HomeMy WebLinkAboutItem 4.4 ClaimPolicyAmendCITY OF DUBLIN
AGENDA STATEMENT
CITY COUNCIL MEETING DATE: July 23, 1990
SUBJECT: Amendment to Policy on Processing and Settling General
?n Liability Claims
(Prepared by: Paul S. Rankin, Assistant City Manager)
EXHIBITS ATTACHED: Proposed Resolution Rescinding Resolution No. 114-86
Memorandum dated July 19, 1990 from Chair of ABAG PLAN
fAdopt ResolNo. 114-86
RECOMMENDATION: Resolution
FINANCIAL STATEMENT: None
DESCRIPTION: The purpose of this item is to provide an update on the
status of the City's Self-Insured Liability Insurance Program. In
addition, the ABAG PLAN program has recommended that member cities modify
their procedures to streamline the claims process.
Self-Insured Program Backgl-ound
The City currently obtains liability insurance: coverage from ABAG PLAN
Corporation . This is a public agency pool currently representing 26
public agencies. ABAG PLAN began offering coverage in June of 1986 and the
City of Dublin was a Charter Member.
The program has been very successful due to [l variety of factors. In
addition to providing coverage, the group has emphasized training and other
programs to reduce City liabilities. Also, each year an actuarial study is
conducted to assess the amount of premium necessary to cover the
anticipated losses. Reserve funds are invested according to the same
restrictions as would apply to a public agency. The self-insured pool
provides coverage up to $5 million per occurrence and the City of Dublin
has a $25,000 deductible.
Success of Program
After only four years of operation, the progr;3m has proven to be quite
successful. The 1990 Actuarial Report showed that the pool had equity in
excess of what the actuary estimated to be needed. The actuarial
assumptions are based on a 90% confidence level. This provides a high
degree of assurance that the program is properly funded.
In July, ABAG PLAN distributed $1.6 million in excess equity to the
members. The City of :Dublin received $33,962 as its share of the
distribution. This represents a return of approximately 30% of the loss
premium paid by the City in the first two years of the program. The
premiums paid to ABAG PLAN consist of two coriponents: Loss Premium and
Administrative Premium. The administrative premium covers the plan
operations including the investigation of all claims.
The primary factors which :impact the City's premium are:
(1) Changes in the population
(2) Changes in the Gross Payroll of the City
(3) Number of claims incurred
(4) Value of claims incurred
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COPIES TO:
L? Albert Fierro, ABAG PLAN Risk Manager
ITEM NO. m
If the City's record of claims and that of the entire pool continues to be
posit=ive, the City may receive future equity distributions. The program is
operated using a Board of Directors consisting of one representative of
each agency. The City of Dublin is represented on the Board of Directors
by the Assistant City Manager.
Change in Policy - Denial of Claims
ABAG PLAN had an external claims audit conducted by the firm of Warren
McVeigh & Griffin, Inc. This type of audit focuses on the operational
issues surrounding the handling of claims.
The Auditors have recommended that all member agencies amend their claims
processing procedures. The Board of Directors has concurred with the
Auditor's recommendation regarding the denial of claims submitted to the
City.
The current policy has all claims submitted to the City Council for denial.
The claim is presented to the City Council after the ABAG PLAN adjustor has
had an opportunity to review the claim and provide a recommendation. The
City Council has typically handled the denial of claims as part of the
consent calendar.
State Law contains certain time requirements for the handling of claims.
Typically, this provides 45 days for action on the claim. If the City does
not act in a timely manner, the time frame for the claimant to file a law
suit is extended. The Auditors have recommended that the City Council
authorize a Staff member to deny claims. State Law contains provisions
which allow the City Council to delegate the authority to deny claims.
This avoids any conflicts with the timing of a claim on the agenda and
having the recommendation of the ABAG PLAN adjustor. It also recognizes
the fact that most denials are a matter of rcutine business and can be
handled by Staff.
The proposed resolution would authorize the City Manager or his/her
designee to process all claims including denying claims on behalf of the
City Council.
Delegation of Settlement Authority
When Resolution No. 114-86 was adopted by the City Council, the Resolution
allowed the City Manager to settle claims up to $5,000 (Five Thousand
Dollars). California Government Code Section 935.4 has been amended to
allow public entities to adopt a resolution providing for an employee of
the public entity to settle claims up to $50,001) (Fifty Thousand Dollars).
