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1993-089-Authorizing The Town Manager To Execute An Agreement With Willis Corroon For Third Party Admin Of The Town's Workers Compensation ProgramRESOLUTION 1993 -89 RESOLUTION OF THE TOWN OF LOS GATOS AUTHORIZING THE TOWN MANAGER TO EXECUTE AN AGREEMENT WITH WILLIS CORROON FOR THIRD PARTY ADMINISTRATION OF THE TOWN'S WORKERS' COMPENSATION PROGRAM RESOLVED, by the Town Council of the Town of Los Gatos, County of Santa Clara, State of California that the Town of Los Gatos enter into an agreement with Willis Corroon for third party administration of Town's Workers' Compensation Program on the terms and conditions outlined in attached Exhibit A, and that the Town Manager is authorized, and is hereby directed, to execute said agreement in the name and on behalf of the Town of Los Gatos. PASSED AND ADOPTED at a regular meeting of the Town Council of the Town of Los Gatos, California, held on the 21st day of June, 1993 by the following vote: COUNCIL MEMBERS: AYES: Randy Attaway, Steven Blanton, Linda Lubeck Mayor Joanne Benjamin NAYES: None ABSENT: Patrick O'Laughlin ABSTAIN: None SIGNED: S GATOS OR OF THE TOW F LOS GATOS , CALIFOR A ATTEST: CLERK OF THE TOWN OF LOS EIATOS— LOS GATOS, CALIFORNIA RISK MANAGEMENT SERVICE AGREEMENT This Agreement entered into this 1st day of July, 1993 by and between the TOWN OF LOS GATOS, hereafter referred to as "Client ", and WILLIS CORROON ADMINISTRATIVE SERVICES CORPORATION, hereafter referred to as the "Administrator ", for the administration of Workers' Compensation claims in the State of California and related matters. SECTION I: The "Administrator" The "Administrator" shall provide the following services to "Client ": 1. Investigate, adjust and otherwise administer all of the Workers' Compensation claims, subrogation claims related thereto, vocational rehabilitation claims, and coordinate for disability retirement for local safety members of Public Employees Retirement Systems (PERS) pertaining to employees of "Client" during the period of this Agreement. 2. Determine the compensability, if any, the settlement thereof and payment of all claims with funds provided by "Client ". 3. Prepare and file all claim reports in accordance with established procedures and State guidelines. 4. Maintain a separate claim file on each reported claim. 5. Maintain computerized loss reports disclosing the following pertinent claims data, as well as a copy of each check issued: a. Monthly reports of occurrences by department /division showing program year, date and time of occurrence, name of claimant, type of occurrence and amounts paid or reserved, part of body affected, accident type, open /closed status. b. Cumulative summaries on at least a quarterly basis that summarize each loss and occurrence statistics to date, as well as indicating part of body, accident type, time of day, day of week, length of service and age. 6. Prepare the Self- Insured Annual Report. 7. Process "Client's" Internal Revenue Service Form 1099 documents. 8. Coordinate all litigation and activity with "Client" selected legal counsel. All referrals will be approved by "Client ". 9. Establish appropriate reserves for each file. 10. Advise the excess carrier of claims which may exceed the self - insured retention as outlined in coverages provided by the excess insurance company. Page 1 of 7 11. Keep "Client" informed of major claims with reserves in excess of Twenty Thousand Dollars ($20,000). 12. Except as respect to those areas of activity expressly delegated to "Administrator ", "Administrator" shall take no action on behalf of "Client" to settle any claim, to obligate "Client" to payment of any settlement funds, or to initiate or control any litigation or other formal administrative proceedings, without prior approval of "Client ". In no event shall "Administrator" settle any claim on behalf of the Town with respect to any individual claim, in excess of One Thousand Five Hundred Dollars ($1,500). 13. Maintain an office in Santa Clara County, California with local computer access and local ability to satisfy benefit payment obligations. SECTION II: "Client" "Client" Agrees To: 1. Provide adequate funds from which to pay all claims and allocated expenses, and the timely replenishment of same. 2. Provide up -to -date information on all excess insurance. 3. Cooperate fully in the disposition of all claims. 4. Establish a settlement authority limit of One Thousand Five Hundred Dollars ($1,500) per claim. 5. Report on a timely basis all claims, incidents, claim reports and all other claim correspondence. Any penalty imposed for delay in reporting shall be the responsibility of "Client ". 6. Establish an Escrow Account to pay all claims and allocated expenses. 7. Promptly pay the "Administrator's" fee. 8. Provide copies of the applicable excess policies. SECTION III: General Conditions 1. "Client" agrees that it will indemnify and hold harmless "Administrator" and its directors, officers, employees, parents, subsidiaries and affiliates from and against any and all claims incurred by Administrator as the direct or indirect result of any misconduct, error or omission of "Client ", or any of its directors, officers, subsidiaries or affiliates taken in connection with the furtherance or performance of any provision of this Agreement, provided that said claims, losses, liability costs, damages and reasonable attorney's fees have not been directly caused by any misconduct, error or omissions Page 2 of 7 of Administrator, its directors, officers, employees, subsidiaries and affiliates. 