Staff Report
PREPARED BY: LISA VELASCO
Human Resources Director
Reviewed by: Town Manager, Assistant Town Manager, Town Attorney, and Finance Director
C:\Users\slombardo\Downloads\Staff_Report_-_ICS_Agreement_V2.docx 8/16/2018 3:58 PM LV
110 E. Main Street Los Gatos, CA 95030 ● 406-354-6832
www.losgatosca.gov
TOWN OF LOS GATOS
COUNCIL AGENDA REPORT
MEETING DATE: 08/21/2018
ITEM NO: 06
DATE: AUGUST 15, 2018
TO: MAYOR AND TOWN COUNCIL
FROM: LAUREL PREVETTI, TOWN MANAGER
SUBJECT: AUTHORIZE THE TOWN MANAGER TO EXECUTE A FIFTH AMENDMENT TO
THE PROFESSIONAL SERVICES AGREEMENT WITH INNOVATIVE CLAIMS
SOLUTIONS, INC. TO EXTEND THE CONTRACT FOR TEN MONTHS TO
PERFORM WORKERS’ COMPENSATION CLAIMS ADMINISTRATION
RECOMMENDATION:
Authorize the Town Manager to execute a fifth amendment (Attachment 6) to the professional
services agreement with Innovative Claims Solutions, Inc. to extend the contract for ten months
to perform workers’ compensation claims administration.
BACKGROUND:
The Town uses Innovative Claims Solutions, Inc. (ICS), a third-party administrator, for its self-
funded workers’ compensation program. ICS was selected through a competitive bid process
conducted in 2010. The original agreement with ICS was established through June 30, 2012. In
August 2013, the Town extended the contract through June 30, 2016. Three subsequent one-
year extensions were approved through August 31, 2018.
DISCUSSION:
Due to the length of time since a formal request for proposals (RFP) has been solicited for
workers’ compensation claims administration services, a new request will be sent to vendors
before the end of fiscal year 18/19. Since the timeframe before the current agreement expires
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SUBJECT: AUTHORIZE THE TOWN MANAGER TO EXECUTE A FIFTH AMENDMENT TO THE
PROFESSIONAL SERVICES AGREEMENT WITH INNOVATIVE CLAIMS
SOLUTIONS, INC. TO EXTEND THE CONTRACT FOR TEN MONTHS TO PERFORM
WORKERS’ COMPENSATION CLAIMS ADMINISTRATION
110 E. Main Street Los Gatos, CA 95030 ● 406-354-68xx
www.facebook.com/losgatosca
DISCUSSION (cont’d):
is brief and to allow the effective date of a new agreement to coincide with the fiscal year, ICS is
amenable to extending the agreement for ten additional months, at the lower renewal rate,
which will also allow sufficient time for the RFP process to be completed.
CONCLUSION:
Staff recommends that ICS continue to serve as the Town’s third-party administrator for an
additional ten months through June 30, 2019, at a renewal rate reduced from $4,292 to $4,067
per month based on claims submission experience.
FISCAL IMPACT:
ICS has agreed to extend the agreement through June 30, 2019 at the lower renewal rate that
was effective on July 1, 2018. The ten-month 2018/19 fiscal impact is a total reduction of
$2,250. Funding to support this agreement is in the Adopted Operating Budget.
ENVIRONMENTAL ASSESSMENT:
This is not a project defined under CEQA, and no further action is required.
Attachments:
1. Original Agreement
2. First Amendment to Agreement
3. Second Amendment to Agreement
4. Third Amendment to Agreement
5. Fourth Amendment to Agreement
6. Proposed Fifth Amendment to Agreement