HomeMy WebLinkAboutR-1998-008 Agreement / Zaremba Claims Services Damage Claims InvestigationsRESOLUTION NO. R-98-118
A RESOLUTION authorizing and directing the City Manager and the City
Clerk of the City of Yakima to enter into an Agreement with
Zaremba Claims Service -Yakima for the purpose of reviewing
and investigating property and general liability damage
claims filed with and against the City of Yakima.
WHEREAS, the City is self-insured for most property and general liability
damage claims; and
WHEREAS, the City requires investigation and adjustment services
regarding such claims; and
WHEREAS, the City has previously contracted with Zaremba Claims
Service -Yakima ("ZCS") for these services; and
WHEREAS, ZCS is willing to continue to provide these claims
investigation and adjustment services to the City in accordance with the terms
and conditions of the attached Claims Service Agreement; and
WHEREAS, the City Council deems it to be in the best interest of the City
of Yakima to enter into an Agreement with Zaremba Claims Service -Yakima in
accordance with the terms and conditions of the attached Agreement, now,
therefore,
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF YAKIMA:
The City Manager and the City Clerk of the City of Yakima are hereby
authorized and directed to sign the attached Claims Service Agreement with
Zaremba Claims Service -Yakima for the purpose of of obtaining investigation
and adjustments services regarding property and general liability damage
claims filed with and against the City of Yakima.
ADOPTED BY THE CITY COUNCIL this /< 3 day of 1--� -('
1998.
ATTEST:
City Clerk
Pkpe./Za,emba/pm
/(---erre-frf-A°1--e( •
John Puccinelli, Mayor
CLAIMS SERVICE AGREEMENT
THIS CLAIMS SERVICE AGREEMENT (hereinafter the "Agreement") is
made and entered into by and between ZAREMBA CLAIMS SERVICE - YAKIMA,
with its principal place of business at 508 North 20th Avenue, Yakima,
Washington 98902 (hereinafter "ZCS") and the CITY OF YAKIMA, a municipal
corporation, with its principal place of business at 129 North Second Street,
Yakima, Washington 98901 (hereinafter the "City") .
WHEREAS, the City is self-insured for most property and general liability
damage claims.
WHEREAS, the City requires investigation and adjustment services
regarding such claims.
WHEREAS, ZCS is willing to provide said claims investigation and
adjustment services in accordance with the terms and conditions of this
Agreement
NOW, THEREFORE, in consideration of the mutual covenants, promises,
and conditions set forth herein, it is agreed by and between the City and ZCS
as follows:
1. Scope of Services. ZCS shall provide the following claims investigation
and adjustment services to the City:
a. Review and investigate all property and general liability
damage claims filed with and against the City during the
term of this Agreement.
b. Provide the City with a written investigation report
concerning each damage claim within thirty (30) calendar
days of receipt of the damage claim from the City. In the
event that more time is necessary to complete the
investigation report, a ZCS representative shall contact and
notify the appropriate attorney or his/her designee at the
City Legal Department. Each investigation report shall
contain the following: a recommendation whether the claim
should be denied or accepted; if appropriate, a analysis of
the validity of the claimed damages; and, if appropriate, a
recommended settlement amount/range for the claim.
c. In the event that the City attorney responsible for reviewing
an investigation report determines additional investigation
services are necessary, provide such services as directed by
said attorney or his/her designee.
Page 1
(lk)agr/Zaremba 98/pm
January 8, 1998
d. When a damage claim is accepted and a settlement
amount/range is approved by the City, ZCS shall take all
necessary steps to contact the damage claimant and resolve
the damage claim, including execution of an appropriate
release and settlement agreement by the damage claimant.
e. Provide a quarterly and annual claim reports in a format
acceptable to the City and Sedgwick James. A copy of the
claim database file will be provided by ZCS to the City in
Dbase format on a quarterly basis.
f. Furnish all damage claim forms necessary for proper claims
administration.
g.
