City Council
Report
City Council Meeting: January 24, 2023
Agenda Item: 5.E
1 of 4
To: Mayor and City Council
From: Gigi Decavalles-Hughes, Director, Finance Department, Risk Management Subject: Award Agreement to TCS Risk Management Services, LLC for Workers’ Compensation Program Data Analysis and Reporting Services Recommended Action
Staff recommends that the City Council:
1. Adopt a finding of no possibility of significant effect pursuant to Section 15061(b)(3) (Common Sense Exemption) of the California Environmental Quality Act (CEQA) Guidelines.
2. Award RFP# 330 to TCS Risk Management Services, LLC (“TCS) for workers’ compensation program data analysis and reporting services;
3. Authorize the City Manager to negotiate and execute an agreement with TCS, in an amount not to exceed $437,897 over a five-year period, with future year funding contingent on Council budget approval.
Summary
The City has an ongoing need for a consultant to prepare regular in-depth analyses detailing the financial and operational position of the City’s Workers’ Compensation Program. This data is critical for staff to closely monitor program performance and focus cost containment efforts on areas which yield the greatest cost savings. Primarily due to these efforts, the City’s workers’ compensation liabilities (i.e., the value of all open claims) at the end of FY 2021-22 decreased by $4.6 million from three years prior.
Given the sophisticated nature of the data being generated, the City does not have the resources for this reporting to be produced in-house. With the current agreement for workers’ compensation program data analysis and reporting services set to expire, staff solicited proposals in accordance with procurement policies and received responses from three consultants. A panel of City staff subsequently evaluated each firm’s 2 of 4
proposal and determined that TCS was the best qualified firm. The Evaluation Committee recommends the City pursue a five-year agreement with TCS at a cost of $437,897.
Discussion
The Risk Management Division is responsible for managing the City’s Workers’ Compensation Program, and in this capacity, ensures that the program operates costeffectively and in compliance with State regulations. Tracking the financial and operational performance of the program is vital to this effort. Therefore, for the past twelve years, staff has utilized the services of TCS to prepare in-depth quarterly performance reports detailing the program’s performance, identifying negative trends in the program, and suggesting strategies to address these trends. The consultant also meets with City staff regularly to review key findings from the report and develop cost containment efforts to combat any negative trends. Staff has utilized these analyses to track the progress of program cost containment efforts to determine their effectiveness and make adjustments as necessary.
The most significant cost containment effort to date is a program in the Department of Transportation to determine the most cost-effective model for managing workers’ compensation claims. In November 2017, the City embarked on a pilot program in which claims administration responsibilities for all Big Blue Bus claims transferred from the City’s in-house staff to a third-party administrator (TPA). For the duration of the pilot, TCS produced quarterly reports evaluating the program’s success against a set of objective performance measures. These reports provided the data necessary for staff to closely monitor the program’s performance and gauge the effectiveness of a TPA model for administration of the City’s workers’ compensation claims. This data ultimately supported the Council’s July 12, 2022 (Attachment A) decision to authorize a permanent shift to a TPA model for the management of DOT’s workers’ compensation claims.
Vendor/Consultant Selection
Bidder Recommendation
3 of 4
Best Qualified Person/Firm Best Qualified Vendor or Firm Evaluation Criteria Training/credentials/experience, competence/skill, results track record, sample materials, reputation, references, and cost.
Municipal Code SMMC 2.24.190
RFPs Received
Angela Livingston
Collaborations, Inc.
Northshore Risk Consulting, LLC TCS Risk Management
Services, LLC
RFP Data
Posted On Posted On
Advertised In
(City Charter & SMMC)
Vendors
Downloaded
Date Publicly
Opened
09/16/2022 City's Online
Bidding Site Santa Monica Daily Press 12 10/13/2022
Justification to Award
Staff evaluated the RFP submission from the three firms. Based on the evaluation criteria established in the RFP and criteria in SMMC 2.24.190, staff recommends TCS Risk Management Services, LLC as the best qualified firm to provide workers’ program consulting services based on their extensive experience with preparing comprehensive program data analysis for municipal clients, the quality of their sample reporting, proven track record of providing this service to the City and a competitively priced proposal.
Environmental Review
The award of an agreement for data analysis and reporting services would have no possibility of significant effect on the environment, and therefore, is exempt pursuant to Section 15061(b)(3) (Common Sense Exemption) of the California Environmental Quality Act (CEQA) Guidelines.
Financial Impacts and Budget Actions
Staff seeks authority to approve funding from the Self-Insurance, Workers’ Compensation Fund to award a five-year agreement with TCS Risk Management Services for workers’ compensation program data analysis and reporting services. The annual cost for the first two years of the agreement is $85,500, which is the same as the cost for TCS’s current agreement; each year thereafter contains an annual increase of 2%.
Contract/Agreement/Purchase Order Request
Request Amount
FY 2022-23 Budget
Department/CIP Account #
Total Contract
Amount
$42,750 74800002.552010 $437,897
Future year funding is contingent on Council budget approval. 4 of 4
Prepared By: Oles Gordeev, Risk Manager
Approved Forwarded to Council
Attachments:
A. 7.12.22 Staff Report (Attachment A)
B. TCS RMS Oaks Form (Attachment B)