HomeMy WebLinkAboutContracts & Agreements_103-2025AGREEMENT TO PERFORM PROFESSIONAL SERVICES
This agreement for the provision of claims adjusting and administration services
("Agreement") is made and entered in this Yd day of June, 2025 ("Effective Date"), by and between
the City of Redlands, a municipal corporation ("City") and Carl Warren & Company, LLC, a
California limited liability company. ("Consultant"). City and Consultant are sometimes
individually referred to herein as a "Party" and, together, as the "Parties." In consideration of the
mutual promises contained herein, City and Consultant agree as follows:
ARTICLE 1— ENGAGEMENT OF CONSULTANT
1.1 City hereby engages Consultant to provide claims adjusting and administration services for
City (the "Services").
1.2 The Services shall be performed by Consultant in a professional manner, and Consultant
represents that it has the skill and the professional expertise necessary to provide the
Services to City at a level of competency presently maintained by other practicing
professional consultants in the industry providing like and similar types of Services.
ARTICLE 2 — SERVICES OF CONSULTANT
2.1 The Services that Consultant shall perform are more particularly described in Exhibit "A,"
titled "Scope of Services," which is attached hereto and incorporated herein by reference.
2.2 Consultant shall comply with applicable federal, state and local laws and regulations in the
performance of this Agreement including, but not limited to, any applicable State
prevailing wage laws.
ARTICLE 3 — RESPONSIBILITIES OF CITY
3.1 City designates Robert J. Mclean, Human Resources/Risk Management Director, as the
City's representative with respect to performance of the Services, and such person shall
have the authority to transmit instructions, receive information, interpret, and define City's
policies and decisions with respect to performance of the Services.
ARTICLE 4 — PERFORMANCE OF SERVICES
4.1 Consultant shall perform and complete the Services in a prompt and diligent manner in
accordance with the schedule set forth in Exhibit "A," titled "Scope of Services," which is
attached hereto and incorporated herein by reference.
4.2 The term of this Agreement shall be for a period of three (3) years beginning July 1, 2025
(the "Initial Term"). The City shall have the option to extend the Initial Tenn of this
Agreement by two (2) additional one-year terns (each, an "Extended Term"), on the same
terms and conditions, by providing written notice to Consultant at least thirty (30) days
prior to the expiration of the Initial Term or any Extended Term.
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4.3 If Consultant's Services include deliverable electronic visual presentation materials, such
materials shall be delivered in a form, and made available to the City, consistent with City
Council adopted policy for the same. It shall be the obligation of Consultant to obtain a
copy of such policy from City staff.
ARTICLE 5 — PAYMENTS TO CONSULTANT
5.1 The total annual compensation for Consultant's performance of the Services is specified in
Exhibit B, "Fee Schedule," which is fully incorporated herein. Fees and expenses to be
paid to the Consultant during the Initial Term commencing on the Effective Date, shall not
exceed the amounts below per fiscal year:
• 2025/26 One Hundred Thirty -Six Thousand Seven Hundred Forty -Four Dollars
($136,744)
• 2026/27 One Hundred Twenty -Five Thousand Five Hundred Fifty Dollars ($125,550)
• 2027/28 One Hundred Twenty -Nine Thousand Four Hundred Eighty -Nine Dollars
($129,489)
If the Agreement is extended for two additional one year renewal options, the Fees and
expenses paid to Consultant shall not exceed the amounts below per fiscal year:
• 2028/29 One Hundred Thirty -Three Thousand Eight Hundred Sixty -Six Dollars
($133,866)
2029/30One Hundred Thirty -Eight Thousand Eighty -Six Dollars ($138,086).
The Agreement total amount shall not exceed Six Hundred Sixty -Three Thousand Seven
hundred Thirty -Five Dollars ($663,735). City shall pay Consultant based on fixed and
reimbursable costs and expenses, tip to the not -to -exceed amount in accordance with
Exhibit `B" titled "Fee Schedule" which is attached hereto and incorporated herein by
reference.
5.2 Consultant shall submit monthly invoices to City for Services performed during the
preceding month. Consultant's invoices shall include a brief description of services
performed outside the fixed monthly fee, i.e. field work and ancillary services, , the dates
performed, the number of hours spent and by whom, and a description of reimbursable
expenses related to the Services. City shall pay Consultant no later than thirty (30) days
after receipt and approval by City of Consultant's invoice.
