HomeMy WebLinkAbout10 - Third Party Administrator for General Liability ClaimsCITY OF
o rA NEWPORT BEACH
City Council Staff Report
June 24, 2014
Agenda Item No. 10.
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: Terri L. Cassidy, Deputy City Manager /Human Resources Director -(949) 644 -3303,
tcassidy @newportbeachca.gov
PREPARED BY: Lauren Farley, HR /RM Administrator, Sheri Anderson, HR Supervisor, and Jill Ortiz,
HR Specialist
PHONE: (949) 644 -3302, (949) 644 -3307, and (949) 644 -3310
TITLE: Approval of the City's Third Party Administrator for General Liability Claims
Administration
ABSTRACT:
As a self- insured public entity, the City contracts with a third party administrator (TPA) for
necessary claims adjusting services. The TPA provides overall Program Administration of
general liability claims, including Claims Administration, Investigation Services, Management of
Litigation, Subrogation, and Reporting services. The City was in a joint agreement with the City
of Costa Mesa for these services in previous years, due to the similarities in our size, municipal
services provided, geographic location and type of claims filed. Upon expiration of that
agreement, the City continued to contract with Carl Warren & Company in successive renewals
through June 30, 2014.
As Costa Mesa just completed an RFP process in October 2013 for these services, staff asked
both the Finance Department (Purchasing Division) and the City Attorney's Office to determine
if Costa Mesa's process was within our standards and procurement guidelines. Public sector
general liability claims administration is a subspecialty in claims administration, so both
concluded no competitive advantage would be gained by soliciting new proposals from multiple
Consultants or Contractors. Staff was given the approval to use Costa Mesa's RFP
responses.
RECOMMENDATION:
Staff recommends Council's approval of Carl Warren & Company for Third Party Liability
Claims Administration with an annual expenditure of $79,675.00, effective July 1, 2014.
FUNDING REQUIREMENTS:
Fiscal Year 14/15 budget request of $125,000 is a sufficient amount to cover the proposed
annual cost of $79,675.00 for GL Claim Administration.
DISCUSSION:
The City asked Costa Mesa's finalists to submit a revised proposal and compensation terms
specific to Newport Beach. The deadline to file the proposal was January 9, 2014.
Three of Costa Mesa's top finalists chose to formally bid: Carl Warren & Company, Keenan
and Associates, and Tristar Risk Management. All three proposals met the City's minimum
submittal standards and were advanced to the evaluation phase of the process. The
evaluation committee consisted of two outside public agencies, Anaheim and Huntington
Beach, subject matter experts in general liability claims processes, and one from our Risk
Management Division within Human Resources. Proposals were scored on the weighted
criteria in Table A using a 300 -point scale:
Table A: Technical Score
Proposer
Average Technical
Score
Rank
Carl Warren & Company
224.00
1
Keenan and Associates
181.33
2
Tristar Risk Management
168.00
3
Firms rated based on their cumulative body of work, incorporating the proposal and interview
responses. These post- interview rankings are noted below in Table B:
Table B: Post - Interview Ranking
Proposer
Votes: Vt
Place
Votes: 2nd
Place
Votes: 3rd
Place
Overall
Ranking
Carl Warren & Company
3
0
0
1
Keenan and Associates
0
3
0
2
Tristar Risk Management
0
0
3
3
Annual cost analysis is reflected in Table C below:
Table C: Cost Analysis
Proposed
Proposer
Staffing
Proposed Annual
Blended
Allocation
Cost
Hourly Rate
(Hours)
Carl Warren & Company
1405
$107.561.00
$76.56
Keenan and Associates
1627
$138,295.00
$85.00
ristar Risk Management
1105
$83,980.00
$76.00
Of the three proposers, Carl Warren & Company was unanimously rated as the highest
qualified for this program, earning the highest scores in proposal and interview rating, as well
as offering a lower competitive annual cost for services.
As the incumbent provider to the City, Carl Warren & Company cited project history and work
experience with the City of over ten (10) years with extensive working knowledge of the City's
litigated claims and excess insurance reporting requirements critical to coordination,
development and settlement of cases. The evaluation panel was also impressed with their
broader project history and references provided by other public agencies with similar claims
administration needs as the City. Carl Warren also received a rating of excellent and was
complimented on a job well done when the City's files were audited, in May 2014, by CSAC
Excess Insurance Authority, the City's excess liability insurance carrier. Keenan and
Associates and Tristar Risk Management, while demonstrating qualifications in some areas,
were not as strong in other areas deemed critical to the success in delivering the level of
service required for this program.
Upon conclusion of this RFP evaluation process, the evaluation panel recommends award of
any resultant agreement for General Liability Claims Administration services to Carl Warren
and Company.
ENVIRONMENTAL REVIEW:
Staff recommends the City Council find this action is not subject to the California Environmental Quality Act
( "CEQA ") pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect
physical change in the environment) and 15060(c)(3) (the activity is not a project as deli ned in Section 15378) of the
CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential for resulting in
physical changeto the environment, directly or indirectly.
NOTICING:
The agenda item has been noticed according to the Brown Act (72 hours in advance of the
meeting at which the City Council considers the item).
ATTACHMENTS:
Description
Amended Staff Report
Attachment A - Professional Services Agreement
CITY OF
NEWPORT BEACH
City Council Staff Report
June 24, 2014
Agenda Item No. 10.
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: Terri L. Cassidy, Deputy City Manager /Human Resources Director -(949) 644 -3303,
tcassidy @newportbeachca.gov
PREPARED BY: Lauren Farley, HR /RM Administrator, Sheri Anderson, HR Supervisor, and Jill Ortiz,
HR Specialist
PHONE: (949) 644 -3302, (949) 644 -3307, and (949) 644 -3310
TITLE: Approval of the City's Third Party Administrator for General Liability Claims
Administration
ABSTRACT:
As a self- insured public entity, the City contracts with a third party administrator (TPA) for
necessary claims adjusting services. The TPA provides overall Program Administration of
general liability claims, including Claims Administration, Investigation Services, Management of
Litigation, Subrogation, and Reporting services. The City was in a joint agreement with the City
of Costa Mesa for these services in previous years, due to the similarities in our size, municipal
services provided, geographic location and type of claims filed. Upon expiration of that
agreement, the City continued to contract with Carl Warren & Company in successive renewals
through June 30, 2014.
