Resolution No. 4819
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RESOLUTION NO. 4819
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
VERNON APPROVING THE EXECUTION OF A CONTRACT BY
AND BETWEEN CLAIMS ADMINISTRATION SYSTEMS, INC.
AND THE CITY OF VERNON PROVIDING FOR SPECIAL
SERVICES TO ADMINISTER A SELF-INSURED WORKERS'
COMPENSATION PROGRAM
WHEREAS, the City of Vernon has received a Certificate
of Consent to self insure its workers' compensation program from
the Director of the Department of Industrial Relationsi and
WHEREAS, Claims Administration Systems, Inc. has
previously provided claims administration for said program
pursuant to an agreement which expires on June 30, 1981i and
WHEREAS, the City of Vernon and Claims Administration
Systems, Inc. have approved a new three (3) year agreement
providing for claims administration of the City's self-ins~red
workers' compensation program.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF VERNON AS FOLLOWS:
SECTION 1: That the City Council of the City of Vernon
hereby finds and determines that the recitals contained herein-
above are true and correct.
SECTION 2: That the City Council of the City of Vernon
hereby approves the Agreement which is attached hereto as Exhibit
"A" and incorporated herein by this reference as though fully
set forth at length and hereby authorizes the Mayor of the City
of Vernon to execute said Agreement for and on behalf of the
City of Vernon.
SECTION 3: That the City Clerk of the City of Vernon
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shall certify to the passage of this Resolution apd thereupon
and thereafter the same shall be in full force and effect.
APPROVED AND ADOPTED this 30th day of June, 1981.
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ATTEST:
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BRUCE V. MALKENHORST,
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Clerk
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1 STATE OF CALIFORNIA
ss
2 COUNTY OF LOS ANGELES
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4 I, BRUCE V. MALKENHORST, City Clerk of the City of
5 Vernon, do hereby certify that the foregoing Resolution, being
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Resol~tion NO. 4819
, was duly adopted by the City Council
7 of the City of Vernon, and wa~ approved by the Mayor of said
8 City at an adjourned meeting of the City Council held on Tuesday,
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June 30
, 1981.
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BRUCE V. MALKENHORST, City Clerk
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(SEAL)
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AGREEMENT
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:~ THIS AGREEMENT, made and entered into this 25th day of
4 June, 1981, by and between the CITY OF VERNON, a municipality
5 (hereinafter known as "CITY"), and Claims AdministrationSystems~
6 Inc~, dbaCDS of California, a California Corporation {herein-
7 after known as "SERVICE COMPANY")
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n WIT N E SSE T H:
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11 The parties hereto do agree as follows:
12 (1) RECITALS. This Agreement is made and entered into
13 with respect to the following facts ,:
14 (a) That City, pursuant to Government Code ~53060,
15 lS desirous of obtaining special services and advice in
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administrative matters related to a self-insurance program for
17 Workers' Compensation coveragei and
18 (b) That the Governing Board has hereto determined
19 that the Service Company and its employees are specially trained
20 and experienced and competent to perform the services necessarYi
21 and
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(c) The Service Company has agreed to perform
23 the serVlces required pursuant to this Agreement in the time and
24 manner hereinafter Set forthi and
25 (d) That the City has heretofore determined that
26 the public interest, convenience and nec::essity require the
27 execution of this Agreement, and that said services are not
28 available at no cost from any other public entity.
EXHIBIT ---4
(2) SERVICES. The services to be performed by the
Service Company consist of the following:
(a) To examine, on behalf of City, all reports of
industrial injury to or disease of employees reported to it.
(b) To conduct such investigation of such cases
by its salaried employees as in its judgment is deemed necessary~
(c) With the approval of the City, to engage the
services of persons or firms outside its organization for work
in connection with investigations and adjustments of claims at
the City's expense, hereinafter referred ,to as "Allocated Loss
Expense".
(d) To decide on behalf of the City what benefits,
if any, should be paid or rendered under the applicable Workers~
Compensation laws in each report claim subject to consultation
with an administrative official designed by the City andlor the
City Attorney.
(e) To make payments of compensation, medical
expenses, and other required benefits payable under the
applicable Workers' Compensation laws, together with "Allocated
Loss Expense" out of funds provided by the City. Said payments
shall be made only after consultation with an administrative
official designated by the Ci ty and/or the City Attorney, and said
official may, prior to payment, direct that any payment not be
made, in which case payment shall not be made by Service Company
priOr to approval by the City.
(f) To maintain a claim file on each report claim
which shall be available to the City or its designee at all times
for inspection or claims audit. Inspection andlor audit will
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oCGur at a mutually agreed time and location.
(g) To provide all forms necessary for the
efficient operation of the self-insurance program, and to prepare
and file all legally required forms.
(h) In the performance of its obligations under
this contract, to assign the work involved only to persons who
are specially trained, experienced and competent in the
administration of Workers' Compensation claims. City shall have
the right, reasonably exercised, to direct Service Company to
not use persons who, in the opinion of the City are not specially
trained, experienced and competent to render the required
serVlces.
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(i) To endeavor to consult with and advise the
City on any matter arising in connection with the business of
the City which involves the subject matter of this contract.
(j) Attorneys other than the City Attorney who
may appear before the Workers' Compensation Appeals Board in the
State of California, on behalf of the City on account of injuries
to the City's employees may be selected and employed by the
service Company, but the selection of individual attorneys, if
any, and their compensation must be approved by the City. City
retains the right to direct Service Company to terminate the
employment of an attorney considered unsatisfactory by the City.
