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HomeMy WebLinkAboutReso 184-2018 (18-974)City of South San Francisco P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, CA City Council Resolution: RES 184 -2018 File Number: 18 -974 Enactment Number: RES 184 -2018 RESOLUTION APPROVING AN AGREEMENT WITH TRISTAR RISK MANAGEMENT SERVICES FOR WORKER'S COMPENSATION CLAIMS ADMINISTRATION SERVICES IN AN AMOUNT NOT TO EXCEED $496,820 FOR JULY 1, 2016 THROUGH JUNE 30, 2019, AND AUTHORIZING A BUDGET AMENDMENT TO THE SELF - INSURANCE FUND FOR FISCAL YEAR 2018 -2019. WHEREAS, the City has contracted with Tristar Risk Management Services for worker's compensation claims administration services since 1997, in order to maintain a self - insured worker's compensation program; and WHEREAS, the current agreement with Tristar was last amended in 2015 for the period of July 1, 2015 to June 30, 2016, attached hereto and incorporated herein as Exhibit 1; and WHEREAS, based on increased indemnity claims and cost -of- living increases, Tristar's required service fee has increased from $152,800 to $191,220 for fiscal year 2018 -2019; and WHEREAS, the last contract extension between the City and Tristar covered only up to the period of July 2015 to July 2016; and WHEREAS, since then, Tristar has continued to provide services to the City under the rates and terms of the contract extension covering 2015 -2016; and WHEREAS, the City desires to provide continuous services for worker's compensation claims through Tristar during the remainder of the current fiscal year while considering alternative options for cost - effective claims administration for fiscal year 2019 -2020; and WHEREAS, the City and Tristar agree to enter into an agreement to retroactively cover the period of July 2016 to June 2016 under the $152,800 service fee rate, and continue to cover the current July 2018 -June 2019 period under the $191,220 service fee rate; and WHEREAS, the increased service fee rate for 2018 -2019 is $38,420 above the amount allocated in the 2018 -2019 budget for claims administrator service fees, but no new funding is required as the excess amount will be covered by the total worker's compensation claim allocation within the City's self - insurance fund; however, a budget amendment is necessary to allocate funds from claims losses to claims administration fees to cover the excess amount. City of South San Francisco Page 1 File Number. 18 -974 Enactment Number., RES 184 -2018 NOW THEREFORE BE IT RESOLVED, that the City Council of the City of South San Francisco hereby takes the following actions: 1. Approves the Agreement for claims management services for the period of July 1, 2016 through June 30, 2019, attached hereto and incorporated herein as Exhibit 2. 2. Authorizes the City Manager to execute this agreement and to make any revisions, amendments, or modifications, deemed necessary to carry out the intent of this resolution which do not materially alter or increase the City's obligations thereunder, subject to approval as to form by the City Attorney. 3. Approves Budget Amendment number 19.025 to allocate an amount of $38,420 from the City's Self - Insurance Fund to claims administration service fees. At a meeting of the City Council on 10/24/2018, a motion was made by Richard Garbarino, seconded by Pradeep Gupta, that this Resolution be approved. The motion passed. Yes: 4 Mayor Normandy, Councilmember Garbarino, Councilmember Gupta, and Councilmember Addiego Absent: 1 Mayor Pro Tem Matsumoto Attest City of South San Francisco Page 2 CLAIMS SERVICE AGREEMENT - WORKERS COMPENSATION THIS CLAIMS SERVICE AGREEMENT ( "Agreement ") is made by and between TRISTAR Risk Management, a California corporation, hereinafter referred to as "TRISTAR," with principal offices at 100 Oceangate, Suite 700, Long Beach, CA 90802, and the City of South San Francisco, hereinafter referred to as "Client ", with principal offices located at 400 Grand Avenue, South San Francisco, CA 94080. In consideration of the mutual covenants and promises of the parties, TRISTAR hereby agrees to furnish to Client, and Client hereby agrees to receive from TRISTAR, those certain claims handling services identified in this Agreement, all on the terms and conditions set forth herein: ARTICLE 1 — TERM 1.1 The initial term of this Agreement shall commence on July 1st, 2011, and shall remain in effect continuously through June 30t", 2013, unless terminated in accordance with the provisions of Article 12 of this Agreement. ARTICLE 2 — DEFINITIONS As used herein and in the performance of set-vices by TRISTAR for Client, the following terms shall have the meanings described below: 2.1 Adjust or Adjustment: The process of handling and disposing of claims involving injury, death damage or loss, in accordance and consistent with generally accepted claims handling standards. 2.2 Administrative Agency: Any state, federal, or local governmental agency which supervises or regulates the handling of claims, including, but not limited to, industrial commissions, workers' compensation offices, bureaus, commissions, and state insurance departments and boards. 2.3 Allocated Loss Adjustment Expenses (ALAE A. Except as provided in Subsection 2.3.13 below, those expenses arising out of or connected with the handling and disposition of claims by TRISTAR including, but not limited to: 1. Fees of attorneys, including representation at hearings or pretrial conferences; 2. Fees of court reporters; 3. Court costs, court fees and court expenses, service of process; 4. Costs of undercover operative and detective set-vices; 1 Costs of employing experts for advice, opinions, or testimony concerning claims under investigation or in litigation and costs of appraisals; Costs of independent medical examinations and/or evaluations for rehabilitation and /or to determine the extent of Client's liability; Costs of legal transcripts of testimony taken at coroner's inquests, criminal proceedings, or civil proceedings; Costs of copies of public records and /or medical reports; Fees paid to witnesses and corresponding travel expenses; 10. Costs of photographs and photocopy services; 11. Vocational Rehabilitation, Medical Case Management and Utilization Review; 12. Electronic Index Bureau inquiry or reporting fees; 13. Interest paid as a result of litigation; 14. State - mandated electronic data interchange (EDI) costs. 15. Section 111 MMSEA of 2007 reporting. B. "Allocated Loss Adjustment Expenses" shall not include (i) any of the fees, costs, or expenses that are included in the claims service fees payable to TRISTAR by Client as agreed to herein or (ii) any payment of benefits to claimant or claimant's representatives. 2.4 Authority: That sum of money set forth in this Agreement for which TRISTAR shall have full and sole discretion and authority to adjust and make payments on behalf of Client unless advised differently by Client in writing. 2.5 Claim: A single exposure of liability involving actual or potential injury, death, loss or damage reported by Client to TRISTAR which might result in any payment being made on behalf of Client and for which TRISTAR establishes a claim file, with the following types: A. Indemnity Claim: Each separate claim where a reserve is established in the indemnity category based on possible exposure, regardless of whether or not any indemnity payment is ultimately made. B. Medical -Only Claim: Each separate claim where an indemnity reserve is never established, but a medical reserve is established based on possible exposure. C. Incident Report: A claim where no reserve of any kind is established. 2.6 Claim Adjustment File: Documentation of the claim adjustment process arising from any single incident involving one or more claimants and containing the relevant activity records, including written records of notices, investigations, evaluations, and payments. 2.7 Incident Date: The date of an event as reported by Client or as later revised by TRISTAR as the more appropriate date of occurrence. 2.8 Report Date of Claim: The date when Client first reports claim to TRISTAR. 2.9 Reserve: The monetary evaluation by TRISTAR of the estimated financial exposure to Client with respect to a claim. 2.10 Services: Those services described in Article 3 of this Agreement and Exhibit A hereto (which Exhibit is incorporated herein by reference) that are furnished by TRISTAR to Client in accordance with the terms of this Agreement, the applicable insurance policy if any, or in compliance with the laws of any state having jurisdiction over the claim. ARTICLE 3 — AUTHORITY AND RESPONSIBILITIES OF TRISTAR 3.1 Subject to all the terms and conditions of this Agreement, TRISTAR shall have the authority and responsibility to provide claims adjusting and administration services for the Client in connection with claims or losses adjusted during the term of this Agreement. 3.2 In comnection with its authority and responsibilities under this Agreement, TRISTAR shall: A. Receive and examine, on behalf of the Client, all claims reported to it and initiate procedures for the proper servicing of each claim. B. hivestigate and adjust, settle or deny all claims in accordance with applicable insurance laws and Client guidelines, as provided in Article 4 hereof. C. Upon approval or at the direction of the Client, engage the services of persons or firms outside its organization for work in connection with investigations and adjustment of claims and to incur other "Allocated Loss Adjustment Expenses" (as herein defined) at the Client's expense. Client shall have the right to require TRISTAR to cease using the services of any person or firm considered unsatisfactory by the Client. D. Establish and adequately reserve each claim for which there is injury and/or anticipated liability and/or a formal claim has been made and code each claim in accordance with Client's statistical data requirements as may be mutually agreed upon. E. Make timely payments of valid claims for compensation, rehabilitation expenses, and other required benefits payable under applicable insurance laws, together with Allocated Loss Adjustment Expenses, out of funds provided by the Client pursuant to Article 5 hereof subject to the limitations and requirements of this Agreement. If an authorized representative of the Client directs in writing that any payment not be made, and if after receipt of such notice TRISTAR nevertheless makes such payment, TRISTAR will reimburse Client for the payment(s). F. Maintain an accurate and complete claim file on each reported claim which shall be available during normal business hours for inspection by the Client, its representatives or by appropriate regulatory authorities. The Client shall have the right to copy any and all claims files or any documents related to any claim. TRISTAR shall maintain and store closed claim files for no less than one year after the expiration of the statute of limitations applicable to each claim file or as otherwise directed by governing state law. G. Provide all forms necessary for efficient claims administration and prepare and timely file all legally required forms and reports with the appropriate state and federal agencies. H. In connection with the performance of its obligations under this Agreement, provide licensed claims adjusters and perform the services to be rendered in good faith, and in accordance with all applicable laws and regulations. I. Protect and pursue any subrogation rights of the Client which may arise upon payment of claims and notify the Client of any subrogation rights which, through litigation or otherwise, may be available to the Client. 7. Perform all administrative and clerical work in connection with reported claims including the preparation of checks and/or drafts drawn on the loss fund established herein. K. Respond immediately to any inquiry, complaint or request received from an Insurance Department, other Regulatory Agency, Client, claimant, agent, broker, or other interested party relating to a claim serviced under this Agreement; a copy of both the original inquiry and the TRISTAR's response shall be provided in a timely manner to Client. L. Upon prior approval of Client, engage the services of licensed and/or Certified Health and Rehabilitation firms or individuals for Rehabilitation Management as may be required by state regulations. M M. Report all cases involving suspected fraud to the appropriate state mandated agency. Settlement authority is not permitted on cases of suspected fraud unless TRISTAR receives written authority from Client. When operating in states that require fraud to be reported to the state insurance department, TRISTAR must maintain an internal special investigative unit or contract with an entity to provide such services. N. Provide first notice and status reports to excess insurers in accordance with the criteria and reporting format dictated by that excess carrier. ARTICLE 4 - CLAIM SETTLEMENT AUTHORITY 4.1 Unless otherwise advised by the Client or in cases of suspected fraud, TRISTAR shall have authority to make payments on claim files with the following limitations: A. Any settlement on a single claim file in excess of $25,000 shall first be approved by the Client. B. Single payments of any allocated adjustment expense in excess of $25,000 shall first be approved by the Client. C. Any settlement of a single claim file, which would involve an aggregate expenditure (of loss and Allocated Loss Expenses) in excess of the Client's SIR, must first be approved by Excess Carrier. 