CITY OF OAKLAND

2
AGENDA REPORT
TO: Of f i c e of the City Admi ni strator
ATTN: Deborah A. Edgerly
FROM: Fi nance and Management Agency
DATE: J ul y 10,2007
RE: Re soluti on Authori zi ng The City To Enter An Agreement Wi th JT2
Integrated Resources For The Provision Of Workers' Compensation
Admi ni strati on Services For A Total Contract Amount Of $2,059,560
For Contrac t Year 2007-08 And For A Total Contract Amount Of
$2,162,538 For Contrac t Year 2008-09 With An Opti on To Extend
The Agreement For Two Addi ti onal Two-Year Terms For An
Amount Not To Exceed The Pri or Year's Contract Amount Adjusted
By The Pri or Year's Consumer Price Index Not To Exceed A
Contract Amount Increase Of 5% For Each Contract Year for
Contrac t Ye ars 2009 through 2013
SUMMARY
The State of Cali f orni a re qui re s all employers to provi de Workers' Compensation benefits to
employees who become i njure d or ill as a result of their work. The City of Oakland is self-
i nsure d for the provi si on of these Workers' Compensation benefits. Since 1977, the City has
uti li ze d the servi ces of licensed Third Party Admi ni strati on (TPA) firms for the delivery of
Workers' Compensati on be ne f i ts. The current TPA contract, with JT2 INTEGRATED
RESOURCES, expi res August 31, 2007. Staff has recently completed the Request for Proposal
(RFP) process for Workers' Compensati on Third Party Claims Administration Services.
Staff recommends that Counci l authori ze the City Admi ni strator to enter i nto a two-year contract
for Worke rs' Compensation TPA Services with JT2 INTEGRATED RESOURCES (JT2). JT2
submi t t e d the most quali f i e d and cost ef f ecti ve bid and scored highest in the review of
quali f i c ati ons process.
Staff f urther recommends that Council authorize the City Admi ni strator to exercise two options
to e xte nd thi s contract for two addi ti onal years should the recommended contractor demonstrate
acceptable perf ormance in the deli very of the contracted services. Acceptable services wi ll be
determi ned by negoti ated pe rf ormanc e measures and an independent performance audit
c ommi ssi one d by the Fi nanc e and Management Agency - Risk Management Division at the end
of each c ontrac t ye ar.
Item:
Fi nance and Management Committee
July 10,2007
Deborah A. Edge rly
FMA: Workers' Compensati on Third Party Admi ni strati on Contract Page 2
FISCAL IMPACT
The proposed contract wi t h JT2 would provi de Workers' Compensation Thi rd Party
Admi ni strati on (TPA) Services for Contract Year 2007-08 in an amount not to exceed
$2,059,560 (whi c h i ncludes the base contract fee of $1,999,572 plus the 3% Contract
Compli anc e Fee) and for Contract Year 2008-09 in an amount not to exceed $2,162,538 (which
i nc lude s the base contract fee of $2,099,551 plus the 3% Contract Compliance Fee). Therefore,
the two-year contract amount for Contract Years 2007-09 would not exceed $4,222,098. The
f undi ng for thi s contract is contained wi thi n Fund 1150 - Workers' Compensation Insurance
Clai ms Fund, and no additional budgetary adjustment is necessary. The contract year for this
c ontrac t runs f rom September 1 through August 31.
Exte nsi on of thi s contract for two addi ti onal two-year terms, upon satisfactory performance,
would be in amounts not to exceed a 5% consumer price i ndex adjustment over the prior year's
contract amount, plus a 3% contract compli ance fee for Contract Years 2009-2011 and for
Contrac t Years 2011-2013.
These costs are i nc lusi ve of all requi red and specified program elements with the exception of
Managed Care Servi ces, Bi ll Revi ew and Preferred Provi der Uti li zati on Review services which
are charged agai nst i ndi vi dual clai ms as allocated services. Note that this amount does not
i nc lude Workers' Compensati on be ne f i ts costs, as the costs of benefits are paid to employees on
be half of the Ci ty by the TPA, rather than to the TPA for the i r administration services.
BACKGROUND
All e mploye rs i n the State of Cali f orni a are mandated to provide Workers' Compensation (WC)
be ne f i ts to its employees. The admi ni strati on of workers' compensation benefi ts by public
agenci es is accompli shed by one of three systems: insured, self-insured/self-administered, or
se lf -i nsure d/thi rd-party admi ni stered. The Ci ty of Oakland is permissibly self-insured by the
State of Cali f orni a and managed its worke rs' compensation administration in-house unti l 1977, as
did many other publi c agencies. Si nce Fiscal Year 1977-78, the City of Oakland has used the
opti on of a thi rd party admi ni strator for clai ms management.