53 Any notice or other communication required, or which may be given, pursuant to this
Agreement, shall be in writing. Any such notice shall be deemed delivered (i) on the date
of delivery in person; (ii) five (5) days after deposit in first class registered mail, with return
receipt requested; (iii) on the actual delivery date if deposited with an overnight courier; or
(iv) on the date sent by facsimile or electronic mail transmission (including PDF), if
confirmed with a copy sent contemporaneously by first class, certified, registered or
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express mail; in each case properly posted and fully prepaid to the appropriate address set
forth below, or such other address as a Party may provide notice in accordance with this
section:
CITY:
City Clerk
City of Redlands
35 Cajon Street
P.O. Box 3005 (mailing)
Redlands, CA 92373
jdonaldson@cityofredlands.org
Phone: (909) 798-7531
CONSULTANT:
Angelique King, President
Carl Warren & Company, LLC
P.O. Box 2411
Tustin, CA 92781
aking@carlwarren.com
Phone: (916) 477-4211
Fax: (866) 254-4423
ARTICLE 6 — INSURANCE AND INDEMNIFICATION
6.1 The following insurance coverage required by this Agreement shall be maintained by
Consultant for the duration of its performance of the Services. Consultant shall not perform
any Services unless and until the required insurance listed below is obtained by Consultant.
Consultant shall provide City with certificates of insurance and endorsements evidencing
such insurance prior to commencement of the Services. Insurance policies shall include a
provision prohibiting cancellation or modification of the policy except upon thirty (30)
days prior written notice to City.
A. Workers' Compensation and Employer's Liability insurance in the amount that meets
statutory requirements with an insurance carrier acceptable to City, or certification to
City that Consultant is self -insured or exempt from the workers' compensation laws of
the State of California. Consultant shall execute and provide City with Exhibit "C,"
titled "Workers' Compensation Insurance Certification," which is attached hereto and
incorporated herein by this reference, prior to performance of the Services.
B. Comprehensive General Liability insurance with carriers acceptable to City in the
minimum amount of Two Million Dollars ($2,000,000) per occurrence and Four
Million Dollars ($4,000,000) aggregate, for public liability, property damage and
personal injury is required. City shall be named as an additional insured, and such
insurance shall be primary and non-contributing to any insurance or self-insurance
maintained by City.
C. Commercial Auto Liability coverage, with minimum limits of One Million Dollars
($1,000,000) per occurrence, combined single limit bodily injury liability and property
damage liability. This coverage shall include all Consultant owned vehicles used in
connection with Consultant's provision of the Services, hired and non -owned vehicles,
and employee non -ownership vehicles. City shall be named as an additional insured,
and such insurance shall be primary and non-contributing to any insurance or self-
insurance maintained by City.
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D. Consultant is expressly prohibited from assigning or subcontracting any of the Services
without the prior written consent of City. In the event of mutual agreement by the
Parties to assign or subcontract a portion of the Services, Consultant shall add such
assignee or subcontractor as an additional insured to the insurance policies required
hereby and provide City with the insurance endorsements prior to any Services being
performed by the assignee or subcontractor.
6.2 Consultant shall defend, indemnify and hold harmless City and its elected officials,
employees and agents from and against any and all claims, losses or liability, including
attorneys' fees, arising from injury or death to persons or damage to property occasioned
by any negligent act or omission by, or the willful misconduct of, Consultant, or its officers,
employees and agents in performing the Services.
ARTICLE 7 — CONFLICTS OF INTEREST
7.1 Consultant covenants and represents that it does not have any investment or interest in any
real property that may be the subject of this Agreement or any other source of income,
interest in real property or investment that would be affected in any manner or degree by
the performance of Consultant's Services. Consultant further covenants and represents that
in the performance of its duties hereunder, no person having any such interest shall perform
any Services under this Agreement.