4.2 Client shall have the option of taking over the handling and settlement of any claim upon written notice to TRISTAR. 4.3 TRISTAR shall comply with claims procedures and guidelines as may be agreed to by TRISTAR and the Client. ARTICLE 5 - CLAIM FUNDING /TRUST ACCOUNT 5.1 TRISTAR shall have the authority to draw upon a bank account which shall be established and funded by the Client for the purpose of making payments on claim files. It is the responsibility of the Client to have sufficient funding available in the account to allow TRISTAR to be able to make all payments in a timely maimer and as required by law. 5.2 If the account is established by TRISTAR for Client, under TRISTAR's tax identification number at a banking institution selected by TRISTAR: A. Client will incur no banking charges nor earn interest. B. Client account will be exclusive to Client and funds will not be commingled with funds of any other Client. C. Account will have a Positive Pay feature with daily electronic transmission of data from TRISTAR to bank. D. TRISTAR accounting department will perform a monthly bank reconciliation and supply same to Client on a timely basis. E. By 10`x' day of each month, TRISTAR will invoice Client for funds expended the previous month, so that the account can be replenished. Along with the invoice, Client will be provided with documentation, such as check registers, concerning finds expended in the previous month 5.3 If Client elects to arrange its own banking for claims finding, Client will be responsible for all banking fees and none of the services outlined in Article 5.2 will be provided by TRISTAR except for any documentation concerning funds expended the previous month. 5.4 Payments from Claims Fund: TRISTAR shall make payment of claims and Allocated Loss Adjustment Expenses from a claims payment account funded by Client (as provided in Article 5 of this Agreement). 5.5 No TRISTAR funding: Client acknowledges that at no time will TRISTAR be obligated to make any claims payments out of TRISTAR funds. 5.6 Requirements of Administrative Agencies: TRISTAR shall file, on a timely basis on behalf of Client, such forms and reports as may be required by any Administrative Agency concerning the claim fund account, including handling Escheat reporting. 5.7 1099 Filings: TRISTAR shall collect, process, and report data in the manner prescribed by the Internal Revenue Set-vice for the purpose of preparing Client's 1099 Miscellaneous Income filing with respect to the claims payments which are the subject of this Agreement. ARTICLE 6 — PAYMENT OF CLAIMS; DISCRECTIONARY AUTHORITY 6.1 Claims Pay n: TRISTAR shall have the authority to make payments on any claim handled by TRISTAR pursuant to this Agreement. 6.2 Allocated Loss Expenses: TRISTAR shall have the authority to pay, on behalf of Client, any claims - related services falling within the definition of Allocated Loss Expenses. 6.3 Authority: TRISTAR shall make no single payment in excess of its authority limit indicated in Article 4 to this Agreement, without the approval of Client. 6.4 Discretion: TRISTAR shall have the full and sole discretion to finally adjust or settle any claim in an amount equal to or less than the authority limit indicated in Exhibit A to this Agreement without supervision or direction from Client, and such adjustment or settlement shall be binding upon Client. 6.5 Reservation of Rights: TRISTAR reserves the right, on any particular claim, to disregard the authority granted in this Article 4 and treat said claim as requiring Client's approval prior to final disposition. Client reserves the right, on any particular claim, and upon written notice to TRISTAR, to revoke the authority granted in this Article 4 and treat such claim as requiring Client's approval prior to final disposition. ARTICLE 7 — PROPRIETARY INTEREST 7.1 Ownership of Systems: All systems created or utilized by TRISTAR in the performance of activities under this Agreement shall belong to, and shall remain the property of, TRISTAR, and Client shall have no ownership interest therein. The term "systems" as used herein shall include, but shall not be limited to, computer programs, computer equipment, formats, risk data report formats, procedures, documentation and internal reports of TRISTAR, but such term shall not include claims adjustment file data. 7.2 Ownership of Files: TRISTAR shall be entitled to full and complete possession of all files and materials prepared by TRISTAR in the course of investigating or administering any claim under this Agreement, until this Agreement is canceled and all outstanding sums due to TRISTAR are paid by Client. After termination of this Agreement and the payment of all fees due to TRISTAR, Client shall be entitled to return of Client's files. 7.3 Protection of Data: TRISTAR shall make reasonable efforts to ensure the availability of the computer loss data and the operation of the computer hardware. In the event of damage to or malfunction of the computer hardware or software, TRISTAR will use reasonable efforts to obtain replacement alternative computer hardware to restore service to an acceptable level in a timely manner. In the event that computer loss data is not available for use by the computer system utilized by TRISTAR, TRISTAR will attempt to reconstruct or recover such unavailable data from computer data files stored at remote locations and from source records, in order to restore service to an acceptable level in a timely manner. 7.4 Privacy of Data: TRISTAR will make reasonable efforts to maintain the confidentiality of the data supplied to and used by TRISTAR in the performance of this Agreement. TRISTAR will not disclose such data or the contents of the corresponding data files without the consent of Client. Notwithstanding the foregoing, Client agrees that TRISTAR shall have the right to use such data for the purpose of preparing and disseminating analytical reports inclusive of the cumulative data of TRISTAR Clients, provided such use in no way specifically identifies Client or its operations or expenses, nor individual claimant information. 7 ARTICLE 8 — INDEPENDENT CONTRACTOR; AGENCY; SUBCONTRACTING 8.1 hi the performance of this Agreement, TRISTAR, its affiliated corporations and the employees and officers of TRISTAR are independent contractors. 8.2 TRISTAR reserves the right to subcontract activities under this Agreement, but such action will not relieve TRISTAR of its obligations to Client in any way. ARTICLE 9 — INDEMNIFICATION AND INSURANCE 9.1 TRISTAR agrees to defend and hold harmless Client, their officers, agents and employees, from and against any and all liability, loss, damage or expense, including by law to protect itself and extra contractual and punitive damages and attorney's fees, incurred in connection with claims or demands for damages arising out of the services provided under this Agreement, except when such claims or demands arise from or are caused by the sole negligence or willful misconduct of Client. 9.2 Client agrees to defend and hold harmless TRISTAR, their officers, agents and employees, from and against any and all liability, loss, damage or expense, including extra contractual and punitive damages and attorney's fees, incurred in connection with claims or demands for damages arising out of the services provided under this Agreement, when such claims or demands arise from or are caused by the sole negligence or willful misconduct of Client. 9.3 TRISTAR shall, at all times while obligations under this Agreement remain to be performed by TRISTAR, maintain in force such insurances as are normal and customary or required by law to protect itself and its Clients, including the following: A. Workers' Compensation Insurance under the laws of the states in which operations are conducted. B. Comprehensive General Liability Insurance with limits of not less than $1 million including contractual liability and personal injury for libel, slander and assault insuring this Agreement. C. An Errors and Omissions policy providing coverage in the amount of not less than $3 million. D. A Fidelity bond providing coverage for all officers and other employees of TRISTAR (including "money and securities" coverage) in the amount not less than $1 million. 9.4 Client shall have the right to inspect each of the above - mentioned policies and bonds and TRISTAR, upon Client's request, shall cause its insurers to provide Client with a certificate of insurance or other evidence of coverage which provides Client with 30 days notice of cancellation. 0 9.5 In the event TRISTAR is unable, after using its best efforts, to obtain any of the above - mentioned coverages, it shall immediately notify Client. Client shall then have the opportunity to immediately terminate this Agreement or continue the Agreement upon the understanding that TRISTAR will continue to use its best efforts to obtain and thereafter immediately obtain any or all such coverages when and if they become available. ARTICLE 10 — COMPENSATION 10.1 Exhibit A: Except as otherwise provided in this Agreement, Client shall compensate TRISTAR in accordance with the terms of Exhibit A to this Agreement. Fees will be for the term of the Agreement and any renewal subject to Article 1.1. 10.2 Separate Claims Fund: The compensation payable to TRISTAR under this Article 9 shall in no way include or affect the separate payment obligations of Client as respects the claims fund described in Article 5 of this Agreement or the direct payment for other services rendered by TRISTAR. 10.3 Payment Terms: All sums due TRISTAR are due and payable within twenty (20) days of receipt by Client of TRISTAR invoice. 10.4 Billing Disputes: Client shall have twenty (20) days from its receipt of any billing to dispute any bill, or portion of a bill, submitted by TRISTAR. Should Client fail to dispute a billing within the prescribed period of time, the billing shall be deemed correct. ARTICLE 11- DEFAULT 11.1 The following are events of default under this Agreement: A. Any material breach of this Agreement which is not cured by the breaching party within ten (10) days of receipt of notice of such breach by the other party. B. Failure of Client to provide sufficient funds for payments on claims. C. Failure of Client to pay Administration fees to TRISTAR as per Agreement. D. Dissolution, liquidation, voluntary or involuntary bankruptcy of a substantial part or all of a party's business or entity. 11.2 The failure of either party to declare a default at the time of the defaulting event shall not act as a waiver to declare a default at a later date. W ARTICLE 12 — TERMINATION 12.1 This Agreement may be terminated by Client or TRISTAR as follows: A. Upon ten (10) days written notice in the event of a default as defined in Article 11. B. Upon ninety (90) days written notice. C. Inmiediately with written notice in the event of fraud, abandomnent, gross or willful misconduct, insolvency, or lack of legal capacity, by either party. 12.2 Termination by Client: In the event this Agreement is terminated by Client, then any and all claims and unresolved recovery activities pending on the date of termination shall, at Client's option, either: A. Continue to be handled by TRISTAR until the expiration of the period in which Client has paid the claims service fees, and thereafter on a time - and - expense basis at TRISTAR's prevailing hourly rate and expense method of billing when time and expenses are incurred, or B. Thereafter be assumed and handled by Client or delegated by Client to some third party, provided, however, that TRISTAR shall be entitled to all fees earned or incurred prior to the effective date of termination without offset or reduction. Client shall inform TRISTAR in writing, prior to the termination date of the contract, of the selected option. Should Client fail to inform TRISTAR or should agreement not be reached between TRISTAR and Client for the continued handling of the open claims, then TRISTAR, on the termination date, shall suspend all activity on Client's files, and TRISTAR thereafter shall have no responsibility for the disposition of such matters. ARTICLE 13 - HIRING OF EMPLOYEES 13.1 Client agrees that during the tern of, and for a period of two (2) years after the termination of this Agreement, it will not, without prior written consent of TRISTAR, hire any employee of TRISTAR or its affiliate who was assigned to, or performed, any service for Client in connection with this Agreement. ARTICLE 14 - PAYMENT OF PENALTIES( RECONCILIATION 14.1 Though TRISTAR claims handlers make every effort to avoid penalties, some are inevitable. All penalties are payable from the Claims Fund of Client. When penalties are due to improper processing by TRISTAR, TRISTAR will reimburse the Client or claims fund. B 14.2 Recognizing that many penalties involve small amounts of money, the accounting cost of reconciling can outweigh the amounts to be reconciled. For that reason, TRISTAR performs reconciliation at the end of each service year, or quarterly for accounts with annual administration fees in excess of $500,000. Client is supplied documentation as to the reconciliation. ARTICLE 15 - GENERAL PROVISIONS 15.1 The subject headings of the Articles of this Agreement are included for purposes of convenience only and shall not affect the construction or interpretation of any of its provisions. 