HomeMy WebLinkAbout05.G- Human Resources i
RESOLUTION (ID#2882) DOC ID: 2882
CITY OF SAN BERNARDINO—REQUEST FOR COUNCIL ACTION
Agreement/Contract
From: Helen Tran M/CC Meeting Date: 01/21/2014
Prepared by: Linda Wynn, (909) 384-5161
Dept: Human Resources Ward(s): All
Subject:
Resolution of the Mayor and Common Council of the City of San Bernardino Authorizing the
Execution of a Consultant Services Agreement with AON Risk Insurance Services West, Inc.,
and the City of San Bernardino for Property Insurance Broker Services. (#2882)
Current Business Registration Certificate: Yes
Financial Impact:
Total Annual Amount Not to Exceed$50,000,plus 20% commission on premium savings.
Account Number: 629-110-0056-5161
Motion: Adopt the Resolution.
Synopsis of Previous Council Action:
None.
Background:
The City's current agreement for property insurance brokerage services will expire on January
30, 2014.
The City's property insurance broker is responsible for the marketing of City property for
insurance coverage, commonly referred to as Property/All Risk insurance. Property/All Risk
insurance provides coverage for accidental damage to buildings, business personal property and
personal property of others in which the insured has financial interest. This insurance also covers
loss of business income arising out of such accidental damage. The Equipment Breakdown
extension includes explosion of pressure vessels, electrical arcing and mechanical breakdown.
The City's membership with BICEP (Big Independent Cities Excess Pool) has provided an
avenue to locate an insurance broker at a reduced fee. AON Risk Insurance Services West, Inc.,
(AON) will be a benefit to the City by restructuring insurance layers and utilizing domestic-only
insurance carriers. This strategy will provide complete insurance wholesale commission
transparency to the City. By marketing the property insurance in this manner it is estimated to
generate a cost saving of 10%-17.5% from the current property insurance premium of $1.4
million.
Staff s research has identified significant premium reduction opportunities from previous year's
insurance policy premiums. Based upon Staffs findings this agreement has a 20% cost savings
component to share with AON. This methodology would provide AON a direct-benefit incentive
Updated: 1/13/2014 by Linda Sutherland PaCket�Pg.86•
5.G
2882
to have a strong, vested interest in reducing the City's property insurance premiums and
maintaining the same level of insurance coverage.
This is a strong win-win for the City. Automatically, the City would save $30,000 from
insurance broker service fees; it is estimated that the savings could be higher, potentially up to
$200,000.
City Attorney Review:
Supporting Documents:
reso 2882 (PDF)
agrmt 2882 (PDF)
Updated: 1/13/2014 by Linda Sutherland
5.G.a
RESOLUTION NO.
1
2 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN
BERNARDINO AUTHORIZING THE EXECUTION OF A CONSULTANT SERVICES
3 AGREEMENT BETWEEN AON RISK INSURANCE SERVICES WEST, INC., AND
THE CITY OF SAN BERNARDINO.
4
5 NOW THEREFORE, BE IT RESOLVED BY THE MAYOR AND COMMON
6 COUNCIL OF THE CITY OF SAN BERNARDINO AS FOLLOWS:
z
7 SECTION 1. The City Manager is hereby authorized and directed to execute °a
N
CD
8 this Consultant Service Agreement between AON Risk Insurance Services West,
Inc., and the City of San Bernardino for property insurance broker services,
10 0
attached hereto as Exhibit "A." m
11
12 SECTION 2. The Director of Administrative Services is hereby authorized to L
3
N
13 issue a Purchase Order to AON Risk Insurance Services West, Inc., for property
14
insurance broker services for a total annual amount not to exceed $50,000.00, plus 0
a
15 20% commission on premium savings, with three one-year extensions. N
co
co
16 N
SECTION 3. The authorization granted hereunder shall expire and be void N
17 co
18 and of no further effect if the Agreement is not executed by both parties and returned 0
1g to the Office of the City Clerk within sixty (60) days following the effective date of this
E
20 Resolution.
U
3 w
21
22
l 23
24
25 lIl
26 Ill
27
28
Packet Pg. 88
5.G.a
1 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN
2 BERNARDINO AUTHORIZING THE EXECUTION OF A CONSULTANT SERVICES
AGREEMENT BETWEEN AON RISK INSURANCE SERVICES WEST, INC., AND
3 THE CITY OF SAN BERNARDINO.
4 1 HEREBY CERTIFY that the foregoing Resolution was duly adopted by the
5 Mayor and Common Council of the City of San Bernardino at a
6 meeting thereof, held on the day of
z
7 °a
2014, by the following vote, to wit:
8 U
9 Council Members: AYES NAYS ABSTAIN ABSENT
10
MARQUEZ L
m
11 JENKINS
12
VALDIVIA
13
14 SHORETT Q
0
15 VACANT a
N
co
16 JOHNSON N
17 N
MULVIHILL N
18
L
19
20 Georgeann Hanna, City Clerk s
21 The foregoing Resolution is hereby approved this day of a
2014.
