsource these tasks to third-party claim
administrators because of the potential to reduce overhead and provide improved claims services
at significant annual savings. The advantages of using an external third-party administrator are:
1. Less costly than performing the tasks internally, estimated annual savings of$260,000.
(Since bankruptcy filing, the City has received 148 liability claims.)
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2664
2. Immediate access to highly-trained, highly-efficient professional people. People that are
experienced, thus eliminating the costly introduction and training curve that is inherent
within an internal department.
3. People motivated to perform at peak proficiency, immediately and continually.
4. People that are not "on the clock" and are paid for only what they produce, eliminating
costly down time.
Essentially, outsourcing to a third-party administrator will typically yield a direct benefit to
include,but not be limited to, the below areas which all have a fiscal impact to the City:
1. Improve investigation and reporting claim activity to determine validity and
compensability;
2. Promptly and accurately determine all benefits due for all compensable claims;
3. Guarantee timely delivery of all benefits due in accordance with payment procedures, as
established by the City;
4. Properly and adequately document and handle defense of all claims considered non-
compensable; assist and provide support to the City's legal counsel in preparation for
defending the City through all stages of the claim;
5. Efficiently maintain pertinent data on all claims;
6. File required claim information, as appropriate and/or necessary, within required
timeframes;
7. Develop, implement and maintain a claim-specific plan of action, including a meaningful
resolution plan for each claim;
8. Establish, monitor and periodically adjust claim-specific reserves through the life of each
claim.
Staff surveyed ten Cities in the general region; six of those cities utilized a third-party claims
administrator for its general liability claims administration. The below chart represents the
survey results:
Cities With Third-Party Claims Cities With In-House
Updated: 9/10/2013 by Linda Wynn B Packet Pg.78
2664
Administrators Administration
CORONA MORENO VALLEY
FONTANA ONTARIO
RANCHO CUCAMONGA POMONA
TEMECULA UPLAND
RIALTO
HIGHLAND
It is the intention of the City to retain the responsibilities of overseeing insurance and surety
bond certifications, confirmation/approval of contract and special event risk compliance. The
acceptability of insurance and bond certificates shall be determined by the Human Resources
Analyst so that required insurances and bonds are in place by carriers with a current A.M. Best's
rating of no less than A:VII, or the carrier is an admitted carrier to the State of California. (This
can be easily checked online within the State Insurance Commissioner's website.)
City Attorney Review:
Supportiniz Documents:
reso 2664-2 (PDF)
RFP TPA Liability 9-3-13 (PDF)
Updated: 9/10/2013 by Linda Wynn B Packet Pg. 79
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RESOLUTION NO.
l
2 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF
SAN BERNARDINO AUTHORIZING THE ISSUANCE OF A REQUEST FOR
3 PROPOSAL FOR LIABILITY AND PROPERTY CLAIMS ADMINISTRATION
SERVICES.
4
5 NOW THEREFORE, BE IT RESOLVED BY THE MAYOR AND COMMON
6 COUNCIL OF THE CITY OF SAN BERNARDINO AS FOLLOWS:
7 SECTION 1. The City Manager and the Director of Administrative Services are
8 hereby authorized and directed to issue a Request for Proposal for Liability and Property
9 Claims Administration Services.
10
11 SECTION 2. The authorization granted hereunder shall expire and be void and of no
12 further effect if the Request for Proposal for Liability and Property Claims Administration
13 Services is not completed within sixty (60) days following the effective date of the
14 Resolution.
15 /ll
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19 !!/
20 III
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1 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF
2 SAN BERNARDINO AUTHORIZING THE ISSUANCE OF A REQUEST FOR
PROPOSAL FOR LIABILITY AND PROPERTY CLAIMS ADMINISTRATION
3 SERVICES.
4
5 I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor
6 and Common Council of the City of San Bernardino at a meeting
7 thereof,held on the day of ,2013,by the following vote,to wit:
$
Council Members: AYES NAYS ABSTAIN ABSENT
9
10 MARQUEZ
11 JENKINS
12 VALDIVIA
13 SHORETT
14 KELLEY
15
16 JOHNSON
17 MCCAMMACK
18
19 Georgeann Hanna,City Clerk
20 The foregoing Resolution is hereby approved this day of .2013.
21
22
23 Patrick J. Morris,Mayor
City of San Bernardino
24
Approved as to form:
25 JAMES F. PENMAN,
26 City Attorney
27 By: �,.
28