HomeMy WebLinkAboutStaff Report 274-06City of Palo Alto
City Manager’s Report7
TO:
FROM:
DATE:
SUBJECT:
HONORABLE CITY COUNCIL
CITY MANAGER DEPARTMENT: HUMAN RESOURCES
JUNE 19, 2006 CMR: 274:06
APPROVAL OF A ONE-YEAR CONTRACT IN THE AMOUNT OF
$249,000 WITH GREGORY B. BRAGG & ASSOCIATES FOR
WORKERS’ COMPENSATION CLAIMS ADMINISTRATION SERVICES
AND AUTHORIZATION FOR CONTRACT EXTENSIONS FOR TWO _
ADDITIONAL YEARS
RECOMMENDATION
Staff recommends that Council:
1. Approve and authorize the Mayor to execute the attached contract with Gregory
B. Bragg & Associates (Bragg) effective July 1, 2006 in the amount of $249,000 for
one year to provide workers’ compensation claims administration services.
2. Authorize the City Manager or his designee to exercise the option to renew the
contract in the amount not to exceed $259,000 for the second year; and in the third
year by an amount not to exceed $265,000 provided Bragg is responsive to the City’s
needs and the quality of its work is acceptable during the term of the contract.
BACKGROUND
Project Description
The work to be performed under the contract is for third-party claims administration services for
the City’s Workers’ Compensation Program currently provided by Athens Administrators
(Athens). These services include the processing of all workers’ compensation claims in
accordance with applicable Labor Code regulations; engaging services related to the
investigation and defense of claims; engaging the services of appropriate medical providers;
determining what benefits, if any, should be paid; handling all the necessary forms in each
reported claim; and performing all tasks in a timely manner as required under California
workers’ compensation laws. Athens has been providing claims administration services to the
City for the past 13 years and provided satisfactory services overall. The term of the contract
with Athens ends on June 30, 2006. Because it is the City’s obligation to ensure that
administration of the workers.’ compensation program is managed in the most effective manner,
CMR: 274:06 Page 1 of 3
the City was interested in seeking proposals from other administrators to see what alternatives
other firms had to offer.
DISCUSSION
Selection Process
Staff sent a request for proposals to six firms on April 6, 2006. The proposal period was 27 days.
A total of 8 firms submitted proposals ranging between $191,000 to $293,000. A selection
advisory committee consisting of Human Resources staff and a claims auditor reviewed the
proposals. The committee carefully reviewed each firm’s qualifications and submittal in
response to the RFP relative to the following criteria:
¯Public agency experience, specifically with California Labor Code 4850 public safety
officers benefits (Labor Code 4850 provides injured public safety employees with salary
continuation up to one year in lieu of temporary disability and requires additional
handling and knowledge);
¯Stability of ownership and management experience;
¯Ability to provide innovative programs and services;
¯Superior reporting technology and online capabilities; and
¯Customer service capability.
After careful review, 3 finalists were selected to interview on May 12, 2006: Athens, Bragg, and
Matrix Absence Management. The interview panel consisted of Fire, Police, and Human
Resources staff. Athens and Bragg were clearly the stronger candidates with seasoned staff and
both well-experienced in working with public agencies. However, the presentation by Bragg
was highly professional and showed a strong desire to work with the City of Palo Alto.
An onsite visit to one of Bragg’s offices was conducted and an overview of Bragg’s computer
system was provided. Bragg’s computer system has superior features that would not only assist
Risk Management staff in managing claims but it also has reporting capabilities that Athens has
not been able to offer. Specifically Bragg would be able to provide reports that the City Auditor
has recommended Risk Management provide to City managers. Supervisors will also be able to
report injuries online directly to Bragg with a copy going to Risk Management staff to ensure
accuracy. This tool will save time in reporting injuries. Finally, references were checked with
five local public agencies with favorable feedback overall. Bragg was selected because it
demonstrated its ability to provide a high level of quality, service and results in its claims
administration services.
RESOURCE IMPACT
Bragg will charge a flat fee not to exceed $249,000 for the first year of the contract. The fees for
the second year will not exceed $257,000 and the third year will not exceed $265,000. The cost
for the current contract with Athens Administrator for Fiscal Year 2005-2006 is $193,000 but
would have increased to $223,000 for Fiscal Year 2006-2007. Funding for this agreement is
provided in the 2006-07 budget.
CMR: 274:06 Page 2 of 3
POLICY IMPLICATIONS
This recommendation is consistent with current City policies.
ENVIRONMENTAL REVIEW
This is not a project under the California Environmental Quality Act (CEQA).
ATTACHMENTS
A: Agreement No. C06116778
PREPARED BY: Sandra T.R. Blanch, Risk & Benefits Manager
DEPARTMENT HEAD:
RUSS CARLSEN
Director of Human Resources
APPROVAL:,.’~~/~E ~IARRI@ASST. CITY MANAGER
EAs is~t~lt’cityManager
CMR: 274:06 Page 3 of 3
CITY OF PALO ALTO CONTRACT NO. C06116778
AGREEMENT BETWEEN THE CITY OF PALO ALTO AND
GREGORY B. BRAGG and ASSOCIATES FOR PROFESSIONAL SERVICES for
Administration of the City of Palo Alto Self-Insured Workers
Compensation Program
This AGREEMENT is entered into July 3, 2006, by and
between the CITY OF PALO ALTO, a chartered city and a municipal
corporation of the State of California ("CITY"), and GREGORY B.
BRAGG and ASSOCIATES, a Corporation, !ocated at One Sierra Gate
Plaza, Roseville,CA 95678. Telephone:(916)783-0100
("CONSULTANT").
RECITALS
The following recitals are a substantive portion of this
Agreement.
A. CITY intends to engage a consultant to provide professional
services for workers’ compensation administration services.
B. CONSULTANT has represented that it and any subconsultants have
the necessary professional expertise, qualifications, and
capability, and all required licenses and/or certifications to
provide the Services.
C. CITY in reliance on these representations desires to engage
CONSULTANT to provide the Services as more fully described in
Exhibit "A", attached to and made a part of this Agreement.
D. CONSULTANT has agreed to perform the Services on the terms and
conditions contained in this Agreement.
