____________________________________________________________________________________
FOR CITY CLERK ONLY
Council Meeting:
Disposition:
Agenda Item No: 4.g
Meeting Date: April 7, 2025
SAN RAFAEL CITY COUNCIL AGENDA REPORT
Department: Human Resources
Prepared by: Marissa Sanchez, Human
Resources Director
City Manager Approval: ______________
TOPIC:
SUBJECT:
SECOND AMENDMENT TO THE WORKERS’ COMPENSATION CLAIMS
ADMINISTRATION PROFESSIONAL SERVICES AGREEMENT
RESOLUTION AUTHORIZING THE CITY MANAGER TO EXECUTE THE SECOND
AMENDMENT TO THE PROFESSIONAL SERVICES AGREEMENT WITH LWP CLAIMS SOLUTIONS, INC, FOR WORKERS’ COMPENSATION CLAIMS
ADMINISTRATION SERVICES INCREASING THE TOTAL NOT TO EXCEED AMOUNT UNDER THE AGREEMENT TO $1,745,311, SUBJECT TO
APPROPRIATION, AND EXTENDING THE TERM DATE JUNE 30, 2026 RECOMMENDATION:
Staff recommend that the City Council adopt a resolution authorizing the City Manager to execute the second amendment to the Professional Services Agreement with LWP Claims Solutions, Inc. for workers’ compensation claims administration services, increasing the total not to exceed amount under the Agreement to $1,745,311, subject to appropriation which will be proposed in the FY 2025-26 budget, and extending the term date June 30, 2026.
BACKGROUND:
At the April 2, 2018, City Council meeting, the Council authorized the City Manager to enter into a Professional Services Agreement with LWP Claims Solutions, Inc. (LWP), effective May 1, 2018, to provide workers’ compensation claims administration services for the City. The City entered into a threeyear agreement with LWP. At that time, LWP provided pricing options to continue into the fourth year and a fifth year, and after working with LWP and finding their services satisfactory, the City decided to remain in the contract for the fourth and fifth years, for a total not to exceed amount of $904,089.
On May 1, 2023, the City entered into a First Amendment to extend the agreement term by three years (May 1, 2023 – April 30, 2026) and increase the agreement to add $586,826, increasing the total not to exceed amount under the Agreement to $1,490,915.
ANALYSIS:
The City desires to provide employees who are in the workers’ compensation process with continuity of service as there are ongoing claims handled by LWP. In addition, utilizing LWP as a third-party SAN RAFAEL CITY COUNCIL AGENDA REPORT / Page: 2
administrator (TPA) aids the City in ensuring efficient claims management, cost control, and compliance with regulatory requirements. LWP brings specialized expertise in handling workers’ compensation claims, reducing the administrative workload on City staff, and ensuring that injured employees receive timely and appropriate benefits. By leveraging the experience of LWP, the City can minimize fraudulent claims, expedite return-to-work programs, and manage medical costs effectively. Additionally, LWP’s online portal allows Human Resources and Risk Management to access advanced data analytics and reporting tools that help track claims, identify trends, implement safety measures, and improve workplace conditions, reducing future claims and liabilities. As a measure of best practice, the City will conduct a Request for Prospal process in FY 2025-26, to assess other TPAs who handle Workers’ Compensation administration.
In consideration of aligning the professional services agreement timeline to the fiscal year and above mentioned cost increases, staff recommends executing a Second Amendment to add $254,396 to the agreement (Attachment 2) and adjusting the term, extending it to June 30, 2026, for a total not to exceed of $1,745,311.
FISCAL IMPACT:
The staff recommendation would authorize expenditure of $254,396 for third party workers’ compensation administrative services through June 30, 2026. Funding to cover the extension and additional fees will be covered by appropriations in the Non-Departmental FY 2025-26 budget, and through the Workers’ Compensation Fund (Fund 606) for FY 2025-26.
OPTIONS:
The City Council has the following options to consider on this matter:
1. Authorize the City Manager to enter into the Second Amendment to the Professional Services Agreement as recommended.
2. Do not authorize the City Manager to enter into the Second Amendment to the Professional Services Agreement and provide further direction to staff.
RECOMMENDED ACTION:
Staff recommend that the City Council adopt a resolution authorizing the City Manager to execute the second amendment to the Professional Services Agreement with LWP Claims Solutions, Inc. for workers’ compensation claims administration services increasing the total not to exceed amount under the Agreement to $1,745,311, subject to appropriation which will be proposed in the FY 2025-26 budget, and extending the term date June 30, 2026.
ATTACHMENTS:
1. Resolution to Approve the Second Amendment to the Professional Services Agreement with LWP Claims Solutions, Inc., for Workers’ Compensation Claims Administration
2. Second Amendment to the Claims Administration Agreement with LWP Claims Solutions, Inc. For Workers’ Compensation Claims Administration Services
RESOLUTION NO.
