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HomeMy WebLinkAbout4.4 ClaimPolicyAmendCITY OF DUBLIN AGENDA STATEMENT CITY COUNCIL MEETING DATE: July 23, 1990 SUBJECT: Amendment to Policy on Processing and Settling General ?n Liability Claims (Prepared by: Paul S. Rankin, Assistant City Manager) EXHIBITS ATTACHED: Proposed Resolution Rescinding Resolution No. 114-86 Memorandum dated July 19, 1990 from Chair of ABAG PLAN fAdopt ResolNo. 114-86 RECOMMENDATION: Resolution FINANCIAL STATEMENT: None DESCRIPTION: The purpose of this item is to provide an update on the status of the City's Self-Insured Liability Insurance Program. In addition, the ABAG PLAN program has recommended that member cities modify their procedures to streamline the claims process. Self-Insured Program Backgl-ound The City currently obtains liability insurance: coverage from ABAG PLAN Corporation . This is a public agency pool currently representing 26 public agencies. ABAG PLAN began offering coverage in June of 1986 and the City of Dublin was a Charter Member. The program has been very successful due to [l variety of factors. In addition to providing coverage, the group has emphasized training and other programs to reduce City liabilities. Also, each year an actuarial study is conducted to assess the amount of premium necessary to cover the anticipated losses. Reserve funds are invested according to the same restrictions as would apply to a public agency. The self-insured pool provides coverage up to $5 million per occurrence and the City of Dublin has a $25,000 deductible. Success of Program After only four years of operation, the progr;3m has proven to be quite successful. The 1990 Actuarial Report showed that the pool had equity in excess of what the actuary estimated to be needed. The actuarial assumptions are based on a 90% confidence level. This provides a high degree of assurance that the program is properly funded. In July, ABAG PLAN distributed $1.6 million in excess equity to the members. The City of :Dublin received $33,962 as its share of the distribution. This represents a return of approximately 30% of the loss premium paid by the City in the first two years of the program. The premiums paid to ABAG PLAN consist of two coriponents: Loss Premium and Administrative Premium. The administrative premium covers the plan operations including the investigation of all claims. The primary factors which :impact the City's premium are: (1) Changes in the population (2) Changes in the Gross Payroll of the City (3) Number of claims incurred (4) Value of claims incurred ---------------------------------------------------------------------- COPIES TO: L? Albert Fierro, ABAG PLAN Risk Manager ITEM NO. m If the City's record of claims and that of the entire pool continues to be posit=ive, the City may receive future equity distributions. The program is operated using a Board of Directors consisting of one representative of each agency. The City of Dublin is represented on the Board of Directors by the Assistant City Manager. Change in Policy - Denial of Claims ABAG PLAN had an external claims audit conducted by the firm of Warren McVeigh & Griffin, Inc. This type of audit focuses on the operational issues surrounding the handling of claims. The Auditors have recommended that all member agencies amend their claims processing procedures. The Board of Directors has concurred with the Auditor's recommendation regarding the denial of claims submitted to the City. The current policy has all claims submitted to the City Council for denial. The claim is presented to the City Council after the ABAG PLAN adjustor has had an opportunity to review the claim and provide a recommendation. The City Council has typically handled the denial of claims as part of the consent calendar. State Law contains certain time requirements for the handling of claims. Typically, this provides 45 days for action on the claim. If the City does not act in a timely manner, the time frame for the claimant to file a law suit is extended. The Auditors have recommended that the City Council authorize a Staff member to deny claims. State Law contains provisions which allow the City Council to delegate the authority to deny claims. This avoids any conflicts with the timing of a claim on the agenda and having the recommendation of the ABAG PLAN adjustor. It also recognizes the fact that most denials are a matter of rcutine business and can be handled by Staff. The proposed resolution would authorize the City Manager or his/her designee to process all claims including denying claims on behalf of the City Council. Delegation of Settlement Authority When Resolution No. 114-86 was adopted by the City Council, the Resolution allowed the City Manager to settle claims up to $5,000 (Five Thousand Dollars). California Government Code Section 935.4 has been amended to allow public entities to adopt a resolution providing for an employee of the public entity to settle claims up to $50,001) (Fifty Thousand Dollars). In the proposed resolution, Staff did not modify the settlement from what is stated in Resolution No. 114-86. Recommendation Staff has also requested that the City Attorney review the proposed change. The City Attorney has concurred that it would be consistent for a Staff member to both deny and settle claims. In order to streamline the City's Liability Claims process and to implement the recommendations of the ABAG PLAN auditor, Staff recommends that the City Council adopt the proposed resolution. RESOLUTION NO. - 90 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DUBLIN