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HomeMy WebLinkAboutIR 7968 INFORMAL REPORT TO CITY COUNCIL MEMBERS NO. 7968 VP 011ATE!Z6 To the Mayor and Members of the City Council December 12, 1995 Subject: PARKS AND COMMUNITY SERVICES DEPARTMENT CONTRACT FEE PROGRAM Introduction The following provides an update on liability issues and risk management actions related to the Parks and Community Services Department's contract fee class program. This matter was discussed as part of the Report of the City Manager at the Pre Council session on August 8, 1995. Background The contract fee class program was established by the City in the early 1980's. The purpose of this program is to provide a variety of recreational and educational services to community center customers through private instructors. Classes are available for youth through adult and involve activities such as physical fitness, art, karate, ceramics, etc. Contract instructors receive 70% of gross class fee revenues and the City receives 30% of the revenues. In 1987, in accordance with City policy, the contract fee program was changed whereby contract instructors became independent contractors rather than city employees. In accordance with this change instructors received a percentage of fees collected rather than a standard hourly rate. Effective January 1 , 1995, in accordance with the FY 1994-95 adopted budget, the contract fee program was again changed whereby the instructors were required to collect all fees and submit a percentage to the City. This provided staff flexibility to conduct outreach programs and enhance monitoring of facilities. This change also allowed for instructors to set their own prices based on market rates. The initial program change in 19.87 assigned liability to the instructors and their contract included an indemnification clause. However, due to the absence of any claims being filed during the ensuing eight (8) years, this exposure was not a concern until a participant submitted a claim regarding an accident that occurred in March 1995 during a contract fee class. The City denied this claim since it occurred during a class supervised by a contract fee instructor. Insurance Research and Services As a result of the staffs' and instructors' concern regarding the potential exposure for liability, the Parks and Community Services Department and isk N,anagement Department reviewed options for identifying a reasonable level ire at a feasible cost for participants and instructors in the progra 71�1 I Ff. W0111111, ..iRWwwwormonmmmvmmr»'pomiirzA'J) ISSUED BY THE CITY MANAGER FORT WORTH,TEXAS INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 7968 F' To the Mayor and Members of the City Council December 12, 1995 Page 2 of 2 X Subject: PARKS AND COMMUNITY SERVICES DEPARTMENT CONTRACT FEE PROGRAM One such option identified is through BENE-MARC, Inc. of Fort Worth. This company specializes in athletic insurance for sports camps, universities and school districts. The program which this company is offering would insure all contract instructors with liability coverage and cover participants with accident insurance. BENS-MARC, Inc. representatives have recommended the following policy for participants: ITT Hartford for accident/medical expense (AME) insurance for participants and the Interstate Insurance Group (Chicago Insurance Company) for commercial liability insurance for contract instructors. The combined insurance fee would be $1 .25 - $ 1 .75 per month per class for each participant. By the participants paying the fee, the contract instructors would be covered for liability. The deductible for participants is $100.00 per claim. Limitation of coverage is $10,000 for medical payments, per injury, per person with no annual aggregate; and $1 ,000,000 each occurrence and aggregate limit for liability per each policy period. Orr` Other insurance programs were reviewed, including a plan provided by the National Recreation and Park Association. None of them met all of the needs for the contract fee program. Review and Input The Parks and Community Services Advisory Board reviewed this matter at their November 21, 1995 meeting. They concurred with staff's recommendation that all contract fee instructors and participants be encouraged, but not required, to secure insurance coverage through theBENE-MARC, Inc. program effective January 1 , 1996. Meetings with the contract instructors were held on November 30, and December 7, 1995 to review the terms of their contracts and convey information on the new insurance program. Those present agreed with staff's recommendation but did express some concern regarding their class participants' ability and willingness to pay an additional fee. Given the fact that the insurance program will be offered as an additional service and not required, these concerns are mitigated. This action will not require a change in the program policy. Should you have any questions regarding this matter please contact me or Richard Zavala, Parks and Co Services Director at 871-5711 . -.......... City Mana r e ISSUED BY THE CITY MANAGER FORT WORTH,TEXAS ........................