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HomeMy WebLinkAbout07 DELEGATING AUTHORITY TO PERFORM LIABILITY CLAIMS ADMINISTRATIVE FUNCTIONS AND DETERMINE ELIGIBILIDocuSign Envelope ID: 95D788E0-2431-481B-8D8F-46BB1CA5B447 Agenda Item 7 � Reviewed: DS DS AGENDA REPORT City Manager Finance Director N/A MEETING DATE: APRIL 2, 2024 TO: NICOLE BERNARD, ACTING CITY MANAGER FROM: DERICK YASUDA, DIRECTOR OF HUMAN RESOURCES SUBJECT: DELEGATING AUTHORITY TO PERFORM LIABILITY CLAIMS ADMINISTRATIVE FUNCTIONS AND DETERMINE ELIGIBILITY FOR CALPERS DISABILITY RETIREMENT SUMMARY Adoption of the attached Resolutions will transfer the responsibility for performing liability claim administrative functions and determining an employee's eligibility for a CalPERS disability retirement from the City Council to staff. RECOMMENDATION Staff recommends that the City Council adopt the following Resolutions: 1. Resolution No. 24-21 to delegate authority to the City Manager or their designee to perform liability claim administrative functions; and 2. Resolution No. 24-22 to delegate authority to the City Manager or their designee to make determinations on Local Safety employee eligibility for a CalPERS disability retirement. FISCAL IMPACT None. BACKGROUND AND DISCUSSION Under state law, it is generally up to the governing body of a public agency to perform administrative functions associated with liability claims filed against the public agency and make determinations on a Local Safety employee's eligibility for a disability retirement with CalPERS. However, state law also permits the governing body to delegate decision - making authority on both of these matters to staff of the public agency. Liabilitv Claims The City of Tustin has significant risk exposures as a result of being a full -service city, including those related to providing police services and maintaining public roads and DocuSign Envelope ID: 95D788E0-2431-481B-8D8F-46BB1CA5B447 City Council Agenda Report April 2, 2024 Delegating Authority for Liability Claims and Disability Retirements Page 2 facilities. Individuals or other third parties may file claims against the City for damages to person or personal property they believe are caused by the City in accordance with the California Tort Claims Act (Government Code sections 810-996.6). Claims for death, injury to person, or damage to personal property must be filed no later than six months after the accrual of the cause of action, while claims for damage to real property must be filed no later than one year after the accrual of the cause of action. With limited exceptions, third parties cannot sue a government agency without first filing a claim within those specified time periods. The City is a member of the California Insurance Pool Authority (CIPA), a risk sharing joint powers authority comprised of 14 Southern California cities. As a member of CIPA, the City jointly purchases liability and workers' compensation insurance with the other members and has access to risk management experts. Through CIPA, the City contracts with a third -party administrator (TPA) to assist with the management of liability claims filed against the City. With staff's assistance, all claims filed against the City are reviewed and investigated by the TPA. If a claim is litigated or appears likely to be litigated, the City Attorney's Office or outside counsel evaluates the claim as well. Ultimately, the TPA and/or assigned attorney recommends settlement or denial of the claim based on the specific circumstances of the case. Currently, when staff recommends claims for rejection, staff presents the claims to the City Council in Closed Session, Council Members vote on the recommendation, and the action is subsequently reported out publicly in the Regular Meeting. After a claim is affirmatively rejected, staff mails written notice of the action to the claimant to commence the statute of limitations to file a lawsuit. Historically, the majority of claims filed against the City are rejected. When a claim is rejected, it is typically for reasons such as the following: the actions leading to the damage were performed by a contractor or third party, the incident occurred in a location outside of the City's jurisdiction, the damage was caused by an Act of God, the claimant failed to demonstrate proof that the City had actual or constructive knowledge of a dangerous condition of public property prior to the incident and had a reasonable amount of time to correct it, or the claimant failed to provide sufficient evidence to justify their monetary demand. If the City affirmatively denies a claim, a claimant has six months from date the notice of denial was delivered to file a lawsuit. However, if the City takes no action within 45 days of the filing of the claim, the claim is deemed denied by