1988-0592006L
NO 99-059
AN ORDINANCE AUTHORIZING THE MAYOR TO EXECUTE A CONTRACT WITH
EMPLOYERS CLAIMS ADJUSTMENT SERVICES, INC FOR PROFESSIONAL
SERVICES FOR CLAIMS ADMINISTRATION, AUTHORIZING THE EXPENDITURE
OF FUNDS THEREFOR, AND PROVIDING AN EFFECTIVE DATE
THE CITY COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS
SECTION I That the City Council hereby approves and
authorizes the Mayor to execute the agreement between the City
of Denton and Employers Claims Adjustment Services, Inc
providing for professional services for claims administration
under the terms and conditions contained in said agreement, a
copy of which is attached hereto and made a part hereof
SECTION II That the City Council hereby authorizes the
expenditure of-funds in the manner and amount as specified in
the agreement
SECTION III That this ordinance shall become effective
imme ate y upon its passage and approval
PASSED AND APPROVED this the/, day of / U& , 1988
RAY ST P NS , P AYOR
ATTEST
•.1 d~
J IF WALTERS, CITY SECRETARY
APPROVED AS TO LEGAL FORM
DEBRA ADAMI DRAYOVITCH, CITY ATTORNEY
BY &-ha) A
2006L
Contract No L0004
THE STATE OF TEXAS S
THIRD PARTY LOSS MANAGEMENT
COUNTY OF DENTON S PROFESSIONAL SERVICES CONTRACT
I PURPOSE
Employers Claims Adjustment Services, Inc , a Texas
corporation, ("Employers") is a corporation engaged in providing
various claim management services The City of Denton is a
nonprofit political subdivision This City during the term of
this Agreement as specified in paragraph two (2), desires to use
the services of Employers as provided in this Agreement The
purpose of this Agreement is to set forth the duties and
obligations of the parties and the compensation to be paid
II TERM
The term of this Agreement shall be from October 1, 1987 to
September 30, 1988 and annually thereafter, unless amended as
provided in paragraph ten (10), or cancelled as provided in
paragraph twelve (12) The anniversary date of this agreement
shall be October 1
III SCOPE
Employers shall perform the services specified in paragraph
four (4) Employers shall provide these services in accordance
with the requirements of any regulatory authority having
jurisdiction Where required by law or regulation, Employers
will utilize licensed claims adjusters to render contracted
service The services shall be performed in accordance with
generally accepted professional standards and in accordance with
such legal requirements or restrictions as may be imposed by
governmental authority Employers is expressly forbidden to act
for the City of Denton in any other capacity, or to represent
itself in any manner as an agent of the City of Denton, except
under the terms hereof During the term of this Agreement,
Employers, and Employers' employee(s), shall be considered and
act as an independent contractor and shall not be considered as
employees of the City of Denton Employers shall furnish all
labor required to perform the services and will have full control
and direction over the method and manner of supervision of their
employees
IV SERVICES TO BE PROVIDED
A Within the term specified in paragraph two (2), Employers
agrees to provide claims management, administration, and settle-
ment recommendation services to the City of Denton for the
following classifications of coverages
1 General Liability
2 Auto Liability
3 Police Professional Liability
4 Public Officials Liability
City of Denton agrees to report to Employers all such clams
covered under this Agreement on a timely basis
B Employers shall establish claim files to include claim
codings, reserves, and record of payments for the reported claims
C Employers shall investigate, adjust, make settlement
recommendations to the City of Denton and negotiate settlements
on behalf of the City of Denton with the injured third parties or
their duly assigned representative These services shall be
provided by Employers on a timely basis
D Employers' settlement authority shall not exceed the
mutually agreed value reached between Employers and the City of
Denton previous to settlement negotiations with the injured third
party or its duly assigned representative At the onset of this
agreement, the mutually agreed upon value is $2,500, however,
this amount may be adjusted, effective upon receipt of written
notice from the City authorizing such adjustment
E During the term of this Agreement as established in
paragraph two (2), Employers agrees to return to the City of
Denton all claims closed in each preceding contract period within
thirty (30) days following the anniversary date of the Agreement
as specified in paragraph two (2) herein
F The City of Denton shall establish a Risk Retention Fund
(herein after referred to as Fund) as a loss fund This Risk
