Staff Report - FINALPREPARED BY: Vilcia Rodriguez
Human Resources Analyst
Reviewed by: Assistant Town Manager Town Attorney Finance
MEETING DATE: 06/07/16
ITEM NO: 5
COUNCIL AGENDA REPORT
DATE: MAY 16, 2016
TO: MAYOR AND TOWN COUNCIL
FROM: LAUREL PREVETTI, TOWN MANAGER
SUBJECT: AUTHORIZE THE TOWN MANAGER TO EXECUTE A SECOND AMENDMENT
TO THE PROFESSIONAL SERVICES AGREEMENT WITH INNOVATIVE CLAIMS
SOLUTIONS, INC. TO EXTEND THE CONTRACT FOR ONE YEAR AT A COST
NOT TO EXCEED $52,000 TO PERFORM WORKERS’ COMPENSATION CLAIMS
ADMINISTRATION
RECOMMENDATION:
Authorize the Town Manager to execute a second amendment to the professional services agreement
with Innovative Claims Solutions, Inc. to extend the contract for one year at a cost not to exceed
$52,000 to perform workers’ compensation claims administration.
BACKGROUND:
The Town uses Innovative 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 (Attachment 1). In August 2013,
the Town extended the contract through June 30, 2016 (Attachment 1). A one year contract extension
through June 30, 2017 is necessary for ICS to continue to administer the Town’s Workers’
Compensation Program without interruptions while staff conducts a formal request for qualifications
(RFQ) process.
DISCUSSION:
The Town planned to conduct a formal request for proposals (RFQ) before the expiration of the current
contract, but due to staff transition in the Human Resources Department, this has not been feasible.
Staff is requesting a one year contract extension through June 30, 2017 to allow staff sufficient time to
conduct a formal RFQ process.
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MAYOR AND TOWN COUNCIL
SUBJECT: AUTHORIZE THE TOWN MANAGER TO EXECUTE AN AMENDMENT TO THE
CONSULTING SERVICE AGREEMENT WITH INNOVATIVE CLAIMS SOLUTIONS
DATE: MAY 16, 2016
Under the existing contract, ICS has been highly effective in assisting the Town to contain costs
associated with the Workers’ Compensation Program. For the most recent reportable claim period
ending June 30, 2015, ICS successfully recovered approximately $297,988.35 from the Town’s excess
insurance carriers, assisted in reducing estimated future liability by $ $364,007, and served as an agent
on the Town’s behalf to negotiate a reduction in the costs of all benefits paid for workers’ compensation
by approximately $201,694.95. ICS also ensures the Town’s compliance with State of California
Workers’ Compensation requirements and keeps the Town staff updated on legal and procedural
changes.
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 Town staff to conduct
a competitive bid process.
COORDINATION:
This report was coordinated with following departments: Finance Department and the offices of the
Town Manager and Town Attorney.
FISCAL IMPACT:
Agreement amendment amount of $52,000 for FY 2016/17 is included in the Workers’ Compensation
Program proposed budget.
ENVIRONMENTAL ASSESSMENT:
This item is not a project defined under CEQA, and no further action is required.
Attachments:
1. Proposed Second Amendment to the Agreement