REQUEST FOR EXTENSION OF WORKERS' COMPENSATION CLAIM ADMINISTRATION SERVICE AGREEMENT WITH

HAZELRIGG RISK MANAGEMENT SERVICES, INC.

Recommendation:

It is recommended that the City Council authorize the City Manager to negotiate and execute a two-year extension of the services agreement with Hazelrigg Risk Management Services, Inc. for workers' compensation claims administration services.

Background:

On May 24, 1994 the City Council selected Hazelrigg Risk Management Services, Inc. (H-RMS) to serve as the City's Third Party Administrator for Workers' Compensation claims.

This selection, pursuant to the terms of the Request for Proposals was for an initial three year term with an additional two year renewal option. The initial term expires June 30, 1997.

Analysis:

H-RMS, as our Third Party Administrator for Workers' Compensation claims, provides administrative and adjustment services for all workers' compensation claims filed. These services include: initial correspondence and continued communication with injured employees; scheduling of necessary medical reviews and evaluations; payment of mandated benefits; statistical reporting; establishing case files and setting reserves; assistance in investigating claims; negotiating settlement of both litigated and non-litigated claims; and, seeking recovery from third party contributors when appropriate.

H-RMS's services have been professional and responsive to both City Management and injured employees during the term of the services agreement. Benefits have been timely to injured employees and employees' questions and concerns are appropriately addressed by H-RMS staff.

Based on the above, and recognizing that H-RMS was the lowest responsive bidder three years ago, staff is requesting Council authority to continue this agreement.

Fiscal Impact:

H-RMS has requested a 3% increase for FY 97/98. This will increase the annual fee from $35,280 to $36,338 ($1,058 increase).