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HomeMy WebLinkAbout94-133 Resolution No. 94-133 RESOLUTION AUTHORIZING EXECUTION OF A CLAIMS SERVICE CONTRACT WITH WILLIS CORROON ADMINISTRATIVE SERVICES CORPORATION BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ELGIN, ILLINOIS, that Richard B. Helwig, City Manager, and Dolonna Mecum, City Clerk, be and are hereby authorized and directed to execute a Claims Service Contract on behalf of the City of Elgin with Willis Corroon Administrative Services Corporation for the administration of liability and property claims, a copy of which is attached hereto and made a part hereof by reference. s/ George VanDeVoorde George VanDeVoorde, Mayor Presented: May 11, 1994 Adopted: May 11, 1994 Omnibus Vote: Yeas 7 Nays 0 Attest: s/ Dolonna Mecum Dolonna Mecum, City Clerk CLAIMS SERVICE CONTRACT THIS AGREEMENT is made and entered into with an effective date of October 1, 1993 between WILLIS CORROON ADMINISTRATIVE SERVICES CORPORATION, a Tennessee Corporation, with principal offices at 26 Century Boulevard, P. O. Box 305148, Nashville, Tennessee 37230-5148, hereinafter referred to as "WCASC", and CITY OF ELGIN, ILLINOIS with principal offices in Elgin, Illinois, hereinafter referred to as "Client" . WITNESS: WHEREAS, "WCASC" is in the claims service business; and, WHEREAS, "Client" desires to employ "WCASC" as its claims service company to service the claims of "Client" arising out of coverages provided under policies issued by Underwriters at Lloyd's effective October 1, 1991 through September 30, 1994 for their facilities located in Elgin, Illinois. NOW, THEREFORE, "WCASC" and "Client" contract as follows: "WCASC" AGREES: 1. (a) To review all claim and/or loss reports with occurrence dates as provided under said coverages specified in the policies issued by Underwriters at Lloyd's and reported to "WCASC" under the provisions of these coverages, which involves claims against "Client" and/or claims by "Client" under said coverages. Claims Service Contract Page 1 of 6 5/93 ALA/CR/OCC (b) To investigate, adjust, settle or resist all such losses and/or claims within the agreed discretionary settlement authority limit of Five Thousand Dollars ($5, 000) . (c) To investigate, adjust, settle or resist all such losses and/or claims as are in excess of the discretionary settlement authority limit of Five Thousand Dollars ($5, 000) only with specific prior approval of "Client" . 2. To furnish claim forms necessary for proper claims admini- stration. 3 . To establish claim and/or loss files for each reported claim and/or loss. Such files shall be the exclusive property of "Client" and Underwriters at Lloyd's. Such files are avail- able for review by "Client" during normal business hours with reasonable notice. 4. To furnish "Client" a monthly Claim Activity Loss Run and a semiannual Loss Prevention Analysis Run. 5. To indemnify, defend and hold harmless "Client" with respect to any claims asserted as a result of any errors, omissions, torts, intentional torts or other negligence on the part of "WCASC" and/or its employees unless the complained of actions of "WCASC" were taken at the specific direction of "Client" . "CLIENT" AGREES: 1. To make funds available that "WCASC" may draw from at any time and from time to time for claim and/or loss payments and associated allocated expense within the discretionary settle- ment authority limit of Five Thousand Dollars ($5, 000) and Claims Service Contract Page 2 of 6 5/93 ALA/CR/OCC for claim and/or loss payments in excess of the discretionary settlement authority limit of Five Thousand Dollars ($5, 000) with the prior approval of "Client". 2 . (a) To pay "WCASC" the service fee as prescribed in this Contract. (b) To pay "WCASC" service fees as prescribed in this Contract within forty-five (45) days of the inception date of this Contract. 3 . (a) To pay all Allocated Loss Expense in addition to the claim service fee to be paid to "WCASC" as prescribed in this Contract. (b) Allocated Loss Expense shall include but not be limited to attorneys' fees, court reporters' fees, transcript fees, the cost of obtaining public records, witness fees, witnesses' travel expense, commercial photo- graphers' fees, experts' fees (i.e. engineering, physicians, chemists, etc. ) , fees for independent medical examinations, all outside expense items, and any other similar fee, cost or expense associated with the investigation, negotiation, settlement or defense of any claim hereunder or as required for the collection of subrogation on behalf of "Client" . (c) To pay all Unallocated Loss Expense, which is defined as automobile appraisal or property appraisal fees and extraordinary travel expense incurred by "WCASC" at the request of "Client" . Claims Service Contract Page 3 of 6 5/93 ALA/CK/OCC 4 . To indemnify, defend and hold "WCASC" and/or its employees harmless in the event "WCASC", acting at the specific direc- tion of "Client", becomes