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HomeMy WebLinkAbout16-Human Resources CITY OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION From: Linn Livingston Subject: MERCER BROKER AND HEALTH ADMINISTRATION SERVICES AGREEMENT. Dept: Human Resources Date: May 26, 2011 MICC Meeting Date: June 6, 2011 Synopsis of Previous Council Action: On August 16, 2010, Mayor and Common Council authorized the execution of an agreement with Mercer Health and Benefits LLC to provide broker and administration services to the City's employee Healthcare program. On May 3,2010, Mayor and Common Council authorized the Director of Human Resources to negotiate the terms of a contract with Mercer Health & Benefits for broker administration servIces. Recommended Motion: / Adopt Resolution. Contact person: Linn Livinoston Phone: 384-5161 Supporting data attached: Ward: FUNDING REQillREMENTS: Amount: $282.500 FY 2011-12: $290.000 FY 2012-13 Source: (Acct. No.) 001-090-5502-0000-0053 (Acct. Description) Health & Life Insurance Finance: Council Notes: Agenda Item No. I ( {J 6~-tX..e- :30 ( I CITY OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION Staff Report SUBJECT Resolution of the Mayor and Common Council of the City of San Bernardino authorizing the execution of an amended agreement with Mercer Health and Benefits LLC to provide broker and administration services for the City's health care program. BACKGROUND On May 3, 2010, Mayor and Common Council authorized the Director of Human Resources to negotiate the terms of the contract with Mercer Health & Benefits for broker and administration services for the City's health care plans. On August 16, 2010, Mayor and Common Council authorized the execution of an agreement with Mercer Health and Benefits LLC to provide broker and administration services to the City's employee health care program pending updated language in the services agreement. The City Attorney's Office and Mercer's Legal Team collaborated to finalize language agreeable to both parties. The Human Resources Department is requesting the services agreement be approved with the updated language in the services agreement (see attached). FINANCIAL IMPACT The cost of these services is $282,500 for FY 2011-12 and $290,000 for FY 2012-13. Pricing is a flat annual fee for services quoted. Funds for these services will be appropriated in the General Govemment division in the FY 2011-12 and FY 2012-13 budgets. The Water Department participates in the City's Health Care plans and services. The cost share portion for FY 2011-12 to the Water Department (Master Services Agreement) is $48,500. This will reduce the City contribution to $234,000 for FY 2011-12. RECOMMENDATION Adopt Resolution. Resolution No 2 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO AUTHORIZING THE EXECUTION OF AN AMENDED AGREEMENT WITH MERCER HEALTH AND BENEFITS LLC TO PROVIDE BROKER AND ADMINISTRATION SERVICES FOR THE CITY'S HEALTH CARE PROGRAM. 3 4 WHEREAS, on August 16, 2010, Mayor and Common Council of the City of San 5 Bernardino authorized the execution of an agreement with Mercer Health and Benefits LLC to 6 provide broker and administration services to the City's employee healthcare program pending 7 8 updated language in the services agreement (Resolution 2010-277); and 9 WHEREAS, the City Attorney's Office and Mercer's legal team collaborated to finalize 10 language agreeable to both parties; and \I WHEREAS, the original Agreement commenced on July 1,2010 and was for a period of 12 one (1) year with an option of two (2), one (1) year extensions; 13 BE IT RESOLVED BY THE MAYOR AND COMMON COUNCIL OF THE CITY OF 14 SAN BERNARDINO AS FOLLOWS: 15 SECTION 1: The City Manager of the City of San Bernardino is hereby authorized and 16 directed to execute on behalf of said City an Amended Agreement with Mercer Health and 17 Benefits LLC to provide health, broker, and administration services for a period of one (1) year 18 with an option of a one (1) year extension, commencing on July I, 2011; authorize the 19 20 Purchasing Manager to issue an annual purchase order as outlined in Exhibit "A" and 21 incorporated herein by reference as fully as though set forth at length. 22 SECTION 2: That the Director of Finance or his/her designee is hereby authorized to 23 issue an annual Purchase Order to Mercer Health and Benefits LLC in an amount not to exceed 24 $282,500 and an additional one (1) year extension, not to exceed $290,000 respectively. 25 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO AUTHORIZING THE EXECUTION OF AN AMENDED AGREEMENT WITH MERCER HEALTH AND BENEFITS LLC TO PROVIDE BROKER AND ADMINISTRATION SERVICES FOR THE CITY'S HEALTH CARE PROGRAM. 2 3 SECTION 3: The authorization to execute the above mentioned agreement is rescinded 4 if the parties to the agreement fail to sign it within sixty (60) days of the passage of this 5 resolution. 6 III 7 III 8 9 III 10 III 11 III 12 III 13 III 14 III 15 III 16 III 17 III 18 III 19 III 20 21 III 22 III 23 III 24 III 25 III RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO AUTHORIZING THE EXECUTION OF AN AMENDED AGREEMENT 2 WITH MERCER HEALTH AND BENEFITS LLC TO PROVIDE BROKER AND ADMINISTRATION SERVICES FOR THE CITY'S HEALTH CARE PROGRAM. 3 4 I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor and 5 the Common Council of the City of San Bernardino at a meeting thereof, , 20 II, by the following vote, to wit: AYES NA YES ABSTAIN ABSENT Rachel G. Clark, City Clerk The foregoing resolution IS hereby approved this day of 18 , 20 II. 19 20 21 PanickJ.Morris,Mayor City of San Bernardino Approved as to form: 22 23 JAMES F. PENMAN, City Attorney 24 ~J , ~L~-- , By: v .. 1-4 '21....... /"0><--xI 25 SERVICES AGREEMENT 2 THIS AGREEMENT is made and entered into as of this 1st day of July, 2010 3 ("Effective Date"), by and between the CITY OF SAN BERNARDINO, a charter city ("City" or 4 "Client"), and MERCER HEALTH & BENEFITS LLC, a Delaware limited liability company 5 ("CONSULTANT" or "Mercer"). 6 WIT N E SSE T H: 7 WHEREAS, CITY proposes to have CONSULTANT perform the services described 8 herein below; and 9 WHEREAS, CONSULTANT represents that it has that degree of specialized expertise 10 contemplated within California Government Code, Section 37103, and holds all necessary 11 licenses to practice and perform the services herein contemplated; and 12 WHEREAS, CITY and CONSULTANT desire to contract for professional services as 13 described in the Scope of Services, attached hereto as Exhibit "A"; and 14 WHEREAS, no official or employee of CITY has a financial interest, within the 15 provisions of California Government Code, Sections 1090-1092, in the subject matter of this 16 Agreement. 17 NOW, THEREFORE, for and in consideration of the mutual covenants and conditions 18 contained herein, the parties hereby agree as follows: 19 1.0. SERVICES PROVIDED BY CONSULTANT 20 1.1. Scope of Services. For the remuneration stipulated, CONSULTANT 21 shall provide the professional services described in the Scope of Services 22 attached hereto as Exhibit "A" and incorporated herein by this reference 23 ("Services"). If a conflict arises between the Scope of Services document 24 and this Professional Services Agreement (hereinafter "Agreement"), the 25 terms of the Scope of Services shall govern. Exhibit "A" 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 1.2. Professional Practices. All Services to be provided by CONSULTANT pursuant to this Agreement shall be provided by skilled personnel and in a manner consistent with the standards of care, diligence and skill ordinarily exercised by professional consultants in similar fields and circumstances in accordance with sound professional practices. CONSULTANT also warrants that it is familiar with all laws that may affect its performance of this Agreement and shall advise CITY of any changes in any laws that may affect CONSULTANT's performance of this Agreement if the CONSULTANT has actual knowledge of such changes. 1.3. Warranty. CONSULTANT warrants that it shall perform the Services required by this Agreement in compliance with all applicable Federal and California employment laws including, but not limited to, those laws related to minimum hours and wages; occupational health and safety; fair employment and employment practices; workers' compensation insurance and safety in employment; and all other Federal, State and local laws and ordinances applicable to the services required under this Agreement. CONSULTANT shall indemnify and hold harmless CITY from and against all claims, demands, payments, suits, actions, proceedings, and judgments of every nature and description including reasonable attorneys' fees and costs, or recovered against CITY to the extent arising from CONSULTANT's violation of any such applicable law. 1.4. Non-discrimination. In performing this Agreement, CONSULTANT shall not engage in, nor permit its officers, employees or agents to engage in, discrimination in employment of persons because of their race, 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 religion, color, national ongm, ancestry, age, mental or physical disability, medical condition, marital status, sexual gender or sexual orientation, except as permitted pursuant to Section 12940 of the Government Code. Violation of this provision may result in the imposition of penalties referred to in Labor Code, Section 1735. 