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CO OF SAN BI!RNARDJCP - RI!QU-eJ' FOR COUNCIL ACT~N
From:
M.J. PERLICftlC'O.-AOMI". Off.
Personne I \9115 JM4 23 PM It! OT
Subject: NEW RECOMMENDED HEALTH PLAN CONSULTANT-
THE WYATT COMPANY-CONTRACT APPROVAL
Dept:
Date: 1-18-iS5
Synopsis of Previous Council action:
Approve prior contract with health plan consultant, which expired 12-1-84.
Recommended motion:
Approve resolution.
4~.:L/
ignature
Contact person: M.J. Perlick
Phone:
383-5161
Supporting data attached:
Yes
Ward:
n/a
FUNDING REQUIREMENTS:
Amount: $14 ,800
Source: Sel f Insured Hp.l th Plan ""nn
Finance: ~(?- C /f~
~
Council Notes:
75-0262
AgendaltemNo~ ~
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CITY OF SAN BI!RNARDINO - RI!QUEST FOR COUNCIL ACTION
STAFF REPORT
In 1975, the City of San Bernardino first contracted with a consultant for health
plan advice and recommendations. The area of health plan selection and benefit
administration is extremely complex, requiring expertise in related laws, medical
practices, tax accounting, to name a few of the sub specialities. A consultant
was first contracted to fill the need for such expertise. Our current consultant,
the Epler Company, has been performing health plan work for the City since 1975.
In mid-1984, a request for proposal was sent to consultants in the health benefit
field. The request was originated to: Determine the costs of health plan con-
sulting as may be charged by various consultants and the levels of service avail-
able and specifically include the development of bid specifications and competitive
analysis for possible new health plans.
Eight proposals were received and reviewed, along with the Epler Company's proposed
amendment to their existing agreement. The nine documents were subsequently ranked
by the Benefit Consultant Proposal Review Committee cons~sting of M.J. Perlick,
Director of Personnel, Roger DeFratis, Assistant Director of Personnel, Warren Knud-
son, Director of Finance and Ray Schweitzer, Deputy City Administrator. The re-
sponses were ranked on the relative cost of service, ability to perform the re-
quired functions and like criteria. The two consultant organizations best meeting
the needs of the City were invited for a meeting with the Committee. (The Epler
Company was not in the group of the top two). After additional followup data was
presented and reviewed, the Committee unanimously recommended that the Wyatt Com-
pany become the City's health plan consultant for the next one-year contract period.
The Wyatt Company cost for all benefit consulting services for the contract period
is $14,800. This amount includes, as mentioned above, the development of new plans
and bid specifications. The Epler Company charge for benefit consulting services
alone would have been $9,775, plus $600 for clerical/printing/travel and approxi-
mately $10,000 for new plan/bid specifications, a rough total of $20,000.
For your additional information, attached is a partial client listing from the Wy-
att Company Proposal (A) a biography of Michael D. Baker (B) who will be the main
consultant for the City.
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BIOGRAPHY
MICHAEL D. BAKER
Michael D. Baker is an employee benefits consultant with The Wyatt Company. His
background and knowledge for benefit plan purposes are twofold in that he is a group
benefit (insured and noninsured health and welfare plans) as well as a deferred
compensation (Internal Revenue Service qualified pension, profit-sharing and stock
bonus type) plan consultant. He is assigned to The Wyatt Company's San Diego office
and his primary responsibility is to San Diego County based clients.
Prior to joining The Wyatt Company, Mr. Baker was a consultant with a San Diego
based firm for six years. He joined The Wyatt Company in October 1977 as a benefits
consultant and participates in all areas of functions and services related to noncash
compensation programs.
Recent assignments which Mr. Baker has managed include:.
. Designed, implemented and is involved in the ongoing administration of
several 40 l(k) salary deferred defined contribution plans as well as an
Employee Stock Ownership Plan, ESOP.
. Performed a feasibility study on the merits of opting out of the federal
social security system for a local hospital
. The development and implementation of a self-funded long-term disability
and rehabilitation program for a large government agency.
. Performed an indepth analysis of a major financial institution's group
benefits program which focused upon plan design, funding concepts,
employee communications and flex-spending accounts.
. Completed an analysis/comparison of five major insurance carriers claims
system and management report capabilities.
Mr. Baker's experience in benefit plans covers qualified, as well as Wlqualified, plans
of industry, government agencies, and other nonprofit and quasi-governmental
agencies.
