1992-198 ORDINANCE NO. ~
AN ORDINANCE ACCEPTING THE PROPOSAL OF FRONTIER ADJUSTERS OF DENTON
FOR ADMINISTRATION OF GENERAL LIABILITY CLAIMS AGAINST THE CITY OF
DENTON; AUTHORIZING THE CITY MANAGER TO EXECUTE A CONTRACT FOR SUCH
SERVICES; AND AUTHORIZING THE EXPENDITURE OF FUNDS THEREFORE; AND
PROVIDING AN EFFECTIVE DATE.
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
SECTION I. That the City authorizes Frontier Ad3usters of
Denton to administer general liability claims against the City of
Denton and the City Manager is hereby authorized to execute a
contract wxth Frontier Adjusters, a copy of which ls attached
hereto.
SECTION II. That the City Council authorizes the expenditures
of funds in the manner and amount specifled in the contract.
S C_~. That this ordinance shall become effective lmme-
dlately upon its passage and approval.
BOB CASTLE~B~~
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
AP ED AS TO LEGAL FORM:
DEBRA A. DRAYOVITCH, CITY ATTORNEY
~DMZMZBTI~TZVE SERVZCB ~GREEI~ENT
BETWEEN THE CZTY OF DBI~TON ~%ND FRONTZER ~D~USTERB OF DENTON
This A~_~n~strati¥~,Servlce, Agreement (the Agreement) is made
as of the ~_~day of ~~__, 1992, by and among:
The City of Denton, a Texas home rule city, 215 East McKinney,
Denton, Texas 76201, hereafter referred to as Client.
Frontier Adjusters of Denton, Texas, 512 W. Hickory, Suite
222, Denton, Texas 76201, who shall be known as Frontier.
WHEREAS, Client has elected a self-~nsured program for its
general liab211ty claims and requires claim and computer report
services for the administratlon of this program; and
WHEREAS, Frontier is in the business of providing insurance
claims investigation, adjustment and computer report services; and
WHEREAS, Client desires to retain Frontier to provide
insurance claims investigation, adjustment and computer report
service.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements of the parties herein contained, the parties hereby
agree as follows:
I. Term. This Agreement w~ll be effective from November 18,
1992 to November 16, 1993. If Frontier has performed in a manner
satisfactory to Client, the city Manager may extend the Agreement
by one-year periods for up to four (4) years beginning at the
conclusion of the initial contract and by s~gnlng an extension
letter.
II. Ssrvioos to be Provided by Frontier. Frontier shall:
1. Investigate, ad]ust and administer claims submitted
against Client in accordance w~th its best professional
judgment, including;
a. Screening accident reports for potential claims and
~nit~atlng contact with claimants.
b. Initiating and maintaining contact w~th claimants
or their attorneys.
c. Deciding upon and initiating a proper course of
investigation.
d. Determining responsibility.
e. Seeking contribution or Indemnity from responsible
third parties.
f. Evaluating damages and determlnlng settlement value
of claims.
g. Preparing written reports to C~ty staff or C~ty
Council when recommending settlements in excess of
$10,000.
h. Performing any and all required inspections and
examination of estimates.
2. Produce computer reports in an agreed format for
monthly loss detail and summary print-out and semi-annual
claims summary report ~ncludlng a report summarizing frequency
and severity of losses and loss activity for each defined
organizational unit of Client. Frontier shall also provide to
the Client a monthly loss detail and summary print-out.
3. Maintain a claim file on each reported claim. The
claim files will be the property of Client and may be reviewed
or copied at a reasonable t~me by Client or a designated
representative.
4. Determine claim payments, if any, to be paid on the
Client's behalf from funds supplied by Client. Frontier shall
obtain Client's approval before payment is made.
5. Establish reserves, where appropriate, reflecting
Frontier's professional judgment.
6. Make recommendations on allocated loss expenses.
7. Assist Client in appointment of defense counsel
where necessary on Client's behalf and cooperate fully with
legal counsel appointed by the City
8. Inform Client of claim status, reserve adjustments
and settlement recommendations in a format agreed upon with
Client. Each estimate and any subsequent change shall be
included in the risk management information system. No
reserve estimate can be established or chanaed w~thout prior
consultation with Client's Risk Manaaer or the CltV Attorney.
9. Report to Client any claim which ~n Frontier's
professional judgment warrants a denial.
10. Frontier shall maintain, at a minimum, one claims
off~ce located within 60 miles of the City of Denton. Ail
activity related to the services requested will be coordinated
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through the Texas based claims office. An 800 number will be
established for claims offices located outside the C~ty of
Denton.
ll. Submit to Cllent all claim files which have been
closed for one year to be maintained by Client for statutory
retention period.
12. Make available a representative on a twenty-four
hour basis for Investigation or other action required on
general liability claims where a death or serious bodily
injury has occurred.