liable to any third party. "WCASC" AND "CLIENT" MUTUALLY AGREE AS FOLLOWS: 1. (a) The term of this Contract is continuous from its effec- tive date for one (1) year. This Contract may be terminated by either "WCASC" or "Client" upon cancella- tion of the coverages provided under the policies of insurance underwritten by Lloyd's of London. (b) "Client" shall have the option, upon termination or expiration of this Contract: (i) With approval of Underwriters of Lloyd's, to self- handle to a conclusion all claims and/or losses and associated services which have been reported to "WCASC" on the date of termination or expiration of this Contract, such handling not to result in any expense or reduction in Contract revenue to "WCASC" ; or, (ii) To have "WCASC" handle and adjust to a conclusion all claims and/or losses pending on the date of termination or expiration of this Contract. Sufficient funds of "Client", including allocated claim and/or loss expense, shall remain available to "WCASC" to liquidate such claims and/or losses. Claims Service Contract Page 4 of 6 5/93 ALA/CR/OCC 2 . This Contract covers Claim Service for "Client" in the United States of America. 3. (a) "Client" shall pay "WCASC" fees in the amount of Fifty- Six Thousand Three Hundred Dollars ($56, 300) for claims services provided during the term of this Contract. "Client" agrees to pay "WCASC" an additional annual fee of One Thousand Two Hundred Dollars ($1, 200) for systems costs. "Client" agrees to pay "WCASC" for additional expenses, including the printing of computer compatible checks or other printing specifically requested by "Client" at "WCASC's" cost. (b) Gross receipts tax or assessments in those states or jurisdictions where levied shall be in addition to the service fee. 4. In the event any one or more of the provisions of this Contract shall be determined to be invalid or unenforceable by any court or other appropriate authority, the remainder of this Contract shall continue in full force and effect, as if said invalid and unenforceable portion had not been included in this Contract. 5. This Contract shall be construed and interpreted in accor- dance with the laws of the state of Illinois. 6. This Contract represents the entire understanding of "WCASC" and "Client" and supersedes all prior oral and written com- munications between "WCASC" and "Client" as to the subject matter. Neither this Contract nor any provisions of it may Claims Service Contract Page 5 of 6 5/93 ALA/CR/OCC be amended, modified or waived except in writing signed by a duly authorized representative of "WCASC" and "Client". 7. The failure or delay of either "WCASC" or "Client" to take action with respect to any failure of the other party to observe or perform any of the terms or provisions of this Contract, or with respect to any default hereunder by such other party, shall not be construed as a waiver or operate as a waiver of any rights or remedies of either "WCASC" or "Client" or operate to deprive either "WCASC" or "Client" of its right to institute and maintain any action or proceeding which it may deem necessary to protect, assert or enforce any such rights or remedies. IN WITNESS WHEREOF, "WCASC" and "Client" have caused this Contract to be executed by the person authorized to act in their respective names. WILLIS CORROON ADMINISTRATIVE SERVICES CORPORATION WITNESS: /AA 91,(k BY: � � 0 TITLE: Senior Vice President DATE: 3///`j/` CITY OF ELGIN, ILLINOIS WITNESS:-- y ` i A/L,( BY: ∎ (�. TITLE: c_� / DATE: 194 Claims Service Contract Page 6 of 6 5/93 ALA/CR/OCC •n ;��� ° Agenda Item No. I() 4 �p�9gTED FEB 1� May 4, 1994 TO: Mayor and Members of the City Council FROM: Richard B. Helwig, City Manager SUBJECT: Claims Administration Service Contracts PURPOSE The purpose of this memorandum is to adopt separate resolu- tions approving our two current claims administration service contracts . BACKGROUND At your September 22, 1993 meeting, Council approved the City' s Self-Insurance program for the policy year from Octo- ber 1, 1993 through September 30, 1994 . Included as part of this program are the contracts for claims administration services to be provided by third-party adminis- trators as follows : 1) Workers Compensation claims to be administered by Cannon Cochran Management Services Inc. (MSI) . 