In 2001, the contract for Worke rs' Compensati on TPA Services was awarded to JT2 Integrated
Resources. In 2003 and 2005, the Ci ty exerci sed its opti on to extend the contract wi th thi s team
based on acceptable servi ces. No addi ti onal contract extensi ons are available under the 2001
agre e me nt. The c urre nt c ontrac t e xpi re s August 31, 2007.
The Ci ty c onduc te d a RFP process se e ki ng the most quali f i ed vendor to provide these services
be gi nni ng September 1, 2007. On March 30, 2007, the RFP for Workers' Compensation TPA
Services was released. The RFP process sought to determi ne the most overall quali f i ed TPA to
Item:
Fi nance and Management Committee
July 10,2007
Deborah A. Edge rty
FMA: Worke rs
1
Compensati on Third Party Admi ni strati on Contract Page 3
service the needs of the City in its efforts to achieve the Counc i l's goal of reducing Workers'
Compe nsati on Program costs. The services sought included, but were not limited to, certain
enhancements of traditional Workers' Compensation Claims Administration services such as;
Tri age, takeover and management of all existing Workers' Compensation claims
wi th mi ni mu m i nterrupti on of services and ongoing provision of benefi ts;
Compre he nsi ve Cl ai ms Admi ni strati on for all new and exi sti ng Workers'
Compe nsati on c lai ms f i led by City of Oakland employees;
Earl y Inte rve nti on and Transi ti onal Work Program services for all occupational
(and opt i onal l y non-oc c upati onal) di sabi li ti es;
Ut i l i z a t i on Revi ew and Managed Care services for all occupational di sabi li ti es;
Managed Care Services for ref erred occupational disabilities;
Bi l l Re vi e w services for all i nvoi ced medical services, i nc ludi ng therapeutic and
pre sc ri pti on services related to all occupational disabilities - TPA is to handle the
entire Bi ll Revi ew package wi th no break-out to sub-contracting entities;
Preferred provi der network opti on (PPQ) parti ci pati on for all medical services
re qui re d to cure or relieve any/all occupati onal disabilities;
Te l e phoni c / Electroni c Clai m Reporti ng capabi li ti es for all City departments;
Onsi te Database Inf ormati on and Re porti ng access capabi li ti es for certain City
l oc at i ons;
Onsi te Non-te c hni c al Servi ce Personnel to act as liaison between designated City
departments and selected TPA - to assist department personnel with timely and
accurate completi on of requi red f orms, obtain necessary i nf ormati on to properly
process clai ms, and assist department personnel and/or i njured employees in
obtai ni ng answers to pe rti ne nt questi ons, etc.;
Provi de Ci ty departments and i njure d employees toll-free access to encourage and
promote i ni t i al and ongoi ng communi cati ons;
In pre parati on f or the RFP process, Ri sk Manage me nt uti li ze d the services of Hardy Insurance
Consultants, a local ri sk manage me nt c onsultati on f i rm that specializes i n Workers'
Compe nsati on Thi rd Party Admi ni strati on RFP Selecti on Processes. Securing the consultant as a
process f ac i l i t at or, the Ci ty was able to ensure a balanced and equi table process was uti li zed in
the soli c i tati on and se le c ti on phases of thi s process.
On March 30, 2007, the Fi nance and Management Agency - Risk Management Di vi si on issued a
Request for Proposal for the provi si on of Workers' Compensati on Program Services. Invitations
to parti ci pate in the process were sent to twenty-one (21) Workers' Compensation Third Party
Admi ni strati on f i rms who had pre vi ously expressed interest in participating in the RFP process
or were re c omme nde d by our process c onsultant.
The Ci ty also adve rti se d in local papers and made the RFP document available on the Ci ty's
website. Hard-copi es of the RFP were made available to all parties requesting such. A
Item:
Finance and Management Committee
July 10,2007
Deborah A. Edge rly
FMA: Workers
1
Compe nsati on Third Party Admi ni strati on Contract Page 4
mandatory Bi dde rs' Conf erence was he ld on Apri l 12, 2007. Thirteen (13) TPAs attended the
Bi dde rs' Conf e re nc e . In orde r to accommodate speci f i ed ti me li ne s i n the Ci ty's Professional
Servi ces Program, the publi she d submi ssi on de adli ne was set for May 11, 2007.