operation of law, and the statute of limitations to file a lawsuit is two years from the date the incident occurred. Therefore, it is typically in the City's best interests to affirmatively deny a claim to initiate a shorter statute of limitations for the claimant to file a lawsuit. The City's denial of a claim does not preclude the City from subsequently making a settlement offer to the claimant if warranted or desired. DocuSign Envelope ID: 95D788E0-2431-481B-8D8F-46BB1CA5B447 City Council Agenda Report April 2, 2024 Delegating Authority for Liability Claims and Disability Retirements Page 3 Government Code section 935.4 expressly authorizes the governing body of a public agency to delegate to staff the authority to perform all of the administrative functions of the California Tort Claims Act that would otherwise be performed by the City Council. The most common administrative function the City needs to perform is denying a claim. Additional administrative functions include, but are not limited to, returning a claim as insufficient or untimely and approving or denying an application for leave to present a late claim. Government Code section 935.4 also authorizes the governing body to delegate to staff the authority to settle claims, though only a charter provision may authorize staff to settle a claim in excess of $50,000. In accordance with City Council Resolution No. 23-32, the Director of Human Resources, City Attorney, and City Manager jointly have the authority to settle liability claims of up to $50,000, the maximum authority allowed to be delegated to staff in a General Law city. Settlement of any claims in excess of $50,000 must be authorized by the City Council. In addition, settlement of any claims in which total expenditures exceed $350,000 (the City's self -insured retention) must also be authorized by CIPA. Delegating authority to the City Manager or their designee to perform all types of claims administrative functions will allow the City to deny claims more quickly and thus initiate the statute of limitations sooner, which may reduce the potential for a lawsuit to be filed against the City. Staff will continue to keep the City Council apprised of significant claims filed against the City and seek City Council approval for potential settlement of any claims in excess of $50,000. Further, adoption of the delegation of authority resolution will not preclude the City Council from reviewing, considering, or acting upon any liability claim if desired. Disability Retirements For members of the California Public Employees' Retirement System (CaIPERS), there are two types of retirement due to disability: Disability Retirement (DR) and Industrial Disability Retirement (IDR). DR is retirement resulting from an employee's mental or physical incapacity to perform their usual job duties as the result of an injury or illness. DR is available to all members of CaIPERS who have at least five years of service credit. For a DR, the injury or disease causing the incapacity need not be job -related. An IDR is similar to a DR, however the employee's mental or physical incapacity to perform their usual job duties is the result of a mob -related injury or illness. At the City of Tustin, only Local Safety members (i.e. sworn peace officers) are eligible for an IDR. As soon as it is believed an employee is unable to perform their job because of an illness or injury that is expected to be permanent or of an extended and uncertain duration, an application for disability retirement must be submitted to CaIPERS by the employee or by DocuSign Envelope ID: 95D788E0-2431-48113-81D81`4613131CA5B447 City Council Agenda Report April 2, 2024 Delegating Authority for Liability Claims and Disability Retirements Page 4 the City. For Local Miscellaneous members (i.e. civilian employees), CalPERS makes the determination on an employee's eligibility for a DR. However, for Local Safety members (i.e. sworn peace officers), the City is required to determine an employee's eligibility for a DR or IDR following specific objective criteria (Government Code section 21156). For Local Safety employees, the City is generally required to make a determination on the employee's eligibility for a disability retirement within six months of the date of the disability retirement application (Government Code section 21157). By default, the action of approving or denying either type of disability retirement must be taken by the City Council. Determining eligibility for a disability retirement must be based solely on credible medical evidence. Disability retirements expressly cannot be approved as a substitute for disciplinary action or based on a cost -benefit analysis. There are two key criteria in establishing an employee's eligibility for both types of disability retirement: 1) the City is in