NOW, THEREFORE, in consideration of the recitals,
covenants, terms, and conditions, this Agreement, the parties
agree:
AGREEMENT
Section I. SCOPE OF SERVICES. CONSULTANT shall perform the Services
described in Exhibit "A" in accordance with the terms and
conditions contained in this Agreement. The performance of al!
Services shall be to the reasonable satisfaction of CITY.
SECTION 2. TERM. The term of this Agreement shall be from the
date of its full execution to June 30, 2007, unless terminated
earlier pursuant to Section 20 of this Agreement. CITY reserves the
right, with mutual agreement of both parties, to extend the Terms
of this Agreement for up to two (2) additional One (i) year terms.
SECTION 3. SCHEDULE OF PERFORMANCE. Time is of the essence in the
performance of Services under this Agreement. CONSULTANT shall
complete the Services within the term of this Agreement and in
accordance with the schedule set forth in Exhibit "B", attached to
and made a part of this Agreement. Any Services for which times for
performance are not specified in this Agreement shall be commenced
and completed by CONSULTANT in a reasonably prompt and timely
manner based upon the circumstances and direction communicated to
the CONSULTANT. CITY’s agreement to extend the term or the
schedule for performance shall not preclude recovery of damages for
delay if the extension is required due to the fault of CONSULTANT.
SECTION 4. NOT TO EXCEED COMPENSATION. The compensation to be paid
to CONSULTANT for performance of the Services described in Exhibit
"A", including both payment for professional services and
reimbursable expenses, shall not exceed:
For Year One: two hundred forty nine thousand dollars
($249,000.00); If applicable, for Year Two: two hundred fifty seven
thousand dollars ($257,000.00) and Year Three: two hundred sixty
five thousand dollars ($265,000.00). The applicable rates and
schedule of payment are set out in Exhibit "C", entitled
"COMPENSATION," which is attached to and made a part of this
Agreement.
SECTION 5. INVOICES. in order to request payment, CONSULTANT shall
submit monthly invoices to the CITY describing the services
performed and the applicable charges (including an identification
of personne! who performed the services, hours worked, hourly
rates, and reimbursable expenses. If applicable, the invoice shal!
also describe the percentage of completion of each task. The
information in CONSULTANT’s payment requests shal! be subject to
verification by CITY.
SECTION 6. QUALIFICATIONS/STANDARD OF CARE. All of the Services
shall be performed by CONSULTANT or under CONSULTANT’s supervision.
CONSULTANT represents that it possesses the professiona! and
technica! personnel necessary to perform the Services required by
this Agreement and that the personne! have sufficient skill .and
experience to perform the Services assigned to them. CONSULTANT
represents that it, its employees and subconsultants have and shal!
maintain during the term of this Agreement all licenses, permits,
qualifications, insurance and approvals of whatever nature that are
legally required to perform the Services.
All of the services to be furnished by CONSULTANT under this
agreement shall meet the professional standard and quality that
2
prevail among professionals in the same discipline and of similar
knowledge and skill engaged in related work throughout California
under the same or similar circumstances.
SECTION 7. COMPLIANCE WITH LAWS. CONSULTANT shall keep itself
informed of and in compliance with all federa!, state and local
laws, ordinances, regulations, and orders that may affect in any
manner the Project or the performance of the Services or those
engaged to perform Services under this Agreement. CONSULTANT shall
procure all permits and licenses, pay all charges and fees, and
give all notices required by law in the performance of the
Services.
CONSULTANT shall report immediately to the CITY’s project manager,
in writing, any discrepancy or inconsistency it discovers in the
laws, ordinances, regulations, orders, and/or guidelines in
relation to the Project of the performance of the Services.
All documentation prepared by CONSULTANT shall provide for a
completed project that conforms to all applicable codes, rules,
regulations and guidelines that are in force at the time such
documentation is prepared.
SECTION 8. ERRORS/OMISSIONS. CONSULTANT shall correct, at no cost
to CITY, any and al! errors, omissions, or ambiguities in the work
product submitted to CITY, provided CITY gives notice to
CONSULTANT.
SECTION 9. INDEPENDENT CONTRACTOR. it is understood and agreed
that in performing the Services under this Agreement CONSULTANT,
and any person employed by or contracted with CONSULTANT to
furnish labor and/or materials under this Agreement, shall act as
and be an independent contractor and not an agent or employee Of
the CITY. The manner and means of conducting the Services are the
responsibility of and under the control of CONSULTANT, except to
the extent they are limited by applicable law and the express
terms of this Agreement.
CONSULTANT will be responsible for employing or engaging all
persons necessary to perform the Services. Al! contractors and
employees of CONSULTANT are deemed to be under CONSULTANT’S
exclusive direction and contro!. CONSULTANT shal! be responsible
for their performance.
SECTION I0. ASSIGNMENT. The parties agree that the expertise and
experience of CONSULTANT are material considerations for this
Agreement. CONSULTANT shall not assign or transfer any interest in
this Agreement nor the performance of any of CONSULTANT’s
obligations hereunder without the prior written consent of the city
3
manager. Consent to one assignment will not be deemed to be
consent to any subsequent assignment. Any assignment made without
the approval of the city manager will be void.
SECTION Ii. SUBCONTRACTING. CONSULTANT shall not subcontract any
portion of the work to be performed under this Agreement without
the prior written authorization of the city manager or designee.
SECTION 12. PROJECT MANAGEMENT. CONSULTANT will assign Randall
C. Smith as the project director to have supervisory responsibility
for the performance, progress, and execution of the Services. If
circumstances or conditions subsequent to the execution of this
Agreement cause the substitution of the project director or any
other key personnel for any reason, the appointment of a substitute
project director and the assignment of any key new or replacement
personnel will be subject to the prior written approva! of the
CITY’s project manager. CONSULTANT, at CITY’s request, shall
promptly remove personnel who CITY finds do not perform the
Services £n an acceptable manner, are unc.ooperative, or present a
threat to the adequate or timely completion of the Project or a
threat to the safety of persons or property.
The city manager will represent CITY for all purposes under this
Agreement. Sandra Blanch is designated as the project manager for
the CITY. The project manager will be CONSULTANT’s point of
contact with respect to performance, progress and execution of the
Services. The CITY may designate an alternate project manager from
time to time.