7.2 Consultant agrees it is not a designated employee within the meaning of the Political
Reform Act because Consultant:
A. Does not make a governmental decision whether to:
(i) approve a rate, rule or regulation, or adopt or enforce a City law;
(ii) issue, deny, suspend or revoke any City permit, license, application,
certification, approval, order or similar authorization or entitlement;
(iii) authorize City to enter into, modify or renew a contract;
(iv) grant City approval to a contract that requires City approval and to which
City is a party, or to the specifications for such a contract;
(v) grant City approval to a plan, design, report, study or similar item;
(vi) adopt, or grant City approval of, policies, standards or guidelines for City
or for any subdivision thereof.
B. Does not serve in a staff capacity with City and in that capacity, participate in
making a governmental decision or otherwise perform the same or substantially the
same duties for City that would otherwise be performed by an individual holding a
position specified in City's Conflict of Interest Code under Government Code
section 87302.
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7.3 In the event City determines that Consultant must disclose its financial interests, Consultant
shall complete and file a Fair Political Practices Commission Form 700, Statement of
Economic Interests, with the City Clerk's office pursuant to the written instructions
provided by the City Clerk.
ARTICLE 8 — GENERAL CONSIDERATIONS
8.1 In the event any action is commenced to enforce or interpret any of the terms or conditions
of this Agreement the prevailing Party shall, in addition to any costs and other relief, be
entitled to the recovery of its reasonable attorneys' fees, including fees for the use of in-
house counsel by a Party.
8.2 Consultant shall not assign any of the Services, except with the prior written approval of
City and in strict compliance with the terms and conditions of this Agreement. Any
assignment or attempted assignment without such prior written consent may, in the sole
discretion of City, result in City's immediate termination of this Agreement.
8.3 Consultant is for all purposes under this Agreement an independent contractor and shall
perform the Services as an independent contractor. Neither City nor any its agents shall
have control over the conduct of Consultant or Consultant's employees, except as herein
set forth. Consultant shall supply all necessary tools and instrumentalities required to
perform the Services. Assigned personnel employed by Consultant are for its account only,
and in no event shall Consultant or personnel retained by it be deemed to have been
employed by City or engaged by City for the account of, or on behalf of City. Consultant
shall have no authority, express or implied, to act on behalf of City in any capacity
whatsoever as an agent, nor shall Consultant have any authority, express or implied, to bind
City to any obligation.
8.4 This Agreement may be terminated by City, in its sole discretion, by providing not less
than five (5) days prior written notice to Consultant of City's intent to terminate. If this
Agreement is terminated by City, an adjustment to Consultant's compensation shall be
made, but (1) no amount shall be allowed for anticipated profit or unperformed Services,
and (2) any payment due Consultant at the time of termination may be adjusted to the extent
of any additional costs to City occasioned by any default by Consultant. Upon receipt of a
termination notice, Consultant shall immediately discontinue its provision of the Services
and, within five (5) days of the date of the termination notice, deliver or otherwise make
available to City, copies (in both hard copy and electronic form, where applicable) of
project related data, design calculations, drawings, specifications, reports, estimates,
summaries and such other information and materials as may have been accumulated by
Consultant in performing the Services. Consultant shall be compensated on a pro-rata basis
for Services completed up to the date of termination.
8.5 Consultant shall maintain books, ledgers, invoices, accounts and other records and
documents evidencing costs and expenses related to the Services for a period of three (3)
years, or for any longer period required by law, from the date of final payment to Consultant
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pursuant to this Agreement. Such books shall be available at reasonable times for
examination by City at the office of Consultant.
8.6 This Agreement, including the Exhibits incorporated herein by reference, represents the
entire agreement and understanding between the Parties as to the matters contained herein,
and any prior negotiations, written proposals or verbal agreements relating to such matters
are superseded by this Agreement. Except as otherwise provided for herein, any
amendment to this Agreement shall be in writing, approved by City and signed by City and
Consultant.
8.7 This Agreement shall be governed by and construed in accordance with the laws of the
State of California.
8.8 If one or more of the sentences, clauses, paragraphs or sections contained in this Agreement
is declared invalid, void or unenforceable by a court of competent jurisdiction, the same
shall be deemed severable from the remainder of this Agreement and shall not affect,
impair or invalidate the remaining sentences, clauses, paragraphs or sections contained
herein, unless to do so would deprive a Party of a material benefit of its bargain under this
Agreement.