Establish and maintain an investigation file for each damage
claim received by ZCS from the City. All such files shall be
the property of the City and may be inspected by a City
representative at a reasonable time with or without advance
notice.
h. Provide the City with e-mail access and voice mail with
individual mailboxes.
2. Term of Agreement: the term of this Agreement shall be for a period of
four (4) years commencing January 1, 1998 and terminating at 12:00 p.m. on
December 31, 2001, unless sooner terminated by either party in accordance
with Section 6 of this Agreement,
3. Consideration. In consideration of the damage claims investigation and
adjustment services to be performed by ZCS hereunder, the City shall pay ZCS
an annual fee of Twenty -Seven Thousand Six Hundred and Eighty Dollars
($27,680.00) for a total sum of One Hundred Ten Thousand Seven Hundred
and Twenty Dollars ($110,720.00). Each annual fee shall be paid by the City to
ZCS on a quarterly basis in payments of Six Thousand Nine Hundred and
Twenty Dollars ($6,920.00); provided, however, that payment of the entire
remaining annual fee shall become due when ZCS receives 120 damage claims
in that year for which claims investigation and adjustment services are
necessary. The City shall make payment to ZCS within thirty (30) calendar
days of receipt of each quarterly billing; provided, however, that all such
payments are expressly conditioned upon ZCS providing services hereunder
that are satisfactory to the City.
Each annual fee represents consideration to ZCS for claims investigation
and adjustments services for 120 damage claims that are received that year
(damage claims where ZCS prepares just "incident" reports and no other
investigation and adjustment services are not counted as part of this annual
figure). The City shall pay ZCS the sum of Two Hundred and Twenty -Five
Dollars ($225.00) for claims investigation and adjustment services for each
additional damage claim that is received by ZCS during that year over the 120
damage claim figure.
Page 2
(1k)agr/Zaremba 98/pm
January 8, 1998
4. Payment of Accepted Damage Claims. When the a damage claim and
corresponding settlement amount is accepted and approved by the City, the
necessary funds shall be made available by the City to ZCS for payment of the
damage claim. Unless otherwise directed by the City, payment of all damage
claims by ZCS to the claimants is expressly conditioned upon the respective
claimant executing an appropriate release and settlement agreement.
5. Payment of Allocated Loss Expenses. In addition to the claim service
fee required under Section 3 of this Agreement, the City shall pay all
reasonable and necessary "allocated loss expenses" incurred during and as a
result of the investigation and adjustment of damage claims against the City;
provided, however, that ZCS must obtain prior approval for these expenses
from the appropriate City attorney at the City Legal Department. These
expenses include fees and charges for commercial photography services, expert
witness services, witness fees, independent medical examinations, witness
travel, extraordinary travel for ZCS personnel (outside of Yakima County), court
reporter services, transcription services, obtaining public records, auto or
property appraisal services, and other similar costs or expenses.
6. Termination. The City or ZCS may terminate this Agreement, with or
without cause, by giving not less than sixty (60) calendar days written notice of
termination to the other party; In the event of termination, and except as
otherwise provided in this Section, the City shall pay ZCS a pro -rata share of
the applicable quarterly payment through the tee niination date. With regard to
the processing of damage claims pending with ZCS at the time of termination,
the City shall have the option to directly investigate and adjust all such damage
claims, or the City may negotiate a fee with ZCS for all necessary investigation
and adjusting services to bring these pending damage claims to conclusion.
7. Status of Contractor. ZCS and the City understand and expressly agree
that ZCS is an independent contractor in the performance of each and every
part of this Agreement. ZCS and its employees shall make no claim of City
employment nor shall claim against the City any related employment benefits,
social security, and/or retirement.
8. Taxes and Assessments. ZCS shall be solely responsible for and shall
pay all taxes, deductions, and assessments, including but not limited to,
federal income tax, FICA, social security tax, assessments for unemployment
and industrial injury insurance, and other deductions from income which may
be required by law or assessed against either party as a result of this
Agreement. In the event the City is assessed a tax or assessment as a result of
this Agreement, ZCS shall pay the same before it becomes due.
