2.8. ERMUSR 01-08-2013 Elk River
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Municipal Utilities
13069 Orono Parkway
P.O. Box 430
Elk River,MN 55330
(763) 441-2020
UTILITIES COMMISSION MEETING
TO: FROM:
Elk River Municipal Utilities Commission Theresa Slominski—Finance Director
John Dietz, Chair
Daryl Thompson, Vice Chair
Allan Nadeau,Trustee
MEETING DATE: AGENDA ITEM NUMBER:
January 8, 2013 2.8
SUBJECT:
Request for Proposals —Insurance Agent of Record Services
BACKGROUND:
We have been with our current Insurance Agent of Record, Liberty Insurance Agency, formerly
First National Insurance for over twenty years. For due diligence, we would like to partner with
the City and put out for bid these insurance services.
DISCUSSION:
The proposal request is suggested as a matter of professionalism, given that we have not had a
bid request in over twenty years. Tim Simon, Lori Ziemer, and myself have reviewed a Request
for Proposal and would like to distribute the request on January 23r1, contingent on the City
approving the same request. The request requires submission of proposal for the next five years
to include an annual determined fee rather than a commission percentage.
Peter Beck is reviewing the document request and is proposing a Standard Professional Services
Contract for inclusion with this.
ACTION REQUESTED:
There is some work to be done on the final Request for Proposals itself, however, the approval to
move forward with this proposal is requested, contingent on final legal review, and Council
approval at the end of the month.
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City of
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City of Elk River and Elk River Municipal Utilities
Minnesota
Request for Proposals
Insurance Agent of Record Services
For the periods of
July 1, 2013 - June 30, 2014
July 1, 2014 - June 30, 2015
July 1, 2015 - June 30, 2016
July 1, 2016 - June 30, 2017
July 1, 2017 - June 30, 2018
Tim Simon
Finance Director
13065 Orono Parkway
Elk River, Minnesota 55330
763-635-1029
tsimon@elkrivermn.gov
PROPOSALS MUST BE RECEIVED BY 4:00 PM, February 15, 2013
I. INTRODUCTION
A. General Information
The City of Elk River's and Elk River Municipal Utilities' insurance coverage for property, liability,
automobiles, and workers' compensation is provided by the League of Minnesota Cities
Insurance Trust (LMCIT). LMCIT requires member cities to utilize the services of an agent of
record to assist and advise the city on matters related to insurance coverage. The City of Elk
River (City) and Elk River Municipal Utilities (ERMU) invites written proposals from insurance
brokers (Broker) to act as the Agent of Record on behalf of the City and ERMU for
property/casualty insurance for a five (5) year period beginning on July 1, 2013. The City and
ERMU currently acts as its own agent for workers' compensation insurance; however, the
Broker may include Agent of Record services for workers' compensation insurance as an
optional service. The City and ERMU will make its selection of an agent based on the insurance
agency or broker's qualifications, experience, references, and cost of providing service to the
City and ERMU.
B. Scope of Services
Background
The City is requesting insurance consulting and brokerage services to assist in the acquisition of
property/casualty and worker's compensation insurance coverage. Brokerage and consulting
services must be provided for annual policy renewals on an as needed basis. The selected
broker(s) must provide a thorough renewal presentation each year with policy
recommendations to include an analysis of available alternatives in consideration of the City's
and ERMU's exposures. Brokerage services must also include insurance market research, policy
endorsements, certificates of insurance and coverage consultation on City and ERMU claims.
In prior years the City and ERMU have completed a joint renewal with the LMCIT, but due to
growth and size we are looking at completing separate renewals starting in 2013.
A copy of the combined City of Elk River's insurance coverage for 2012/2013 is included as
Appendix A for reference.
Broker Duties and Responsibilities
1. Assist with the completion of the LMCIT renewal forms using the data supplied by the
City and ERMU.
2. Advise and assist the City and ERMU in evaluating and selecting coverage alternatives
such as deductibles, limits, optional coverage, alternative coverage forms, etc. Advise
the City and ERMU on potential gaps or overlaps in coverage. Provide the City's and
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ERMU's Finance Director with access to the broker's working files of city business upon
request, at the city's convenience and discretion.