SECTION 13. DUTIES of CITY. To assist CONSULTANT in the performance
of the Services, CITY will furnish or cause to be furnished the
specified services and/or documents described in Exhibit "A" and
such other available information as may be reasonably requested by
CONSULTANT.
SECTION 14. OWNERSHIP OF M~TERIALS. All drawings, plans, reports,
specifications, calculations, documents, other materials and
copyright interests developed or discovered by CONSULTANT or any
other person engaged directly or indirectly by CONSULTANT to
perform the services required hereunder shall be and remain the
property of CITY without restriction or limitation upon their use.
Neither CONSULTANT nor its contractor~, if any, shall make any of
such materials available to any individual or organization without
the prior written approval of the city manager or designee.
SECTION 15. AUDITS. CONSULTANT will permit CITY to audit, at any
reasonable time during the term of this Agreement and for three (3)
years thereafter, CONSULTANT’s records pertaining to matters
covered by this Agreement. CONSULTANT further agrees to maintain
and retain such records for at least three (3) years after the
expiration or earlier termination of this Agreement.
SECTION 16. INDEMNITY. To the fullest extent permitted by law,
CONSULTANT shal! protect, indemnify, defend and hold harmless CITY,
its Council members, officers, employees and agents (each an
"Indemnified Party") from and against any and all demands, claims,
or liability of any nature, including death or injury to any
person, property damage or any other loss, including all costs and
expenses of whatever nature including attorneys fees, experts fees,
court costs and disbursements ("Claims") resulting from, arising
out of or in any manner related to performance or nonperformance by
CONSULTANT, its officers, employees, agents or contractors under
this Agreement, regardless of whether or not it is caused in part
by an indemnified Party.
The acceptance of CONSULTANT’s services and duties by CITY shall
not operate as a waiver of the right of indemnification. The
provisions of this Section 16 shall survive the expiration or early
termination of this Agreement.
SECTION 17. WAIVERS. The waiver by either party of any breach
or violation of any covenant, term, condition or provision of this
Agreement, or of the provisions of any ordinance or law, wil! not
be deemed to be a waiver of any other term, covenant, condition,
provisions, ordinance or law, or of any subsequent breach or
violation of the same or of any other term, covenant, condition,
provision, ordinance or law.
SECTION 18. INStrRANCE.
18.1.CONSULTANT, at its sole cost and expense, shall
obtain and maintain, in full force and effect during the term of
this Agreement, the insurance coverage described in Exhibit "D"
CONSULTANT and its contractors, if any, shal! obtain a policy
endorsement naming the City of Pa!o Alto as an additional insured
under any general liability or automobile policy or policies.
18.2.All insurance coverage required hereunder shall
be provided through carriers with Best’s Key Rating Guide ratings
of A-’VII or higher which are admitted to transact insurance
business in the State of California. Any and al! contractors of
CONSULTANT retained to perform Services under this Agreement will
obtain and maintain, in full force and effect during the term of
this Agreement, identical insurance coverage, naming CITY as an
additional insured under such policies as required above.
18.3. Certificates evidencing such insurance shall be
filed with CITY concurrently with the execution of this Agreement.
5
The certificates will be subject to the approval of CITY’s Risk
Manager and will contain an endorsement stating that the insurance
is primary coverage and will not be canceled, or materially reduced
in coverage or limits, by the insurer except after filing with the
Purchasing Manager thirty (30) days’ prior written notice of the
cancellation or modification, CONSULTANT shall be responsible for
ensuring that current certificates evidencing the insurance are
provided to CITY’s Purchasing Manager during the entire term of
this Agreement.
18.4.The procuring of such required policy or
policies of insurance will not be construed to limit CONSULTANT’s
liability hereunder nor to fulfill the indemnification provisions
of this Agreement. Notwithstanding the policy or policies of
insurance, CONSULTANT wil! be obligated for the full and tota!
amount of any damage, injury, or loss caused by or directly arising
as a result of the Services performed under this Agreement,
including such damage, injury, or loss arising after the Agreement
is terminated or the term has expired.
SECTION 19. WORKERS’ COMPENSATION. CONSULTANT, by executing this
Agreement, certifies that it is aware of the provisions of the
Labor Code of the State of California which require every employer
to be insured against liability for workers’ compensation or to
undertake self-insurance in accordance with the provisions of that
Code, and certifies that it wil! comply with such provisions, as
applicable, before commencing and during the performance of the
Services.
SECTION 20. TERMINATION OR SUSPENSION OF AGREEMENT OR SERVICES.
20.1.The city manager may suspend the performance of
the Services, in whole or in part, or terminate this Agreement,
with or without cause, by giving ten (I0) days’ prior written
notice thereof to CONSULTANT. Upon receipt of such notice,
CONSULTANT will i~mediately discontinue its performance of the
Services.
20.2.CONSULTANT may terminate this Agreement or
suspend its performance of the Services by giving ten (I0) days
prior written notice thereof to CITY, but only in the event of a
substantial failure of performance by CITY.
20.3.Upon such suspension or termination, CONSULTANT
shall deliver to the City Manager immediately any and al! copies of
studies, sketches, drawings, computations, and other data, whether
or not completed, prepared by CONSULTANT or its contractors, if
any, or given to CONSULTANT or its contractors, if any, in
connection with this Agreement. Such materials wil! become the
property of CITY.
20.4.Upon such suspension or termination by CITY,
CONSULTANT wil! be paid for the Services rendered or materials
delivered to CITY in accordance with the scope of services on or
before the effective date (i.e., i0 days after giving notice) of
suspension or termination; provided, however, if this Agreement is
suspended or terminated on account of a default by CONSULTANT, CITY
will be obligated to compensate CONSULTANT only for that portion of
CONSULTANT’s services which are of direct and immediate benefit to
CITY as such determination may be made by the City Manager acting
in the reasonable exercise of his/her discretion
20.5. No payment, partial payment, acceptance, or
partial acceptance by CITY wil! operate as a waiver on the part of
CITY of any of its rights under this Agreement.
