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HomeMy WebLinkAbout05-08-2012 c3 claims delegation1 counci laccnba 1 epont Meting Dute May 8, 201 2 Item Number C 3 CITY OF SAN LUIS OBISP O FROM : J. Christine Dietrick, City Attorne y Greg Zocher, Human Resources Manage r SUBJECT : CLAIMS DELEGATION TO CALIFORNIA JOINT POWER S INSURANCE AUTHORIT Y RECOMMENDATION Adopt a resolution delegating all responsibility for handling claims to California Joint Power s Insurance Authority (Authority). DISCUSSION The City is a member of the California Joint Powers Insurance Authority . The City's Memorandum of Coverage states : "The Authority, at the shared expense of its Members, and out of funds of the Program deposited or obligated to be deposited by its Members, shall investigate, negotiate, settle, o r defend, at the Authority's sole discretion, any Claim or Suit which has been tendered to the Authority and which is in the sole opinion of the Authority is encompassed by this Program ." Upon the recommendation of the City Managers Committee, the Executive Committee of th e Authority recently took action to provide members with an additional alternative for the handlin g of liability claims filed against member cities . This alternative would allow the City to delegat e the entire claims handling responsibility to Authority, which would eliminate the need for th e City's staff or legislative body to take administrative actions on the claims or send rejectio n letters to claimants . Historically, the administrative function of claims rejection and notificatio n has been handled by the City Risk Management staff. On an annual basis the city receive s approximately 68 claims to be processed . Claims against the City must be presented to the City Clerk . Once presented, the City's existin g practice is that the claims are logged in by Risk Management staff and then forwarded to Car l Warren & Company, the third party administrator for the Authority . The Claims Administrato r reviews each claim for its merits and contacts the City with a requested action . While the clai m is being investigated, the claimant is provided updates and claim status by the Claim s Administrator . When the determination is made by Carl Warren, after considering informatio n and recommendations of City staff, that the claim should be rejected, the City's Risk Manage r then sends out a notice of rejection, shortening the time period in which the claimant can file a lawsuit against the City from two years to six months . If for some reason the City takes n o action of the claim, the claim is deemed rejected by course of law 45 days after it was presente d to the clerk . By allowing the claim to be rejected by course of law, the time period in which a lawsuit may be filed is two years from the date of the occurrence . C3-1 Claims Delegation to CaIJPIA Page2 During the course of the City's risk management review, the Ca1JPIA recommended that the Cit y Council delegate claims handling responsibility in its entirety to Authority in order to furthe r streamline the administrative process . City Risk Management, departmental staff wit h knowledge of the facts of individual claims, and City Attorney staff will continue to work closely with the claims administrator to ensure appropriate review and response to claims . However, adoption of the attached resolution will delegate the claims handling responsibility in its entirety to the Authority, consolidating the administrative review and claims rejections notificatio n functions . This action will allow the Authority to send notice of claims rejection, which staff believes will further ensure consistency in the administration of claims, reduce administrativ e demands on Risk Management staff, and shorten the . timeframe in which to file a lawsuit o n rejected claims against the City to six months . All of these outcomes are in the best interests o f operating the City's risk management function as efficiently and effectively as possible . FISCAL IMPAC T There is no additional cost associated with delegating all claims handling to the Ca1JPIA . Because of this action staff resources will be available to address other functions within the ris k management arena . ALTERNATIVES The City Council could decide to not adopt the attached resolution . This alternative is no t recommended because the splitting of the handling of claims leads to unnecessary expenditure o f staff resources and increases the likelihood that statutory deadlines may be missed . ATTACHMEN T Resolution delegating all claims administration to Ca1JPIA . T:\Council Agenda Reports \2012\2012-05-08\Claims Delegation (Dietrick)\ECAR .Claims Delegation.2012.5.8 .docx C3-2 RESOLUTION NO . (2012 Series ) A RESOLUTION OF THE CITY OF SAN LUIS OBISPO ESTABLISHIN G DELEGATING TORT LIABILITY CLAIMS HANDLING RESPONSIBILITIES T O THE CALIFORNIA JOINT POWERS INSURANCE AUTHORITY AS AUTHORIZE D BY GOVERNMENT CODE SECTIONS 910, ET SEQ . WHEREAS,the City of San Luis Obispo is a member of the California Joint Power s Insurance Authority (California JPIA), and pursuant to Government Code sections 990 .4, et seq . and 6500 et seq . pools its self-insured liability claims and losses with other California JPI A members under a Memorandum of Coverage ; and WHEREAS,the Joint Powers Agreement creating the California JPIA authorizes it t o exercise powers common to members and appropriate to defend and indemnify members fro m liability claims under the Memorandum of Coverage, NOW, THEREFORE, BE IT RESOLVED,by the City Council of the City of San Lui s Obispo as follows : SECTION 1 . The City of San Luis Obispo delegates to the California Joint Power s Insurance Authority the authority to act on behalf of the City of San Luis Obispo, pursuant t o Government Code sections 910, et seq ., to accept, reject, return as insufficient, or return a s untimely, any claims against it and to provide any notices authorized under those statutes o n behalf of the City of San Luis Obispo . SECTION 2 . This Resolution shall become effective immediately upon its adoption . SECTION 3 . The City Clerk shall certify to the adoption of this Resolution . Upon motion of , seconded by and on the following vote : AYES : NOES : ABSENT : 1/ // 1/ // Resolution No . (2012 Series) CalJPIA Claims Delegation Authority Page 2 The foregoing resolution was adopted this 8th day of May 2012 . Mayor Jan Marx ATTEST : Sheryll Schroede r Interim City Cler k APPROVED AS TO FORM : /s/ J . Christine Dietric k J . Christine Dietric k City Attorney C3-4