15.2 This Agreement sets forth the entire understanding of the parties and supersedes any prior Agreement or understanding relating to the subject matter hereof. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by all the parties. No waiver of any of the provisions of this Agreement shall be deemed, or shall constitute, a waiver of any other provision, whether or not similar, nor shall any waiver constitute a continuing waiver. No waiver shall be binding unless executed in writing by the party making the waiver. 15.3 In the event of any conflict or ambiguity between the terms and provisions of this Agreement and any Exhibit attached hereto, the terns and provisions of the Exhibit shall govern. 15.4 Nothing in this Agreement shall be construed to mean that either party has waived any rights to seek a legal or equitable remedy for breach of this Agreement by the other party. 15.5 Each of the Exhibits listed below is an essential part of the Agreement, which governs the rights and duties of the parties: Exhibit A- Relating to Fees payable to Tristar 15.6 TRISTAR may not assign, sell, transfer or otherwise convey, pledge or encumber any of its rights, obligations or interests under this Agreement without the prior written consent of the Client. 15.7 Except as otherwise provided herein, the provisions hereof shall inure to the benefit of, and be binding upon, the successors, assigns, heirs, executors and administrators of the parties hereto. 15.8 This Agreement shall be governed by and construed in accordance with the laws of the State of California. In the event that any provision of this Agreement is held by a court of competent jurisdiction to be unenforceable or void in any jurisdiction, the other provisions of this Agreement shall remain in full force and applicable law shall be construed in order to effectuate the purpose and intent of this Agreement. 11 15.9 Each notice or other instrument referred to in this Agreement shall be in writing and shall be deemed "given" to a party when delivered by hand, when given by facsimile transmission during normal business hours or three (3) days after a writing is deposited in the mail, postage prepaid and registered, addressed to each party at the address set forth below or at such other address as such party, by notice to the other party, may designate from time to time. If to TRISTAR: TRISTAR Risk Management 100 Oceangate, Suite 700 Long Beach, CA 90802 Attention: Thomas J. Veale Telephone: (562) 495 -6600 Fax: (562) 432 -8619 If to Client: City of South San Francisco 400 Grand Avenue South San Francisco, CA 94080 Attention: Kathy Mount 12 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed in duplicate by their authorized representatives on the dates set forth below. Date: ✓f �� Date: By: TRISTAR RISK MANAGEMENT 16]I: Nagel Title: City Manager 13 Approved as to form EXHIBIT A COMPENSATION Claims Administration Fees For services rendered pursuant to the attached Agreement for the period July 1, 2011 to June 30, 2013, Client will pay TRISTAR an annual Claims Administration Fee of $148,020.00, payable, in advance, in monthly installments of $12,335.00. These fees are premised on an estimated average annual (open) indemnity claims volume of 100 files. Should the actual claim volumes be less than or exceed these estimates by 15 %, then both parties will agree to negotiate in good faith, as reasonable fee adjustment. Bill Review Fees TRISTAR shall utilize TRISTAR Managed Care (TMC) for Medical Bill Review and PPO Network Access. TMC fees for such services will be paid against individual claim files. The following TMC fees have been agreed to: a) For medical treatment and pharmacy bills reviewed to the Official Medical Fee Schedule or Usual and Customary database: The fee is $8.50 per bill. b) For medical treatment and pharmacy bills that belong to the PPO: The fee is twenty -five percent (25 %) of the PPO savings. c) For IMFS (Inpatient Medical Fee Schedule): The fee is $100 per bill of savings. d) For Specialty Bill Review reductions: The fee is thirty percent (30 %) of savings Case Management Fees For nurse case management services provided by MEDSTAR, the fees will be as follows: Utilization Review: In Patient - $95.00 per hour (includes review of treatment guidelines for appropriateness of care including length of stay and need for assistant surgeon; directing into PPO and confirmation letters) Out Patient - $95.00 per hour (includes review of treatment guidelines for appropriateness of care, directing into PPO and confirmation letters) ILI Telephonic Case Management: $95.00 per hour Field Case Management: $105.00 per hour, plus expenses Peer Review: $200.00 per hour for record review without MD discussion $250.00 per hour for record review with MD discussion In consideration of such compensation, TRISTAR shall handle all claims for the period of the Agreement. 15 FIRST AMENDMENT TO AGREEMENT That certain Two Party Claims Servicing Agreement effective July 1, 2011, by and between Tristar Risk Management, (hereinafter referred to as "TRISTAR ") and the City of South San Francisco, (hereinafter collectively referred to as "Client') for the period July 1, 2011 through June 30, 2013, is amended herein by deleting in its entirety Article 1 and EXHIBIT A, such amendment to be effective July 1, 2013. All other terms and conditions of the above referenced Agreement remain unchanged. II. EFFECTIVE DATE/TERM ARTICLE 1— TERM 1.1 The term of this Amendment shall commence on July 15t, 2013, and shall remain in effect continuously through June 30th, 2014, unless terminated in accordance with the provisions of Article 12 of this Agreement. EXHIBIT A COMPENSATION Claims Administration Fees For services rendered pursuant to the attached Agreement for the period July 1, 2013 to June 30, 2014, Client will pay TRISTAR an annual Claims Administration Fee of $148,020.00, payable, in advance, in monthly installments of $12,335.00. These fees are premised on an estimated average annual (open) indemnity claims volume of 100 files. Should the actual claim volumes be less than or exceed these estimates by 15 %, therm both parties will agree to negotiate in good faith, as reasonable fee adjustment. Bill Review Fees TRISTAR shall utilize TRISTAR Managed Care (TMC) for Medical Bill Review and PPO Network Access. TMC fees for such services will be paid against individual claim files. The following TMC fees have been agreed to: a) For medical treatment and pharmacy bills reviewed to the Official Medical Fee Schedule or Usual and Customary database: The fee is $8.50 per bill. b) For medical treatment and pharmacy bills that belong to the PPO: The fee is twenty -five percent (25 %) of the PPO savings. c) For IMFS (Inpatient Medical Fee Schedule): The fee is $100 per bill of savings. d) For Specialty Bill Review reductions: The fee is thirty percent (30 %) of savings Case Management Fees For nurse case management services provided by MEDSTAR, the fees will be as follows: Utilization Review: In Patient - $95.00 per hour (includes review of treatment guidelines for appropriateness of care including length of stay and need for assistant surgeon; directing into PPO and confirmation letters) Out Patient - $95.00 per hour (includes review of treatment guidelines for appropriateness of care, directing into PPO and confirmation letters) Telephonic Case Management: $95.00 per hour Field Case Management: $105.00 per hour, plus expenses Peer Review: $200.00 per hour for record review without MD discussion $250.00 per hour for record review with MD discussion In consideration of such compensation, TRISTAR shall handle all claims for the period of the Agreement. Date: 7X == %r By: C\ —TY OF S UT� N FRANCISCO Date: By. Barry M. Nagel Title: City Manager Approvgd a� to form SECOND AMENDMENT TO AGREEMENT That certain Two Party Claims Servicing Agreement effective July 1, 2011, by and between Tristar Risk Management, (hereinafter referred to as "TRISTAR ") and the City of South San Francisco, (hereinafter collectively referred to as "Client') for the period July 1, 2011 through June 30, 2013, is amended herein by deleting in its entirety Article 1 and EXHIBIT A, such amendment to be effective July 1, 2015. All other terms and conditions of the above referenced Agreement remain unchanged. II. EFFECTIVE DATE/TERM ARTICLE 1— TERM 1.1 The term of this Amendment shall commence on July 1", 2015, and shall remain in effect continuously through June 30`s, 2016, unless terminated in accordance with the provisions of Article 12 of this Agreement. EXHIBIT A COMPENSATION Claims Administration Fees For services rendered pursuant to the attached Agreement for the period July 1, 2015 to June 30, 2016, Client will pay TRISTAR an annual Claims Administration Fee of $152,800.00, payable, in advance, in monthly installments of $12,733.33. These fees are premised on an estimated average annual (open) indemnity claims volume of 120 files. Should the actual claim volumes be less than or exceed these estimates by 15 %, then both parties will agree to negotiate in good faith, as reasonable fee adjustment. Bill Review Fees TRISTAR shall utilize TRISTAR Managed Care (TMC) for Medical Bill Review and PPO Network Access. TMC fees for such services will be paid against individual claim files. The following TMC fees have been agreed to: a) For medical treatment and pharmacy bills reviewed to the Official Medical Fee Schedule or Usual and Customary database: The fee is $8.50 per bill. b) For medical treatment and pharmacy bills that belong to the PPO: The fee is twenty -five percent (25 %) of the PPO savings. c) For IMFS (Inpatient Medical Fee Schedule): The fee is $100 per bill of savings. d) For Specialty Bill Review reductions: The fee is thirty percent (30 %) of savings Case Management Fees For nurse case management services provided by MEDSTAR, the fees will be as follows: Utilization Review: In Patient - $95.00 per hour (includes review of treatment guidelines for appropriateness of care including length of stay and need for assistant surgeon; directing into PPO and confirmation letters) Out Patient - $95.00 per hour (includes review of treatment guidelines for appropriateness of care, directing into PPO and confirmation letters) Telephonic Case Management: $95.00 per hour Field Case Management: $105.00 per hour, plus expenses Peer Review: $200.00 per hour for record review without MD discussion $250.00 per hour for record review with MD discussion In consideration of such compensation, TRISTAR shall handle all claims for the period of the Agreement. Date: ���� By: Date: By: TRISTAR RISK MANAGEMENT CITY City Manager A,t?rv�de;l us ;� #ci r;i CEty AJfrr"t, ; "2 TRISTAR CITY OF SOUTH SAN FRANCISCO (9-26-18) page 1 Claims Services Agreement AGREEMENT made this ___ day of ____________, 2018 by and between TRISTAR Risk Management, a California corporation having its principal place of business at 100 Oceangate, Suite 700, Long Beach CA 90802 (“TRISTAR”), and City of South San Francisco, a general law city organized and operating under the laws of the State of California having its principal place of business at 400 Grand Avenue, South San Francisco, CA 98040 (“Customer”). WHEREAS, Customer, as a qualified self-insured under applicable state law, has a self-insured retention program with respect to workers’ compensation claims and claim expenses pertaining to Customer’s business (“SIR Program”) with a retention level as set forth in Schedule A attached hereto (“Retention Level”); and WHEREAS, Customer has the sole responsibility to provide for competent claims administration and claims funding with respect to claims and/or losses and claims e xpenses arising within the SIR Program; and WHEREAS, Customer desires to engage TRISTAR as the claims administrator with respect to those claims and/or losses arising under the SIR Program, [including certain claims that were previously handled by Customer or any other entity]; and WHEREAS, TRISTAR desires to accept such engagement pursuant to the terms and conditions of this Agreement; NOW, THEREFORE, in consideration of the terms, conditions and other agreements set forth herein, TRISTAR and Customer hereby agree as follows: 1. Term The term (“Term”) of this Agreement shall commence at 12:00 A.M. on July 1, 2016 (“Effective Date”) and shall remain in effect through June 30, 2019 unless sooner terminated in accordance with the provisions of Section 9 of this Agreement. 2. Engagement , Duties , and Authority of TRISTAR 2.1 Customer hereby engages TRISTAR and TRISTAR hereby accepts such engagement as the claims administrator to represent and act for Customer with respect to all claims arising under the SIR Program, occurring during the Term, reported to TRISTAR during the Term, and assigned to TRISTAR by Customer (“Claims”). Claims shall consist of: i) “Takeover Claim(s)” which shall be defined as any Claim reported to TRISTAR that has been handled by Customer or any preceding manager or administrator prior to being assigned to TRISTAR and is open and pending as of the Effective Date; and ii) “Newly Reported Claim(s)” which shall be defined as any Claim other than Takeover Claims. 