Retention Fund shall be funded by the City of Denton for payment
of claims The cost of printing checks or check requisitions and
any other specialized form as required by Employers to administer
this program, which are not in common use by Employers, shall be
paid for by the City of Denton
1 Employers shall not be given the authority to issued drafts
and/or checks in payment of claims hereunder
2 The City of Denton shall be solely responsible for funding
and agrees to maintain such fund at a level to pay said
claims and claims expense
3 All cost in connection with establishing the Risk Retention
Fund and with maintaining such loss fund will be paid by
the City of Denton
PAGE 2
4 Administration and account reconciliation of the Fund
shall be the responsibility of the City of Denton
G Employers shall not be obligated, under this agreement, to
provide safety and loss control services Upon request from the
city of Denton, Employers will offer said services at the expense
of the City of Denton
H It is understood that as of the date of execution of this
Agreement, the City has no excess insurance However, should
City obtain such coverage, City agrees to notify Employers of
such coverages in writing and to furnish reporting levels
Thereafter, Employers shall notify City and any excess insurers
applicable to any claim that may potentially fall within the
excess carrier's level of coverage and, if requested, provide
City and such excess insurers with information on the current
status of those claims and potential losses
I Employers will supply to the City of Denton during the
term hereof, monthly loss reports Such reports shall include a
detailed listing of all claims by areas or departments, loss
payments, open reserves, code description by type of losses
Employers shall not be responsible for failure of the City of
Denton to notify Employers of said claim incident or settlement,
or other circumstances beyond Employers' control Should this
Agreement be terminated for any reason, Employers shall furnish
statistical reports on a quarterly basis for three (3) years at a
cost of $100 per line per year
J Employers will not be obligated to prepare on behalf of
the City of Denton any official reports or documents required by
Federal, State or Local authorities in connection with claims
handling
K Employers shall furnish all standard claim forms necessary
for proper claims administration
L Employers shall recommend and upon approval by the City of
Denton retain and supervise legal counsel on behalf of the City
of Denton for the defense of any litigation Any suit handled by
Employers shall be in the name of the City of Denton
M This Agreement does not require Employers to provide
services to the City of Denton, under the terms of this contract,
for losses or occurrences prior to the commencement date of this
Agreement In no event shall Employers have any liability or
obligation for work performed or expense incurred by others
N Appeal of any case shall be solely at the discretion of
the City of Denton
PAGE 3
V COMPENSATION
A Employers shall be compensated by the City of Denton as
invoiced Compensation shall be payable within thirty (30) days
of receipt of the invoice Fees shall be as set forth in
Addendum I
B Exclusions The fee schedule contained in Addendum I does
not include the following items
1 Attorney's fees, reporter's fees, bonds of any nature or
type (including but not limited to appeal and supersedeas
bonds) and court costs,
2 Medical examinations and witness fees,
3 Official documents and transcripts,
4 Photographs, official reports and appraisals,
5 Expert's fees, subrogation investigations and sub rosa
investigation,
6 Extraordinary travel expense, incurred at the City of
Denton's request,
7 Safety and loss control expense,
8 Any extraordinary expense, and
9 Any other expense not expressly assumed by Employers
herein
The City of Denton shall pay expenses of this nature form the
City of Denton's loss fund and Employers shall not be required to
advance funds on behalf of the City of Denton for such Expenses
C In the event the City of Denton fails or refuses to make
the payment of fees as herein provided, Employers reserves the
right to terminate this Agreement by giving thirty (30) days
written notice and to collect any and all payments that are
earned pro rata for the period of the agreement preceding
contract termination
VI LEGAL STATUS
Employers is a corporation(s) duly organized, validly
existing and in good standing under the laws of the respective
states in which Employers operates with power to carry on its own
business as now being conducted The City of Denton warrants
that it has approval, if required, to operate a self-insured
program in the State covered in the Agreement
PAGE 4
