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HomeMy WebLinkAbout11-106 Resolution No. 11-106 RESOLUTION AUTHORIZING EXECUTION OF AN AGREEMENT WITH MESIROW INSURANCE SERVICES, INC. FOR INSURANCE BROKER AND CONSULTING SERVICES FOR RISK MANAGEMENT PROGRAMS BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ELGIN, ILLINOIS, that Sean R. Stegall, City Manager, and Jennifer Quinton, Acting City Clerk, be and are hereby authorized and directed to execute an agreement on behalf of the City of Elgin with Mesirow Insurance Services, Inc. for insurance broker and consulting services in connection with risk management programs, a copy of which is attached hereto and made a part hereof by reference. s/ David J. Kaptain David J. Kaptain, Mayor Presented: June 22, 2011 Adopted: June 22, 2011 Omnibus Vote: Yeas: 6 Nays: 0 Attest: s/Jennifer Quinton Jennifer Quinton, Acting City Clerk 't AGREEMENT THIS AGREEMENT is made and entered into as of the 22nd day of June, 2011, by and between the CITY OF ELGIN,an Illinois municipal corporation(hereinafter referred to as"CITY") and Mesirow Insurance Services,Inc.,an Illinois corporation(hereinafter referred to as"BROKER"). WHEREAS, the CITY desires to engage the BROKER to furnish certain professional services in connection with providing to the CITY insurance broker and consulting services for the CITY in connection with the CITY'S risk management programs (hereinafter referred to as the "PROJECT"); and WHEREAS,the BROKER represents that it is in compliance with Illinois Statutes relating to professional registration of insurance brokers and has the necessary expertise and experience to furnish such services upon the terms and conditions set forth herein below. NOW, THEREFORE, it is hereby agreed by and between the CITY and the BROKER that the CITY does hereby retain the BROKER for and in consideration of the mutual promises and covenants contained herein,the sufficiency of which is hereby acknowledged to perform the services relating to the PROJECT as described herein, subject to the following terms and conditions and stipulations, to-wit: 1. SCOPE OF SERVICES A. All work hereunder shall be performed under the direction of the CITY'S Risk Management Assistant Kelly Wasilewski, herein after referred to as the "RISK MANAGER". B. BROKER shall provide the insurance broker and risk management consulting services to the CITY as outlined in Attachment A entitled"Scope of Services"dated May 25, 2011, a copy of which is attached hereto and made a part hereof by this reference. C. The BROKER shall insure the services performed under this Agreement are performed with due diligence, in a competent professional manner in accordance with the standard procedure and practices generally accepted in the insurance brokering profession. 2. SCHEDULE BROKER shall provide the services to the CITY pursuant to this Agreement as requested by the CITY and in accordance with a schedule as from time-to-time directed by the CITY. 4 � 3. WORK PRODUCT All work product prepared by the BROKER pursuant hereto including, but not limited to, reports,plans,designs,calculations,estimates,work drawings,studies,photographs,models and recommendations shall be the property of the CITY and shall be delivered to the CITY upon request of the RISK MANAGER; provided, however, that the BROKER may retain copies of such work product for its records. BROKER'S execution of this Agreement shall constitute BROKER'S conveyance and assignment of all right,title and interest, including but not limited to any copyright interest, by the BROKER to the CITY of all such work product prepared by the BROKER pursuant to this Agreement. The CITY shall have the right either on its own or through such other brokers as determined by the CITY to utilize and/or amend such work product. Any such amendment to such work product shall be at the sole risk of the CITY. Such work product is not intended or represented to be suitable for reuse by the CITY on any extension to the PROJECT or on any other project,and such reuse shall be at the sole risk of the CITY without liability or legal exposure to the BROKER. 4. PAYMENTS TO THE BROKER A. The CITY shall reimburse the BROKER for services under this Agreement a lump sum of Twenty-Nine Thousand Five Hundred Dollars($29,500)per year regardless of actual Costs incurred by the BROKER unless substantial modifications to the PROJECT are authorized by the CITY and approved by way of written amendment to this Agreement. B. The CITY shall pay to the BROKER such annual fee of Twenty-Nine Thousand Five Hundred Dollars ($29,500) for each year this Agreement is in effect in two installments, with the first installment in the amount of Fourteen Thousand Seven Hundred Fifty Dollars ($14,750) being paid on October 1 of each year this Agreement is in effect and the second installment of Fourteen Thousand Seven Hundred Fifty Dollars ($14,750) being paid May 1 each year this Agreement is in effect. C. Notwithstanding anything to the contrary in this agreement, BROKER shall not receive additional compensation for the time period between July 1, 2011 and September 30,2011,it being agreed and understood that BROKER'S fee for the time period of July 1, 2011 through September 30, 2012 shall be in the total amount of Twenty-Nine Thousand Five Hundred Dollars ($29,500). D. The BROKER shall not accept any contingent commission on the CITY'S account. 