2.2 The terms and conditions of this Agreement will continue to apply during the Term and during any period Claims continue to be handled by TRISTAR. In consideration of payment of the agreed-upon fees as set forth in this Agreement, TRISTAR agrees to perform the following services (“Services”) during the Service Period as defined in Schedule A and any extension or renewal thereof, if applicable, with respect to the Claims. Subject to the authority limits stated below, TRISTAR shall: TRISTAR CITY OF SOUTH SAN FRANCISCO (9-26-18) Claims Services Agreement - page 2 2.2.1 provide to Customer the following basic services (“Basic Services”): i) establish and maintain an electronic file with respect to each Claim (“Claim File”); such Claim Files shall include accurate records and accounts of all transactions with respect to Claims; and be maintained in accordance with prudent standards of record keeping; ii) conduct analysis of Claims to determine their validity [and compensability] in accordance with Claims’ guidelines as may be agreed to by TRISTAR and Customer; iii) establish case-specific reserves, adjust, resist, deny and/or settle Claims as set forth in Schedule A: iv) upon approval or at the direction of Customer, use legal counsel where appropriate and assist legal counsel in the preparation of cases for hearings, trials and/or appeals; v) comply with the Banking and Funding Schedule attached hereto as Schedule B which Schedule governs the operation of an account maintained pursuant to Section 4 (“Account”); vi) pursue, as deemed appropriate by TRISTAR, reasonable possibilities of subrogation, contribution, or indemnity (not insurance or reinsurance recoveries) on behalf of Customer and deposit all recovery amounts in the Account; vii) refer all regulatory complaints to Customer and cooperate with Customer to resolve such complaints; viii) report cases involving suspected fraud to the appropriate state mandated agency and when reporting to the state insurance department is required, use an internal special investigative unit or contract with an entity to provide such services; ix) provide TRISTAR’s standard claims reports to Customer; and x) make payments of valid claims for compensation, rehabilitation expenses, and other required benefits payable under applicable insurance laws, together with Allocated Lo ss Adjustment Expenses, out of funds provided by the Customer pursuant to Section 3 hereof subject to the limitations and requirements of this Agreement. 2.2.2 provide to Customer information services in accordance with the provisions of Schedule C attached hereto (“Information Services”); 2.2.3 provide, or use TRISTAR Managed Care, Inc. (“TMC”), an affiliate of TRISTAR, to provide, utilization management services in accordance with the provisions of Schedule E attached hereto (“Utilization Management Services”); 2.2.4 provide, or use TMC to provide, case management services in accordance with the provisions of Schedule F attached hereto (“Case Management Services”); and 2.2.5 provide, or use vendors to provide, all other specialty services (“Other Specialty Services”) such as early intervention, medical bill review, PPO network, Specialty Carve-out PPO networks for Diagnostic Services and Durable Medical Equipment, claim call -in reporting (telephonic, electronic, fax or internet), Special Investigat ion (SIU), and index bureau reports. Utilization Management Services, Case Management Services, and Other Specialty Services shall be refereed to collectively as “Specialty Services.” Specialty Services are charged as Allocated Loss Adjustment Expenses (as defined in Section 12) or, where required by state law, as loss. TRISTAR CITY OF SOUTH SAN FRANCISCO (9-26-18) Claims Services Agreement - page 3 3. Duties of Customer 3.1 Customer shall: 3.1.1 promptly forward, or cause to be forwarded to TRISTAR, all claims, claim forms, demands, notices, inquiries or correspondence concerning or related to Claims; 3.1.2 at the time that Claims are assigned to TRISTAR, provide TRISTAR with a copy of any investigative and pertinent material; 3.1.3 not comment upon, discuss with third parties, or independently adjust, attempt to settle, or otherwise process Claims without prior written notice to TRISTAR; 3.1.4 comply with the Banking and Funding Schedule as respects the operation of the Account including Customer’s obligation to provide funds to TRISTAR for the payment of all Claims and Allocated Loss Adjustment Expenses; 3.1.5 cooperate with TRISTAR with respect to the performance of Claim services, including, but not limited to: responding promptly to TRISTAR’s requests for information; providing timely direction to TRISTAR for matters exceeding its authority; meeting with TRISTAR, as may be needed; and making decisions as required by this Agreement and within such time periods as to meet all legal requirements applicable to the obligations under this Agreement; 3.1.6 report to any and all insurers, reinsurers or intermediaries all facts, notices, documents, and information sufficient to comply with reporting requirements of said insurers or reinsurers regarding the Claims hereunder. TRISTAR shall make no such reports unless specifically requested in writing by Customer, or as specifically provided in this Agreement. TRISTAR shall however cooperate with Customer with respect to Customer's obligations to insurers and reinsurers; 3.1.7 be responsible for managing the vendors (managed care, other third party administrators, and other services) Customer has contracted with and meeting all requirements in connections therewith. TRISTAR will have no responsibility or liability for the obligations of vendors or Customer in connection with the services provided by such vendors and Customer shall indemnify, hold harmless, and defend TRISTAR against any such liability, except that TRISTAR shall cooperate with the vendors Customer contracted with and assist Customer with respect to such vendor requirements; 3.1.8 using Customer’s letterhead, provide written direction to TRISTAR in the event Customer elects to proceed with Utilization Management Services that do not comply with URAC guidelines as set forth on Schedule F; and 3.1.9 perform all such other actions and things reasonably necessary or otherwise required to enable TRISTAR to perform its services under this Agreement. 3.2 Customer represents and warrants that it is and shall remain throughout the Term a qualified self - insured under applicable state law. 4. Payment of Claims and Allocated Loss Adjustment Expense(s) 4.1 In addition to the invoices for Fees and Expenses (as defined in Subsection 5.5) addressed in Section 5 below, all Claims obligations, including loss, indemnity, and Allocated Loss Adjustment Expenses and other Claim-related expenses, are the obligations of Customer and shall TRISTAR CITY OF SOUTH SAN FRANCISCO (9-26-18) Claims Services Agreement - page 4 be funded by Customer as provided in the Banking and Funding Schedule. Customer acknowledges that at no time will TRISTAR be obligated to make any payments out of TRISTAR funds. 4.2 Unless otherwise agreed by TRISTAR and Customer, Specialty Services which are listed on Schedule D attached hereto shall be provided by TRISTAR’s Preferred Provider network, which may include TRISTAR, its affiliates and subsidiaries (including TMC), or third parties . Specialty Services will be charged to Customer as Allocated Loss Adjustment Expenses or, where required by state law, as loss. Customer understands and agrees that TRISTAR may receive compensation in connection with the Specialty Services, either by retaining a portion of the fees and expenses charged to the Account, or by receiving fees from preferred providers. The amount TRISTAR retains or receives will vary depending upon the preferred provider, and may be calculated based on percentage of savings, percentage of revenue to the provider, or TRISTAR’s mark-up of provider fees. The amounts retained or received by TRISTAR in connection with Specialty Services are in addition to the Fees and Expenses paid to TRISTAR by Customer under Section 5 of this Agreement. The fees set forth on Schedule D may be adjusted from time to time without prior notice. 5. Payment of Fees, Expenses, and Taxes 5.1 For Basic Services and Information Services performed, TRISTAR shall be entitled to and Customer shall pay the fees and expenses, including Reimbursable Expenses (as defined in Subsection 5.2), calculated and earned in accordance with this Section 5 and Schedule A. 5.2 TRISTAR shall be reimbursed for those expenses which are incurred by TRISTAR in the rendering or performance of services and not incorporated in the Basic Fee (“Reimbursable Expenses”). Reimbursable Expenses include, but are not limited to, any data processing or telecommunications charges, hotel, travel, living and out-of-pocket expenses related to the provision of services pursuant to this Agreement. 5.3 For all services other than Basic Services, Information Services, and Specialty Services provided under this Agreement, Customer shall compensate TRISTAR in accordance with this Section 5 and Schedule A (“Additional Services Fees”), plus Reimbursable Expenses. Additional Services Fees and expenses charged pursuant to this Subsection 5.3 are in addition to those fees and expenses charged under Subsections 5.1 and 5.2. 5.4 Customer shall be responsible to pay directly to the applicable taxing authority or to TRISTAR, if imposed on TRISTAR, all federal, state and local taxes (other than net income taxes) which TRISTAR may be required to pay or collect or which may be incurred or asse ssed against TRISTAR or Customer, under any existing or future law, relating to the sale, delivery, rendering or provision of services by TRISTAR to Customer (“Taxes”). 5.5 TRISTAR shall submit itemized invoices to Customer for all fees, Reimbursable Expenses, and, if applicable, Additional Services Fees and Taxes (“Fees and Expenses”) incurred in accordance with this Section 5 on a monthly basis and such invoice shall be paid by Customer to TRISTAR upon receipt of same. Amounts which remain unpaid in exce ss of thirty (30) days from the date of receipt of the invoice shall be subject to an interest charge of one and one -half (1.5%) percent per month, such charge to be effective beginning thirty (30) days after the date due until paid. TRISTAR CITY OF SOUTH SAN FRANCISCO (9-26-18) Claims Services Agreement - page 5 6. Records: Inspection , Access, and Ownership 6.1 Customer shall at all times retain the ownership of the Claim Files and Claims data (collectively, “Claim File Information”). Customer acknowledges that TRISTAR has a right of continuing possession and access to the Claim File Information, including any accessing software, hardware, and systems to permit TRISTAR to fulfill all of its obligations under this Agreement, whether before or after termination, including in the event of any dispute or legal action between the parties. 6.2 Claim File Information shall, upon thirty (30) days prior written notice to TRISTAR, be available for on-site audit, review, and/or inspection by duly authorized representatives of Customer and by regulatory authorities having appropriate jurisdiction. The parties agree that if there are more than four (4) audits, reviews, and/or inspections including reasonable follow-up of the activities of TRISTAR by Customer, regulatory authorities or other parties, or any combination thereof during each twelve (12) month period of the Term, TRISTAR shall be compensated in accordance with Subsection 5.3 for its involvement with any such additional audit(s), reviews, and/or inspections. 6.3 At the conclusion of TRISTAR’s obligation to handle Claims and subject to the payment of all Fees and Expenses due TRISTAR, TRISTAR shall send directly to Customer or a third party selected by Customer i) an electronic copy in TRISTAR’s then current format of the Claim File Information, and ii) all open and closed physical Claim Files, if any (collectively, “Transfer Services”) in accordance with Subsection 9.3. Customer hereby acknowledges that Customer, such third party selected by Customer, or any succeeding administrator is responsible for retaining Claim File Information that is transferred to it for the longest of the following time periods: i) for five (5) years from the closing of the Claim; ii) for the duration of any applicable regulatory requirement or state law; or iii) for the duration of the applicable Statute of Limitations. 7. Indemnification, Limitation of Liability , Insurance 7.1 Each Party (“Indemnitor”) agrees to hold the other Party (“Indemnitee”) harmless and indemnify the Indemnitee against any and all losses, claims, expenses (including reasonable attorneys’ fees), fines, penalties, damages, judgments or liabilities incurred by the Indemnitee (“Liabilities”) as a result of an action brought by a third party but only to the extent such Liabilities have been caused by the actual fraud, negligence or willful misconduct of the Indemnitor with respect to its obligations under this Agreement. 