2005 AGN MAY 17 I08 - Laserfiche WebLink

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CITY OF COLTON AGENDA REPORT FOR COUNCIL MEETING OF MAY 17, 2005 Item #8 TO: HONORABLE MAYOR AND CITY COUNCIL FROM: ANTHONY ARROYO, HUMAN RESROUCES DIRECTOR SUBJECT: Approve the Contract Extension with Tristar—the City of Colton's Workers' Compensation Third Party Administrator DATE: May 8, 2005 BACKGROUND: In June 2002, the City of Colton entered into a three year contract with Tristar, the city's third party administrator for work-related injuries. The initial contract amount for Year 1 was $57,800, Year 2 was $59,800 and Year 3 is currently $61,500. These costs include all labor associated with the administration of work-related injuries (i.e., contacting the injured employee, arranging for doctor visits, follow up letters, etc.). The cost for doctor's visits, surgery or surveillance is not included in this cost. Tristar has provided superb service to the city's employees and has assured cost- effectiveness in regard to work-related injuries. DISCUSSION/ANALYSIS: A one year contract extension, beginning July 1, 2005 through June 30, 2006, is being sought in order to continue with uninterrupted service. The contract amount for the one year extension will be $63,800, which still maintains the $2,000 annual increase as was stipulated in the original contract. The Human Resources Department is very satisfied with the level of attention each injured employee receives; in addition, Tristar is one of the few companies in compliance with the mandated changes involving workers' compensation that took effect last year. The city's Purchasing Ordinance allows for contract extensions to be signed by the city manager upon Council approval (§3.08.070(g)). The reason for the extension is that Human Resources staff has been very busy with various negotiations and preparing for meetings with other bargaining groups. Time is not of the essence to complete a request for proposal and to interview the various companies who respond to the request for proposals. The cost of $63,800 is commensurate with what other agencies of Colton's size are paying. The City of Fontana recently received numerous bids for its workers' compensation administration. The bids ranged from $45,000 to $110,000. The low bids do not include other costs such as file review, photocopies, or other administrative tasks. Such costs will typically add about $5,000 to the annual amount. Coincidentally, Tristar's bid to the city of Fontana was approximately $60,000, which does not include the aforementioned tasks. The City of Colton does not pay for any additional administrative services. FINANCIAL IMPACT: The one year extension will cost $63,800. This will be allocated to account # 605-6040-8601-2350. ENVIRONMENTAL IMPACT: None. Agenda Report for One Year Contract Extension with Tristar 051705 (2) Pagel of2