5. INVOICES A. The BROKER shall submit invoices in a format approved by the CITY. - 2 - B. The BROKER shall maintain records showing actual time devoted and cost incurred. The BROKER shall permit the authorized representative of the CITY to inspect and audit all data and records of the BROKER for work done under this Agreement. The BROKER shall make these records available at reasonable times during the Agreement period and for one (1)year after termination of this Agreement. 6. TERMINATION OF AGREEMENT Notwithstanding any other provision hereof,the CITY may terminate this Agreement at any time upon sixty (60) days prior written notice to the BROKER. In the event that this Agreement is so terminated,the BROKER shall be paid for services actually performed and reimbursable expenses actually incurred prior to termination,except that reimbursement shall not exceed the task amounts set forth under Paragraph 4 above. 7. TERM The term of this Agreement shall commence on July 1,2011,and shall end on September 30, 2015. 8. NOTICE OF CLAIM If the BROKER wishes to make a claim for additional compensation as a result of action taken by the CITY, the BROKER shall give written notice of his claim within fifteen (15) days after occurrence of such action. No claim for additional compensation shall be valid unless so made. Any changes in the BROKER'S fee shall be valid only to the extent that such changes are included in writing signed by the CITY and the BROKER. Regardless of the decision of the RISK MANAGER relative to a claim submitted by the BROKER, all work required under this Agreement as determined by the RISK MANAGER shall proceed without interruption. 9. BREACH OF CONTRACT If either party violates or breaches any term of this Agreement, such violation or breach shall be deemed to constitute a default, and the other party has the right to seek such administrative, contractual or legal remedies as may be suitable to the violation or breach; and, in addition, if either party, by reason of any default, fails within fifteen (15)days after notice thereof by the other party to comply with the conditions of the Agreement,the other party may terminate this Agreement. Notwithstanding the foregoing,or anything else to the contrary in this Agreement, with the sole exception of an action to recover the monies the CITY has agreed to pay to the BROKER pursuant to Paragraph 4 hereof,no action shall be commenced by the BROKER against the CITY for monetary damages. BROKER hereby further waives any and all claims to interest on money claimed to be due pursuant to this Agreement,and waives any and all such rights to interest which it claims it may otherwise be entitled pursuant to law,including,but not limited to,the local Government Prompt Payment Act,as amended,(50 ILCS 501/1,et seq.)or the Illinois Interest Act,as amended(815 ILCS - 3 - 205/1,et seq.). Additionally,BROKER shall not be entitled to,and hereby waives,any and all rights that it may have to file suit or bring any cause of action or claim for damages against the City of Elgin and/or its officials, officers, employees, agents, attorneys, boards and commissions, and other affiliated entities or persons of any nature whatsoever in whatever form after two (2) years from the termination or expiration of this Agreement. 10. INDEMNIFICATION To the fullest extent permitted by law,BROKER agrees to and shall indemnify, defend and hold harmless the CITY, its officers,employees,agents,boards and commissions from and against any and all claims, suits,judgments, costs, attorneys fees, damages or other relief, including, but not limited to, workers' compensation claims, in any way resulting from or arising out of negligent actions or omissions of the BROKER in connection herewith, including negligence or omissions of employees or agents of the BROKER arising out of the performance of this Agreement. In the event of any action against the CITY, its officers, employees, agents, boards or commissions, covered by the foregoing duty to indemnify, defend and hold harmless such action shall be defended by legal counsel of the CITY'S choosing. The provisions of this paragraph shall survive any expiration,completion and/or termination of this Agreement. 11. NO PERSONAL LIABILITY No official,officer, employee, attorney or agent of the CITY shall be charged personally or held contractually liable under any term or provision of this Agreement or because of their execution, approval or attempted execution of this Agreement. 