2 ) Liability and Property claims to be administered by Willis Corroon Administrative Services Corp. (WCASC) . Both these companies have been handling our self-insurance claims continuously for several years (MSI since Oct. 1, 1987 and WCASC since Oct. 1, 1990) . Both service agreements have an effective date of October 1, 1993 and it is noted that both MSI and WCASC have been administering all claims pursu- ant to the terms of their respective agreements while waiting for these contracts documents . FINANCIAL IMPACT Sufficient funds have been established in our Risk Management Fund for these contracts under the general heading "Miscella- neous Services" Acct #630-0000-796-3099 . Mayor and Members of the City Council Page 2 May 5, 1994 RECOMMENDATION The recommendation is to adopt the following two (2) resolu- tions approving the claims administration services contracts with Cannon Cochran Management Services Inc and with Willis Corroon Administrative Services Corp. MAS/db RESOLUTION ACCEPTING THE PROPOSAL OF CORPORATE POLICYHOLDERS COUNSEL, INC. BE - IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ELGIN, ILLINOIS, that Larry L. Rice, City Manager, be and is hereby authorized and directed to accept the proposal on behalf of the City of Elgin of Corporate Policyholders Counsel, Inc. for risk management consulting services, a copy of which is attached hereto and made a part hereof by reference. s/ George VanDeVoorde George VanDeVoorde, Mayor Presented: September 9, 1992 Adopted: September 9, 1992 Omnibus Vote: Yeas 7 Nays 0 Recorded: Attest: s/ Dolonna Mecum Dolonna Mecum, City Clerk CORPORATE POLICYHOLDERS COUNSEL, INC. 1460 RENAISSANCE DRIVE, PARK RIDGE, ILLINOIS 60068 (708)298-1770 FAX:(708)298-3458 vd INDEPENDENT CONSULTANTS ESTABLISHED 1898 August 21, 1992 Mr. Michael A. Sarro Purchasing Director City of Elgin 150 Dexter Court Elgin, IL 60120-5555 RE: RISK MANAGEMENT CONSULTING SERVICES Dear Mike: Thank you for your letter of August 18, 1992, offering CPC the opportunity to provide you with a proposal for continuation of our services to the City of Elgin. Specifically, this proposal deals with the review and analysis of the renewal proposal you are to receive from Hanchette Insurance on or about August 31, 1992. We propose to conduct an in depth analysis of the proposal including, but not necessarily limited to the following: 1. An examination of the program description as presented by the broker. 2. A thorough analysis of all specimen policies and endorsements furnished by the broker to be certain the forms do, in fact, provide the described coverage. 3. A complete analysis of the financial ramifications for the City of each of the risk financing alternatives being offered, if any. The results of our analysis will be documented in both a spreadsheet format and a written narrative. Our report will contain recommendations for modification to the proposed program, if appropriate, and a specific recommendation regarding acceptance of any alternatives which may be presented. We anticipate a turn around time of approximately three days from the time we receive the proposal until we will be prepared to deliver our report. As such, there should be no problems whatsoever with the meeting schedule you have outlined. Management Consultants in Risk and Insurance "cl„ +- 4 Mr. Michael A. Sarro Page 2 August 21, 1992 Although I will have the overall responsibility for the services provided to the City of Elgin, I believe your interests will be best served by assigning the primary responsibility to Richard Rudolph. In answer to the specific questions you have asked regarding qualifications and experience, I have attached a brief resume of Rich's credentials, a list of Illinois public entities for which he has provided risk management consulting services and a list of a few of his publications and presentations which deal directly with the public sector. After reviewing these attachments, I am sure you will understand my excitement about having Rich as a part of CPC. Rich's hourly fee for this or other work for the City of Elgin will be $165. Based upon this rate and our estimate of the time required to accomplish the work described above, we project our fee for this project to be approximately $2,000. We are confident enough with this estimate to agree that under no circumstances will our fee exceed $2,250. If you have any questions regarding any of the foregoing, please give either Rich or me a call. Very truly yours, CORPORATE POLICYHOLDERS COUNSEL, INC. By: l au/- Ronald E. Seaver RES:ms enc. • • • RICHARD G. RUDOLPH, PhD. CPCU, ARM, ARP, APA, AIAF, AAM Richard Rudolph is a risk management consultant with Corporate Policyholders Counsel, Inc., Park Ridge, Illinois. Dr. Rudolph has twenty-one years of experience covering all lines of insurance as well as insurance training, underwriting, management, and risk management consulting. He earned a Bachelor of Science in Accountancy from the University of Illinois-Urbana, where he also studied international monetary theory and insurance and risk management in graduate school. He attained his MBA in 1984 and his Doctor of Philosophy in Business Administration in 1989 from California Coast University. Dr.Rudolph holds the Chartered Property Casualty Underwriters designation as well as the Associate in Risk Management, Associate in Research and Planning, Associate in Premium Auditing, Associate in Insurance Accounting and Finance, and Associate in Automation Management designations from the Insurance Institute of America. He is currently serving on the Faculty Committee and the Budget