As Costa Mesa just completed an RFP process in October 2013 for these services, staff asked
both the Finance Department (Purchasing Division) and the City Attorney's Office to determine
if Costa Mesa's process was within our standards and procurement guidelines. Public sector
general liability claims administration is a subspecialty in claims administration, so both
concluded no competitive advantage would be gained by soliciting new proposals from multiple
Consultants or Contractors. Staff was given the approval to use Costa Mesa's RFP
responses.
RECOMMENDATION:
Staff recommends Council's approval of Carl Warren & Company for Third Party Liability
Claims Administration with an annual expenditure of $107,561.00, effective July 1, 2014.
FUNDING REQUIREMENTS:
Fiscal Year 14/15 budget request of $125,000 is a sufficient amount to cover the proposed
annual cost of $107,561.00 for GL Claim Administration.
DISCUSSION:
The City asked Costa Mesa's finalists to submit a revised proposal and compensation terms
specific to Newport Beach. The deadline to file the proposal was January 9, 2014.
Three of Costa Mesa's top finalists chose to formally bid: Carl Warren & Company, Keenan
and Associates, and Tristar Risk Management. All three proposals met the City's minimum
submittal standards and were advanced to the evaluation phase of the process. The
evaluation committee consisted of two outside public agencies, Anaheim and Huntington
Beach, subject matter experts in general liability claims processes, and one from our Risk
Management Division within Human Resources. Proposals were scored on the weighted
criteria in Table A using a 300 -point scale:
Table A: Technical Score
Proposer
Average Technical
Score
Rank
Carl Warren & Company
224.00
1
Keenan and Associates
181.33
2
Tristar Risk Management
168.00
3
Firms rated based on their cumulative body of work, incorporating the proposal and interview
responses. These post- interview rankings are noted below in Table B:
Table B: Post - Interview Ranking
Proposer
Votes: 1't
Place
Votes: 2nd
Place
Votes: 3rd
Place
Overall
Ranking
arl Warren & Company
3
0
0
1
Keenan and Associates
0
3
0
2
Tristar Risk Management
0
0
3
3
Annual cost analysis is reflected in Table C below:
Table C: Cost Analysis
Of the three proposers, Carl Warren & Company was unanimously rated as the highest
qualified for this program, earning the highest scores in proposal and interview rating, as well
as offering a lower competitive annual cost for services.
Proposed
Proposer
Staffing
Proposed Annual
Blended
Allocation
Cost
Hourly Rate
(Hours)
Carl Warren & Company
1405
$107,561.00
$76.56
Keenan and Associates
1627
$138,295.00
$85.00
rist r Risk Mana em nt
1105
$83,980.00
$76.00
Of the three proposers, Carl Warren & Company was unanimously rated as the highest
qualified for this program, earning the highest scores in proposal and interview rating, as well
as offering a lower competitive annual cost for services.
As the incumbent provider to the City, Carl Warren & Company cited project history and work
experience with the City of over ten (10) years with extensive working knowledge of the City's
litigated claims and excess insurance reporting requirements critical to coordination,
development and settlement of cases. The evaluation panel was also impressed with their
broader project history and references provided by other public agencies with similar claims
administration needs as the City. Carl Warren also received a rating of excellent and was
complimented on a job well done when the City's files were audited, in May 2014, by CSAC
Excess Insurance Authority, the City's excess liability insurance carrier. Keenan and
Associates and Tristar Risk Management, while demonstrating qualifications in some areas,
were not as strong in other areas deemed critical to the success in delivering the level of
service required for this program.
Upon conclusion of this RFP evaluation process, the evaluation panel recommends award of
any resultant agreement for General Liability Claims Administration services to Carl Warren
and Company.
ENVIRONMENTAL REVIEW:
Staff recommends the City Council find this action is not
Quality Act ( "CEQA ") pursuant to Sections 15060(c)(2).
reasonably foreseeable indirect physical change in /tf
activity is not a project as defined in Section 15378.) ^of'
of Regulations, Title 14, Chapter 3, because it has �no p\
to the environment, directly or indirectly. � -
NOTICING:
The agenda item has be
meeting at which the City
1( \ )
cbto the /California Environmental
cfivty will not result in a direct or
✓ironment) and 15060(c)(3) (the
EQA Guidelines, California Code
)I for resulting in physical change
to the Brown Act (72 hours in advance of the
item).
ATTACHMENT A June 24, 2014
Agenda Item No. 10
PROFESSIONAL SERVICES AGREEMENT
WITH CARL WARREN & COMPANY FOR
THIRD PARTY GENERAL LIABILITY CLAIMS ADMINISTRATION SERVICES
THIS PROFESSIONAL SERVICES AGREEMENT ( "Agreement') is made and
entered into as of this 1 st day of July, 2014 ( "Effective Date "), by and between the CITY
OF NEWPORT BEACH, a California municipal corporation and charter city ( "City "), and
CARL WARREN & COMPANY, a California corporation ( "Consultant'), whose address
is 770 South Placentia Avenue, Placentia, CA 92870, and is made with reference to the
following:
RECITALS
A. City is a municipal corporation duly organized and validly existing under the laws
of the State of California with the power to carry on its business as it is now being
conducted under the statutes of the State of California and the Charter of City.
B. City desires to engage Consultant to provide third party general liability claims
administration services ( "Project').
C. Consultant possesses the skill, experience, ability, background, certification and
knowledge to provide the professional services described in this Agreement.
D. City has solicited and received a proposal from Consultant, has reviewed the
previous experience and evaluated the expertise of Consultant, and desires to
retain Consultant to render professional services under the terms and conditions
set forth in this Agreement.
NOW, THEREFORE, it is mutually agreed by and between the undersigned
parties as follows:
1. TERM
The term of this Agreement shall commence on the Effective Date, and shall
terminate on June 30, 2019, unless terminated earlier as set forth herein.
Consultant shall diligently perform all the services described in the Scope of
Services attached hereto as Exhibit A and incorporated herein by reference ( "Services'
or "Work "). City may elect to delete certain Services within the Scope of Services at its
sole discretion.