SECTION 21. NOTICES. All notices hereunder will be given in
writing and mailed postage prepaid, by certified mail dd:essedas follows:
To CITY"Office of the City Clerk
City of Palo Alto
Post Office Box 10250
Palo Alto, CA 94303
With a copy to the Purchasing Manager.
To CONSULTANT: Randall C. Smith, CPA, ARM
P.O. Box 2216
G "~rani~e Bay, CA 95746-2216
(916) 960-0908
SECTION 22.CONFLICT OF INTEREST
22.1.in accepting this Agreement, CONSULTANT
covenants that it presently has no interest, and wil! not acquire
any interest, direct or indirect, financia! or otherwise, which
would conflict in any manner or degree with the performance of the
Services.
22.2.CONSULTANT further covenants that, in the
performance of this Agreement, it will not emp!oy subconsultants,
contractors or persons having such an interest. CONSULTANT
certifies that no person who has or will have any financia!
interest under this Agreement is an officer or emp!oyee of CITY;
this provision wil! be interpreted in accordance with the
applicable provisions of the Palo Alto Municipal Code and the
Government Code of the State of California.
22.3. If the Project Manager determines that CONSULTANT
is a "Consultant" as that term is defined by the Regulations of the
Fair Politica! Practices Commission, CONSULTANT shal! be required
and agrees to file the appropriate financial disc!osure documents
required by the Palo Alto Municipa! Code and the Political Reform
Act.
SECTION 23. NONDISCRIMINATION. As set forth in Palo Alto Municipal
Code section 2.30.510, CONSULTANT agrees that in the performance of
this Agreement, it shal! not discriminate in the employment of any
person because of the race, skin color, gender, age, religion,
disability, nationa! origin, ancestry, sexua! orientation, housing
status, marital status, familia! status, weight or height of such
person. CONSULTANT acknowledges that it has read and understands
the provisions of Chapter 2.28 of the Palo Alto Municipal Code
relating to Nondiscrimination Requirements and the penalties for
violation thereof, and agrees to meet all requirements of Chapter
2.28 pertaining to nondiscrimination in employment, including
completing the form fur.nished by CITY and set forth in Exhibit "E".
SECTION 24. MISCELLANEOUS PROVISIONS.
24.1. This Agreement wil! be governed by the laws of
the State of California.
24.2.In the event that an action is brought, the
parties agree that tria! of such action will be vested exclusively
in the state courts of California or in the United States District
Court for the Northern District of California in the County of
Santa Clara, State of California.
24.3.The prevailing party in any action brought to
enforce the provisions of this Agreement may recover its reasonable
costs and attorneys’ fees expended in connection with that action.
24.4.This document represents the entire and
integrated agreement between the parties and supersedes all prior
negotiations, representations, and contracts, either written or
oral. This document may be amended only by a written instrument,
which is signed by the parties.
24.5. The covenants, terms, conditions and provisions
of this Agreement will apply to, and will bind, the heirs,
successors, executors, administrators, assignees, and CONSULTANTs,
as the case may be, of the parties.
24.6. if a court of competent jurisdiction finds or
rules that any provision of this Agreement or any amen6ment thereto
is void or unenforceable, the unaffected provisions of this
Agreement and any amendments thereto will remain in full force and
effect.
24.7.All exhibits referred to in this Agreement and
any addenda, appendices, attachments, and schedules to this
Agreement which, from time to time, may be referred to in any duly
executed amendment hereto are by such reference incorporated in
this Agreement and will be deemed to be a part of this Agreement.
24.8.This Agreement is subject to the fiscal
provisions of the Charter of the City of Palo Alto and the Palo
Alto Municipa! Code. This Agreement will terminate without any
penalty (a) at the end of any fiscal year in the event that funds
are not appropriated for the fol!owing fisca! year, or (b) at any
time within a fiscal year in the event that funds are only
appropriated for a portion of the fiscal year and funds for this
Agreement are no longer available. This Section 24.8 shall take
precedence in the.event of a conflict with any other covenant,
term, condition, or provision of this Agreement.
JUN-09-2006 F~! ~0:02 AN NO.
!N WITNESS WHEREOF, the parties hereto have by their duly
authorized representatives executed this Agreement on the date
first above written. "
AP[~ROVEI) AS TO FORM:CITY OF PAL0 ALTO
Senior Asst. City Attorney
APPROVED :
Director of Administrative
Services
PurcI~ase Manager
Assistant City Manager
Gregory B. Bragg and Associates
Taxpayer Identification No.
Attachments
EXHIBIT "A":
EXHIBIT "B":
EXHIBIT
EXHIBIT
EXHIBIT "E":
(Compliance wi~h Ccrp, Code ~ 313 is re~u£red
if the entity on whose behalf thl~ contr~=~ is
¯ igned i~ a corporatlon. In ~hs alterna~ivs, a
csr~ified corporats resolution atte~tin~ to
signatory authority of Khe individuals signing
~n their respectiv~ capacities is aceept~bl~)
SCOPE OF WORK
SCHEDULE OF PErFOrMANCE
COMPENSATION
INSURANCE
NONDISCRIMINATION COMPLIANCE FORM
I0
1~1~0~L916 XYH .eI’:~I 900~/Z1/90
EXHIBIT A
SCOPE OF SERVICES
WORKERS’ COMPENSATION PROGP, AM ADMINISTRATION
INTRODUCTION
The City of Palo Alto (D.City) is permissible self-insured for
workers’ compensation in the State of California through a
combination of self-insurance (Certificate #7102) and excess
coverage. Under this Scope of Services, Gregory B. Bragg &
Associates (Bragg) shall administer the Workers’ Compensation
Program of the City of Palo Alto, related to such obligations in
accordance with the terms of this agreement.
The n~ ~i..uenL of this Scope of Services is to insure that the City and
Bragg agrees on the service levels outlined herein this agreement
in an effort to maintain the highest customer service standards to
the benefit of the City’s emp!oyees.