1.5 Non-Exclusive Agreement. CONSULTANT acknowledges that CITY may enter into agreements with other consultants for services similar to the Services that are subject to this Agreement or may have its own employees perform services similar to those Services contemplated by this Agreement. 1.6. Delegation and Assignment. This is a personal service contract, and the duties set forth herein shall not be delegated or assigned to any person or entity without the prior written consent of CITY, which consent shall not be unreasonably withheld or delayed. CONSULTANT may engage a subcontractor(s) as permitted by law and may employ other personnel to perform services contemplated by this Agreement at CONSULTANT's sole cost and expense. 1.7 Conflicts of Interest. During the term of this Agreement, CONSULTANT shall at all times maintain a duty of loyalty as to the CITY and shall not accept payment from or employment with any person or entity which will constitute a conflict of interest with the CITY. 1.8 CITY Business Certificate. CONSULTANT shall obtain and maintain during the term of this Agreement, a valid CITY Business Registration Certificate pursuant to Title 5 of the City of San Bernardino Municipal Code and any and all other licenses, permits, qualifications, insurance o 2 and approvals of whatever nature that are legally required of CONSULTANT to practice its profession, skill or business. 3 2.0. COMPENSATION AND BILLING 4 2.1. Compensation. Except as provided herein, CONSULTANT 5 compensation shall be as set forth in Exhibit A. 6 2.2. Additional Services. CONSULTANT shall not receive compensation for 7 any services provided outside the scope of services specified in the 8 Exhibit A unless the CITY, prior to CONSULTANT performing the 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 additional services, approves such additional services in writing. It is specifically understood that oral requests and/or approvals of such additional services or additional compensation shall be barred and are unenforceable. 2.3. Method of Billing. CONSULTANT may submit invoices to CITY for approval. Said invoice shall be based on the total of all CONSULT ANT's services which have been performed in accordance with the terms of this Agreement during the period covered by such invoice. CITY shall pay CONSULTANT's invoice within thirty (30) days from the date CITY receives said invoice. The invoice shall describe in detail, the services performed and the associated time for completion. Any additional services approved and performed pursuant to this Agreement shall be designated as "Additional Services" and shall identify the number of the authorized change order, where applicable, on all invoices. 2.4. Performance Standard Guarantees. The CONSULTANT shall reduce the total cost of service related fees to the project, up to a maximum of 10%, if their services are not satisfactory to the CITY as outlined in the chart (Exhibit "B").] 2 3 4 5 6 7 8 9 2.5 Records and Audits. Records of CONSULTANT's Services directly relating to this Agreement shall be maintained in accordance with generally recognized accounting principles and shall be made available to CITY for inspection and/or audit at mutually convenient times for a period of three (3) years from the Effective Date. Any such inspection shall be conducted at the CITY's expense, during normal business hours and upon reasonable prior written notice to CONSULTANT. Such audit shall also be subject to the execution of a confidentiality agreement reasonably satisfactory to CONSULT ANT. 10 3.0. TERM AND NOTIFICATION. 11 3.1. Term. This Agreement shall commence on the Effective Date and 12 continue until the third anniversary of the Effective Date unless the 13 Agreement is previously terminated as provided for herein. 14 15 16 17 18 19 20 21 22 23 24 25 3.2 3.3 Termination. CITY or CONSULTANT may terminate the Services provided under Section 1.1 of this Agreement upon thirty (30) days written notice to the other party. In the event of termination, CONSULTANT shall be paid the reasonable value of Services rendered to the date oftermination. Documents. In the event of an early termination of this Agreement, all documents prepared by CONSULTANT in its performance of this Agreement shall be delivered to the CITY within ten (10) days of delivery of termination notice to CONSULTANT, at no cost to CITY. Any use of uncompleted documents without specific written authorization from CONSULTANT shall be at CITY's sole risk and without liability or legal expense to CONSULTANT. 4.0. INSURANCE 2 4.1. Scope and Limits of Insurance. CONSULTANT shall obtain and 3 maintain during the term of this Agreement all of the following insurance 4 coverage: 5 (a) Commercial general liability, including premises-operations, 6 products/completed operations, broad form property damage, 7 blanket contractual liability, independent contractors, personal 8 injury with a policy limit of One Million Dollars ($1,000,000.00) 9 per occurrence and Five Million Dollars ($5,000,000.00) general 10 aggregate. 11 (b) Automobile liability for owned vehicles, hired, and non-owned 12 vehicles, with a policy limit of One Million Dollars 13 ($1,000,000.00), combined single limits, per occurrence and 14 aggregate. 15 (c) Workers' compensation msurance as required by the State of 16 California. 17 4.2. Endorsements. The commercial general liability insurance policy shall 18 contain or be endorsed, using general policy endorsements, to contain the 19 following provisions: 20 (a) Additional insured: "The City of San Bernardino and its elected 21 and appointed boards, officers, and employees are additional 22 insured with respect to their vicarious liability arising out of 23 CONSULTANT'S performance of the Services hereunder." 24 (b) Other insurance: "Any other insurance maintained by the City of 25 San Bernardino shall be excess and not contributing with the 2 3 4 5 6 7 8 9 10 11 12 13 14 insurance provided by this policy with respect to claims arising solely and directly from CONSULTANT's provision of the Services. " 4.3. Certificates of Insurance. CONSULTANT shall provide to CITY certificates of insurance showing the insurance coverage and required endorsements described above, prior to performing any services under this Agreement. 4.4. Non-limiting. Nothing in this Section shall be construed as limiting in any way, the indemnification provision contained in this Agreement, or the extent to which CONSULTANT may be held responsible for payments of damages to persons or property. 4.5 Notice of Cancellation. CONSULTANT shall provide the CITY thirty (30) days prior written notice of cancellation of or a material change in any ofthe required coverage. 15 5.0. GENERAL PROVISIONS 16 5.1. Entire Agreement. This Agreement together with the Appendices and/or 17 Exhibits attached hereby constitutes the entire Agreement between the 18 parties with respect to any matter referenced herein and supersedes any 19 and all other prior writings and oral negotiations. This Agreement may 20 be modified only in writing, and signed by the parties in interest at the 21 time of such modification. The terms of this Agreement shall prevail 22 over any inconsistent provision in any other contract document 23 appurtenant hereto. 24 25 5.2. Notices. Any notices, documents, correspondence or other communications concerning this Agreement or the work hereunder may 7 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 be provided by personal delivery, facsimile or mail and shall be addressed as set forth below. Such communication shall be deemed served or delivered: a) at the time of delivery if such communication is sent by personal delivery; b) at the time of transmission if such communication is sent by facsimile; and c) 48 hours after deposit in the U.S. Mail as reflected by the official U.S. postmark if such communication is sent through regular United States mail. IF TO CONSULTANT: IF TO CITY: CITY MANAGER City of San Bernardino 300 North "D" Street San Bernardino, CA 92418 Telephone: (909) 384-5122 Fax: (909) 384-5138 5.3. Attorneys' Fees: In the event that litigation is brought by any party in connection with this Agreement, the prevailing party shall be entitled to recover from the opposing party all costs and expenses, including reasonable attorney' fees, incurred by the prevailing party in the exercise of any of its rights or remedies hereunder or the enforcement of any of the terms, conditions or provisions hereof The costs, salary and expenses of the City Attorney and member of his office in enforcing this Agreement on behalf of the City shall be considered as "attorney's fees" for the purposes of this paragraph. 