receipt of competent medical opinion that states the employee is substantially incapacitated from performing the usual and customary duties of their position with the City and 2) the incapacitating disability is expected to be permanent or of an extended and uncertain duration. In addition, for an employee to qualify for an IDR, the incapacitating disability must be accepted by the City and the City's workers' compensation third -party administrator (TPA) as industrial, arising out of and in the course of employment. If these criteria are met, the City is obligated to determine the employee is eligible for a DR or IDR, as the case may be. To protect an employee's privacy to the extent possible, the City generally discusses the details of an employee's pending disability retirement in Closed Session, if permitted by the Brown Act. However, for the City Council to take any action on a disability retirement, they must do so publicly during the Regular Meeting. As a result, the City is required to provide a written summary of the employee's circumstances, including some details on their medical condition, in an Agenda Report that is available online for anyone to see. Therefore, it is not possible to truly keep an employee's medical condition private as long as the City Council is responsible for making determinations on eligibility for disability retirement. Once the City approves a disability retirement, the City is required to send CalPERS documentation related to the determination. In the past, the City simply sent CalPERS certification that the employee's disability retirement was approved by the City in accordance with state law. However, CalPERS recently implemented new requirements that can potentially complicate and delay the disability retirement process. For all disability retirements as of March 15, 2023, the City is now required to send CalPERS substantial additional information, including details on the employee's job duties, the physical requirements of their job, medical reports from the employee's treating specialist, a detailed report from the City's workers' compensation TPA, and all medical reports used DocuSign Envelope ID: 95D788E0-2431-48113-81D81`4613131CA5B447 City Council Agenda Report April 2, 2024 Delegating Authority for Liability Claims and Disability Retirements Page 5 in making the disability retirement determination. If CaIPERS deems that any information received from the City is incomplete or insufficient, they will delay processing the employee's disability retirement until the City provides information that is satisfactory to CaIPERS. Government Code section 21173 expressly permits the governing body of any contracting agency to delegate their authority to make determinations on disability retirements to staff of that public agency. In fact, CalPERS staff often recommends that public agencies have this authority delegated to staff in order to make the disability retirement process more efficient. With the authority to determine an employee's eligibility for a disability retirement delegated to the City Manager or their designee, the City will be able to more adequately protect employees' privacy and make determinations on disability retirement eligibility quickly and more efficiently. Summary The City's practice has been to discuss liability claims in Closed Session prior to reporting out the City Council's decision during the Regular Meeting. Similarly, the City's practice has been to discuss an employee's IDR application in Closed Session before the Council approves an IDR during the Regular Meeting. Both of these processes take up valuable Closed Session time, which is increasingly filled with many other high -priority and time - sensitive items. As a result, the ability to meet in Closed Session to discuss claims and disability retirements may be delayed by weeks or months since the City Council is typically scheduled to meet two times each month. Further, due to the specific and limited factors considered when evaluating liability claims and disability retirements, the City Council historically has approved staff's recommendation on these matters on virtually every occasion. Therefore, to be more efficient with the City Council's and staff's time, and to act more quickly to minimize the City's liability exposure, staff recommends that the City Council delegate decision -making to the City Manager or their designee on liability claims administrative processes and making determinations on disability retirements. Derick Yasuda Director of Human Resources DocuSign Envelope ID: 95D788E0-2431-48113-81D81`4613131CA5B447 RESOLUTION NO. 24-21 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TUSTIN, CALIFORNIA, DELEGATING TO THE CITY MANAGER AUTHORITY TO HANDLE LIABILITY CLAIMS ADMINISTRATIVE FUNCTIONS WHEREAS, the California