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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. dh YJd'- , / /' Signature Conta~ person: Victor Lorch Phone: 5308 Supporting data attached: yes Ward: FUNDING REQUIREMENTS: Amount; $';5.000 Source: (Acct. No.) Professional/Contractual (Acct. Descriotion) Ov '-'\s"'W :;0 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 c r-.. V 1 2 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. 11 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 / / / / / 21 / / / / / 22 / / / / / 23 / / / / / 24 / / / / / 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 9 10 11 12 13 14 15 16 17 Approved as to form and legal content: 18 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 20 21 22 23 24 25 26 27 28 /) -2- r' -, '..,I Exhibit "A" \,.,I 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 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 o 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. 28 -2- 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: 10 11 12 13 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 14 15 16 17 18 19 20 21 22 23 24 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 28 -3-