3. Review the LMCIT insurance policies for completeness and accuracy. Confirm the
schedules have been updated for the new data supplied during the renewal process.
4. Provide the city and ERMU with a recap of insurance costs and an explanation of
premium increases for each renewal.
5. Provide explanations of insurance coverage, coverage options and make
recommendations as requested.
6. Conduct quarterly review of open claims. Review claim reserves for appropriateness.
7. Assist the City and ERMU in identifying risk exposures and developing appropriate
strategies to address those exposures.
8. Assist as requested with safety and loss control activities.
9. Evaluate and advise the City and ERMU on whether comparable insurance can be
provided by someone other than the League of Minnesota Cities.
10. Other usual functions expected of an insurance broker and requested by the City and
ERMU such as, but not limited to, accurately amending policies, providing interpretation
of coverage, policy maintenance, binders and certificates, timely delivery of policies
and/or binders, providing unbiased recommendations, answering questions and
resolving issues.
C. Fees
The insurance agency shall indicate in its proposal the fee required to service the City's and
ERMU's LMCIT insurance coverage for the policy periods of:
July 1, 2013 -June 30, 2014
July 1, 2014 -June 30, 2015
July 1, 2015 -June 30, 2016
July 1, 2016 -June 30, 2017
July 1, 2017 -June 30, 2018
The fees proposed for each period shall be listed on the form attached as Appendix B to this
proposal. The fee proposed is in lieu of a commission. It is anticipated the agent will be
appointed for a minimum of a five year period. An annual review process will be required with
the understanding the City and ERMU or Agent reserves the right to cancel the contract with a
60-day written notice.
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D. Rights of Review
The City of Elk River and Elk River Municipal Utilities reserves the right to reject any or all
proposals or to request additional information from any or all applicants as determined to be in
the best interest of the City and ERMU.
The City of Elk River and Elk River Municipal Utilities reserves the right, where it may serve the
City of Elk River's and Elk River Municipal Utilities best interest, to request additional
information or clarification from proposers or to allow corrections of errors or omissions. At
the discretion of the City and ERMU, firms submitting proposals may be requested to make oral
presentations as part of the evaluation process. Following a review of the proposals, a
recommendation for award will be made by the Finance Director to the City Council and
Utilities Commission. A final decision for award of the work will be made by majority vote of
the City Council.
The City of Elk River and Elk River Municipal Utilities reserves the right to retain all proposals
submitted and to use any ideas in a proposal regardless of whether that proposal is selected.
Submission of a proposal indicates acceptance by the proposing firm of the conditions
contained in this request for proposal, unless clearly and specifically noted in the proposal
submitted and confirmed in the letter of engagement between the City of Elk River and Elk
River Municipal Utilities and the firm selected.
E. Term of Engagement
A five year engagement is contemplated, subject to annual review and renewal. Based on
satisfactory performance, the concurrence of the City Council and Utilities Commission and the
annual availability of an appropriation,the City and ERMU may extend the agreement annually
without solicitations from other firms. In the event of unsatisfactory performance, or when in
the best interest of the City and ERMU, proposals may be solicited before the end of the five
year period.
The agreement between the City of Elk River and Elk River Municipal Utilities and the insurance
broker shall be in the form of a written contract.
F. Subcontracting
Following the award of the contract, no subcontracting will be allowed without the express
prior written consent of the City and ERMU.
II. INSTRUCTIONS
A. Proposal Submission and Evaluation
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Four (4) hard copies and one (1) electronic copy of the proposal must be received by 4:00 PM
on February 15, 2013. Proposals should be mailed or hand delivered to:
Tim Simon, Finance Director
City of Elk River
13065 Orono Parkway
Elk River, Minnesota 55330
tsimon @elkrivermn.gov
763.635.1029
All questions, correspondence and responses shall be directed to Finance Director Tim Simon.
In the interest of fairness, do not contact other staff or elected/appointed officials with respect
to this RFP.