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REPRESENTATIVE GROUP BENEFIT PROGRAM AND GOVERNMENT AGENCIES
CLIENT LISTING
CITY OF ANTIOCH, CALIFORNIA
CITY OF CARLSBAD, CALIFORNIA
CITY OF CHICAGO
CITY OF LA MESA, CALIFORNIA
CITY OF LONG BEACH, CALIFORNIA
CITY OF LOUISVILLE <Ie BOARD OF HEALTH
CITY OF MODESTO, CALIFORNIA
CITY OF MADISON, WISCm,SIN
CITY OF MILWAUKEE
CITY OF NATIONAL CITY, CALIFORNIA
CITY OF OCEANSIDE, CALIFORNIA
CITY OF SAN DIEGO, CALIFORNIA
COUNTY OF MARICOPA, ARIZONA
COUNTY OF SAN MATEO, CALIFORNIA
GOVERNMENT OF ONTARIO, CANADA
HENNEPIN COUNTY, MINNESOTA
MINNESOTA STATE TEACHERS RETIREMENT SYSTEM
ORANGE COUNTY WATER DISTRICT, CALIFORNIA
STATE OF CALIFORNIA
ST ATE OF ILLINOIS RETIREMENT SYSTEM
STATE OF OHIO RETIREMENT SYSTEM
STATE TEACHERS RETIREMENT SYSTEM, CALIFORNIA
STATE OF VERMONT MUNICIPAL EMPLOYEES RETIREMENT SYSTEM
TEACHERS RETIREMENT SYSTEM, TEXAS
UNIVERSITY OF MINNESOTA
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RESOLUTION NO.
RESOLUTION OF THE CITY OF SAN BERNARDINO AUTHORIZING THE
EXECUTION OF AN AGREEMENT WITH WYATT COMPANY FOR CONSULTING
SERVICES ON CITY'S INSURANCE AND BENEFIT PROGRAMS.
BE IT RESOLVED BY THE MAYOR AND COMMON COUNCIL OF THE CITY OF
SAN BERNARDINO AS FOLLOWS:
SECTION 1. The Mayor of the City of San Bernardino is hereby
authorized and directed to execute on behalf of said City an
Agreement with Wyatt Company for consulting services on City's
insurance and benefit programs, a copy of which is attached
hereto, marked Exhibit ftAft and incorporated herein by reference as
fully as though set forth at length.
I HEREBY CERTIFY that the foregoing resolution was duly
adopted by the Mayor and Common Council of the City of San
Bernardino at a
meeting thereof, held on
the
day of
, 1985, by the following vote,
to wit:
AYES:
Council Members
NAYS:
ABSENT:
City Clerk
The foregoing resolution is hereby approved this
day
of
, 1985.
Mayor of the City of San Bernardino
Approved as to form:
/ 2/p/J~t'/J?
City A'ttorney
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AGREEMENT
(Consulting Services for Employees
Group Insurance and Benefit Programs)
THIS AGREEMENT is made and entered into this
day
of
, 19__, by and between the CITY OF SAN
BERNARDINO, a municipal corporation, hereinafter called "City",
and WYATT COMPANY , hereinafter called "Consultant".
1. Recitals.
A. Consultant represents that it possesses all consulting,
actuarial, and other professional qualifications necessary to
render the services to the City set forth herein, and City enters
into this Agreement in reliance upon Consultant's express
representations in regard thereto.
B. City desires to retain Consultant to provide on-going
analysis, evaluation and assistance on City's insurance and
benefit programs, to prepare adequate specifications acceptable
for obtaining bids for employees' group insurance plans as set
forth herein, to assist in analyzing the bids that will be
received for e~~loyee health and life insurance coverage,
including dental and vision plans, and to provide a consulting
service for a one-year period on City health, life insurance, and
other benefit programs.
C. Consultant represents that it is ready, willing and able
to serve City on the terms and conditions of this agreement, and
City enters into this agreement in reliance upon Consultant's
representations concerning its qualifications and capabilities.
II. Employment of Consultant. City hereby employs
Consultant to perform on-going analysis, to prepare
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specifications, and to assist the City in obtaining bids for
revised health and life insurance coverage, including dental and
vision plans. Consultant shall, at City's request and to the
satisfaction of the Personnel Director, perform the following
services and projects:
A. Annual On-9oin9 Services
1. An annual financial evaluation of plan results for
the past plan year which sets forth a complete accounting of all
employee benefit dollars spent. The maximum charge under this
paragraph 1. for all items is $5,000. The evaluation will
include, but not be limited to:
a. A breakdown of claims experience and benefit
payments, by plan, on an employee versus dependents basis.
