HomeMy WebLinkAbout29A - AGMT FOR JOINT POWERSREQUEST FOR
COUNCIL ACTION
CITY COUNCIL MEETING DATE:
JULY 7, 2020
TITLE
APPROVE RENEWAL FOR JOINT POWERS
AUTHORITY AGREEMENT BETWEEN THE
CITY OF SANTA ANA AND INDEPENDENT
CITIES RISK MANAGEMENT AUTHORITY
(ICRMA) AND APPROVE ASSOCIATED
INSURANCE PREMIUMS AND
CORRESPONDING AGREEMENT FOR A
TOTAL AMOUNT NOT TO EXCEED
$4,853,000
(NON -GENERAL FUND)
/s/ Kristine Ridge
CITY MANAGER
CLERK OF COUNCIL USE ONLY:
_••e•
❑ As Recommended
❑ As Amended
❑ Ordinance on 1 s' Reading
❑ Ordinance on 2ntl Reading
❑ Implementing Resolution
❑ Set Public Hearing For_
CONTINUED TO
FILE NUMBER
RECOMMENDED ACTIONS
1. Authorize the City Manager to approve the agreement between the City of Santa Ana and
Arthur J. Gallagher, broker of record (Exhibit 1), from July 1, 2020 to June 30, 2021 for
insurance brokerage services, subject to non -substantive changes approved by the City
Manager and City Attorney.
2. Authorize the City Manager to approve payment of insurance premiums to Independent
Cities Risk Management Authority (ICRMA) for excess liability and workers' compensation
for protection of City's assets.
a. Approve the City's continued participation in ICRMA's Excess Liability Program from
July 1, 2020 to June 30, 2021 at an estimated premium not to exceed $1,680,000.
b. Approve the City's continued participation in ICRMA's Excess Workers'
Compensation Program from July 1, 2020 to June 30, 2021 at an estimated premium
not to exceed $386,000.
c. Approve the City's continued participation in the ICRMA's Auto Physical Damage
Program from July 1, 2020 to June 30, 2021 at an estimated premium cost not to
exceed $79,000.
d. Approve the City's continued participation in the ICRMA's Property and Equipment
Program from July 1, 2020 to June 30, 2021 at an estimated premium cost not to
exceed $455,000.
e. Approve the City's continued participation in ICRMA's Crime Program from July 1,
2020 to June 30, 2021 at an estimated premium not to exceed $12,000.
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ICRMA JPA Renewal / Associated Insurance Premiums
July 7, 2020
Page 2
f. Approve the City's continued participation in ICRMA's Cyber Program from July 1,
2020 to June 30, 2021 at an estimated premium not to exceed $31,000.
3. Approval payment of insurance premiums to Arthur J. Gallagher, Broker, for coverages of
City's assets.
a. Approve the City's General Liability Buffer Program from July 1, 2020 to June 30,
2021 at an estimated premium cost not to exceed $786,000.
b. Approve the City's Workers' Compensation Buffer Program from July 1, 2020 to June
30, 2021 at an estimated premium not to exceed $194,000.
c. Approve the City's Earth Movement & Flood and Difference in Coverage Program
from July 1, 2020 to June 30, 2021 at an estimated premium not to exceed $844,000.
Coverage includes significant enhancement of past coverage.
d. Approve the City's Terrorism Insurance Program from July 1, 2020 to June 30, 2021
at an estimated premium not to exceed $13,000.
e. Approve the City's Underground Storage Tank Program from July 1, 2020 to June
30, 2021 at an estimated premium not to exceed $8,000.
4. Approve the City's obligation to pay the State of California Department of Industrial Relations
(DIR) fee for the Workers' Compensation Program from July 1, 2020 to June 30, 2021 at an
estimated assessment not to exceed $365,000.
DISCUSSION
Staff is recommending that the City Council approve a renewal agreement with Independent Cities
Risk Management Authority (ICRMA) a joint powers authority formed in 1980 in accordance with
California Government Code Section 6500. ICRMA's purpose is to provide; 1) excess and re-
insurance to protect members from extensive financial debt due to large claims, settlements and
judgments, 2) group insurance purchasing power that can offer broader coverage at a lower cost,
3) rate stability, 4) protect individual member cities through pooling of losses, and self-insurance.