RESOLUTION RESCINDING RESOLUTION NO. 114-86 AND ESTABLISHING STAFF AUTHORITY TO ACT ON GENERAL LIABILITY CLAIMS WHEREAS, the City of Dublin has participated as a Charter Member in the Association of Bay Area Governments Pooled Liability Assurance Network (ABAG PLAN); and WHEREAS, since 1986 ABAG PLAN has provided self-insured general liability coverage to the City of Dublin; and WHEREAS, Part 3 of Division 3.6 of Title 1 of t:1e California Government Code (Sections 900 et seq) impose certain enumerated duties upon the City Council relating to claims for money or damages which are presented to the City; and WHEREAS, California Government Code Section 935.4 permits a City Council by resolution to authorize a City employee to perform the Eunctions of the City Council relating to such claims; and WHEREAS, ABAG PLAN has obtained an audit repo:'t which recommends that the elected bodies of the member agencies delegate these duties in accordance with State Law; and WHEREAS, the processing and settlement of certain claims can most efficiently be considered a ministerial responsibility of the City Manager or his/her designee; and WHEREAS, the City Council is desirous of amending the City Manager's settlement authority as stated in Resolution No. 114-86. NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Dublin does hereby rescind City of Dublin Resolution No. 114-86 in ii:s entirety. BE IT FURTHER RESOLVED that the City Manager or his/her designee is hereby authorized to perform on behalf of the City Council the duties imposed upon the City Council by California Government Code Section 900 et seq, relating to claims for money or damages. In accordance with Section 935.4, the cla;.ms settlement authority which the City Council does hereby delegate to the City Manacer or his/her designee, shall not exceed $5,000 (five thousand dollars). BE IT FURTHER RESOLVED that the Fiscal Officer o:: the City of Dublin shall be authorized to pay all claims which are settled within the limits presented within this resolution and in accordance with State Law. PASSED, APPROVED AND ADOPTED this 23rd day of July, 1990. AYES: NOES: ABSENT: ATTEST: Mayor City Clerk f(ECEIVED JUL i ! i950 ABAG pLQGy Corporation CITY nf- DUBLIN Main Office - P.O. Box 2050, Oakland, CA 94604-2050 (415) 464-79C0, Fax: (415) 464-7979 South Bay Office -10 Twin Dolphin Drive, Suite B-315, Redwood City, CA 94065 (415) 598-9750, Fax: (415) 598-0790 DATE: July 19, 1990 T0: ABAG PLAN Corporation Board of Directors Dianne Gershuny, Chair FROM: RE: Delegation of Claims Authority Based upon the recommendation of the ABAG PLAN Board of Directors and our claim auditors, Warren, McVeigh & Griffin, Inc., Please advise your City/Town Council to adopt a resolution whereby you are delegated the authority to review and resolve all general liability claims filed against you:: City/Town. Attached you will find a sample City/Town resolution which describes this process. ABAG claim staff will continue to investigate, coordinate litigation and file reports on all claims. If you have any questions concerning this process, give Albert Fierro, our Ris1: Manager a call at (415) 464-7969. The Pooled Liability Assurance Network is a non-profit corporation established by the Association of Bay Area Governments RESOLUTION NO. 114- 86 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DUBLIN RESCINDING RESOLUTION NO. 22-86 AND ESTABLISHING LIABILITY CLAIMS SETTLEMENT AUTHORITY LIMITS AND AUTHORIZING PAYMENT OF SETTLED CLAIMS WHEREAS, effective June 2, 1986, the City of Dublin became a charter member of Association of Bay Area Governments Pooled Liability Assurance Network (ABAG PLAN); and WHEREAS, the program is a pooled self insurance program of member entities; and WHEREAS, Resolution No. 22-86 is in conflict with the newly established insurance program; and WHEREAS, ABAG Plan has established claims settlement procedures. NOW, THEREFORE, BE IT RESOLVED that the C:_ty Council of the City of Dublin does hereby rescind claims settlement authority established in Resolution No. 22-86. BE IT FURTHER RESOLVED that the following claims settlement authority shall be established: A. The City Manager or his/her designee shall have the authority to allow, settle, or compromise claims brought against the City of Dublin up to five thousand dollars ($5,000). B. Any settlement of claims shall require that appropriate documents are received from the claimant to assure closure of the matter. C. The City Manager may delegate his/:aer settlement authority in an increment which is determined to be in the interest of the City. D. Section 935.2 of the Government Code permits the City Council to establish a claims board to perform any of its functions as set forth in Sections 900, et seq. The Claims Committee of ABAG PLAN Corporation shall be considered to meet the requirements of State Law and is hereby authorized to settle claims on behalf of the City of Dublin pursuant to Sections 900, et seq. of the California Government Code, provided that the amount of the settlement is more than $5,000 and less than the 2ity's deductible under ABAG PLAN. E. The fiscal officer of the City of Dublin shall be authorized to pay any claims allowed, compromised by the Committee described in Section D above, provided that the settlement is within the authority of the Committee and that it is in writing. PASSED, APPROVED AND ADOPTED this 27th day of October, 1986. AYES: Councilmembers Hegarty, Jeffery, Moffatt, Vonheeder and Mayor Snyder NOES: None ABSENT: None i Mayo ATTEST• C - Ts City Clerk