.b. An accounting of nonbenefit plan costs such
as:
II.) Insurance premiums.
12.) Special risk and pooling charges.
(3.) Claims administration charges.
(4.) Booklet, forms and printing costs.
(5.) Premiums taxes, where applicable.
c. An evaluation of plan expenses for claims and
nonbenefit costs compared with expected contribution rates and
premiums for the period.
d. Evaluation of rate and contribution levels to
support the planls) for the next plan year.
e. Development of cash versus accrual accounting
costs and the establishment of reserve levels necessary to
support the plan(s) and properly state plan liabilities at year
end.
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f. Comparisons of expected versus actual claims
experience results.
2. An evaluation of the adequacy of benefit levels and
plans provided by the City and in particular, how the City's
plans compare with those of other government agencies and
employees in the San Bernardino market area. The maximum charge
under this paragraph shall be $1,900.
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3. On-going advice concerning government legislation
impacting employee benefits and compliance procedures, at no
charge.
4. Assistance with plan contracts, amendments and the
salary negotiation process, for a maximum charge of $600.
5. Assistance in updating employee communications,
booklets and plans documents to support both the insured and
self-funded plans, at a maximum charge of $750.
6. Assistance and advice concerning problem claims,
claims audits and administrative procedures, at a maximum charge
of $500.
7. Meetings with City staff, providers and carriers,
as needed during the plan year, for a maximum charge of $700.
8. Annual plan financial analysis, which will include
a full written report of results as well as findings and
recommendations for future improvements, at a maximum charge of
$650.
B. Special Projects.
The development of new plans, bid specifications, spread
sheet analysis of carrier and provider proposals, risk analysis
and special studies, at a maximum charge of $4,700.
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III. Personnel. Consultant represents that it has, or will
secure at its own expense, all personnel required to perform the
services called for under this agreement. Consultant shall at
all times be and remain an independent contractor, and such
personnel as may be employed by Consultant shall not be employees
or agents of City for any purposes.
IV. Time of Performance. Services of Consultant are to
commence as soon as practicable after the execution of this
agreement. Consultant shall promptly perform work and duties
required hereunder and complete same in time to permit City to
implement Consultant's recommendations relating to plan rate
changes on or before November 1, 1985, and to implement
Consultant's recommendations for new or additional plans on or
before August 1, 1985.
V. Compensation. City shall pay to Consultant a sum not to
exceed a total of fourteen thousand eight hundred dollars
($14,800.00) for all work including the maximum charges set forth
under paragraph A, subparagraphs 1-8 hereinabove and for services
involved in providing the work set forth in paragraph B. City
will only be charged for and will only pay for these services
specifically requested by the City. Consultant shall be paid for
services in accordance with the maximum fee schedule set forth
herein, said sum to constitute full and complete compensation for
all Consultant's services rendered. There shall be no other
compensation payable to Consultant hereunder, and Consultant
shall be solely responsible for paying the expenses for all
services rendered to the City pursuant to this agreement.
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VI. Method of Payment. Prior to commencement of a project,
Consultant and the Personnel Director shall define the work to be
performed and the amount to be charged. Consultant shall present
itemized billings describing work completed to the Personnel
Director, not more often" than on a monthly basis, as the work
progresses, and upon approval by the Personnel Director, City
shall promptly pay approved billings within the period of time
normally used by City for making such payments. Consultant shall
bill City only for actual expenses incurred and actual time
expended. A final payment of $3,000.00 to be made by City shall
not be made until such time as the Consultant has finally
performed all work required hereunder.
VII. warranties of Consultant. Consultant specifically
warrants and represents its skill and expertise to be adequate
and competent for the completion of the assignment hereunder in a
good and professional manner, and the representations set forth
in Recitals A and C hereinabove are incorporated in this
paragraph by reference.
VIII. Assignability. The experience, skill and expertise
of Consultant is of the essence of this agreement. Consultant
shall not assign (whether by assignment or novation) this
agreement or delegate the duties or any right or interest
hereunder in whole or in part without the prior written consent
of City. Any assignment or attempt to assign this agreement
without such prior written consent or by operation of law shall
be void and shall constitute cause for termination.