12. INSURANCE A. Comprehensive Liability. The BROKER shall provide, pay for and maintain in effect,during the term of this Agreement,a policy of comprehensive general liability insurance with limits of at least $1,000,000 aggregate for bodily injury and $1,000,000 aggregate for property damage. The BROKER shall deliver to the RISK MANAGER a Certificate of Insurance naming the CITY as additional insured. The BROKER shall endeavor to notify the RISK MANAGER with thirty (30) days written notice of any modification or termination of the insurance policy. The Certificate of Insurance shall include the contractual obligation assumed by the BROKER under Paragraph 10 entitled"Indemnification". There shall be no endorsement or modification of this insurance to make it excess over other available insurance. -4 - f ` + B. Comprehensive Automobile Liability. Comprehensive Automobile Liability Insurance covering all owned,non-owned and hired motor vehicles with limits of not less than $500,000 per occurrence for bodily injury and/or property damage. C. Combined Single Limit Policy. The requirements for insurance coverage for the general liability and auto exposures may be met with a combined single limit of $1,000,000 per occurrence subject to a$1,000,000 aggregate. D. Professional Liability. The BROKER shall carry Brokers Professional Liability Insurance covering claims resulting from error, omissions or negligent acts with a combined single limit of not less than $1,000,000 per claim. A Certificate of Insurance shall be submitted to the RISK MANAGER as evidence of insurance protection. The BROKER shall endeavor to notify the RISK MANAGER with thirty (30) days written notice of any modification or termination of the insurance policy. 13. RECORDS AND INFORMATION The BROKER understands the confidentiality of the information it receives and acknowledges that such information will be used only for the purpose of meeting objectives of this Agreement. Further,any output from this Agreement is to be kept confidential and is for the sole use of the CITY. Such information and/or output shall not be revealed to other parties without the written permission of the CITY. All records received by the BROKER from the CITY shall remain the sole property of the CITY and all such records, or exact copies thereof, shall be turned over intact to the CITY, within thirty(30) days of request. The BROKER will make reasonable efforts to retain files and records for at least five years after expiration of coverage for each insurance/bond affected for CITY'S account. BROKER shall endeavor to provide the CITY with ninety (90) days' advance notice of any file destruction. BROKER shall retain files longer, or retain same, as directed by CITY. Confidentiality -Confidential information shall include without limitation: A. All information that concerns the business affairs of the CITY, including, without limitation, financial information, and all other data, records, and proprietary information involving the CITY'S business operations,including their residents and suppliers; B. Any information developed or created by the BROKER in connection with the services being rendered under this Agreement by the BROKER including but not limited to design, reports, estimates and concepts; and C. Any other information reasonably identified by the CITY as confidential; provided, however,that confidential information shall not include the following: (i) Information known by, or generally available to the insurance - 5 - industry or the public at large through no breach by BROKER of this confidentiality agreement; (ii) Any information given to the BROKER by a third party without continuing restrictions on its use; (iii) Information disclosed by BROKER with CITY'S written approval; and (iv) Information required to be disclosed by law. 14. NONDISCRIMINATION hi all hiring or employment made possible or resulting from this Agreement,there shall be no discrimination against any employee or applicant for employment because of sex,age,race, color,creed,national origin,marital status,of the presence of any sensory,mental or physical handicap, unless based upon a bona fide occupational qualification, and this requirement shall apply to, but not be limited to, the following: employment advertising, layoff or termination,rates of pay or other forms of compensation and selection for training,including apprenticeship. No person shall be denied or subjected to discrimination in receipt of the benefit of any services or activities made possible by or resulting from this Agreement on the grounds of sex, race,color,creed,national origin, age except minimum age and retirement provisions, marital status or the presence of any sensory,mental or physical handicap. Any violation of this provision shall be considered a violation of a material provision of this Agreement and shall be grounds for cancellation, termination or suspension, in whole or in part, of the Agreement by the CITY. 15. ASSIGNMENT AND SUCCESSORS This Agreement and each and every portion thereof shall be binding upon the successors and the assigns of the parties hereto; provided, however, that no assignment shall be made without the prior written approval of the CITY, and the CITY may refuse to approve any such proposed assignment in its sole and exclusive discretion. 