13. Create a file for each claim upon receiving notlce
of an incident where there ~s a possiblllty of a loss or
expense payment. All incidents not requiring the creation of
an individual file shall be held in "suspense" files. The
claim file shall contain all investlgatlon, legal and process-
lng records attributable to the claim and each document or
piece of correspondence is "date stamped" upon receipt.
14. Make every attempt to contact claimants within
forty-eight hours of receipt of notice of loss. W~thin
fourteen (14) days of notice of loss, Frontier wlll have eval-
uated the claim and communicated to Client an initial
determination as to the liability, potential costs and
reserves for the claim. Frontier shall review reserves
quarterly and modify as approprlate.
15. Within the authorization extended, negotiate and
settle all claims which warrant such dispositions and make
reasonable efforts in accordance with industry standards to
dispose of all claims submitted by Client and prepare compro-
mises, agreements, and releases for Client. The City
requires that the Risk Manager, the city Attorney and the city
Manager approve in advance all liability settlements and
payments. After the contract is executed, the Risk Manager
may, by letter, grant settlement authority of up to $1,000
when a settlement is in the best interest of the City and the
City Attorney or the Risk Manager ls unavallable for
consultation.
16. Provide copies to client of all correspondence
written to claimants.
17. Comply with all other terms and conditions in this
Agreement.
Frontier shall perform the services specified in this
agreement in accordance with the requirements of any
regulatory authority having jurisdiction. Where required by
law or regulation, Frontier will utilize licensed claims
adjusters to render contracted service. The services shall be
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performed in accordance with generally accepted professional
standards and in accordance with such legal requirements or
restrictions as may be imposed by governmental authority.
III. obligations of Client. Client shall:
1. Promptly refer to Frontier all claims which are
covered by this Agreement.
2. Establish a claim paying fund.
3. Maintain a Loss Fund for the paying of claims and
allocated expenses. If there are not adequate monies in the
Loss Fund, Frontier may suspend all payments and all other
services under this Agreement until the Client provides
adequate funds. Client agrees that Frontier will not be
liable for any fines, assessments, fees, judgments or penal-
ties resulting from an interruption of services which was
caused by Client's failure to pay Frontier's fees, to reim-
burse the Loss Fund or to provide appropriate monies for the
Loss Fund.
4. Pay Frontier service fees according to the provi-
sions of Exhibit A to this Agreement.
5. Respond promptly to settlement or action requests
from Frontier.
IV. ~eneNal Con~itions
I 1. This Agreement is for the sole benefit of the
parties. This Agreement shall be interpreted in accordance
with the law of the state of Texas. The Agreement may be
modified or amended only by a writing signed by both parties
2. If Client fails to make timely payment of monies
owing Frontier for services properly performed, i.e. within 30
days of an invoice, Client agrees to payment of interest for
late payment at the prevailing rate. In the event Frontier
incurs collection expense in obtaining monies owed for
services properly performed, Client agrees to reimburse those
e~penses.
VJ Termination.
1. The Agreement shall be subject to termination under
any of the following conditions:
a. Mutual Agreement. Upon mutual written agreement of
the contracting parties to terminate specifying the
effective date of termination with ninety days
notice in writing.
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Frontier shall maintain such minimum coverage during the term
of this Agreement.
VII. Definit~ons.
1. Allooated Loss Expense: Allocated Loss Expense
cludes, but is not limited to the following: subrogation;
rehabilitation; automobile or other physical damage appraisal,
all court oost, fees, and expenses: fees for service of pro-
cess; fees to attorneys; the cost of services of undercover
operations and detectives; fees of independent adjusters or
attorneys for investigation or adjustment of claims; the cost
of employing experts for the purpose of preparing maps, photo-
graphs, diagrams, and chemical or physical analysis, or for
expert advice or opinion; the cost of obtaining copies of any
public records; and the costs of depositions and court report-
ers or recorded statements.
VIII. Confidential Information. Any data or other technical
or other information furnished or disclosed hereunder is the
property of Client and shall be deemed confidential to Client and
shall be returned to Client at the conclusion of this Agreement.
If such information is known by the public, Frontier is free of any
obligation to keep it confidential. Frontier shall maintain
adequate security to prevent unauthorized access to Client's claim
files.
IX. Non-Disorimination. Frontier shall comply with the
provisions of all applicable state and federal laws and regulations
applicable to the work and to Frontier as an employer of labor or
otherwise. Frontier agrees not to discriminate against any
employee or applicant for employment because of race, religion,
sex, age, national origin or disability.
X. Inde~mification. Frontier agrees to indemnify, defend and
hold harmless Client with respect to any claims, demands, actions,
damages, costs and expenses to which Client may be subjected as a
consequence of or as a result of any error, omission, tort,
intentional tort, wilful misconduct or any other negligence on the
part of Frontier, its employees, agents, and subcontractors, unless
the complained of actions of Frontier were taken at the specific
request of Client.