3. TIME OF PERFORMANCE
3.1 Time is of the essence in the performance of Services under this
Agreement and Consultant shall perform the Services in accordance with the schedule
included in Exhibit A. In the absence of a specific schedule, the Services shall be
ATTACHMENT A
performed to completion in a diligent and timely manner. The failure by Consultant to
strictly adhere to the schedule set forth in Exhibit A, if any, or perform the Services in a
diligent and timely manner may result in termination of this Agreement by City.
3.2 Notwithstanding the foregoing, Consultant shall not be responsible for
delays due to causes beyond Consultant's reasonable control. However, in the case of
any such delay in the Services to be provided for the Project, each party hereby agrees
to provide notice within two (2) calendar days of the occurrence causing the delay to the
other party so that all delays can be addressed.
3.3 Consultant shall submit all requests for extensions of time for performance
in writing to the Project Administrator as defined herein not later than ten (10) calendar
days after the start of the condition that purportedly causes a delay. The Project
Administrator shall review all such requests and may grant reasonable time extensions
for unforeseeable delays that are beyond Consultant's control.
3.4 For all time periods not specifically set forth herein, Consultant shall
respond in the most expedient and appropriate manner under the circumstances, by
hand - delivery or mail.
4. COMPENSATION TO CONSULTANT
4.1 City shall pay Consultant for the Services on a time and expense not -to-
exceed basis in accordance with the provisions of this Section and the Schedule of
Billing Rates attached hereto as Exhibit B and incorporated herein by reference.
Consultant's compensation for all Work performed in accordance with this Agreement,
including all reimbursable items and subconsultant fees, shall not exceed Five Hundred
Thirty Seven Thousand Eight Hundred Five Dollars and 00/100 ($537,805.00),
subject to the annual Consumer Price Index adjustment to the billing rates after the third
year of the Agreement as further detailed in Section 4.2 below, without prior written
authorization from City. No billing rate changes shall be made during the term of this
Agreement without the prior written approval of City.
4.2 Upon the third anniversary of the Effective Date and upon each
anniversary of the Effective Date thereafter, the billing rates set forth in Exhibit B
( "Billing Rates ") shall be adjusted in proportion to changes in the Consumer Price Index,
subject to the maximum adjustment set forth below. Such adjustment shall be made by
multiplying the Billing Rates in Exhibit B by a fraction, the numerator of which is the
value of the Consumer Price Index for the calendar month three (3) months preceding
the calendar month for which such adjustment is to be made, and the denominator of
which is the value of the Consumer Price Index for the same calendar month
immediately prior to Effective Date. The Consumer Price Index to be used in such
calculation is the "Consumer Price Index, All Items, 1982 -84 =100 for All Urban
Consumers (CPI -U) ", for the Los Angeles- Riverside- Orange County Metropolitan Area,
published by the United States Department of Labor, Bureau of Labor Statistics. If both
an official index and one or more unofficial indices are published, the official index shall
be used. If said Consumer Price Index is no longer published at the adjustment date, it
Carl Warren & Company Page 2
ATTACHMENT A
shall be constructed by conversion tables included in such new index. In no event,
however, shall the amount payable under this Agreement be reduced below the Billing
Rates in effect immediately preceding such adjustment. The maximum adjustment
increase to the Billing Rates, for any year where an adjustment is made pursuant to this
Section, shall not exceed three percent (3 %) of the Billing Rates in effect immediately
preceding such adjustment.
4.3 Consultant shall submit monthly invoices to City describing the Work
performed the preceding month. Consultant's bills shall include the name of the person
who performed the Work, a brief description of the Services performed and /or the
specific task in the Scope of Services to which it relates, the date the Services were
performed, the number of hours spent on all Work billed on an hourly basis, and a
description of any reimbursable expenditures. City shall pay Consultant no later than
thirty (30) calendar days after approval of the monthly invoice by City staff.
4.4 City shall reimburse Consultant only for those costs or expenses
specifically identified in Exhibit B to this Agreement or specifically approved in writing in
advance by City.
4.5 Consultant shall not receive any compensation for Extra Work performed
without the prior written authorization of City. As used herein, "Extra Work" means any
Work that is determined by City to be necessary for the proper completion of the
Project, but which is not included within the Scope of Services and which the parties did
not reasonably anticipate would be necessary at the execution of this Agreement.
Compensation for any authorized Extra Work shall be paid in accordance with the
Schedule of Billing Rates as set forth in Exhibit B.
5. PROJECT MANAGER
5.1 Consultant shall designate a Project Manager, who shall coordinate all
phases of the Project. This Project Manager shall be available to City at all reasonable
times during the Agreement term. Consultant has designated Michael Reed to be its
Project Manager. Consultant shall not remove or reassign the Project Manager or any
personnel listed in Exhibit A or assign any new or replacement personnel to the Project
without the prior written consent of City. City's approval shall not be unreasonably
withheld with respect to the removal or assignment of non -key personnel.
5.2 Consultant, at the sole discretion of City, shall remove from the Project
any of its personnel assigned to the performance of Services upon written request of
City. Consultant warrants that it will continuously furnish the necessary personnel to
complete the Project on a timely basis as contemplated by this Agreement.
6. ADMINISTRATION
This Agreement will be administered by the Human Resources Department.
City's Risk Management Administrator or designee shall be the Project Administrator
and shall have the authority to act for City under this Agreement. The Project
Carl Warren & Company Page 3
ATTACHMENT A
Administrator shall represent City in all matters pertaining to the Services to be
rendered pursuant to this Agreement.
7. CITY'S RESPONSIBILITIES
To assist Consultant in the execution of its responsibilities under this Agreement,
City agrees to provide access to and upon request of Consultant, one copy of all
existing relevant information on file at City. City will provide all such materials in a
timely manner so as not to cause delays in Consultant's Work schedule.
8. STANDARD OF CARE
8.1 All of the Services shall be performed by Consultant or under Consultant's
supervision. Consultant represents that it possesses the professional and technical
personnel required to perform the Services required by this Agreement, and that it will
perform all Services in a manner commensurate with the highest professional
standards. For purposes of this Agreement, the phrase "highest professional
standards" shall mean those standards of practice recognized by one (1) or more first -
class firms performing similar work under similar circumstances.
8.2 All Services shall be performed by qualified and experienced personnel
who are not employed by City. By delivery of completed Work, Consultant certifies that
the Work conforms to the requirements of this Agreement, all applicable federal, state
and local laws, and the highest professional standard.