B. Schedule
1. City distributes Request for Proposal January 23, 2013
2. Proposal due date February 15, 2013
3. Review of RFP's completed February 22, 2013
4. Interviews (if necessary) March 6-8, 2013
5. Final decision/Contract negotiation March 11, 2013
6. Contract consideration by City Council March 18, 2013
NOTE: ALL PROPOSALS MUST BE RECEIVED AT ELK RIVER CITY HALL BY 4:00 PM,
FEBRUARY 15, 2013.
C. Proposal Format
Responses to this Request should include the information in the format and order prescribed
on Appendix B and Appendix C to this RFP.
D. Evaluation Criteria
The City and ERMU shall select a broker with the qualifications and proposal best meeting the
needs of the City and ERMU. Proposals shall be evaluated based several criteria including, but
not limited to:
1. The fees listed in Appendix B.
2. The responses to the questions listed in Appendix C.
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3. Number of years the agency has been in business.
4. Experience of working with municipalities and utilities insured by the LMCIT during the
last five years.
5. The qualifications, experience, and professional designations of the agency's staff
proposed to service the City's and ERMU's account.
6. Agency premium volume excluding personal lines of coverage (health, life, etc.).
7. Present limit of errors and omissions coverage in place for the agency.
8. At least three references for municipal clients with contact information.
9. Any other agency resources or special qualifications that would be advantageous to the
City, such as health insurance, life insurance and disability insurance.
III. CONTRACT EXECUTION
The information below is being provided as part of this Request for Proposal to give proposers
an understanding of the City's and ERMU's expectations with respect to contract execution.
A. Negotiations and Contract Execution
The City and ERMU reserves the right to negotiate the final terms and conditions of the
contract to be executed. Should the City and ERMU and agency be unable to agree upon the
entire contract, the City and ERMU reserves the right to discontinue negotiations, select
another agency, or reject all of the proposals. Upon completion of negotiations agreeable to
the City and ERMU and the agency, the Broker shall enter into a Professional Services Contract
with the City and ERMU (see Appendix D).
B. Contracting Ethics
1. No elected official or employee of the City of Elk River and Elk River Utilities Commission
who exercises any responsibilities in the review, approval, or implementation of the
proposal shall participate in any decision, which affects his or her direct or indirect
financial interests.
2. It is a breach of ethical standards for any person to offer, give, or agree to give any City
of Elk River or Elk River Municipal Utility employee or council/commission person, or for
any to solicit, demand, accept, or agree to accept from another person or firm, a
gratuity or an offer of employment whenever a reasonable prudent person would
conclude that such consideration was motivated by an individual, group or corporate
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desire to obtain special, preferential, or more favorable treatment than is normally
accorded the general public.
3. The agency shall not assign any interest in this contract and shall not transfer any
interest in the same without the prior written consent of the City and ERMU.
4. The agency shall not accept any private client or project which, by its nature, places it in
ethical conflict during its representation of the City of Elk River and Elk River Municipal
Utilities.
5. The Broker(s) agrees, as a condition of being awarded this RFP, to require each of its
agents, officers and employees to abide by city, state and federal laws and regulations
pertaining to sexual harassment, firearms and smoking, as well as all other reasonable
work rules, safety rules or policies regulating the conduct of persons on City and ERMU
property at all times while performing duties pursuant to this Contract.The Broker
agrees and understands that a violation of any of these policies or rules constitutes a
breach of the Contract and sufficient grounds for immediate termination of the Contract
by the City and ERMU.
