Resolution No. 5791
1
RESOLUTION NO. 5791
2
3
A RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF VERNON APPROVING AND AUTHORIZING
THE EXECUTION OF A WORKERS' COMPENSATION
SELF-INSURANCE SERVICE AGREEMENT BY AND
BETWEEN THE CITY OF VERNON AND COLEN &
LEE, INC. PROVIDING FOR THE ADMINISTRATION
OF A WORKERS' COMPENSATION SELF-INSURANCE
PROGRAM
4
5
6
7
WHEREAS, the City of Vernon is self-insured in its
8
workers' compensation program; and
9
WHEREAS, Colen & Lee, Inc., the current administrator
10
11
12
13
14
for the City's Workers' Compensation Self-Insurance Program, has
submitted a Service Agreement reflecting an eleven percent (11%)
increase for fiscal year 1990-1991; and
WHEREAS, the City Administrator has recommended said
Service Agreement as being fair and reasonable to administer the
15
16
17
18
19
program for the City of Vernon.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF
THE CITY OF Vernon AS FOLLOWS:
SECTION 1:
The City Council of the City of Vernon
hereby finds and determines that the recitals contained
20
21
22
23
24
hereinabove are true and correct.
SECTION 2:
The City Council of the City of Vernon
hereby approves the Service Agreement, a copy of which has been
presented to the City Council concurrently with this resolution
and the City Council hereby orders said Agreement to be received
25
26
27
28
and filed by the City Clerk.
SECTION 3: The City Council of the City of Vernon
hereby authorizes the Mayor and the City Clerk to execute said
Agreement for, and on behalf of, the City of Vernon.
1
2
SECTION 4: The City Clerk of the City of Vernon shall
3 certify to the passage of this resolution and thereupon and
4 thereafter the same shall be in full force and effect.
5 APPROVED AND ADOPTED this 21st day of August, 1990.
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
ATTEST:
,0"'1
;.,:;4'
" ~
BRUCE V.
~~.
.0 L~ONIS C. MAL G, May r
//ff~~
MALKENHORST, City Clerk
-2-
1
STATE OF CALIFORNIA )
2 ) ss
COUNTY OF LOS ANGELES )
3
I, BRUCE V. MALKENHORST, City Clerk of the City of
4
5
6
7
Vernon, do hereby certify that the foregoing Resolution, being
Resolution No. 5791, was duly adopted by the City Council of the
ci ty of Vernon at a regular meeting of the City Council duly
held on Tuesday, August 21, 1990, and thereafter duly signed by
8
the Mayor of the City of Vernon.
9
10
1:1' /H;~
BRUCE V. MALKENHORST, City Clerk
11
12
13
14
15
16
( SEAL)
17
18
19
20
21
22
23
24
25
26
27
28
-3-
'''--fI
r '
:"'"
WORKERS' COMPENSATION SELF-INSURANCE
SERVICE AGREEMENT
THIS AGREEMENT is entered into this J1'tJ... day of .:s~+~((Lhjf2, 1990
between the CITY OF VERNON, hereinafter referred to as the "City," and
COLEN & LEE, INC., a California Corporation, hereinafter referred to as
the "Administrator."
WHEREAS, the City has undertaken to self-insure its Workers'
Compensation obligation; and
WHEREAS, the Administrator is engaged in the business of
administering Workers' Compensation self-insurance programs; and
WHEREAS, the City desires to retain the services of the
Administrator to administer a Workers' Compensation self-insurance
program, hereinafter referred to as the "Program," for the City;
NOW, THEREFORE, the City hereby retains the services of the
Administrator and the Administrator agrees to perform services for the
City under the terms and conditions of this Agreement.
1. TERM: This Agreement shall become effective as of July 1, 1990
and shall continue in effect until terminated by the cancellation
provision set forth herein.
2. PERIODIC MEETINGS: The Administrator shall meet with City
staff no more than four times per year to:
- 1 -
I
,
A. Assist the City in developing internal procedures.
B. Provide orientation and training to City personnel involved in
the administration of the Program.
C. Discuss specific claims and general trends in the Program.
3. ADVISORY SERVICES: The Administrator shall provide written
advisory bulletins to inform the City of the adoption, amendment or
repeal of all statutes, rules and regulations which directly affect the
Program.
4. REOUIRED FORMS: The Administrator shall provide the City with
all forms required by the State in connection with the Program.
5. COMPLIANCE WITH LAW: The Administrator shall administer the
Program in full compliance with all laws, rules and regulations
governing Workers' Compensation and self-insurance.
6. CLAIMS ADMINISTRATION: The Administrator shall have the
authority and responsibility to provide claims administration services
which include:
A. Entering claim information on a log and establishing a claim
file upon receipt of an injury report.
