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BACKGROUND <br /> Many municipalities hire professional third -party administrators with the expertise to <br /> handle the challenges of the specialized field of workers compensation administration. <br /> Administration of workers' compensation claims is a complex process due in part to <br /> various legal mandates as well as medical aspects of handling claims. Workers' <br /> compensation administrators are expected to interface with medical and legal staff <br /> representing the City, the employee or both. Delays or mistakes in processing claims <br /> can result in severe penalties, financial liability and poor employer - employee relations. <br /> The City retained Innovative Claims Services, Inc. (ICS) in 2001 to provide third -party <br /> administration for the City's workers compensation program. Initial goals included the <br /> development of consistent and efficient procedures in compliance with state <br /> requirements, as well as providing exceptional customer service to both the injured <br /> worker and City staff. ICS streamlined the case management process and has <br /> consistently met the established goals of the City. As a result, the City currently has an <br /> orderly, efficient and compliant worker's compensation program based in part on the <br /> relationships between the City, ICS, health providers and other related parties. Since <br /> 2001, the City of Pleasanton has entered into a number of contracts with ICS varying <br /> from one to three years. <br /> The City also participated in the Bay Cities Joint Powers Insurance Authority (Bay <br /> Cities) workers' compensation program so that it could obtain excess workers' <br /> compensation coverage through Bay Cities' associated agency, the Local Agency <br /> Workers' Compensation Excess Joint Powers Authority (LAWCX). However, the City <br /> has not utilized administrative and other workers' compensation services Bay Cities <br /> provide, even though we are charged for such services. In early spring 2010, staff — <br /> including the Assistant City Manager, Human Resources Manager, Employee Services <br /> Manager and the former City Attorney — explored participating more fully in the Bay <br /> Cities workers' compensation program. This would require the City to terminate its <br /> direct contract with ICS and utilize the services through Bay Cities for which it has been <br /> paying. Alternatively, staff investigated whether it might be more fiscally prudent to no <br /> longer participate in the Bay Cities workers' compensation program, continue to contract <br /> separately with ICS as the workers' compensation third -party administrator and <br /> participate directly with the LAWCX as a regular member to obtain excess workers' <br /> compensation insurance. <br /> DISCUSSION <br /> Upon completion of the extensive review referenced above, staff concluded that <br /> remaining a part of the Bay Cities workers' compensation program was not necessary <br /> or warranted. To that end, the City withdrew from the Bay Cities workers' compensation <br /> program and filed a formal application with LAWCX for membership (which was <br /> accepted). On July 20, 2010, the City Council adopted a resolution to authorize the City <br /> to participate in the LAWCX as a regular member to obtain excess workers' <br /> compensation insurance. <br /> Page 2 of 3 <br />