At the spe c i f i e d c l osi ng ti me on May 1 l
l h
, a total of f i ve proposals were received from the
i nte re ste d f i rms. To date, no other proposals have been received. Of the five proposals received,
f our were f ound to be qual i f i e d as they met the mi ni mum requirements outlined in the RFP and
cover le tte r. All qu al i f i e d bi dde rs parti c i pate d throughout the review process which i nc lude d
staff re vi e w of the submi tte d proposal doc ume nts and oral presentations / interviews. The oral
i nte rvi e w panel c onsi ste d of two Ci ty representati ves and two external representatives, including:
Pe rsonne l re pre se ntati ve f rom Oakland Fi re Department;
Staf f re pre se ntati ve f rom Fi nanc e and Management Agency, Risk Management;
Hu man Resources Di rector f rom Ci ty of Santa Clara, CA; and
Vi c e Pre si de nt, Insurance Servi ces f rom Alli ant Insurance Services, San Francisco,
CA.
Oral Pre se ntati ons/Inte rvi e ws were conducted on June 5, 2007. Questions were developed by
the c onsul t ant for use by the i nte rvi e w panel and the results were recorded. Followi ng the oral
pre se ntati ons, the pane l made recommendati ons i de nti f yi ng the top two f i rms for the City's
c onsi de rati on. These two f i rms we re : JT2 Integrated Resources and Sedgwick Clai ms
Manage me nt, Inc .
Based on the re vi e w process, the ve ndors were scored as i ndi cated below. A detai led
Qu al i f i c at i ons Mat ri x i s provi de d as Attac hme nt A f or f urthe r i nf ormati on.
Thi rd Party
Admi ni st r at or
Se dgwi c k Clai ms
Manage me nt
JT2 Inte grate d
Resources
Cl ai ms Manage me nt,
Inc .
Tri Star Ri sk
Management
Haze lri gg Ri sk
Manage me nt Se rvi c e s*
Proposal
Review
Score
87
85
82
83
42
Fixed Two-Year
TPA Admi ni strati on
Cost
$5,632,032
$4,099,123
$3,570,000
$5,087,500
$8,750,000
Fixed
Transi ti on
Cost
$0
$0
$7,500
$8,800
$25,000
Overall
Ranki ng
1
2
3
4
5
Item:
Finance and Management Committee
July 10,2007
De borah A. Edge rly
FMA: Worke rs' Compensati on Third Party Administration Contract Page 5
KEY ISSUES AND IMPACTS
Slate law mandates and Ci ty Me morandums of Understanding (MOUs) requi re that the City
provi de worke rs" c ompe nsati on be ne f i ts to all Ci ty employees. The City i s permissibly self-
i nsure d by the State of Cal i f orni a. Fai lure to c omply wi th State laws pursuant to the California
Labor Code can expose the Ci ty to si gni f i c ant f i ne s and penalties as well as loss of its self-
i nsurance certification. Wi thout authority to self-insure, the City would have to purchase
pre mi um-base d Worke rs' Compe nsati on Insurance. It is esti mated that the premiums for first-
dol l ar c ove rage Worke rs' Compe nsati on Insurance would cost between $30 to $35 mi lli on and
woul d f ar exceed c urre nt annual worke rs' compensati on costs.
To se l f -admi ni st e r the workers' compensation program i nte rnally, the level of staf f i ng necessary
woul d equate to approxi mate ly 20.2 Full-Ti me Equi valent (FTE) positions, or approximately
$2.25 mi l l i on per ye ar i n salary and be ne f i ts alone. Addi ti onal costs that would need to be
f ac tore d i n to mai nt ai n thi s ope rat i on i n-house i nclude ongoi ng trai ni ng and certification of staff,
errors and omi ssi ons insurance, facilities and equipment acquisitions and maintenance, a
spe c i ali ze d c ompute r system and li c e nsi ng, etc. Ulti mate ly, securing the same services from a
qual i f i e d ve ndor i s more cost e f f e c ti ve and removes muc h of the li abi li t y associated with Clai ms
Admi ni st r at i on f rom the Ci t y. It also allows the Ci ty to benef i t f rom the pool of resources
br ou ght to the table by qu al i f i e d TPAs that c an ulti mate ly be made avai lable to the Ci ty's
Di s a b i l i t y Manage me nt Team.