16. DELEGATIONS AND SUBCONTRACTORS Any assignment,delegation or subcontracting shall be subject to all the terms,conditions and other provisions of this Agreement and the BROKER shall remain liable to the CITY with respect to each and every item,condition and other provision hereof to the same extent that the BROKER would have been obligated if it had done the work itself and no assignment, delegation or subcontract had been made. Any proposed assignment, delegation or subcontractor shall require the CITY'S advanced written approval and the CITY may refuse - 6 - to approve any such proposed assignment, delegation or subcontracting in its sole and exclusive discretion. 17. NO CO-PARTNERSHIP OR AGENCY This Agreement shall not be construed so as to create a partnership, joint venture, employment or other agency relationship between the parties hereto. The parties intend and agree that the BROKER shall act as an independent contractor. 18. SEVERABILITY The parties intend and agreed that, if any paragraph, sub-paragraph,phrase,clause or other provision of this Agreement, or any portion thereof, shall be held to be void or otherwise unenforceable, all other portions of this Agreement shall remain in full force and effect. 19. HEADINGS The headings of the several paragraphs of this Agreement are inserted only as a matter of convenience and for reference and in no way are they intended to define,limit or describe the scope of intent of any provision of this Agreement, nor shall they be construed to affect in any manner the terms and provisions hereof or the interpretation or construction thereof. 20. MODIFICATION OR AMENDMENT This Agreement and its attachments constitutes the entire Agreement of the parties on the subject matter hereof and may not be changed,modified, discharged or extended except by written amendment duly executed by the parties. Each party agrees that no representations or warranties shall be binding upon the other party unless expressed in writing herein or in a duly executed amendment hereof, or change order as herein provided. 21. APPLICABLE LAW This Agreement shall be deemed to have been made in,and shall be construed in accordance with the laws of the State of Illinois. Venue for the resolution of any disputes or the enforcement of any rights pursuant to this Agreement shall be in the Circuit Court of Kane County, Illinois. 22. NEWS RELEASES The BROKER may not issue any news releases without prior approval from the RISK MANAGER,nor will the BROKER make public proposals developed under this Agreement without prior written approval from the RISK MANAGER prior to said documentation becoming matters of public record. - 7 - 23. COOPERATION WITH OTHER BROKERS The BROKER shall cooperate with any other brokers in the CITY'S employ or any work associated with the PROJECT. 24. INTERFERENCE WITH PUBLIC CONTRACTING The BROKER certifies hereby that it is not barred from bidding on this contract as a result of a violation of 720 ILCS 5/33E et seq. or any similar state or federal statute regarding bid rigging. 25. SEXUAL HARASSMENT As a condition of this contract,the BROKER shall have written sexual harassment policies that include, at a minimum,the following information: A. the illegality of sexual harassment; B. the definition of sexual harassment under state law; C. a description of sexual harassment, utilizing examples; D. the vendor's internal complaint process including penalties; E. the legal recourse,investigative and complaint process available through the Illinois Department of Human Rights, and the Illinois Human Rights Commission; F. directions on how to contact the department and commission; G. protection against retaliation as provided by Section 6-101 of the Human Rights Act. A copy of the policies shall be provided by BROKER to the Department of Human Rights upon request(775 ILCS 5/2-105). 26. SUBSTANCE ABUSE PROGRAM. As a condition of this agreement, BROKER shall have in place a written substance abuse prevention program which meets or exceeds the program requirements in the Substance Abuse Prevention Public Works Project Act at 820 ILCS 265/1 et seq. A copy of such policy shall be provided to the CITY'S RISK MANAGER prior to the entry into and execution of this agreement. - 8 - 27. WRITTEN COMMUNICATIONS All recommendations and other communications by the BROKER to the RISK MANAGER and to other participants which may affect cost or time of completion, shall be made or confirmed in writing. The RISK MANAGER may also require other recommendations and communications by the BROKER be made or confirmed in writing. 