Fremont City Council Meeting: 09/17/24 07:00 PM
3300 Capitol Avenue Div/Dept: Risk Management
Fremont, CA 94538 Category: Agreements and Contracts
SCHEDULED
Sponsors:
COUNCIL STAFF REPORT (ID # 5267) DOC ID: 5267
Updated: 9/10/2024 4:24 PM by Dina Lewis Page 1
ENTER INTO A CONTRACT FOR THIRD PARTY ADMINISTRATION SERVICES FOR THE CITY'S SELF- INSURED WORKERS' COMPENSATION PROGRAM - Authorize the City Manager to enter into an Agreement with LWP Claims Solutions, Inc. to Provide Workers’ Compensation Claims Administration Service for the City of Fremont, for a Three-Year Term in an Amount Not-to-Exceed $689,271, and Two Additional Two-Year Options
Contact Persons:
Name: Steven E. Schwarz Rafael Alvarado
Title: Risk Manager City Attorney
Div/Dept: Risk Management City Attorney's Office
Phone: 510-284-4052 510-284-4030
E-Mail: [email protected] [email protected]
Executive Summary: The City of Fremont currently contracts for services to administer the City’s self-insured workers’ compensation program under an agreement with LWP Claims Solutions, Inc (LWP). The current agreement expires on September 30, 2024. City staff recommends that the City Council authorize the City Manager to execute a three-year agreement for administration of the City’s self-insured workers’ compensation program with LWP Claims Solutions, Inc. with the option for two, two-year extensions.
BACKGROUND: The City has contracted with LWP to provide workers’ compensation administrative services since October 1, 2018. The current contract expires September 30, 2024. In anticipation of the expiration of the existing contract, Risk Management initiated a request for proposals (RFP) for third party administrators on June 10, 2024. The City received five responses to the RFP.
Discussion/Analysis: City staff reviewed each RFP response to determine the depth of each proposer’s experience and approach with claims administration for workers’ compensation claims in the State of California, as well as depth of experience of proposer’s service team, including claims adjusters, claims manager and information technology support, the proposer’s understanding of the project and cost of services. At the conclusion of the review, City staff determined that LWP was the most qualified and responsible proposer. Over the past seven years LWP has saved the City $2,636,666 total incurred costs (reserves and payments) on all 187 claims that were transferred to them on taking over the City account.
LWP’s fee for the first three years of the agreement would be as follows:
• Year 1 $ 228,000
• Year 2 $ 234,690
• Year 3 $ 241,581
The City will have the option to extend the agreement two times, for two-year periods. The increased cost of any extension shall not exceed 5% of the previous year.
Council Staff Report (ID # 5267) Meeting of September 17, 2024 Updated: 9/10/2024 4:24 PM by Dina Lewis Page 2
ENVIRONMENTAL REVIEW: The proposed agreement is exempt from and not subject to review under the California Environmental Quality Act (CEQA) because, without limitation, it is not a “project” as defined in CEQA Guidelines Section 15378(b)(2) and/or 15378(b)(5) and as it can be seen with certainty that there is no possibility that the activity may have a significant effect on the environment pursuant to CEQA Guidelines Section 15061(b)(3), each as a separate and independent basis for CEQA compliance
ATTACHMENTS: None.
RECOMMENDATIONS:
1. Authorize the City Manager or her designee to execute a three-year agreement with LWP Claims Solutions, Inc., effective October 1, 2024, in the amount of $689,271 and the option for two, two-year extensions in an additional amount not to exceed 5% of the previous year.
2. Find the proposed action exempt from CEQA under guidelines 15378(b)(2), 15378(b)(5), and/or 15061(b)(3).