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HomeMy WebLinkAbout4.3 Liability Claims Settlement . . CITY OF DUBLIN AGENDA STATEMENT CITY COUNCIL MEETING DATE: October 27, 1986 SUBJECT Establishment of Liability Claims Settlement Authority I o Proposed Resolution o Resolution No. 22-86 o Memorandum dated September 18, 1986 to ABAG PLAN Corporatie,n Board of Directors EXHIBITS ATTACHED ~ RECOMMENDATION ~ : Adopt Resolution rescinding Resolution No. 22-86 FINANCIAL STATEMENT: City Manager would have a settlement authority of $5,000 DESCRIPTION The City Council adopted Resolution No. 22-86 after becoming uninsured March 1, 1986. The Resolution provided the City Manager with a $5,000 claims settlement authority. The independent adjustment firm was authorized to settle claims for $1,000 or less without direct approval from the City Manager. This arrangement provided an efficient procedure provided that lCO% of the claims were being paid by the City. Effective June 2, 1986, the City became a participant in the ABAG PLAN Corporation. The Board of Directors of ABAG PLAN Corporation has now adopted policies for claims settlement. Pursuant to documents adopted by the City Council, the Assistant to the City Manager is the City of Dublin representative to the Board of Directors. State Law allows the City Council to authorize an employee to settle claims up to $20,000 without action of the City Council. The proposed resolution establishes a settlement authority of $5,000 for the City Manager. As provided for in the resclution, the City Manager would be authorized to delegate any part of this authority. The ABAG PLAN has suggested that the Claims Administrator be authorized to settle claims for less than $1,500. The Board of Directors is utilizing George Hills Company for claims investigation which is the same firm used by the City since March 1, 1986. The Resolution also clarifies the use of the ABAG PLAn Corporation Claims Committee as a Claims Board pursuant to State Law. At all times, ABAG PLAN will advise the City of proposed settlements. If the Ci ty disagrees a request may be made to have the proposal acted on by the Claims Committee. The Committee will automatically act on any settlement which exceeds the City's deductible of $25,000. The City's right to request a review of the settlement provides more security than exists with a traditional insurance company. In settling a claim, the Company would merely advise the City of the amount under the deductible and the City would be obligated to make the payment. Participation in ABAG PLAN provides the City with the opportunity to have more input into the process. As a policy, Staff wi 11 always keep the City Council informed of the development of claims and any proposed settlements. Staff recommends that the City Council adopt the proposed resolution. ITEM NO. 4-7 , COPIES TO: . . RESOLUTION NO. - 86 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DUBLIN ************************** RESCINDING RESOLUTION NO. 22-86 AND ESTABLISHING LIABILITY CLAIMS SETTLEMENT AUTHORITY LIMITS AND AUTHORIZING PAYMENT OF SETTLED CLAIMS WHEREAS, effective June 2, ~986, the City of Dublin became a charter member of Association of Bay Area Governments Pooled Liability Assurance Network (ABAG PLAN); and WHEREAS, the program is a pooled self insurance program of member entities; and WHEREAS, Resolution No. 22-86 is in conflict with the newly established insurance program; and WHEREAS, ABAG Plan has established claims settlement procedures. NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Dublin does hereby rescind claims settlement authority established in Resolution No. 22-86. BE IT FURTHER RESOLVED that the following claims settlement authority shall be established: A. The City Manager or his/her designee shall have the authority to allow, settle, or compromise claims brought against the City of Dublin up to five thousand dollars ($5,000). B. Any settlement of claims shall require that appropriate documents are received from the claimant to assure closure of the matter. C. The City Manager may delegate his/her settlement authority in an increment which is determined to be in the interest of the City. D. Section 935.2 of the Government Code permits the City Council to establish a claims board to perform any of its functions as set forth in Sections 900, et seq. The Claims Committee of ABAG PLAN Corporation shall be considered to meet the requirements of State Law and is hereby authorized to settle claims on behalf of the City of Dublin pursuant to Sections 900, et seq. of the California Government Code, provided that the amount of the settlement is more than $5,000 and less than the City's deductible under ABAG PLAN. E. The fiscal officer of the City of Dublin shall be authorized to pay any claims allowed, compromised by the Committee described in Section D above, provided that the settlement is within the authority of the Committee and that it is in writing. PASSED, APPROVED AND ADOPTED this 27th day of October, 1986. AYES: NOES: ABSENT: Mayor ATTEST: City Clerk _~~_.m__ ("' . ( RESOLUTION NO. 22 - 86 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DUBLIN APPROVING LIABILITY CLAIMS ADJUSTING AND ADMINISTRATION SERVICE CONTRACT AND ESTABLISHING SETTLEMENT AUTHORITY LIMITS \~EREAS, the City of Dublin is in need of professional liability claims adjusting and administration services; and \JHEREAS, the City Staff revie,ved proposals to determine the most effective method of providing these services; and WHEREAS, the George Hills Company, Inc., is licensed as