9. Indemnification.
a. ZCS agrees to hold harmless, indemnify, and defend the City, its
elected officials, officers, employees, and agents from and against any and all
suits, actions, claims, liability, damages, judgments, costs and expenses
(including reasonable attorney's fees) which result from or arise out of the sole
Page 3
(Ik)agr/Zaremba 98/pm
January 8, 1998
negligence of ZCS, its officers, employees, and agents in connection with or
incidental to the performance or non-performance of this Agreement.
b. The City agrees to hold harmless, indemnify, and defend ZCS, its
officers, employees, and agents from and against any and all suits, actions,
claims, liability, damages, judgments, costs and expenses (including
reasonable attorney's fees) which result from or arise out of the sole negligence
of the City, its elected officials, officers, employees, and agents in connection
with or incidental to the performance or non-performance of this Agreement.
c. Except as otherwise provided in subsection c of this Section, in the
event that the officials, officers, agents, and/or employees of both ZCS and the
City are negligent, each party shall be liable for its contributory share of
negligence for any resulting suits, actions, claims, liability, damages,
judgments, costs and expenses (including reasonable attorney's fees).
d. Nothing contained in this Section or this Agreement shall be
construed to create a liability to any third party or a right of indemnification in
any third party.
10. Insurance provided by ZCS.
a. Commercial Liability Insurance. On or before date this Agreement
is fully executed by the parties, ZCS shall provide the City with a certificate of
insurance as proof of commercial liability insurance with minimum liability
limit of One Million Dollars ($1,000,000.00) combined single limit bodily injury
and property damage. The certificate shall clearly state who the provider is, the
amount of coverage, the policy number, and when the policy and provisions
provided are in effect (any statement in the certificate to the effect of "this
certificate is issued as a matter of information only and confers no right upon
the certificate holder" shall be deleted). Said policy shall be in effect for the
duration of this Agreement. The policy shall name the City, its elected officials,
officers, agents, and employees as additional insureds, and shall contain a
clause that the insurer will not cancel or change the insurance without first
giving the City thirty (30) calendar days prior written notice (any language in
the clause to the effect of "but failure to mail such notice shall impose no
obligation or liability of any kind upon the company" shall be crossed out and
initialed by the insurance agent). The insurance shall be with an insurance
company or companies rated A -VII or higher in Best's Guide and admitted in
the State of Washington.
b. Commercial Automobile Liability Insurance. On or before date this
Agreement is fully executed by the parties, ZCS shall provide the City with a
certificate of insurance as proof of commercial automobile liability insurance
with minimum liability limit of One Million Dollars ($1,000,000.00) combined
single limit bodily injury and property damage. The certificate shall clearly
state who the provider is, the amount of coverage, the policy number, and
when the policy and provisions provided are in effect (any statement in the
certificate to the effect of "this certificate is issued as a matter of information
Page 4
(lk)agr/Zaremba 98/pm
January 8, 1998
only and confers no right upon the certificate holder" shall be deleted). Said
policy shall be in effect for the duration of this Agreement. The policy shall
name the City, its elected officials, officers, agents, and employees as additional
insureds, and shall contain a clause that the insurer will not cancel or change
the insurance without first giving the City thirty (30) calendar days prior
written notice (any language in the clause to the effect of "but failure to mail
such notice shall impose no obligation or liability of any kind upon the
company" shall be crossed out and initialed by the insurance agent). The
insurance shall be with an insurance company or companies rated A -VII or
higher in Best's Guide and admitted in the State of Washington.
c. Professional Liability Policy. On or before date this Agreement is
fully executed by the parties, ZCS shall provide the City with a certificate of
insurance as evidence of professional liability coverage with a limit of One
Million Dollars ($1,000,000.00) for each wrongful act and an annual aggregate
limit of Two Million Dollars ($2,000,000.00). The certificate shall clearly state
who the provider is, the amount of coverage, the policy number, and when the
policy and provisions provided are in effect. The insurance shall be with an
insurance company rated A -VII or higher in Best's Guide. The retroactive date
of the insurance policy shall be on or before January 1, 1993, or shall provide
full prior acts. The insurance coverage shall remain in effect during the term of
this Agreement and for a minimum of three (3) years following the termination
of this Agreement.