7.2 Notwithstanding anything in this Agreement to the contrary, UNDER NO CIRCUMSTANCES AND UNDER NO LEGAL THEORY (TORT, WARRANTY, CONTRACT, OR OTHERWISE) SHALL A PARTY BE LIABLE TO THE OTHER PARTY, OR ANY OTHER PERSON, OR ENTITY FOR ANY ACT PERFORMED, OR ANY FAILURE TO ACT, ON BEHALF OF THAT PARTY OR ANY OTHER PERSON OR ENTITY OR IN THEIR INTEREST, THE MULTIPLIED PORTION OF ANY MULTIPLIED DAMAGES, INDIRECT, INCIDENTAL, CONSEQUENTIAL, EXEMPLARY, EXTRA-CONTRACTUAL, PUNITIVE, OR SPECIAL DAMAGES OF ANY CHARACTER, OR ANY DAMAGES FOR WHICH THE LAW OR PUBLIC POLICY PROHIBITS INDEMNIFYING OR INSURING EVEN IF T HAT PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. 7.3 As used in this Section 7, the terms “Indemnitor” and “Indemnitee” shall include, respectively, its directors, officers, employees, contractors, subcontractors, agents and other representat ives. TRISTAR CITY OF SOUTH SAN FRANCISCO (9-26-18) Claims Services Agreement - page 6 7.4 The provisions of Sections 7.1 – 7.4 shall survive the termination of this Agreement. 7.5 TRISTAR shall, at all times while obligations under this Agreement remain to be performed by TRISTAR, maintain in force such insurances as are normal and customary or required by law to protect itself and its clients, including the following: i) Workers’ Compensation Insurance under the laws of the states in whic h operations are conducted. ii) Comprehensive General Liability Insurance and automobile liability insurance with limits of not less than $1 million dollars per occurrence. If a Commercial General Liability Insurance or an Automobile Liability form or other form with a general aggregate limit is used, either the general aggregate limit shall apply separately to the work to be performed under this Agreement or the general aggregate limit shall be at least twice the required occurrence limit. Such coverage shall include but shall not be limited to, protection against claims arising from bodily and personal injury, including death resulting there from, and damage to property resulting from activities contemplated under this Agreement, including the use of owned and non-owned automobiles. iii) An Errors and Omissions policy providing coverage in the amount of not less than $3 million. iv) A Fidelity bond providing coverage for all officers and other employees of TRISTAR (including “money and securities” coverage) in the amount not less than $1 million. 8. Confidential Information 8.1 The parties acknowledge that in the course of dealings between each other: 8.1.1 each party will acquire from the other information about business activities and operations, technical information and trade secrets, all of which are highly confidential and proprietary (“Confidential Business Information”). Confidential Business Information shall not include (i) information already known to a party; (ii) information which now is or hereafter becomes publicly known through no wrongful act of a party, (iii) information received by a party from a third party without similar restriction and without breach of this Agreement; (iv) information independently developed by a party; (v) information approved for release by written authorization of the other party; and (vi) information which, after notice to a party providing a reasonable opportunity to contest disclosure, must be disclosed pursuant to the Public Records Act and other applicable requirements of a governmental agency or a final binding order of a court of competent jurisdiction; and 8.1.2 each party may gain access to and/or generate information of Customer’s consumers, customers, insureds or claimants which may include personally identifiable, financial and/or health information which may be protected by federal, state and local laws (“Protected Information”). 8.2 In the event a party provides its Confidential Business Information and/or Protected Information (collectively “Confidential Information”) to the other party (“Receiving Party”), such Confidential Information shall be provided subject to the following confidentiality terms: 8.2.1 A party’s Confidential Information shall be safeguarded by the Receiving Party with at least as great a degree of care as the Receiving Party uses to safeguard its own most confidential materials or information relating to its own business. 8.2.2 The Confidential Information must be circulated, quoted, disclosed, or distributed solely on a “need to know basis” and only to employees, attorneys, or consultants of the Receiving Party TRISTAR CITY OF SOUTH SAN FRANCISCO (9-26-18) Claims Services Agreement - page 7 (“Representatives”) after such Representatives have been informed of and agreed to be bound by this duty of confidentiality. Further, a Receiving Party agrees to obligate each of its Representatives to a level of care sufficient to protect the Confidential Information from unauthorized use or disclosure. 8.2.3 A Receiving Party and its Representatives shall not further circulate, quote, disclose or distribute any of the Confidential Information except as permitted under this Section 8. 8.3 The provisions of this Section 8 shall survive the termination of this Agreement. 9. Termination 9.1 This Agreement shall be terminated in accordance with any of the following subsections of this Section 9: 9.1.1 Either party may terminate this Agreement by giving at least ninety (90) days prior written notice of termination to the other party, such termination to be effective no sooner than the first (1 st) anniversary of the Effective Date. 9.1.2 Upon a material breach by TRISTAR or Customer in the performance of its duties or responsibilities as provided in this Agreement, the non-breaching party may advise the breaching party of said material breach by written notice. Except for breach by Customer for failure to pay Fees and Expenses or a breach by Customer for failure to fund the Account as required in this Agreement (“Monetary Breach”), the breaching party shall then have thirty (30) days from the date of written notice within which to cure said breach. For Monetary Breach, the Customer shall have five (5) business days from date of written notice within which to pay overdue Fees and Expenses to TRISTAR or to fund the Account as required. The non-breaching party shall have the right to terminate this Agreement upon written notice to the breaching party if the breaching party fails to cure said material breach within the specified time period. 9.1.3 This Agreement shall immediately terminate at the election of either party upon the occurrence of any of the following events with respect to the other party: its insolvency, its inability to meet its debts as they mature, its filing of a petition of voluntary bankruptcy under any chapter of the US bankruptcy laws, institution of proceedings to adjudge it bankrupt in an involuntary proceeding, filing of a petition for rehabilitation or liquidation, execution of an assignment for the benefit of creditors, its appointment by a court of a receiver, trustee, rehabilitator or liquidator, or its dissolution. 9.2 If this Agreement is terminated: 9.2.1 for cause pursuant to Subsection 9.1.2 or 9.1.3, TRISTAR shall cease the handling of all Claims as of the effective date of termination (“Termination Date”) and TRISTAR shall have no more obligations with respect thereto. 9.2.2 for convenience pursuant to Subsection 9.1.1, Customer, in its sole discretion, shall exercise one of the following options: i) Customer may require TRISTAR to continue the handling of all Claims reported to TRISTAR before the Termination Date, on the terms, conditions and limitations of this Agreement; or ii) Customer may require TRISTAR to cease the handling of all Claims as of the Termination Date and TRISTAR shall have no more obligations with respect thereto. TRISTAR CITY OF SOUTH SAN FRANCISCO (9-26-18) Claims Services Agreement - page 8 9.3 Upon termination of this Agreement: 9.3.1 TRISTAR and Customer shall perform all of their respective obligations in accordance with the terms of this Agreement whether to be performed before or after the Termination Date until the conclusion of TRISTAR’s obligation to handle Claims as set forth in Section 9.2 and Schedule A. At that time and upon TRISTAR’s receipt of payment of all earned but unpaid Fees and Expenses, TRISTAR shall provide the Transfer Services in accordance with Subsections 6.3 and 9.3.2. 9.3.2 Unless this Agreement has been terminated by Customer for cause pursuant to either Subsection 9.1.2 or 9.1.3, Customer shall reimburse TRISTAR for all fees and expenses incurred by TRISTAR (“Transfer Fees”) in connection with the Transfer Services. These Transfer Fees shall be considered Additional Services Fees and calculated in accordance with Section 5.3. Transfer Fees shall include, but not be limited to: i) the actual costs incurred (examples: packing materials and shipping expenses in the event there are physical Claim Files); plus ii) TRISTAR’s fees for its services in effecting such transfer (examples: hourly fees for clerical labor to inventory, sort, pack, and ship such Claim Files; hourly fees for data processing labor to perform data extract and testing with receiving vendor; fees for production of notification letters to claimants, attorneys, and medical providers). 9.3.3 As respects all Claims, Customer shall remain liable for the funding of the Account in accordance with Section 4 and the payment of all Fees and Expenses in accordanc e with Section 5 that they would have been liable for had the Agreement not been terminated. 10. Independent Contractor TRISTAR and its affiliates, shall act as an independent contractor(s) in providing services to Customer hereunder. Neither this Agreement nor the performance thereof by TRISTAR shall create nor be deemed to create any employer-employee, joint venture or partnership relationship between TRISTAR or any of its affiliates, officers, directors or employees, on the one hand, and Customer or any of its affiliates, officers, directors or employees, on the other hand. 11. Force Majeure If any cause or condition shall occur beyond the control of TRISTAR which wholly or partially prevents the performance by TRISTAR of its obligations hereunder, including, without limitation, any act of God or the public enemy, fire, explosion, flood, earthquake, war, riot, adverse weather conditions, breakdowns in equipment or facilities, strike, slowdown, work stoppage or other labor trouble, then TRISTAR shall be excused from its obligations hereunder to the extent made necessary by such cause or condition and during the continuance thereof, and TRISTAR shall incur no liability by reason of its failure to perform the obligations so excused. Such cause or condition shall not, however, relieve Customer of the obligation to pay to TRISTAR fees and charges due to TRISTAR for services rendered and expenses incurred hereunder prior to such stoppage. 12. Definition “Allocated Loss Adjustment Expense” 12.1 For the purposes of this Agreement, Allocated Loss Adjustment Expense(s) (“Allocated Loss Adjustment Expense(s)”) shall mean any fee or expense which is chargeable or attributab le to the investigation, coverage analysis, adjustment, negotiation, settlement, defense or general handling of any Claim(s) or action(s) related thereto, or to the protection and/or perfection of the TRISTAR CITY OF SOUTH SAN FRANCISCO (9-26-18) Claims Services Agreement - page 9 Customer’s right of subrogation, contribution or indemnification, all as reasonably determined by TRISTAR. 