14 - Alternate District Engineer Errors & Omission Insurance
ITEM NO. 14
Costa Mesa Sanitary District
Memorandum
To:
Board of Directors
From:
Scott Carroll, General Manager
Date:
November 21, 2013
Subject: Alternate District Engineer Errors & Omission Insurance
Summary
Errors and Omissions (E&O) insurance is a professional liability insurance that protects
agencies from negligence claims and damages awarded from civil lawsuits. This type
of insurance is common for private consultants practicing engineering, architecture,
Bruce Mattern Consultant, does not carry E&O Insurance.
Staff Recommendation
That the Board of Directors give staff direction on requiring Bruce Mattern, Alternate
District Engineer, to carry errors & omission insurance.
Analysis
Earlier this year, the District revised the role of the Alternate District Engineer when a
conflict arises from the District Engineer, Rob Hamers, performing private civil
engineering work. The Alternate District Engineer is now required to sign plans or
By signing plans and/or other documents the Alternate District Engineer is confirming
that construction plans are in accordance to local and state codes. If an accident
occurs during construction and it was determined that the plans signed by the
Alternate District Engineer are at fault, the District would be held liable. E&O
insurance will protect the District from negligence claims and damages awarded from
civil lawsuits if claims are not settled between the District and claimant.
Typically, the District requires a limit of $1 million for E&O insurance, which is the limit
required of the District Engineer. However, Bruce Mattern does not review and sign
many plans for the District and he does not sign plans for the City of San Gabriel, his
only other client. The District could lower the limit to $500,000 or $250,000, but Mr.
Mattern indicated that he does not want to carry E&O insurance because its too
Protecting our community's health and the environment by providi
www.cmsdca.gov
Board of Directors
November 21, 2013
23
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expensive. The little work he does for the District makes it not worth carrying the
insurance.
The District could waive the E&O insurance for Mr. Mattern, but staff does not
Alternate District Engineer be required to have E&O insurance.
If the Board directs staff to terminate the agreement with Bruce Mattern Consultant
then staff will present to the Board a list of proposals from qualified engineering firms
s Operations Code Section 3.01.045, the Board
of Directors appoints the Alternate District Engineer.
Strategic Plan Element & Goal
This item complies with the objective and strategy of Strategic Element 5.0,
Administrative Management, which states the following:
5.0 Administrative Management
Objective:
To create, maintain and implement policies and procedures to ensure
sound management of the District.
Strategy:
We will conduct periodic reviews, refine and implement policies and
procedures, and assure the General Manager has the direction and tools necessary for
successful District operations.
Legal Review
When the District entered into an agreement with Bruce Mattern Consultant, the
agency gave Mr. Mattern immunity under Government Code Section 830.6. Mr.
Mattern and the District has immunity for injuries caused by his design as long as
reasonable. However, the immunity may not go as far as mistakes in plan checking. If
those mistakes constituted failure to provide to perform a ministerial duty, liability could
ensue.
The immunity does not protect Mr. Mattern if the District believes an accident at the job
site was caused by his professional negligence. Without E&O insurance the District
has no source of recovery as a result of his negligence, except his personal assets.
Environmental Review
Subject activity is exempt from the requirements of the California Environmental
Quality Act (CEQA) (Public Resources Code Section 21000 et. seq.). Section 15300.4
istrict has adopted
Financial Review
ally, the hourly rate from
an engineering consulting firm is $221 an hour, but said hourly rate will be confirmed
after receiving proposals from qualified firms.
Board of Directors
November 21, 2013
33
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Public Notice Process
Copies of this report are on file and will be included with the entire agenda packet for
the November 21, 2013 Board of Directors regular meeting at District Headquarters
Alternative Actions
1. Waive E&O insurance for Bruce Mattern Consultant.