ICRMA also offers to its member's actuarial services, safety trainings, claim audits, and policy
reviews. Currently comprised of 16 California cities, (Adelanto, Bell, Downey, El Monte, El
Segundo, Fullerton, Glendora, Hawthorne Hermosa Beach, Huntington Park, Inglewood, Lynwood,
Monterey Park, San Fernando, and South Gate) Santa Ana joined ICRMA in July 2019.
In this renewal period, the City acquired premiums with an overall average increase of 22% over
FY 2019-20. The City's Workers' Compensation excess coverage saw a 15% decrease. The only
significant program change is the increase in coverage for Earth Movement & Flood coverage to
include all property without value restriction. Even with a declining number of excess carriers willing
to provide quotes and an increase in recent claims/settlement sizes trending nation-wide the City's
premium increase is less than the average of other cities in ICRMA.
The General Liability Buffer coverage policy lowers the City Member Retrained Limit (MRL) from
$3 Million to $2 Million per occurrence. The workers' compensation buffer policy lowers the City's
MRL from $2 Million to $1.5 Million per occurrence.
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ICRMA JPA Renewal / Associated Insurance Premiums
July 7, 2020
Page 3
ICRMA & Gallagher Policy and Premium Fiscal Year Comparison
PREMIUMS
FY 2019-20 FY 2020-21
Excess Pool Liability Program
$1,579,693
$1,680,000
Excess Pool Workers' Compensation Program
$456,447
$386,000
Auto Property Damage Program
$70,550
$79,000
Property & Equipment Program
$356,514
$455,000
Crime Program
$10,845
$12,000
C ber Program
$21,611
$31,000
Excess Liability Buffer
$713,112
$786,000
Excess Workers' Compensation Buffer
$155,433
$194,000
Earth Movement & Flood'
$289,368
$844,000
Terrorism
$10,965
$13,000
Underground Storage Tanks
$7,282
$8,000
Total
$3,671,820
$4,488,000
Total Percentage Change
22%
'Enhanced coverage program FY 2020-21
The City is permissibly self -insured for workers' compensation through the State of California
Department of Industrial Relations (DIR). For FY 2020-21, staff is requesting that the City Council
approve the City's obligation to pay the State of California DIR estimated assessment in an amount
not to exceed $365,000 for the period of July 1, 2020 to June 30, 2021.
FISCAL IMPACT
Funds are budgeted in the proposed FY 2020-21 Liability & Property Insurance account, No.
08009051-64010 for an estimated premium and administrative cost not to exceed $3,908,000 and
Workers' Compensation account, Insurance (Risk Management), (No. 08209054-64010) for an
estimated premium cost not to exceed $945,000.
Fiscal Impact Verified By: Kathryn Downs, CPA, Executive Director — Finance and Management
Services Agency
Submitted By: Steven V. Pham, Executive Director - Human Resources
Exhibit: 1. Agreement for Consultant Services Between City Of Santa Ana And Arthur J.
Gallagher Insurance Brokers Of California, Inc. For Insurance Broker Services, Client
Service Agreement
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AGREEMENT FOR CONSULTANT SERVICES BETWEEN
CITY OF SANTA ANA AND ARTUR J. GALLAGHER
INSURANCE BROKERS OF CALIFORNIA, INC.
INSURANCE BROKER SERVICES
THIS AGREEMENT is made and effective as of July 7, 2020, between the City of Santa
Ana, a charter city and municipal corporation organized and existing under the Constitution and
laws of the State of California (hereinafter referred to as "City"), and Arthur J. Gallagher & Co.
Insurance Brokers of California, Inc. a Corporation (hereinafter referred to as "Consultant"). In
consideration of the mutual covenants and conditions setforth herein, the parties agree as follows:
TERM
This Agreement shall commence on July 1, 2020, and shall remain and continue in effect
until tasks described herein are completed, but in no event later than June 30, 2021, unless
sooner terminated pursuant to the provisions of this Agreement.
