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Home My WebLink About7/9/2008 - STAFF REPORTS - 2.Y. ;O?NLMS. ry UU N C C�RoRAiFOi P� City Council Staff Report DATE: July 09, 2008 CONSENT CALENDAR SUBJECT: APPROVE AMENDMENT NO. 2 TO AGREEMENT A5322 FOR AS- NEEDED CLAIMS ADMINISTRATION AND ADJUSTMENT SERVICES WITH CARL WARREN & COMPANY FROM: David H. Ready, City Manager BY: Douglas Holland, City Attorney SUMMARY The City has retained Carl Warren & Company to provide Third Party Claims Administration and Adjustment Services in July of 2006. The current contract with Carl Warren has expired with the advent of the Fiscal Year. This action would extend the term of the City's agreement with Carl Warren & Company for on-call third party claims administration and adjustment services for an additional one (1) year term and adjust the hourly rate for adjustor services from $51.00 per hour to $54.00 per hour. RECOMMENDATION- 1- Approve Amendment No. 2 to Agreement A5322 with Carl Warren & Company for as-needed Third Party Claims Administration and Adjusting Services in an amount not-to-exceed $65,000 for Fiscal Year 2008-09. 2. Authorize the City Manager to execute all necessary documents to effectuate this amendment. 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. Commencing this fiscal year, the City Attorney's Office will provide oversight of the general liability claims program. Item No. 2 • Y • City Council Staff Report July 09, 2008 -- Page 2 Claims Administration and Adjusting Services To ensure the efficient and economical processing and resolution of liability claims, the City Council entered into a contract with Carl Warren & Company in July of 2006 to provide professional claims administration and adjustment services. Carl Warren & Company has provided claim and litigation management services since 1944. The firm serves over 650 clients from the high-tech, retail, transportation, consumer products, healthcare, banking, and hospitality industries. Carl Warren & Company also serves 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, as amended in July of 2007, expired at the end of the Fiscal Year. Due to the specialized nature of claims administration, the City Manager and the City Attorney recommend continuing the City's relationship with Carl Warren & Company for as-needed claims administration and adjustment services. The company's fee structure is proposed to be adjusted from $51.00 per hour to $54.00 per hour for the term of the extension. (This is the first adjustment that Carl Warren & Company has requested since the inception of the Agreement in 2006.) Services will continue to be billed on a time and materials basis and with a "not-to-exceed" cap on total costs. In Fiscal Year 2007-08, the City budgeted $60,000 for claims administration. Of this amount, the City spent an estimated $45,000 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 be adjusted to $65,000, the amount provided in the Council's approved budget for FY 2009-09, FISCAL IMPACT: This is a budgeted expense. There are sufficient funds in the Risk Fund Account (#540- 5904-48 to sufficiently cover the anticipated cost of this contract. Douglas Holland, City A rney David H. Ready, C' er Attachments: Amendment No. 2 000'002 SECOND AMENDMENT TO AGREEMENT FOR CLAIMS ADJUSTMENT AND ADMINSTRATION This Second Amendment to the Consultant Services Agreement with Carl Warren & Company ("Second Amendment' or "Amended Agreement") is made and entered into this 1S7 day of July, 2008, 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 for Claims Adjustment and Administration Services" (the "Agreement') dated July 27, 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 Amendment was for a period of one year expiring on June 30, 2007. C. A First Amendment, dated July 1, 2007, to the original Agreement, was approved by the City Council on July 25, 2007. The term of this Amendment was for one year, expiring on June 30, 2008. D. A Second Amendment, dated July 1, 2008, to the original Agreement, dated July 26, 2006, was approved by the City Council on July 9, 2008. The term of this Amendment is for one year, expiring on June 30, 2009. E. City does not have the staffing or expertise necessary to adequately perform these services and needs the continued assistance of a qualified consultant. F. City and Consultant desire to amend the Agreement to extend the term and increase the Contract Sum and the hourly rate for adjustment services. MON 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-Five Thousand Dollars ($65,000) ("Contract Sum") for services provided prior to June 30, 2009, and not exceeding the Contract Sum for services provided during the period of July 1, 2008 through June 30, 2009. 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 term of this agreement shall be for a one year period ending June 30, 2009 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. IN WITNESS WHEREOF, the parties hereto executed this First Amendment to be effective as of the Date first written above. ATTEST- CITY OF PALM SPRINGS, a municipal corporation By: City Clerk City Manager APPROVED AS TO FORM: CARL WARREN & COMPANY City Attorney Name: Title: EXHIBIT "B„ SCHEDULE OF COMPENSATION Total compensation for services and expenses provided hereunder shall not exceed $60,000 over the contract term. Services shall be provided on a time and materials basis in accordance with the following rate schedule, Personnel Hourly Rates: Adjustor $54.00 per hour Office staff $24.30 per hour Allocated Expenses: Photographs $2.00 per print Mileage @ IRS approved rate Administrative Expense: Includes online access to "myCarlWarren° $400/month (billed quarterly)