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(�. � �-2 <br /> 1. Octogan, while very p�ofessional, has no municipal experience and <br /> Redwood City is the largest agency within the JPA. The City would prefer <br /> to have Octagon troubleshoot any implementation issues with the smaller <br /> agencies prior to taking the City's case load. <br /> 2. Octagon's contract price represents a 20.33% increase over the city's <br /> current TPA. Plus the City would be charged an additional one-time <br /> $10,000 computer conversion fee. The city is not prepared to take on <br /> these significant increases mid-year. <br /> 3. In addition to the anticipated $162,450 administrative TPA costs for the <br /> nine-month contract with Octagon, the City would have to enter into a 3 <br /> year contract with a negotiated 3.8% increase in each the second and <br /> third years. <br /> 4. Octagon will need to hire at least six new employees to service the JPA. <br /> The City would prefer to have the employees trained and familiar with the <br /> Octagon systems prior to joining them. <br /> The City is monitoring and managing the Worker's Compensation Program and will <br /> continue to explore alternatives that provide the city with the best case management at <br /> a reasonable price. For now, staff has established performance standards and a <br /> performance based compensation program (see Exhibit B) in which CMI services will be <br /> regularly monitored. If the standards are not satisfactorily met then CMI risks up to a <br /> maximum of $20,000 of the total agreement costs. Additionally, the city asked CMI to <br /> reduce the examiner case load to 150 versus the current 170. This will allow for better <br /> case management; however, it will increase CMI's current contract costs by $22,500 for <br /> the nine month period. Despite this rate increase with CMI Octagon's rates are still <br /> 20.33% higher. <br /> Staff has been researching alternative providers for excess coverage as well as TPA <br /> services. At the end of this fiscal year, staff will return to Council to present findings and <br /> make a recommendation to stay with the current TPA, join the JPA's TPA, or move to <br /> another provider. <br /> Alternative <br /> Council could direct the Human Resources Department to enter into a new contract with <br /> Octagon. <br /> Fiscal impact <br /> Staff is not requesting additional funds at this time; however, based on the performance <br /> of CMI staff may be requesting a year-end adjustment to a maximum of $22,500. <br /> Funds for third party administrative services have been appropriated in the Human <br /> Resources Worker's Compensation FY 2004-2005 budget. <br /> r � / <br /> � v � <br /> , �i , <br /> � ,��, ., �; <br /> l� �- <br /> Maria Rivera-Pena Ed Everett <br /> Human Resources Director City Manager <br /> Attachment <br /> Contract for TPA services befinreen the City and CMI <br /> Workers' Compensation Program Performance Standards <br />