Tort Claims Act (Government Code sections 810-996.6) imposes certain duties upon the City Council of the City of Tustin (the "City") relating to claims for damages presented to the City by third parties ("claims administrative functions"); and WHEREAS, California Government Code section 935.4 authorizes the City Council, by resolution, to delegate authority to an employee of the City to perform the claims administrative functions as set forth in the California Tort Claims Act; and WHEREAS, the City Council has previously delegated authority to settle liability claims of up to $50,000 to the Director of Human Resources, City Attorney, and City Manager via Resolution No. 23-32; and WHEREAS, the City Council hereby desires to delegate authority to perform additional claims administrative functions to the City Manager or their designee. NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Tustin does hereby delegate to the City Manager, or their designee, authority to perform the claims administrative functions set forth in the California Tort Claims Act that are otherwise required to be performed by the City Council, including but not limited to denying a claim, returning a claim as insufficient, returning a claim as untimely, approving or denying an application for leave to present a late claim, and providing any related notices to claimants on behalf of the City. BE IT FURTHER RESOLVED that nothing herein shall prevent the City Council from reviewing, considering, or acting upon any liability claim in its sole and absolute discretion. PASSED AND ADOPTED at a regular meeting of the City Council of the City of Tustin held on the 2nd day of April 2024. AUSTIN LUMBARD, Mayor Resolution 24-21 Page 1 of 2 DocuSign Envelope ID: 95D788E0-2431-481B-8D8F-46BB1CA5B447 ATTEST: ERICA N. YASUDA, City Clerk APPROVED AS TO FORM: DocuSigned by: .a41�b��. 3RR4F37FIl��1d�C: DAVID E. KENDIG, City Attorney STATE OF CALIFORNIA ) COUNTY OF ORANGE 1 SS CITY OF TUSTIN CERTIFICATION FOR RESOLUTION NO. 24-21 I, Erica Yasuda, City Clerk and ex-officio Clerk of the City Council of the City of Tustin, California, do hereby certify that the whole number of the members of the City Council of the City of Tustin is five; that the above and foregoing Resolution No. 24-21 was duly passed and adopted at a regular meeting of the Tustin City Council, held on the 2nd day of April, 2024, by the following vote: COUNCILMEMBER AYES: COUNCILMEMBER NOES: COUNCILMEMBER ABSTAINED: COUNCILMEMBER ABSENT: COUNCILMEMBER RECUSED: ERICA N. YASUDA, City Clerk Resolution 24-21 Page 2 of 2 DocuSign Envelope ID: 95D788E0-2431-48113-81D81`4613131CA5B447 RESOLUTION NO. 24-22 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TUSTIN, CALIFORNIA, DELEGATING TO THE CITY MANAGER AUTHORITY TO MAKE DISABILITY RETIREMENT DETERMINATIONS WHEREAS, the City of Tustin (the "City") is a contracting agency of the California Public Employees' Retirement System (CaIPERS); and WHEREAS, the California Public Employees' Retirement Law (PERL) requires that a contracting agency determine whether an employee of such agency who is classified as a Local Safety member is "disabled" for purposes of the PERL and whether such disability is "industrial" within the meaning of such law; and WHEREAS, the City has determined upon legal advice that it may delegate authority under Government Code section 21173 to make such determinations to the City Manager or their designee. NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Tustin does hereby delegate to the City Manager, or their designee, authority to make determinations of disability on behalf of the City of Tustin pursuant to Government Code section 21156 and whether such disability is industrial and to certify such determinations and all other necessary information to CalPERS. PASSED AND ADOPTED at a regular meeting of the City Council of the City of Tustin held on the 2nd day of April 2024. AUSTIN LUMBARD, Mayor ATTEST: ERICA N. YASUDA, City Clerk Resolution 24-22 Page 1 of 2 DocuSign Envelope ID: 95D788E0-2431-481B-8D8F-46BB1CA5B447 APPROVED AS TO FORM: EDocuSig ned by: �a41�b��. 3aeaF��Fo�2�a2r. DAVID E. KENDIG, City Attorney STATE OF CALIFORNIA ) COUNTY OF ORANGE ) SS CITY OF TUSTIN ) CERTIFICATION FOR RESOLUTION NO. 24-22 I, Erica Yasuda, City Clerk and ex-officio Clerk of the City Council of the City of Tustin, California, do hereby certify that the whole number of the members of the City Council of the City of Tustin is five; that the above and foregoing Resolution No. 24-22 was duly passed and adopted at a regular meeting of the Tustin City Council, held on the 2nd day of April, 2024, by the following vote: COUNCILMEMBER AYES: COUNCILMEMBER NOES: COUNCILMEMBER ABSTAINED: COUNCILMEMBER ABSENT: COUNCILMEMBER RECUSED: ERICA N. YASUDA, City Clerk Resolution 24-22 Page 2 of 2