IX. Interest of Consultant. Consultant covenants that it
presently has no interest and shall not acquire any interest,
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direct or indirect, which would conflict in any manner or degree
with the performance of services required to be performed under
this agreement. Consultant further covenants that in the
performance of this agreement no person having any such
conflicting interest shall be employed.
X. Findin9s Confidential. Any reports, information or data
given to or prepared or assembled by Consultant under this
agreement which City requests to be kept confidential shall not
be made available to any individual or organization by Consultant
without the prior written approval of City.
XI. Publication. Reproduction and Use of Material. No
material produced in whole or in part under this agreement shall
be subject to copyright in the United States or in any other
country. The final report furnished by Consultant to City shall
become the sole property of City, and City shall have
unrestricted authority to publish, disclose, distribute and
otherwise use, in whole or in part, any reports, data, or other
materials prepared under this agreement.
XII. Termination of Contract for Cause. If for any cause
Consultant shall fail to fulfill in a timely and proper manner
its obligation under this agreement, or if Consultant shall
violate any of the covenants, agreements or stipulations of this
agreement, City shall thereupon have the right to terminate this
agreement by giving written notice to consultant of such
termination and specifying the effective date thereof at least
five (5) days before the effective date of such termination. In
that event, all finished and unfinished documents, data, studies,
surveys, drawings and reports or other material prepared by
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Consultant under this agreement shall, at the option of City,
become its property, and Consultant shall be entitled to receive
just and equitable compensation for any satisfactory work
completed on such documents and other materials.
Notwithstanding the above, Consultant shall not be relieved
of liability to City for damages sustained by City by virtue of
any breach of this agreement by Consultant, and City may withhold
any payments to Consultant for the purpose of set-off until such
time as the exact amount of damages due City from Consultant is
determined.
This agreement may not be terminated if the failure to
perform arises from unforeseeable cause beyond the control and
without the fault or negligence of Consultant.
XIII. Termination for Convenience of City. City may
terminate this agreement at any time by giving written notice to
Consultant of such termination and specifying the effective date
thereof at least fifteen (15) days before the effective date of
such termination. In such event, all finished and unfinished
documents and other materials as described in paragraph XII above
shall, at the option of City, become its property. If the
agreement is terminated by City as provided herein, Consultant
will be entitled to be paid all compensation for work performed
to the the date of termination. If termination is due to the
fault of persons other than Consultant, Consultant will be
entitled to be paid all compensation for work performed to the
date of termination. Should this agreement be terminated due to
default of Consultant, paragraph XII hereof relative to
termination shall be applicable.
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XIV. changes~ShOuld City ~uire changes in the scope~f
the services of consultant to be performed hereunder, such
changes, including any corresponding increase or decrease in the
amount of Consultant's compensation which shall be mutually
agreed upon by City and Consultant, shall be incorporated in this
agreement only by written amendments hereto.
XV. Consultant to Hold Harmless. Consultant hereby agrees
to, and shall, hold City, its elective and appointive boards,
commissions, officers, agents and employees harmless from any
liability for damage or claims for damage for personal injury,
including death, as well as from claims for property damage which
may arise from Consultant's operations under this agreement,
whether such operations be by Consultant or by anyone or more
persons directly or indirectly employed by or acting as agent for
Consultant. Consultant agrees to and shall defend City and its
elective and appointive boards, commissions, officers, agents and
employees from any suits or actions at law or in equity for
damages caused, or alleged to have been caused, by reason of any
of the aforesaid operations.
XVI. Workers Co~ensation. Consultant shall provide proof
of workers compensation insurance coverage for all its employees
employed pursuant to this agreement. Evidence of such insurance
shall be furnished to City's Risk Manager prior to commencement
of work.
XVII. Time of the Essence. Time is of the essence with
respect to Consultant's performance under this agreement.
XVIII. Notice. All notices herein required shall be in
writing and delivered in person or sent by certified mail,
postage prepaid, addressed as follows:
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Consultant
Director of Personnel
City of San Bernardino
300 N. -D- Street
San Bernardino, CA 92418
Wyatt company
Suite 220
3366 North Torrey pines Curt
La Jolla, CA 92037
XIX. ~. This agreement shall be effective for the
period
, 198__, through
, 198__.
IN WITNESS WHEREOF, the parties hereto have executed this
agreement on the date first hereinabove written.
ATTEST:
CITY OF SAN BERNARDINO
By
City Clerk
Mayor
TilE !VYnrr ~MPIT4IY
(Consultant)
BY~.z;.~
Title {b.AAIiA~-:I
Approved as to form:
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City J{'ttorney
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