RESOLUTION AUTHORIZING THE CITY MANAGER TO EXECUTE THE SECOND
AMENDMENT TO THE PROFESSIONAL SERVICES AGREEMENT WITH LWP CLAIMS SOLUTIONS, INC, FOR WORKERS’ COMPENSATION CLAIMS
ADMINISTRATION SERVICES, INCREASING THE TOTAL NOT TO EXCEED AMOUNT UNDER THE AGREEMENT TO $1,745,311, SUBJECT TO
APPROPRIATION, AND EXTENDING THE TERM DATE JUNE 30, 2026 WHEREAS, on April 2, 2018, the City Council authorized the City Manager to enter into a Professional Services Agreement with LWP Claims Solutions, Inc., to provide workers' compensation claims administration services, effective May 1, 2018, with a total not to exceed amount of $904,089 for a five-year term; and WHEREAS, on May 1, 2023, an informal First Amendment to the Agreement was entered into to extend the term of the Agreement through April 30, 2026, and to increase the not to exceed amount under the Agreement to $1,490,915; and WHEREAS, it has been determined that an additional extension of the Agreement term through June 30, 2026, is necessary to align the professional services agreement with the City’s fiscal year, and to ensure continuity of services for ongoing workers' compensation claims; and
WHEREAS, staff recommends executing a Second Amendment to add $254,396 to the agreement and adjusting the term, extending it to June 30, 2026, and increasing the total not to exceed under the Agreement to $1,745,311; and WHEREAS, staff recommends authorizing the expenditure of $254,396 for third party workers’ compensation administrative services through June 30, 2026; and WHEREAS, funding to cover the extension and additional fees will be covered by appropriations in the Non-Departmental FY 2025-26 budget, and through the Workers’ Compensation Fund (Fund 606) for FY 2025-26; and
WHEREAS, the City desires to maintain continuity of service for workers’ compensation claims, ensuring efficient claims management, cost control, and compliance with regulatory requirements, and to support City staff in managing these claims effectively.
NOW, THEREFORE BE IT RESOLVED, that the City Council hereby finds that the foregoing recitals are true and correct and authorizes the City Manager to execute the second amendment to the Professional Services Agreement with LPW Claims Solutions, Inc., increasing the total not to exceed amount under the Agreement to $1,745,311, subject to appropriation, and extending the term date June 30, 2026.
I, LINDSAY LARA, Clerk of the City of San Rafael, hereby certify that the foregoing Resolution was duly and regularly introduced and adopted at a regular meeting of the City Council of the City of San Rafael, held on Monday, the 7th day of April 2025, by the following vote, to wit:
AYES: Councilmembers:
NOES: Councilmembers:
ABSENT: Councilmembers:
Lindsay Lara, City Clerk
1 SECOND AMENDMENT TO THE CLAIMS ADMINISTRATION AGREEMENT WITH LWP CLAIMS SOLUTIONS, INC. FOR WORKERS’ COMPENSATION CLAIMS
ADMINISTRATION SERVICES
THIS SECOND AMENDMENT to the Claims Administration Agreement by and between the CITY OF SAN RAFAEL (hereinafter “CITY”), and LWP CLAIMS SOLUTIONS, INC. (hereinafter “CONSULTANT”), is made and entered into as of ______________________.
RECITALS
WHEREAS, the CITY and CONSULTANT entered into a Claims Administration Agreement dated May 1, 2018, to perform professional services in connection with CITY’S workers’ compensation claims administration, for an amount not to exceed $904,089 (the “Agreement”); and
WHEREAS, the CITY and CONSULTANT informally entered into a First Amendment to the Agreement dated May 1, 2023, to extend the Agreement term by three years, for an amount not to exceed $586,826 and increasing the total not to exceed under the Agreement to $1,490,915; and
WHEREAS, under the terms of the Agreement, the Term of the Agreement is to expire on April 30, 2026; however CITY and CONSULTANT, agreed informally that the Term of the Agreement would be extended, and now wish to ratify and memorialize that extension; and
WHEREAS, the CITY and CONSULTANT wish to amend the Agreement to modify the total compensation payable to CONSULTANT so as to authorize CONSULTANT to continue providing worker’s compensation claims administration services.
AMENDMENT TO AGREEMENT
NOW, THEREFORE, the parties hereby agree to amend the Agreement as follows:
1. The First Amendment to the Agreement is hereby ratified.
2. Article I of the Agreement, entitled “TERM”, is hereby amended, to extend the Agreement term by two (2) months, through June 30, 2026. 2 3. Article VIII of the Agreement, entitled “COMPENSATION” is hereby amended to include additional compensation payable to CONSULTANT in an amount of $33,570 for the annual fee, and in a not to exceed amount of $54,600 for additional services described in Exhibit A to this Second Amendment, on a basis in accordance with the Exhibit A, changing the total not-to-exceed amount under the agreement to $1,745,311, subject to funds being appropriated in the Fiscal Year 2025-26 budget.
3. Except as specifically amended herein, all of the other provisions, terms and obligations of the Agreement between the parties shall remain valid and shall be in full force.
IN WITNESS WHEREOF, the parties have executed this Second Amendment on the day, month, and year first above written.
CITY OF SAN RAFAEL CONSULTANT
______________________________ By:______________________________ CRISTINE ALILOVICH, City Manager
Name:____________________________
Title:_____________________________
ATTEST:
[If Consultant is a corporation, add
signature of second corporate officer]
______________________________
LINDSAY LARA, City Clerk
By:_____________________________
APPROVED AS TO FORM:
Name:____________________________
Title:_____________________________
______________________________
ANDREA VISVESHWARA,
Chief Assistant City Attorney