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HomeMy WebLinkAbout4.09 Liability Claims Adjusting Svcs 310-4 W CITY OF DUBLIN AGENDA STATEMENT CITY COUNCIL MEETING DATE: March 10, 1986 SUBJECT Liability Claims Adjusting & Administration Services EXHIBITS ATTACHED : I Resolution Approving Liability Claims Adjusting & Administration Service Contract;Z.Budget Transfer Form; 3.Proposal Submitted by George Hills Company dated February 20, 1986;tSample Statistical Reports RECOMMENDATION Adopt Resolution and authorize the budget transfer FINANCIAL STATEMENT: Annual Administration Fee $ 1, 200 Estimated Annual Claims Investigation 2, 400 $ 3, 600 This amount is exclusive of any settlements or special litigation arising from claims . Sufficient funds are budgeted, however, a transfer is necessary within the Insurance Budget . DESCRIPTION Effective March 1, 1986, the City of Dublin' s liability insurance was cancelled. Therefore, the City must have the ability to investigate claims . It is anticipated that any future insurance arrangements will include a significant self-insured retention. This will require the services of a qualified claims adjustment and administration firm. At the regular City Council meeting on February 10, 1986, Staff was directed to request proposals from firms providing these services . Three responses were reviewed by the City Staff and representatives of two firms were interviewed. Both of the firms interviewed had significant experience with public agencies . After careful review of the services proposed by the firms, Staff recommends the City Council approve an agreement with George Hills Company, Inc . . Attached is a detailed proposal and sample reports, which are provided to their clients . The firm provides services to the cities of Pleasanton, Livermore, San Leandro, and other public agencies in Northern California. In the interview process Staff explored measures which would be implemented if a conflict of interest arose. Mr . Hills, explained that if the company represented two clients on the same claim they have internal procedures to protect each client . If necessary they could have the claims investigated by different offices within their organization . Given the existing controls, it does not appear that this would create a problem. The services which will be provided include a full range of risk management and administration activities . The Administrator will provided an extensive manual outlining the processing of claims and they will assist in the organization of administrative files . Also, representatives of the firm will meet with City Staff to discuss loss control , exposures, and general information of interest to each Department Head. Each claim will be handled on an individual basis and a complete report will be made within ten days . They will be administered from the Walnut Creek Office and Ms . Julie Aumock will be the primary adjuster assigned to claims for the City of Dublin. Ms . Aumock currently handles claims for Contra Costa County, Contra Costa Water District and a Sanitary District . The reports will outline facts related to the claim and an assessment of the liability. If the report reveals City liability, the Adjuster will identify recommended reserves . The provision of these services will be charged on a COPIES TO: I TEM NO. q.q CO-:qr./ r 1 Loo -3O CITY OF DUBLIN AGENDA STATEMENT CITY COUNCIL MEETING DATE: March 10, 1986 i SUBJECT Liability Claims Adjusting & Administration Services EXHIBITS ATTACHED : l, Resolution Approving Liability Claims Adjusting & Administration Service Contract;=.Budget Transfer Form; 3.Proposal Submitted by George Hills Company dated February 20, 1986;'LSample Statistical Reports '.1i/RECOMMENDATION Adopt Resolution and authorize the budget transfer FINANCIAL STATEMENT: Annual Administration Fee $ 1, 200 Estimated Annual Claims Investigation 2, 400 $ 3, 600 This amount is exclusive of any settlements or special litigation arising from claims . Sufficient funds are budgeted, however, a transfer is necessary within the Insurance Budget . DESCRIPTION Effective March 1, 1986, the City of Dublin' s liability insurance was cancelled. Therefore, the City must have the ability to investigate claims . It is anticipated that any future insurance arrangements will include a significant self-insured retention. This will require the services of a qualified claims adjustment and administration firm. At the regular City Council meeting on February 10, 1986, Staff was directed to request proposals from firms providing these services . Three responses were reviewed by the City Staff and representatives of two firms were interviewed. Both of the firms interviewed had significant experience with public agencies . After careful review of the services proposed by the firms, Staff recommends the City Council approve an agreement with George Hills Company, Inc . . Attached is a detailed proposal and sample reports , which are provided to their clients . The firm provides services to the cities of Pleasanton, Livermore, San Leandro, and other public agencies in Northern California. In the interview process Staff explored measures which would be implemented if a conflict of interest arose . Mr . Hills, explained that if the company represented two clients on the same claim they have internal procedures to protect each client . If necessary they could have the claims investigated by different offices within their organization . Given the existing controls, it does not appear that this would create a problem. The services which will be provided include a full range of risk management and administration activities . The Administrator will provided an extensive manual outlining the processing of claims and they will assist in