In the proposed resolution, Staff did not modify the settlement from what
is stated in Resolution No. 114-86.
Recommendation
Staff has also requested that the City Attorney review the proposed change.
The City Attorney has concurred that it would be consistent for a Staff
member to both deny and settle claims.
In order to streamline the City's Liability Claims process and to implement
the recommendations of the ABAG PLAN auditor, Staff recommends that the
City Council adopt the proposed resolution.
RESOLUTION NO. - 90
A RESOLUTION OF THE CITY COUNCIL
OF THE CITY OF DUBLIN
RESOLUTION RESCINDING RESOLUTION NO. 114-86
AND ESTABLISHING STAFF AUTHORITY TO ACT ON GENERAL LIABILITY CLAIMS
WHEREAS, the City of Dublin has participated as a Charter Member in the
Association of Bay Area Governments Pooled Liability Assurance Network (ABAG PLAN);
and
WHEREAS, since 1986 ABAG PLAN has provided self-insured general liability
coverage to the City of Dublin; and
WHEREAS, Part 3 of Division 3.6 of Title 1 of t:1e California Government Code
(Sections 900 et seq) impose certain enumerated duties upon the City Council relating
to claims for money or damages which are presented to the City; and
WHEREAS, California Government Code Section 935.4 permits a City Council by
resolution to authorize a City employee to perform the Eunctions of the City Council
relating to such claims; and
WHEREAS, ABAG PLAN has obtained an audit repo:'t which recommends that the
elected bodies of the member agencies delegate these duties in accordance with State
Law; and
WHEREAS, the processing and settlement of certain claims can most efficiently
be considered a ministerial responsibility of the City Manager or his/her designee;
and
WHEREAS, the City Council is desirous of amending the City Manager's settlement
authority as stated in Resolution No. 114-86.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Dublin does
hereby rescind City of Dublin Resolution No. 114-86 in ii:s entirety.
BE IT FURTHER RESOLVED that the City Manager or his/her designee is hereby
authorized to perform on behalf of the City Council the duties imposed upon the City
Council by California Government Code Section 900 et seq, relating to claims for money
or damages. In accordance with Section 935.4, the cla;.ms settlement authority which
the City Council does hereby delegate to the City Manacer or his/her designee, shall
not exceed $5,000 (five thousand dollars).
BE IT FURTHER RESOLVED that the Fiscal Officer o:: the City of Dublin shall be
authorized to pay all claims which are settled within the limits presented within this
resolution and in accordance with State Law.
PASSED, APPROVED AND ADOPTED this 23rd day of July, 1990.
AYES:
NOES:
ABSENT:
ATTEST:
Mayor
City Clerk
f(ECEIVED
JUL i ! i950
ABAG pLQGy Corporation CITY nf- DUBLIN
Main Office - P.O. Box 2050, Oakland, CA 94604-2050 (415) 464-79C0, Fax: (415) 464-7979
South Bay Office -10 Twin Dolphin Drive, Suite B-315, Redwood City, CA 94065 (415) 598-9750, Fax: (415) 598-0790
DATE: July 19, 1990
T0: ABAG PLAN Corporation Board of Directors
Dianne Gershuny, Chair
FROM:
RE: Delegation of Claims Authority
Based upon the recommendation of the ABAG PLAN Board of
Directors and our claim auditors, Warren, McVeigh & Griffin, Inc.,
Please advise your City/Town Council to adopt a resolution
whereby you are delegated the authority to review and resolve all
general liability claims filed against you:: City/Town.
Attached you will find a sample City/Town resolution which
describes this process. ABAG claim staff will continue to
investigate, coordinate litigation and file reports on all claims.
If you have any questions concerning this process, give Albert
Fierro, our Ris1: Manager a call at (415) 464-7969.
The Pooled Liability Assurance Network is a non-profit corporation established by the Association of Bay Area Governments
RESOLUTION NO. 114- 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, 1986, 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 C:_ty 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/:aer 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 2ity'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: Councilmembers Hegarty, Jeffery, Moffatt, Vonheeder
and Mayor Snyder
NOES: None
ABSENT: None
i
Mayo
ATTEST•
C - Ts
City Clerk