TO: Honorable City Council
FROM: City Manager
SUBJECT: A Resolution of the City Council of the City of Commerce, California Approving Renewal Agreement for Self-Insured Claims Administration MEETING DATE: May 27, 2025
RECOMMENDATION:
The City Council will consider adopting a Resolution to execute the Renewal Agreement for Self-Insured Claims Administration (Worker’s Compensation Claims) with Keenan & Associates and authorize the Mayor or City Manager to execute Renewal Agreement July 1, 2025 through June 30, 2028.
BACKGROUND:
On May 27, 2016, the City Council approved and authorized an agreement and related documents for membership in the Municipal Insurance Cooperative Joint Powers Authority providing the services and maintenance of a joint purchasing program for Worker’s Compensation and other coverage.
The City Administrator executed the Self-Insured Claims Administration Agreement from July 1, 2016 through June 30, 2019 with Keenan & Associates, a full-service brokerage firm with management of the Municipal Insurance Cooperative, to provide the City of Commerce with a Worker’s Compensation program to include a self-insured retention.
On September 17, 2019, the City Council approved and authorized the City Manager to execute Renewal Amendment No. 1 to the July 1, 2016 through June 30, 2019 Self-Insured Claims Administration Agreement, which extended the agreement through June 30, 2022.
On June 28, 2022, the City Council approved and authorized the Mayor or City Manager to execute Renewal Amendment No. 2 to the July 1, 2016 through June 30, 2019 Self-Insured Claims Administration Agreement, which extended the agreement through June 30, 2023.
On June 13, 2023, the City Council approved and authorized the Mayor or City Manager to execute Renewal Amendment No. 3 to the July 1, 2016 through June 30, 2019 Self-Insured Claims Administration Agreement, which extended the agreement through June 30, 2024. The City Council also approved the additional $40,547 cost associated with this one-year extension.
On June 25, 2024, the City Council approved a resolution authorizing the Mayor or City Manager to execute Renewal Amendment No. 4 to the July 1, 2016 through June 30, 2019 Self-Insured Claims Administration Agreement, which extended the agreement through June 30, 2025, and approved the $44,601 cost associated with this one-year extension.
City Staff is now requesting the City Council to approve a resolution authorizing the Mayor or City Manager to execute a three-year agreement from July 1, 2025 through June 30, 2028, with two optional years unless extended or terminated earlier as provided in the agreement.
Keenan will continue performing the services as indicated in Exhibit A-1 of the Renewal agreement 2025-2028, such as claims administration, medical administration, legal administration and risk management services.
ANALYSIS:
The City entered into a Self-Insured Claims Administration Agreement with Keenan & Associates on July 1, 2016, and this agreement was extended on September 17, 2019 and on June 28, 2022. The City Council authorized two additional extensions to this agreement on June 30, 2024, which will expire on June 30, 2025.
The total cost for the Renewal Agreement for claims management services shall not exceed $268,897 for the three-year term and the optional two years.
The cost of the three-year term is $156,993 and the breakdown by fiscal year is as follows:
FY 2025-26: $50,939
FY 2026-27: 52,317
FY 2027-28: $53,737
The cost for the optional two years is $111,904 and the breakdown by fiscal year is as follows:
FY 2028-29 (optional year 1): $55,199
FY 2029-30 (optional year 2): $56,705
ALTERNATIVES:
Approve staff’s recommendation to execute agreement.
Disapprove staff recommendation.
Provide further direction to staff.
FISCAL IMPACT:
If the City Council approves the agreement to the Self-Insured Claims Administration, the associated amounts will be incorporated into the General Fund budget in account 10-8800-41040.
RELATIONSHIP TO STRATEGIC GOALS:
This agenda report relates to the 2016 City of Commerce Strategic Guiding Principles as follows:
City Organization; Guiding Principle 2: Foster an environment that continuously seeks to improve service and organizational responsiveness to internal and external customers.
Fiscal Sustainability; Guiding Principle 2: Implement city business processes and operational efficiencies to streamline the cost of government including the examination and identification of cost of services and cost of recovery policies.
Prepared by: Ela Pappo, Director of Human Resources
Fiscal Impact Reviewed by: Alvaro Castellon, Director of Finance Approved as to form: Noel Tapia, City Attorney
Respectfully submitted: Ernie Hernandez, City Manager
ATTACHMENTS:
Self-Insured Claims Administration Agreement – Fully Executed (July 1, 2016 through June 30, 2019) Renewal Agreement (July 1, 2025 through June 30, 2028)
Resolution
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CITY OF COMMERCE
AGENDA REPORT
Item No.