8.3 Consultant represents and warrants to City that it has, shall obtain, and
shall keep in full force and effect during the term hereof, at its sole cost and expense, all
licenses, permits, qualifications, insurance and approvals of whatsoever nature that is
legally required of Consultant to practice its profession. Consultant shall maintain a City
of Newport Beach business license during the term of this Agreement.
8.4 Consultant shall not be responsible for delay, nor shall Consultant be
responsible for damages or be in default or deemed to be in default by reason of strikes,
lockouts, accidents, acts of God, or the failure of City to furnish timely information or to
approve or disapprove Consultant's Work promptly, or delay or faulty performance by
City, contractors, or governmental agencies.
9. HOLD HARMLESS
9.1 To the fullest extent permitted by law, Consultant shall indemnify, defend
and hold harmless City, its City Council, boards and commissions, officers, agents,
volunteers and employees (collectively, the "Indemnified Parties ") from and against any
and all claims (including, without limitation, claims for bodily injury, death or damage to
property), demands, obligations, damages, actions, causes of action, suits, losses,
judgments, fines, penalties, liabilities, costs and expenses (including, without limitation,
attorneys' fees, disbursements and court costs) of every kind and nature whatsoever
(individually, a Claim; collectively, "Claims "), which may arise from or in any manner
relate (directly or indirectly) to any breach of the terms and conditions of this
Carl Warren & Company Page 4
ATTACHMENT A
Agreement, any Work performed or Services provided under this Agreement including,
without limitation, defects in workmanship or materials or Consultant's presence or
activities conducted on the Project (including the negligent, reckless, and /or willful acts,
errors and /or omissions of Consultant, its principals, officers, agents, employees,
vendors, suppliers, consultants, subcontractors, anyone employed directly or indirectly
by any of them or for whose acts they may be liable, or any or all of them).
9.2 Notwithstanding the foregoing, nothing herein shall be construed to
require Consultant to indemnify the Indemnified Parties from any Claim arising from the
sole negligence or willful misconduct of the Indemnified Parties. Nothing in this
indemnity shall be construed as authorizing any award of attorneys' fees in any action
on or to enforce the terms of this Agreement. This indemnity shall apply to all claims
and liability regardless of whether any insurance policies are applicable. The policy
limits do not act as a limitation upon the amount of indemnification to be provided by
Consultant.
10. INDEPENDENT CONTRACTOR
It is understood that City retains Consultant on an independent contractor basis
and Consultant is not an agent or employee of City. The manner and means of
conducting the Work are under the control of Consultant, except to the extent they are
limited by statute, rule or regulation and the expressed terms of this Agreement. No
civil service status or other right of employment shall accrue to Consultant or its
employees. Nothing in this Agreement shall be deemed to constitute approval for
Consultant or any of Consultant's employees or agents, to be the agents or employees
of City. Consultant shall have the responsibility for and control over the means of
performing the Work, provided that Consultant is in compliance with the terms of this
Agreement. Anything in this Agreement that may appear to give City the right to direct
Consultant as to the details of the performance of the Work or to exercise a measure of
control over Consultant shall mean only that Consultant shall follow the desires of City
with respect to the results of the Services.
11. COOPERATION
Consultant agrees to work closely and cooperate fully with City's designated
Project Administrator and any other agencies that may have jurisdiction or interest in the
Work to be performed. City agrees to cooperate with the Consultant on the Project.
12. CITY POLICY
Consultant shall discuss and review all matters relating to policy and Project
direction with City's Project Administrator in advance of all critical decision points in
order to ensure the Project proceeds in a manner consistent with City goals and
policies.
Carl Warren & Company Page 5
ATTACHMENT A
13. PROGRESS
Consultant is responsible for keeping the Project Administrator informed on a
regular basis regarding the status and progress of the Project, activities performed and
planned, and any meetings that have been scheduled or are desired.
14. INSURANCE
Without limiting Consultant's indemnification of City, and prior to commencement
of Work, Consultant shall obtain, provide and maintain at its own expense during the
term of this Agreement or for other periods as specified in this Agreement, policies of
insurance of the type, amounts, terms and conditions described in the Insurance
Requirements attached hereto as Exhibit C, and incorporated herein by reference.
15. PROHIBITION AGAINST ASSIGNMENTS AND TRANSFERS
Except as specifically authorized under this Agreement, the Services to be
provided under this Agreement shall not be assigned, transferred contracted or
subcontracted out without the prior written approval of City. Any of the following shall
be construed as an assignment: The sale, assignment, transfer or other disposition of
any of the issued and outstanding capital stock of Consultant, or of the interest of any
general partner or joint venturer or syndicate member or cotenant if Consultant is a
partnership or joint- venture or syndicate or co- tenancy, which shall result in changing
the control of Consultant. Control means fifty percent (50 %) or more of the voting
power or twenty -five percent (25 %) or more of the assets of the corporation, partnership
or joint- venture.
16. SUBCONTRACTING
The subcontractors authorized by City, if any, to perform Work on this Project are
identified in Exhibit A. Consultant shall be fully responsible to City for all acts and
omissions of any subcontractor. Nothing in this Agreement shall create any contractual
relationship between City and any subcontractor nor shall it create any obligation on the
part of City to pay or to see to the payment of any monies due to any such
subcontractor other than as otherwise required by law. City is an intended beneficiary
of any Work performed by the subcontractor for purposes of establishing a duty of care
between the subcontractor and City. Except as specifically authorized herein, the
Services to be provided under this Agreement shall not be otherwise assigned,
transferred, contracted or subcontracted out without the prior written approval of City.
17. OWNERSHIP OF DOCUMENTS
17.1 Each and every report, draft, map, record, plan, document and other
writing produced, including but not limited to, websites, blogs, social media accounts
and applications (hereinafter "Documents "), prepared or caused to be prepared by
Consultant, its officers, employees, agents and subcontractors, in the course of
implementing this Agreement, shall become the exclusive property of City, and City
shall have the sole right to use such materials in its discretion without further
Carl Warren & Company Page 6
ATTACHMENT A
compensation to Consultant or any other party. Additionally, all material posted in
cyberspace by Consultant, its officers, employees, agents and subcontractors, in the
course of implementing this Agreement, shall become the exclusive property of City,
and City shall have the sole right to use such materials in its discretion without further
compensation to Consultant or any other party. Consultant shall, at Consultant's
expense, provide such Documents, including all logins and password information to City
upon prior written request.