and Finance Committee of the Insurance School of Chicago and is the Treasurer of the Insurance Society of Chicago. He teaches CPCU classes at the Insurance School of Chicago. He is also the Treasurer of the Chicago Chapter, Society of Chartered Property and Casualty Underwriters and serves on the Society's national research activities committee. In addition, he is a member of the Society of Insurance Research where he serves on the Publication Committee. Rudolph is the author of the Society of CPCU 1987 Outstanding Research Project, "Bond- financed Self-Insurance for Public Entities:A Risk Management Alternative"and has written several other published articles on insurance and risk management topics. He speaks extensively for the Society of CPCU on insurance-related topics. • RICHARD G. RUDOLPH, PH.D. CPCU, ARM, ARP, APA, AIAF, AAM Publications: "Bond Financed Self-Insurance for Public Entities: A Risk Management Alternative," CPCU Journal, March 1988. (1987 Society of CPCU Outstanding Research Project Award winner) "Risk Financing for Schools: The Capital Markets Approach, " School Business Affairs. June 1988. "Public Officials Liability - Solving the Riddle," unpublished manuscript under consideration for • publication. Presentations: "Bond-financed Self-Insurance for Public Entities," Urban Counties Council of Illinois, April 1987. "Risk Management for County Governments," Urban Counties Council of Illinois, February, 1989. "Public Officials Errors and Omissions," Urban Counties Council of Illinois, Bloomington, Illinois, April 1990. RICHARD G. RUDOLPH, PH.D. CPCU, ARM, ARP, APA, AIAF, AAM Public Entity Clients Self-insurance Adminstration Urban Counties Council of Illinois - manager of self-insured workers' compensation pool and general insurance consultant for members Bond-Financed Self-Insurance and Bond-Assisted Insurance Programs County of Knox County of Sangamon County of Piatt County of Carroll City of Springfield, City Water, Light and Power Department Joliet Park District North Main Fire Protection District Streator Elementary School District Streator High School District Byron Forest Preserve District Risk Management and Insurance Audit Springfield Park District Byron Forest Preserve District Chicago Public Schools Ella 1 1A enda Item No. I August 25, 1992 MEMORANDUM TO: Mayor and Members of City Council FROM: City Manager SUBJECT: Selection of an Independent Insurance Consultant PURPOSE: The purpose of this memorandum is to provide Council with information to select an independent insurance consultant. BACKGROUND: Approximately August 1st, the City' s longtime independent insurance consultant, Corporate Policyholders Coun- sel (CPC) underwent some dramatic personnel changes that result- ed in most of its consultants ( including the two individuals who have served the City of Elgin over the last several years) leav- ing to form a new consulting firm called Risk Resources (please refer to Attachments "Al" & "A2" ) . Because of this unusual situation, staff drafted letters to both firms requesting proposals regarding the evaluation of the upcom- ing renewal quotation from Hanchette Insurance for our new poli- cy period beginning October 1st as well as requesting hourly rates for other future consulting work (please refer to Attach- ments "B1" & "B2" ) . Both firms responded with proposals by our 12 :00 noon August 24th deadline (please refer to Attachments "Cl" & "C2" ) . Staff's evaluation of these proposals finds: CPC has hired a new consultant, Richard Rudolph, who would become our primary consultant; Risk Resources indicates that Bill Leinheiser, who has been our prima- ry consultant for the last 5 years, would continue in that capacity. CPC has offered a somewhat better-priced proposal pack- age, offering to perform Hanchette's upcoming renewal quotation for a maximum of $2250 (vs . Risk Resources estimate of $3000-$4000) and offering other future consulting work at $165/hour (vs . Risk Resources $170/hour. ) Memo to Mayor and Members of City Council Page 2 August 25, 1992 The crux of the analysis comes down to this question: Would the City be better served by staying with CPC or by switching to Risk Resources? CPC has been our independent consulting firm for ap- proximately 20 years, has always done an outstanding job, is offering somewhat better rates, but there would be some "learning time" involved for Mr. Rudolph to become familiar with Elgin's self-insurance program. Risk Resources offers Mr. Bill Leinheiser, who has done an outstanding job serving as our primary consul- tant for the past 5 years and is most familiar with the City's current self-insurance program. Staff is of the opinion that both firms would do an outstanding job. Taking all factors into considera- tion, staff recommends that we stay with CPC as our independent insurance consultant. FINANCIAL IMPACT: There are sufficient funds set-aside for the review of this year's insurance renewal quotation