City of Sacramento City Council 915 I Street, Sacramento, CA,

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1 City of Sacramento City Council 915 I Street, Sacramento, CA, Meeting Date: 9/13/2011 Report Type: Consent Title: Agreements: Workers' Compensation Legal Services Report ID: Location: Citywide Recommendation: Adopt a Resolution 1) awarding separate consultant and professional service agreements for workers compensation legal services for contract terms of three years to Bradford & Barthel LLP with an annual not to exceed amount of $25,000 and a total not to exceed amount of $75,000; to Cuneo, Black, Ward & Missler with an annual not to exceed amount of $110,000 and a total not to exceed amount of $330,000; to Hanna, Brophy, MacLean, McAleer, and Jensen, LLP with an annual not to exceed amount of $210,000 and a total not to exceed amount of $630,000; to Laughlin, Falbo, Levy & Moresi, LLP with an annual not to exceed amount of $50,000 for a total not to exceed amount of $150,000; to Mullen & Filippi with an annual not to exceed amount of $20,000 for a total not to exceed amount of $60,000; and to Twohy, Darneille & Frye with an annual not to exceed amount of $100,000 for a total not to exceed amount of $300,000 and 2) authorizing the City Manager to execute each agreement. Contact: Patrick Flaherty, Risk Manager, (916) , Human Resources Department Presenter: None Department: Human Resources Division: Risk Mgmt/Insurance Prgms Dept ID: Attachments: 1 -Description/Analysis 2- ADRS Unexecuted Contract Cover 3 - Bradford & Barthel Contract 4 - Cuneo, Black, Ward & Missler Contract 5 - Hanna, Brophy, MacLeam, McLeer & Jensen Contract 6 - Laughlin, Falbo, Levy & Moresi Contract 7 - Mullen & Filippi Contract 8 - Twohy, Darneille & Frye Contract 9 - Resolution Eileen Teichert, City Attorney Shirley Concolino, City Clerk 1 of 143 Russell Fehr, City Treasurer John F. Shirey, City Manager

2 City Attorney Review Approved as to Form Sandra Talbott 9/8/ :16:35 AM Approvals/Acknowledgements Department Director or Designee: Geri Hamby - 9/7/2011 6:00:40 PM City Treasurer Review Prior Council Financial Policy Approval or Outside City Treasurer Scope Russell Fehr 8/30/ :11:13 AM Eileen Teichert, City Attorney Shirley Concolino, City Clerk Russell Fehr, City Treasurer John F. Shirey, City Manager 2 of 143

3 Description/Analysis Issue: The City has self-insured and self-administered its workers compensation claims since the 1980s. The City receives approximately 700 new workers compensation injury claims a year and approximately 70 of these claims will become litigated. The City contracts out its workers compensation defense work to outside attorney firms and have done so since the 1980s. Workers compensation legal services are contracted out due to the high degree of specialization required to handle this type of litigation. Most workers compensation defense attorneys specialize in this field and it is advantageous to the City to work with firms that specialize in the defense of workers compensation litigation. The City pays out approximately $450,000 per year to outside workers compensation legal defense firms who represent the City in workers compensation litigation. Policy Considerations: The City utilizes attorneys that specialize in workers compensation legal defense work to defend the City in workers compensation litigation. This is the most cost effective and efficient method of protecting the City from workers compensation litigation. Environmental Considerations: California Environmental Quality Act (CEQA): Under the California Environmental Quality Act (CEQA) guidelines, continuing administrative activities do not constitute a project and are therefore exempt from review. Sustainability Considerations: There are no sustainability considerations applicable to this action. Other: None. Commission/Committee Action: None. Rationale for Recommendation: Workers compensation defense firms interested in working with the City are invited to submit an application to the City Attorney s Office for review. The City Attorney s Office reviews each firm s application and selects a panel of firms qualified to provide workers compensation legal services to the City. The recommendation is to enter into contracts with each of these firms for a period of three years. Financial Considerations: The annual cost for workers compensation legal services is approximately $450,000. The not-to-exceed amount in the contracts with the six workers compensation defense firms total $515,000 per year, or $1,545,000 for three years. This amount is budgeted in the workers compensation fund (Fund 6504) and the corresponding expenditure budgets are established, subject to funding, annually through the annual budget process for the duration of the contract. 3 of 143

4 Award of Workers Compensation Legal Services Unexecuted Contract/Agreements The Unexecuted Contract/Agreement is signed by the other party, is attached as an exhibit to the resolution, and is approved as to form by the City Attorney. The Unexecuted Contract/Agreement (Public Project) is NOT signed by the other party, is attached as an exhibit to the resolution, and is approved as to form by the City Attorney. The Unexecuted Contract is NOT included as an exhibit to the Resolution because the Agreement(s) is with other another governmental agency and it is not feasible to obtain the other agency s signature prior to Council action (be they denominated Agreements, MOUs, MOAs, etc.); however, the City Attorney approves the forwarding of the report to Council even though the signed agreement is not in hand yet. The Unexecuted Contract is NOT included as an exhibit to the resolution because, due to special circumstances, and the City Attorney confirms in writing that it is okay to proceed with Council action even though the signed agreement is not in hand yet. All unexecuted contracts/agreements which are signed by the other parties are in the Office of the City Clerk before agenda publication. 4 of 143

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143 Workers Compensation Legal Services September 13, 2011 RESOLUTION NO. Adopted by the Sacramento City Council AGREEMENT FOR WORKERS COMPENSATION LEGAL SERVICES BACKGROUND A. The City of Sacramento has self-insured and self-administered its workers compensation claims since the 1980s. The City utilizes outside workers compensation legal firms to defend the City against workers compensation litigation. Contracting out the handling of the Cities workers compensation defense work is an effective and efficient method of handling workers compensation litigation. The City pays out approximately $450,000 per year to legal firms specializing in workers compensation defense work. Workers compensation defense firms interested in working with the City submit applications to the City Attorney s Office and a list of six (6) qualified law firms was established. B. There is sufficient funding built into the FY2011/12 for workers compensation legal services. Corresponding expenditure budgets will be established, subject to funding, annually through the budget process for the duration of the contract. BASED ON THE FACTS SET FORTH IN THE BACKGROUND, THE CITY COUNCIL RESOLVES AS FOLLOWS: Section 1. Section 2. Awards separate consultant and professional service agreements for workers compensation legal services for contract terms of three years to the following firms: Bradford & Barthel LLP, with an annual not-to-exceed amount of $25,000 and a total not-to-exceed amount of $75,000; Cuneo, Black, Ward & Missler with an annual not-toexceed amount of $110,000 and a total not-to-exceed amount of $330,000; Hanna, Brophy, MacLean, McAleer, and Jensen, LLP with an annual not-to-exceed amount of $210,000 and a total notto-exceed amount of $630,000; Laughlin, Falbo, Levy & Moresi, LLP with an annual not-to-exceed amount of $50,000 for a total notto-exceed amount of $150,000; Mullen & Filippi with an annual notto-exceed amount of $20,000 for a total not-to-exceed amount of $60,000; and Twohy, Darneille & Frye with an annual not-to-exceed amount of $100,000 for a total not-to-exceed amount of $300,000 The City Attorney and the City Manager or his designee are authorized to execute each agreement. 143 of 143