II.CLAIMS MANAGEMENT
Bragg Agrees-
A. To examine, on behalf of the City, all reports of
industrial injury or illness relating to City employees and
reported to Bragg;
B. To engage the services of person(s) or firm(s) other than
Bragg, upon approva! from the City, for services relating to the
investigation and defense of claims, subject to the conditions set
forth in this Agreement at.the expense of the City;
To determine in a timely and accurate manner, on behalf
of the City, what benefits, if any, should be paid or rendered
under the applicable_ workers’ compensation laws in each repo_~edr~
claim;
D. To pay compensation, medical expenses, Allocated Loss
Expenses, and ouhe_~ r benefits, as prescribed by law out of funds
provided by the City;
E. To maintain a claim file on each reported claim which
shall be available to the City at al! times for inspection and to
conduct, at a time and frequency to be determined by the City,
claim file reviews with the City at a location to be determined by
the City;
ii
F. To aggressively handle subrogation claims against
responsible parties in order to preserve the City’s right to
recovery;
G To consult w~¯!~h and advise the City on any matter arisingin conjunction with the business of the City which involves the
subject matter of this Agreement;
To provide all necessary forms and supplies for the
efficient operation of the Workers’ Compensation Program, including
customized checks bearing the City name and seal, and to prepare
and file all legally required forms and documents;
I. To insure that the claims examiner shall handle City
claims exclusively for the City, the claims examiner shall not be
assigned to any other accounts and shall not at any time be
assigned a case!oad in excess of one-hundred fifty (150) open
indemnity claims.
J- The City shall be notified ~rior to any s a~flng changes
l~h any claims person assigned to the account. In the event that
Bragg, at any time during this agreement, intends to reassign any
claims person assigned to the account, Bragg shall notify the City
prior to reassignment of any staff member and al!ow the City to be
involved in the decision-making process. In addition, the City of
Pa!o Alto shall retain the right to participate in the selection of
the senior and assistant examiners assigned to the account;
K. In the event that the City, at any time during the term
of this agreement, is dissatisfied with any claims person assigned
to the account, the City wil! notify Bragg of their
dissatisfaction. If after 60 da.ys from notification, the City is
stil! dissatisfied, Bragg shall remove said person assigned
immediately upon receiving written notification from the City of
the desire for the removal of such person;
L. To provide the City with computer-generated loss runs,
case !ogs, check registers, risk management reports and any othe<
claim related r ~ -epor~s requested by the City, at a frequency to bedetermined by the City;
M. To biannually provide a loss e~or~ for claims that have
had no activity for the previous six months;
N. To provide monthly, a comprehensive claims report as
described by the City two weeks or less after the end of the
reporting period;
12
O. To utilize a third party vendor, upon the approval of the
City, to review and cost control, al! medical, hospita! and drug
bills and to assist the City with designating industrial medica!
clinics and hospitals which wi!l provide the City with a preferred
provider (PPO) discount at fees less than the Industria! Fees
Schedule (IFS), and to provide an itemized list of all medica!
savings resulting from this program, at a frequency to be
determined by the City;
P. To utilize a third party vendor, upon the approval of the
City, to provide Utilization Review services consistent with ACOEM
guidelines and the California Labor Code to monitor frequency,
duration and appropriateness of all services during the claim life,
and to provide an itemized list of al! medica! savings resulting
from this program, at a frequency to be determined by the City;
Q. To subscribe to and pay on behalf of the City, enrollment
in the Index Bureau System on behalf of the City, for workers’
.compensation claims in California and to .report to the Index Bureau
each and every Indemnity claim filed;
R. To provide toll-free "800" telephone numbers for
emp!oyees of the City to contact Bragg regarding questions or
concerns regarding claims information; and
S. To provide a complete and detailed electronic conversion
of al! claims data.
III.SPECIAL CLAIMS HANDLING SERVICES
!. Bragg agrees to provide the following Special Claims
Hand!_ng Service:
A. To establish Indemnity of Lost Time Claims within five
(5) days upon receipt of the Employers First Report of injury (Form
5020) from the City.
The definition of an Indemnity Claim shall be an industrial injury
or illness claim for which any of the following benefits are
claimed-
2.
3.
4.
Temporary Disability
Permanent Disability
Life Pension
Death;
B.To confer with the City’s Risk Manager or Safety Officer
regarding questions, reports, or issues concerning claims and to
assist City department managers and supervisors regarding
13
questions, concerns, or issues involving employee claims;
C. To immediately notify the Risk Manager, by providing a
copy of a Reserve Computation Sheet, of any reserve changes over
twenty-thousand dollars ($20,000.00);
D. To review and obtain advance notice and approval by Risk
Manager or Safety Officer of any Claim Denials;
E. To close Medical Only Claims within twelve (12) months
from the date of injury, exceptions to this requirement shall be
reported in writing to the City;
F. To confer with the Risk Manager or Safety Officer as
conditions arise:To approve a Vocationa! Rehabilitation Plan for
injuries prior to 1/1/04
To refer a claim to a law firm or attorney
To approve surveillances, sub rosa, or other investigations
To obtain settlement authority over fifteen-thousand dollars
($15,000.00);
G.To promptly acknowledge receipt of voicemail and email
messages;
H. To consistently maintain a high level of customer service
with City staff and injured employees;
I. To promptly furnish the Risk Manager or Safety Officer
with al! required materia! papers, which consist of but shall not
be limited to:
Applications and Other Legal Documents
Work Restrictions
Letters from Defense Counsel
Vocational Rehabilitation Reports
Private Investigation Reports and Summaries
Benefit Notices
Delay and/or Denial of Claim Notices
Medical Reports, as needed, in cases involving an Industrial
Disability Retirement;
J. To submit for approval and closure within five (5) days
of receipt of written notice, al! undisputed Advisory Ratings; and
K. To provide the City with a check register and a claims
and expense report that balances with the monthly !oss experience
report. These reports wil! be sent no later than ten (!0) days
following the end of each month to the Risk Manager.
L. To establish controls and procedures to manage and
contro! the cost of defense.