2. SERVICES
Consultant shall perform insurance brokerage services for the placement of the City of
Santa Ana's insurance programs as outlined in Exhibit A.
3. PERFORMANCE
Consultant shall at all times faithfully, competently and to the best of his or her ability,
experience, and talent, perform all tasks described herein. Consultant shall employ, at a minimum,
generally accepted standards and practices utilized by persons engaged in providing similar
services as are required of Consultant hereunder in meeting its obligations under this Agreement.
4. PAYMENT
a. The City agrees to pay Consultant for insurance premiums invoiced for
insurance placements.
b. Consultant will submit invoices for insurance premiums. Invoices shall be
submitted once insurance coverage is bound. Payment shall be made within thirty (30) days of
receipt of each invoice as to all non -disputed fees. If the City disputes any of Consultant's fees, it
shall give written notice to Consultant within thirty (30) days of receipt of an invoice of any disputed
fees set forth on the invoice.
5. LEGAL RESPONSIBILITIES
The Consultant shall keep itself informed of all local, State and Federal ordinances, laws
and regulations which in any manner affect those employed by it or in any way affect the
performance of its service pursuant to this Agreement. The Consultant shall at all times observe
and comply with all such ordinances, laws and regulations. The City, and its officers
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and employees, shall not be liable at law or in equity occasioned by failure of the Consultant to
comply with this section.
6. RELEASE OF INFORMATION
a. All information gained by Consultant in performance of this Agreement shall
be considered confidential and shall not be released by Consultant without City's prior written
authorization. Consultant, its officers, employees, agents or subcontractors, shall not without
written authorization from Risk Management Department or unless requested by the City
Attorney, voluntarily provide declarations, letters of support, testimony at depositions, response
to interrogatories or other information concerning the work performed under this Agreement or
relating to any project or property located within the City. Response to a subpoena or court order
shall not be considered "voluntary" provided Consultant gives City notice of such court order or
subpoena.
b. Consultant shall promptly notify City should Consultant, its officers,
employees, agents or subcontractors be served with any summons, complaint, subpoena, notice
of deposition, request for documents, interrogatories, request for admissions or other discovery
request, court order or subpoena from any party regarding this Agreement and the work
performed there under or with respect to any project or property located within the City. City
retains the right, but has no obligation, to represent Consultant and/or be present at any
deposition, hearing or similar proceeding. Consultant agrees to cooperate fully with City and to
provide City with the opportunity to review any response to discovery requests provided by
Consultant. However, City's right to review any such response does not imply or mean the right
by City to control, direct, or rewrite said response.
NOTICES
Any notices which either party may desire to give to the other party under this Agreement
must be in writing and may be given either by (i) personal service, (ii) delivery by a reputable
document delivery service, such as but not limited to, Federal Express, that provides a receipt
showing date and time of delivery, or (iii) mailing in the United States Mail, certified mail, postage
prepaid, return receipt requested, addressed to the address of the party as set forth below or at
any other address as that party may later designate by Notice. Notice shall be effective upon
delivery to the addresses specified below or on the third business day following deposit with the
document delivery service or United States Mail as provided above.
City: City of Santa Ana
Attn: Clerk of Council
20 Civic Center Plaza, M-30
P.O. Box 1988
Santa Ana, CA 92701
With courtesy copies to: Risk Manager
City of Santa Ana
20 Civic Center Plaza, M-28
P.O. Box 1988
Santa Ana, CA 92701
City Attorney
City of Santa Ana
20 Civic Center Plaza, M-29
P.O. Box 1988
Santa Ana, CA 92701
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To Consultant: Arthur J. Gallagher & Co., Insurance Brokers of
California., Inc.