12.2 Allocated Loss Adjustment Expense(s) may be incurred for services provided by TRISTAR, its affiliates and subsidiaries, or third parties and include, but are not limited to, the following: 12.2.1 attorney’s fees and disbursements incurred in connection with the determination of coverage and/or the adjustment, defense, negotiation or settlement of any Claim; attorney's fees incurred for representation at depositions, hearings, pretrial conferences and/or trials; 12.2.2 fees and expenses incurred for: handling any Alternative Dispute Resolution proceeding (“ADR”); legal actions, including trials or appeals; pursuing any declaratory judgment action, including deposition fees; cost of appeal bonds; court reporter or stenographic services, filing fees, and other court costs, fees and expenses; transcript or printing services and all discovery expenses; service of process; witnesses’ testimony, opinions, or attendance at hearings or trial; 12.2.3 fees and expenses for attendance at or participation in ADR proceedings, hearings, trials or other proceedings by TRISTAR personnel or its subcontractors; 12.2.4 statutory fines or penalties; pre- and post-judgment interest paid as a result of litigation, unless regulatory or reporting requirements define such interest as loss or indemnity payments; 12.2.5 subcontractors’ fees and travel expenses, including independent adjusters, automobile and property appraisers, to the extent that same are incurred in the adjustment, negotiation, settlement or defense of any Claim; 12.2.6 fees and expenses incurred in conjunction with the telephonic, web, or other electronic methods of reporting Claims as set forth on Schedule D; 12.2.7 experts' fees and expenses including reconstruction experts, engineers, photographers, accountants, economists, metallurgists, cartographers, architects, hand-writing experts, physicians, appraisers and other natural and physical science experts, plus the fees and expenses associated with preparation of expert reports, depositions, and testimony; 12.2.8 fees and expenses for surveillance, undercover operative and detective services or any other investigations; 12.2.9 fees and expenses for: medical examinations, or autopsies, including diagnos tic services, and related transportation services; durable medical equipment; and medical reports and rehabilitation evaluations, unless regulatory or reporting requirements define such fees and expenses as loss or indemnity payments; 12.2.10 fees and expenses for any public records, medical records, credit bureau reports, index bureau reports, and other like reports as set forth on Schedule D; 12.2.11 fees and expenses incurred where TRISTAR determines it is reasonable to pursue the rights of contribution, indemnification or subrogation of the Customer, including attorney and collection agency fees and/or expenses; 12.2.12 medical or vocational rehabilitation fees and expenses, and all other medical cost containment services, including, but not limited to utilization review and management, pre-audit admission authorization, hospital bill audit or adjudication, provider bill audit or adjudication, and medical TRISTAR CITY OF SOUTH SAN FRANCISCO (9-26-18) Claims Services Agreement - page 10 case management, if applicable, unless regulatory or reporting requirements define such expenses as loss or indemnity payments as set forth on Schedule D; and 12.2.13 extraordinary travel and related fees and expenses incurred by TRISTAR at the express request of Customer, which are not otherwise payable under this Agreement. 12.3 With respect to TRISTAR’s determination that a fee or an expense incurred pursuant to this Agreement is an Allocated Loss Adjustment Expense, TRISTAR makes no representation or warranty and assumes no responsibility that such determination (i ) is in compliance with or meets the requirements of any statistical plan filing, statutory, regulatory, or insurance industry reporting scheme or the definition of “Allocated Loss Adjustment Expense” thereunder; (ii) is or could be characterized as payment of loss or indemnity; or (iii) is or is not subject to insurance or reinsurance coverage or limits. Customer agrees that it is responsible for making all such judgments and for complying with any and all such requirements. 13. MMSEA 13.1 Section 111 of the Medicare, Medicaid, and SCHIP (State Children’s Health Insurance Programs) Extension Act of 2007 (all of which together shall be referred to as “MMSEA”) (P.L. 110 -173), contains mandatory reporting requirements (“MIR”) for group health plan arrangements and for liability insurance (including self-insurance), no-fault insurance, and workers' compensation (see 42 U.S.C. 1395y(b)(7) & (8)). As respects compliance with MMSEA under this Agreement: 13.1.1 Customer has the obligation to perform MIR requirements as respects Claims, register with the Centers for Medicare and Medicaid Services (“CMS”) as a Responsible Reporting Entity (“RRE”), and provide to TRISTAR all relevant information including the RRE Identification Number(s) assigned. Customer has appointed the reporting agent(s) identified on Schedule A for the purpose of meeting MMSEA obligations including MIR requirements (“Reporting Agent(s)”). 13.1.2 Reporting Agent services include determining Medicare eligibility, reporting to CMS eligible Claims using the mandated format for a determination of Medicare eligibility, processing error corrections, and providing quarterly reports. Where applicable, Reporting Agent should also respond to all inquiries and requests for conditional payments, comply w ith settlement approvals, negotiate and prepare claim set-aside agreements (“CSA’s”) and Medicare set-aside agreements (“MSA’s”). 13.1.3 Customer consents to the disclosure by TRISTAR of Claims information required by MIR to Reporting Agent or others for the purpose of providing MIR pursuant to this Agreement. Customer and TRISTAR agree that Claim data reported to or by CMS is confidential and each shall take reasonably necessary steps to protect the confidentiality of this data. 13.1.4 Customer agrees that fees and charges by Reporting Agent incurred for compliance with MMSEA and other related services shall be paid by Customer and charged against the Claim Files as Allocated Loss Adjustment Expenses. Such fees and charges are listed on Schedule D. 14. Non -Hire 14.1 Without the written consent of the other, Customer and TRISTAR shall not: i) solicit for employment or employ any employee of the other who is or has been directly engaged in the performance of this Agreement; and TRISTAR CITY OF SOUTH SAN FRANCISCO (9-26-18) Claims Services Agreement - page 11 ii) for a period of six (6) months following the termination of any employee who had been directly engaged in the performance of this Agreement, solicit for employment or employ such employee of the other. 14.2 Customer agrees that: (i) the prohibition against solicitation and employment of TRISTAR employees by Customer in Section 14.1 without TRISTAR’s written consent shall also apply to any affiliates of Customer; and (ii) that violation of this prohibition by Customer shall be deemed to be a material breach of this Agreement by Customer. For purposes of this Section 14.2, “Affiliates of Customer” includes any entity controlling, controlled by, or in common control with Customer or any entity in which Customer has an interest during the Term or with which Customer has entered into a contract. 14.3 This provision shall not apply to any offer of employment by TRISTAR or Customer arising from a general employment solicitation to the public and not specifically directed at any employee of the other party who is directly engaged in the performance of this Agreement. 14.4 The provisions of this Section 14 shall apply during the Term and the six (6) month period immediately following the Term. 15. Notices 15.1 All notices or other communications required pursuant to Section 9 shall be in writing and sufficient if i) delivered personally; ii) sent by a nationally recognized overnight carrier; or iii) sent by registered or certified mail return receipt requested, postage prepaid and via facsimile; and addressed as follows: TRISTAR: TRISTAR Risk Management 100 Oceangate, Suite 700 Long Beach, CA 90802 Attn.: Thomas J. Veale With a copy to: TRISTAR Insurance Group, Inc. 2540 Route 130, Suite 109 Cranbury, NJ 08512 Attn.: General Counsel’s Office Customer: City of South San Francisco 400 Grand Avenue South San Francisco, CA 98040 Attn.: 15.2 When required or issued pursuant to this Agreement, notices shall be deemed to have been given at the time i) when personally delivered, ii) upon the day following the day sent by overnight carrier, or iii) if mailed, upon the third (3rd) day after the date such notice is postmarked. 16. State Amendment Requirements 16.1 The Agreement shall be deemed to incorporate any and all provisions required by applicable state insurance laws, relating to insurance administrators or third party administrators, insofar as such provisions relate to the services performed by TRISTAR pursuant to the Agreement. TRISTAR CITY OF SOUTH SAN FRANCISCO (9-26-18) Claims Services Agreement - page 12 17. General 17.1 This Agreement constitutes the entire agreement of the parties and supersedes all previous agreements and/or contracts whether oral or written between them with respect to the subject matter hereof. 17.2 If any provision of this Agreement shall contravene or be invalid under the laws of the United States, the state in which enforcement is sought, or the regulatory requirements of such state, it is agreed that such provision shall not invalidate the whole Agreement but the Agreement shall be construed as if not containing the particular provision or provisions held to be invalid. 17.3 This Agreement may only be amended by a written instrument signed by the parties hereto. 17.4 The parties shall not disclose to any third party the terms and conditions of this Agreement, except as may be required by law, reasonable advice of its counsel, or the written consent of the non-disclosing party. Notwithstanding the aforementioned, this Agreement may be disclosed to the parties’ representatives, accountants, attorneys, and advisors and to insurers of Customer, including excess insurers to and reinsurers of the SIR Program. 17.5 This Agreement shall be binding upon and inure to the benefit of the parties hereto, their successors and assigns. A party may not assign this Agreement or the services required herein without the prior written consent of the other party, which shall not be unreasonably withheld or delayed. 17.6 Except as otherwise provided herein, nothing in this Agreement is intended or shall be construed to give any person, other than the parties hereto, their respective successors and permitted assigns, any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision contained herein. 17.7 A party hereto shall not be deemed to have waived any rights or remedies accruing to it hereunder unless such waiver is in writing and signed by such party. No delay or omission by a party hereto in exercising any right shall operate as a waiver of said right on any further occasion. 17.8 Wherever approval of a party is required under this Agreement, it shall not be unreasonably withheld or delayed. 17.9 The captions are for convenience of reference only and shall not control or affect the meaning o r construction of any provision of this Agreement. 17.10 This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original, but all of which shall constitute one and the same instrument. 17.11 The exchange of copies of this Agreement and of signature pages by e-mail transmission shall constitute effective execution and delivery of this Agreement and may be used in lieu of the original for all purposes. Signatures of the parties transmitted by e -mail shall be deemed to be their original signatures for all purposes. 17.12 This Agreement shall be interpreted and construed in accordance with the internal laws of the State of California without regard to conflicts of law. 17.13 Each party represents to the other that it is authorized to enter into this Agreement and that its entry into this Agreement does not and will not violate the terms of any judgment, decree or ruling or any contract with any third party. TRISTAR CITY OF SOUTH SAN FRANCISCO (9-26-18) Claims Services Agreement - page 13 TRISTAR AND CUSTOMER CERTIFY BY THEIR UNDERSIGNED AUTHORIZED OFFICERS THAT THEY HAVE READ THIS AGREEMENT, INCLUDING ALL SCHEDULES AND EXHIBITS HERETO, AND AGREE TO BE BOUND BY ITS TERMS AND CONDITIONS. TRISTAR Risk Management City of South San Francisco By: _________________________________________ By: ________________________________________ Name: _________________________________________ Name: ________________________________________ Title: _________________________________________ Title: ________________________________________ Date: _________________________________________ Date: ________________________________________ TRISTAR CITY OF SOUTH SAN FRANCISCO (9-26-18) Claims Services Agreement - page 14 Schedule A General Information; Service Period; Fees and Expenses This Schedule A shall be effective July 1, 2016 and it shall: i) apply to all Claims reported and all Information Services provided on or after that date, and ii) remain in effect until the parties agree on new rates . The terms and conditions of the Agreement apply unless and to the extent modified or supplemented by the specific terms and conditions of this Schedule A. A.1 General Information A.1.1 Retention Level(s): $500,000 A.1.2 Settlement Authority: $0 A.1.3 Reporting Agent(s): i) for MMSEA reporting to CMS: TRISTAR; ii) for MMSEA compliance and other related services: TRISTAR’s Preferred Provider, unless Customer directs the use of a different vendor. A.2 Service Period A.2.1 In consideration of payment by Customer of the fees described in Section A.3, TRISTAR will provide the Services for the periods set forth below (“Service Period”): Basic Services. TRISTAR will provide Basic Services for each Claim beginning on the date the Claim is reported to TRISTAR and ending on the sooner of: i) the date the Claim is closed; or ii) the effective date of termination of this Agreement in accordance with any provision of Section 9. Information Services. TRISTAR will provide Information Services beginning on the Effective Date and ending on the date TRISTAR is no longer obligated to provide Basic Services as set forth above. A.3 Basic Fees A.3.1 Annual Services Fee. In consideration for the Basic Services and Information Services for the first three (3) users performed by TRISTAR during the Service Period, TRISTAR shall be entitled to and Customer shall pay TRISTAR in accordance with Section A.4, subject to any adjustments made in accordance with Subsection A.3.3, the following annual fees (“Annual Services Fee(s)”) each year in twelve (12) equal monthly installments (“Monthly Installment(s)”): ANNUAL MONTHLY ANNUAL PERIOD SERVICES FEE INSTALLMENT 7/1/16 to 6/30/17 .................