5.4. Governing Law. This Agreement shall be governed by and construed under the laws of the State of California without giving effect to that Richard Hill, Principal Mercer Health & Benefits 4695 MacArthur Court, Suite 600 Newport Beach, CA_92660 Telephone (949) 222-1300 R 2 3 4 5 6 7 8 9 10 II 12 13 14 15 16 17 18 19 20 21 22 23 24 25 body of laws pertaining to conflict of laws. In the event of any legal action to enforce this Agreement, the parties hereto agree that the sole and exclusive venue shall be a court of competent jurisdiction located in San Bernardino County, California. 5.5. Assignment. CONSULTANT shall not voluntarily or by operation oflaw assign, transfer, sublet or encumber all or any part of CONSULTANT's interest in this Agreement to an unrelated third party without CITY's prior written consent which consent shall not be unreasonably withheld or delayed. Any attempted assignment, transfer, subletting or encumbrance shall be void and shall constitute a breach of this Agreement and cause for termination of this Agreement. Regardless of CITY's consent, no subletting or assignment shall release CONSULTANT of CONSULTANT's obligation to perform all other obligations to be performed by CONSULTANT hereunder for the term of this Agreement. 5.6. Indemnification and Hold Harmless. CONSULTANT shall protect, defend, indemnify and hold harmless CITY and its elected and appointed officials, boards, commissions, officers and employees from any and all claims, losses, demands, suits, administrative actions, penalties, liabilities and expenses, including reasonable attorney fees, damage to property or injuries to or death of any person or persons or damages of any nature including, but not limited to, all civil claims or workers' compensation claims to the extent directly arising from or in CONSULTANT's negligent or wrongful acts or omissions in connection with the performance under this Agreement, except to the extent caused by an indemnified party's negligent or wrongful acts or omissions. n 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Notwithstanding anything contained herein to the contrary, in no event should CONSULTANT be liable for any damages not directly or proximately caused by CONSULTANT's negligent or wrongful acts or omissions in connection with the Services or this Agreement for any indirect, special, punitive, consequential or incidental damages. 5.7. Independent Contractor. CONSULTANT, at all times while performing under this Agreement, is and shall be acting at all times as an independent contractor and not as an agent or employee of CITY. CONSULTANT shall secure, at his expense, and be responsible for any and all payment of wages, benefits and taxes including, but not limited to, Income Tax, Social Security, State Disability Insurance Compensation, Unemployment Compensation, and other payroll deductions for CONSULTANT and its officers, agents, and employees, and all business licenses, if any are required, in connection with the Services to be performed hereunder. Neither CONSULTANT nor its officers, agents and employees shall be entitled to receive any benefits which employees of CITY are entitled to receive and shall not be entitled to workers' compensation insurance, unemployment compensation, medical insurance, life insurance, paid vacations, paid holidays, pension, profit sharing or social security on account of CONSULTANT and its officers', agents' and employees' work for the CITY. This Agreement does not create the relationship of agent, servant, employee partnership or joint venture between the CITY and CONSULTANT. 5.8. Conflict of Interest Disclosure. CONSULTANT or its employee may be subject to the provisions of the California Political Reform Act of 1974 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 (the "Act"), which (1) requires such persons to disclose financial interests that may be materially affected by the work performed under this Agreement, and (2) prohibits such persons from making or participating in making decisions that will have a foreseeable financial affect on such interest. CONSULTANT shall conform to all requirements of the Act. Failure to do so constitutes a material breach and is grounds for termination of the Agreement by CITY. 5.9. Responsibility for Errors. CONSULTANT shall be responsible for its work and results under this Agreement. CONSULTANT, when requested, shall furnish clarification and/or explanation as may be required by the CITY's representative, regarding any services rendered under this Agreement at no additional cost to CITY. In the event that an error or omission attributable to CONSULTANT occurs, then CONSULTANT shall, at no cost to CITY, provide all other CONSULTANT professional services necessary to rectify and correct the matter to the sole satisfaction of CITY and to participate in any meeting required with regard to the correction. CONSULTANT will assume the information supplied by the CITY, (or on its behalf by third parties) is accurate and complete. CONSULTANT'S responsibilities (and associated compensation) do not include independent verification of required information. Problems with information quality and/or delays in providing such information may result in a delay in the performance of the Services or an increase in fees. " 2 3 4 5 6 7 8 9 10 II 12 13 14 15 16 17 18 19 20 21 22 23 24 25 5.10. Prohibited Employment. CONSULTANT shall not employ any current employee of CITY to perform the work under this Agreement while this Agreement is in effect. 5.11. Costs. Each party shall bear its own costs and fees incurred in the preparation and negotiation of this Agreement and in the performance of its obligations hereunder except as expressly provided herein. 5.12. No Third Party Beneficiary Rights. This Agreement is entered into for the sole benefit of CITY and CONSULTANT and no other parties are intended to be direct or incidental beneficiaries of this Agreement and no third party shall have any right in, under or to this Agreement. 5.13. Headings. Paragraphs and subparagraph headings contained III this Agreement are included solely for convenience and are not intended to modify, explain or to be a full or accurate description of the content thereof and shall not in any way affect the meaning or interpretation of this Agreement. 5.14. Amendments. Only a writing executed by all of the parties hereto or their respective successors and assigns may amend this Agreement. 5.15. Waiver. The delay or failure of either party at any time to reqUire performance or compliance by the other of any of its obligations or agreements shall in no way be deemed a waiver of those rights to require such performance or compliance. No waiver of any provision of this Agreement shall be effective unless in writing and signed by a duly authorized representative of the party against whom enforcement of a waiver is sought. The waiver of any right or remedy with respect to any occurrence or event shall not be deemed a waiver of any right or remedy " I 2 3 4 5 6 7 8 9 10 II 12 13 14 15 16 17 18 19 20 21 22 23 24 25 with respect to any other occurrence or event, nor shall any waiver constitute a continuing waiver. 5.16. Severability. If any provision of this Agreement is determined by a court of competent jurisdiction to be invalid or unenforceable for any reason, such determination shall not affect the validity or enforceability of the remaining terms and provisions hereof or of the offending provision in any other circumstance, and the remaining provisions of this Agreement shall remain in full force and effect. 5.17. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original. All counterparts shall be construed together and shall constitute one agreement. 5.18. Corporate Authority. The persons executing this Agreement on behalf of the parties hereto warrant that they are duly authorized to execute this Agreement on behalf of said parties and that by doing so, the parties hereto are formally bound to the provisions ofthis Agreement. 