(k) The Service Company shall provide a monthly
report on loss experience to include for each reported claim the
amount of medical, legal, indemnity or other costs incurred,
future liability and a summary by department of all claims. In
addition, a comprehensive annual statistical report and narrativ
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1 shall be submitted as a basis for analysis of loss ratio and
2 trends. Service Company shall prepare on behalf of the City
3 reports required by the California Department of Industrial
4 Relations on the Workers' Compensation self-insurance program.
S (3) COMPENSATION. City agrees to pay Service Company
6 for its services hereunder, and Service Company agrees to accept
7 from the City, One Hundred Fifty I;>ollars ($lSO. 00) per reported
8 claim for the first year of this contract. Payment of the
9 service fee to Service Company shall be paid quarterly on the
10 first day of July, October, January and April of each year ,in
11 advance, based on an anticipated fee of $10,000.00. Adjustments
12 will be made quarterly in arrears with a final adjustment to be
13 made at the end of each contract year. The per case reported
14 fee, in subsequent years, shall be increased by the percentage
15 increase of the average Los Angeles/Long Beach Consumer Price
16 Index for all urban consumers for the preceding calendar year.
17 (4) TER11. The term of this Agreement shall be for a
18 period of three (3) years, commencing on the first day of July,
19 1981, provided that:
20 (a) City or Service Company may terminate this
21 Agreement upon the giving of sixty (60) days written notice.
22 Such termination shall take effect on the sixty-first (61) day
23 after the giving of such notice or upon such other date which is
24 mutually agreeable. Upon such termination, Service Company shall
25 be entitled to pro rata fee based upon work actually accomplished
26 as of the effective date of such terminationi and
27 (b) On termination, a final accounting will be
28 made of the fees payable to the Service Company and of any funds
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belonging t~theCity in possession of the Service Company, and
any balarrce due either party will be promptly paid by the debtor
party. Pending claim files and loss(es) are to remain under the
control of and become the responsibility of the City or such
other party as the City designates upon date of contract
termination. Final accounting shall include any amounts due
either party on account of such pending claims and loss(es)
including "Allocated Loss Expense".
(S) OBLIGATIONS OF CITY. City shall be obligated to
make available funds for the payment of Workers' Compensation
benefits or services to or for injured or diseased employees of
CitYr or their dependents in the event of their death, and
"Allocated Loss Expense".
(6) FUNDS. City shall provide to Service Company an
initial amount of $10,000.00 to be held in trust by, and used. by,
the Service Company to meet the obligations of the City provided
by paragraph 5 of this Agreement. Said funds shall be paid out
by Service Company in the manner set forth by paragraph (2) (e)
of this Agreement. It is hereby agreed that Service Company
shall provide a certificate of coverage for a blanket employee
Fidelity Bond in the sum of $100,000.00 and a copy of said Bond
to the City with an acceptable surety company.
At the end of each calendar month, Service Company shall
send to City an itemized statement of all payments made from
said fund. City ,shall thereafter replenish said fund as soon as
feasible. The parties may agree in writing to modify the amount
retained in said fund.
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(7) LIABILITY.
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(a) Service Company agrees to hold free and
;:~ harmless, the City, its officers and employees, from, any claim,
4 demand or judgment arising out of the activities of the Service
5 Company, its agents or employees, pursuant to this Agreement.
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(b) It is hereby agreed that Service Company shall
7 provide a certificate of Professional Liability insurance in
R the amount of $1,000,000.00 and a copy of said policy to the
n City.
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(8) NOTICES. Notices pursuant to this Agreement shall
11 be given by United States mail, postage prepaid, addressed to the
12 parties as follows:
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CITY:
CITY OF VERNON
4305 Santa Fe Avenue
Vernon, CA 90058
SERVICE COMPANY:
CLAIMS ADMINISTRATION
SYSTEMS, INC.
2908 Oregon Court, suite 1-7
Torrance, CA 90503
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Notices shall be deemed given as of the time the same
are placed in the course of transmission of the said postal
service.
(9) DEFINITIONS. For the purpose of this Agreement,
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the term "Allocated Loss Expense" shall mean all Workers'
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Compensation Appeals Board or court costs, fees, and expensesi
fees for service of processi fees to attorneysi the cost of
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services of undercover operatives and detectivesi fees of Case
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Service Representatives, rehabilitation counselors, independent
adjusters and para-legals for investigation or adjustment of
claims, the costs of employing experts for the purpose of
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11 preparing maps, photographs, diagrams, chemical or physical
2 analysis, or giving expert advice or opinions involving Chemical
3 or physical questionsi the cost of copies of transcripts of
4 testimony at coroner's inquests or criminal or civil proceedingsi
5 the cost of obtaining copies of any public recordsi the costs
6 of depositions and court reporter or recorded statements; and
7 any similar costs or expenses properly chargeable to the defense
8 of a, particular claim or to protection of the subrogation rights
n of the City. "Allocated Loss Expenses" is not included in the
10 annual service fee.
11 The term "annual" shall main a twelve month period
12 beginning July 1 of each year for the term of this contract.
13 IN WITNESS WHEREOF, the parties hereto cause this
14 Agreement to be executed on the day and year first above written.
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CITY OF VERNON
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By
LEONIS C. MALBURG, Mayor
APPROVED AS TO FOffi1
David B. Brearley, City Attorney
CLAIMS ADMINISTRATION SYSTEMS,
INC.
By
Executive Vice President
APPROVED AS TO FORM
General Counsel
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