HomeMy WebLinkAboutCC 7 CITY WKRS COMP 03-03-80OATE:
February 25, 1980
Consent Calendar
No. 7
3-3-80
Inter-Corn
TO:
FROM:
SUBJECT:
Dan Blankenship, City Administrator
Ed Bushong, Finance Director
ADMINISTRATION OF CITY WORKER'S COMPENSATION PROGRAM
Several months ago a claims audit wa:~ approved for our
Workers Compensation program. This audit was conducted
in November, 1979 and a copy of the final report is attached
for your review.
As clearly stated in the audit report, the excessive case-
load is the source of most of our problems. The claims
administrator for the Orange County Cities Risk Management
Authority (OCCRMA) since July 1, 1979 is Bierly & Associates.
A formal bid process was followed and because of the outstand-
ing reputation of the Bierly firm an~ the low cost per case
bid, Bierly was chosen by OCCRMA.
The City of Tustin was not receiving an acceptable level of
service from the firm of R. L. Kautz at that time, and Mike
Taft and I agreed the City should use the administrative
services of Bierly & Associates thru the OCCRMA contract.
From July 1, 1979 Bierly & Associates has been the City
claims administrator for Workers Compensation.
From a Finance Department perspective, Bierly has been late
with monthly reports, careless in clerical procedures
including check preparation and unable to produce a monthly
check register that we can use necessitating considerable
manual effort and reconciliation.
From a Personnel Department perspective, Bierly has failed
to return telephone calls the same day, has not allowed
the assigned City claim representative to be available for
case review and follow-up and blamed internal turnover for
the inadequate and promised service level.
The Personnel and Finance Departments, both individually
and jointly, have met with several representatives of Bierly
& Associates, including the president of the company, Mike
Bierly. The City has been promised a service level as
provided in the contract and committed to at the time the
City chose to use Bierly services. To date this promised
level of service has not been attained. In fact, many of the
same problems continue to be repeated.
February 25, 1980
Page two
Administration of City Worker's Compensation
I am attaching a copy of my letter to Mr. Bierly and a copy
of his response, which in my view did not address our problem
or answer my que%tion. Also attached is a copy of my letter
to Mr. Ross Oliver who is Risk Manager for OCCR~.
A small administrative firm who serves the City of Stanton,
also an OCCRMA city, and the cities of Montebello, Seal Beach
and Santa Monica has proposed to serve the City of Tustin.
This firm, Fitzpatrick Self-Insurance Administrators, made the
initial contact with us and is not willing to take on enough_
new business to impact their current clients adversely. Mike
Taft and I personally interviewed Larry Fitzpatrick, Principal
of the firm, and Bernard Colen, the Claims Processor who '
would be assigned to the City of Tustin. In our opinion, the
Fitzpatrick firm can and will provide the level of service
we desire. The City of Stanton is so satisfied with Fitzpatrick
services that membership in OCCRMA and premium savings on the
excess insurance was considered secondary to a required change
to OCCRMA Workers Comp claims administrator. The City of
Stanton and the City of Montebello have indicated to us they
are very satisfied with Fitzpatrick's services.
As you are already aware, the success of a self-insured Workers
Compensation program depends on sound and professional manage-
ment. Internally management of claims is accomplished by
the Personnel Director; management of funds and funding is
accomplished by the Finance Director. Externally management of
claims is accomplished by the claims administrator.
In concurrence with the request by Mike Taft to contract with
Fitzpatrick Self-Insurance Administrators, I have taken the
necessary steps to terminate the City of Tustin relationship
with Bierly'and Associates and contract directly with Fitz-
patrick. Personnel and Finance will continue to moniter the
Workers Compensation program to assure the City receives
the best possible service at the most favorable price.
Ed Bushong
Finance Director
cc: Mike Taft, Personnel
Ross Oliver, OCCRMA