5.19. Disputes. Before commencing any action or proceeding with respect to any dispute between the parties arising out of or relating to any Services that are the subject of this Agreement, the parties shall first attempt to settle the dispute through consultation and negotiation in good faith and in a spirit of mutual cooperation. If the dispute is not resolved within five (5) business days, either party may elect to escalate the resolution of such dispute by submitting the dispute to senior personnel from each party who will promptly meet and confer in an effort to resolve the dispute. In particular, each party will identify such senior person by notice to the other Party, and each Party may change its senior person at any time n 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 1/1/ 21 1/1/ 22 23 1/1/ 24 1/1/ 25 /1// thereafter by notice. Any mutually agreed upon written decisions of the senior personnel will be final and binding on both parties, if approved by the Mayor and Common Council of the City of San Bernardino. In the event the senior executives are unable to resolve any dispute within thirty (30) days after submission to them, either party may then refer such dispute to mediation by a mutually acceptable mediator to be chosen by both parties within forty-five (45) days after written notice by either party demanding mediation. Neither party may unreasonably withhold, delay or condition consent to the selection of a mediator. All communications and discussions in furtherance of this paragraph shall be treated as confidential settlement negotiations that are not subject to disclosure to any third party. The costs of the mediator shall be shared equally, but each party shall pay its own attorney's fees. Any dispute that is not resolved within six (6) months of the date of the initial demand for mediation by one of the parties may then be submitted to a court of competent jurisdiction in accordance with the provisions of Section 5.4. Nothing in this Section 5.19 will prevent either party from resorting to judicial proceedings at any time if interim equitable relief from a court is necessary to prevent serious and irreparable injury or damage to that party or to others. 3 ATTEST: 4 5 6 Rachel Clark City Clerk 7 8 9 10 Approved as to form: 11 JAMES F. PENMAN 12 City Attorney 13 14 By: 15 16 17 18 19 20 21 22 23 24 25 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be 2 executed by and through their respective authorized officers, as of the date first above written. CITY OF SAN BERNARDINO Municipal Corporation and Charter City Charles McNeely City Manager CONSULTANT: By: Richard L. Hill, Principal SERVICES AGREEMENT 2 THIS AGREEMENT is made and entered into as of this 1 sl day of July, 2010 3 ("Effective Date"), by and between the CITY OF SAN BERNARDlNO, a charter city ("City" or 4 "Client"), and MERCER HEALTH & BENEFITS LLC, a Delaware limited liability company 5 ("CONSULTANT" or "Mercer"). 6 WIT N E SSE T H: 7 WHEREAS, CITY proposes to have CONSULTANT perform the services described 8 herein below; and 9 WHEREAS, CONSULTANT represents that it has that degree of specialized expertise 10 contemplated within California Government Code, Section 37103, and holds all necessary 11 licenses to practice and perform the services herein contemplated; and 12 WHEREAS, CITY and CONSULTANT desire to contract for professional services as 13 described in the Scope of Services, attached hereto as Exhibit "A"; and 14 WHEREAS, no official or employee of CITY has a financial interest, within the 15 provisions of California Government Code, Sections 1090-1092, in the subject matter of this 16 Agreement. 17 NOW, THEREFORE, for and in consideration of the mutual covenants and conditions 18 contained herein, the parties hereby agree as follows: 19 1.0. SERVICES PROVIDED BY CONSULTANT 20 1.1. Scope of Services. For the remuneration stipulated, CONSULTANT 21 shall provide the professional services described in the Scope of Services 22 attached hereto as Exhibit "A" and incorporated herein by this reference 23 24 25 ("Services"). If a conflict arises between the Scope of Services docwnent and this Professional Services Agreement (hereinafter" Agreement"), the terms of the Scope of Services shall govern. 2 3 4 5 6 7 8 9 10 11 12 1.2. Professional Practices. All Services to be provided by CONSULTANT pursuant to this Agreement shall be provided by skilled personnel and in a manner consistent with the standards of care, diligence and skill ordinarily exercised by professional consultants in similar fields and circumstances in accordance with sound professional practices. CONSULTANT also warrants that it is familiar with all laws that may affect its performance of this Agreement and shall advise CITY of any changes in any laws that may affect CONSULTANT's performance of this Agreement if the CONSULTANT has actual knowledge of such changes. 1.3. Warranty. CONSULTANT warrants that it shall perform the Services required by this Agreement in compliance with all applicable Federal and California employment laws including, but not limited to, those laws related to minimum hours and wages; occupational health and safety; fair employment and employment practices; workers' compensation insurance and safety in employment; and all other Federal, State and local laws and ordinances applicable to the services required under this Agreement. CONSULTANT shall indemnify and hold harmless CITY from and against all claims, demands, payments, suits, actions, proceedings, and judgments of every nature and description including reasonable attorneys' fees and costs, or recovered against CITY to the extent arising from CONSULTANT's violation of any such applicable law. 1.4. Non-discrimination. In performing this Agreement, CONSULTANT shall not engage in, nor permit its officers, employees or agents to engage in, discrimination in employment of persons because of their race, 13 14 15 16 17 18 19 20 21 22 23 24 25 2 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 religion, color, national ongm, ancestry, age, mental or physical disability, medical condition, marital status, sexual gender or sexual orientation, except as permitted pursuant to Section 12940 of the Government Code. Violation of this provision may result in the imposition of penalties referred to in Labor Code, Section 1735. 1.5 Non-Exclusive Agreement. CONSULTANT acknowledges that CITY may enter into agreements with other consultants for services similar to the Services that are subject to this Agreement or may have its own employees perform services similar to those Services contemplated by this Agreement. 1.6. Delegation and Assignment. This is a personal service contract, and the duties set forth herein shall not be delegated or assigned to any person or entity without the prior written consent of CITY, which consent shall not be unreasonably withheld or delayed. CONSULTANT may engage a subcontractor(s) as permitted by law and may employ other personnel to perform services contemplated by this Agreement at CONSULTANT's sole cost and expense. 1.7 Conflicts of Interest. During the term of this Agreement, CONSULTANT shall at all times maintain a duty of loyalty as to the CITY and shall not accept payment from or employment with any person or entity which will constitute a conflict of interest with the CITY. 1.8 CITY Business Certificate. CONSULTANT shall obtain and maintain during the term of this Agreement, a valid CITY Business Registration Certificate pursuant to Title 5 of the City of San Bernardino Municipal Code and any and all other licenses, permits, qualifications, insurance 1 2 and approvals of whatever nature that are legally required of CONSULTANT to practice its profession, skill or business. 3 2.0. COMPENSATION AND BILLING 4 2.1. Compensation. Except as provided herein, CONSULTANT 5 compensation shall be as set forth in Exhibit A. 6 2.2. Additional Services. CONSULTANT shall not receive compensation for 7 any services provided outside the scope of services specified in the 8 Exhibit A unless the CITY, prior to CONSULTANT performing the 9 additional services, approves such additional services in writing. It is 10 specifically understood that oral requests and/or approvals of such 11 additional services or additional compensation shall be barred and are 12 unenforceable. 13 2.3. Method of Billing. CONSULTANT may submit invoices to CITY for 14 approval. Said invoice shall be based on the total of all CONSULTANT's 15 services which have been performed in accordance with the terms of this 16 Agreement during the period covered by such invoice. CITY shall pay 17 CONSULTANT's invoice within thirty (30) days from the date CITY 18 19 20 21 22 23 24 25 receives said invoice. The invoice shall describe in detail, the services performed and the associated time for completion. Any additional services approved and performed pursuant to this Agreement shall be designated as "Additional Services" and shall identify the number of the authorized change order, where applicable, on all invoices. 