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REQUEST FOR COUNCIL ACTION Date: 12/15/99 Item No.: Department Approval: Manager Reviewed Agenda Section 0 6— Deports and Recommendations 1 Item Description; Worker's Compensation Claim Handling Background The City's workers compensation program has been self insured by the City since its origination in 1980. During the period (1 980 -1 999) the claims management has been handled directly by the Assistant Finance Director. The program has been very successful and an independent review has shown that the City has an outstanding Experience Modification Factor of .86. This rating speaks well of the City's decision to handle the program in house, as well as a reflection on the professional expertise of Nick Ensrudc, Assistant Finance Director, who has administered the program since its inception. In looking ahead to Nick's retirement in the next 24 months as well as the general direction of increasing complexity of the worker's compensation statutcs, we have been working with the LM IT., our insurance carrier as to alternatives regarding claims handling. Berkley Risk Administrators Company LLC, currently has the contract with the LICIT to administer their claims. Because we are currently self insured, the LI I IT will allow Berkley to contract directly with the City for a similar service. The timing is such that by having Berkley contract with us for 2000, the City can still have Nick's expertise to monitor the transition and to assist in evaluation of the effectiveness of the program. Financial The estimated east to Berkley to handle the City's workers compensation claims is $12,500 annually. This cost would be from the worker's Compensation Fund, which would not affect the 000 tax levy and is included in the total budget for 2000. Staff Recommendations Staff` is recommending that the City Council approve the entering into are agreement with Berkley Disk Administrators Company, LLC for workers' Compensation claims administration for the calendar year of 2000. It is further emphasized that the Finance Department will monitor the contract and provide an evaluation prior to any continuation beyond December 31, 2000. Motion to approve a one year agreement with Berkley Risk Administrators Company, LLC for worker's compensation claims administration and authorizing the City Manager, upon an aflir native review by the City Attorney, to sign a contract for the year 2000.