B. Setting and updating reserves.
C. Arranging for investigation.
D. Determining compensability.
- 2 -
I
E. Preparing and issuing benefit notices and pamphlets.
F. Arranging for medical treatment from specialists, as necessary.
G. Initiating and maintaining contact with employees or their
attorneys.
H. Monitoring disability status by reviewing medical reports and
calling doctors for updates.
I. Auditing and paying medical bills.
J. Paying mileage reimbursement to employees.
K. Paying temporary disability compensation when appropriate to do
so or advising the City of the need to adjust payroll records when
salary continuation is applicable.
L. Arranging medical exams in conformance with State law to
determine whether an employee's medical condition is permanent and
stationary and what, if any, permanent disability exists.
M. Paying permanent disability compensation in accordance with the
l~.
N. Arranging for attorney representation of the City whenever the
need arises, selecting attorneys from a list approved by the City.
O. Monitoring attorneys and assisting them in preparing cases.
P. Auditing and paying legal expenses.
Q. Arranging for vocational rehabilitation services when
appropriate.
R. Monitoring vocational rehabilitation consultants and assisting
them as necessary.
S. Auditing and paying vocational rehabilitation expenses.
- 3 -
T. Attending all hearings that are required by law.
U. Preparing and issuing vocational rehabilitation notices.
V. Preparing and issuing permanent disability compensation
notices.
W. Pursuing subrogation when there is a viable third party.
X. Notifying the City's excess insurers of all claims which exceed
or may exceed the City's self. insurance retention, maintaining liaison
between the City and its excess insurers on matters affecting the
handling of such claims and arranging for reimbursement to the City of
losses in excess of its self-insurance retention.
Y. Obtaining settlement authority and negotiating settlement on
appropriate claims.
Z. Closing claim files when appropriate to do so.
7. OBLIGATIONS OF EMPLOYER: The City shall:
A. Submit all reports of work injury to the Administrator within
one day of the City's knowledge of the injury, serializing each report
with an ascending incident number.
B. Respond to Administrator requests for information and authority
within five days of such requests.
C. Provide information that is accurate and is in a form specified
by the Administrator.
D. Grant settlement authority to the Administrator in advance of
vocational rehabilitation and legal hearings or be available by phone or
in person during those hearings.
- 4 -
8. CHECKING ACCOUNT: The City and Administrator agree that:
A. The City shall establish a checking account from which all
Workers' Compensation benefits and expenses are to be paid.
B. The Administrator shall prepare checks and issue those checks
directly to payees without delay.
C. The Administrator shall sign checks with a facsimile check
signing machine.
D. The Administrator shall secure both checks and check signer
in a locked room accessible to a limited number of personnel.
E. The City shall maintain an adequate balance in the checking
account to meet all Workers' Compensation obligations without delay.
F. The Administrator shall order the checks.
G. The checking account may be used to pay civil penalties in
which case the Administrator shall reimburse the City within fifteen
days for any amount of the penalty which the Administrator caused.
9. STATISTICAL REPORTS: The Administrator shall provide monthly
statistical reports to assist City management in monitoring the Program.
These reports shall include, at a minimum:
A. A monthly loss experience report, on or before the fifteenth
(15) day of each calendar month, for the preceding month, containing the
following information: employee's name, injury date, closing date,
department, location, cause of injury, type of injury, days lost from
work, OSHA coding, reserves and payments.
- 5 -
B. A monthly transaction report, on or before the fifteenth (15)
day of each calendar month for the preceding month, containing the
following information: check number, transaction date, amount, payee,
name of employee and claim number.
10. REGULATORY REPORTING: The Administrator shall prepare all
reports required by State regulatory agencies in connection with the
Program, including the Self-Insurer's Annual Report required by the
Department of Self-Insurance Plans.
11. RECORDS: The Administrator shall establish and maintain claim
files, claim logs, transaction documents and all other records
associated with the Program. These records shall be the property of the
City and shall be available, on five (5) days notice, for review or for
transfer to another custodian. Unless this Agreement is cancelled,
closed files shall be stored by the Administrator for five (5) years and
shall thereafter become the responsibility of the City. Upon
cancellation of this Agreement, the City shall be responsible for
maintaining and storing all records. The Administrator shall not
dispose of or destroy these records without the prior, written
authorization of the City.
12. CONSIDERATION: The City shall pay the Administrator $1,788.00
per month for services rendered under this Agreement. Once a year after
the first year of this Agreement, the Administrator may increase or
.6-
decrease the service fee by giving written notice of the change to the
City at least sixty (60) days prior to the change.
