Report Prepared by: Stephanie R. Dietz, City Manager
Title
SUBJECT: Approval of the First Amendment to the Agreement with Jackson Lewis, P.C., for Additional Compensation of $90,000 and the Total not to Exceed Contracted Amount of $120,000 for Special Legal Services Related to the City’s Self Insured Retention for Employment Risk Management Authority (ERMA) Personnel Related Matters
REPORT IN BRIEF
Considers the approval of the First Amendment to the Agreement between the City of Merced and Jackson Lewis, P.C., for specialized legal services related to ERMA covered personnel matters.
RECOMMENDATION
City Council - Adopt a motion:
A. Approving the First Amendment to the Agreement with Jackson Lewis, P.C. for an amount not to exceed $120,000 related to legal services for the City’s self-insured retention; and,
B. Approving the reduction of $58,000 in Fund 672-Support Services expense, transferring to the General Fund and appropriating the same in the City Attorney’s Professional Service account line; and,
C. Approving a Supplemental Appropriation in the amount of $32,000 from the General Fund unreserved, unencumbered Fund Balance; and,
D. Authorizing the City Manager or designee to execute the necessary documents.
Body
ALTERNATIVES
1. Approve as recommended by staff; or,
2. Approve with modifications; or,
3. Refer to staff for reconsideration of specific items as requested by Council; or,
4. Continue to a future Council meeting; or,
5. Deny.
AUTHORITY
Charter of the City of Merced, Section 200.
CITY COUNCIL PRIORITIES
As provided for in the 2020-21 Adopted Budget.
DISCUSSION
The City of Merced entered into a Memorandum of Coverage (MOC) to become a member of ERMA (Employment Risk Management Authority). Under the MOC, the City’s self-insured retention for each ERMA covered claim is $100,000. The self-insured retention requires the City to cover the first $100,000 in eligible costs associated with each covered claim.
When a claim is received, ERMA in consultation with the City, makes a determination regarding coverage and appropriate initial steps including potentially assigning ERMA approved defense counsel for each ERMA related claim, where appropriate.
On November 29, 2018, the City of Merced entered into a contract with Jackson Lewis, P.C., a Professional Corporation. Jackson Lewis is an ERMA approved law firm providing defense counsel for ERMA covered claims. The City has utilized the services of Jackson Lewis since 2018 for these purposes. The initial budget allocation was $15,000 in 2018. An additional allocation of $15,000 was budgeted in 2019. These allocations have been sufficient to cover the City’s self-insured retention thus far. However, the City has received an ERMA covered claim that will require the full allocation of the $100,000 self-insured retention. In addition, the eligible costs associated with this claim and incurred to date couple with the self-insured retention costs of previous claims has caused the amount of the agreement to exceed the City Manager’s authority. In order to cover the City’s self-insured retention costs as required by the MOC, including the cost of ERMA approved defense counsel, an amendment to the contract is required.
IMPACT ON CITY RESOURCES
An additional $90,000 is needed for the contract amendment. There is $58,000 available within the current operating budget of the Information Technology Division in the Support Services Fund due to salary savings. A $32,000 supplemental appropriation from the General Fund is required in order to meet the need.
To align all legal service contracts under the oversight of the City Attorney’s office the revenue and expense of $58,000 also needs to move into the General Fund in the City Attorney’s department.
ATTACHMENTS
1. First Amendment
2. Agreement