22
23
24 Patrick J. Morris, Mayor
City of San Bernardino
25
26 Approved as to form:
Gary D. Saenz
27 City Attorney
28 By, �
Packet Pg. 89
I
5.G.b
CONSULTANT SERVICES AGREEMENT
{ BETWEEN CITY OF SAN BERNARDINO AND
AON RISK INSURANCE SERVICES WEST, INC.
This Consultant Services Agreement (hereinafter referred to as "Agreement') is made
and entered into this 22nd day of January 2014 (hereinafter referred to as "Effective
Date") by and between CITY of San Bernardino, a Municipal Corporation and Charter
City, (hereinafter referred to as "CITY') and Aon Risk Insurance Services West, Inc.,
(hereinafter referred to as "CONSULTANT") (sometimes jointly referred to herein as the
"PARTIES").
WITNESSETH: z
0
� a
A. WHEREAS, CITY is in need of a consultant to provide property insurance N
broker services, and
B. WHEREAS, it has been determined by the Human Resources Division U)
Manager that CONSULTANT represents that it has that degree of specialized expertise o
contemplated within California Government Code, Section 37103, and holds all m
necessary licenses to practice and perform the services herein contemplated; and
L
C. WHEREAS, CONSULTANT is competent, experienced and able to N
perform said responsible services; and
D. WHEREAS, CONSULTANT will provide the most advantageous and 0-
responsible services;
N
NOW THEREFORE, in consideration of mutual covenants contained in this co
Agreement and the mutual benefits to be derived therefrom, PARTIES agree as follows: N
00
00
1. TERM.
E
L
This agreement shall be in full force and effect from the Effective Date through
January 30, 2015, with three one-year extensions.
E
2. CONSULTANT RESPONSIBILITIES:
Q
CONSULTANT is responsible for performing the work as identified in Exhibit A,
contained herein. CONSULTANT commits the necessary principal personnel to the
performance of such services for the duration of this Agreement.
3. CITY RESPONSIBILITIES
CITY shall provide, in a reasonable timely fashion, CONSULTANT with any
documentation, records, reports, statistics or other data or information pertinent to
Packet Pg. 90
5.G.b
the provision of services, which are reasonably available to CITY. CITY will provide
a contact person to assist in the timely resolution of any issues that may arise.
4. CONFIDENTIALITY OF REPORTS
CONSULTANT shall keep confidential all reports, information and data received,
prepared or assembled pursuant to performance hereunder. Such information shall
not be made available to any person, news release, firm, corporation, or entity
without prior written consent of CITY or as otherwise required by law.
5. COMPENSATION
z
The compensation for property insurance broker services for CITY will not exceed Q
the annual amount of $50,000.00, plus 20% commission on premium savings. This
fee is inclusive of all professional fees and expenses.
L
Q
6. NONDISCRIMINATION; MONITORING AND REPORTING WORK `n
PERFORMANCE
0
L
m
In the performance of this Agreement and in the hiring and recruitment of
employees, CONSULTANT shall not engage in, nor permit its officers, employees or L
agents to engage in, discrimination in employment of persons because of their race, N
religion, color, national origin, ancestry, age, mental or physical disability, genetic a
information, medical condition, marital status, sexual gender or sexual orientation, or
any other status protected by law. o
L
a.
7. CONFLICT OF INTEREST N
00
00
N
CONSULTANT shall maintain a code or standard of conduct. CONSULTANT shall N
neither solicit nor accept gratuities, favors, or anything of monetary value for work co
completed under the Scope of Services. To the extent permissible by state laws,
rules and regulations, the standards adopted by CONSULTANT shall provide for
penalties, sanctions, or other disciplinary actions to be applied for violations of such
standards by CONSULTANT.