by CPC in the Risk Management Fund under the general classification "Mis- cellaneous Professional Services" (Approp #630-809-9320) . Al, RECOMMENDATION: The recommendation is that Corporate Policy- holders Counsel be retained as the City' s independent insurance consultant and that they be directed to review our upcoming 1992/1993 Insurance program quotation for the not to exceed price of $2250. Larr• . rice, ity Manager Al, CORPORATE POLICYHOLDERS COUNSEL, INC. 1460 RENAISSANCE DRIVE, PARK RIDGE,ILLINOIS 60068 (708)298-1770 FAX:(708)298-3458 cij INDEPENDENT CONSULTANTS ESTABLISHED 1898 August 3, 1992 • Mr. Michael A. Sarro Purchasing Director City of Elgin 150 Dexter Court Elgin, IL 60120 Dear Mike: You may be aware that Messrs. Coombs, Trompeter and Leinheiser have left CPC to pursue other endeavors. The purpose of my letter to you at this point is to explain and clarify this situation rok and to assure you that CPC remains and will continue as a strong and viable force within the consulting community. Further, unless you specifically instruct otherwise, we will continue to provide those services to your organization which we have agreed to_provide as well as any others you may wish us to perform. You should also be aware that all of your original files remain in the possession of CPC. CPC has for ninety-four years been a pioneer and recognized leader in the Risk Management Consulting field. I assure you that it will continue as such. I will be more than pleased to answer any questions you may have regarding this situation in general and to discuss specifically our plans for a smooth and uninterrupted continuation of our service to your firm. Very truly yours, CORPORATE POLICYHOLDERS COUNSEL, INC. By: • E. Seaver Chairman RES:lf Management Consultants in Risk and Insurance "Al" ISK OURCES 4.1) Independent Risk Management Consultants . Insurance Advisors August 1, 1992 Michael A. Sarro Purchasing Agent . City of Elgin 150 Dexter Court Elgin, IL 60120 Dear Mike: All consultants except one from.CPC have formed a new consulting firm effective August 1, 1992. The name of our firm is Risk Resources. We plan to continue to provide the same services and independent counsel you have received from us in the past. Our method of operation and billing structure will not change. I have enclosed two business cards for your files. Please amend your internal records accordingly, so we do not miss any written correspondence with you. I would also appreciate your re-sending anything to me that may have been mailed since July 28, 1992. We are informing your agents and insurers of this change also. We welcome the opportunity to continue our relationship, and appreciate your confidence in us. iyou, iii.)g..,e,j William Leinheiser WL:kk I Two Westbrook Corporate Center • Wolf Road at 22nd Street Suite 640 • Westchester.Illinois 60154 Telephone (708)449-0165 • Fax (708)449-0235 °A2° . . • TELEPHONE 708/695-6500 Eon FAX 708/931-5610 FOR HEARING IMPAIRED TDD 708/931-5616 CITY OF ELGIN 150 DEXTER COURT ELGIN, ILLINOIS 60120-5555 August 18, 1992 Mr. Ronald Seaver Corporate Policyholders Counsel 1460 Renaissance Drive Park Ridge, IL 60068 Dear Ron: I am in receipt of your letter, dated August 3rd, as well as a similar one from Mr. Bill Leinheiser of Risk Resources, regarding the recent personnel changes that have occurred at CPC. As you are aware, the City will be receiving its renewal quotation from Hanchette Insurance shortly for the upcoming poli- cy period beginning October 1st; and, as has been our practice in recent years, we would like to have an independent insurance consultant review this proposal and make recommendations to our City Council in September. Because of the circumstances alluded to in your letter as well as our desire to have the best possible consultant serving the City of Elgin; we are requesting letters of proposal from both you and Risk Resources. Your letter of proposal should specifically describe the scope of services you will perform in the evaluation of this year's renewal quotation from Hanchette, including the estimated fee for those services and your time frame for completing the evaluation (Note: Hanchette's proposal is due August 31st and the City Council meetings are scheduled for September 9th and September 23rd) . Further, your proposal should include the name(s) of the consultant(s) that will be handling the City of Elgin's account, both for this renewal and for any future work. Please indicate these individual(s) qualifications, including specific comments regarding: a. Their experience and expertise in handling public entity clients. b. Public entity clients in Illinois . c. Level of experience in handling the above over the past 5-10 years. "Bl" Printed on recycled parer Page 2 August 18, 1992 Additionally, please include your hourly fee for consulting services, both for this renewal and for any future work through December 31, 1993. Unfortunately, because of the timing