Matte rs that shou l d be c onsi de re d i n the selecti on of a Workers' Compensati on TPA as a
Di sabi l i t y Manage me nt Team me mbe r i nc l ude the f i rm's abi li ty to:
Provi de t i me l y response to c li e nt needs,
Present new ideas and i nnovat i ons related to clai ms admi ni strati on and di sabi li ty
manage me nt , and
Work c ol l abor at i ve l y wi th other vendors that make up the overall Disability Management
te am.
Whi l e each ve ndor pre se nte d the i r proposal f or addressing the Ci ty's program objectives, staff
be l i e ve s that the recommended f i rm is best prepared to contribute valuable expertise and
experience to the team, while maintaining the fluidity and flexibility necessary for the program
adj ust me nt s that wi l l take place as the Di s abi l i t y Management program matures.
SUSTAINABLE OPPORTUNITIES
The re are no e c onomi c , e nvi r onme nt al or social e qui ty opportuni ti es associated with thi s report.
DISABILITY AND SENIOR CITIZEN ACCESS
The i ssues addressed in t hi s report di rectly pertai n to di sabi li ty issues, as they may impact Ci ty
Item;
Finance and Management Committee
July 10,2007
De borah A. Edge rly
FMA: Worke rs' Compe nsati on Thi rd Party Admi ni strati on Contract Page 6
e mploye e 's who become i njure d or i ll on-the-job. The legal, e f f i c i e nt and competent
admi ni st r at i on of a workers' c ompe nsati on c lai ms dove-tai ls i nto the City's collateral
obli gati ons, as an e mpl oye r, pursuant to the Federal Housi ng and Employment Act (FEHA), the
Ame ri c ans wi t h Di sabi l i t i e s Ac t (ADA) and worke r-re late d di sabi li ty retirement issues.
JT2 has best de monstrate d the abi l i t y to assist the Ci ty i n compli ance wi th the regulations across
the mu l t i t u de of f orums whi c h may be i ntersected by a workers' compensation clai m.
RECQMMENDATl QNf S) AND RATIONALE
Based on the r e sul t s of the re vi e w process summari zed above, staff recommends that the Council
authori ze the Ci ty to e nt e r i nt o an agreement wi t h JT2 Integrated Resources f or the provi si on of
Worke rs' Compe nsat i on Admi ni s t r at i on Servi ces f or a total contract amount of $2,059,560 f or
Contrac t Year 2007-08 and for a total a c ontrac t amount of $2,162,538 for Contract Year 2008-
09 wi t h an opt i on to e xte nd the agreement f or two addi ti onal two-year terms f or an amount not to
exceed the pri or ye ar's contract amount adjuste d by the prior year's Consumer Price Index not to
exceed a contract amount i ncrease of 5% for each contract year for Contract Years 2009 through
2013.
Eve n though the ove rall sc ori ng ranke d JT2 as second most quali f i ed for the contract services,
staff re c omme nds JT2 over the Sedgwick Clai ms Management for a number of reasons.
1. J T2's proposed two-ye ar costs are nearly $1.6 mi l l i on less than those proposed by
Se dgwi c k Cl ai ms Manage me nt .
2. Both f i rms provi de d documented evi dence of the i r abi li ty to reduce overall program
c osts based on the past year e xpe ri e nc e . Whi le Sedgwick has a depth of resources to
draw f rom be i ng a nati onal f i rm, JT2 has demonstrated their abi li ty to f lex and grow
wi t h the Ci t y's program as c hange s presented themselves.
3. JT2 has c onsi st e nt l y met or exceeded the pe rf ormanc e measure standards established
unde r the pri or c ontrac t and has consi stently impressed the independent audi tors with
the qual i t y of the i r c lai ms management practi ces.
4. JT2 has hi s t or i c al knowle dge of the Ci ty and i ts i nternal operations. Past experience
has shown that any transi ti on period from one TPA to another usually results in
c l ai ms manage me nt di f f i c ul t i e s f or the f i rst 9 to 12 months of the transi ti on period.
These di f f i c u l t i e s usual l y re sult i n penalti es bei ng imposed on the City due to late
c l ai m payme nts or other vi ol at i ons of the state labor code.