2. "Administrator" agrees that it will indemnify and hold harmless "Client" and its directors, officers, employees, subsidiaries and affiliates from and against any and all claims, losses, liability costs, damages and reasonable attorney's fees incurred as the direct or indirect result of any misconduct, error or omissions of "Administrator" or any of its directors, officers, employees, subsidiaries and affiliates, provided that said claims, losses, liability costs, damages, and reasonable attorney's fees have not been directly caused by any misconduct, error or omission of "Client ", its directors, officers, employees, subsidiaries and affiliates. 3. In providing the services called for under this Agreement, "Administrator" shall comply with all applicable laws, ordinances, and government regulations including, but not limited to, the Workers' Compensation laws of the State of California. Such obligations shall include not only an obligation of "Administrator" to comply with the Worker's Compensation laws of the State of California with respect to its employees, but also an obligation to administer the Workers' Compensation claims of "Client" in accordance with said laws. 4. All documents, materials, reports, claims, and other written, photographed or electronic records provided to "Administrator" by "Client ", or which are produced by "Administrator" in connection with the duties under this Agreement, shall be maintained as confidential by "Administrator ", except when disclosure is authorized by "Client" or is necessary to perform the Obligations of "Administrator" under this Agreement. All such documents and materials shall be owned by "Client" and, upon expiration or termination of this Agreement, shall be returned to "Client ". 5. The terms of this Agreement shall commence on July 1, 1993 and shall continue through June 30, 1996. Not less than sixty (60) days prior to any adjustment, "Administrator" shall notify "Client" of any proposed change in fees. 6. "Administrator" shall maintain the following insurance coverages during the term of this Agreement, and provide certificates to "Client ": a. General Liability: Includes premises operations, products /completed operations, contractual and personal injury. Limit One Million Dollars ($1,000,000) combined single limit. b. Automobile Liability: One Million Dollars ($1,000,000) combined single limit per accident for bodily injury and Property damage. Page 3 of 7 C. Workers' Compensation and Em Compensation limits as requi of California. d. Errors and Omissions: One limit. "Administrator" will certificates at the inception clovers Liability: Workers' red by the laws of the State Million Dollars ($1,000,000) provide "Client" insurance of this Agreement. 7. "Administrator" shall not assign, transfer, or subcontract, whether by an assignment or novation, any of its rights, duties, benefits, obligations, liabilities, or responsibilities under this Agreement without the written consent of "Client ". 8. During the term of this Agreement, "Administrator" agrees not to discriminate against any employee or applicant for employment because of race, religion, creed, color, national origin, ancestry, physical or mental handicap, medication condition, sex or marital status. 9. No waiver of any breach of the terms of this Agreement shall constitute a waiver of any other such breach, nor shall payment of any sums due hereunder constitute a waiver of any breach. 10. In the event an action is brought for enforcement of any of the terms of this Agreement, the prevailing shall be entitled to an award of reasonable attorney's fees. 11. In the event that correspondence required by this Agreement is directed to any party hereto, it shall be sent addressed to the following mailing addresses: "Client ": Mark Linder Assistant Town Manger Town of Los Gatos P.O. Box 949 Los Gatos, California 95031 "Administrator ": Ron Scheidt Willis Corroon Administrative Services Corporation 438 Camino del Rio South, Suite 223 San Diego, California 92108 SECTION IV: Fees As full compensation for all services provided hereunder by "Administrator ", "Client" agrees to pay the following sums: 1. For the period July 1, 1993 through June 30, 1994: "Client" will deposit the sum of Twelve Thousand Three Hundred Twenty -Five Dollars ($12,325) with "Administrator" at the inception of this period. This deposit is based on the projection that twenty -five (25) new claims will be opened during this period. "Administrator" will be entitled to draw down Four Hundred Ninety -Three Dollars ($493) against Page 4 of 7 "Client's" deposit upon commencement of processing each new claim. If at any time during this period, the total number of new claims opened exceeds twenty -five (25), "Administrator" shall invoice and "Client" shall pay Four Hundred Ninety -Three Dollars ($493) for each such additional claim up to a maximum of Twenty -Two Thousand One Hundred Eighty -Five Dollars ($22,185). Any additional new claims opened during this period shall be serviced without further charge or payment. "Client" agrees to depositfftthen some of Thirteen Thousand Twenty -Five Dollars ($131025) with "Administrator" at the inception of this