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Home My WebLink AboutAGENDA REPORT 1999 0217 CC REG ITEM 10LTO: FROM: DATE: SUBJECT: SUMMARY CITY OF MOORPARK AGENDA REPORT The Honorable City Council 206 - I (D) �r�....a ITEM 10' Le CITY OF MOORPARK, CALIFORNIA City Council Meeting of ACTION: '"' PPrc''' e d c. {f [ ecc:r,, w , r, d O, t�CYI • a odCp ed BY:��;�� Donald P. Reynolds Jr., Administrative Services Manager February 8, 1999, (CC Mtg. Of 2/17/99) Consider Resolution No. 99- Granting Authority for the Settlement of Minor Claims The purpose of this report is to request that the City Council delegate the authority to settle claims not to exceed an estimated value of $2,500 to the City Manager without having to schedule such claims for Council consideration. The City Manager's actions will be provided to Council within a week after the date of the action. BACKGROUND All claims submitted to the City through the City's claim adjuster, provided to the City Council for to reject or settle the matter. rejects the claim in either Closed Calendar agenda item. are currently processed and this input is then determination of whether In most cases, the City Session, or as a Consent In general terms and pursuant to State law, when a claim is rejected within 45 days of receipt the claimant is put on notice that he or she has six months to file a complaint (lawsuit) against the City. If the claim is not rejected within this 45 day time frame, pending other resolution, the claimant is allowed two years to file a complaint against the City. A claim may be rejected regardless of the City's intent to settle, just to keep this window of time to a minimum of six months. 000209 Claims Procedure Page 2 In calendar year 1998, seven general liability claims were filed against the City, and all but three were rejected. These three claims ranged from between $75 to $1,200, and were paid from budgeted monies available in the general overhead insurance line item. Of the four claims that were rejected, some have developed into law suites, (the subject matter is confidential), while others are still open awaiting action on behalf of the claimant (or will be closed six months after rejection by the City) . In some cases, the settled claims have taken several months to resolve. One claim escalated to include additional costs not part of the original damage claim. Adoption of a formal policy for these small claims will help the City respond faster and reduce the exposure to additional liability cost. PROCEDURES Government Code Section 935.4 allows the Council to authorize an employee of a local agency to perform functions of the governing body to compromise or settle a claim against the public entity if the amount is less than $50,000. The draft procedure outlined in the attached resolution and as summarized in the flow chart shown in Attachment "B," is consistent with the Government Code, and does increase the City's ability to settle or compromise small claims quickly. Staff is recommending a limit be placed on this authority of $2,500 per occurrence. This is because if the cost is more than this amount a budget action from Council may be needed, which would then also include consideration of the claim as well. The recent claims history described in the "BACKGROUND" of this report indicates that most small claims are less than $1,000, so staff is recommending a $2,500 limit. Staff surveyed six cities, and found that those that have delegated this authority to the City Manager have applied either a $2,500 or $5,000 limit to the authority. The City's General Liability Insurance has a $5,000 deductible per occurrence, and it is reasonable to stay below this level. 000210 Claims Procedure Page 3 When a claim is filed for less than $2,500, and a recommendation to settle the claim is agreed to by the City Manager, a release of liability form will be sent to the claimant. Upon receipt of the notarized release from the claimant, the City will issue payment. The release does not admit liability for the damage, it does attempt to prohibit any further action to be taken by the claimant, and effectively closes the matter. As proposed, if the recommendation is to reject the claim, it will still be sent to the Council for formal approval. If the recommendation is to reject a claim, it will be scheduled as a Consent item on the earliest possible agenda. If deemed necessary by either the City Manager, City Attorney or the Council, the claims can be pulled from Consent and discussed in closed session. When cases are settled by the City Manager, staff will provide the Council with a box item describing the circumstances. RECOMMENDATION Adopt Resolution to settle claims $2,500. Attachments: A) B) 99- , authorizing the City Manager with an estimated cost not to exceed Resolution 99 - Draft Claims Procedure Flow Chart 00 ®21:1. ATTACHMENT "A" RESOLUTION NO. 99 - RESOLUTION OF THE CITY COUNCIL OF THE CITY OF MOORPARK, CALIFORNIA, AUTHORIZING THE CITY MANAGER TO ALLOW, SETTLE, AND /OR COMPROMISE ANY GENERAL LIABILITY CLAIM FILED AGAINST THE CITY WHEREAS, all municipal governments are susceptible to a wide variety of general liability exposure ranging in damages (allegations of fault as well as actual fault) from less than $100 to greater than one million dollars, and every effort is taken to reduce this exposure; and WHEREAS, to defend itself against general liability claims, the City coordinates its responses with the support of the general liability insurance carrier, a claims adjuster, and within the time frames established by State law; and, WHEREAS, when general liability claims are filed against the City, the City can improve its position and reduce its exposure by responding quickly to allegations, and by staying within those time limits established by State law; and WHEREAS, California Government Code Section 935.4, provides a mechanism for a public agency to delegate the authority to allow, settle and /or compromise claims against the City having a value of less than $50,000, to an employee of the agency for the purpose of expediting the response to a claim. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF MOORPARK DOES RESOLVE AS FOLLOWS: SECTION 1. Pursuant to that authority provided in California Government Code 935.4, the City Council authorizes the City Manager to allow, settle and /or compromise any general liability claim filed against the City with a value of less than $2,500, in the quickest most efficient manner possible. SECTION 2. The City Clerk shall certify to the adoption of this resolution and shall cause a certified resolution to be filed in the book of original resolutions PASSED, APPROVED AND ADOPTED this 17th day of February, 1999. ATTEST: Deborah S. Traffenstedt City Clerk Patrick Hunter, Mayor 000212 CITY OF MOORPARK CLAIMS PROCESS ATTACHMENT °B' INCIDENT OCCURS l amended claim filed NOTICE OF INSUFFICIENCY Recommendation to City Manager NO Settle Claim NO YES T Release Signed and Notarized Payment Made 1 Case Closed 1� REFER TO ATTORNEYS CLAIM IS FILED w /City Clerk and logged in CLAIM IS REVIEWED BY 4 Administrative Services filed within 6 months? I NO substantially complete? YES Est. Damages above $2,500 YES TO CLAIMS REJECT %or CLAIM Council Consent Item (special cases may be referred to Closed Session)* YES I RETURN W/O I Appl. For I Late Claim ACTION Late Allowed (cc: Claims Adjuster) Claim NO Petition from Claimant to Court for Relief CASE CLOSED NO Relief Granted By Court Settle Claim Applying $5,000 Deductible and Gen. Liability Ins. Policy MUST BE DONE Payment Made Ins. W /IN 45 DAYS** City Clerk Sends Notice of Rejection Wait up to 6 Months for Complaint to be NO _i CASE CLOSED YES 30 DAYS TO FILE COMPLAINT * EVERY ATTEMPT WILL BE MADE TO SCHEDULE CLAIMS ON THE CONSENT CALENDAR. Council may pull a consent item and refer it to closed session at its discretion, or at the recommendation of the City Manager or City Attorney ** IF ACTION IS NOT TAKEN WITHIN 45 DAYS, THE TIME TO FILE A COMPLAINT IS EXTENDED FROM SIX MONTHS TO TWO YEARS 000213