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APPROVE A MOTION TO EXECUTE A CONTRACT WITH KLEAR.AI LLC TO IMPLEMENT AND MAINTAIN A RISK MANAGEMENT INFORMATION SYSTEM
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RECOMMENDATION
It is recommended that the City Council approve a motion to:
1. Approve entering into a service agreement with Klear.ai LLC to implement and maintain a Risk Management Information System (RMIS);
2. Authorize the City Manager to execute a three (3) year service agreement with Klear.ai LLC to implement and maintain a Risk Management Information System (RMIS);
3. Approve findings pursuant to Stockton Municipal Code section 3.68.070 in support of an exception to the competitive bidding process; and
4. Authorize the City Manager to take necessary and appropriate actions to carry out the purpose and intent of this motion.
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Summary
The Risk Services Division in the Human Resources Department consists of ten disciplines: COVID oversight; workers compensation; Americans with Disabilities Act (ADA), medical, and religious accommodations; Industrial Disability Retirement (IDR); liability claims; safety; ergonomics; insurance; subrogation; and contract insurance review. Each of these disciplines has a unique and siloed system which does not allow for the sharing of data. Risk Services needs a system that will capture data and allow us to analyze and identify the City's risks. Analyzing the data will support us in identifying and implementing preventative measures to help reduce employee injuries, loss time, accidents, and claims with the goal of decreasing financial loss. A RMIS system works from a dashboard concept where all the above areas would be visible. Management could identify current claim counts, safety violations, outstanding insurance claims, subrogation recovery, employees on leave (either occupational or non-occupational), ADA accommodations, COVID data, and determine areas of frequency or severity to assign the correct resources. A RMIS system can pull/push data from third-party administrators such as MUNIS, ATHENS, Sedgwick, and import data history held on Excel spreadsheets.
Staff requests approval to contract with Klear.ai LLC for the implementation and maintenance of a Risk Management Information System (RMIS) to provide a reporting and analytics platform for all functions within risk services (Attachment A). This system will improve accuracy by automating tasks and streamlining workflows.
DISCUSSION
Background
The City issued a Request for Proposals (RFP) for a Risk Management Information System (PUR 24-010) on September 26, 2023. The RFP review committee, consisting of representatives from Information Technology, Human Resources, and the Administrative Services Department, selected Klear.ai LLC to implement and maintain a Risk Management Information System.
Present Situation
The City of Stockton currently tracks Workers’ Compensation claims, industrial and non-industrial leaves, subrogation, liability claims, COVID-19 data, Americans with Disability Act (ADA) requests and accommodations, certificates of insurance, and safety reporting on excel spreadsheets. This does not allow the City to record or analyze data.
It is advantageous for the City to implement a RMIS to identify potential hazards and increased cost for claims due to high jury verdicts, improve the return to work process and injury prevention for Workers Compensation claims, track leaves to eliminate negative impacts on employees and the City, and assist with claims and subrogation collections in a timely manner.
Findings
Pursuant to Stockton Municipal Code (SMC) section 3.68.070, Council may approve findings which support an exception to the competitive bidding process. These findings include:
1. Use of the RFP process is appropriate for this software contract because, in addition to cost, it relies on the evaluation of professional qualifications and performance for the selection of a RMIS provider. The RFP process helps ensure selection of a vendor that will furnish a product that meets the City’s needs and provide responsive and timely support.
2. The City negotiated a contract following the solicitation of competitive proposals in accordance with SMC section 3.68.070.A.3.
FINANCIAL SUMMARY
Human Resources is requesting to enter into a three (3) year agreement with Klear.ai LLC, not to exceed a total of $368,181. These costs consist of $278,181 for the software license for three (3) years, plus $90,000 in one-time fees for implementation and configuration. The agreement includes an option to extend the contract for two (2) additional years, on a year-to-year basis.
There is sufficient budget for this expenditure in the current FY 2023-24 appropriation to cover the first year of the contract, as follows:
45% General Liability 2530-000-630006-520-000-00-25-000-000-
45% Workers Compensation 2510-000-630006-530-000-00-25-000-000-
10% Safety 2530-043-630006-530-000-00-25-000-000-
Costs for subsequent contract years will be budgeted in the same accounts and subject to Council approval during the annual budget development process.
Attachment A - Klear.ai LLC Agreement