13. ALLOCATED EXPENSES: The City shall pay for check printing,
Index Bureau membership, field investigation, defense attorneys, legal
costs, remote photocopy, engineering experts, accident reconstruction
experts, process service, messenger service, court reporters, vocational
rehabilitation consultants, structured settlement consultants and
translators.
14. PENALTIES: The Administrator shall be responsible for paying
or appealing penalties unless the penalty results from the City's
failure to:
A. Provide an Employee Claim Form to an injured employee within 24
hours of knowledge of the injury.
B. Date stamp the returned Employee Claim Form.
C. Provide an Employer's First Report of Work Injury to the
Administrator within five days from the date of knowledge of an injury.
D. Provide a wage statement within ten days from the date of
knowledge of an injury where the employee is entitled to less than the
maximum temporary disability rate.
E. Provide information requested by the Administrator within a
timely manner.
F. Provide accurate information to the Administrator.
G. Follow a written recommendation of the Administrator.
- 7 -
15. INDEMNIFICATION: The Administrator shall indemnify, hold
harmless, and defend the City from all claims, legal actions, losses,
expenses, injuries or damages arising out of the Administrator's actual
or alleged negligence or intentional wrongdoing incident to the
performance of this Agreement except when such claims, legal actions,
losses, expenses, injuries or damages are due to the sole negligence of
the City, its officers, agents or employees.
16. INSURANCE: The Administrator shall:
A. Maintain in force at all times General Liability and Errors and
Omissions Insurance in the amount of One Million ($1,000,000) Dollars
per occurrence, combined single limit.
B. Maintain in force at all times a Fidelity Bond in the amount of
Five Hundred Thousand ($500,000) Dollars.
C. Maintain in force at all times Workers' Compensation Insurance
for employees of the Administrator, as required by law.
D. Notify the City, in writing, thirty (30) days prior to any
cancellation or reduction in the above coverages.
E. Maintain evidence of the above coverages on file with the City
throughout the term of this Agreement.
l7. NOTICES: All notices, demands, requests, or approvals which
are required under this Agreement, or which either the City or the
Administrator may desire to serve upon the other, shall be in writing
- 8 -
and shall be conclusively deemed served when delivered personally, or
forty-eight (48) hours after the deposit thereof in the United States
Mail with postage pre-paid.
18. CANCELLATION: This Agreement may be cancelled by either party-
giving to the other, in writing, notice of its intention to cancel this
Agreement at least sixty (60) days prior to the date of termination.
Upon the date of termination of this Agreement, or the date on which
records are transferred to another custodian, whichever occurs first,
the Administrator shall no longer be responsible for administration of
the City's claims.
19. PARTIAL INVALIDITY: If any provision of this Agreement is
held by a competent court to be invalid, void or unenforceable, the
remaining provisions shall nevertheless continue in full force and
effect.
20. GOVERNING LAW: The validity of this Agreement and of any of
its terms and provisions shall be interpreted pursuant to the Laws of
the State of California.
21. INTERPRETATION: The terms and conditions of this Agreement
shall be construed pursuant to their plain, ordinary meaning and shall
not be interpreted against the maker.
- 9 -
22. ATTORNEY FEES: If any action at law or equity, including an
action for declaratory relief, is brought to enforce or interpret the
provisions of this Agreement, the prevailing party shall be entitled to
reasonable attorney fees in addition to any other relief to which it may
be entitled.
23. ASSIGNMENT: The Administrator shall not assign, sublet or
transfer by operation of law or otherwise any or all of its rights,
burdens, duties or obligations of this Agreement without the prior,
written consent of the City.
24. CONFLICT OF INTEREST: The Administrator agrees not to accept
any employment during the term of this Agreement from any other person,
firm or corporation if that employment is likely to result in a conflict
between the interests of the City and the interests of any third
parties.
25. ENTIRE CONTRACT: This instrument contains the entire
Agreement between the parties relating to the rights herein granted and
obligations herein assumed. Any oral representations or modifications
concerning this instrument shall be of no force or effect. Subsequent
modifications shall be made in writing with the agreement of both
parties.
- 10 -
. ~
EXECUTED at Vernon, California, on the date and year first above
written.
CITY OF VERNON COLEN & LEE, INC.
by-'~~~~tcU!-"Y' by _~ Jz
ATTEST: APPROVED AS TO FORM:
by ft-
A/$~
by
'..... .;...-,..,...." !,,, TO~OHJt.
It ',-" ',~"" ,- L.. U ',.....,. .' .
~" '1) l~~- \
~.j~:~\~~;_ r; .~:)~ L.~H~jL:\LEY
Cl-j',::" AlTO. W.Y
DATED
- 11 -