2.4. Performance Standard Guarantees. The CONSULTANT shall reduce the total cost of service related fees to the project, up to a maximum of 10%, if their services are not satisfactory to the CITY as outlined in the chart (Exhibit "B").] 4 2.5 2 3 4 5 6 7 8 9 Records and Audits. Records of CONSULTANT's Services directly relating to this Agreement shall be maintained in accordance with generally recognized accounting principles and shall be made available to CITY for inspection and/or audit at mutually convenient times for a period of three (3) years from the Effective Date. Any such inspection shall be conducted at the CITY's expense, during normal business hours and upon reasonable prior written notice to CONSULTANT. Such audit shall also be subject to the execution of a confidentiality agreement reasonably satisfactory to CONSULTANT. 10 3.0. TERM AND NOTIFICATION. 11 3.1. Term. This Agreement shall commence on the Effective Date and 12 continue until the third anniversary of the Effective Date unless the 13 Agreement is previously terminated as provided for herein. 14 3.2 Termination. CITY or CONSULTANT may terminate the Services 15 provided under Section 1.1 of this Agreement upon thirty (30) days 16 written notice to the other party. In the event of termination, 17 CONSULTANT shall be paid the reasonable value of Services rendered 18 to the date of termination. 19 3.3 Documents. In the event of an early termination of this Agreement, all 20 documents prepared by CONSULTANT in its performance of this 21 Agreement shall be delivered to the CITY within ten (10) days of 22 delivery of termination notice to CONSULTANT, at no cost to CITY. 23 Any use of uncompleted documents without specific written 24 authorization from CONSULTANT shall be at CITY's sole risk and 25 without liability or legal expense to CONSULTANT. 5 4.0. INSURANCE 2 4.1. Scope and Limits of Insurance. CONSULTANT shall obtain and 3 maintain during the term of this Agreement all of the following insurance 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 coverage: (a) Commercial general liability, including premises-operations, products/completed operations, broad form property damage, blanket contractual liability, independent contractors, personal injury with a policy limit of One Million Dollars ($1,000,000.00) per occurrence and Five Million Dollars ($5,000,000.00) general aggregate. (b) Automobile liability for owned vehicles, hired, and non-owned vehicles, with a policy limit of One Million Dollars ($1,000,000.00), combined single limits, per occurrence and aggregate. (c) Workers' compensation msurance as required by the State of California. 4.2. Endorsements. The commercial general liability insurance policy shall contain or be endorsed, using general policy endorsements, to contain the following provisions: (a) Additional insured: "The City of San Bernardino and its elected and appointed boards, officers, and employees are additional insured with respect to their vicarious liability arising out of CONSULTANT'S performance of the Services hereunder." (b) Other insurance: "Any other insurance maintained by the City of San Bernardino shall be excess and not contributing with the ~ 2 3 4 5 6 7 8 9 10 11 12 13 14 insurance provided by this policy with respect to claims arising solely and directly from CONSULTANT's provision of the Services. " 4.3. Certificates of Insurance. CONSULTANT shall provide to CITY certificates of insurance showing the insurance coverage and required endorsements described above, prior to performing any services under this Agreement. 4.4. Non-limiting. Nothing in this Section shall be construed as limiting in any way, the indemnification provision contained in this Agreement, or the extent to which CONSULTANT may be held responsible for payments of damages to persons or property. 4.5 Notice of Cancellation. CONSULTANT shall provide the CITY thirty (30) days prior written notice of cancellation of or a material change in any ofthe required coverage. 15 5.0. GENERAL PROVISIONS 16 5.1. Entire Agreement. This Agreement together with the Appendices and/or 17 Exhibits attached hereby constitutes the entire Agreement between the 18 parties with respect to any matter referenced herein and supersedes any 19 and all other prior writings and oral negotiations. This Agreement may 20 be modified only in writing, and signed by the parties in interest at the 21 time of such modification. The terms of this Agreement shall prevail 22 over any inconsistent provision in any other contract document 23 appurtenant hereto. 24 5.2. Notices. Any notices, documents, correspondence or other 25 communications concerning this Agreement or the work hereunder may 7 2 3 4 5 6 7 8 9 10 II 12 13 14 15 16 17 18 19 20 21 22 23 24 25 be provided by personal delivery, facsimile or mail and shall be addressed as set forth below. Such communication shall be deemed served or delivered: a) at the time of delivery if such communication is sent by personal delivery; b) at the time of transmission if such communication is sent by facsimile; and c) 48 hours after deposit in the U.S. Mail as reflected by the official U.S. postmark if such communication is sent through regular United States mail. IF TO CITY: CITY MANAGER City of San Bernardino 300 North "D" Street San Bernardino, CA 92418 Telephone: (909) 384-5122 Fax: (909) 384-5138 5.3. Attorneys' Fees: In the event that litigation is brought by any party in connection with this Agreement, the prevailing party shall be entitled to recover from the opposing party all costs and expenses, including reasonable attorney' fees, incurred by the prevailing party in the exercise of any of its rights or remedies hereunder or the enforcement of any of the terms, conditions or provisions hereof. The costs, salary and expenses of the City Attorney and member of his office in enforcing this Agreement on behalf of the City shall be considered as "attorney's fees" for the purposes of this paragraph. 5.4. Governing Law. This Agreement shall be governed by and construed under the laws of the State of California without giving effect to that IF TO CONSULTANT: Richard Hill, Principal Mercer Health & Benefits 4695 MacArthur Court, Suite 600 Newport Beach, CA_92660 Telephone (949) 222-1300 R 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 body of laws pertaining to conflict of laws. In the event of any legal action to enforce this Agreement, the parties hereto agree that the sole and exclusive venue shall be a court of competent jurisdiction located in San Bernardino County, California. 5.5. Assignment. CONSULTANT shall not voluntarily or by operation oflaw assign, transfer, sublet or encumber all or any part of CONSULTANT's interest in this Agreement to an unrelated third party without CITY's prior written consent which consent shall not be unreasonably withheld or delayed. Any attempted assignment, transfer, subletting or encumbrance shall be void and shall constitute a breach of this Agreement and cause for termination of this Agreement. Regardless of CITY's consent, no subletting or assignment shall release CONSULTANT of CONSULTANT's obligation to perform all other obligations to be performed by CONSULTANT hereunder for the term ofthis Agreement. 5.6. Indemnification and Hold Harmless. CONSULTANT shall protect, defend, indenmifY and hold harmless CITY and its elected and appointed officials, boards, commissions, officers and employees from any and all claims, losses, demands, suits, administrative actions, penalties, liabilities and expenses, including reasonable attorney fees, damage to property or injuries to or death of any person or persons or damages of any nature including, but not limited to, all civil claims or workers' compensation claims to the extent directly arising from or in CONSULTANT's negligent or wrongful acts or omissions in connection with the performance under this Agreement, except to the extent caused by an indenmified party's negligent or wrongful acts or omissions. 9 Notwithstanding anything contained herein to the contrary, in no event should CONSULTANT be liable for any damages not directly or proximately caused by CONSULTANT's negligent or wrongful acts or omissions in connection with the Services or this Agreement for any indirect, special, punitive, consequential or incidental damages. 