E
8. INDEPENDENT CONTRACTOR
w
a
PARTIES intend that the relationship created under this Agreement is that of an
independent contractor only. CONSULTANT shall perform each element of the work
set forth in the Scope of Services as an independent contractor and shall not be
considered an employee of CITY. This Agreement is by and between
CONSULTANT and CITY, and is not intended, and shall not be construed, to create
the relationship of agent, servant, employee, partnership, joint venture or
association, between CITY and CONSULTANT. CITY is interested only in the results
obtained under this Agreement; unless otherwise indicated and under unusual
circumstances, the manner and means of performing the services are subject to
Packet Pg.91
5.G.b
CONSULTANT's sole control. CONSULTANT shall have no right or authority to bind
or commit CITY. CONSULTANT shall not be entitled to any benefits, including,
without limitation, worker's compensation, disability insurance, vacation or sick pay.
CONSULTANT shall be responsible for providing, at its expense and in its name,
disability, worker's compensation or other insurance.
CONSULTANT assumes full and sole responsibility for, and shall therefore pay, any
and all federal and state income taxes, Social Security, estimated taxes,
' unemployment taxes, and any other taxes incurred as result of the compensation set
forth herein. CONSULTANT agrees further to provide CITY with proof of payment
upon reasonable demand. CONSULTANT holds CITY harmless from and against _
any and all claims, demands, losses, costs, fees, liabilities, taxes, penalties, Z
damages or injuries suffered by CITY (including, but not limited to, attorney fees and a
court costs, whether or not litigation is commenced) arising out of the failure of
CONSULTANT to comply with this provision. Further, this indemnification shall
apply to any and all claims, demands, losses, costs, fees, liabilities, taxes, penalties,
damages and injuries suffered by CITY as a result of the classification of
CONSULTANT as independent contractor under this Agreement, o
ML
W
9. RECORDS
c
L
CONSULTANT shall keep full and accurate records of all consulting work performed
under this Agreement. All records, content, sketches, drawings, prints,
computations, charts, reports and other documentation made in the course of the a
consulting work performed hereunder, or in anticipation of the consulting work to be o
performed in regard to this Agreement, shall at all times be and remain the sole a
property of CITY and CONSULTANT shall turn over to CITY all copies of the work co
records within seven (7) calendar days after a written request by CITY. N
N
10,BUSINESS LICENSE/TIN o
N
r+
E
CONSULTANT shall obtain a City of San Bernardino business license and provide
CITY with evidence that its license has been obtained on or before receipt of w
payment hereunder. CONSULTANT agrees to keep said license current and valid
throughout the term of this Agreement. s
U
t0
r
CONSULTANT shall obtain a state and federal taxpayer identification number and a
shall provide evidence to CITY that this number has been obtained.
11.RIGHT TO OBTAIN OTHER CONTRACTURAL ARRANGEMENTS.
CONSULTANT, at any time, has the right to: (a) accept employment or other
association with any person, CITY or company in the United States of America or
any Territory thereof, or through media reasonably accessible by persons in the
United States of America or any Territory thereof, or (b) in the United States of
0 America or any Territory thereof, or through media reasonably accessible by
Packet Pg. 92
5.G.b
Persons in the United States of America or any Territory thereof, engage in
activities, projects or services similar in nature or competitive with those of CITY,
limited only by the confidential information described in Section 4, or (c) become
employed by, associate with or otherwise engage any entity anywhere in the world.
CITY acknowledges that the provisions of this section are reasonable in light of the
legitimate business needs of CITY.
12.SUCCESSOR AND ASSIGNMENT.
The services as contained herein are to be rendered by CONSULTANT, whose
name is as appears first above written and said CONSULTANT shall not assign nor
transfer any interest in this Agreement without the prior written consent of CITY. z
0
a
13.INDEMNIFICATION.
U
CONSULTANT agrees to indemnify, defend and hold harmless CITY, its agents, in
officers and employees from and against all liability, expense, including defense
costs and legal fees, and claims for damages of any nature whatsoever, including, L
but not limited to, bodily injury, death, personal injury or property damage arising out m
of this Agreement from CONSULTANT's or CONSULTANT's employees or agents
negligence, errors or omissions connected with the services performed by or on
behalf of CONSULTANT pursuant to this Agreement. The costs, salary and =
expenses of the City Attorney and members of his office in enforcing this Agreement
on behalf of CITY shall be considered as "attorneys' fees" for the purposes of this Q
paragraph. CONSULTANT agrees to obtain a policy of insurance in the minimum 0
amount of $1,000,000.00 (one million dollars) to cover any and all claims. °
CONSULTANT shall provide CITY with evidence that the necessary liability o
insurance has been obtained, and that the CITY has been named as an additional N.
insured on said policy by the Effective Date hereof. N
00
00
N
14.LIMITATION OF LIABILITY
L
In no event shall CONSULTANT be liable for indirect, special, incidental, economic,
consequential or punitive damages, including but not limited to lost revenue, lost £
profits, replacement goods, loss of technology rights or services, loss of data, or
interruption or loss of use of software or any portion thereof regardless of the legal y
theory under which such damages are sought even if CONSULTANT has been
advised of the likelihood of such damages, and notwithstanding any failure of
essential purpose of any limited remedy.