28. NOTICES All notices, reports and documents required under this Agreement shall be in writing and shall be mailed by First Class Mail, postage prepaid, addressed as follows: A. As to the CITY: Kelly Wasilewski, Risk Management Assistant City of Elgin 150 Dexter Court Elgin, Illinois 60120-5555 Telephone: (847) 931-5917 Fax: (847) 931-5665 E-Mail: wasilewski_k@cityofelgin.org With a copy to: William A. Cogley, Corporation Counsel City of Elgin 150 Dexter Court Elgin, Illinois 60120-5555 Telephone: (847) 931-5600 Fax: (847) 931-5665 E-Mail: cogley_w@cityofelgin.org B. As to the BROKER: Michael Mackey Senior Managing Director-Public Sector Services Mesirow Insurance Services, Inc. 353 North Clark Street Chicago, Illinois 60654 Telephone: (312) 595-7900 Fax: (312) 595-7163 E-mail: mmackey@mesirowfinancial.com - 9 - 29. COMPLIANCE WITH LAWS Notwithstanding any other provision of this AGREEMENT it is expressly agreed and understood that in connection with the performance of this AGREEMENT that the BROKER shall comply with all applicable federal,state,city and other requirements of law,including, but not limited to,any applicable requirements regarding prevailing wages,minimum wage, workplace safety and legal status of employees. Without limiting the foregoing, BROKER hereby certifies,represents and warrants to the CITY that all BROKER's employees and/or agents who will be providing products and/or services with respect to this AGREEMENT shall be legal residents of the United States. BROKER shall also at its expense secure all permits and licenses,pay all charges and fees and give all notices necessary and incident to the due and lawful prosecution of the work, and/or the products and/or services to be provided for in this AGREEMENT. The CITY shall have the right to audit any records in the possession or control of the BROKER to determine BROKER'S compliance with the provisions of this paragraph. In the event the CITY proceeds with such an audit the BROKER shall make available to the CITY the BROKER'S relevant records at no cost to the CITY. BROKER shall pay any and all costs associated with any such audit. IN WITNESS WHEREOF,the parties hereto have entered into and executed this agreement effective as of the date and year first written above. CITY OF ELGIN: c By: 1‘.00a kJgall, City Manage Attest: Air Actin i� g Ci. erk � MESIROW INSURANCE SERVICES, IN . ‘Of By: i I�L_ / / s MANA(atNC* Ol' s'. , F:\Legal Dept\Agreement\Consultant Agreement-Mesirow Insurance.doc - 10 - ATTACHMENT A SCOPE OF SERVICES DATED MAY 25,2011 BROKER'S RESPONSIBILITIES 1. Serve as designated insurance broker of record for commercial insurance programs. 2. Develop an insurance marketing strategy, prepare insurance coverage specifications and submissions, and assist with preparing underwriting applications. 3. Analyze insurance proposals, meet with insurance company underwriters and present summary results of such analysis to the appropriate parties. 4. Negotiate insurance renewals and procure insurance policies as directed by the City. 5. Provide loss reports upon request. 6. Prepare and attend annual reviews of claims experience for all lines of coverage. Provide claims management services upon request. 7. Evaluate insurance programs in light of industry trends, claims history, loss development, legal or regulatory requirements, and market conditions. 8. In accordance with parameters and criteria established by the City,provide recommendations regarding the insurance programs,risk financing,insurance carriers,limits,deductible levels, administrators and service providers. 9. Provide actuarial/loss forecasting analysis and loss development factors annually. 10. Review loss exposures. 11. Assist with budget projections on future insurance costs. 12. Review insurance quotes, binders, policies and endorsements for accuracy, make recommendations regarding changes, modifications and/or coverage enhancements, and negotiate changes with carriers. 13. Offer advice on claims and assist with billing issues when needed. 14. Prepare insurance certificates. 15. Assist with establishing insurable values when needed. - 11 - ' ► 16. Assist with the transition process associated with changing insurance carriers and/or claims administrators. Act as a technical resource by providing regular updates on current market conditions, issues and trends that may affect the City. 17. Attend meetings of the Elgin City Council and other administrative meetings as requested. 18. Provide concise,timely and effective special executive summary reports, as needed. 19. Provide benchmarking reports as needed. 20. Provide up to 100 hours of loss control services per year. - 12 - i Ill , r , REPORT TO MAYOR &MEMBERS OF CITY COUNCIL E LG I N THE CITY IN THE SUBURBS AGENDA ITEM: F MEETING DATE: June 8, 2011 ITEM: Proposed Agreement with Mesirow Insurance Services forj Insurance Broker Services for the Period 2011—2015 ($29,500 per year) OBJECTIVE: Procure comprehensive insurance broker services and reduce the overall costs of the city's insurance and risk management program. RECOMMENDATION: Approval of the agreement with Mesirow Insurance Services for insurance broker services for the period 2011—2015 in the amount of$29,500 per year. r BACKGROUND The city requires the services of an insurance broker to procure the city's insurance each year and to otherwise assist the city with insurance and risk 1 management matters. Lundstrom Insurance has been the insurance broker for the city for a number of years. It has been several years since the city has issued a request for proposals for insurance broker services. The city's risk management functions were reassigned to tie legal department in 2010. Since that time the legal