5.7. Independent Contractor. CONSULTANT, at all times while performing under this Agreement, is and shall be acting at all times as an independent contractor and not as an agent or employee of CITY. CONSULTANT shall secure, at his expense, and be responsible for any and all payment of wages, benefits and taxes including, but not limited to, Income Tax, Social Security, State Disability Insurance Compensation, Unemployment Compensation, and other payroll deductions for CONSULTANT and its officers, agents, and employees, and all business licenses, if any are required, in connection with the Services to be performed hereunder. Neither CONSULTANT nor its officers, agents and employees shall be entitled to receive any benefits which employees of CITY are entitled to receive and shall not be entitled to workers' compensation msurance, unemployment compensation, medical insurance, life insurance, paid vacations, paid holidays, pension, profit sharing or social security on account of CONSULTANT and its officers', agents' and employees' work for the CITY. This Agreement does not create the relationship of agent, servant, employee partnership or joint venture between the CITY and CONSULTANT. Conflict of Interest Disclosure. CONSULTANT or its employee may be subject to the provisions of the California Political Reform Act of 1974 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 5.8. 10 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 (the "Act"), which (1) requires such persons to disclose financial interests that may be materially affected by the work performed under this Agreement, and (2) prohibits such persons from making or participating in making decisions that will have a foreseeable financial affect on such interest. CONSULTANT shall conform to all requirements of the Act. Failure to do so constitutes a material breach and is grounds for termination of the Agreement by CITY. 5.9. Responsibility for Errors. CONSULTANT shall be responsible for its work and results under this Agreement. CONSULTANT, when requested, shall furnish clarification and/or explanation as may be required by the CITY's representative, regarding any services rendered under this Agreement at no additional cost to CITY. In the event that an error or omission attributable to CONSULTANT occurs, then CONSULTANT shall, at no cost to CITY, provide all other CONSULTANT professional services necessary to rectify and correct the matter to the sole satisfaction of CITY and to participate in any meeting required with regard to the correction. CONSULTANT will assume the information supplied by the CITY, (or on its behalf by third parties) is accurate and complete. CONSULTANT'S responsibilities (and associated compensation) do not include independent verification of required information. Problems with information quality and/or delays in providing such information may result in a delay in the performance of the Services or an increase in fees. 11 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 5.10. Prohibited Employment. CONSULTANT shall not employ any current employee of CITY to perform the work under this Agreement while this Agreement is in effect. 5.11. Costs. Each party shall bear its own costs and fees incurred in the preparation and negotiation of this Agreement and in the performance of its obligations hereunder except as expressly provided herein. 5.12. No Third Party Beneficiary Rights. This Agreement is entered into for the sole benefit of CITY and CONSULTANT and no other parties are intended to be direct or incidental beneficiaries of this Agreement and no third party shall have any right in, under or to this Agreement. 5.13. Headings. Paragraphs and subparagraph headings contained In this Agreement are included solely for convenience and are not intended to modify, explain or to be a full or accurate description of the content thereof and shall not in any way affect the meaning or interpretation of this Agreement. 5.14. Amendments. Only a writing executed by all of the parties hereto or their respective successors and assigns may amend this Agreement. 5.15. Waiver. The delay or failure of either party at any time to require performance or compliance by the other of any of its obligations or agreements shall in no way be deemed a waiver of those rights to require such performance or compliance. No waiver of any provision of this Agreement shall be effective unless in writing and signed by a duly authorized representative of the party against whom enforcement of a waiver is sought. The waiver of any right or remedy with respect to any occurrence or event shall not be deemed a waiver of any right or remedy 12 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 with respect to any other occurrence or event, nor shall any waiver constitute a continuing waiver. 5.16. Severability. If any provision of this Agreement is determined by a court of competent jurisdiction to be invalid or unenforceable for any reason, such determination shall not affect the validity or enforceability of the remaining terms and provisions hereof or of the offending provision in any other circumstance, and the remaining provisions of this Agreement shall remain in full force and effect. 5.17. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original. All counterparts shall be construed together and shall constitute one agreement. 5.18. Corporate Authority. The persons executing this Agreement on behalf of the parties hereto warrant that they are duly authorized to execute this Agreement on behalf of said parties and that by doing so, the parties hereto are formally bound to the provisions ofthis Agreement. 5.19. Disputes. Before commencing any action or proceeding with respect to any dispute between the parties arising out of or relating to any Services that are the subject of this Agreement, the parties shall first attempt to settle the dispute through consultation and negotiation in good faith and in a spirit of mutual cooperation. If the dispute is not resolved within five (5) business days, either party may elect to escalate the resolution of such dispute by submitting the dispute to senior personnel from each party who will promptly meet and confer in an effort to resolve the dispute. In particular, each party will identify such senior person by notice to the other Party, and each Party may change its senior person at any time 11 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 1/1/ 21 1/1/ 22 23 /1// 24 /1// 25 1/1/ thereafter by notice. Any mutually agreed upon written decisions of the senior personnel will be final and binding on both parties, if approved by the Mayor and Common Council of the City of San Bernardino. In the event the senior executives are unable to resolve any dispute within thirty (30) days after submission to them, either party may then refer such dispute to mediation by a mutually acceptable mediator to be chosen by both parties within forty-five (45) days after written notice by either party demanding mediation. Neither party may unreasonably withhold, delay or condition consent to the selection of a mediator. All communications and discussions in furtherance of this paragraph shall be treated as confidential settlement negotiations that are not subject to disclosure to any third party. The costs of the mediator shall be shared equally, but each party shall pay its own attorney's fees. Any dispute that is not resolved within six (6) months of the date of the initial demand for mediation by one of the parties may then be submitted to a court of competent jurisdiction in accordance with the provisions of Section 5.4. Nothing in this Section 5.19 will prevent either party from resorting to judicial proceedings at any time if interim equitable relief from a court is necessary to prevent serious and irreparable injury or damage to that party or to others. 14 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be 2 executed by and through their respective authorized officers, as of the date first above written. 