HomeMy WebLinkAbout1982-10-19; City Council; 7185; Workers Compensation ClaimsO
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CITY OF CARLSBAD — AGENDA -JLL
AR# 7/ff\£r*"
MTG. 10/19/82
DEPT. CA
TITLE: AUTHORIZATION FOR THE ADJUSTMENT,
SETTLEMENT AND DEFENSE OF WORKERS COMPEN-
SATION CLAIMS AGAINST THE CITY
DI=PT HD.
CITY ATTY V^
CITY MGR._3^—
RECOMMENDED ACTION:
1. Approve Resolution No. */O _y>?_ authorizing the adjustment and
settlement of worker's compensation claims against the City.
2. Determine whether or not to solicit proposals for special
counsel and direct the City Attorney to return with the
document^ retaining special counsel for workers compensation
defense.
ITEM EXPLANATION
As a result of the City's change from the State Fund to a
self-insured retention, responsibility and authority for the
adjustment and settlement of worker's compensation claims has been
transferred from the insurance carrier to the City. To minimize
costs and expedite settlement of smaller claims, it is necessary
that staff have specified authority to enter into settlement
agreements without authorization by Council
After investigation and recommendation by the City's Administrator
that there is full or partial liability, it is recommended that the
City Manager, with the concurrence of the City Attorney, have
authority to enter into a settlement not exceeding $4,999. Any
settlement of $5,000 or more would be referred to the City Council
for determination.
The City is using special counsel for workers compensation defense
without Council authorization. Council should determine whether or
not to get proposals from interested firms or just the lawyers now
on board. Council should then direct the City Attorney to return
with documents accepting the proposal and authorizing the retention
of special counsel for workers compensation defense.
A memorandum discussing the reasons for the recommended actions is
attached. The actions are similar to those already approved for
liability claims.
FISCAL IMPACT
The financial limitations established by this action are consistent
with other financial controls established in the budget and
purchasing rules. There is no direct fiscal impact from this
action.
EXHIBITS
Resolution No. JO H 3~.
Memorandum to Council dated September 27, 1982
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RESOLUTION NO.7042
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A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CARLSBAD, CALIFORNIA ESTABLISHING WORKERS'
COMPENSATION CLAIMS SETTLEMENT AUTHORITY.
WHEREAS, the City Council has established a program of
self-insurance for workers' compensation; and
WHEREAS, as part of the said program the City has
authority to settle all workers' compensation claims against the
City; and
WHEREAS, the effective and expedient administration of
the workers' compensation program requires that the authority to
settle cases be clearly defined and established;
NOW, THEREFORE, BE IT RESOLVED by the City Council of
the City of Carlsbad as follows:
1. That the above recitations are true and correct.
2. That the City Manager, with the concurrence of the
>
City Attorney, shall have authority to settle workers'
compensation claims against the City not exceeding four thousand
nine hundred ninety nine dollars ($4,999).
3. That the City Manager, with the concurrence of the
City Attorney, may delegate settlement authority not exceeding
four hundred ninety nine dollars ($499) to the City's
administrator.
4. That the City Council shall have authority to
settle workers' compensation claims against the City of five
thousand dollars ($5,000) or more.
f . " **>
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PASSED, APPROVED, AND ADOPTED at a regular meeting of
the City Council of the City of Carlsbad, California, .on the
19th day of October » 1982, by the following vote,
to wit:
AYES : Council Members Casler, Lewis and Chick
NOES : None
ABSENT: Council Members Kulchin and Anear
C^L J.&u*.-
MARY H. ^CASLER, Mayor
ATTEST :
j^iii //
AtETHA L. RAUTENKRANZ, City IClerk
(SEAL)
•-
:
2.
MEMORANDUM
DATE: September 27, 1982
TO: Mayor and City Council
FROM: City Attorney
SUBJECT: REVISIONS TO CITY'S INSURANCE PROGRAM
At a recent meeting of the San Diego County City Attorneys
Association, we had occasion to discuss the procedures followed
by cities in our area in settling worker's compensation
claims. That discussion caused some concern in our office
that Carlsbad's procedures might not be in accord with legally
required procedures as generally followed in our area. As a
result, we have undertaken a review of City Council actions
to date in establishing the City's self-insurance retention
program for liability and worker's compensation. As a result
of that review, we have concluded that, while there are no
problems with the liability program, there are some additional
Council actions which should be taken to properly establish
the worker's compensation program.
On June 5, 1981, the Assistant City Manager for Administration
made a series of recommendations to the City Manager to estab-
lish a revised insurance program for worker's compensation and
liability. A copy of his memorandum is attached (Exhibit A)•
The seven recommended actions were approved by the City Council
at your meeting of June 16, 1981. One of the actions for the
liability program was the authorization by the Council for the
adjustment and settlement of liability claims against the City
(AB No. 6515, supp. #4). In that regard, Council adopted
Resolution No. 6590, giving the City Manager, with the concur-
rence of the City Attorney, authority to settle liability claims
not exceeding $4,999. Any settlements in excess of that amount
require City Council approval. A copy of the resolution is
attached (Exhibit B). The City Council has given no such auth-
orization for the settlement of worker's compensation claims.
In our judgment, any expenditure of City funds requires City
Council authority as does the settlement of any items of liti-
gation. At the present time, there is no authority for the
settlement of worker's compensation claims. Nevertheless, they
are being settled and payments are being made.