of this situation the City will require receipt of your proposal no later than 12 : 00 noon on next Monday August 24th so that this issue may be consid- ered and that a consultant may be selected by City Council at their August 26th Committee of the Whole meeting. Your proposal may be "faxed" to my attention: City Fax #708-931-5610. Should you have any questions, please call . Sincerely, Michael A. Sarro Purchasing Director MAS/db cc: Mr. Ronald Pavlik & Mr. Bill Beckmann Hanchette Insurance P. 0. Box 544 Elgin, IL 60121 • TELEPHONE 708/695-6500 Ele3i FAX 708/931-5610 FOR HEARING IMPAIRED r TDD 708/931-5616 ��OE1CITY OF ELGIN 150 DEXTER COURT ELGIN, ILLINOIS 60120-5555 JjoR„c_F August 18, 1992 Mr. Bill Leinheiser Risk Resources 2 Westbrook Corporate Center, Suite 640 Westchester, IL 60154 Dear Bill : I am in receipt of your letter, dated August 1st, as well as a similar one from Mr. Ron Seaver of Corporate Policyholders Counsel, regarding the recent personnel changes that have oc- curred at CPC. As you are aware, the City will be receiving its renewal quotation from Hanchette Insurance shortly for the upcoming poli- cy period beginning October 1st; and, as has been our practice in recent years, we would like to have an independent insurance consultant review this proposal and make recommendations to our City Council in September. Because of the circumstances alluded to in your letter as well as our desire to have the best possible consultant serving the City of Elgin; we are requesting letters of proposal from both you and Corporate Policyholders Counsel . Your letter of proposal should specifically describe the scope of services you will perform in the evaluation of this year' s renewal quotation from Hanchette, including the estimated fee for those services and your time frame for completing the evaluation (Note: Hanchette's proposal is due August 31st and the City Council meetings are scheduled for September 9th and September 23rd) . Further, your proposal should include the name(s) of the consultant(s) that will be handling the City of Elgin's account, both for this renewal and for any future work. Please indicate these individual(s) qualifications, including specific comments regarding: a. Their experience and expertise in handling public entity clients . fillk b. Public entity clients in Illinois. c. Level of experience. in handling the above over the past 5-10 years. ® - Mr. Bill Leinheiser Page 2 August 18, 1992 Additionally, please include your hourly fee for consulting services, both for this renewal and for any future work through December 31, 1993 . Unfortunately, because of the timing of this situation the City will require receipt of your proposal no later than 12 :00 noon on next Monday August 24th so that this issue may be consid- ered and that a consultant may be selected by City Council at their August 26th Committee of the Whole meeting. Your proposal may be "faxed" to my attention: City Fax #708-931-5610. Should you have any questions, please call . �Siincerely, Michael A. Sarro Purchasing Director MAS/db cc: Mr. Ronald Pavlik & Mr. Bill Beckmann Hanchette Insurance P. 0. Box 544 Elgin, IL 60121 CORPORATE POLICYHOLDERS COUNSEL, INC. 1460 RENAISSANCE DRIVE, PARK RIDGE, ILLINOIS 60068 (708)298-1770 FAX:(708)298-3458 INDEPENDENT CONSULTANTS ESTABLISHED 1898 August 21, 1992 Mr. Michael A. Sarro Purchasing Director City of Elgin 150 Dexter Court Elgin, IL 60120-5555 RE: RISK MANAGEMENT CONSULTING SERVICES Dear Mike: Thank you for your letter of August 18, 1992, offering CPC the opportunity to provide you with a proposal for continuation of our services to the City of Elgin. Specifically, this proposal deals with the review and analysis of the renewal proposal you are to receive from Hanchette Insurance on or about August 31, 1992. We propose to conduct an in depth analysis of the proposal including, but not necessarily limited to the following: 1. An examination of the program description as presented by the broker. 2. A thorough analysis of all specimen policies and endorsements furnished by the broker to be certain the forms do, in fact, provide the described coverage. 3. A complete analysis of the financial ramifications for the City of each of the risk financing alternatives being offered, if any. The results of our analysis will be documented in both a spreadsheet format and a written narrative. Our report will contain recommendations for modification to the proposed program, if appropriate, and a specific recommendation regarding acceptance of any alternatives which may be presented. We anticipate a turn around time of approximately three days from the time we receive the proposal until we will be prepared to deliver our report. As such, there should /ok be no problems whatsoever with the meeting schedule you have outlined. Management Consultants in Risk and Insurance "ci" • Mr. Michael A. Sarro Page 2 August 21, 1992 Although I will have the overall responsibility