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HomeMy WebLinkAboutItem 3d: Agreement with Carl Warren & Company: General and Auto Liability Claims 76v ARc NtIFORNI "'CA 4.47,7l S,till] �1+A1fy Dt�e6 STAFF REPORT Administrative Services Department DATE: June 19, 2012 TO: Honorable Mayor and City Council FROM: Hue C. Quach, Administrative Services Director Michael A. Casalou, Human Resources Administrato SUBJECT: AUTHORIZE THE CALIFORNIA INSURANCE POOL AUTHORITY (CIPA) TO ENTER INTO A THREE-YEAR AGREEMENT WITH CARL WARREN & COMPANY ON BEHALF OF THE CITY OF ARCADIA FOR THIRD PARTY ADMINISTRATOR SERVICES FOR GENERAL AND AUTO LIABILITY CLAIMS IN THE AMOUNT OF $19,800 FOR FISCAL YEAR 2012-13 AND $20,390 ANNUALLY FOR FY 2013-14 & 2014-15. Recommendation: Approve SUMMARY It is recommended the City Council authorize the California Insurance Pool Authority (CIPA) to enter into a contract with Carl Warren & Company on behalf of the City of Arcadia for Third Party Administrator Services for General and Auto Liability Claims Administration in the amount of $19,800 for Fiscal Year 2012-13 and $20,390 annually for FY 2013-14 & 2014-15. BACKGROUND The City of Arcadia operates a self-funded general and auto liability insurance program and requires the services of a third party administrator (TPA) to handle the day-to-day operations of the City's claims. Carl Warren & Company has administered the City's program since July 1, 2011. The scope of services for the liability program may include processing and tracking claim information, setting and updating reserves, arranging for investigations and providing reports, providing clear and concise narratives, documenting all actions taken on claims, providing litigation management, and providing appropriate notices. Additionally, a TPA will ensure the City maintains compliance with liability best practices and laws. In-house staff does not have the capacity or the expertise to properly manage this program. As a result, the City has always contracted for this specialized service. Authorize the California Insurance Pool Authority (CIPA) to enter into a three-year agreement with Carl Warren & Company on behalf of the City of Arcadia June 19, 2012 Page 2 of 2 DISCUSSION The City's current JPA for workers compensation and liability (CIPA) went out to bid for general and auto liability claims administration services on behalf of eight (8) member cities in July 2009. An agreement was reached with Carl Warren & Company that runs through June 30, 2012. In May 2011, the City Council authorized CIPA to add the City of Arcadia to that agreement via an addendum. The current CIPA contract with Carl Warren & Company runs through June 30, 2012. The CIPA General Manager was successful in renegotiating a new three-year agreement with no increase in the first year (a one-time $150 annual administrative fee that was waived this past year is included in first year fee), a modest 3% increase in the second year, and no increase in the third year. Given Carl Warren & Company have performed satisfactorily this past year, it is recommended that the City Council authorize CIPA to include the City of Arcadia in the new three-year agreement with Carl Warren & Company. FISCAL IMPACT The annual cost of $19,800 for general and auto liability claims administration is included in the Fiscal Year 2012-13 Budget. The cost of the second and third year of this agreement will be $20,390 annually. RECOMMENDATION It is recommended that the City Council authorize the California Insurance Pool Authority (CIPA) to enter into a three-year agreement with Carl Warren & Company on behalf of the City of Arcadia for Third Party Administrator Services for General and Auto Liability Claims in the amount of $19,800 for Fiscal Year 2012-13 and $20,390 annually for FY 2013-14 & 2014-15. APPROVED: Dominic Lazza o City Manager