SR-01-22-1980-11DRLK:SKS:ms 1/16/80
Council Mt.g: 1; ?/80
January 16, 1980
Santa Monica, California
TO: Mayor and City Council
FROM: City Attorney
SUBJECT: Adjusting and Investigating Services
For Civil Liability Claims
INTRODUCTION
3 A Z 2 1980
Brown Brothers Adjuster's Contract providing for
adjusting and investigating services for civil liability
claims terminated on December 31, 1979. Brown Brothers has
proposed to provide adjusting and investigating services for
the 1980 calendar year at a contract cost of $59,375.00.
Addition to said contract price, Brown Brothers has proposed
that the hourly rate for services outside the contract be
increased to $21.00 per hour and, that any time undertaken by
Mr. Robbins to negotiate claims against the City of Santa Monica
which are in suit be on an expense basis at the hourly rate of
$21.00.
The contract price for the calendar year of 1979 was
$47,,500.00. The proposed $59,375.00 contract price for the
1980 contract year is a 25 per cent increase. The City Attorney's
Office has been very pleased with the performance by Brown
Brothers, specifically Paul Robbins and Jim Pasco. But for the
large increase, 25 per cent, the City Attorney would, without
hesitation, recommend approval of this contract.
An alternative to the City Council entering into a
contract for the sum of $59,375.00 would be to enter into a
month -to -month agreement with Brown Brothers at the proposed
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JAN 2 2 1980
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$59,375.00 price, prorated on a month -to -month basis while the
City seeks proposals from various other adjusting and investi-
gating firms to test the $59,375.00 price in the market place.
REASONS FOR INCREASE
By letter dated December 27, 1979, Brown Brothers by
Thomas Beasley, has outlined the reasons for the 25 per cent
increase on the contract price which are as follows:
1. Brown Brothers Adjusters has administered the
City's self- insurance program at a financial loss for the last
three years.
2. The City of Santa Monica has realized a reduction
in the amount paid per claim over the past year which is remarkable
in this age of inflation.
3. Paul Robbins, Supervisor,and Jim Pasco, Field
Investigator,have over thirty years and twelve years experience,
respectively.
DISCUSSIONS WITH OTHER AGENCIES
At the City Council Meeting of November 9, 1976, the
City Staff presented to the City Council a comprehensive report
concerning adjusting and investigating services for civil liability
claims. Contained within said report were bid proposals made
by other adjusting services.
The City Attorney's Office has contacted the firm
of R. L. Kautz (who handles Culver City) and General Adjustment
Bureau, Inc. (G.A.B.) who handles other municipalities. Copies
of the Brown Brothers Contract with the City have been provided
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to representatives of the above two companies. once responses
are received, the City Council will be in a better position to
determine whether the proposed contract price by Brown Brothers
is a realistic figure in the market place.
ALTERNATIVES
The City Council is requested to do one of the following:
1. Authorize the City to enter into a contract with
Brown Brothers for adjusting, investigation and collection
services in the sum of $59,375.00 and all hourly rate items at
$21.00 per item.
2. Authorize the City to enter into a month -to -month
contract with Brown Brothers at the new proposed rate while the
City accepts bid proposals from other adjusting services. De-
pending upon the results of the market study, the City Council
is then free to:
a) Enter into a contract with Brown Brothers;
b) Enter into a contract with the lowest but
Most responsible bidder.
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RLK:SKS:ms 1/18/80
Council Mt 1/22/80
January 18, 1980
TO: Mayor and City Council
FROM: City Attorney
SUBJECT: Addendum to Staff Report on Adjusting and
Investigating Services For Civil Liability
Claims, Item No. 11 -D
Brown Brothers Adjusters has been informed of
the City's intent to ask for bids from other companies.
In the process of discussing the possibilities available
to the City Council, it was suggested to Brown Brothers
that they consider lowering their bid 10 per cent to a
15 per cent increase over the 1979 Contract price. On
January 18, 1980 Brown Brothers agreed to lower their
proposed contract price from $59,375.00 to $54,625.00,
even though Brown Brothers on the 1979 Contract suffered
a $22,000.00 loss.
The City Attorney's Office recommends that the
City Council approve a contract with Brown Brothers in the
sum of $54,625.00. Brown Brothers' service has been close
to outstanding and the City has received a substantial amount
of service for the price of the contract.
APPROVED BY:
RICHARD L. KNICKERBOCKER, City Attorney
SHARI K. SILVER, Assistant City Attorney
�I
Agenda Item 11 -D; Presented for consideration at this time was a
recommendation for approval of a contract with Brown Brothers for
provision of adjusting and investigating services for civil liability
claims. Councilmember Reed moved to approve Contract No. 34A,4,(CCS) as
amended. SeconU by Councilmember Rhoden,
Council. Vote: Affirmative: Councilmembers Yannytta Goldway,
Jennings, Reed, Rhoden and Mayor
Bambrick
Negative: Councilmember Scott
Absent: Councilmember van den Steenhoven
CITY COUNCIL MINUTES Jamuary 30, 1980