VII GOOD FAITH ERROR AND OMISSION
No accidental errors or omissions upon the part of either
party shall relieve the other party of its responsibilities under
this Agreement, provided such errors or omissions are rectified
as soon after discovery as possible Employers may be held
accountable for any act of negligence, as now or hereafter may be
defined by the Texas Supreme Court, in handling any claim, or
administrative service, or, any deliberate or willful failure to
carry out reasonable instructions of the City of Denton with
respect to a specific matter, in such event, Employers agrees to
indemnify and hold harmless the City of Denton from any damages
occasioned by said negligence, provided however, Employers shall
not be held accountable for any increased cost or expense to the
City of Denton based upon any allegation that a claim, risk
management or administrative service could have been handled
differently, if its agents have not been negligent in performing
the investigations set forth in Section IV
VIII CONFIDENTIALITY
Employers agrees that information released to it by the City
of Denton for the purpose of performing the agreed upon services
shall be kept confidential and shall be used only in connection
with the performance of said duties for the City of Denton
Employers shall exercise reasonable care to preserve said
information but shall not be liable for unauthorized disclosure
which may occur in spite of such care Employers shall not be
responsible for any information (1) generally known in the
industry, (2) known prior to release by the City of Denton, (3)
independently developed by Employers or (4) published or
otherwise becoming available to others without restriction
IX CONFLICT
Nothing in this agreement shall prevent Employers from
representing other cities However, should Employers be assigned
a claim by the City of Denton wherein Employers has also
previously received an assignment from a adverse company, or
party also represented by Employers, Employers will so inform the
City of Denton Solely at the discretion of the City of Denton,
Employers may continue to handle such claim or the City of Denton
may assign the same to another third party claims administrator
Employers shall incur no liability for failing to notify the City
of Denton of any claim wherein a conflict may exist
X AMENDMENTS
This Agreement may be altered, extended, changed or amended
in writing by mutual agreement of the parties hereto when dated
PAGE 5
and attached hereto without altering the other terms of this
Agreement
Amendments regarding changes in prices for services provided
under this Agreement may be made by the parties by giving thirty
(30) days written notice prior to the effective date of such a
price change
XI CONTINUATION
This Agreement will automatically be renewed unless written
notice is received by either party sixty (60) days prior to the
expiration date specified in paragraph two (2)
XII CANCELLATION
This Agreement may be cancelled by either party by providing
sixty (60) days written notice at the addresses specified in
paragraph seventeen (17)
XIII OBLIGATIONS AT TERMINATION
A Whether this Agreement terminates by exercise of the right
of cancellation, as provided in paragraph twelve (12), or by
exercise of the right of nonrenewal as provided in paragraph
eleven (11), Employers will, upon mutual agreement with the City
of Denton, continue handling those open claims reported during
the active term of this Agreement until such claims have been
closed
1 In return for the continuation of the open claims
service, the City of Denton agrees to the provisions of
this Agreement and to the claims administration fees as
described in Addendum I and shall pay Employers monthly
on the basis of these terms until all remaining open
claims handled by Employers are settled (closed)
2 Those open claim files remaining after the effective
date of termination, which are subsequently closed by
Employers, shall be returned to the City of Denton
These closed claim files will be returned to the City
of Denton once each year, within forty-five (45) days
following what would have been the normal anniversary
date of this contract At City's option, Employers
will handle any claims which occur during the term of
the Agreement but which were not reported until after
contract termination
3 Upon termination of this Agreement, Employers shall
return to the City of Denton within forty-five (45)
days after the effective day of said termination all
closed claim files not previously returned
PAGE 6
B Under no circumstances is Employers obligated to handle
the City of Denton's remaining open claims if the termination of
this Agreement results from nonpayment of fees, as provided in
paragraph five (5), section C