17.2 Documents, including drawings and specifications, prepared by
Consultant pursuant to this Agreement are not intended or represented to be suitable
for reuse by City or others on any other project. Any use of completed Documents for
other projects and any use of incomplete Documents without specific written
authorization from Consultant will be at City's sole risk and without liability to
Consultant. Further, any and all liability arising out of changes made to Consultant's
deliverables under this Agreement by City or persons other than Consultant is waived
against Consultant, and City assumes full responsibility for such changes unless City
has given Consultant prior notice and has received from Consultant written consent for
such changes.
17.3 All written documents shall be transmitted to City in formats compatible
with Microsoft Office and /or viewable with Adobe Acrobat.
18. CONFIDENTIALITY
All Documents, including drafts, preliminary drawings or plans, notes and
communications that result from the Services in this Agreement, shall be kept
confidential unless City expressly authorizes in writing the release of information.
19. INTELLECTUAL PROPERTY INDEMNITY
Consultant shall defend and indemnify City, its agents, officers, representatives
and employees against any and all liability, including costs, for infringement or alleged
infringement of any United States' letters patent, trademark, or copyright, including
costs, contained in Consultant's Documents provided under this Agreement.
20. RECORDS
Consultant shall keep records and invoices in connection with the Services to be
performed under this Agreement. Consultant shall maintain complete and accurate
records with respect to the costs incurred under this Agreement and any Services,
expenditures and disbursements charged to City, for a minimum period of three (3)
years, or for any longer period required by law, from the date of final payment to
Consultant under this Agreement. All such records and invoices shall be clearly
identifiable. Consultant shall allow a representative of City to examine, audit and make
transcripts or copies of such records and invoices during regular business hours.
Consultant shall allow inspection of all Work, data, Documents, proceedings and
activities related to the Agreement for a period of three (3) years from the date of final
payment to Consultant under this Agreement.
Carl Warren & Company Page 7
ATTACHMENT A
►4PONL, 91111: 1: [a] 1111101 [c'?
City may withhold payment to Consultant of any disputed sums until satisfaction
of the dispute with respect to such payment. Such withholding shall not be deemed to
constitute a failure to pay according to the terms of this Agreement. Consultant shall
not discontinue Work as a result of such withholding. Consultant shall have an
immediate right to appeal to the City Manager or designee with respect to such disputed
sums. Consultant shall be entitled to receive interest on any withheld sums at the rate of
return that City earned on its investments during the time period, from the date of
withholding of any amounts found to have been improperly withheld.
22. ERRORS AND OMISSIONS
In the event of errors or omissions that are due to the negligence or professional
inexperience of Consultant which result in expense to City greater than what would
have resulted if there were not errors or omissions in the Work accomplished by
Consultant, the additional design, construction and /or restoration expense shall be
borne by Consultant. Nothing in this Section is intended to limit City's rights under the
law or any other sections of this Agreement.
23. CITY'S RIGHT TO EMPLOY OTHER CONSULTANTS
City reserves the right to employ other Consultants in connection with the
Project.
24. CONFLICTS OF INTEREST
24.1 Consultant or its employees may be subject to the provisions of the
California Political Reform Act of 1974 (the "Act "), which (1) requires such persons to
disclose any financial interest that may foreseeably be materially affected by the Work
performed under this Agreement, and (2) prohibits such persons from making, or
participating in making, decisions that will foreseeably financially affect such interest.
24.2 If subject to the Act, Consultant shall conform to all requirements of the
Act. Failure to do so constitutes a material breach and is grounds for immediate
termination of this Agreement by City. Consultant shall indemnify and hold harmless
City for any and all claims for damages resulting from Consultant's violation of this
Section.
25. NOTICES
25.1 All notices, demands, requests or approvals, including any change in
mailing address, to be given under the terms of this Agreement shall be given in writing,
and conclusively shall be deemed served when delivered personally, or on the third
business day after the deposit thereof in the United States mail, postage prepaid, first -
class mail, addressed as hereinafter provided.
Carl Warren & Company Page 8
ATTACHMENT A
25.2 All notices, demands, requests or approvals from Consultant to City shall
be addressed to City at:
Attn: Risk Management Administrator
Human Resources Department — Risk Management
City of Newport Beach
100 Civic Center Drive
PO Box 1768
Newport Beach, CA 92658
25.3 All notices, demands, requests or approvals from City to Consultant shall
be addressed to Consultant at:
Attn: Michael Reed
Carl Warren & Company
770 South Placentia Avenue
Placentia, CA 92870
26. CLAIMS
Unless a shorter time is specified elsewhere in this Agreement, before making its
final request for payment under this Agreement, Consultant shall submit to City, in
writing, all claims for compensation under or arising out of this Agreement.
Consultant's acceptance of the final payment shall constitute a waiver of all claims for
compensation under or arising out of this Agreement except those previously made in
writing and identified by Consultant in writing as unsettled at the time of its final request
for payment. Consultant and City expressly agree that in addition to any claims filing
requirements set forth in the Agreement, Consultant shall be required to file any claim
Consultant may have against City in strict conformance with the Government Claims Act
(Government Code sections 900 et seq.).
27. TERMINATION
27.1 In the event that either party fails or refuses to perform any of the
provisions of this Agreement at the time and in the manner required, that party shall be
deemed in default in the performance of this Agreement. If such default is not cured
within a period of two (2) calendar days, or if more than two (2) calendar days are
reasonably required to cure the default and the defaulting party fails to give adequate
assurance of due performance within two (2) calendar days after receipt of written
notice of default, specifying the nature of such default and the steps necessary to cure
such default, and thereafter diligently take steps to cure the default, the non - defaulting
party may terminate the Agreement forthwith by giving to the defaulting party written
notice thereof.
27.2 Notwithstanding the above provisions, City shall have the right, at its sole
and absolute discretion and without cause, of terminating this Agreement at any time by
giving no less than seven (7) calendar days' prior written notice to Consultant. In the
event of termination under this Section, City shall pay Consultant for Services
Carl Warren & Company Page 9
ATTACHMENT A
satisfactorily performed and costs incurred up to the effective date of termination for
which Consultant has not been previously paid. On the effective date of termination,
Consultant shall deliver to City all reports, Documents and other information developed
or accumulated in the performance of this Agreement, whether in draft or final form.
