HomeMy WebLinkAbout2006-02-01 STAFF REPORTS 2L �F F p LM sAR
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DATE: February 1, 2006 CONSENT CALENDAR
SUBJECT: APPROVE_ AN INCREASE IN THE PURCHASE ORDER ISSUED TO
CARL WARREN & COMPANY FOR THIRD PARTY CLAIMS
ADMINISTRATION AND ADJUSTMENT SERVICES
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. These services have been provided under
purchase order on a time and materials basis. The original purchase amount, which
was based on the number of claims being processed at the time, as well as historical
claim activity, was initially set at $24,000. Due to an increase in the number and
complexity of claims being filed against the City over the past six months, the original
purchase amount has nearly been exhausted. This action would increase the original
purchase amount with Carl Warren & Company by $21,000 for a total purchase cost of
$45,000.
RECOMMENDATION:
1. Adopt Minute Order No. Approving an Increase in the Purchase Order
issued to Carl Warren & Company for Third Party Claims Administration in an
amount not-to-exceed $45,000.
2. Authorize the City Manager to execute all necessary documents to effectuate this
purchase.
STAFF ANALYSIS:
Prior to the current fiscal year, the City administered its own general liability claims
program. This program was managed by a Risk Management Specialist assigned to
the Human Resources Department. As part on an ongoing deficit reduction strategy,
the City Manager decided to reorganize and move the claims program from Human
Item No. n . L.
Resources to the City Manager's Office as a function of the Assistant City Manager for
Administrative Services. In light of the specialized nature of claims administration and
adjusting and to help improve the overall claims management process, the City issued a
j letter agreement and accompanying purchase order to Carl Warren & Company, who
was already doing claims adjustment work for the City on a time and materials basis, to
assist staff with the City's general liability program.
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, public agency and hospitality industries.
The original purchase order issued to Carl Warren & Company was for $24,000. This
amount was based on the company's proposed fee structure, the actual number of
claims being processed at the beginning of the current fiscal year and an examination of
the City's historical claim activity. The company's fee structure, which is time and
materials based, is billed at a rate of $51 per hour plus allocated expenses. 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. Based on their fee
structure and an examination of our claims, staff believed that the $24,000 that was
initially allocated would sufficiently cover the cost for claims administration in the current
fiscal year. Unfortunately, due to an increase in the number and complexity of the
claims that have been filed against the City over the past six months, the original
purchase amount is nearly depleted. Staff is recommending an increase of $21,000 to
the existing purchase order to cover the anticipated costs of claims administration for
the balance of the fiscal year. The proposed increase will bring the total purchase
amount with Carl Warren & Company to $45,000. Even with this increase, the City
should realize an overall cost savings of approximately $60,000 over last fiscal year
when claims were administered in-house.
FISCAL IMPACT: Finance Director Review
There are sufficient funds within the current year budget to cover the additional amount
requested (Risk Fund Account#540-5904-48415).
tKoy�,,Butzlaf "` s Istant City Manager David H. Ready, City ger
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Attachments:
Minute Orders (1)
MINUTE ORDER NO.
APPROVING AN INCREASE TO THE PURCHASE
ORDER WITH CARL WARREN & COMPANY FOR
THIRD PARTY CLAIMS ADMINISTRATION AND
ADJUSTMENT SERVICES IN AN AMOUNT NOT-TO-
EXCEED $45,000.
I, James Thompson, City Clerk of the City of Palm Springs, hereby certify that this
Minute Order approving an increase to the purchase order with the Carl Warren &
Company for Third Party Claims Administration and Adjustment Services in an
amount not-to-exceed $45,000 was adopted by the City Council of the City of Palm
Springs, California, in a meeting thereof held on the I5t day of February 2006.
James Thompson, City Clerk
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