5. Changi ng f rom one TPA to another wi ll not solve perceived program problems. It is
be tte r to analyze the program whi l e there i s stabi li ty to test where corrective action
Item:
Fi nance and Management Committee
July 10,2007
Deborah A. Edge rly
FMA: Worke rs' Compe nsat i on Thi rd Party Admi ni strati on Contract Page 7
may be necessary.
6. JT2 has de monstrate d that they have a vested interest in worki ng wi th the City of
Oakl and as t he i r ''f lagshi p" ac c ount and c onti nue to commit to strategically change
and adj ust wi t h the Ci t y' s needs as the program prepares to go to the next level of
Clai ms Manage me nt.
Si gni f i c ant c hange s proposed unde r the upc omi ng contract i nclude the requirements to:
Mai nt ai n adjuste r case loads at 125 c l ai ms per adjuster. Studies have shown that
whe re adjuste rs have a lowe r caseload, they are able to provi de more detailed and
di re c t c l ai ms manage me nt and cost containment services. As such, the City has
di re c t e d the caseload to be reduced from 175 to 125 per adjuster.
Pe rf orm a c omple te f i l e revi ew f oc usi ng on closure potenti al for all open clai ms. JT2
has propose d to unde rgo t hi s revi ew wi thi n the first 90 days of the contract. Staff wi ll
di re c t the TPA to provi de c ri ti c al consi derati on for closing the "stale" claims
regardless of the i r pote nti al f or ac t i vi t y i n the f uture .
Part i c i pat e in a Ri sk Management Program Revi ew to determine areas in the overall
Ri sk Manage me nt Program where strategi c program changes could benefi t the City.
Par t i c i pat e i n at least thre e di f f e re nt annual reviews, i nc l udi ng annual actuarial
anal ysi s, a nnu a l c l ai ms audi t and annual ut i l i zat i on revi ew/bi ll review audi t. These
thre e re vi e w processes wi l l al l ow the Ci ty an opportunity to c ri ti c ally review the
pe r f or manc e of the TPA and make any necessary adjustments as recommendations are
brought to l i ght by the vari ous revi ew consultants.
Par t i c i pat e i n se mi -mont hl y f i nanci al vari ance meetings to closely monitor
f l uc t uat i ons i n program costs and determi ne where ti ghter controls or strategic
program c hange s are needed as cost contai nment strategies. This is in addi ti on to the
mont hl y and quarte rly c l ai ms re vi e w meeti ngs already provi ded at the department
l e ve l .
Pr ovi de e ar l y i nt e r ve nt i on/r e t ur n to work servi ces as well as onsite non-technical
pe rsonne l servi ces, to act as a li ai son between desi gnated Ci ty departments and the
TPA.
Tr ansi t i on to a paperless system by the f ourth quarter of 2007. This wi ll ensure that
all c l a i m doc ume ntati on i s di gi ti ze d and mai ntai ne d electronically, making them
avai l abl e to all authori ze d parti e s i n a ti me ly and ef f i ci ent manner.
Pa r t i c i pa t e i n the de ve l opme nt of an e arly "i nte rac ti ve process" program that wi ll
Item:
Fi nance and Management Committee
July 10,2007
Deborah A. Edge rl y
FMA: Worke rs' Compe nsati on Thi rd Party Admi ni strati on Contract Page 8
st r e aml i ne the ti me f rame f or the Ci ty to acti vate and f ully comply wi th i ts
KEHA/ADA and FMLA programs.
JT2 Int e grat e d Re sourc e s (JT2) of Du bl i n, CA, has been provi di ng Workers' Compensation
Admi ni s t r at i on Se rvi c e s si nc e 1986. JT2 has managed the Ci ty's account i n Oakland since 2001
at t he i r of f i c e s i n the Duf wi n Towers bu i l di ng, located at 519-17
th
Street, Oakland. JT2 has
c ommi t t e d to par t ne r i ng wi t h a small local f i rm, Quali ty Assurance Services (QAS) i n a
me nt or/prot e ge arrange me nt . QAS is a young f i rm established in 2003 with the pri mary focus of
t e mpor ar y pl ac e me nt of t e c hni c al c l ai ms pe rsonne l. Unde r the Mentor/Protege Agreement, QAS
wi l l be assi gne d c l ai ms handl i ng work, unde r close supervi si on of the pri mary contractor, JT2.