11. No Insurance. It is understood the City does not maintain liability
insurance for ZCS and/or its employees.
12. Nondiscrimination Provision. During the performance of this
Agreement, ZCS shall not discriminate on the basis of race, age, color, sex,
religion, national origin, creed, marital status, political affiliation, or the
presence of any sensory, mental or physical handicap. This provision shall
include but not be limited to the following: employment, upgrading, demotion,
transfer, recruitment, advertising, layoff or termination, rates of pay or other
forms of compensation, and selection for training.
13. Compliance With Law. ZCS agrees to perform those services under and
pursuant to this Agreement in full compliance with any and all applicable laws,
rules, and regulations adopted or promulgated by any governmental agency or
regulatory body, whether federal, state, local, or otherwise.
14. Non -Waiver. The waiver by ZCS or the City of the breach of any
provision of this Agreement by the other party shall not operate or be construed
as a waiver of any subsequent breach by either party or prevent either party
thereafter enforcing any such provision.
15. Assignment. This Agreement, or any interest herein, or claim
hereunder, shall not be assigned or transferred in whole or in part ZCS to any
other person or entity without the prior written consent of the City. In the
event that such prior written consent to an assignment is granted, then the
Page 5
(lk)agr/Zaremba 98/pm
January 8, 1998
assignee shall assume all duties, obligations, and liabilities of ZCS as stated
herein.
16. Severability. If any portion of this Agreement is changed per mutual
agreement or any portion is held invalid, the remainder of the Agreement shall
remain in full force and effect.
17. Notices. Unless stated otherwise herein, all notices and demands shall
be in writing and sent or delivered to the parties to their addresses as follows:
TO CITY:
TO ZCS:
Finance Director
City of Yakima
129 N. 2nd St.
Yakima, WA 98901
City Attorney
City of Yakima
200 South Third Street
Yakima, WA 98901
Zaremba Claims Service - Yakima
508 North 20th Avenue
Yakima, Washington 98902
or to such other addresses as the parties may hereafter designate in writing.
Notices and/or demands shall be sent by registered or certified mail, postage
prepaid or personally served. Such notices shall be deemed effective when
mailed or hand delivered at the addresses specified above.
18. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Washington.
19. Venue. The venue for any action to enforce or interpret this Agreement
shall lie in the Superior Court of Washington for Yakima County, Washington.
20. Integration and Supersession. This Agreement sets forth all of the
terms, conditions, and agreements of the parties relative to the subject matter
hereof and supersedes any and all such former agreements which are hereby
declared terminated and of no further force and effect upon the execution and
delivery hereof. There are no terms, conditions, or agreements with respect
thereto, except as herein provided and no amendment or modification of this
Agreement shall be effective unless reduced to writing and executed by the
parties.
Page 6
(Ik)agr/Zaremba 98/pm
January 8, 1998
CITY OF YAKIMA
ZAREMBA CLAIMS SERVICE-YAKIMA
By: By:
Its:
R. A. Zais, J.; pity Manager
Date: tz
,::i,I<2
ATTEST:
,',74.1.14‘e4 -116-'- '&(
Date:
SEAL
izq
City Clerk
City Contract No.: 98-06
City Resolution No. R -98-0`b
State of Washington
County of Yakima
ss.
I hereby certify that I know or have satisfactory evidence that
L -Y -ti 1 t . I\JAV\C-E is the person who appeared before me, and said person
acknowledged that he/she signed this instrument, and on oath stated that
he/she was authorized to execute the instrument and acknowledged it as the
)/i/ atkoL e Y_-- L)Lt9Viev-of Zaremba Claims Service - Yakima, to be the free and
voluntay act of such party for the uses and purposes mentioned in this
instrument.