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APPENDIX A
CITY OF ELK RIVER
INSURANCE COVERAGE FOR 2012/2013
A-1
APPENDIX B
CITY OF Elk River/Elk River Utilities
AGENT OF RECORD RFP FEE PROPOSAL
Policy Period Fee (City) Fee (ERMU)
July 1, 2013 —June 30, 2014
July 1, 2014—June 30, 2015
July 1, 2015—June 30, 2016
July 1, 2016—June 30, 2017
July 1, 2017—June 30, 2018
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APPENDIX C
CITY OF ELK RIVER/Elk River Municipal Utility
AGENT OF RECORD RFP RESPONSE FORM
INFORMATION ON THE FIRM
Name of Firm:
Branch Office: National Office: (if applicable)
Address: Address:
List Prior Names of Business if changes have been made:
Telephone Number of Office: FAX Number:
Branch: Branch:
National: National:
Number of Years In Business:
Describe your firm's experience and expertise regarding public entity risks by relating the markets to
which the firm has access, the information technology capabilities of your firm, other public sector
clients with whom you have a relationship and which of the clients are self-funded.
Describe the steps you would take in reviewing our current program and designing changes in the
program. Include specific techniques and procedures your firm may use to assist in identifying current
and anticipated new loss exposures to the City/ERMU. Describe the Loss Control, Risk Management,
Wellness and Legal service offered by your firm.
What are the transition expectations if the City/ERMU uses your services?
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APPENDIX C
CITY OF ELK RIVER/Elk River Municipal Utility
AGENT OF RECORD RFP RESPONSE FORM
After the risk assessment is complete, how does your organization formulate a long-term Risk
Management strategy for the next five years?
Please comment on your anticipated involvement in monitoring and assisting in claims preparation,
management, negotiation and settlement.
What services would you classify within the fee income and what services would you classify outside the
fee income? List your fees for any additional services which may exceed the scope of duties and
responsibilities contemplated within the set fee?
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APPENDIX C
CITY OF ELK RIVER/Elk River Municipal Utility
AGENT OF RECORD RFP RESPONSE FORM
PERSONNEL INFORMATION
Provide the names,professional qualifications and educational background of the Account Executives and key
support personnel who would be responsible for our account:
Branch: National:
Total Personnel: Total Personnel:
Branch: National:
Licensed Brokers: Licensed Brokers:
Branch: National:
Claims Administration: Claims Administration:
Branch: National:
Safety/Loss Control Personnel: Safety/Loss Control Personnel:
Branch: National:
Licensed Insurance Consultants: Licensed Insurance Consultants:
Branch: National:
Licensed Excess&Surplus Lines Broker: Licensed Excess&Surplus Line Broker:
Branch: National:
Legal Personnel: Legal Personnel:
Branch: National:
Wellness Personnel: Wellness Personnel:
Branch: National:
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APPENDIX C
CITY OF ELK RIVER/Elk River Municipal Utility
AGENT OF RECORD RFP RESPONSE FORM
AGENCY PERSONNEL INFORMATION
List principals in firm and denote those who would work with the City of Elk River and Elk River Municipal Utilities.
List the number of clerical/support staff in service office.
Discuss the claims process as it relates to your firm.
In no more than 100 words, offer any additional information related to why your firm should be the City of Elk
River's and Elk River Municipal Utilities selected broker.
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APPENDIX C
CITY OF ELK RIVER/Elk River Municipal Utility
AGENT OF RECORD RFP RESPONSE FORM
INSURANCE COMPANY INFORMATION
Commercial Property/Casualty (list your top 5 companies by premium volume written and indicate the dollars of
premium written):
Branch: National:
What is your Annual Premium Volume by Coverage Area? Branch National
Property/Boiler Machinery
General Liability
Auto Liability
Public Officials/E&O
Crime
Workers Compensation
Professional Liability
Names of governmental entities insured by the agency through the LMCIT during the last five years. For each
client reference, include the scope of the service,time performed, and name, title, address and phone number of
the principal contact person.
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APPENDIX C
CITY OF ELK RIVER/Elk River Municipal Utility
AGENT OF RECORD RFP RESPONSE FORM
REFERENCES
List three references:
L. Entity:
Coverage/Service:
Contact(Name,Title,Address&Tel.No.):
2. Entity:
Coverage/Service:
Contact(Name,Title,Address&Tel.No.):
3. Entity:
Coverage/Service:
Contact(Name,Title,Address&Tel. No.):
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APPENDIX D
CITY OF Elk River
STANDARD PROFESSIONAL SERVICES CONTRACT
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