TO:Andrew P. Powers, City Manager
FROM:Tim Giles, Human Resources Director
DATE:December 5, 2023
SUBJECT: Liability Claims Administrator Services
RECOMMENDATION:
1. Approve three-year agreement from January 1, 2024, through December 31, 2026, with one, two-year extension option to George Hills Company, Inc. (Rancho Cordova, CA) for liability claims administrator services in an amount not to exceed $280,000.
2. Authorize expenditure in the amount of $28,000 for FY 2023-24 and $56,000 for FY 2024-25 from A/C #711-0520-686-5640 (Internal Liability Insurance Fund, Management Fees).
3. Find that this action is not a “Project” as defined under the California Environmental Quality Act.
FINANCIAL IMPACT:
No Additional Funding Requested. Minimal staff time required to prepare the report is included in the Adopted FY 2023-24 General Fund Budget. $28,000 is included in the Adopted FY 2023-24 and $56,000 is included in the Adopted FY 2024-25 Internal Liability Insurance Fund Budget. The additional funds for the remaining contract term will be included in future biennial budget processes.
BACKGROUND:
The City, with the help of a third-party administrator, manages liability claims for allegations of damages submitted by the public. This process involves investigating the claims and authorizing settlements or payments whenever needed. A third-party claims administrator performs crucial functions related to the management of liability claims. They partner on many aspects of the claims process, such as thoroughly reviewing each claim, gathering necessary
Liability Claims Administrator Services
December 5, 2023
information, conducting investigations as needed, and evaluating the extent of liability. They also communicate with claimants, insurance carriers, legal representatives, and other stakeholders to facilitate efficient resolution, which may include settlement negotiations.
The City faces an average of approximately 55 new claims each year. Operating under a self-insured model, the City holds coverage for liabilities up to $1,000,000.
Additionally, the City has proactively secured excess liability insurance to mitigate potential risks beyond this threshold. This prudent approach has guaranteed that in cases of extensive claims or higher financial exposure, the City is well-protected and equipped to manage potential financial burdens while upholding its commitments to claimants.
Since January 2019, George Hills Company, Inc. has been providing professional claims administrator services for the City. Overall, George Hills Company, Inc. contributes to the City's goal of efficient claims management by providing expertise, impartiality, and a structured approach to handling liability claims. The current agreement expires December 31, 2023.
DISCUSSION/ANALYSIS:
In accordance with Thousand Oaks Municipal Code Section 3-10.401, on September 15, 2023, the City released and publicly advertised a Request for Proposals/Qualifications (RFP/Q) for Third-Party Claims Administration Services in the Thousand Oaks Acorn newspaper and the City’s procurement website.
Unlike the low bid requirements of the Public Contract Code, contracts for professional, management, general, or special services should only be awarded when an adequate level of experience, competence, training, credentials, resources, staffing, and other professional qualifications necessary for the services solicited are demonstrated.
Three proposals were received. The list of proposers is as follows:
Company Location
1. Carl Warren & Company Tustin, CA
2. George Hills Company, Inc. Rancho Cordova, CA
3. Sedgwick Claims Mgmt. Services, Inc. Memphis, TN
As part of the RFP/Q process, an evaluation committee was created consisting of representatives from the City’s Human Resources Department and City Attorney’s Office. The committee’s evaluation of proposals received was based on a variety of factors; all of which were designed to decipher which system(s) would create the overall best value for the City. Through the proposal evaluation process, the Liability Claims Administrator Services
December 5, 2023
committee determined that George Hills Company, Inc. is the most qualified vendor for providing the best value systems for the City. Factors that contributed to this include:
1. Relevant experience and demonstrated competence
2. Reasonableness of costs and fees
3. Demonstrated understanding of work required and approach
4. Quality, clarity, responsiveness, and overall impression of proposal Services under this agreement include analysis of claim details and documents, assisting in determining liability and damages, ensuring compliance with legal regulations, negotiating fair settlements under direction and oversight of the City, and maintaining comprehensive documentation.
The estimated cost breakdown is shown in the following table:
Third-Party Liability Claims Administrator Services Agreement Fiscal Year: Cost:
2023-24* $28,000
2024-25 $56,000
2025-26 $56,000
2026-27** $56,000
2027-28*** $56,000
2028-29*** $28,000
Total Cost: $280,000
* Agreement begins 1/1/24
**Agreement ends 12/31/26
***optional 2-year extension to end 12/31/28
Staff recommends award of Third-Party Liability Claims Administrator Services Agreement (Attachment #1) with George Hills Company, Inc.
COUNCIL GOAL COMPLIANCE:
Meets the following City Council goal:
C. Operate City government in a fiscally and managerially responsible and prudent manner to ensure that the City of Thousand Oaks remains one of California's most desirable places to live, work, visit, recreate, and raise a family.
Attachments:
Attachment #1 – Third Party Liability Claims Administrator Services Agreement
HRD: 180-10\sj\H:Common\StaffReports\12052023 Staff Report Third Party Liability Claims Administration