REQUEST FOR CITY COUNCIL ACTION
SUBMITTED TO: Honorable Mayor and City Council Members
SUBMITTED BY: Al Zelinka, City Manager
VIA: Brittany Mello, Administrative Services Director
PREPARED BY: DeAnna Soria, Risk Manager
Subject:
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Approve and authorize execution of Amendment No. 1 to the Professional Services Agreement with Carl Warren and Company for Subrogation/Property Recovery Services
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Statement of Issue:
The City of Huntington Beach maintains a program of self-insurance for general liability pursuant to the California Tort Claims Act. The City has existing professional service contract with Carl Warren and Company for general liability claims investigation, processing, and administration services and other ancillary services. Staff is seeking Council approval on an amendment to that contract in the amount of $222,000 to allow for continued subrogation/property recovery services. These fee-based services are paid for only if Carl Warren is successful in recovering monies for the City. As of September 2022, Carl Warren has collected a net total of $438,739.22 for the City.
Financial Impact:
Should the Amendment be approved, the City's contract with Carl Warren and Company will increase by $222,000 and the total not-to-exceed amount for this agreement will increase from $309,000 to $531,000.
Sufficient appropriation is available in business unit 55230502.69365. It is important to note that the overall financial impact of conducting these services is net positive, as the City receives the majority of the funds resulting from Carl Warren's subrogation/property recovery services, which may otherwise go uncollected. Specifically, 82% of the amount recovered in each claim is returned to the City, less the 18% service fee to Carl Warren. Since beginning these services in March 2021 through September 2022, Carl Warren has successfully collected a total of $535,047.83 for the City, less $96,308.61 in service fees, for a net revenue gain...
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