HomeMy WebLinkAboutContracts & Agreements_38-2025SECOND AMENDMENT TO AGREEMENT TO PERFORM
PROFESSIONAL SERVICES
This second amendment ("Second Amendment") to the agreement for third party
liability claims administration services ("Agreement"), dated July 5, 2022, by and between the
City of Redlands, a municipal corporation and a general law city ("City"), and George Hills
Company, Inc., a California corporation ("Consultant"), is made and entered into this 4" day
of March, 2025.
RECITALS
WHEREAS, the City and Consultant entered into a Professional Services Agreement
on July 5, 2022 for the performance of third party administration services; AND
WHEREAS, the Parties entered into a First Amendment to the Agreement dated April
16, 2024 ("First Amendment"); and
WHEREAS, it is the desire of the City and Consultant to enter into this Second Amendment to
the Agreement to provide additional compensation to paid by City to Consultant for the
Performance of Services, and make other related modifications to the Agreement.
NOW, THEREFORE, for good and valuable consideration in the receipt of which is
hereby acknowledged City and Consultant agree as follows:
AGREEMENT
Section 1. Subsection 4.2 under Article 4 of the Agreement, entitled
"Performance of Services," is hereby amended to read as follows:
4.2 The term of this Agreement shall be for a period of three (3) years beginning
July 5, 2022 and expiring on June 30, 2025.
Section 2. Subsection 5.1 under Article 5 of the Agreement, entitled "Payments
to Consultant," is hereby amended to read as follows:
"The total compensation for Consultant's performance of the Services during the Term
of this Agreement shall not exceed the amount of Three Hundred Ninety -Four
Thousand Three Hundred and Thirty -Three Dollars and 32/100 ($394,333.32).
Effective July 1, 2023, City shall pay Consultant on a time and materials basis up to the
not to not -to -exceed amount set forth in this Section and in accordance with the rates
specified in Exhibit `B", titled "Fee Schedule" attached hereto and incorporated by
reference herein."
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Section 3. Exhibit `B" of the First Amendment titled "Fee Schedule", is hereby
amended and replaced by an amended Exhibit "B", which is attached hereto as Attachment 1
and incorporated herein by this reference.
Section 4. All other provisions of the Agreement and First Amendment shall
remain unchanged by this Second Amendment and in effect.
IN WITNESS WHEREOF, the parties have executed this Second Amendment,
to be effective as of March 4, 2025,
CITY OF REDLANDS GEORGE HILLS COMPANY, INC.
Mario Saucedo,`Mayor Jo6 E. Chaquica,
Chief Executive Officer
ATTEST:
Jee0e Donaldson, City Clerk
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ATTACHMENT
EXHIBIT "B"
Fee Schedule
The following compensation, fees and expenses, shall be paid in consideration for the services
provided by Consultant as described in this Agreement to Perform Professional Services under
Article 5 — Payments to Consultant, which has been agreed to, including claims activity. This
section shall remain in force and services provided during the term of this Contract, unless
otherwise amended by the parties.
The amounts to be paid pursuant to this Agreement are detailed in two distinct areas of services
First, under subsection 1) below, "Fees for Claims Administration Services"; and
Second, under subsection 2) below, "Reimbursable Costs and Expenses" which specifically relate
to provision of claims handling services which is the subject of this Contract.
The fees and expenses/costs will be billed together monthly in our standard invoice format.
Additionally, if the City elects any optional services identified in this section, such as First Party
Subrogation Services or any of the identified Optional Services, such agreed upon additional
amounts will also be billed together monthly where applicable.
1. Fees for Claims Administration Services
For the first year of the Agreement, Client agrees to pay a fixed fee of $69,000 plus
$12,000 in costs for a total of $81,000 in exchange for the claim administration and
handling services described in this Agreement and the Exhibits hereto. The fixed fee
is a base fee and subject to reevaluation in the event that the claim volume increases or
decreases by more than 10%. The City agrees to the base number of claims is 70.