for the services provided to the City of Elgin, I believe your interests will be best served by assigning the primary responsibility to Richard Rudolph. In answer to the specific questions you have asked regarding qualifications and experience, I have attached a brief resume of Rich's credentials, a list of Illinois public entities for which he has provided risk management consulting services and a list of a few of his publications and presentations which deal directly with the public sector. After reviewing these attachments, I am sure you will understand my excitement about having Rich as a part of CPC. Rich's hourly fee for this or other work for the City of Elgin will be $165. Based upon this rate and our estimate of the time required to accomplish the work described above, we project our fee for this project to be approximately $2,000. We are confident enough with this estimate to agree that under no circumstances will our fee exceed $2,250. If you have any questions regarding any of the foregoing, please give either Rich or me a call. Very truly yours, CORPORATE POLICYHOLDERS COUNSEL, INC. By: ` Ronald E. Seaver RES:ms enc. • • • 1 • RICHARD G. RUDOLPH, PhD. CPCU, ARM, ARP, APA, AIAF, AAM Richard Rudolph is a risk management consultant with Corporate Policyholders Counsel, Inc., Park Ridge, Illinois. Dr. Rudolph has twenty-one years of experience covering all lines of insurance as well as insurance training, underwriting, management, and risk management consulting. He earned a Bachelor of Science in Accountancy from the University of Illinois-Urbana, where he also studied international monetary theory and insurance and risk management in graduate school. He attained his MBA in 1984 and his Doctor of Philosophy in Business Administration in 1989 from California Coast University. Dr.Rudolph holds the Chartered Property Casualty Underwriters designation as well as the Associate in Risk Management,Associate in Research and Planning, Associate in Premium Auditing, Associate in Insurance Accounting and Finance, and Associate in Automation Management designations from the Insurance Institute of America. He is currently serving on the Faculty Committee and the Budget and Finance Committee of the Insurance School of Chicago and is the Treasurer of the Insurance Society of Chicago. He teaches CPCU classes at the Insurance School of Chicago. elk He is also the Treasurer of the Chicago Chapter, Society of Chartered Property and Casualty Underwriters and serves on the Society's national research activities committee. In addition, he is a member of the Society of Insurance Research where he serves on the Publication Committee. Rudolph is the author of the Society of CPCU 1987 Outstanding Research Project, "Bond- financed Self-Insurance for Public Entities:A Risk Management Alternative"and has written several other published articles on insurance and risk management topics. He speaks extensively for the Society of CPCU on insurance-related topics. r RICHARD G. RUDOLPH, PH.D. CPCU, ARM, ARP, APA, AIAF, AAM 41/ Publications: "Bond Financed Self-Insurance for Public Entities: A Risk Management Alternative," CPCU Journal. March 1988. (1987 Society of CPCU Outstanding Research Project Award winner) "Risk Financing for Schools: The Capital Markets Approach, " School Business Affairs. June 1988. "Public Officials Liability - Solving the Riddle," unpublished manuscript under consideration for publication. Presentations: "Bond-financed Self-Insurance for Public Entities," Urban Counties Council of Illinois, April 1987. "Risk Management for County Governments," Urban Counties Council of Illinois, February, 1989. "Public Officials Errors and Omissions," Urban Counties Council of Illinois, Bloomington, Illinois, April 1990. • RICHARD G. RUDOLPH, PH.D. CPCU, ARM, ARP, APA, AIAF, AAM Public Entity Clients Self-insurance Adminstration Urban Counties Council of Illinois - manager of self-insured workers' compensation pool and general insurance consultant for members Bond-Financed Self-Insurance and Bond-Assisted Insurance Programs County of Knox County of Sangamon County of Piatt County of Carroll City of Springfield, City Water, Light and Power Department Joliet Park District North Main Fire Protection District Streator Elementary School District Streator High School District Byron Forest Preserve District Risk Management and Insurance Audit Springfield Park District Byron Forest Preserve District Chicago Public Schools ISK OURCES Independent Risk Management Consultants Insurance Advisors August 18, 1992 Michael A. Sarro Purchasing Director City of Elgin 150 Dexter Court Elgin, IL 60120 RE: INSURANCE CONSULTING SERVICES Dear Mike: This is in response to your letter of August 18, 1992 requesting a proposal for independent insurance consulting services. As you know, three consultants have left Corporate Policyholders Counsel and formed Risk Resources. We provide independent insurance advic. on a fee basis. I have been involved with the City of Elgin's insurance program since 1987. The services I have provided include the preparation of specifications that have been used to solicit insurance proposals from various agents and brokers, the review of those proposals, meeting with representatives of the City and City Council to discuss the merits of the various proposals and also responding to various insurance questions raised by employees of the City during the year. I very much want to continue to provide these services to the City of Elgin in my capacity as a consultant at Risk Resources. I propose to provide the following services associated with the October 1, 1992 renewal of your property and casualty insurance program. 