IN WITNESS WHEREOF, duly authorized representatives of City and Consultant Have
signed in confirmation of this Agreement.
CITY OF REDLAND CARL WARREN & COMPANY, LLC
DocuSigned by:
By. By: aUfI`°I,u— 64
Mario Sauce o, Mayor Angelique King, President
ATTEST:
�Donalds"on,City Clerk
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EXHIBIT "A"
SCOPE OF SERVICES
This Exhibit A is intended to provide the scope of services and specific service expectations in this
Agreement, that would not otherwise require revision during the Agreement period, and which may
differ from or elaborate upon our Client Service Profile. Services to be provided by Consultant on behalf
of City may include all or some of the following,
I. SERVICES INCLUDED IN THE AGREEMENT
A. Claims Administration:
Consultant shall provide administrative services that include, but are not limited to:
Administering the City's self-insurance retention program and shall act as the
City's representative in connection with the investigation, adjustment, processing,
supervision and resolution of general liability, motor vehicle liability, property
damage and potential money damage claims asserted by third parties against City,
or against parties for whom City is alleged to be legally responsible, which are
premised upon allegations of willful, intentional, negligent or careless acts and/or
omissions;
2. Perform liability claims adjusting services;
3. Inform City staff of any changes to current laws that could have an impact on the
City's liability claims program;
4. Advise City staff of any claim trends that may have an impact on the City's claim
program; provide data and analytics regarding the City's program to the Risk
Manager and/or Claims Specialist on a monthly basis; provide ad hoc reports as
requested by the City;
5. Attend meetings and file reviews and provide updates on the City's open liability
cases;
6. Provide statistical reports on a monthly basis that depict the claims opened or closed
per month, payments that have been issued and current reserves on all open claims;
and other reports as needed;
7. Respond to any inquiries the City's excess carrier may have in regards to any
particular claim as well as providing the excess carrier with any reports requested;
8. Identify all subrogation claims and initiate a written report to the City on potential
success of subrogation; identify all costs including attorney fees involved in specific
subrogation eligible files; provide recommendations based upon cost -benefit
analysis of potential subrogation files.
B. Claims Handling
All new claims received by the City will be mailed/faxed/scanned/uploaded to the
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Claims Administrator. Upon receipt, the Claims Administrator shall:
1. Set up a claim file within 24 hours of receipt of the claim;
2. Send an acknowledgment letter on all new files opened;
3. Assign an initial case reserve;
4. Review the claim to verify the claim complies with the reporting requirements as set
forth in the California Government Code;
5. With prior approval of the City on a per claim basis, promptly issue the appropriate
letters and notices to the Claimant advising of any deficiencies; claim rejections;
claim denials; or any other pertinent correspondence as required under the
California Government Code;
6. If claim is to be accepted, gather damages documentation and with prior written
approval on a per -claim basis from the City, negotiate a reasonable settlement for
final presentation to the City for approval or ratification (all settlement discussions
with claimant must be made using the following guideline: subject to City and/or
City Council approval);
7. Claims Administrator shall prepare a settlement request and forward that request to
the Human Resources Manager or HR/Risk Management Analyst for approval;
8. All settlements are subject to City approval and the Claims Administrator has no
settlement authority;
9. Obtain settlement agreements and releases upon settlement of claims or potential
claims not in litigation;
10. Report claims to City's excess carrier as appropriate and directed; and in compliance
with excess insurance policy requirements; provide ongoing reporting for all excess
cases as may be requested or required by the excess insurance carrier;
11. Obtain reimbursement from excess carrier should expenditures exceed self -insured
retention; monitor and manage all excess reporting and reimbursement from the
excess carrier; all reimbursements shall be reconciled by the Third Party
Administrator and any and all reductions or short pays shall be immediately flagged
and identified for specific discussion and reporting to the City; all reimbursements
paid in full and received by the Third Party Administrator must be immediately
provided to the City for deposit into the City's bank account. Provide monthly
reports on reimbursement or excess carrier recoveries; and monitor excess carrier
request for reimbursement every 30 days;
12. In addition to the above, it is the City's intent that the Claims Administrator shall act
as the City's Reporting Agent in compliance with the Medicare Secondary payer
requirements under the CMS Section 111 Mandatory Reporting Program.