Any claim by CITY against CONSULTANT relating to this Agreement must be made
in writing and presented to CONSULTANT within one (1) year after the date on
which CONSULTANT completes performance of the services specified in this
Agreement or within one (1) year from the date CITY discovers or reasonably should
discover the existence of the claim.
Packet Pg. 93
15.MODIFICATION.
This Agreement may be supplemented, amended, or modified only by the mutual
agreement of PARTIES. No supplement, amendment, or modification of this
Agreement shall be binding unless it is in writing and signed by both PARTIES.
16.CHOICE OF LAW.
This Agreement, and any dispute arising from the relationship between PARTIES to
this Agreement, shall be governed by California law, excluding any laws that direct
the application of another jurisdiction's laws.
z
17.COMPLIANCE WITH LAWSNENUE °
a
V!
PARTIES agree to be bound by applicable federal, state, and local laws, regulations
and directives as it pertains to the performance of this Agreement.
cn
L
PARTIES hereto agree that all actions or proceedings arising in connection with this c
Agreement shall be tried and litigated either in the State courts located in the County m
of San Bernardino, State of California, or the U.S. District Court for the Central
District of California, Riverside Division. The aforementioned choice of venue is L
intended by PARTIES to be mandatory and not permissive in nature.
18.SEVERABILILTY
In the event that any provision herein contained is held to be invalid, void or illegal a
by any court of competent jurisdiction, the same shall be deemed severable from the C4
remainder of this Agreement and shall in no way affect, impair, or invalidate any
other provision contained herein. If any such provision shall be deemed invalid due N
to its scope of breadth, such provision shall be deemed valid to the extent of the N
scope of breadth permitted by law.
E
R
19.INTERPRETATION
E
No provision of this Agreement is to be interpreted for or against either party
because that party or that party's legal representative drafted such provision, but this a
Agreement is to be construed as if it were drafted by both PARTIES hereto.
20.WAIVER
No waiver of a breach, failure of any condition, or any right or remedy contained in or
granted by the provisions of this Agreement shall be effective unless it is in writing
and signed by the party waiving the breach, failure, right, or remedy. No waiver of
any breach, failure, right, or remedy, shall be deemed a waiver of any other breach,
Packet Pg. 94
failure, right or remedy, whether or not similar, nor shall any waiver constitute a
continuing waiver unless the writing so specifies.
21.NOTICE
Notices herein shall be presented in person or by certified or registered United
States mail, as follows:
To CONSULTANT: William Deeb
AON Risk Insurance Services West, Inc.
707 Wilshire Blvd., Suite 2500
Los Angeles, CA 90017 0
Office: 213-630-3210 a
Cell: 213-200-0080
To CITY: City of San Bernardino N
Human Resources Department
300 North D Street o
San Bernardino, CA 92418 m`
Attn: Helen Tran, Human Resources Division Manager
Phone: (909) 384-5161
22.ENTIRE AGREEMENT
C
This Agreement, with Exhibit "A," constitutes the final, complete and exclusive 0
statement of the terms and the agreement between PARTIES pertaining to the a
engagement of CONSULTANT by CITY and the entire understanding of PARTIES 00
li and supersedes all prior and contemporaneous understandings or agreements of N
PARTIES. No party has been induced to enter into this Agreement by, nor is any
party relying on, any representation or warranty outside those expressly set forth in N
this Agreement. �-
E
L
w
c
CD
Ec
co
Ill
/U
Packet Ag:95
5.G.b
CONSULTANT SERVICES AGREEMENT
BETWEEN CITY OF SAN BERNARDINO AND
AON RISK INSURANCE SERVICES WEST, INC.