the organization of administrative files . Also, representatives of the firm will meet with City Staff to discuss loss control, exposures, and general information of interest to each Department Head. Each claim will be handled on an individual basis and a complete report will be made within ten days . They will be administered from the Walnut Creek Office and Ms . Julie Aumock will be the primary adjuster assigned to claims for the City of Dublin. Ms . Aumock currently handles claims for Contra Costa County, Contra Costa Water District and a Sanitary District. The reports will outline facts related to the claim and an assessment of the liability. If the report reveals City liability, the Adjuster will identify recommended reserves . The provision of these services will be charged on a COPIES TO: ITEM NO. ij.q AGENDA STATEMENT: Liability Claims Adjusting & Administration Services Page 2 time and materials basis . The firm is also available to monitor litigation proceedings to assure that they are handled in a timely and cost efficient manner. The settlement of small claims is usually handled directly by the Claims Administrator . The proposed agreement has been structured to allow the Administrator to settle claims less than $1, 000 . The Administrator will continue to provide documentation on settled claims , 'which will substantiate their actions . In addition, Staff would recommend that the City Manager be authorized a settlement authority of $4, 000 . This will provide an administrative mechanism to promptly handle claims less than $5, 000 . This is consistent with the City' s adopted purchasing ordinance in which only transactions greater than $5, 000 are handled through a formal bid process with City Council approval . When a larger settlement is required, authorization will be obtained from the City Council . Staff also recommends that the Administrator establish a trust account to pay claims on behalf of the City. This is a common practice among self-insured agencies and prompt payment may assist in limiting the overall costs of a specific claim. Once the Adjuster recognizes that litigation of a claim is likely, the City will be notified. The City Attorney has advised Staff that individuals associated with his firm have experience with insurance defense cases . The Claims Administrator will work with the City Attorney to determine the most appropriate legal counsel on any specific claim. It will be advantageous to have the City Attorney involved in this selection to assure that the City' s philosophy and interests are represented. The George Hills firm may be aware of specialized legal counsel, which would be suitable for a particular case . This will be handled on a case-by-case basis . When the City was covered by a traditional liability insurance program first dollar insurance was provided. Therefore, the types of activities proposed under this agreement were conducted by the insurance company. During the past twelve months the City received a total of 11 claims . The 1985-86 budget provided funding for insurance premiums . However, the City has been unable to obtain insurance in any form. Staff is continuing to participate in discussions with ABAG and other groups attempting to form public entity insurance pools . It would be appropriate to redistribute a portion of the 1985-86 budget allocation as shown on the attached budget change form. This will authorize expenditures for the annual administrative fee and an estimate of potential costs for investigations prior to June 30, 1986 . Annual cost estimates will be included in the 1986-87 proposed budget . The budget change also establishes a $5, 000 trust account for claims within the designated authority and reserves of $10, 000 . Staff recommends that the City Council adopt the Resolution and authorize the budget transfer . RESOLUTION NO. - 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 WHEREAS, the City of Dublin is in need of professional liability claims adjusting and administration services; and WHEREAS, the City Staff reviewed 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. NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Dublin does hereby authorize the Mayor to execute the attached Liability Claims Adjusting & Administration Service Contract attached 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 City Council shall authorize a supplemental settlement authority to the City Manager of Four Thousand Dollars ( $4, 000) . In no case shall a claim be settled for more than $5, 000 without direct authorization from the City Council . PASSED, APPROVED AND ADOPTED this 10th day of March, 1986 . AYES: NOES : ABSENT: Mayor ATTEST: City Clerk -, CZ T� ►_ .. CITY OF DUBLIN . BUDGET CHANGE FORM • FRCNI TO 7 APPROPRIATION .- ,' TRANSFER ACCOUNT FOUNT ACCOUNT PUNT . i-1- 06 -1-o5, 10 13 g©o — 00 17 PENDENT /-1- 1o6-1.0S . #1 Si acs I-I- imp,- e4. ' for ¢°"t. JUSTIFICATION FOR CHANCE 1 .-N\41\--,.& L At-L'k,k ., Tmsec e '' S ',--w.Ce.N.W. 0. & ca-cc■gC Co.Ack r.c* toe. loCoi J • k24.0 re-J }""c' f cclviS tvt �` Se.c3∎c..es °fie. cea. ic2.d . if' C�c�t.M.S �Ja25iJhe.�. lS-V� J.,,,-,„..-.%N- cG.. ,O� V(� FIN; buA q *-C'v.1,, e.c o tk, ctv'k�c11, e- e-Nee ` tuct $Cov►1. ** 0,A S O o C C (o C[L� 't,CQ 1 "S vl (...s2 .."..t !.t-�.-S . Pt- esS.c,v c\\ e^^ivice.S a'Drop X00 ITv'UIL COSTS 0\7�o A�,,•.��.tc.z t• s5+,�. eel $s18b 5,( .,) I o- Ir.Svca..c1�.—l.L,,, �Gxre+.se. ; 60 , �'S.�zie�.e i,csses� p lol oo0� h.,� e c�t e S . TOTAL - • 1 11- 500 CITY i iANIACER APPROVAL DATE C I1Y COUNC I J AFFROVAL DATE . -31 +0 I b, CC Meeting: March 10, 1986 Item 4.9 Attachment 3 Proposal submitted by George Hills Company Dated 2-20-86 Attachment 4 — Sample Statistical Repots The above items are missing from the Staff Report. II,