$152,800..................... $12,733 7/1/17 to 6/30/18 .................$152,800..................... $12,733 7/1/18 to 6/30/19 .................$191,220..................... $15,935 TRISTAR CITY OF SOUTH SAN FRANCISCO (9-26-18) Claims Services Agreement - page 15 Subject to the following: The Annual Services Fee is predicated on an open inventory of One Hundred Thirty-Five (135) indemnity Claims (“Indemnity Threshold”). In the event the actual number of open indemnity claims varies from the Indemnity Threshold by fifteen percent (15%) or more in either direction, then Customer and TRISTAR agree to negotiate in good faith a reasonable adjustment to the Annual Services Fee. A.3.2 Fees for optional services requested by Customer. In consideration for the services listed below (collectively, “Optional Service(s)”) rendered during the Service Period upon the request of Customer and in accordance with this Agreement, Customer agrees to pay TRISTAR at the following rates (“Optional Rates”) in accordance with Section A.6, subject to any increases made in accordance with Subsection A.3.3, for as long as the Optional Services are provided: If requested by Customer: Initial Term: i) For each additional user in excess of three (3): Seven Hundred Fifty dollars ($750) per user (“Additional User Rate”); ii) OSHA Reports: Four Thousand dollars ($4,000) per year (“OSHA Rate”); iii) Standard Data File (monthly): One Thousand Two Hundred dollars ($1,200) per year (“Data File Rate”) iv) Self-Insured Reports: in accordance with TRISTAR’s rates, which vary by state, then in effect (“SIR Report Rate”); and v) Customized Interface: on a Time and Expense basis at the hourly rate of One Hundred Forty-Five dollars ($145) (“Customized Interface Rate”). The Additional User Rate, OSHA Rate, and Data File Rate each shall be pro-rated for each applicable Optional Service added at any time other than as of the Effective Date or a subsequent Increase Date, as hereinafter defined. A.3.3 Increases due to Material Change in business terms. In addition to the foregoing, Customer agrees that TRISTAR, in its sole discretion, reserves the right to make adjustments to the Annual Services Fees, Data Conversion Fee, and Optional Rates (collectively, “Basic Fees”) as it deems necessary in the event any of the following occurs: i) a material discrepancy is discovered in the historical data and any other information provided to TRISTAR by Customer or its representatives that is used by TRISTAR to develop the Basic Fees and this Agreement; and ii) there is a material change in the scope of services to be provided by TRISTAR, including the use of TRISTAR’s Preferred Provider network. A.4 Additional Services F ees A.4.1 The Basic Fees shall apply to Services, other than Specialty Services, rendered during the Service Period for Claims. Should TRISTAR be engaged by Customer to provide any other service, Customer shall pay TRISTAR for such services, in accordance with Section A.6, on a Time and Expense basis at TRISTAR’s then current hourly rates unless other rates are mutually agreed upon (“Additional Services Fees”). TRISTAR CITY OF SOUTH SAN FRANCISCO (9-26-18) Claims Services Agreement - page 16 A.5 Expenses A.5.1 Reimbursable Expenses. Customer shall reimburse TRISTAR for Reimbursable Expenses. A.5.2 Taxes. Customer shall pay Taxes. A.6 Payment A.6.1 Notwithstanding any expiration or sooner termination of this Agreement: i) the Annual Services Fee shall be deemed fully earned, due, and nonrefundable upon the first (1st) day of each twelve (12) month period for which it is incurred; and ii) the Data Conversion Fee shall be deemed fully earned, due, and nonrefundable as it is incurred; Optional Rates (if Optional Services requested by Customer and provided by TRISTAR): iii) the Additional User Rate, OSHA Rate, and Data File Rate shall be deemed fully earned, due and non-refundable as of the date a new user is added or an Optional Service is provided, and each subsequent annual anniversary of the Effective Date; and iv) the SIR Report Rate and Customized Interface Rate each shall be deemed fully earned, due, and nonrefundable when it is incurred. A.6.2 All Fees and Expenses shall be payable by Customer to TRISTAR in accordance with Section 5.5 of the Agreement and invoiced as follows: i) The Monthly Installment, Data Conversion Fee, Optional Rates (if any), Additional Services Fees (if any), Reimbursable Expenses (if any), and Taxes (if any) shall be invoiced by TRISTAR at the end of the month in which they are incurred and/or assessed. TRISTAR CITY OF SOUTH SAN FRANCISCO (9-26-18) Claims Services Agreement - page 17 Schedule B Banking and Funding This Schedule B shall be effective July 1, 2016 and it shall: i) apply to all Claims obligations, including loss, indemnity, and Allocated Loss Adjustment Expenses and other Claim -related expenses, and ii) remain in effect until the parties agree otherwise . The terms and conditions of the Agreement apply unless and to the extent modified or supplemented by the specific terms and conditions of this Schedule B. 1. Account for the Payment of Claims and Allocated Loss Adjustment Expense(s) 1.1 All Claims obligations, including loss, indemnity, and Allocated Loss Adjustment Expenses and other Claim-related expenses, are the obligations of Customer and shall be paid by Customer. 1.2 Customer acknowledges and agrees that the depository bank for Customer funds provided to TRISTAR for the payment of Claims and Allocated Loss Adjustment Expenses shall be Citizens Business Bank (“CBB”). 1.3 Customer hereby authorizes TRISTAR to open an account with CBB in trust for (“ITF”) Customer to be used as the depository/funding account relating to the payment of Claims and Allocated Loss Adjustment Expenses (“Account”). 2. Duties of TRISTAR 2.1 Any amounts collected by TRISTAR on behalf of or for Customer and any amounts received from Customer shall be deposited in the Account. Claims and Allocated Loss Adjustment Expenses for the Claims will be paid by checks showing the identity of Customer that are issued by TRISTAR against funds in this Account. CBB shall keep records clearly recording the deposits into and withdrawals from the Account and the balance held on behalf of Customer. When requested by Customer, but no more than once each month, TRISTAR shall cause CBB to render an accounting detailing all transactions with respect to the Account, which accounting shall be provided by TRISTAR to Customer. 2.2 TRISTAR shall collect, process, and report data in the manner prescribed by the Internal Revenue Service for the purpose of preparing Customer’s 1099 Miscellaneous Income filing with respect to the Claims and Allocated Loss Adjustment Expenses payments whi ch are the subject of this Agreement. As respects the Account, TRISTAR shall file required Unclaimed Property reports. 3. Duties of Customer 3.1 Customer shall: 3.1.1 initially deposit in the Account an initial required balance set forth in Exhibit 1 attached hereto and made a part hereof (“Target Amount”); thereafter, maintain such required Target Amount by transferring additional funds to the Account at the interval indicated in Exhibit 1 so that it equals or exceeds the Target Amount. Customer agrees to increase the Target Amount upon request of TRISTAR, and in an amount to be determined by TRISTAR, within two (2) business days after Customer is notified by TRISTAR of the amount of the increase; 3.1.2 maintain a minimum balance equal to or greater than Thirty (30%) percent of the Target Amount (“Minimum Balance”) in the Account at all times. On any day the Account balance is less than TRISTAR CITY OF SOUTH SAN FRANCISCO (9-26-18) Claims Services Agreement - page 18 the Minimum Balance, Customer agrees to transfer sufficient funds to the Account within two (2) business days after it is notified by TRISTAR so that the balance in the Account equals or exceeds the Target Amount; 3.1.3 transfer sufficient funds to the Account within two (2) business days of receipt of each request from TRISTAR to cover each obligation for Claims or Alloca ted Loss Adjustment Expenses exceeding Twenty-Five (25%) percent of the Target Amount (“Cash Call”) that have been or are expected to be paid on behalf of Customer; 3.1.4 be liable for and pay any and all overdraft amounts including bank fees and charges and interest thereon. In the event TRISTAR pays any such amounts on Customer's behalf pursuant to TRISTAR’s agreement with the Bank, Customer shall immediately reimburse TRISTAR upon demand; and 3.1.5 except as provided in Section 3.1.4 above, not be responsible for fees charged by CBB to administer the Customer transactions and the Account. However, earnings or credits earned are applied toward such bank fees, with the excess, if any, retained by TRISTAR. 3.2 The Customer shall provide such documents, written authorizations or resolutions, in a form required or acceptable to the Bank, authorizing TRISTAR and/or the Bank to effect the funding and payment arrangement agreed to under this Schedule B. 3.3 In the event of any dispute between TRISTAR and Customer regarding the propriety of any request for additional funds as contemplated by Subsection 3.1 above, or regarding the propriety of TRISTAR's actions in paying or determining to pay a Claim or Claims or an Allocated Loss Adjustment Expense, Customer shall nonetheless permit or make the payments to the Account under a reservation of rights so that Customer may enforce its rights with respect to any such payments or any other matters relating to this Schedule B. 3.4 The Customer’s obligations under this Section 3 have been duly authorized by all necessary corporate action of the Customer and do not and will not violate any provision of law or of the Customer’s charter, or by-laws, or require any consent or result in the breach of any agreement to which the Customer is a party or by which it may be bound or affected. TRISTAR CITY OF SOUTH SAN FRANCISCO (9-26-18) Claims Services Agreement - page 19 Exhibit 1 To Schedule B Citizens Business Bank Account #: 47035493 Target Amount: $157,000 Funding Frequency: Customer shall fund the Account through the Federal Reserve:  on any day the Account balance is less than the Minimum Balance; and  upon notification of a Cash Call; and  each month. TRISTAR CITY OF SOUTH SAN FRANCISCO (9-26-18) Claims Services Agreement - page 20 Schedule C Information Services The terms and conditions of the Agreement apply unless and to the extent modified or supplemented by the specific terms and conditions of this Schedule C. C .1 Scope of Services In consideration of the payment of the applicable fees calculated in accordanc e with Schedule A, TRISTAR shall furnish the following to Customer (“Information Services”):  online access to TRISTAR’s claim system (“TRISTAR System”); and  related materials. C .2 Limited Warranty TRISTAR MAKES NO WARRANTY OR REPRESENTATION RELATING TO TRISTAR SYSTEM, THE INFORMATION SERVICES, OR ANY OTHER SERVICES, OR MATERIALS PROVIDED IN CONNECTION THEREWITH. THE TRISTAR SYSTEM AND MATERIALS ARE FURNISHED AND ALL INFORMATION SERVICES ARE RENDERED ON AN “AS IS” BASIS WITHOUT ANY WARRANTY WHATSOEVER. TRISTAR DISCLAIMS AND EXCLUDES ANY AND ALL IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. C .3 Limitation of Liability C .3.1 Customer’s exclusive remedy for damage or loss in any way connected with any Information Services furnished by TRISTAR, whether by breach of warranty, negligence or any breach of any other duty, shall be for TRISTAR to refund the amount paid for the Information Services, for which a claim is made. C .3.2 Customer assumes sole responsibility for the selection of the Information Services, to achieve its intended results and for the use made and the result obtained. EXCEPT AS PROVIDED IN THIS SCHEDULE C, TRISTAR SHALL NOT BE LIABLE FOR DIRECT DAMAGES OR SPECIAL, INCIDENTAL, INDIRECT OR CONSEQUENTIAL DAMAGES, EVEN IF TRISTAR HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. WITHOUT LIMITING THE FOREGOING, TRISTAR IS NOT RESPONSIBLE FOR ANY COSTS INCURRED AS A RESULT OF THE USE OF THE INFORMATION SERVICES, INCLUDING WITHOUT LIMITATION, LOST PROFITS OR REVENUE, LOSS OF DATA, COSTS OF RECREATING DATA, THE COST OF ANY SUBSTITUTE EQUIPMENT OR PROGRAM, OR CLAIMS BY ANY THIRD PARTY. TRISTAR’S AGGREGATE LIABILITY ARISING FROM OR RELATING TO THIS AGREEMENT OR THE INFORMATION SERVICES IS LIMITED TO THE AMOUNT OF FEES THAT CUSTOMER HAS PAID IN CONNECTION WITH THE SERVICE FOR WHICH CUSTOMER CLAIMS TRISTAR’S BREACH OF THIS AGREEMENT. THE PROVISIONS OF THIS AGREEMENT THAT LIMIT TRISTAR’S WARRANTIES AND CUSTOMER’S REMEDIES REPRESENT AN ALLOCATION OF RISK BETWEEN TRISTAR AND CUSTOMER. TRISTAR’S PRICING REFLECTS THIS ALLOCATION OF RISK AND THE LIMITATION OF LIABILITY SPECIFIED HEREIN. TRISTAR CITY OF SOUTH SAN FRANCISCO (9-26-18) Claims Services Agreement - page 21 C .4 Proprietary Rights C .4.1 Customer’s rights to Information Services under this Agreement may not be transferred, leased, assigned, or sublicensed except by written consent of TRISTAR, which TRISTAR may grant or withhold at its discretion. C .4.2 Customer acknowledges that the Information Services contain