period for twenty -five (25) new claims or Five Hundred Twenty -One Dollars ($521) per claim. If at any time during this period, the total number of new claims opened exceeds twenty -five (25), "Administrator" shall invoice and "Client" shall pay Five Hundred Twenty -One Dollars ($521) for each such additional claim up to a maximum of Twenty -Three Thousand Four Hundred Dollars ($23,400). qu "Client" agrees to deposit thevsum gun ofeThirteen6Thousand Seven Hundred Twenty -Five Dollars ($13,725) with "Administrator" at the inception of this period for twenty -five (25) new claims or Five Hundred Forty -Nine Dollars ($549) per claim. For each claim in excess of twenty -five (25), "Administrator" shall invoice and "Client" shall pay Five Hundred Forty -Nine Dollars ($549) for each such additional claim up to a maximum of Twenty -Four Thousand Seven Hundred Five Dollars ($23,705). 2. At the end of the term of this Agreement, any sum remaining in "Client's" deposit account shall be refunded to "Client" or credited toward an extended term at "Client's" election. 3. Should "Client" acquire or assume control of additional services which might increase the number of claims, "Administrator" reserves the right to adjust the initial Projected number of claims or the maximum number of claims. 4. "Client" agrees to pay "Administrator" for computer generated claims /loss run reports an additional fee of Six Hundred Fifty Dollars ($650) for the period of July 1, 1993 through June 30, 1994: Sever. Hundred Dollars ($ 700) through June 30, 1995. Seven for the period July period July 1, 1995 through June Dollars ($700) for the 30, 1996 5. "Client" agrees to pay "WCASC" for the printing of computer compatible checks or such other printing specifically requested by "Client" at "Administrator's" cost. 6. In the event this Agreement is terminated prior to its expiration, and the termination becomes effective on a date other than June 30, then the fee payable for the twelve -month (12) period during which the termination occurs shall be pro -rated based on the portion of the twelve -month (12) period between the prior July 1 and the date of the termination. Page 5 of 7 7. In addition to the above service fee, and subject to "Client's" prior approval, "Client" agrees to pay all Allocated Loss Expenses as defined below: Allocated Loss Expenses means any cost or expense "Administrator" incurs on behalf of "Client" as a result of engaging the service of firms or persons outside "Administrator's" organization for work in connection with the investigation, adjustment, settlement or defense of a claim. Allocated Loss Expenses include, but are not limited to, the following: subrogation; rehabilitation; automobile or other physical damage appraisal; all court costs, fees and expenses; fees for service of process; fees to attorneys; the costs of services of undercover operations and detectives; fees of independent adjusters or attorneys for investigation or adjustment of claims in areas removed from reasonable access to "Administrator's" salaries employees; the costs of employing experts for the purpose of preparing maps, photographs, diagrams and chemical or physical analysis, or for expert advice or opinion; the cost of obtaining copies of any public records; and the costs of depositions and court reporters or record statements; the costs of medical cost containment services, such as utilization review, preadmission authorization, hospital bill audit, provider bill audit and medical case management. SECTION V: Cancellation This Agreement may be canceled by either "Client" or "Administrator" by giving to the other in writing notice of intention to cancel this Agreement sixty (60) days prior to the actual date of cancellation. Upon cancellation, "Administrator" will not be required to provide any further services to "Client ", except as otherwise provided in this Section. Either party may also cancel this Agreement without giving the required sixty (60) day prior notice in the event of a substantial breach of any term of this Agreement. In the event of termination of this Agreement, "Client" shall designate, in writing, one of the following options: Option I: Require "Administrator" to return all open /pending or closed files to "Client" on the effective date of termination. "Administrator" shall cooperate fully with "Client" to ensure the orderly transition to a succeeding administrator. Option II: Require "Administrator" to continue to provide all services as previously outlined in this Agreement at a fee to be negotiated between "Client" and "Administrator ". Option III: Require "Administrator" to continue all of the services as previously outlined in this Agreement, with respect to one or more open /pending files designed by "Client" or to continue portions of said services designated by Page 6 of 7 "Client" as to all open /pending files of "Client" or one or more of such files designated by "Client" at a fee to be negotiated between "Client" and "Administrator ". IN WITNESS THEREOF, the parties hereto have caused this Agreement to be executed on behalf of the undersigned duly authorized persons. TOWN OF LOS GATOS By: Title: Town Manager Date: Attest: Town Clerk By: Marian V. Cosgrove Approval As to Form: Town Attorney By: Katherine Anderton WILLIS CORROON ADMINISTRATIVE SERVICES CORPORATION By: Title: Senior Vice - President Date: Witness Page 7 of 7