28. STANDARD PROVISIONS
28.1 Recitals. City and Consultant acknowledge that the above Recitals are
true and correct and are hereby incorporated by reference into this Agreement.
28.2 Compliance with all Laws. Consultant shall, at its own cost and expense,
comply with all statutes, ordinances, regulations and requirements of all governmental
entities, including federal, state, county or municipal, whether now in force or hereinafter
enacted. In addition, all Work prepared by Consultant shall conform to applicable City,
county, state and federal laws, rules, regulations and permit requirements and be
subject to approval of the Project Administrator and City.
28.3 Waiver. A waiver by either party of any breach, of any term, covenant or
condition contained herein shall not be deemed to be a waiver of any subsequent
breach of the same or any other term, covenant or condition contained herein, whether
of the same or a different character.
28.4 Integrated Contract. This Agreement represents the full and complete
understanding of every kind or nature whatsoever between the parties hereto, and all
preliminary negotiations and agreements of whatsoever kind or nature are merged
herein. No verbal agreement or implied covenant shall be held to vary the provisions
herein.
28.5 Conflicts or Inconsistencies. In the event there are any conflicts or
inconsistencies between this Agreement and the Scope of Services or any other
attachments attached hereto, the terms of this Agreement shall govern.
28.6 Interpretation. The terms of this Agreement shall be construed in
accordance with the meaning of the language used and shall not be construed for or
against either party by reason of the authorship of the Agreement or any other rule of
construction which might otherwise apply.
28.7 Amendments. This Agreement may be modified or amended only by a
written document executed by both Consultant and City and approved as to form by the
City Attorney.
28.8 Severability. If any term or portion of this Agreement is held to be invalid,
illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining
provisions of this Agreement shall continue in full force and effect.
28.9 Controlling Law and Venue. The laws of the State of California shall
govern this Agreement and all matters relating to it and any action brought relating to
Carl Warren & Company Page 10
ATTACHMENT A
this Agreement shall be adjudicated in a court of competent jurisdiction in the County of
Orange, State of California.
28.10 Equal Opportunity Employment. Consultant represents that it is an equal
opportunity employer and it shall not discriminate against any subcontractor, employee
or applicant for employment because of race, religion, color, national origin, handicap,
ancestry, sex, age or any other impermissible basis under law.
28.11 No Attorneys' Fees. In the event of any dispute or legal action arising
under this Agreement, the prevailing party shall not be entitled to attorneys' fees.
28.12 Counterparts. This Agreement may be executed in two (2) or more
counterparts, each of which shall be deemed an original and all of which together shall
constitute one (1) and the same instrument.
[SIGNATURES ON NEXT PAGE]
Carl Warren & Company Page 11
ATTACHMENT A
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed on the dates written below.
APPROVED AS TO FORM:
CITY ATTORNEY' OFFICE
Date:
r
I
ff - �.��
ATTEST:
Leilani I. Brown
City Clerk
CITY OF NEWPORT BEACH,
a California municipal corporation
Bv:
Rush N. Hill, II
Mayor
CONSULTANT: Carl Warren & Company,
a California corporation
Date:
By:
Caryn Siebert
President/CEO
Date:
By:
Michael Reed
Public Entity Service Leader
[END OF SIGNATURES]
Attachments: Exhibit A — Scope of Services
Exhibit B — Schedule of Billing Rates
Exhibit C — Insurance Requirements
Carl Warren & Company Page 12
ATTACHMENT A
EXHIBIT A
SCOPE OF SERVICES
The following is a listing of the required services as they relate to General Liability
Claims Administration services:
1. Program Administration
Consultant shall:
1.1 Provide professional and technical staff to perform General Liability
Claims Administration services;
1.2 Represent City in all matters related to the set -up, investigation,
adjustment, processing, negotiation and resolution of liability claims against City;
1.3 Inform the City of changes or proposed changes in statues, rules and
regulations and case law affecting its general liability claims program;
1.4 Assist in the development of policies and procedures relating to the
general liability claims program;
1.5 Provide information and guidance regarding the general liability claims
program and specified claims;
1.6 Provide copies of file correspondence and documentation as requested by
City;
1.7 Inform City of problem areas or trends, both potential and perceived, and
provide recommendations and /or solutions to address problem areas or trends;
1.8 Attend appointments, including but not limited to meetings, conferences,
Court appearances, and scene investigations at request of City;
1.9 Provide 24 -hour on -call service. This can be accomplished by providing
City with a 24 -hour phone number, pager, beeper or telephone number for key
personnel. The 24 -hour on -call service may include, but not limited to, responding to an
incident scene, attending meetings, and conducting investigations;
1.10 Conduct risk management related seminars for department heads and /or
City staff at request of City; and
1.11 Maintain and store all hardcopy files for five (5) years after each
respective file is closed.
2. Claims Administration
Consultant shall:
Carl Warren & Company Page A -1
ATTACHMENT A
2.1 Take in and retain original claims filed against City;
2.2 Create and enter new claim files into the computer within forty -eight (48)
hours of receipt of a loss notice from the City Clerk's Office;
2.3 Maintain a hardcopy file for each claim;
2.4 At the direction of the City, contact claimants or their attorneys within five
(5) days of receipt of a claim and maintain appropriate contact with them until the claim
is closed;
2.5 Obtain two (2) competitive estimates of automobile damage when the loss
is under $1,000. If over this amount, engage the services of a professional appraiser;
2.6 Review the status of claims and adequacy of reserves on all active cases
at least every 90 days;
2.7 Provide first Investigative Report within thirty (30) days of receipt of claim
to Risk Manager;
2.8 Provide narrative reports when recommending rejection or settlement of a
claim, when claim is going to trial, or other significant events have or will occur. Reports
must be clear and concise;
2.9 Negotiate settlements within authority limits. Funding for the payment of
any settlement is specifically excluded from this Agreement;
2.10 Process payments within authority level within fourteen (14) days of
receipt;
2.11 Review vendors for appropriateness of work and cost effectiveness;
2.12 All files will be diaried at appropriate intervals to allow for timely
completion of required activity;
2.13 Content of all files will be in chronological order with correspondence in
the designated section;
2.14 Files will clearly and concisely document action take on the claim;
2.15 Telephone calls will be returned within twenty -four (24) hours. If the
Consultant's staff member called is not available within this time frame, another
designated staff member will return the call;
2.16 All written communications requiring acknowledgment or action will be
responded to and mailed within ten (10) days, or sooner, if an immediate response is
required;
2.17 Review all new claims for liability and provide an assessment of liability to
City no later than thirty (30) days from receipt of loss notice from City;