JT2 c ont i nue s u nde r the owne rshi p of the f our ori gi nal i ndi vi dual owners. They specialize i n
Worke rs' Compe nsati on c l ai ms admi ni st rat i on, and are not a subsi di ary to a larger health
mai nt e nanc e c orporat i on, i nve st me nt or i nsuranc e company. JT2 has committed to continuing
i ts par t ne r shi p wi t h the Ci ty of Oakland i n the admi ni strati on of our Workers' Compensation
Program.
To e ns u r e t hat awardi ng t hi s c ontrac t to JT2 or any other vendor, wi l l not result i n "business as
usual " servi ce, staf f i s pre pare d to uti li ze the three levels of program audits which will include
me asurable , au di t abl e pe rf ormanc e standards to be uti li zed throughout the contract period. The
re sul t s of the au di t s wi l l be used to de te rmi ne the contractor's e li gi bi li ty f or the payment of the
mandat ory hol d back of 10% of the c ontrac t fees requi red by Contract Compli anc e .
Item:
Fi nanc e and Management Committee
July 10,2007
De borah A. Edge rl y
FMA: Worke rs' Compe nsat i on Thi rd Party Admi ni strati on Contract Page 9
ACTION REQUESTED BY COUNCIL
Staf f re que sts that the Ci ty Counc i l adopt a resoluti on authori zi ng the City to enter an agreement
wi th JT2 Integrated Resources for the provision of Workers' Compensation Administration
Servi ces for a t ot al contract amount of $2,059,560 for Contract Year 2007-08 and for a total a
c ont rac t amou nt of $2,162,538 f or Contrac t Year 2008-09 wi th an opti on to extend the agreement
f or two a ddi t i ona l two-year te rms f or an amount not to exceed the prior year's contract amount
adj ust e d by the pr i or ye ar's Consume r Pri c e Index not to exceed a contract amount increase of
5% f or e ac h c ont rac t year f or Cont rac t Years 2009 t hrough 2013.
RespectfUlJM submi tte d,
Wi lli am E. Noland
Di rector, Fi nance and Management Agency
Pre pare d by
De borah Grant, Ri s k Manage r
Ri sk Manage me nt Di vi s i on
APPROVED AND FORWARDED TO THE
FINANCE & MANAGEMENT COMMITTEE:
Of f i c e of the Ci lv Admi ni st r at or
Item:
Fi nance and Management Committee
J ul y 10,2007
ATTACHMENT A
VENDOR QUALIFICATION MATRIX
VENDOR
NAME
Cl ai ms
Manage me nt ,
Inc .
Haze lri gg
Risk
Manage me nt
Services
JT2
Inte grate d
Resources
Sedgwi ck
Clai ms
Manage me nt
Tri Star Ri sk
Manage me nt
OVERALL
RANKING
T
5
2
1
4
2 YEAR
CONTRAC
T
FEE
$3,570.000
$8,750,000
$4,099,123
$5,632,032
$5,087,500
TRANS-
ITION
FEE
$7,500
$25,000
SO
$0
$8,800
PRO-
POSED
STAFFING
LEVEL
15
Not
spe c i f i e d
17
14.3
21
YEARS OF
EXPER-
IENCE
26
16
14
36
20
PUBLIC
AGENCY
CLIENTS
VV/ >2,500
EM PL.
5
7
4
Not Li sted
7( CA-
based)
PARENT
COMPAN
Y
None
Corvel
Enterpri se
Comp,. Inc
None
Fi de l i t y
Sedgwick
Holdi ngs,
Inc .
Tri Star
Insurance
Group
HQ
LOCATION
Ranc ho
Cordova. CA
Sacramento,
CA
Du bl i n, CA
Me mphi s, TN
Long Beach,
CA
SUBS.
RECEIVING
CONTRACT
DOLLARS
None
Not disclosed
Quali ty Assurance
Services
None
None
(Buckeye/RRPI
listed as mentor)
Approved as to Form and Legality
20- ; : i : 52
OAKLAND CITY COUNCIL
f City Attorney
RESOLUTION No. _C.M.S.
