HomeMy WebLinkAboutAgenda Statement 1974/03/05 Item 04
AGENDA ITEM NO.. [ 4
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CHULA VISTA CITY COUNCIL MEETING OF: March 5, 1974
ITEM TITLE: Resolution - Approving Contract with R. L. Kautz & Company,
Inc. for Self-Insurance of Workmen's Compensation
INITIATED BY: Director of Finance
BACKGROUND
On October 10, 1973, the City of Chula Vista was notified by the State Compensation
Insurance Fund that effective immediately the premium produced by the Public Safety
Group (Police and Fire) would no longer be subject to dividend consideration. This
was the result of an adverse decision by the California Court of Appeals in the
Soby Case (Soby vs. WCAB, 26 C.A. 3d 555).
This exclusion is substantial as 40% of our payroll is represented by the Safety Group.
This means that our annual dividend payment due in April 1974 will be 40% less than
anticipated. Dividend payments in the past five years have ranged from $20,000 to
$65,000 per year. In the last fiscal year ending June 30, 1973, the City paid
$106,666.31 to the State Compensation Insurance Fund.
This notification coupled with the ever increasing rates and benefits for all employees
has prompted us to investigate the possibility of self-insurance. Two firms specialize
in administering self-insurance programs in California, namely the R. L. Kautz company
and the Esis company. Both of these firms were asked to quote a plan for Chula Vista
through Mr. Chuck Shippey of Creaser Price Agency.
After a thorough review of both proposals, we are recommending the proposal of
R. L. Kautz Company. We are confident that the R. L. Kautz Company will provide a
better service with more personal interest than we are now presently receiving. We
all agree that self-insurance is a step in the right direction for the City and we are
sure this change will conservatively result in an annual savings to the city of $51,750.
This contract will become effective April 1, 1974 and the annual fee for their services
will be $9,200. Adequate funds are presently in our Workmen's Compensation Insurance
account (01-1700-5236) to cover all expenses.
ATTACHED:
Resolution [X]
Ordinance [ ]
Agreement [X]
Plat [ ]
See EXHIBITS [xl No. 1,2
Financial Statement: Budget funds available in account 01-1700-5236.
Commission-Board Recommendation: N/A
Department Head Recommendation: Approval of Resolution and Contract
City Manager Recommendation: Concur
;"-11 '(Rev .lC/72; (l7JIO