Carl Warren & Company Page A -2
ATTACHMENT A
2.18 Identify and notify possible co- defendants;
2.19 Tender claims to other potentially responsible parties;
2.20 Process all claims in accordance with City's instructions and policies; and
2.21 Have translators available to assist with non - English speaking claimants.
3. Investigations
Consultant shall:
3.1 Within ten (10) days of receipt of claim, unless otherwise requested by
Risk Manager, take statements of facts from claimants when not represented by an
attorney. Statements will be preserved by recording or taking hand written signed
statements;
3.2 Further investigate claims where the initial review indicates that it is
warranted. Further investigation may include, but are not limited to, on -sight
investigation, photographs, interviewing witnesses and taking signed or recorded
statements, verification of damage or loss, taking measurements, obtaining
maps /diagrams from City or other sources, obtaining medical releases, police reports,
internal operations investigations, paramedic reports, marine department reports,
building permits, or other records as required;
3.3 If an attorney is involved, direct all communication to the claimant's
attorney regarding the investigation, negotiation, and evaluation of any claims leading to
a settlement;
3.4 Report all Bodily Injury claims to Index Bureau. Conduct Index Bureau
searches for repeat claimants. Conduct additional Index Bureau searches at request of
City;
3.5 Obtain approval from City before engaging the services of an outside
vendor for an investigative assignment;
3.6 At the request of the City, investigate inverse condemnation claims; and
3.7 Arrange, with prior City approval, for expert services, including but not
limited to, professional photography, independent medical examinations, professional
engineering services, and laboratory services.
4. Litigation Management
Consultant shall:
4.1 Provide City Attorney's Office with transmittal letter outlining the status of
the case, results of investigations, primary issues, requested action, a complete copy of
Carl Warren & Company Page A -3
ATTACHMENT A
the file and any documentation within fourteen (14) days of receipt of lawsuit with a copy
to Risk Manager;
4.2 Defense counsel will be monitored and evaluated based on quality of work
product, timely communication of important issues, timely filings, timely written and
telephone responses, obtaining required approval, accurate billings and timely case
resolution. Deficiencies in performance will be reported to the City;
4.3 Maintain liaison with the City Attorney's Office and defense counsel and
provide such investigation as required during the entire litigation process, including but
not limited to, additional investigations for pretrial and trial that may be requested by
either the City Attorney's Office or defense counsel;
4.4 Obtain approval from City before agreement of a settlement above
authority limit;
4.5 Obtain a fully executed release on all settlements and dismissals;
4.6 Attend Settlement Conferences, mediation or arbitrations as requested;
4.7 Assist the City Attorney and defense counsel in preparing and /or
answering discovery as requested; and
4.8 Assist City personnel in Small Claims Court actions filed by and against
City, including but not limited to, obtaining witness information, evidence, assistance in
preparing the case for trial and appearance at the trial if deemed necessary by City.
5. Subrogation
Consultant shall:
5.1 Place the tortfeasor on notice of the City's subrogation rights; and
5.2 Work with the City Attorney's Office to draft the legal documents to
recover monies spent on a claim.
6. Statistical Reports
Consultant shall:
6.1 Specified standard loss reports must be received within ten (10) days after
the end of the month /quarter, as agreed upon;
6.2 Special reports must be provided as needed by the City;
6.3 Submit monthly reports during the term of the agreement. The monthly
reports shall indicate the status and detail of every open claim assigned to Consultant,
including but not limited to, the server assigned for each claim, summary of each loss by
type, department, year, litigation status, and coded as to cause; and
Carl Warren & Company Page A -4
ATTACHMENT A
6.4 Consultant will enter into its computer any and all files handled in -house
by City. City will provide Consultant with all information necessary for such input.
7. Excess Insurance Reporting
Consultant shall:
7.1 Report to any excess insurance carrier(s) in accordance with policy
provisions. City will provide the names and addresses of excess insurance carriers.
Provide City with written notification that the required notice has been made to the
excess carrier within ten (10) days of the notice of claim; and
7.2 Comply and meet with any excess carrier claims administration
requirements.
Carl Warren & Company Page A -5
ATTACHMENT A
EXHIBIT B
SCHEDULE OF BILLING RATES
The pricing provided in this Exhibit shall be subject to the CPI adjustment in accordance
with Section 4.2 of the Agreement commencing on the anniversary of the third year of
the Effective Date of the Agreement (July 1, 2017) .
Employee
Hourly
Rate
Hours
Worked
Overtime
Rate
Total
Cost2
Supervisor and Lead
Claims Analyst Combined
$60.00
480
N/A
$28,800
Primary Adjuster
$55.00
600
N/A
$33,000
Property and Back -up
Adjuster
$55.00
325
N/A
$17,875
Annual Base Contract Cost
$79,675
Overhead Costs
35%
$27,886
Total Estimated Annual
Contract Cost (including
overhead costs )2
$107,561
Overhead includes monthly RMIS fee, support staff, quality assurance, telephone, fax,
mail, ISO, MMSEA, miles, photos, transcription, photocopies, loss runs, stewardship
report.
2 Funding for the payment of any settlement is specifically excluded from this total.
City agrees to pay charges for outside adjusters other than Consultant's adjusters and
file related expenses such as medical reports, police reports, etc. on a pass through
basis with no additional fees added.
Carl Warren & Company Page B -1
ATTACHMENT A
5'i PWOM
INSURANCE REQUIREMENTS — PROFESSIONAL SERVICES
1. Provision of Insurance. Without limiting Consultant's indemnification of City, and
prior to commencement of Work, Consultant shall obtain, provide and maintain at
its own expense during the term of this Agreement, policies of insurance of the
type and amounts described below and in a form satisfactory to City. Consultant
agrees to provide insurance in accordance with requirements set forth here. If
Consultant uses existing coverage to comply and that coverage does not meet
these requirements, Consultant agrees to amend, supplement or endorse the
existing coverage.