Introduced by Councilmember _
RESOLUTION AUTHORIZING THE CITY TO ENTER AN AGREEMENT
WITH JT2 INTEGRATED RESOURCES FOR THE PROVISION OF
WORKERS' COMPENSATION ADMINISTRATION SERVICES FOR A TOTAL
CONTRACT AMOUNT OF $2,059,560 FOR CONTRACT YEAR 2007-08 AND
FOR A TOTAL CONTRACT AMOUNT OF $2,162,538 FOR CONTRACT YEAR
2008-09 WITH AN OPTION TO EXTEND THE AGREEMENT FOR TWO
ADDITIONAL TWO-YEAR TERMS FOR AN AMOUNT NOT TO EXCEED THE
PRIOR YEAR'S CONTRACT AMOUNT ADJUSTED BY THE PRIOR YEAR'S
CONSUMER PRICE INDEX NOT TO EXCEED A CONTRACT AMOUNT
INCREASE OF 5% FOR EACH CONTRACT YEAR FOR CONTRACT YEARS
2009 THROUGH 2013
WHEREAS, the Ci t y Cou nc i l de si re s worke rs' compensati on thi rd party c lai ms
admi ni st r at i on se rvi c e s; and
WHEREAS, al t e r e ngagi ng i n an RFP process, the Ci ty determi ned that JT2 Integrated
Re sourc e s provi de d the most e f f i c i e nt and e f f e c t i ve opti on f or the provi si on of workers'
c ompe nsat i on t h i r d party c l a i ms admi ni s t r at i on services; and
WHEREAS, the Ci t y Counc i l desi res that the contract f or services i nc lude perf ormance
me asure s f or me c l i ng goals spe c i f i e d i n the c ontrac t i n orde r to quali f y f or ongoing renewal of
the c ont r ac t wi t h i n the spe c i f i e d te rms of the contract; and
WHEREAS, the agreement provides that for the performance of the services JT2
Int e grat e d Re sourc e s wi l l be pai d a base li ne fee and contract renewal i s based on acceptable
pe r f or manc e as de t e rmi ne d by an i nde pe nde nt audi t; and
WHEREAS, pu r s u ant to the Ci t y Counc i l 's moti on authori zi ng the agreement with JT2
Int e grat e d Re sourc e s, the agre e me nt provi de s that the term thereof shall be two years wi th two
opt i ons on the Ci t y' s part to e xte nd the te rm of the agre e me nt f or an addi ti onal two years; and
WHEREAS, the Ci t y Cou nc i l f i nds that t hi s contract i s f or services of a prof essi onal
na t u r e : and
WHEREAS, the Ci t y Cou nc i l f i nds that servi ces unde r thi s contract wi ll be temporary;
and
WHEREAS, the Ci ty Counc i l f i nds that this contract shall not result in the loss of
e mpl oyme nt or salary by any person havi ng permanent status i n the competi ti ve service; now,
theref ore be i t
RESOLVED: That the Ci ty shall enter i nto a prof essi onal services agreement with JT2
Inte grate d Re sourc e s to provi de Worke rs' Compe nsati on Thi rd Party Admi ni strati on services f or
two years for an amount not to exceed $1,999,572 per year plus a 3% contract compliance fee of
$59.988 for a t ot al c ontrac t amount of $2,059,560 for Contract Year 2007-2008 and for an
amount not to exceed $2,099,551 pl us a 3% contract compli ance fee of $62,987 for a total
c ontrac t amou nt of $ 2,162,538 for Contract Year 2008-2009; and be i t
FURTHER RESOLVED: That upon acceptable performance as determined by an
independent audi t, the Ci ty Admi ni strator is authorized to extend the term of the contract for two
addi t i onal two-ye ar te rms i n an amount not to exceed the pri or year's contract amount adjusted
by the pri or ye ar's Consume r Pri c e Index not to exceed a contract amount increase of 5% plus a
3% c ontrac t c ompl i anc e fee for each contract year for Contract Years 2009-2011 and Contract
Ye ars 20 1 1 - 20 1 3: and be i t
FURTHER RESOLVED: That f u ndi ng f or these contract services i s contained i n the
FY 2007-09 Propose d Poli c y Budge t i n the Worke rs' Compensation Fund (1150); and be i t
FURTHER RESOLVED: That the Ci ty Admi ni strator i s authorized to complete all
ne got i at i ons and e xe c ut e all c ontrac ts, amendments, modi f i c ati ons and extensions consistent with
t hi s r e sol u t i on and i t s basi c purpose s.
!N COUNCIL, OAKLAND, CALIFORNIA, , 20
PASSED BY THE FOLLOWING VOTE:
AYE S - BROOKS, BRUNNER, CHANG, KERNIGHAN, NADEL, QUAN, REID, and PRESIDENT DE LA FUENTE
NOE S -
ABS E NT-
ABSTENT1ON -
ATTEST:
LaTonda Simmons
City Clerk and Clerk of the Council
of the City of Oakland, California