For the second year of the Agreement, City agrees to pay for all services performed by
Consultant on a Time and Expense basis. Consultant will charge time to each claim
using 1/10th of an hour increments for each task performed on a claim. The time spent
and further descriptions of each task shall be stated on each monthly invoice. The
cumulative annual billing, however, shall not exceed the annual cap of $143,000 plus
$12,000 in costs for a total of $155,000, which cap is subject to annual adjustments.
The current hourly rates for Consultant's personnel are:
a. Claims Supervisor Rate: $127
b. Claims Adjuster Rate: $102
c. Claims Processor Rate: $84
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For the third year of the Agreement, for the period July 1, 2024 through February 28,
2025, City agrees to pay Consultant on a Time and Expense basis. Consultant will
charge time to each claim using 1/10th of an hour increments for each task performed
on a claim. The time spent and further descriptions of each task shall be stated on each
monthly invoice. The amount to be paid to Consultant shall not exceed $95,000 plus
$12,000 in costs for a total of $107,000, The current hourly rates for Consultant's
personnel are as set forth above. For the third year of the Agreement, for the period
March 1, 2025 through June 30, 2025, the City shall pay Consultant a monthly Flat
Rate of $12,833.33 for a total of $51,333.32. The total not to exceed amount for the
third year of the Agreement is $158,333.32.
It is Consultant's responsibility to monitor, review and advise City of any annual cap
adjustments, whether by increase or decrease. In the event that Consultant reasonably
estimates that the cap will be reached or exceeded in any year, notice will be provided
to the City indicating that an adjustment may be necessary. If the cap is not adjusted,
Consultant will perform services up to the amount of the cap and must cease all work
until the parties reach an agreement on the annual cap adjustment. To be effective, any
annual cap adjustment must be included in a written amendment to this Agreement
pursuant to Section 8.6.
2. Reimbursable Costs and Expenses
b. Annual Administration Fee: City agrees to pay an annual administration
fee of $10,000, in addition to the flat claims administration fee, which is
billed annually at the beginning of the Agreement period and thereafter
upon the anniversary of the Agreement.
C. Mileage — Adjuster: Mileage is paid at the IRS rate.
d. MMSEA: There is a $500 annual reporting fee. which are paid directly to
ExamWorks, for the performance of CMS reporting.
e. Adjuster Travel Expenses: GH will separately charge for any travel
expenses in connection with attendance at mediations, settlement
conferences, trials, etc. This will be subject to prior approval and that actual
expenses will be submitted with receipts on a monthly basis.
f. System Access Fee: Access to the claims management information system,
"CMIS", carries a cost of $1,500 annually. That cost is included in the
annual administration fee and includes the setup and management of up to
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five (5) "read only" user accounts. "Read/write" access to the system can
be obtained for an additional fee.
g. iMetrics Report Fee: There will be no charge for our iMetrics business
intelligence reports with executive in -person debriefs.
h. Custom Reports: Additional charges for custom reporting shall be defined
as, requiring a third -party programmer for three hours or more and is client
specific.
i. Catastrophic Fees: GH recognizes that there are events that are
unanticipated and catastrophic. When such events occur, it requires
additional hours for the handling of such claims. As such, to preserve the
quality and efficiency of service for which we are known, GH proposes that
should any one catastrophic event occur resulting in five or more claimants,
or two or more claimants with their own defense counsel, City shall be
billed at the current hourly rate for all services. See current rates below.
Catastrophic Fees under this section only apply to Cities which have
selected a "Fixed Fee" or "Time and Expense with a cap" payment options.
a. Supervisor Rate: $135
b. Sr, Adjuster Rate: $115
c. Adjuster Rate: $102
d. Claims Processor Rate: $89
j. 3% Annual Escalator: All GH pricing options under this Contract are
subject to an automatic annual increase of 3%. This annual increase shall
take effect upon each anniversary of the Contract effectiveness date.
k. General File: A general administrative file shall be established and
maintained to track effort related to services necessary to fulfill our
contractual obligations and not otherwise associated with a claim.