IV.SPECIAL CLAIMS HAbrDLING SERVICES OF THE CITY
The City agrees to provide the following special claims handling
services- -
A. To promptly report to Bragg all incidents of employee
industria! injuries or illnesses;
B. To promptly forward to Bragg all applications, reports,
notices, or any legal correspondence pertaining to claimsadministration;-
C. When applicable, to make all attempts possible to assign
employees to modified duty pursuant to the City of Palo Alto
Workers’ Compensation Modified Duty Policy;
D. To make available to Bragg funds for the payment of
benefits or services for industria! injuries or illnesses;
E. To pay all Allocated Loss Expenses defined as: all losses
incurred in the adjustment, handling, settlement, or resistance of
claims, including litigation expenses; and
F. To pay Bragg all service fees as prescribed and included
in Exhibit C - Fee Schedule.
A.The Claims Supervisor shall be responsible for the
following-
Review and assign all new claims;
2. Review to deuerm_ne~ ~ if referral to outside investigation
firm is appropriate. Supervisor will document each review whether
investigation is conducted or not;
3. Review to determine if referral to defense counsel is
appropriate when any of the following occur-
a o Notification of applicant attorney representation
Suspected fraud
Subrogation
Filing of 132A or Serious and Willful Misconduct
Need for legal discovery or depositions, etc
15
fo Issues that may need to be resolved by the WCAB
Claims involving presumptions
Claims with incurred value over $25,000
The supervisor will document every claim file in which one or more
of the above criteria exists indicating whether or not the claim
should be referred to defense counsel and the reasoning for the
referral;
4. Oversee the development of the action plan in those cases
in which various alternatives may be appropriate. Supervisor will
contact the City of Palo Alto by telephone or email to communicate
the need to consider alternative action plan Options and solicit
their input and/or concurrence;
5. File review meetings will be coordinated with City staff
and claims staff on a quarterly basis and may include additional
meetings with City department heads; and
6. Establish a p~rsona! relationship with the primary
medical vendors used by the City of Palo Alto and maintain a
professiona! rapport and ongoing communication.
B.The Senior Claims Examiner shall be responsible for the
following:
i. To make initial contact with all injured workers by
telephone within twenty-four (24) hours (and in any event no later
than forty-eight (48) hours following the date Bragg receivgs an
indemnity claim from the City to explain benefits and obtain
medical history, prior workers’ compensation claim information and
any other pertinent information. Fol!ow-up phone contact shal! be
made with the injured worker every two (2) weeks thereafter
provided the injured worker remains off work and unrepresented by
council.All telephone contacts must be documented in the claim
file;
2.To contact injured workers by telephone when any of the
following occurs, unless the injured worker is represented:
a o Explain the delay process when claims are placed on
delay;
Explain the reason for denial when a claim is denied;
Explain permanent and stationary findings, permanent
disability and ratings;
o
plan;
To contact the City on delay claims to determine action
16
4. The claims examiner shall adhere to the following three-
tier system:
a. Schedule the most appropriate medical treatment
utilizing the designated medical scheduling service or authorized
physicians:
I. Physical therapy treatment shall only be authorized
at facilities located in Palo Alto unless otherwise
approved by the Risk Manager or Safety Officer;
2. In order to expedite proper diagnosis of an injury,
the claims examiner shall have the discretion to
authorize initial diagnostic tests such as MRI’s, CT
Scans, and nerve conduction studies without referral to
Utilization Review;
b. Employees on lost time status shall be returned to
modified work status within thirty (30) days. Claims. examiners
should aggressively pursue a release to modified duty for all City
emp!oyees through written and verba! communication with the medical
provider and;
c. Employees on modified work status shall be returned to
<heir usual and customary duty status within thirty days and;
5. In all_ cases, the claims examiner must a~L<empt to gain
and maintain medicalcon~rol~ of cases unless_ a physician’ s
statement is on file or awrm~ten’ ~change in treating physician isprovided by the applicant.
VI.COST R-EDUCTION GUARANTEE
Bragg agrees:
A. To guarantee the City of Palo Alto at least a !:i
!ndemn!Ly c!osure ratio in each calendar year of service under this
contract. If this goal is not attained, Bragg will credit the City
of Palo Alto $5,000.00 of the annual service fee.
B. To guarantee the City of Palo Alto that at least 32% of
the indemnity claims reported during service year wi!l be closed by
the end of the service year. If this goa! is not attained, Bragg
will credit the City of Palo Alto $5,000.00 of the annua! service
fee.
VII.PENALTIES
Penalties imposed by the Workers’ Compensation Appeals Board
(WCAB), the Department of Industria! Relations, the Division of
Workers’ Compensation, the Federa! Government, or any judicial
forum or quasi-judicial forum in the State of California, arising
out of the denial of claims shall be the responsibility of the City
17
if imposed as a result of actions taken by Bragg at the express
direction of the City.
Penalties imposed as a result of improper denial of claims shall be
the responsibility of Bragg if no forma! request for denial was
obtained by the Risk Manager.
Penalties imposed as a result of either party’s failure to comply
with the administrative rules, regulations and the Labor Code of
the State of California shall be the responsibility of the culpable
party.
Bragg shall provide the City with a quarterly accounting of all
penalties paid by Bragg on behalf of the City, including a listing
of each penalty payment and the specific claim file to which the
penalty payment was charged. Penalties shall be paid out of the
City’s benefit account and Bragg shal! then reimburse the City
within thirty days (30) of the issuance of the penalty and fines
report, for those penalties and fines which are the responsibility
of Bragg under [he terms and conditions of this agreement.
18
EXHIBIT "B"
SCHEDULE OF PERFORMANCE
CONSULTANT shall perform the Services so as to complete each milestone within the
number of days specified below. The number of days to complete each milestone may
be increased or decreased by mutual written agreement of the project managers for
CONSULTANT and CITY, so long as all work is completed within the term of the
Agreement. CONSULTANT shall provide a detailed schedule of work consistent with
the schedule below within 10 days of receipt of the notice to proceed.
Milestones
Obtain test data taps and loss runs from current
administrator
Completion
Number of Days From NTP
7 Days
Discuss T.rust.setup and get back accountinformation
from client 7Days
In house programmer will load data and compare
reports to ensure data accuracy 7Days
4. orkers Compensation forms are sent to client 7 DaysW
5.Change of Administrator letter is sent out on 7 DaysClient’s letterhead
Files, data tape and loss runs are picked up, inventoried
and transferred to Bragg office
Night crew uploads data, merges scrubbed information
and prints loss runs to verify accurate data transfer
Claimants receiving disability payments, recently denied
or delayed, and claims scheduled for hearings are
handled first
llDays
llDays
llDays
10.