Independent Insurance Adjusters and Administrators; and WHEREAS, the settlement of claims can be expedited through an authorization of settlement authority. the City attached Contract NOW, THEREFORE, BE IT RESOLVED that the City Council of of Duplin does hereby authorize the Mayor to execute the Liability Claims Adjusting & Administration Service att~hed hereto and by reference made a part hereof. , BE IT FURTHER RESOLVED that George Hills Company, Inc., shall be authorized a One Thousand Dollar ($1,000) authority for the purpose of compromising and/or settling any claims against the City handled pursuant to this agreement. For the purpose of facilitating settlement payments, the Claim Administrator may establish a trust account and make said payments on behalf of the City. The balance in said account shall not exceed Five Thousand Dollars ($5,000), unless authorized by the City Council. BE IT FURTHER RESOLVED that the CLty Council shall authorize a supplemental settlement authority to the City Manager of Four Thousand Dollars ($4,000). In no case shall a clalm be settled for more than $5,000 without direct authorization from the City CouncLl. PASSED, APPROVED AND ADOPTED this 10th day of Harch, 1986. AYES: Councilmembers Hegarty, Jeffery, Moffatt, Vonheeder and Mayor Snyder NOES: None ABSENT: None // ---.'~~ .- .~/..-: .. _,' .c-~ L . a r &- AT~~C City C . . FREDERICK. C. JENNER (RET) ARTHUR HARR.IS KENNETH IC.. MOY LAW OFFICES BENNER, HARRIS & MOY WELLS FARGO BANK BUILDING 2140 SH^TTUCK. AVENUE, SUITE 1103 BERKELEY. CALIFORNIA 94704~1258 1^~aAR.A A. ~.sEIl. MEMORANDUM To: Board of Directors ABAG PLAN Corporation From: Barbara A. Lesser Benner, Harris &. Moy Date: September 18, 1986 Re: Delegation of settlement of claims authority I understand that the Board of Directors of the ABAG PLAN Corporation (PLAN Corporation) wishes to delegate settlement authority for tort claims not exceeding the sum of $1,500 to the claims administrator, George Hills Company, Inc., (George Hills) and for settlements not exceeding the deductible amount of each city's policy to the PLAN Corporation. All settlements in excess of each city's deductible amount would be authorized by the governing body of the individual city. The procedure for delegating authority to enter into settlement of claims exceeding $20,000 is different than that for smaller settlement amounts, except in the case of charter cities. This memorandum will set forth both procedures. 1. Settlem ents not exceeding twenty thousand dollars. Any public entity may by ordinance or resolution authorize one of its employees to allow, compromise, settle or reject tort claims against it if the sum to be paid does not exceed $20,000, pursuant to California Government Code Section 935.4. (All references are to the Government Code unless noted.) Many cities already have resolutions delegating settlement authority to an employee if the sum does not exceed $5,000, which was the upper limit permissable prior to the 1981 amendment to Section 935.4. Those cities may continue with that policy or may pass new resolutions increasing the delegated amount to $20,000. Any ordinances or resolutions now passed should delegate to a specific employee (by job title, not name) or his/her designee the right to allow, compromise or settle claims against the public entity if the sum involved does not exceed $20,000. The ordinance or resolution may also delegate to the employee -1- (415) 848.0630 . . . any of the other rights, duties and obligiiltions listed in Sections 900, et seq. This includes such duties as rejecting and reconsidering claims. Finally, the ordinance or resolution should state that the financial officer of the city will pay any claims up to the delegated amount upon the written authority of the designated employee. Any cities which are charter cities are exempt from the $20,000 requirement if a charter amendment is passed. The charter amendment may delegate authority to an employee to allow, compromise or settle of claims up to any specified amount. The agreement between the PLAN Corporation and George Hills delegates settlement authority to them in the amount of $1,500 for all claims. Consequently, each designated city employee should delegate to George Hills the authority to settle those claims not exceeding $1,500. This may be by way of letter and it does not require any formal action by the city council. 2. Settlem ent in excess of twenty thousand dollars. Section 935.2 permits a public entity by ordinance or resolution to establish a claims board or commission of not less than three members to perform any of its functions as set forth in Sections 900, et seq. The claims committee of the PLAN Corporation consists of three members and thus fits the requirement under Section 935.2. It could thus act as the claims board or commission to which this delegation is made. Those cities wishing to delegate authority to settle claims up to their deductible amount should pass resolutions or ordinances so delegating the authority to allow, settle or compromise claims up to that amount to the claims committee of the PLAN Corporation. The resolution should be worded to sta te that it applies only to claims in excess of $5,000 or $20,000 (depending on the amount delegated to the city employee) up to and including the amount stated as the deductible amount. The resolution or ordinance should further authorize the fiscal officer of the city to pay any claims allowed, compromised or settled by the claims committee within their authority upon written request of said committee. -2-