3 ATTEST: 4 5 6 Rachel Clark City Clerk 7 8 9 10 Approved as to form: CITY OF SAN BERNARDINO Municipal Corporation and Charter City Charles McNeely City Manager CONSULTANT: By: Richard L. Hill, Principal 11 JAMES F. PENMAN City Attorney 12 13 p' /} / By: /yC L~ ~. ~ )(:L~~/ 14 15 16 17 18 19 20 21 22 23 24 25 1 S Exhibit A Health & Benefits Services Statement of Work ("SOW") Mercer is engaged as the Client's exclusive employee benefits insurance broker/consultant and shall perform the following services for the Client with respect to the lines of coverage listed below. The objective of this Statement of Work ("SOW") is to confirm the scope of our work and the compensation for this engagement. This SOW is subject to the terms and conditions contained in our Service Agreement to which it is attached. Mercer's ability to provide you the following services is conditioned upon Mercer's receipt of accurate and timely information related to you and the plans and products subject to our services. Mercer will not independently verify or authenticate information not originating from Mercer. Client shall be solely responsible for the accuracy and completeness of such information and other documentation furnished to Mercer. The Client understands that the failure to provide all necessary information to an insurer, employee benefit provider and third party vendor, whether intentional or by error, could result in the impairment or voiding of coverage or service. A. Core Broker I Consulting Services: Mercer will: . Conduct strategic planning sessions to review current performance of Client's current employee benefits coverage and establish future objectives and strategies to manage Client's employee benefit coverages to which this agreement applies. . Meet with the Client's key people designated by the Client's Human Resources Director, on at least an annual basis, to discuss strategy and open items. . Develop a mutually agreeable renewal action plan and timeline that meets the Client's stated objectives. Details provided in the renewal services plan developed by Mercer and the Client. . Keep the Client informed of significant changes and/or trends in the employee benefits marketplace. . Benchmark medical plan costs and employee contributions to industry, size and regional standards on an annual basis. . Analyze factors driving Client's plan costs if experience data is available. In connection with such analysis, Mercer will review utilization reports to determine possible causes of identified cost increases. Assist Client in managing risks and costs of its employee benefits coverages. . Establish comprehensive claims reports for identified coverages if available from carrier: Carrier medical/prescription drug detailing paid claims (and reimbursements 10 :Vre[c('[ St'n-lcc Agreement SDIT BcrnardllloOflOS 10.do(' if applicable), premium/funding and enrollment summaries. Mercer will review these reports with Client periodically and will identify and discuss trends and potential problems. . Provide cost projections and funding analysis (review of funding methodology with emphasis on employer costs and the tier structure of the contribution.) . When marketing your plans, prepare an analysis comparing current costs, plan designs, administration costs, network discounts and network accessibility. . With respect to the renewal process of Client's employee benefit program, Mercer will conduct an annual review during the renewal process to include negotiations, on Client's behalf, with current vendors/carriers, as per Client's request. . Upon the request of Client, Mercer will assist Client in the preparation of a RFP for purposes of obtaining competitive quotes from the marketplace. Mercer will be the primary point of contact during the bidding process. . Upon request of Client, evaluate and assist in the management of voluntary benefit products offered to Client's employees. . Assist Client in the implementation of the benefit program by dealing with vendor/carriers and performing contract and SPD review for purposes of determining conformity to agreed-upon plan provisions and costs. . Advise Client with respect to available technology platforms to support delivery and administration of its employee benefit plans. Support implementation and maintenance of the Mercer Administration suite of services purchased. . Assist Client in the development of paper and/or web-based communication strategies. . Identify and negotiate on the Client's behalf with insurers and other benefit program providers and keep the Client informed of significant developments. Mercer shall be authorized for purposes of this Agreement to represent and assist the Client in all discussions and transactions with all insurers/providers, provided that Mercer shall not place any insurance or vendor programs on behalf of the Client unless so authorized by the Client. . Assist with documentation and other steps to obtain commitments for and implement insurance policies and other services selected by the Client regarding its employee benefits program upon the Client's instructions, it being understood that Mercer will not independently verify or authenticate information not originating from Mercer necessary to prepare proposals or underwriting submissions and other documents relied upon by insurers/providers, and the Client shall be solely responsible for the accuracy and completeness of such information and other documents furnished to Mercer and/or insurers/providers and shall sign any 11 '\le[cer SerVIce S3nBcmard ino060S 1 0.<1<;(' application for coverage. The Client understands that the failure to provide all necessary information to an insurer, employee benefit provider or third party vendor whether intentional or by error, could result in the impairment or voiding of coverage or service. . Provide Client access to the national insurance marketplace and related services marketplace and use Mercer's commercially reasonable efforts to place insurance policies and other services selected by the Client regarding its employee benefit program on behalf of the Client, if so instructed by the Client. . Act as a liaison between the Client and insurers/ providers for the lines of coverage and services that Mercer has placed or obtained on behalf of Client or for which Mercer is named as the broker of record. . Provide the Client with detailed invoices, except in the case of direct billing by insurers or employee benefits providers. . Mercer may utilize the services of other intermediaries to assist in the marketing of the Client's program (including brokers in the London and other markets), when in Mercer's professional judgment those services are necessary or appropriate. Such intermediaries may be affiliates of Mercer or not related to Mercer. The compensation of such intermediaries is not included in Mercer's compensation under this Agreement and will be paid by insurers/providers out of paid premiums. . Follow up with insurance carriers/providers for timely issuance of policies and endorsements/contracts. . Follow up with insurance carriers/providers with respect to the payment or return premiums. . Review policies, contracts and endorsements for accuracy and conformity to specifications provided by Client and the related negotiated coverages. . Assist the Client in connection with issues relating to interpretation of insurance policies/contracts placed by Mercer. . Provide information/coverage summaries for all new coverages and updates on changes to existing coverages. . Following any such placement, deliver confirmation of coverages as promptly as practicable . Provide Client access to Mercer Select - HB KnowHow self service site. Also, provide access to topical Mercer publications, seminars, roundtables, executive forums, and webcasts. 12 '\:krcer S(;[vic:c Sa!) Bcmard!nnO(,OS10.d()l' . Other Services: o Mercer will provide annual creative services through its Benefits Publishinq Product. Communications Brochures development is included within the quoted fees. Printing fees may be billed separately or alternatively the Client may use its own printer for printing of the benefits brochures. o Mercer will provide its annual series of wellness materials, called the Healthv Habits Newsletter within the quoted fees. These newsletters will be provided in PDF format only, but may be printed by the Client at its own expense B. Employee Benefit Programs related to the Core Services: . Group Life . Group AD&D . Long Term Disability . Short Term Disability . Medical Plans . Prescription Drugs . Dental Plans . Vision Plan . Flexible Benefits and FSA Accounts C. Additional Terms: 1. Mercer does not act on behalf of any insurer or other service provider, is not bound to utilize any particular insurer or service provider, and does not have the authority to make binding commitments on behalf of any insurer or service provider. In addition, Mercer does not guarantee or make any representation or warranty that coverage or service can be placed on terms acceptable to Client. Mercer is not responsible for the solvency or ability to pay claims of any insurance carrier or for the solvency or ability of any service provider to provide service. Insurance carriers or service providers with which Client's other risk or insurance coverage or other business is placed will be deemed acceptable to Client, in the absence of contrary instructions from Client. 