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Home My WebLink About7/25/2007 - STAFF REPORTS - 2.D. � fPpLMSA,� �2 V y i `crox..En pM �T City Council Staff Report DATE: July 25, 2007 CONSENT CALENDAR SUBJECT: APPROVE AMENDMENT NO. 1 TO AGREEMENT A5322 FOR AS- NEEDED CLAIMS ADMINISTRATION AND ADJUSTMENT SERVICES WITH CARL WARREN & COMPANY FROM: David H. Ready, City Manager BY: Assistant City Manager -- Administration SUMMARY The City has heretofore retained Carl Warren & Company to provide Third Party Claims Administration and Adjustment Services. The current contract with Carl Warren has expired with the advent of the Fiscal Year. This action would extend the term of the existing agreement with Carl Warren & Company for on-call third party claims administration and adjustment services for an additional one (1) year term. RECOMMENDATION: 1. Adopt Minute Order No. approving Amendment No. 1 to Agreement A5322 with Carl Warren & Company for as-needed Third Party Claims Administration and Adjusting Services in an amount not-to-exceed $60,000 for Fiscal Year 2007-08. 2. Authorize the City Manager to execute all necessary documents to effectuate this purchase. STAFF ANALYSIS: Historically, the City administered general liability claims via a combination of in-house staff and as-needed support services delivered by a third party claims administration firm. In-house efforts were performed by a Risk Management Specialist assigned to the Human Resources Department. In 2005, the Risk Management Specialist became vacant. Instead of filling this position, the City Manager decided, as part of an ongoing deficit reduction strategy, to transfer the general liability claims program from Human Resources to the City Manager's Office as a function of the Assistant City Manager for Administrative Services. ITEM mo. City Council Staff Report July 25, 2007 -- Page 2 Claims Administration and Adjusting Services To assist staff in the processing and resolution of liability claims, the City Council entered into a contract with Carl Warren & Company to provide professional claims administration and adjustment services. Carl Warren & Company has provided claim and litigation management services since 1944. They serve over 650 clients from the high-tech, retail, transportation, consumer products, healthcare, banking, and hospitality industries. They also serve numerous public agencies throughout the country, including several local cities such as Palm Desert, Indio, Indian Wells, and La Quinta. The City's current contract with Carl Warren expired at the end of the Fiscal Year. Due to the specialized nature of claims administration, staff recommends continuing our relationship with Carl Warren & Company for as-needed claims administration and adjustment services. The company's fee structure will remain the same as the current contract. Services will be billed on a time and materials basis at a rate of $51 per hour. In addition, the company charges a quarterly fee of $1,200 for account management, data entry, and for access to their online reporting and tracking system. In Fiscal Year 2006-07, the City budgeted $60,000 for claims administration. Of this amount, the City spent an estimated $35,000 through June 30, 2007. Although it is difficult to estimate the number of claims that may be filed against the City in any given year, staff has seen a discernable increase in both the number and complexity of claims against the City in recent years. Based on the number of claims currently being processed by Carl Warren and a conservative estimate of claims to be filed against the City over the next twelve (12) months, staff is recommending that the total contract sum paid to Carl Warren remain at $60,000. FISCAL IMPACT: This is a budgeted expense. There are sufficient funds in the Risk Fund Account (#540- 5904-48415) to sufficiently cover the anticipated cost of this contract. Moreover, the cost of this contract saves approximately $45,000 over previous in-house claims administration. Troah Butzlaff, A i t City Manager David H. Realvlanager ents: 1. Minute Orders 2. Amendment No 1 Dob°b� MINUTE ORDER NO. APPROVING AMENDMENT NO. 1 TO AGREEMENT A5322 WITH CARL WARREN & COMPANY FOR AS-NEEDED THIRD PARTY CLAIMS ADMINISTRATION AND ADJUSTING SERVICES IN AN AMOUNT NOT-TO-EXCEED $60,000 FOR FISCAL YEAR 2007-08. I, James Thompson, City Clerk of the City of Palm Springs, hereby certify that this Minute Order, approving an agreement with Carl Warren & Company for as-needed Third Party Claims Administration and Adjusting Services in an amount not-to-exceed $60,000 for Fiscal Year 2007-08, was adopted by the City Council of the City of Palm Springs, California, in a meeting thereof held on the 25th day of July, 2007. James Thompson, City Clerk 000003 ' FIRST AMENDMENT TO AGREEMENT FOR CLAIMS ADJUSTMENT AND ADMINSTRATION i This First Amendment to the Consultant Services Agreement with Carl Warren & Company("First Amendment" or "Amended Agreement") is made and entered into this 251" day of July, 2007, by and between the CITY OF PALM SPRINGS, a municipal corporation ("City") and Carl Warren & Company, a California Corporation ("Consultant") and amends that certain "Contract Services Agreement with Fvergrecn Recycling Solutions" (the "Agreement") dated July 26, 2006 between the same parties. RECITALS A. On or about July 26, 2006, City and Consultant entered into a"Contract Services Agreement" pursuant to which Consultant agreed to provide claims adjustment and administration ("Project"). B. The term of this agreement was for a period o f one year expiring on June 30, 2007. C. City does not have the staffing or expertise necessary to adequately perfonrr these services and needs the continued assistance of a qualified consultant- D. City and Consultant desire to amend the Agreement to extend the term and increase the Contract Sum to reflect the additional work to be performed. AGREEMENT The Agreement is hereby amended as follows: 1. "2.1 Compensation of Consultant. For the services rendered pursuant to this Agreement, Consultant shall be compensated in accordance with the "Schedule of Fees" attached hereto as Exhibit "B" and incorporated herein by this reference, but not exceeding Sixty Thousand Dollars ($60,000) ("Contract Sum") over the contract term." 2. "5.1 Term. Unless earlier terminated in accordance with Section 5.2 of this Agreement, this Agreement shall continue in full force and effect until completion of the services. The tern of this agreement shall he for a one year period commencing July 1, 2007- In no event shall this agreement remain valid past June 30, 2008 unless otherwise extended by written approval of the City." 3. Except as expressly provided herein, all other terms and conditions of the Agreement shall remain in full force and effect. [Signature Bloch on Next Page] IN WITNESS WHEREOF, the parties hereto executed this First Amendment to be effective as of the Date first written above. CITY OF PALM SPRINGS, a municipal corporation By. City Manager ATTEST: City Clerk APPROVED AS TO FORM: CARL WARREN & COMPANY City Attorney Name: Title: C6a0 .3 EXHIBIT "B" SCHEDULE OF COMPENSATION Total compensation for services and expenses provided hereunder shall not exceed $60,000 over i the contract tern. i Services shall be provided on a time and materials basis in accordance with the following rate i schedule: Personnel Hourly Rates: Adjustor $51.00 per hour Office staff $28.05 Allocated Expenses: Photographs $2.00 per print Mileage c� IRS approved rate Administrative Expense: Includes online access to "myCarlWarren" $400/1-nonth (billed quarterly)