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Staff Report PREPARED BY: LISA VELASCO Human Resources Director Reviewed by: Assistant Town Manager Town Attorney Finance S:\COUNCIL REPORTS\2018\05-01-18\03 Innovative Claim Solutions\Staff Report - ICS Agreement V1.docx 4/26/2018 4:42 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: 05/01/2018 ITEM NO: 03 DATE: APRIL 24, 2018 TO: MAYOR AND TOWN COUNCIL FROM: LAUREL PREVETTI, TOWN MANAGER SUBJECT: AUTHORIZE THE TOWN MANAGER TO EXECUTE A FOURTH AMENDMENT TO THE PROFESSIONAL SERVICES AGREEMENT WITH INNOVATIVE CLAIMS SOLUTIONS, INC. TO EXTEND THE CONTRACT FOR TWO MONTHS TO PERFORM WORKERS’ COMPENSATION CLAIMS ADMINISTRATION RECOMMENDATION: Authorize the Town Manager to execute a fourth amendment (Attachment 1) to the professional services agreement with Innovative Claims Solutions, Inc. to extend the contract for two 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. Two subsequent one - year extensions were approved through June 30, 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 in May 2018. Since the timeframe before the current agreement expires is brief, ICS is amenable PAGE 2 OF 2 SUBJECT: AUTHORIZE THE TOWN MANAGER TO EXECUTE A FOURTH AMENDMENT TO THE PROFESSIONAL SERVICES AGREEMENT WITH INNOVATIVE CLAIMS SOLUTIONS, INC. TO EXTEND THE CONTRACT FOR TWO MONTHS TO PERFORM WORKERS’ COMPENSATION CLAIMS ADMINISTRATION APRIL 24, 2018 110 E. Main Street Los Gatos, CA 95030 ● 406-354-68xx www.facebook.com/losgatosca DISCUSSION (cont’d): to extending the agreement for two additional months, at the lower renewal rate, to 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 two months through August 31, 2018, 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 August 31, 2018 at the lower renewal rate that will be effective on July 1, 2018. The two-month 2018/19 fiscal impact is a total reduction of $450. 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. Proposed Fourth Amendment to Agreement