2002 AGN JUN 18 I23 - Laserfiche WebLink

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CITY OF COLTON AGENDA REPORT/CONSENT CALENDAR FOR CITY COUNCIL MEETING OF JUNE 18, 2002 TO: Honorable Mayor and City Council FROM: Dilu deAlwis, Finance Director (;;W SUBJECT: Contract: Award Contract for Self -Insured Workers' Compensation Claims Administration to Tristar Risk Management DATE: June 5, 2002 Item #23 BACKGROUND: The City currently has an agreement with Tristar Risk Management for administration of workers' compensation claims and related services. The existing agreement is a three-year agreement that expires on June 30, 2002. DISCUSSION/ANALYSIS: Requests for proposal were sent out to twelve (12) firms with a deadline to respond of May 16, 2002, six (6) proposals were submitted. Finance/Risk Management staff interviewed all six firms. Annual flat fee rates presented ranged from $54,000 through $79,802. The decision for selection was based on the following: proposal and firm presentation, experience in adjusting; early claims resolution, customer response, philosophy, computer technology; reports, claim reporting, and outside references. The City's Risk Management Division of the Finance Department has continually provided excellent employee medical care, training, response, and service. Due to continual cost containment measures, our City has realized a 30% drop in claims over the past ten years. Because of this decline, we were offered more economical pricing for our workers' compensation TPA rates this contract period. Although many of the firms were well qualified, staff felt that Tristar Risk Management met and exceeded all requirements of the proposal. Their firm has also included training, on line service, cost containment reporting, and medical billing review discounts in their three-year annual fee structure. The low -bidder in this process was Hazelrigg Risk Management Services. However, there were additional charges that the City will incur under certain circumstances if the City chooses to utilize the services of the low bidder. These charges include; (1) Annual software license fee ($1,500), (2) One-time data conversion set-up fee ($8,500) and (3) Any claims in excess of 70 will cost the City of Colton an additional $828 per claim. FINANCIAL IMPACT: The amount is budgeted in Self -Insurance Account No. 605-8600-8601-2350. This contract will lock in the service fee for three years, thereby, saving the City any additional service fee increases. See annual service fee attachment. RECOMMENDATION: That City Council authorize staff to enter into a three-year agreement with Tristar Risk Management and authorize the City Manager to execute the agreement on behalf of the City. TEAM ONLY Attorney: Manager: APte—Finance Director: OTHER: PREPARED BY: Joanne Knowles 06/05/02 Workers' Compensation TPA Award/agenda report Item No.