2. Client understands that the failure to provide, or cause to provide, complete, accurate, up- to-date, and timely documentation and information to Mercer, an insurer, or other service provider, whether intentional or by error, could result in impairment or voiding of coverage or 13 \-'I(;[('er Service San BcrnJrdmo060S1 OJloc: service. Client agrees to review all policies, endorsements and program agreements delivered to Client by Mercer and will advise Mercer of anything which Client believe is not in accordance with the negotiated coverage and terms within thirty (30) days following receipt. 3. Client expressly acknowledge that, with respect to the provision of the Services, Mercer is not, nor are any of Mercer's affiliates or subcontractors, an "administrator" within the meaning under applicable law, including the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), nor, with respect to the provision of the Services, is Mercer or any of Mercer's affiliates or subcontractors a "fiduciary" within the meaning under applicable law or ERISA, unless provided otherwise herein or required by applicable law. 4. Tille V of the Gr;amm-Leach-Bliley Act and related state laws and regulations establish limitations on the use and distribution of non-public information collected by financial institutions from their customers and consumers. Mercer's insurance-related work qualifies it as a financial institution under this Act. Mercer's Privacy Policy Notice is available at www.mercer.com/transparency. At this web address Client will also find information regarding Marsh & McLennan Companies, Inc. and its subsidiaries' equity interests in certain insurers and contractual arrangements with certain insurers and wholesale brokers. 5. Client will inform Mercer at the commencement of its work under each SOW (and thereafter in the event of any change) as to whether or not Client or any of Client's affiliates are subject to any restrictions or obligations directly relevant to the Services as a result of or in connection with having received any federal financial assistance in connection with any federal law or program, including, but not limited to, the American Recovery and Reinvestment Act of 2009 and the Emergency Economic Stabilization Act of 2008, including the Troubled Assets Relief Program. In the event that Client or Client's affiliates are subject to such restrictions or obligations, Client will also promptly describe such restrictions and obligations to Mercer in writing in reasonable detail and make an expert (including internal or external counsel) available to Mercer for additional clarification that Mercer reasonably request regarding the analysis or interpretation of any such restrictions or obligations. Client agrees that Mercer will be entitled to rely on, and have no liability for, the accuracy and completeness of the information, analysis or interpretation that is provided to Mercer in connection with the foregoing. 6. Limitation of Liability. The aggregate liability of CONSULTANT, its affiliates and any officer, director or employee of CONSULTANT and its affiliates ("CONSULTANT Parties") to the CITY, its elected and appointed officials, boards, commissions, officers, directors or employees and any third party (including any benefit plan, its fiduciaries or any plan sponsor) for any and all Losses arising out of or relating to this Agreement shall not exceed five times the compensation for the Services. CONTRACTOR shall have no liability for the acts or omissions of any third party (other than its subcontractors and affiliates). In no event shall either party or its affiliates be liable in connection with this Agreement or the Services for any loss of profit or incidental, consequential, indirect, or similar damages. The provisions of this Section shall apply to the fullest extent permitted by law. Nothing in 14 Mcr(c]^ ServIce Ag,fccrnem San lkrnardilJo060S 1 O.do( this Section limiting the liability of a party shall apply to any liability for property damage or personal injury or that has been finally determined by a court to be a breach of the confidentiality provisions contained herein or have been caused by the fraud of such party. For purposes of this Agreement "Loss" means damages, claims, liabilities, losses, awards, judgments, penalties, interest, costs and expenses, including reasonable attorneys' fees, whether arising in tort, contract or otherwise. For the avoidance of doubt, multiple claims arising out of or based upon the same act, error or omission, or series of continuous, interrelated or repeated acts, errors or omissions shall be considered a single Loss. D. Period of time over which work will be performed: July 1, 2010 through June 30,2013. The contract may be extended for up to two (2) additional one (1) year terms at the City's discretion. E. Compensation and Fees: Mercer will deliver the services as outlined in Exhibit A with respect to the stated coverages (the "Fee Coverages") for annual broker / consulting fees in accordance with the schedule below, .payable and to be invoiced as follows: Monthly Installments. 7/1/2010 - 6/30/2011 $114,301 7/1/2011 - 6/30/2012 $117,417 7/1/2012 - 6/30/2013 $120,536 Mercer will provide a suite of Administrative Services which are governed by a separate agreement through its affiliate, Mercer Administration, and subcontractor(s). These services are provided for a separate annual administration fee in accordance with the schedule below and invoiced monthly as more fully described in that Agreement. 7/1/2010 - 6/30/2011 $160,699 7/1/2011 - 6/30/2012 $165,083 7/1/2012 - 6/30/2013 $169,464 Mercer will invoice these fees monthly on a consolidated billing to the City. Total annual fees are: 7/1/2010 - 6/30/2011 $275,000 7/1/2011- 6/30/2012 $282,500 7/1/2012 - 6/30/2013 $290,000 7/1/2013 - 6/30/2014 Fees to increase no more than 3% over prior year 15 Mercer SerVIce Agn:emcnt San Bernar,llllo060S 1 O.do\.' 7/1/2014 - 6/30/2015 Mercer will continue to instruct insurance carriers that all coverages be provided "net" of commissions as directed by the City of San Bernardino. Such commissions do not include, and Mercer shall be entitled to receive and retain, as to all lines of coverage, wholesale commissions with respect to placements for the Client. Should commissions be received, Mercer will disclose to the Client any commissions or wholesale commissions collected by Mercer. Method of Billinq. Consultant may submit invoices to the City for approval. Said invoice shall be based on the total of all consultants' services, both consulting and administrative, which have been performed in accordance with the terms of this Agreement during the period covered by such invoice. City shall pay Consultant's invoice within thirty (30) days from the date City receives said invoice. The invoice shall describe the services performed and the associated time for completion. Any additional services approved and performed pursuant to this Agreement shall be designated as "Additional Services" and shall identify the number of the authorized change order, where applicable, on all invoices. 16 Mercer Service Agreement SanFkm~lr\i]no060S] O.d,)( CITY OF SAN BERNARDINO (CITY) PERFORMANCE STANDARD GUARANTEES Health and Welfare Plans and Programs MERCER HEALTH & BENEFITS LLC (MERCER) EXHIBIT B Performance Standard Performance Standard Methodology Financial Description Amonnt at Risk Timely response to verbal City to receive verbal response within two (2) City 2% of the cost of mqumes business days of verbal inquiry the service related to each inquiry. Penalty to be assessed at the end of each quarter. Timely response to written City to receive written response within 2 City 2% of the cost of inquiries business days of receipt of inquiry the service related to each inquiry. Penalty to be assessed at the end of each quarter. Projects completed by Mercer shall reduce the total cost of the service 2% of the cost of predetermined deadline * related to the specific project or project phase (for the project or multiple-phase projects) by two percent (2%) for each project phase (for business day that the service is delinquent with a multiple-phase maximum penalty not to exceed ten percent (10%) of projects) for each the project cost City business day that the service If the service related to the project or project phase is related to a delayed by the City, the number of days the project or proj ect or proj ect project phase is delayed will be added to the original phase is delayed. due date) Penalty to be assessed at the end of each proiect. Account management An account management satisfaction score of '3' or 2% of the total satisfaction better on a "1-5" scoring system based on a survey cost of services tool mutually agreed upon by the City and consultant. for the quarter The survev tool will be completed on a quarterlv basis beinl! rated. 17 \'l(TC('[ S<:rvicc Sell) LkrIlClrdilHl()(lOS10Jl0('