1. Paper Files: GII is prepared to take the lead to arrange for all services
relating to conversion storage, copying, scanning, shipping, and disposal.
GH will provide you a quote for any services related to storage, retrieval,
copying, scanning, shipping, and disposal of paper files.
3. First Party Subrogation Services And Fees
GH is a claim administration firm experienced in the handling of first party
subrogation claims and is ready and capable of performing such services on behalf
of City. GH does not handle subrogation claims with a value of less than $1000.
For any claim in excess of $1,000, City authorizes GH for to initiate its Subrogation
Services as described more fully in Attachment A, Scope of Services and Client
Expressed Authority and Limitations as well as Attachment A-1, Subrogation
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Agreement. Our services are unique to a first party loss of the City caused by the
intentional or negligent act of a third party. City will pay a Subrogation Fee in the
amount of 30% for each and every recovery obtained. The minimum amount to be
paid to GH will be $250 per claim upon recovery.
4. Optional Services
a. Legal Services and Consultation (Optional and upon request):
GH employs in-house General Counsel which have vast experience in claims
and litigation handling for all claims which are, or could be, subject to this
agreement. GH offers the services of its attorneys as an additional resource for
GH clients, on a time and expense basis, as follows:
i. Litigation Management: $225.00 per hour
These services include the oversight of all assigned GH claims
adjusters and monitoring and handling of "watch list' claims (highest
exposure, most complex litigation). These services are also available
on a claim by claim basis in support of the Lead Adjuster assigned due
to the complexity of the claims.
ii. Monitoring Counsel: $225.00 per hour
This case specific service includes evaluating coverage issues,
monitoring claim and litigation strategy, analyzing liability and damage
issues, participating in discussions regarding resolution by trial or
settlement, and controlling costs.
iii. Outside General and Special Counsel: $225.00 per hour
These services include confidential analysis and problem solving for
managing risk and avoiding unnecessary litigation and provides
immediate access to legal advice This includes identifying coverage
issues, providing input and assistance on Public Records Act Requests,
tort claim handling and strategy, conflicts of interest, oversight of
outside litigation counsel and providing legal opinions on potential and
active litigation.
iv. Trial/Mediation/Board Meetings Attendance: $175.00 per hour
These services include attending Board Meetings, trial, mediation, and
other court hearing attendance including appearing before Courts of
Appeal. Analysis and consultation provided before, during and after
these significant litigation events can reduce exposure and maximize
opportunities for resolution.
v. Legal Training and Seminars: $175.00 per hour
These services include providing customized seminars and training
upon request. Subject areas include memorandums of coverage, all
aspects of risk management, claims handling and litigation, employment
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law and general liability claims. Courses are customized to address the
client's specific needs.
vi. Professional and Financial Services: $175.00 per hour
As related to risk management and loss prevention in alignment with the
scope of services.
NOTE: These services are traditionally Time and Expense, however an annual fee
can be considered.
5. PAYMENT SCHEDULE
GH will submit its invoices to City, and payment shall be made by City, within a reasonable period
of time, not to exceed thirty (30) days from the date of the invoice.
6. ELECTRONIC FUNDS TRANSFER OR DIRECT DEPOSIT
GH has determined that the most efficient and secure default form of payment for goods
and/or services provided under Contract with City shall be Electronic Funds Transfer
(EFT) or direct deposit, unless an alternative method of payment is deemed appropriate by
both GH and City and agreed to in writing.
GH will submit a direct deposit authorization request via to City with banking and vendor
information, and any other information that the City determines is reasonably necessary to
process the payment and comply with all accounting, record keeping, and tax reporting
requirements.
At any time during the duration of the Contract, GH may submit a written request for an
exemption to this requirement. Such request must be based on specific legal, business or
operational needs and GH will explain why the payment method designated by the City is
not feasible and an alternative is necessary.
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