proprietary and confidential information and materials of TRISTAR which are protected as TRISTAR trade secrets and as copyrighted works, and which Customer may not copy, modify, or distribute except as authorized by TRISTAR. Customer agrees not to remove or deface any titles, trademarks, copyright notices, “restricted rights” or other proprietary legends affixed to or incorporated in the TRISTAR System or the Information Services. C .4.3 All systems created or utilized by TRISTAR in the performance of activities under this Agreement shall belong to, and shall remain the property of, TRISTAR and its affiliates, and Customer shall have no ownership interest therein. The term “systems” as used herein shall include, but shall not be limited to, computer programs, computer equipment, formats, risk data report formats, procedures, documentation and internal reports of TRISTAR and its affiliates, but such term shall not include Claims File Information. C .5 Internet Use Information transmitted and received through the internet may be neither secure nor confidential and TRISTAR cannot and does not guarantee the privacy, security, authenticity, and non- corruption of any information so transmitted or stored in any system connected to the internet. TRISTAR shall not be responsible for any adverse consequences whatsoever of Customer’s connection to or use of the internet, and TRISTAR shall not be responsible for any use by Customer of Customer’s internet connection in violation of any law, rule, or regulation or any violation of the intellectual property rights of another. C .6 Privacy C .6.1 In the course of providing Information Services, TRISTAR may provide to Customer or Customer may gain access to or generate personally identifiable, financial and/or health information of consumers, insureds or claimants which may include confidential information (here inafter collectively “Protected Information”) which may be subject to federal, state and local laws. Customer acknowledges and agrees that it (i) shall at all times comply with all federal, state and local laws and regulations applicable to Protected Information and (ii) shall only use the Protected Information for the purposes for which it was provided under this Agreement and for no other purpose. Except as permitted by applicable law or as necessary to carry out its obligations under this Agreement, Customer shall not disclose, license, sell or otherwise transfer Protected Information to a third party. C .6.2 Customer shall immediately notify TRISTAR of any violations of any such law or regulation applicable to provision of services under the Agreement o r of any complaint or judicial or administrative proceeding initiated concerning any actual or alleged violation of such law or regulation. Notwithstanding the termination or expiration of the Agreement, Customer shall comply with this Section 6 with respect to all Protected Information in Customer’s possession or in the possession of Customer’s subcontractors or any other third party over which it has control. TRISTAR CITY OF SOUTH SAN FRANCISCO (9-26-18) Claims Services Agreement - page 22 Schedule D Preferred Provider Specialty Services Schedule D is effective July 1, 2016 to June 30, 2018. These Preferred Provider Specialty Services fees are paid as Allocated Loss Adjustment Expenses or, where required by state law, as loss. Bill Review Fees a) For medical treatment and pharmacy bills reviewed to the Official Medical Fee Schedule or Usual and Customary database: The fee is $8.50 per bill. b) For medical treatment and pharmacy bills that belong to the PPO: The fee is twenty-five percent (25%) of the PPO savings. c) For IMFS (Inpatient Medical Fee Schedule): The fee is $100 per bill of savings. d) For Specialty Bill Review reductions: The fee is thirty percent (30%) of savings Case Management Fees Utilization Review: In Patient - $95.00 per hour (includes review of treatment guidelines for appropriateness of care including length of stay and need for assistant surgeon; directing into PPO and confirmation letters) Out Patient - $95.00 per hour (includes review of treatment guidelines for appropriateness of care, directing into PPO and confirmation letters) Telephonic Case Management: $95.00 per hour Field Case Management: $105.00 per hour, plus expenses Peer Review: $200.00 per hour for record review without MD discussion $250.00 per hour for record review with MD discussion TRISTAR CITY OF SOUTH SAN FRANCISCO (9-26-18) Claims Services Agreement - page 23 Schedule D Preferred Provider Specialty Services Schedule D is effective July 1, 2018 and is subject to change from time to time thereafter without prior notice. These Preferred Provider Specialty Services fees are paid as Allocated Loss Adjustment Expenses or, wher e required by state law, as loss. Services Fees Medical Bill Review: Provider/Ancillary Bill Review $8.75 per bill or $1.50 per line (minimum 4 lines) Hospital Bill Review (in and outpatient) 12% of savings Implantable Device Review 27% of savings PPO/Pharmacy/DME 27% of Savings (all savings are post fee schedule or U&C) Specialty Bill/Out of Network Review 30% of Savings (all savings are post fee schedule or U&C) e-billing $1.00 per bill Historical Bill Review Conversion $750-$2000 One Time Fee at Implementation Duplicate Bills Duplicate Line Items Monthly Savings Reporting No Charge Utilization Review: Pre-clinical review $22 per pre-clinical review. Fee waived if case proceeds to utilization review Pre-Certification (In- or Out-Patient) $140 per pre-certification Concurrent Review (Review during hospitalization or outpatient treatment, as treatment progresses to ensure duration and type of treatment meet appropriate guidelines) $125 per hour. Peer Review: Level 1 (Includes review of medical records and communication of decision in writing to all parties) $250 flat rate for peer review of episodes of care identified on medical bill review. Level 2 (Includes review of medical records, discussion with treating physician and communication of decision in writing to all parties) $295 flat rate when assigned by a nurse case manager following case manager file review, or receipt of a referral by adjuster for review. Enhanced Intake and Nurse Triage: Enhanced Telephonic First Notice (Operator service by medical assistants. Injured employee and/or supervisor calls to report claims, assistance with PPO direction, questions and referrals. Optional integration with nurse triage services.) $20 per intake call (waived if call moves to triage) Telephonic Nurse Triage (Nurse aids injured worker in self- treatment or sets up appointment with appropriate provider utilizing medical triage guidelines/follow up calls) $120 per intake call TRISTAR CITY OF SOUTH SAN FRANCISCO (9-26-18) Claims Services Agreement - page 24 Nurse Case Management Telephonic Case Management $105 per hour OR Duration Based  First 30 days $370 per claim  Second 30 days $285 per claim  Each 30 days until closure $200 per claim Field Case Management $105 per hour* *plus Mileage at IRS mileage rate Field Case Management - Tasks One time visit to provider $475 plus mileage Two visits to provider $750 plus mileage Medical record retrieval $135 plus mileage Job Analysis $475 plus mileage Catastrophic Case Management (High level of RN interaction with immediate response to significant injury, e.g. severe head injury, severe burns, gunshot. Available 24x7) $150 per hour plus mileage Other Services: Special Investigations Outsourced, at cost – typically $85 per hour Central Index Bureau/OFAC/CSE $15 per report Claim Reporting: Telephonic $20 per report Claim Reporting: Fax or Internet $10 per report MMSEA Reporting $10 per claim Mileage IRS allowance rate TRISTAR CITY OF SOUTH SAN FRANCISCO (9-26-18) Claims Services Agreement - page 25 Schedule E Utilization Management Services The terms and conditions of the Agreement apply unless and to the extent modified or supplemented by the specific terms and conditions of this Schedule E. E.1 Description E.1.1 Utilization Management Services is the evaluation of requests for treatment and/or procedures by determining the medical necessity, appropriateness and efficient of the requested services. E.1.2 Utilization Management Services may include pre-certification and concurrent review which shall be performed in accordance with the regulations of the pertinent state, as well as under the guidelines of TRISTAR’s written policies and procedures and URAC guidelines. TMC’s policies and procedures will meet all state statutes and regulations for workers’ compensat ion. Telephone access, hours of operation, level of reviewers, peer review services, time frames and letters may all be specified by any one or more of the following entities: (i) URAC, or (ii) applicable State Department of Insurance. E.2 Scope of Ser vices E.2.1 TMC will perform Utilization Management Services, which may include the following. TMC shall: i) Provide qualified health professionals that operate and complete utilization reviews during normal business hours; ii) Employ a credentialed staff of health professionals to perform utilization reviews; iii) Perform reviews following the prospective requests for review or after the injury to determine medical necessity. Utilization management that is conducted prior to an injured workers admission is considered pre-certification. Concurrent reviews occur while treatment is being delivered to an injured worker. This review assesses the patient’s condition while in the hospital or for outpatient treatment(s) and/or procedures. Concurrent or prospective reviews are conducted within five (5) days from the receipt of the necessary medical information, but in no event more than fourteen (14) days from the treatment recommendations; iv) Perform expedited reviews when a) the injured worker faces an imminent and serious threat to his or her health, including but not limited to the potential loss of life, limb, or other major bodily function, or b) the normal time frame for the decision-making process would be detrimental to the injured worker’s life or health or could jeopardize the injured worker’s permanent ability to regain maximum function. An expedited review will not exceed seventy-two (72) hours after receipt of the written information reasonably necessary to make a determination; v) Complete retrospective reviews at the request of TRISTAR or Customer. Retrospective reviews must be requested within thirty (30) days from the receipt of all medical information; vi) Provide peer review services through independent IRO’s that have achieved URAC accreditation. Any treatment requests that do not meet URAC guidelines cannot be authorized by TMC and must be referred for peer review. The peer reviewer will review the information from the treating physician and may contact the provider directly for additional TRISTAR CITY OF SOUTH SAN FRANCISCO (9-26-18) Claims Services Agreement - page 26 information. If the peer reviewer agrees with the treatment plan, a recommendation to certify will be issued and sent to TMC. If the peer reviewer still finds the treatment not within guidelines, a letter to not certify is issued to the appropriate parties ; and vii) Offer a process whereby an injured worker or pro vider on behalf of that injured worker may contest an adverse determination. In order for TMC to respond appropriately to a wide range of appeal situations, TMC will provide the injured worker and provider with the required information in order to complete the appeal process. TRISTAR CITY OF SOUTH SAN FRANCISCO (9-26-18) Claims Services Agreement - page 27 Schedule F Case Management Services The terms and conditions of the Agreement apply unless and to the extent modified or supplemented by the specific terms and conditions of this Schedule F. F.1 Description F.1.1 Case Management Services, which are provided in order to achieve quality healthcare services and contain costs, begin with injured employee identification and referral, examples of which include catastrophic injuries or illnesses, injuries associated with invasive treatment (e.g., Surgery), and individuals at risk for non-compliance with treatment. F.2 Scope of Services F.2.1 TRISTAR, TMC will perform Case Management Services, which may include the following. TMC shall: i) Perform a thorough assessment of the injured worker’s situation; ii) Develop a case management plan including specific, measurable goals that focus on meeting the injured worker’s needs through utilization of appropriate resources; iii) Work with all medical service providers and coordi nate activity in order to provide the best response to treatment; iv) Offer treatment recommendations utilizing nationally recognized evidence-based treatment guidelines such as Official Disability Guidelines (ODG), American College of Occupational Environmental Medicine (ACOEM), the Medical Treatment Utilization Schedule (MTUS), or other evidenced-based guidelines to ensure a cost effective treatment plan is in place; v) Establish a target date for return to light and/or full duty in coordination with the Customer; vi) Monitor treatment provided to an injured worker to ensure quality and appropriateness; and vii) Close case when goals are met and the injured worker has improved medically.