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C. Investigative Services:
Consultant shall provide administrative services that include, but are not limited to:
1. Receipt and examination of all reports of accidents, incidents, or claims that are or
may be the subject of claims.
2. Conduct investigation on behalf of the City's Attorney's Office and Risk
Management which shall include contact with the claimant or attorney for
additional claim details, requests for information regarding the claim from the City
and field work, if appropriate, which will include photographs, measurements of
defects etc.; for all field work, prior approval of the City on a per -claim basis is
required.
Investigate accidents, incidents, or claims where the examination warrants such
investigation to include on -site investigation, photographs, interviewing of
witnesses, determination of losses and other such investigative services necessary to
determine any City losses, but not to include extraordinary investigative services
outside the expertise of the Consultant.
4. After investigation is complete, determine whether to recommend the City accept
or reject the claim.
5. If rejection is appropriate, promptly issue rejection notice to claimant or claimant's
attorney or representative, which will include an explanation of why the claim was
rejected; and may include any and all other notices required under the California
Government Code.
6. Maintain service on a 24-hour, 7 days per week basis, to receive telephone reports
of any incident or accident which may be the subject of a liability claim and provide
immediate investigative services to the extent necessary to provide a complete
investigation.
7. Undertake items of investigation requiring special handling for City at the direction
of the City Attorney or authorized representative.
D. Adjustment Services:
Consultant will provide complete adjustment services on each accident or incident
which is or may be the subject of a claim. Such services shall include:
1. Maintain a claim file on each potential or actual claim reported.
2. Process any such claim or potential claim for settlement in accordance with
instructions and policies of City for settlement of such claims.
3. Notify City's primary and excess carriers of all claims which exceed or may exceed
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City's self-insurance retention.
4. Act as liaison between the excess/insurance carriers and the City on matters
affecting the adjustment of such claims.
5. Maintain records on any such claim and notify City when City is entitled to
reimbursements for loss in excess of retention.
6. Litigation management at direction of City Attorney.
E. Administrative Services:
Consultant shall provide administrative services that include, but are not limited to:
1. Assist in training at the request of the City.
2. Assist City in preparing accident kits for City vehicles.
3. Assign a principal account adjuster satisfactory to City to provide liaison between
City and Consultant.
4. Provide tabulated monthly statistical reports and status reports of all reported claims.
Monthly reports shall indicate the status of each reported open claim, the outstanding
reserves for each claim and details of all claim payments during the month. The status
report shall be delivered to the City Attorney and Human Resources Manager within
five days of the close of each calendar month.
5. Periodically review and adjust reserves on all open claims.
6. Assist City Attorney in selection of special counsel, if requested.
7. Investigate and handle through conclusion telephone adjusted claims.
8. Prepare an Internal Revenue Service Form Number 1099 for service providers as
required by the Internal Revenue Code.
9. Provide loss information for the City's annual excess liability application.
F. Legal Support Services:
Consultant will provide the following legal support services on each claim in which a
third -party claimant has commenced or threatened to commence litigation:
1. Upon notification by the City Attorney that litigation has been filed on an open claim,
provide special counsel with all information and files concerning the claim.
2. Cooperate with and assist any attorney assigned to litigation of open claims and
provide such investigative services as directed during pre-trial and trial stages.
3. Oversee the efforts of defense counsel through a sound litigation management plan;
responsible for obtaining a copy of defense counsel's proposed defense budget; and
setting reserve appropriately for each specific case/file/claim
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4. Assist in answering any interrogations or requests for admissions filed by third parties.
At the request of the City Attorney, attend mandatory settlement conferences on
behalf of City.
6. At the request of the Human Resources Manager or designee, file small claim actions
and appear on behalf of City in small claim actions filed against or on behalf of the
City on open claims handled by Consultant.
7. Regularly and reasonably discuss and review investigation issues, discovery, and case
strategy with special counsel.
8. Review case evaluations, correspondence and status reports forwarded to Consultant
by special counsel.
9. Cooperate with special counsel as a team with an open communication approach on
each case to obtain the most economical and best result for the City.