Susan J. Blankenburg
San Francisco, CA 94111
415-536-8417
Susan Blankenburn(a)aia com
8. ASSIGNMENT
The Consultant shall not assign the performance of this Agreement, nor any part thereof,
nor any monies due hereunder, without prior written consent of the City. Upon termination of this
Agreement, Consultant's sole compensation shall be payment for actual services performed up
to, and including, the date of termination or as may be otherwise agreed to in writing between the
City Council and the Consultant.
9. LICENSES
At all times during the term of this Agreement, Consultant shall have in full force and effect,
all licenses required of it by law for the performance of the services described in this Agreement.
10. GOVERNING LAW
The City and Consultant understand and agree that the laws of the State of California shall
govern the rights, obligations, duties and liabilities of the parties to this Agreement and also govern
the interpretation of this Agreement. Any litigation concerning this Agreement shall take place in
the municipal, superior, or federal district court with geographic jurisdiction over the City of Santa
Ana. In the event such litigation is filed by one party against the other to enforce its rights under
this Agreement, the prevailing party, as determined by the Court's judgment, shall be entitled to
reasonable attorney fees and litigation expenses for the relief granted.
11. ENTIRE AGREEMENT
This Agreement contains the entire understanding between the parties relating to the
obligations of the parties described in this Agreement. All prior or contemporaneous agreements,
understandings, representations and statements, oral or written, are merged into this Agreement
and shall be of no further force or effect. Each party is entering into this Agreement based solely
upon the representations set forth herein and upon each party's own independent investigation of
any and all facts such party deems material.
12. AUTHORITY TO EXECUTE THIS AGREEMENT
The person or persons executing this Agreement on behalf of Consultant warrants and
represents that he or she has the authority to execute this Agreement on behalf of the Consultant
and has the authority to bind Consultant to the performance of its obligations hereunder. The City
Manager is authorized to enter into an amendment on behalf of the City to make the following
non -substantive modifications to the agreement: (a) name changes; (b) extension of time not to
exceed one year; (c) non -monetary changes in scope of work; (d) agreement termination.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed the
day and year first above written.
CITY OF SANTA ANA
By:
Kristine Ridge
City Manager
ATTEST:
M
Daisy Gomez
Clerk of Council
APPROVED AS TO FORM:
SONIA R CARVALHO
City Attomey
Arthur J. Gallagher & Co-
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By. Ct wto- A, ke'3�
Laura A_ Rossini CONSULTANT
Acting Chief Assistant City
Attomey
Arthur J. Gallagher & Co.
Susan J_ Blankenburg
1255 Battery Street, Suite 450
_San Francisco, CA 94111
(415) 536-841 f
Susan i3lankenburgiMaig.com
PM Initials:
Date:
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Steven V.
Executive
of Human Resources Agency
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CLIENT SERVICE AGREEMENT
EXHIBIT A
The following outlines Services provided by Gallagher over the term of this Agreement:
• Use its best efforts to secure the following lines of insurance coverage on Client'sbehalf:
o List of Insurance Placements:
o Underground Storage Tanks
o Excess Liability (Buffer)
o Excess Workers' Compensation (Buffer)
o Terrorism
o Difference in Conditions (Earth Movement & Flood)
• Work with Client to prepare comprehensive underwriting data and criteria for insurance carrier
negotiations.
• Formally present coverage submissions to agreed upon insurance carrier(s) and negotiate terms
on behalf of Client.
• Summarize the results of executing the marketing strategy developed with Client and
communicate program recommendations.
• Provide consultation to Client on exposures, existing coverage, and the desirability and/or
feasibility of potential program changes, retention and data analysis as recommended by
Gallagher.
• Request change endorsements, when requested by the Client or when otherwise necessary,
ensuring accuracy and delivery in a timely manner.
• Administration of insurance program (only if applicable), including policy review and issuance,
invoicing, coordination and/or issuance of required documentation, i.e., certificates of insurance,
and other program administration, as required by the Client.
• Review accounting and billing data; audit information from insurance carriers to ensure accuracy.
• Other Services:
o Risk Control Services
o Loss control consultation and claim advocacy
o Certificate Tracking
City of Santa Ana Exhibit A. doc
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