XI. General Provisions.
1. Agreement and Notioes. The provisions of this
Agreement constitute the whole and entire agreement between
Frontier and Client and may be modified or altered only by
mutual agreement, reduced to writing, executed by authorized
representatives, and delivered to each other. Whenever no-
tices or consents are required to be given under this Agree-
ment, such notices or consents shall be reduced to writing,
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executed by authorized representatives, and delivered to the
other party at the following address.
city of Denton, Denton Texas
Attention: Ms. Debra A. Drayovltch
215 E. McKlnney
Denton, Texas 76201
Frontier Adjusters of Denton
Attention: Arthur H. Anthony
512 W. Hickory, Suite 222
Denton, Texas 76201
2. Waiver. The failure of either party at any time to
enforce any right or remedy available to it under this con-
tract with respect to any breach or failure by the other party
shall not be construed to be a waiver of such right or remedy
3. 8evera~ility. In the event that any one or more of
the provisions contained herein shall for any reason be held
to be unenforceable in any respect, such unenforceablllty
shall not affect any other provision of this contract, but
this Agreement shall then be construed as if such unenforce-
able provision or provisions had never been contained herein.
4. Captions. The captions in this Agreement are
included for convenience only and shall not be construed to
define or limit any of the provisions contained herein.
5. Assig-ment. This Agreement is one for personal ser-
vices and may not be delegated or assigned by either party
without written consent of the other. Ail work performed by
a subcontractor, if any, shall be deemed work performed by
Frontier.
6. Relationship. Frontier shall exercise full control
and direction over 1ts subcontractors and employees who per-
form the work described in this Agreement. Neither Frontier
nor its employees, agents or subcontractors shall be deemed to
be employees of Client. It is understood that Frontier is an
· ndependent contractor for all purposes and at all times.
Frontier is wholly responsible for withholding and payment of
all federal, state and payroll taxes with respect to its em-
ployees.
7. Exoass Insuranoe. It is understood that as of the
date of execution of this Agreement, Client has no excess
insurance. However, should Client obtain such coverage,
Client agrees to notify Frontier of such coverages in writing
and to furnish reporting levels Thereafter, Frontier shall
notify Client and any excess insurers applicable to any claim
that may potentially fall within the excess carrier's level of
coverage and, if requested, provide Client and such excess
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insurers with information on the current status of those
claims and potential losses.
8. Reoords. Frontier will establlsh and maintain for
a period of not less than five (5) years, claim files, logs,
transaction documents and all other records associated with
this contract. These records shall not be disposed of or de-
stroyed without prior written authorization from the City.
XXI. Claims Investigation and~nalysis end Payment. Frontier
shall provide prompt and thorough claims ~nvestlgation services.
Depending on the seriousness of the accident or situation,
investigations are to be initiated within one to five (5) working
days after Client has notified Frontier of the situation. For
potential claims involving bodily injury, Frontier shall make
· nitial contact with the injured party or bls representative within
twenty-four (24) hours of notification by Client. Frontier shall
make an emergency phone number available durlng weekends and non-
working hours for notification of potential claims involving a
fatality. Frontier shall conduct, as necessary, on-site ~nspec-
t~ons of accident locations, make photographs of accident
locations, obtain statements from City employees, claimants, and
w~tnesses and obtain copies of policy and accident reports, etc.
XIII. Right To &udit.
1. Client, through its designated representatives, is autho-
rized to visit Frontier's processing and/or storage
premises and have access to all data, ~ncludlng paper
documents, microfilm, microfiche, and magnetically stored
data which relate to services rendered to Client.
2. Frontier agrees to allow the Client or its designee full
access to all claims data, and other items needed for
cost and utilization studies as they pertain to Client.
3. Frontier agrees to assist Client by promptly providing
requested data and assisting in sampling surveys.
XIV. Care of Data. Frontier shall take all steps necessary
to safeguard any data, files, reports, or other information from
loss, destruction or erasure. Liability for any costs or expenses
of replacing, or damages resulting from the loss of such data shall
be borne by Frontier unless at the time of the loss, said data was
in the exclusive custody of Client.
XV. Confliets. Nothing 1n this agreement shall prevent
Frontier from representing other clients. However, should Frontier
be assigned a claim by Client wherein Frontier has also previously
received an assignment from an adverse company, or party also
represented by Frontier, Frontier w~ll so inform the City of
Denton. Solely at the discretion of the C~ty of Denton, Frontier
may continue to handle such claim or the City of Denton may assign
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the same to another third party claims administrator. Frontler
shall incur no liability for falling to notify the city of Denton
of any claim wherein a conflict may exist.
EXECUTED th~s /~day of ~992.
CITY OF DENTON, TEXAS
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
APPROVED AS~O LEGAL FORM:
DEBRA A. DRAYOVITCH, CITY ATTORNEY
FRONTIER ADJUSTERS OF DENTON
P~'ES I~DENT / OWNER /
ALLO0394
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EXHIBIT ~
FROI~IER SERVICE FEE8
Adjuster Fee $37.50 per hour
Secretarial/Clerical Expense $15.00 per hour
Photograph Expense At Cost
Computer Reports $50.00 per month maximum
Mileage Cost .35 per mile
Copies .10 per page
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