IN WITNESS WHEREOF, PARTIES hereto have caused this Agreement to be executed
the day and year first written above.
k
CITY OF SAN BERNARDINO
z
Dated: By: O
a
Allen Parker, City Manager
aD
CONSULTANT
0
ML
W
Dated: By:
William Deeb
L
N
C
Approved as to Form:
Gary D. Saenz, City Attorney o
L
a
co
By: ��-t N
N_
00
I co
N
a+
E
w
C
01
E
I t
I V
I R!
Q
Packet Pg. 96
Exhibit A
Scope of Work
CONSULTANT will act as CITY's Property Insurance Broker, as applicable, with respect
to the following lines of insurance and their respective dates of coverage:
a. Property/All Risk Insurance
b. Auto/Motor Liability Physical Damage
c. Lead Umbrella Excess Liability
d. Fidelity Bond Crime Insurance a
e. Boiler& Machinery
f. Difference in Conditions
L
d
g. Surety bonds L
m
CONSULTANT shall provide the following services as to respects the lines of insurance
specified above:
N
C
a. Work with CITY to assess CITY's risk exposures
a
b. Work with CITY to design and develop CITY's insurance program a
c. Assist with documentation and other steps to obtain commitments for and co
implementation of CITY's insurance program upon CITY's instructions N.
N
W
d. Keep CITY informed of significant changes and or trends in the insurance co
marketplace and provide CITY with annual information on market trends E
e. Assist CITY in identifying insurers. Solicit quotations from insurers for
selection by CITY for the placement of CITY's insurance program in E
accordance with CITY's instructions
r
a
f. Conduct a Renewal Strategy Meeting in advance of each placement
g. Negotiate on CITY's behalf with insurers and keep CITY informed of
significant developments in the negotiations
h. Assist CITY with the evaluation of options received from the insurance
market's best efforts to place insurance on behalf of CITY as directed by
CITY and secure CITY's approval prior to requesting insurers to bind
0 coverage
Packet Pg.97
S.G.b
i. Fallow up with insurance carriers for timely issuance of policies and
endorsements
j. Promptly respond to CITY's questions related to coverage placed by
CONSULTANT or the placement process
k. Deliver binders on or before the effective date of coverage being placed,
subject to placement
I. Facilitate the processing and delivery of certificates or memoranda of
insurance and auto identification cards with respect to insurance policies
placed by CONSULTANT, as requested by CITY o
a
m. Review policies and endorsements for conformity to agreed terms and
coverage
m
n. Provide coverage summaries for all new placements and updates on changes Y
to existing policies o
m
o. Review premium and exposure audits, rating adjustments, dividend
calculations and loss data
N
_
p. Assist CITY in establishing claims reporting procedures to insurers
Q
q. Monitor published financial information of CITY's current insurers and alerts
L-
0.
CITY when the status of one or more of such insurers falls below
co
CONSULTANT's minimum financial guidelines. Insurers with whom CITY's
risks have been placed will be deemed acceptable to CITY, in the absence of
contrary instructions from CITY s. Provide CITY with detailed invoices, except o
in the case of direct billing by insurers. Remit premiums to insurers and taxes
and fees to the relevant authorities on a timely basis, following receipt thereof
from CITY
r. Provide the following property loss control services as respects locations
facilities in San Bernardino: r
Q
1. Evaluate internal hazards of CITY's operations
2. Evaluate external exposures of CITY's operations
3. Provide CITY with information relating to government regulations which
may affect property loss control
4. Assist CITY in CITY's efforts to comply with or mitigate insurer
recommendations
5. Perform one loss control review of CITY's facilities
6. Prepare specialized underwriting information
Packet Pg.98
7. Perform special studies relating to Seismic Assessment
s. Assist CITY in the development and implementation of internal claims
handling procedures
t. Assist CITY with initial reporting of claims to insurers as follows:
1. Evaluate coverage applicability with the exception of Workers'
Compensation and/or Primary Casualty claims
2. Prepare loss notices to insurers
3. Notify insurers of claims, provided that CITY's CONSULTANT claims
I representative is informed of the claim in writing by CITY, with details of o
the claim a
u. Assist CITY with the settlement of claims with Insurers as follows:
1. Assist in the development of settlement strategies d
2. Assist with insurer negotiations L
3. Assist CITY with litigation management issues that impact claim
settlement
L
v. Provide benchmarking information for lines of insurance placed by
CONSULTANT
d
a
w. Upon CITY's request, review CITY's contracts with respect to insurance and a
risk management-related issues. N
00
co
N
N
co
00
N
a+
E
L
d =
$ d
E
V
Q
1
Packet Pg.99