C Should the City of Denton upon termination of this
Agreement not desire continuation of claims handling services on
any remaining open claims, Employers shall bring to current
status all claim files and Employers shall
1 Return all open claim files within ten (10) days after
the effective date of said termination to the City of
Denton or its designee
2 Return all claim files which had been closed within the
preceding contract period to the City of Denton or its
designee within forty-five (45) days after the
effective date of said termination
The cost incurred to package and transport both the open and
closed files to a third party designate shall be born by the City
of Denton without further obligation to Employers
XIV SEVERABILITY
If any separable provision hereof shall be held to be invalid
or unenforceable, such invalidity or unenforceability shall not
affect any other provisions hereof
XV ASSIGNABILITY
This Agreement shall be binding upon and inure solely to the
benefit of the parties hereto and their respective successors and
assigns, and no other person shall acquire or have any right
under or by virtue of this Agreement This Agreement may not be
assigned or transferred by either of the parties without ninety
(90) days prior written consent of the other party hereto, except
that either party may assign this Agreement to a subsidiary or
affiliate company, or except under the circumstances specified in
paragraph nine (9), Conflict
XVI ACCESS TO AND OWNERSHIP OF BOOKS AND RECORDS
It is expressly agreed that claim files, excepting for the
internal working papers of Employers, will be deemed to be owned
by the City of Denton However, the parties to this Agreement
shall each have the right, upon reasonable notice, to inspect and
to audit claim files of the other party, with respect to the
subject matter of this Agreement
PAGE 7
Employers shall at all times during the continuance of this
Agreement or within three (3) years after it termination have
free access to the books, records and files pertaining to claims
of the City of Denton administered by Employers for the purpose
of
A verifying consideration payable by the City of Denton upon
which charges under this Agreement are determined
B Determining the responsibility of Employers arising out of
any claim alleging unfair clam practices or alleged
improprieties on the part of officers, employees, agents
or other representatives of Employers
XVII NOTICES
The City of Denton agrees that it will appoint a coordinator
and Employers shall work primarily through this individual for
liaison purposes Any notice to the attention of the appointed
coordinator shall constitute notice to the City of Denton All
notices shall be deemed given upon receipt by the other party
The City of Denton, Denton, Texas
Attention Ms Debra Drayovitch
215 E McKinney
Denton, Texas 76201
Employers Claims Adjustment Services, Inc
Attention Mr James W Thornton, DCM
Sherman District Office
4107 Texoma Parkway
Sherman, Texas 75090
Either party may change the coordinator designated and the
address designation by written notice to the other party
XVIII APPLICABLE LAW
This Agreement is to be construed, governed, and enforced
under the laws of the State of Texas Situs of the Agreement is
agreed to be Denton County, Texas
XIX HEADINGS
The headings of this agreement are for the convenience of
reference only and shall not affect in any manner any of the
terms and conditions hereof
XX ENTIRE CONTRACT
This Agreement embraces the entire Agreement between the
parties No oral agreement or representation concerning this
PAGE 8
Agreement
shall
be binding
any amendments must be in writing
and signed
by an
officer of
each of the parties
Fxecut
%/~j?j4.e,
d, in
duplicate,
, 1980
~~7
at Denton, Texas on this day of
EMPLOYERS
CLAIMS
ADJUSTMENT
CITY OF DENTON, DENTON, TEXAS
SERVICES,
Corporatio
INC ,
n
a Texas
a nonprofit Texas Political
Subdivision
BY BY ut'Yr-A~
Y RAY STE ENS, AYOR
Title
PAGE 9
ADDENDUM I
FEES AND EXPENSES
1
$38
per
hour for a field adjuster's service
2
$45
per
hour for a home office adjuster's service
3
25
per
mile auto charge
4
$38
for
each claim file creation
5
Mont
hly
computerized loss reports at $600 annually for each
line
of
coverage recorded
A General Liability
B Auto Liability
C Police Professional Liability
D Public Officials Liability
6 Employers Claims Adjustment Services has no copying charge
and no separate administrative fees Special services
including but not limited to, out-of-state adjusting firms
and services, reconstructive engineering reports, photo-
copy studies, legal defense, special investigators and
witness transportation and lodging fees will be charged
to the City of Denton at actual cost
7 Any sales tax, if applicable