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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