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It is our strong recommendation that the City Council remedy
this situation by taking action similar to that taken for
liability; that is, that the City Council adopt a resolution
authorizing the City Manager, with the concurrence of the City
Attorney, to settle worker's compensation claims not to exceed
$4,999. Any settlements in excess of that amount would require
City Council approval. We have prepared an Agenda Bill and
Resolution to carry out this recommendation and establish a
legally appropriate procedure for the settlement of worker's
compensation claims. A copy is attached (Exhibit C). It is
our intention to submit it to the City Council at the next
convenient regular meeting.
Our review indicates one other action which should also be
taken, relating to the worker's compensation program. As the
City Council will recall,, the program consists of a $100,000
self-insurance retention plus excess insurance coverage. We
are responsible for administering the claims and the City
retains consultants for that purpose. The City also utilizes
the services of special legal counsel for the r.-... lected defense
of suits under our self-insurance program. The Municipal Code
gives our office the responsibility of defending the City in
all litigation, including liability and worker's compensation.
Section 2.14.130 provides that the City Council may employ
special counsel. Rather than authorize the retention of special
counsel for individual liability cases, the City Council has
previously approved our recommendation authorizing the reten-
tion of special counsel for the liability cases in general.
In accordance with the requirements of the purchasing ordinance,
we solicited proposals from interested law firms. The Council,
at your meeting of September 15, 1981, adopted Resolution No.
6671, accepting the proposals of three law firms and authorizing
the retention and payment of special counsel for self-insurance
defense (liability). City Council has not authorized the
retention of outside counsel for the worker's compensation
program. Nevertheless, special counsel is being utilized.
This presents a smiliar problem to the claims settlement matter
discussed above in that the selection, retention and payment
of the worker's compensation attorney is without the required
Council authority.
Again, it is our recommendation that the City Council remedy
the situation by taking action similar to that for liability.
The Council may wish to request proposals from interested law
firms. We make no recommendation in that regard. The City is
apparently receiving the satisfactory service from the attorneys
presently handling our worker's compensation defense; and,
because of their familiarity with the City, the finding could
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be made that requesting proposals from other interested attorneys
would not be required. However, it is oxir recommendation that
a letter proposal from the firm be obtained so as to reduce the
terms of their employment to writing, and that a resolution be
adopted by the City Council accepting the proposal and autho-
rizing the retention of special counsel for worker's compensa-
tion defense. If the City Council approves as soon as the
necessary letter proposal has been obtained, we will return
with the Agenda Bill and Resolution.
VFB/ra
Attachments
cc: City Manager
VINCENT F. BIONDO, JR.
-3-
J3XHIBIT__A_
DATE: JUNE 5, 1981
TO: CITY MANAGER
FROM: Assistant City Manager/Administration
SUBJECT: REVISIONS TO CITY'S INSURANCE PROGRAM
At the City Council's June 9, 1981 meeting, we will present
information in order to implement the revised program. The
City Council approved the revised program in concept at its
February 24, 1981 meeting*
The city's insurance broker and consultant will be present
to explain the changes that are proposed in the existing
program. If the Council concurs in the staff's recommen-
dations, we will bring back the necessary documents for
formal adoption on June 16, 1981.
Attached are a series of agenda bills that will need to be
adopted at the June 16, 1981 meeting to formally implement
this recommended program.
The revised program will be discussed in two parts; the
city's self-insured worker's compensation program, and
the city's self-insured liability program. The actions
that the Council will be asked to take are similiar for
both parts of the program and are outlined as follows:
Worker's Compensation
Establish Revolving Fund from which
to pay worker's compensation insurance
premiums, claims & administrative
expenses.
(Exhibit I)
Approve contract for worker's
compensation claim administration.
(Exhibit 2)
Approve contract for renewal of excess
worker's compensation insurance and
set self-insurance level.
(Exhibit 3)
Liability
Establish Revolving Fund
from which to pay liability
insurance premiums, claims
and administrative expenses.
(Exhibit 4)
Approve contract for lia-
bility claims administration
(Exhibit 5)
Approve contract for liabili
insurance and set self-
insurance level.
(Exhibit 6)
Establish liability
settlement limits.
(Exhibit
-•"\claims\
FRANK MANNEN
Assistant City Manager/Administration
ACTION:7
EXHIBIT B
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RESOLUTION NO. 6590
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF CARLSBAD, CALIFORNIA ESTABLISHING LIABILITY
. - CLAIMS' SETTLEMENT AUTHORITY.'
WHEREAS, the City Council has established a program of
liability self-insurance; and
WHEREAS, as part of the liability self-insurance program
the City will have authority to settle all liability claims
*
against the City; and
WHEREAS, the effective and expedient administration of
the liability self-insurance program requires that the authority
to settle liability claims be clearly defined and established.
'NOW, THEREFORE, BE IT RESOLVED by the City Council of the
City of Carlsbad as follov;s:
1. That the above recitations are true and correct.
2. That the City Manager V7ith the concurrence of the
City Attorney shall have authority to settle
t
liability claims against the City not exceeding
four thousand, nine hundred and ninety-nine dollars
($4999).
3. That the City Manager with the concurrence of the
City Attorney may delegate claims settlement
• *authority not exceeding four hundred ninety-nine
dollars to the City's claims administrator.
4. That the City Council shall have authority to sett!)
liability claims against the City of five thousand
. dollars ($5,000) or more.
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PASSED, APPROVED AND ADOPTED at a regular meeting of the City
Council on the 16th clay of June ; 1981,
by the following vote, to wit: . •.
AYES: ' City Council Menbers Packard, Casler, Anear, Lewis and Rulchin."
NOES: None •
ABSENT: None - -
RONALD C. PACKARD, Mayor
ATTEST:
—-=s»^ V -jf~~~7?—1<—^Wh;O^r<
ALETHA L." RAJJTENKRANZ, City Clerk
KAREN R. STEVENS, Deputy City Clerk
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