G. Third Party Subrogation Services
Consultant personnel are well -versed in the identification, handling, and pursuit of
subrogation claims arising out of Claims which are the subject of this Agreement. Included
within this Agreement, Consultant will perform the following functions:
I_ Identify potential opportunities to recover from persons, businesses, and entities other
than the City.
2. Prepare and file a claim with each identified entity.
3. As applicable, tender defense to or seek recovery from any identified entity.
4. With the assistance of coimsel, prepare and file any necessary litigation required to
effect the claim of recovery on behalf of the City
5. Manage litigation related to such claims made to other person, businesses or entities
H. First Party Subrogation Services
Consultant 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 the
City. Our services are unique to a first -party loss of the City caused by the intentional or
negligent act of a third party. Such losses generally are for the recovery of damages, and
may include:
1. Labor costs, fully loaded and including benefit costs, for City or other personnel
responding to or in any manner providing services;
2. Services or materials provided by outside vendors or contractors;
3. Internal or external vehicle or equipment use and/or rental;
4. Materials and/or goods utilized for the repair/replacement of damaged property; and/or
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5. Additional fees that maybe specific to the individual entity that are provided for within
municipal code, ordinances or other governing documents.
I. File Reviews
It is anticipated that regularly scheduled file reviews will take place throughout the year.
These file reviews are intended to evaluate open claims which shall include the litigated
claims and to determine whether the reserves and current strategies for the handling of the
files are appropriate. These reviews can also assist in identifying current claim trends, case
law changes and ways to improve the claims administration and communication process.
The Claims Administrator shall be prepared to attend these meetings as requested by the
City whether on a regular scheduled basis or ad hoc scheduling.
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EXHIBIT "B"
FEESCHEDULE
The following compensation, fees and expenses, shall be paid in consideration for the services
provided by Consultant as described in this Agreement and which shall not exceed those amounts
set forth in Article 5 ("Payments to Consultant").
The compensation paid to Consultant for "Claims Administration Services" shall be as follows:
1) Fees for Claims Administration Services
City agrees to pay a fixed fee of $123,744 per year for the first year of its
engagement with Consultant.
The compensation paid to Consultant for "Reimbursable Costs and Expenses" shall be as follows:
1) Reimbursable Costs and Expenses
a. Field Work Services
• Scene Investigations: $95.00 per hour
• Surveillance, appraisals — At cost
b. Ancillary Services
• MMSEA- per submission: $5.00
• Index/OFAC per submission - $20.00
• Misc/loss expenses (medical reports, appraisals) — At cost
c. Risk Management Information System Services,
Y Custom Reports, data fees - $250 per hour.
The fees and expenses/costs will be billed together monthly in Consultant's 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) First Party Subrogation Services and Fees
Consultant 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. City will pay a Subrogation Fee in the amount of 2 1 % of the net recovery
obtained.
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EXHIBIT "C"
WORKERS' COMPENSATION INSURANCE CERTIFICATION
Every employer, except the State, shall secure the payment of compensation in one or more of the
following ways:
(a) By being insured against liability to pay compensation by one or more insurers duly
authorized to write compensation insurance in this State.
(b) By securing from the Director of Industrial Relations, a certificate of consent to
self -insure, either as an individual employer, or as one employer in a group of
employers, which may be given upon furnishing proof satisfactory to the Director
of Industrial Relations of ability to self -insure and to pay any compensation that
may become due to his or her employees.
CHECK ONE
x I an aware of the provisions of Section 3700 of the Labor Code which requires every
employer to be insured against liability for Workers' Compensation or to undertake self-insurance
in accordance with the provisions of that Code, and I will comply with such provisions before
commencing the performance of the work and activities required or permitted under this
Agreement. (Labor Code §1861).
I affirm that at all times, in performing the work and activities required or permitted under
this Agreement, I shall not employ any person in any manner such that I become subject to the
workers' compensation laws of California. However, at any time, if I employ any person such that
I become subject to the workers' compensation laws of California, immediately I shall provide the
City with a certificate of consent to self -insure, or a certification of workers' compensation
insurance.
I certify under penalty of perjury under the laws of the State of California that the information and
representations made in this certificate are true and correct.
Carl Warren & Company, LLC
Oocuslgnetl by:
By:
e �t?r°� 4� M Date: 5/14/2025
A g-89qug, President
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