Open files are organized into Bragg file folders, properly
labeled, and placed in file cabinets
Claim review ofhigh.Iy sensitive ctaims are reviewed with
Client
21 Days
45 Days
!1.
t2.
Claims review of litigated claims are reviewed with
Defense At-tomeys
Claims review with Client and Departments
60 Days
90 Days
19
EXHIBIT "C"
COMPENSATION & FEE SCHEDULE
The compensation to be paid to CONSULTANT under this Agreement for all
services described in Exhibit "A" ("Services") shall not exceed $249,000.00
for Services provided in Year One.. CONSULTANT agrees to complete all
Services, including reimbursable expenses, within this amount. If applicable,
the compensation to be paid to CONSULTANT under this Agreement for all
services described in Exhibit "A" ("Services") shall not exceed $257,000.00 for
Services provided in Year Two, and shall not exceed $265,000 for Services
provided in Year Three..
SERVICES INCLUDED IN COSTS
All Services described in Exhibit A.
Cost of handling all takeover claims
Assigned dedicated examiner if claims to be examined exceed 140
claims.
20 050310
EX_I-IIBIT :D
Philadelphia Insurance Companies
One Bala Plaza, Suite 100, Bala Cynwyd, Pennsylvania 19004
Philadelphia Indemnity Insurance Company
COMMON POLICY DECLARATIONS
Policy Number: PHSD!74860 -
Named Insured and Mailing Address:
Gregory B. Bragg & Associates .
1 Sierra Gate PIz
Roseville, CA 95678-6609
Producer: 1981
VALLEY OAKS GROUP
1S28 EUREKA ROAD
SUITE 102
ROSEVILLF, CA, 9S661
Policy Period From: 02/01/2006 To: 02/01/2007
Business Description: Claims Adjuster
at 12:01 A.M..Standard Time at your mailing
address shown above.
IN RETURN FOR THE PAYMENT OF THE PREMIUM, AND SUBJECT TO ALL THE TERMS OF THIS
POLICY, WE AGREE WITH YOU TO PROVIDE THE INSURANCE AS STATED IN THIS POLICY.
THIS POLICY CONSISTS OF THE FOLLOWING COVERAGE PARTS FOR WHICH A PREMIUM IS
INDICATED. THIS PREMIUM MAY BE SUBJECT TO ADJUSTMENT.
Commercial Property Coverage Part
Commercial General Liability Coverage Part
Commercial Crime Coverage Part
Commercial Inland Marine Coverage Part
Commercial Auto Coverage Part
Businessowners
Workers Compensation
PREMIUM
Miscellaneous Professional
Total
FORM (S) AND ENDORSEMENT (S) MADE A PART OF THIS POLICY AT THE TIME OF ISSUE
Refer To Forms Schedule
"Omits applicable Forms and Endorsements if shown in specific Coverage Part/Coverage Form Declarations
......Countersi.qnature Date.Authorized Reoresentativ~.
:P...hilad.e!phia .IndemnitY insurance Company
Form Schedule - Policy
Policy Number: PHSD174860
Forms and Endorsements applying to this Coverage Part and made a part of this
policy at time of issue:
Form
B]P-190-1
LAH-Notice
Common Policy Dec
PP 0701
~L098S
Edition Description
1298 Commercial Lines Policy]acket
1002 Policyholder Notice (Loss Assistance Hotline)
0100 Common PolicyDeclarations
0701 Privacy Policy Notice
0103 Disclosure Pursuant to Terrorism Risk ]:ns Act of 2002
P~n~.. 1- of- 1 ....
PI-PLSP-1 (0812004)
Philadelphia Insurance Companies
One Baia Plaza, Suite 100, BaIa Cynws~d, Peu.~syIva~a 19004
610.617.7900 Fax: 610.617.7940
PROFESSIONAL LIABILITY FOR SPECIFIED PROFESSIONS
Philadelphia Indemnity Insurance Company [] Philadelphia Insurance Company
DECLARATIONS
Policy Number: PHSD174860
NOTICE: THIS IS A CLAIMS MADE AND REPORTED POLICY. PLEASE READ THIS POLICY
CAREFULLY. THE LIMIT OF LIABILITY AVAILABLE TO PAY JUDGMENTS OR SETTLEMENTS
SHALL BE REDUCED BY AMOUNTS INCURRED FOR INVESTIGATION AND LEGAL COSTS.
FURTHER NOTE THAT AMOUNTS INCURRED FOR SUCH COST SHALL BE APPLIED AGAINST
THE DEDUCTIBLE AMOUNT
Item 1.Named Insured and Address:
Gregory B. Bragg & Associates
i Sierra Gate PIz
Roseville, CA 95678-6609
Item la,Agent Name and Address:
VALLEY OAKS GFLOUP
1528 EUREKA ROAD
SUITE
ROSEVILLE, CA, 95661
Item
Item
Item 5.
Item 6.
Item 7.
Item 8.
Policy Period: From: 02/01/2006 To: 02/01/2007
(12:01 A.M. Standard Time)
Premium:$ .
Limits of Liability: (A) $2,000,000
(B)$2,000,000
each Claim, including Claims Expense
Annual Aggregate, including Claims
Expense
Deductible:$Deductible per Claim
Retroactive Date: 03/24/1986
Additional Premium for Supplemental Extended RepoFting PeFiod: $
Named Insureds Profession:
Claims Adjuster
PI-PLSP-1 (08/2004)
Endorsements:
By accepting this Policy, the Insured agrees that the statements in the application are personal
representations, that they shall be deemed material, and that this Policy is issued in reliance upon the
truth of such representations.
Authorized Representative Countersignature Countersignature Date
Page
82
23’
BZ
SBA
This Spectrum Policy consists of the Declarations, Coverage Forms, Common Policy Conditions and any
other Forms and Endorsements issued to be a part of the Policy. This insurance is provided by the insurance
company of The Hartford Insurance Group shown below.
