2009122106MEETING DATE: December 21, 2009
ITEM NO:
COUNCIL AGENDA REPORT
DATE: December 16, 2009
TO: MAYOR AND TOWN COUNCIL
FROM: GREG LARSON, TOWN MANAGER A--•
SUBJECT: ADOPT RESOLUTION AUTHORIZING THE TOWN MANAGER TO
EXECUTE AN AMENDMENT TO THE PROFESSIONAL SERVICES
AGREEMENT WITH INNOVATIVE CLAIMS SOLUTIONS, INC., TO
EXTEND THE CONTRACT FOR SIX MONTHS TO PERFORM
WORKERS' COMPENSATION CLAIMS ADMINISTRATION
RECOMMENDATION:
It is recommended that Council adopt a resolution authorizing the Town Manager to
execute an amendment to the Professional Services Agreement with Innovative Claims
Solutions, Inc., to extend the contract for the performance of Workers' Compensation
claims administration through June 30, 2010.
BACKGROUND:
In 2002, the Town entered into a three-year contract with Innovative Claim Solutions,
Inc. (ICS) to serve as the third -party administrator for the Town's Workers'
Compensation program. Annual renewal for professional services requires an
amendment to the contract. Council authorized the renewal of contract with ICS for a
one-year period in July 2005 and a three-year period in June 2006. The last amended
contract with ICS was further extended for six months beginning in July 1, 2009, and is
scheduled to expire on December 31, 2009. The Human Resources Department will be
soliciting proposals from qualified third party administrators and requires an additional
six-month extension on the contract with ICS while it participates in the formal bid
process.
PREPARED BY: RUMI PORTIL'
Human Resources ' ector
C:\Users\mbermudez\Desktop\RTC.ICS Amendment.12.21.09.doc
Reviewed by: Assistant Town Manager
Clerk Administrator /&i Finance
Town Attorney
Community Development
PAGE 2
MAYOR AND TOWN COUNCIL
SUBJECT: ADOPT RESOLUTION AUTHORIZING THE TOWN MANAGER TO
EXECUTE AN AMENDMENT TO THE PROFESSIONAL SERVICES
AGREEMENT WITH INNOVATIVE CLAIMS SOLUTIONS, INC., TO
EXTEND THE CONTRACT FOR SIX MONTHS TO PERFORM
WORKERS' COMPENSATION CLAIMS ADMINISTRATION
DATE: December 16, 2009
DISCUSSION:
The Town's purchasing practice does not recommend committing the Town to a multi-
year contract over five fiscal years. Accordingly, the Human Resources Department will
be soliciting proposals from qualified third party administrators (TPA) to administer the
Town's Workers' Compensation claims upon the expiration of the current contract with
ICS. Formal bid or Request for Proposals (RFP) process is required for purchases more
than $50,000.
The formal bid process requires, among many things, the reasonable public notice of the
invitation for bids as well as the public opening of bids in the presence of one or more
witnesses. Therefore, an extension of the current contract with ICS is necessary while
Town staff engages in an open, fair and competitive bid process for Workers'
Compensation TPA (see Proposed Timeline for RFP attached as Exhibit A). This will
ensure no disruption in the administration of Town's Workers' Compensation claims
while Town staff participates in the selection process for a Workers' Compensation TPA.
CONCLUSION:
The contract for Workers' Compensation claims administration is estimated to exceed
$50,000, requiring the Town to participate in a formal bid process. It is recommended
that ICS continue to serve as the Town's third party administrator through June 30, 2010,
under the same terms as the last amended contract. This continuation will minimize
disruption in the management of claims while Town staff participates in the selection
process for a Workers' Compensation TPA.
ENVIRONMENTAL ASSESSMENT:
The re -bid for a Workers' Compensation TPA is not a project defined under CEQA, and
no further action is required.
FISCAL IMPACT:
The Town is currently paying $3,667.33 a month in professional service fees to ICS to
serve as the Town's Workers' Compensation third party administrator. ICS has agreed to
extend the contract for an additional six months, or through June 30, 2010, at the same
rate. The Town has included this professional service fees in the current fiscal year
budget. Thus, an amendment to the contract with ICS will result in no fiscal impact.
PAGE 3
MAYOR AND TOWN COUNCIL
SUBJECT: ADOPT RESOLUTION AUTHORIZING THE TOWN MANAGER TO
EXECUTE AN AMENDMENT TO THE PROFESSIONAL SERVICES
AGREEMENT WITH INNOVATIVE CLAIMS SOLUTIONS, INC., TO
EXTEND THE CONTRACT FOR SIX MONTHS TO PERFORM
WORKERS' COMPENSATION CLAIMS ADMINISTRATION
DATE: December 16, 2009
Attachments:
Resolution Authorizing the Town Manager to Execute an Amendment to the Professional
Services Agreement with Innovative Claims Solutions, Inc., to Extend the Contract
through June 30, 2010 for the Performance of Workers' Compensation Claims
Administration Services.
Exhibit A: Proposed Timeline for Request for Proposals.
Distribution: Cheryl Westemen, Innovative Claims Solutions, Inc., PO Box 5128, San
Ramon, CA 94583
RESOLUTION
ADOPT RESOLUTION AUTHORIZING THE TOWN MANAGER TO EXECUTE A THIRD
AMENDMENT TO THE PROFESSIONAL SERVICES AGREEMENT WITH INNOVATIVE
CLAIMS SOLUTIONS, INC., TO EXTEND THE CONTRACT FOR SIX MONTHS TO
PERFORM WORKERS' COMPENSATION CLAIMS ADMINISTRATION
WHEREAS, on September 30, 2002, the Town of Los Gatos entered into an
agreement with Innovative Claims Solutions, Inc., to serve as the third party administrator for the
Town's Workers' Compensation program.
WHEREAS, on June 20, 2005, the Town of Los Gatos extended the agreement with
Innovative Claims Solutions, Inc., to serve as the third party administrator for the Town's
Workers' Compensation program for an additional year.
WHEREAS, on June 19, 2006, the Town of Los Gatos extended the agreement with
Innovative Claims Solutions, Inc., to serve as the third party administrator for the Town's
Workers' Compensation program for an additional three years.
WHEREAS, a third Amendment to the Agreement is necessary to extend the
agreement through June 30, 2010 to complete an open, fair and competitive bid process for a
Workers' Compensation TPA.
WHEREAS, a third Amendment to the Agreement is necessary to continue services
related to Workers' Compensation administration services.
WHEREAS, the Town is currently paying $3,667.33 in professional Service fees
monthly to ICS to serve as the Town's Workers' Compensation third party administrator.
WHEREAS, a third amendment to extend the agreement for six months at the same
rate would result in an annual fee in FY 2009-10 of $44,007.
-1-
Town of Los Gatos
Sealed Request for Proposals
Workers' Compensation Claims Administration Services
PROPOSED TIMELINE FOR RFP (IEY DATES IN BOLD)
Issue Invitation for Bids (RFP)
February 1, 2010
Deadline for Receipt of Proposals
March 3, 2010
Complete Evaluation of Proposals
March 12, 2010
Invite Top Bidders to Participate in
Presentation/Interview;
Mail/Email Non -Selection Letters
March 15, 2010
Bidder Presentation
March 23, 2010
Notify All Bidders of Selected TPA
March 26, 2010
Prepare Report to Council
March 29, 2010
Report to Council Due to Town
Manager
April 5, 2010
Date of Council Meeting (Contract
Award)
April 19, 2010
Contract Start -Up
July 1, 2010
N:\MGR\AdminWorkFiles\2009 Council Reports\Proposed Timeline for RFP_1.doc
EXHIBIT A