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COUNTY OF SAN MATEO
Inter-Departmental Correspondence
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Human Resources Department
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DATE:
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May 19, 2008
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BOARD MEETING DATE:
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June 3, 2008
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SPECIAL NOTICE/HEARING:
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None
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VOTE REQUIRED:
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Majority
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TO:
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Honorable Board of Supervisors
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FROM:
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Donna Vaillancourt, Human Resources Director
Janine Keller, Risk Manager
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SUBJECT:
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Contract with Keith A. Hillegass Company, Inc.
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RECOMMENDATION:
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Adopt a Resolution authorizing the Human Resources Director to:
1) Enter into a three year agreement with Keith A. Hillegass Company, Inc., to provide administration and support services for the County’s self-insured general and auto liability claims, effective July 1, 2008 and ending June 30, 2011, each year’s contractual payment equaling $108,000 per year for a total of $324,000;
2) Exercise two additional one-year options.
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VISION ALIGNMENT:
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Commitment: Responsive, effective and collaborative government.
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Goal No. 20: Government decisions are based on careful consideration of future impact, rather than temporary relief or immediate gain. The agreement ensures a cost-effective manner of administering general liability and auto claims.
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Performance Measure(s):
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Measure
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FY 2006-07
Actual
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FY 2007-08
Projection
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FY 2008-09
Projection
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Number of Claims Processed
- Auto
- General Liability
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253
107
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260
150
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260
150
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Percent of claims, or notice of claims, with investigation commenced within 24 hours of receipt
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100%
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100%
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100%
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BACKGROUND:
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The County contracts with a third party administrator (TPA) for the provision of general liability and auto claim services. The TPA is responsible for creating claim files, determining liability, providing compensation, coordinating litigation and communicating with the County on an on-going basis.
In June 2002, this Board adopted Resolution No. 065347, authorizing the execution of a five-year agreement with Keith A. Hillegass, Company, Inc. (Hillegass). A new agreement was then executed for the period July 1, 2007 thru June 30, 2008, allowing adequate time for Risk Management staff to prepare a Request for Proposal (RFP).
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DISCUSSION:
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The Risk Management Division issued a new RFP for a general and auto liability administrator in January 2008. The RFP was advertised and six potential vendors were mailed notifications.
Seven proposals were received. An RFP Committee identified Keith A. Hillegass Company, Inc., (Hillegass) as best meeting the County’s needs. Hillegass was selected based on their extensive experience investigating and negotiating settlements on behalf of public agencies since 1967 and for their lowest pricing. Hillegass offered a flat annual fee of $108,000 per year for five years. The next lowest proposal received was 83% or $90,000 higher than the Hillegass’ proposal.
Hillegass has handled claims for the County of San Mateo since 1977 and has continuously offered competitive pricing and excellent customer service.
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FISCAL IMPACT:
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Funding for the contract with Hillegass are offset by the Risk Management’s General and Auto Liability Trust Funds. The amount of the contract will be $108,000 per year. The total amount of the three-year contract (July 1, 2008 to June 30, 2011) is $324,000. The two-year options to extend agreement total $108,000 each year for a total contractual obligation of $432,000 through June 30, 2012 and $540,000 through June 30, 2013. There is no impact to the Net County Cost.
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