November 15, 2022
Human Resources
DATE: November 15, 2022
TO: Mayor Butt and Members of the City Council
FROM: Nickie Mastay, Deputy City Manager
Sharrone Taylor, Interim Director of Human Resources
Laura Marquez, Risk Manager
SUBJECT:
Third Contract Amendment with George Hills Company
FINANCIAL IMPACT: The proposed additional $88,560 expenditure is included in the approved Fiscal Year 2022-2023 Human
Resources Department, Risk Management Division
budget (account string 50182316-400201), and the
remaining $181,548 will be budgeted accordingly for in
Fiscal Year 2023-2024.
PREVIOUS COUNCIL
ACTION:
June 16, 2019: approved standard contract with an
option for two-year extension.
June 21, 2022: approved extension for 6 months.
STATEMENT OF THE
ISSUE:
Risk Management is seeking to amend its contract with
George Hills Company, Inc. to continue providing third- party administration of general liability claims received by the City.
RECOMMENDED ACTION:
APPROVE a third amendment extending the contract
with George Hills Company through June 30, 2024, and
adding an additional $270,108, to continue providing
third-party administration of general liability claims
received by the City, for a new total contract amount not to exceed $868,668 – Human Resources Department
(Sharrone Taylor/Laura Marquez 510-620-6974).
AGENDA
REPORT
November 15, 2022
DISCUSSION:
The City maintains its general liability insurance program with a Self-Insurance Retention (SIR) of $750,000 and, thereafter, participates in a pooled insurance program with the California Joint Powers Risk Management Authority (CJPRMA). The City is responsible for selecting their own claims adjusting firm, or third-party administrator (TPA).
General liability claims—claiming damages to person or property based on alleged City negligence—are received by the City of Richmond and handled by a TPA. A Request for Proposals (RFP) for third-party administration of these claims was issued in May of 2019. Following the completion of the proposal evaluation process, George Hills Company, Inc. (“George Hills”) was retained for three years with an option for a two- year extension to provide third-party administration of general liability claims.
The City has been satisfied with the incumbent’s performance during the three-year contract period beginning 2019. In June 2022, City Council approved a six-month extension while the City completed an internal audit of George Hills, which returned favorable results. The City is, therefore, recommending exercising its option to extend the contract for an additional 18 months, through June 30, 2024, after which the City will issue a new RFP.
FISCAL IMPACT:
The amendment seeks to add an additional $270,108 to the contract amount, which would result in a total contract amount not exceeding $868,668. This proposed expenditure is included in the approved Fiscal Year 2022-2023 Human Resources Department, Risk Management Division budget, and will be budgeted for future years at the appropriate amount.
CONCLUSION:
City staff recommends that City Council approve the proposed contract amendment with George Hills to continue providing third -party administration of the City’s general liability claims through June 30, 2024.
DOCUMENTS ATTACHED:
Attachment 1 – Original Contract
Attachment 2 – 1st Amendment
Attachment 3 – 2nd Amendment
Attachment 4 – Proposed 3rd Amendment to the Contract