1. Review the initial renewal offering from Hanchette Insurance. from both a coverage and cost standpoint.. 2. Negotiate with the broker and proposed insurer regarding coverage issues, cost and alternatives. In the past, these negotiations have covered such things as the inclusion of coverage for sexual abuse claims, the inclusion of coverage for claims arising out of the City's failure to provide services, replacement cost valuation as opposed to depreciated cost valuation for specific high valued City vehicles, optional proposals at various levels of self-insurance, and others. Two Westbrook Corporate Center • Wolf Road at 22nd Street Suite 640 • Westchester,Illinois 60154 Telephone (708)449-0165 • Fax (708)449-0235 "C2" August 18, 1992 Page 2 Michael A. Sarro 3. . Prepare an independent analysis of what is proposed including all options for both the City management staff as well as the City Council. This analysis will include a recommendation regarding the specific coverages and options the City should include in the October 1, 1992 renewal insurance program. As part of this process, we anticipate appearing before the City Council to outline the proposals submitted and answer any questions any of the Council members may have. 4. If the City wishes, we will also review the renewal policies when they are issued to confirm or deny they are in accordance with the proposal that was accepted. As mentioned earlier, I will personally do the work and am very familiar with Elgin's current program of insurance as well as the City's philosophy on insurance matters. I have been involved as an insurance advisor to the City since 1987. Prior to that time, the City's insurance advisor was Steven Coombs. Mr. Coombs is also with Risk Resources and can be considered a backup to advising the City. We charge on an hourly basis for our time with my rate being $170. It is extremely difficult to estimate the total fee we may incur since it will be dependent upon the number of options offered for the renewal. We estimate the total fee to be in the $3,000 to $4,000 range. We do not anticipate any problems with making a recommendation and appearing at the September 23 City Council meeting. Although it is possible to complete the project by the September 9 City Council meeting, depending on the extent of the negotiations that may be necessary after the initial proposals are submitted, it may be difficult to put together a complete synopsis prior to the September 9 meeting date. I believe I am well qualified to perform this important assignment for the City. I have personally been the City's primary insurance consultant for the past five years. In addition, I have personally handled, not supervised, the following Illinois public entity clients in the past five years. City of Kankakee Village of Mount Prospect City of Park Ridge Village of Winnetka The Chicago Public Building Commission • August 18, 1992 Page 3 Michael A. Sarro '" In addition, I have personally handled within the past five years the following non-profit public entities. These include both public entities similar to the City of Elgi . :as well as quasi- public entities. The Art Institute of Chicago The Chicago Historical Society City Light & Water of Paragould, Arkansas City Water & Light of Jonesboro, Arkansas Gateway Technical College in Kenosha, Wisconsin Kokomo Public Schools in Kokomo, Indiana Logan (Agency for mentally retarded in St. Joseph's County, Indiana) Madison Area Technical College in Madison, Wisconsin The Metropolitan Museum of Art in New York City Milwaukee Area Technical College in Milwaukee, Wisconsin The Penn-Harris-Madison Schools in Mishawaka, Indiana Suburban Library System Waukegan Port District Mike, the above is our proposal for me to continue servicing the City of Elgin. If necessary, I am available to meet with you and/or the City Council to discuss my qualifications further. I did not include my educational background nor my work history but if you need that, please let me know. Prior to forming Risk Resources, I was associated with CPC for nearly 14 years. I look forward to hearing from you regarding the outcome of the City Council in this important matter. Very truly yours, William Leinheiser WL:kk • • 1