City Council
Report
City Council Meeting: March 19, 2024
Agenda Item: 5.F
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To: Mayor and City Council
From: Oscar Santiago, Director, Finance Department, Risk Management Subject: Approval of Fourth Modification to Agreement with Origami Risk, Inc. for Claims Management Software Subscription Services
Recommended Action
Staff recommends that the City Council:
1. Authorize the City Manager to negotiate and execute a fourth modification to agreement #10275 in the amount of $810,525 with Origami Risk, Inc., an Illinoisbased company, for Risk Management Information System software subscription services for the Finance Department. This will result in a thirteen-year amended agreement with a new total amount not to exceed $1,764,278 with future year funding contingent on Council budget approval; and
2. Adopt a finding of no significant effect pursuant to Section 15061(b)(3) (Common Sense Exemption) of the California Environmental Quality Act (CEQA) Guidelines.
Summary
In 2016, the City purchased a Risk Management Information System (RMIS) from Origami Risk, Inc. (Origami). The system is necessary for staff to track, manage, and report on the City’s liability and workers’ compensation claims in compliance with various laws and regulations. Since the system was implemented, City staff has worked with Origami to implement additional features to the system, including giving City employees the ability to enter liability incident reports directly into the system. The current agreement with Origami that includes an ongoing software subscription and maintenance, and support services is set to expire in May 2024. To continue using the existing RMIS, receive critical technical support, and to build out expanded features including citywide insurance compliance, a modification to extend the term of the agreement by an additional five years is required. This fourth modification will increase 2 of 5
the contract by $810,525 resulting in a thirteen-year amended agreement in an amount not to exceed $1,764,278. The increased costs of the contract include continuing performance and security upgrades to the RMIS as well as costs to build out and continually service updated and added features, an insurance portal, which will simplify and automate the process of managing insurance compliance of City insureds that have agreements with the City. Origami is the only vendor qualified to provide support for its proprietary RMIS.
Discussion
The Finance Department oversees the City’s two Self-Insurance Programs. The Liability Program provides funding to investigate, defend and pay all damages for general, auto and transit liability claims, and lawsuits filed against the City. The Workers’ Compensation Program funds all expenses associated with employee work-related injuries, including medical care and indemnity payments. Risk Management staff is responsible for processing all liability claims and most workers’ compensation claims.
Staff utilize a RMIS for routine tasks such as issuing payments, tracking claim activity, updating reserves, and generating notices. The system is also used to provide required workers’ compensation reporting to the California Department of Industrial Relations and the Centers for Medicare and Medicaid Services. In addition, a RMIS generates data to track the overall financial and operational performance of the Self-Insurance Programs.
On March 22, 2016 (Attachment A), Council approved an agreement with Origami for claims management software subscription services after staff completed an extensive RFP process. The implementation of the Origami RMIS was completed in January 2017. Since then, it has been a highly functioning and easy-to-use system, with several unique features that have enabled staff to efficiently administer claims. The most valuable feature is the portal for employees to submit injury reports online, which allows workers’ compensation claims to be set-up faster, which in turn, has sped up authorization of initial medical care, commencement of the investigation process, issuance of benefit payments, and return of injured employees to work. In April 2023 the portal was expanded to provide a capability for employees citywide to submit liability 3 of 5
and City property damage reports directly into the system. Origami offers other robust capabilities, such as automated reporting, system generated emails, and integration with other systems such as Tyler Munis.
The current agreement with Origami expires this May. A fourth modification extending the agreement is necessary to continue to receive regular system updates and support services. The Origami software is a proprietary product and only Origami can provide these services for its software. Engaging a new software maintenance and support company would necessitate purchasing a new claims management system, which would be much more costly than maintaining the current system and would involve significant disruption to Risk Management’s operations. In addition, staff will now utilize Origami’s insurance compliance module to automate and streamline the process of keeping in compliance the roughly 1,400 insureds that currently have active agreements with the City.
To protect the City from risks associated with each agreement, Risk Management works with City staff to select the appropriate insurance requirements for each agreement, procure the proper insurance documentation from the insured, and then keeps the documentation on file for the life of the agreement. Each year the City receives, reviews, and stores thousands of certificates and endorsements, a process which takes up many hours of staff time for Risk Management, citywide staff, and the insureds themselves.
As it did with the City’s workers’ compensation and liability claims programs, the Origami system will enable Risk Management to create a streamlined and automated Insurance Compliance system that will not only save hours of staff time but will also help protect the City’s interests.
Origami’s RMIS system is a benchmark for the Risk Management Industry. It is a userfriendly, easily configurable system that has continued to meet the expanding needs of the City’s Risk Management Program and can continue to do so for years to come. 4 of 5
Environmental Review
This contract modification is exempt from CEQA pursuant to Section 15061(b)(3) of the CEQA Guidelines. The agreement is covered by the common sense exemption which states that CEQA does not apply, “where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment.” The contract modification will provide for a software system that would not have a physical effect on the environment. Therefore, it can be seen with certainty that actions would not result in adverse physical impacts on the environment, and as such, is exempt from CEQA.
Past Council Actions
Meeting Date Description
March 22, 2016
(attachment A)
Approval of agreement with Origami Risk, Inc. following RFP process.
April 21, 2021
(attachment B)
Most recent modification to agreement with Origami Risk, Inc.
Financial Impacts and Budget Actions
The agreement will continue to be funded by the City’s Self-Insurance Funds, which are financed with contributions from all City Departments. Staff seeks authority to approve available funding from the General Liability/Auto, Transit, and Workers’ Compensation Funds to increase the amount of the agreement with Origami Risk, Inc. for claims management software subscription services. Funds are available in the adopted FY 2023-24 budget. Future year funding is contingent on Council budget approval.
Contract Modification Request
Agreement #
Current Authorized
Amount
FY 2023-24
Modified Request
Amount
FY 2023-24 Budget
Dept Account #
Total Revised
Contract Amount
10275 $238,438.00 $202,631.00 72800002.529230 $441,070.00 10275 $238,438.00 $202,631.00 73800002.529230 $441,070.00 10275 $476,877.00 $405,263.00 74800002.529230 $882,138.00 TOTAL $953,753.00 $810,525.00 $1,764,278.00
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Prepared By: Michael Spenelli, Risk Management Analyst
Approved Forwarded to Council
Attachments:
A. Attachment A - Origami Original Contract
B. Attachment B - Origami Third Modification
C. 3-22-16 Staff Report
D. 4-27-21 Staff Report
E. Oaks Initiative Form
F. Levine Act Disclosure Form