INSURER:HARTFORD CASUALTY INSURANCE COMPANY
HARTFORD PLAZA, HARTFORD, CT 06115
COMPANY CODE: 3
Policy Number: 57 SBA BZ2382 SC
SPECTRUM POklCY DECLARATIONS ORIGINAL
HTHEARTFORD
o
O
O
Named Insured and Mailing Address:
(No., Street, Town, State, Zip Code)
GREGORY B.BRAGG & ASSOCIATES INC.
ONE SIERRA GATE PLAZA STE 250
ROSEVILLE CA 95678
Policy Period: From 02/01/06 To 02/01/07 1 YEAR
12:01 a.m., Standard time at your mailing address shown above. Exception: 12 noon in Maine, Michigan, New
Hampshire, North Carolina.
Name of AgendBrdker: VALLEY OAKS INSURANCE AGR-rNCy
Code: 121553
Previous Policy Number:NEW
Named Insured is: CORPORATION
Audit Period: NON-AUDITABLE
Type of Property Coverage: SPECIAL
Insurance Provided: In return for the payment of the premium and subject to all of the terms of this policy, we
agree with you to provide insurance as stated in this policy.
TOTAL ANNUAL PREMIUM IS:
Countersigned by
Authorized RePresentative Date
Form SS 00 02 11 93 T Printed in U.S.A. (NS)Page 001 (CO[xFL’INUED ON NEXT PAGE)
Process Date: 03/06/06 Policy Expiration Date: 02/01/07
INSUB_E D COPY
sPECTRUM POLICY DECLARATIONS (Continued)
POLICY NUMBER: 5? SBA Bz2382
BUSINESS LIABILITY
LIABILITY AND MEDICAl. EXPENSES
MEDICAL EXPENSES - ANY ONE PERSON
PERSONAL AND ADVERTISING INJURY
DAMAGES TO PREMISES RENTED TO YOU
ANY ONE PREMISES
AGGREGATE LIMITS
PRODUCTS-COMPLETED OPERATIONS
GENERAL AGGREGATE
BUSINESS LIABILITY OPTIOhlAL
COVERAGES
HIRED/NON-0WNED AUTO LIABILITY
FORM: SS 04’ 38
EMPLOYEE BE/qEFITS LIABILITY
COVERAGE: FORM SS 04, 13
CLAIMS -MADE
RETROACTIVE DATE:02/01/2006
EACH CLAIM
AGGREGATE
LIMITS OFINSURANCE
$2,000,000
$ !0,000
$2,000,000
$ 300,000
$4,000,000
$4,000,000
$2,000,000
$2,000,000
$4,000,000
Form SS O0 02 11 93 T Printed in U.S.A. (NS)
Process Date: 03/06/05
Page 017 (CONTINUED ON NEXT PAGE)
Policy Expiration Date: 02/01/07
STATE
COMPENSATION
I1~1 S UF:iAN CE
FUND
POLICYHOLDER COPY
P.O. BOX 420807, SAN FRANCISCO, CA 94142.-0807
CERTIFICATE OF WORKERS’COMPENSATION INSURANCE
ISSUE DATE: 04-17-2006
GROUP:
POLICY NUMBER:1488390-2006
CERTIFICATE ID:188
CERTIFICATE EXPIRES:O4-01-2OO7
O4-O1-2OO6/O4-01-2OO7
THIS CERTIFICATE SUPERSEDES AND CORRECTS
CERTIFICATE # 125 DATED 04-01-2006
NF
NF
This is to certify that we have issued a valid VVorkers’ Compensation insurance policy in a form approved by the
California Insurance Commissioner to the employer named below for the policy period indicated.
This policy is not subject to cancellation by the Fund except upon30 days advance written notice to the employer.
We will also give you 30 days advance notice should this policy be cancelled prior to its normal expiration.
This certificate of insurance is not an insurance policy and does not amend, extend or alter the coverage afforded
by the policy listed herein. Notwithstanding any requirement, term or condition of any contract or other document
with respect to which this certificate of insurance may be issued or to which it may pertain, the insurance
afforded by the policy described herein is subject to all the terms, exclusions, and conditions, of such policy.
E PRESIDENT
EMPLOYER’S LIABILITY LIMIT INCLUDING DEFENSE COSTS: $1,O00,000 PER OCCURRENCE.
ENDORSEMENT //2065 ENTITLED CERTIFICATE HOLDERS’ NOTICE EFFECTIVE 04-01-1998 IS
ATTACHED TO AND FORMS A PART OF THIS POLICY.
EMPLOYER
GREGORY B. BRAGG & ASSOCIATES,INC.PO BOX 2216
GRANITE BAY CA 95746
NF
[IMD.CN}
PRINTED : 04-17-2006
EXI-IIBIT E
Certification of Nondiscrimination
As supp!iers of goods or services to the City of Palo Alto, the firm and individuals listed below
certify that they do not discriminate in emp!oyment of any person because of race, skin color,
gender, age, religion, disability, nationa! origin, ancestry, sexual orientation, housing status,
marital status, familial status, weight or height of such person; that they are in compliance with
all Federal, State and local directives and executive orders regarding nondiscrimination in
employment.
Date:
If Proposer is I-NDIVIDUAL, sign here:
Proposer’ s Sighature
Proposer’s typed name and title
If Proposer is PARTNERSHIP or JOINT VENTURE, at least (2) Partners or each
of the Joint Venturers shall sign here:
Partnership or Joint Venture Name (type or print)
Date:
Date:
6.If Proposer is
follows:
Member of the Partnership or Joint Venture signature
Member of the Partnership or Joint Venture signature
a CORPORATION, the duly authorized officer(s) shall sign as
The undersigned certify that they are respectively:
President and
Title
Vice President - Workers’
Title
Compensation
Of the corporation named below; that they are designated to sign the Proposal Cost Form by
resolution (attach a certified copy, with corporate seal, if applicable, notarized as to its
authenticity or Secretary’s certificate of authorization) for and on behalf of the below named
CORPORATION, and that they are authorized to execute same for and on behalf of said
CORPORATION.
050310
Gregory B. Bragg & Associates, Inc.
Corporation Name (type or print)
President
0<-~- Date:
Title:
By:
Title:Vice President - Workers’ Compensation Claims
15 osoB~o