Staff Report
PREPARED BY: LISA VELASCO
Human Resources Director
Reviewed by: Town Manager, Assistant Town Manager, Town Attorney, and Finance Director
110 E. Main Street Los Gatos, CA 95030 ● 408-354-6832
www.losgatosca.gov
TOWN OF LOS GATOS
COUNCIL AGENDA REPORT
MEETING DATE: 06/20/2017
ITEM NO: 3
DATE: JUNE 13, 2017
TO: MAYOR AND TOWN COUNCIL
FROM: LAUREL PREVETTI, TOWN MANAGER
SUBJECT: AUTHORIZE THE TOWN MANAGER TO EXECUTE A THIRD AMENDMENT TO
THE PROFESSIONAL SERVICES AGREEMENT WITH INNOVATIVE CLAIMS
SOLUTIONS, INC. TO EXTEND THE CONTRACT FOR ONE YEAR TO PERFORM
WORKERS’ COMPENSATION CLAIMS ADMINISTRATION
RECOMMENDATION:
Authorize the Town Manager to execute a third amendment to the professional services
agreement with Innovative Claims Solutions, Inc. to extend the contract for one year 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. In June 2016, the Town
requested an extension through June 30, 2017.
DISCUSSION:
The Town planned to conduct a formal request for qualifications (RFQ) before the expiration of
the contract; however, due to staff vacancies within the Human Resources Department, this
was not feasible. Staffing recently stabilized within the Human Resources Department and staff
is requesting a one-year contract extension through June 30, 2018 to allow ICS to continue to
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SUBJECT: AUTHORIZE THE TOWN MANAGER TO EXECUTE A THIRD AMENDMENT TO
THE PROFESSIONAL SERVICES AGREEMENT WITH INNOVATIVE CLAIMS
SOLUTIONS, INC. TO EXTEND THE CONTRACT FOR ONE YEAR TO PERFORM
WORKERS’ COMPENSATION CLAIMS ADMINISTRATION
DATE: JUNE 13, 2017
S:\COUNCIL REPORTS\2017\06-20-17\ICS Contract\Staff Report - ICS Contract FINAL.docx 6/15/2017 9:23 AM LV
DISCUSSION (cont’d):
administer the Town’s Workers’ Compensation Program without interruptions while staff
conducts a formal request for qualifications process.
CONCLUSION:
ICS has demonstrated effective case management and has produced cost savings in the Town’s
Workers’ Compensation Program. It is recommended that ICS continue to serve as the Town’s
third party administrator for an additional year, under the same terms as the original contract.
This continuation will minimize disruption in the management of claims and will allow the Town
staff to conduct a competitive bid process.
FISCAL IMPACT:
ICS has agreed to extend the agreement through June 30, 2018 and waive an increase in fees.
The annual fiscal impact is $51,500, which is the same fee incurred for fiscal year 2016/17 .
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. Proposed Third Amendment to Agreement