DATED:
Print Name: t--' ve,A
NOTARY PUBLIC in and for the State
of Washington, residing at naCUtc 5 .
My commission expires: 5 e- __ �'
Page 7
(1k)agr/Zaremba 98/pm
January 8, 1998
BUSINESS OF THE CITY COUNCIL
YAKIMA, WASHINGTON
AGENDA STATEMENT / [�
Item No. /
For Meeting 1/13/98
ITEM TITLE: Resolution authorizing execution of agreement for reviewing and inves-
tigating property and general liability damage claims . st the City
SUBMITTED BY: Department of Finance & Budget
CONTACT PERSON/TELEPHONE: John R. Hanson, Director
SUMMARY EXPLANATION:
The attached report from Deb Krautwurm and Joel Pearson of Sedgwick provides a
brief history, renewal proposal review and recommendation for the provision of general
risk claim adjudication services to the City.
The recommendation is to continue the City's relationship with Zaremba Claims
Services, Inc. at a guaranteed rate of $27,680 per year. As indicated in the report from
Deb and Joel, it appears this remains a cost effective and beneficial relationship for
the City when compared to industry charges for claims adjudication services.
Resolution X Ordinance Contract X Other (Specify) Analysis & Recommendation
Funding Source
APPROVED FOR SUBMITTAL:
City Manager
STAFF RECOMMENDATION: Pass Resolution
BOARD/COMMISSION RECOMMENDATION:
COUNCIL ACTION:
Legal/BD ^c
Sedgwick
Sedgwick of Washington, Inc.
1430 N. 16th Avenue, Lake Aspen Park, PO Box 2547, Yakima, Washington 98907
Facsimile 509 248-9007 Telephone 509 248-7460
October 31, 1997
Mr. John Hanson, Director of FinanceBudget
City of Yakima
129 N 2nd Street
Yakima, WA 98901
Claims Adjudication Services
Dear John:
The claims administration for the City of Yakima has been handled through Zaremba Claims
Service for the past three years The contract with Zaremba states it is continuous from its
effective date, but the service fee has been guaranteed for a three-year period.
History
When the City made the decision to become self-insured in 1986, the claims services of Willis
Corroon were utilized until 1992. At that time, the City bid the claims service and limited the
selection to local firms, allowing Willis Corroon of Seattle to submit a bid.
Enclosed is a summary of the proposal analysis, completed in 1992. Zaremba Claims Service not
only obtained the highest rating, but were substantially less expensive than the other three firms.
In 1994, when the contract came up for renewal, Zaremba submitted an annual fee of $24,500,
which was guaranteed for three years.
Renewal Proposal
Zaremba has submitted an offer to renew the service contract for an additional three year period
at an annual cost of $27,680. They have also agreed to hire a programmer to help improve the
format and look of the existing claim report.
According to the feedback we have received from your legal department, they are generally
pleased with the services offered by Zaremba.
Conclusion and Recommendation
- The cost of claims adjusting has continued to escalate in the past three years. In other self-insured
accounts, the fees have increased approximately 3% per year. If we requested bids from other
local firms, probably GAB and Crawford and Company would be qualified. In 1992, GAB was
almost 70% higher than Zaremba, and Crawford and Company was 36% higher. Knowing the
Insurance Broking Risk Services Employee Benefits
ty.)
Sedgwick
-
Mr. John Hanson
City of Yakima
October 31, 1997
Page 2
level of increases in claims -adjustment costs, we believe this difference would be even greater
today. In addition, you would have the additional expense to handle current, open claims from
previous years, and the additional time required by City personnel to educate the new firm.
Based on these factors, we would recommend renewal with Zaremba, and contracting for an
additional three -years at the guaranteed rate of $27,680.
John, your prompt consideration of this request will allow Zaremba adequate time to begin the
programming necessary to meet the City's future needs in reporting format.
Sincerely,
Deborah Ki -au
Vice President
L'IVab
encl.
rm
i(V.11.1/&
oicf Pearson
e President