Placement: Consent Agenda
Action Requested: Motion / Vote
title
Approve Contract #20250211 for Third Party Administration Services for Claims Related to Sewer Collection Systems with Relation Insurance Services of Florida, Inc.
body
Submitted By: Nathaniel Rubel, Procurement Assistant Director, Procurement Management Division (PMD).
Strategic Plan Link: The City's Goal of a high-performing city government organization.
Summary Brief (Agreements/Contracts only)
1. Prepared by: Nathaniel Rubel, Procurement Assistant Director, PMD.
2. Parties: City of Port St. Lucie and Relation Insurance Services of Florida, Inc. (“Relation”).
3. Purpose: Relation will provide claims administration and loss control services for the City’s Utility Systems Department (“USD”).
4. New/Renewal/Modified: New.
5. Duration: The Contract will start when executed and will terminate on December 31, 2028, with one (1) additional three (3)-year option to renew.
6. Benefits to Port St. Lucie: Provides experienced sewer collection system claims handling and loss control services for USD. The handling of such claims is a very labor-intensive process and is best managed by experienced claims handlers to best protect the City’s interests.
7. Cost to Port St. Lucie (Annual and Potential): The Third Party Claims Administration Services will be $1,200.00 per claim. Total annual expenditures will be based on the number of claims submitted.
Presentation Information: N/A.
Staff Recommendation: Move that the Council Approve Contract #20250211 for Third Party Administration Services for Claims Related to Sewer Collection Systems with Relation Insurance Services of Florida, Inc.
Alternate Recommendations:
1. Move that the Council amend the recommendation and approve Contract #20250211
2. Move that the Council not approve Contract #20250211 and provide staff with direction.
Background: In 1987, a group of government agencies on the Treasure Coast joined together in a cooperative effort known as TRICO, to develop, implement, and participate in a coordinated management program to make the most efficient use of their expenditures and to provide the necessary services to self-insure as authorized by various Florida Statutes. TRICO is comprised of the City of Port St. Lucie, the City of Stuart, Martin County and St. Lucie County.
Through a competitive solicitation process conducted in 2022, Relation was awarded a contract by the TRICO Board to provide Third Party Insurance Claims Administration and Brokerage Services.
The original agreement with TRICO did not provide coverage for insurance claims made by the member agencies unless the claim was a result of negligence on behalf of the member. Due to the specialized experience required to handle insurance claims, the members desired to amend the Contract to provide adjustment services for claims not covered by TRICO such as inverse condemnation, malpractice, and sewer collection system claims. Amendment #1 to the Contract added adjustment services for claims not covered by TRICO to each member at the rate of $1,000.00 per claim. Authority for Relation to adjudicate claims on behalf of TRICO members was granted through Amendment #3.
Since Relation has been handling these claims on behalf of the member agencies, they have experienced a higher level of activity than originally anticipated from the City’s Utility Systems Department for claims related to sewer collection systems. These claims, by their nature, tend to be markedly more complex and therefore, more labor-intensive for the adjusters and claims handlers. Therefore, USD staff is requesting Council approval of this separate agreement with Relation to handle the third-party claims administration and loss control services indicated in the Contract in conjunction with the administration of these claims at a rate of $1,200.00 per claim.
Issues/Analysis: Staff has reviewed the proposal from Relation and understands the elevated complexity and labor-intensive qualities of the USD claims and believes it still provides excellent value to the City to have an experienced team of adjusters and claims administrators handling these claims. Relation is already acting as the City’s Third Party Claims Administrator and Broker through the City’s membership in TRICO. Keeping these services with Relation to handle the USD claims will maintain continuity of the City’s risk management program and activities.
Good Cause Shown: Staff is requesting Council approve the contract and waive formal bidding for good cause shown under City Code of Ordinances, Section 35.08(c). Relation was awarded a contract as the claims administrator for TRICO based on a competitive solicitation, and the City is a member of TRICO. Since Relation is administering covered claims for the City through TRICO, to maintain consistency, continuity, and familiarity, staff recommends Council approve the Contract.
Financial Information: Expenditures will be allocated from the USD Sewer Preventative Maintenance Fund (431-3516-534000). A pre-funded account with the City & Relation will be established to facilitate timely vendor payments, settlement of USD claims, and reimbursement of content claims. Authorization from the City Manager or their designated representative is required prior to any withdrawals from this account.
Special Consideration: N/A.
Location of Project: N/A.
Attachments:
1. Signed Contract.
2. TRICO Contract with Relation.
NOTE: All of the listed items in the “Attachment” section above are in the custody of the City Clerk. Any item(s) not provided in City Council packets are available upon request from the City Clerk.
Internal Reference Number: 25233-02.
Legal Sufficiency Review:
Reviewed by Alyssa Lunin, Senior Deputy City Attorney. Approved as to Legal form and sufficiency by Richard Berrios, City Attorney.