2. Acceptable Insurers. All insurance policies shall be issued by an insurance
company currently authorized by the Insurance Commissioner to transact
business of insurance in the State of California, with an assigned policyholders'
Rating of A- (or higher) and Financial Size Category Class VII (or larger) in
accordance with the latest edition of Best's Key Rating Guide, unless otherwise
approved by the City's Risk Manager.
3. Coverage Requirements.
A. Workers' Compensation Insurance. Consultant shall maintain Workers'
Compensation Insurance, statutory limits, and Employer's Liability
Insurance with limits of at least one million dollars ($1,000,000) each
accident for bodily injury by accident and each employee for bodily injury
by disease in accordance with the laws of the State of California, Section
3700 of the Labor Code.
Consultant shall submit to City, along with the certificate of insurance, a
Waiver of Subrogation endorsement in favor of City, its officers, agents,
employees and volunteers.
B. General Liability Insurance. Consultant shall maintain commercial general
liability insurance, and if necessary umbrella liability insurance, with
coverage at least as broad as provided by Insurance Services Office form
CG 00 01, in an amount not less than one million dollars ($1,000,000) per
occurrence, one million dollars ($1,000,000) general aggregate. The
policy shall cover liability arising from premises, operations, personal and
advertising injury, and liability assumed under an insured contract
(including the tort liability of another assumed in a business contract) with
no endorsement or modification limiting the scope of coverage for liability
assumed under a contract.
C. Automobile Liability Insurance. Consultant shall maintain automobile
insurance at least as broad as Insurance Services Office form CA 00 01
covering bodily injury and property damage for all activities of Consultant
arising out of or in connection with Work to be performed under this
Agreement, including coverage for any owned, hired, non -owned or rented
Carl Warren & Company Page C -1
ATTACHMENT A
vehicles, in an amount not less than one million dollars ($1,000,000)
combined single limit each accident.
D. Professional Liability (Errors & Omissions) Insurance. Consultant shall
maintain professional liability insurance that covers the Services to be
performed in connection with this Agreement, in the minimum amount of
one million dollars ($1,000,000) per claim and in the aggregate. Any policy
inception date, continuity date, or retroactive date must be before the
Effective Date of this Agreement and Consultant agrees to maintain
continuous coverage through a period no less than three years after
completion of the Services required by this Agreement.
4. Other Insurance Requirements. The policies are to contain, or be endorsed to
contain, the following provisions:
A. Waiver of Subrogation. All insurance coverage maintained or procured
pursuant to this Agreement shall be endorsed to waive subrogation
against City, its elected or appointed officers, agents, officials, employees
and volunteers or shall specifically allow Consultant or others providing
insurance evidence in compliance with these requirements to waive their
right of recovery prior to a loss. Consultant hereby waives its own right of
recovery against City, and shall require similar written express waivers
from each of its subconsultants.
B. Additional Insured Status. All liability policies including general liability,
excess liability, pollution liability, and automobile liability, if required, but
not including professional liability, shall provide or be endorsed to provide
that City and its officers, officials, employees, and agents shall be included
as insureds under such policies.
C. Primary and Non Contributory. All liability coverage shall apply on a
primary basis and shall not require contribution from any insurance or self -
insurance maintained by City.
D. Notice of Cancellation. All policies shall provide City with thirty (30)
calendar days notice of cancellation (except for nonpayment for which ten
(10) calendar days notice is required) or nonrenewal of coverage for each
required coverage.
5. Additional Agreements Between the Parties. The parties hereby agree to the
following:
A. Evidence of Insurance. Consultant shall provide certificates of insurance
to City as evidence of the insurance coverage required herein, along with
a waiver of subrogation endorsement for workers' compensation and other
endorsements as specified herein for each coverage. Insurance
certificates and endorsement must be approved by City's Risk Manager
prior to commencement of performance. Current certification of insurance
shall be kept on file with City at all times during the term of this
Carl Warren & Company Page C -2
ATTACHMENT A
Agreement. City reserves the right to require complete, certified copies of
all required insurance policies, at any time.
B. City's Right to Revise Requirements. City reserves the right at any time
during the term of the Agreement to change the amounts and types of
insurance required by giving Consultant sixty (60) calendar days advance
written notice of such change. If such change results in substantial
additional cost to Consultant, City and Consultant may renegotiate
Consultant's compensation.
C. Enforcement of Agreement Provisions. Consultant acknowledges and
agrees that any actual or alleged failure on the part of City to inform
Consultant of non - compliance with any requirement imposes no additional
obligations on City nor does it waive any rights hereunder.
D. Requirements not Limiting. Requirements of specific coverage features
or limits contained in this Section are not intended as a limitation on
coverage, limits or other requirements, or a waiver of any coverage
normally provided by any insurance. Specific reference to a given
coverage feature is for purposes of clarification only as it pertains to a
given issue and is not intended by any party or insured to be all inclusive,
or to the exclusion of other coverage, or a waiver of any type.
E. Self- insured Retentions. Any self- insured retentions must be declared to
and approved by City. City reserves the right to require that self- insured
retentions be eliminated, lowered, or replaced by a deductible. Self -
insurance will not be considered to comply with these requirements unless
approved by City.
F. City Remedies for Non - Compliance. If Consultant or any subconsultant
fails to provide and maintain insurance as required herein, then City shall
have the right but not the obligation, to purchase such insurance, to
terminate this Agreement, or to suspend Consultant's right to proceed until
proper evidence of insurance is provided. Any amounts paid by City shall,
at City's sole option, be deducted from amounts payable to Consultant or
reimbursed by Consultant upon demand.
G. Timely Notice of Claims. Contractor shall give City prompt and timely
notice of claims made or suits instituted that arise out of or result from
Contractor's performance under this Contract, and that involve or may
involve coverage under any of the required liability policies. City assumes
no obligation or liability by such notice, but has the right (but not the duty)
to monitor the handling of any such claim or claims if they are likely to
involve City.
H. Consultant's Insurance. Consultant shall also procure and maintain, at its
own cost and expense, any additional kinds of insurance, which in its own
judgment may be necessary for its proper protection and prosecution of
the Work.
Carl Warren & Company Page C -3