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HomeMy WebLinkAbout1996-10-22; City Council; 13858; LIABILITY AND WORKERS' COMPENSATION CLAIMS SETTLEMENT AUTHORITYLMILITY AND WORKERS’ COMPENSATION CLAIMS SETTLEMENT AUTHORITY ITEM EXPLANATION The evaluation of a liability claim begins the day it is received. Staffreports are gathered and an investigation is initiated so that the claimant receives a response and any compensation due as quickly as possible. This emphasis on expeditious processing is possible through the settlement authority provided to staff, and provides claimants with high quality customer service, minimizes inconvenience to the claimant, and reduces the potential for additional costs to the claimant and the City. In 1981, Council established liability claims settlement authority. The City Manager, with the concurrence of the City Attorney, was provided with settlement authority not to exceed four thousand nine hundred ninety-nine dollars ($4,999). Since 1981, claim amounts have increased, as have all costs since that time. As a result, an increasing number of claim settlements are above the limit of staff authority, and the processing of these settlements necessarily includes the time required to bring an agenda bill before the City Council. This step results in additional time the claimant must wait for a determination and any compensation due for hisher property damage and/or injury. Processing time for settlements can be particularly problematic for claimants who have experienced property damage as a result of a sewer back-up or water-line break. In these instances, remedial actions must be taken immediately or the claimant and City can incur additional damages and expenses. In recognition of the need for the efficient and timely resolution of claims, and the increase in 0. om PAGE 2 OF AB # /3 J’Sf be calculated in a specific manner. A physician’s report is “rated”, using specific criteria developed by the State, to arrive at a level of permanent disability (PD) that is the equivalent of a sum of money. This sum of money constitutes the “settlement” with the employee. Moreover, the State requires that PD payments be made within a specified time period. Under Section 4650 of the Labor Code, employers are mandated to begin paying PD benefits within 14 days of the date the employee is determined to be “permanent and stationary” by the treating physician. Even if there is a disagreement on the total amount of the settlement, or the City is waiting for completed settlement paperwork on a case, the City must make advances in good faith toward a sum that is a reasonable expectation of settlement. As a result, there is little discretion that can be applied to workers’ compensation settlements, and under the current settlement authority limits, cases are presented to the Council for which there is little the Council can do but approve payments already made or already mandated by the State. In the settlement of nearly all cases, except in those litigated, there is little discretionary action provided for under the Labor Code. Even if the rating on one medical report is disputed, it is contested through another physician’s report which undergoes the same rating system. Finally, all settlements, contested or not, are approved by the WCAB and are adjusted if a judge so determines it is appropriate. In recognition of the state laws surrounding settlement determinations and procedures, the increase in the cost of settlements since the limit was established in 1982, and the importance of public review of expenditures, staff recommends adoption of the attached resolution to provide the City Manager, with the concurrence of the City Attorney, the authority to settle workers’ compensation claims against the City when the amount to be paid pursuant to the settlement does not exceed ten thousand dollars ($10,000). FISCAL WACT Revising the settlement authority limits will not have a direct fiscal impact on the City. However, the quick and expeditious settlement of certain claims may help the City avoid additional legal costs and/or increases in the amounts claimed due to frustration with the settlement process. EXHIBITS 1. Resolution No. 96-3HSRevising Liability and Workers’ Compensation Claims Settlement Authority 1 2 3 4 5‘ 6 7 a g 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 eo .. RESOLUTION NO. 96-345 A RESOLUTION OF THE CITY COUNCIL, OF THE CITY OF CARLSBAD, CALIFORNIA REVISING LIABILITY AND WORKERS’ COMPENSATION CLAIMS SETTLEMENT AUTHORITY WHEREAS, the effective and expedient administration of the liability and workers’ compensation self-insurance programs requires that the authority to settle claims be clearly defined and established; and WHEREAS, liability and workers’ compensation claims settlement authority limits were established in 1981 and 1982 respectively; and WHEREAS, the need exists to revise the settlement authority limits. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad as follows: 1. That the above recitations are true and correct. 2. That the City Manager with the concurrence of the City Attorney shall have authority to settle liability and workers’ compensation claims against the City when the amount to be paid pursuant to the settlement does not exceed ten thousand dollars ($lO,OOO), or twenty-five thousand dollars ($25,000) in the case of liability claims related to water or sewer service. 3. That the City Council shall have authority to settle liability and workers’ compensation claims against the City when the amount to be paid pursuant to the settlement exceeds ten thousand dollars ($lO,OOO), or twenty-five thousand dollars ($25,000) in the case of liability claims related to water or sewer service. I - If 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 I)@ 00 ’ PASSED, APPROVED AND ADOPTED at a regular meeting of the City Council on the 22nd day of OCTOBER 1996, by the following vote, to wit: AYES: Council Members Lewis, Nygaard, Kulchin, Finnila, Hall NOES: None ABSENT: None ATTEST: ~/;v,-~~7< /- LC* ,244Akdt7 ALETHA L. RAUTENKRANZ, City Clerk - I,