department has been assessing the city's overall risk management program including the services being provided by the city's insurance broker. Basic insurance broker services include assisting the city with obtaining pricing for the city's insurance policies each year and providing other incideital services related to the city's insurance program. In addition to basic insurance broker !services, comprehensive insurance broker services should also include loss control services, benchmarking and loss forecasting services. Loss control services include a variety of efforts toeduce and control insurance losses including such matters as a safety program, safety manual, training, inspections, safety incentives and analysis of losses. Benchmarking services inc ude utilizing statistics from carriers and third-party administrators to analyze loss data, mea ure improvements and determine acceptable financial levels of risk. Loss forecasting services relate to attempting to predict losses and is used when trending losses, determining cause of loss and evaluating potential changes to an insurance program. These types of services and functions are essential to ensure J ' the city is obtaining the best value in connection with its risk management program and in controlling its losses and costs in connection with such risk management program. In an effort to obtain more comprehensive insurance broker services and to otherwise ensure that the city is obtaining the best value for its insurance broker services, the city issued in April of 2011 a request for proposals requesting proposals from qualified insurance brokerage companies for comprehensive insurance broker services. Notices were published in the Courier News, Daily Herald and posted on the city's website. Requests for proposals were also sent directly to ten insurance brokerage firms. The city received eight responses to the request for proposals. The Corporation Counsel and the Risk Management Assistant evaluated the responding firms. The insurance brokerage firms were evaluated based upon their insurance industry experience, staffing and project organization, degree of service, work plan and public sector knowledge and experience. Three firms were interviewed by the Corporation Counsel and the Risk Management Assistant. OPERATIONAL ANALYSIS Following the completion of the RFP process, Mesirow Insurance Services was identified as the best qualified firm to provide the comprehensive insurance broker services being sought by the city. Mesirow's public sector division handles the largest number of municipal entities in the State of Illinois. Mesirow's clients include a wide array of public entities including states, counties, cities, villages, housing authorities, museums, school districts, state colleges, transportation districts, airports, universities, and venues. Mesirow's roster of public sector clients includes both large and small public sector clients including the State of Illinois, counties, park districts, boards of education, risk management agencies and numerous cities and villages. Mesirow has professionals in all insurance brokerage and risk management areas including marketing, loss control, claims management, risk management, consulting and financial risk management and will be able to provide personalized service. Mesirow also has a strong infrastructure in technology and accounting as well as executive level relationships with all leading insurance carriers. Mesirow is known to develop innovative strategies for its clients that offer flexibility and cost effective terms and conditions. With the assistance of Mesirow's certified OSHA instructors, the City will also be able to better manage the safety program and perform valuable training to ensure IDOL/OSHA compliance. Mesirow is an active participant in many insurance industry groups such as Public Risk Management Association (PRIMA) and Risk and Insurance Management Society (RIMS). References contacted by the city provided positive feedback on Mesirow. Attached is the proposed insurance broker services agreement with Mesirow. Pursuant to the agreement, Mesirow would provide the city comprehensive insurance broker services. These services would also include additional services to the city such as loss control, benchmarking and loss forecasting services. The scope of services to be provided by Mesirow as the city's insurance broker pursuant to the agreement may be summarized as follows: 2 • I 1. Serve as designated insurance broker of record for commercial insurance programs. 2. Develop an insurance marketing strategy, prepare insurance coverage specifications and submissions, and assist with preparing underwriting applications. 3. Analyze insurance proposals, meet with insurance company underwriters and present summary results of such analysis to the appropriate parties. 4. Negotiate insurance renewals and procure inIsurance policies as directed by the City. 5. Provide loss reports upon request. 6. Prepare and attend annual reviews of claims experience for all lines of coverage. Provide claims management services upon request. 7. Evaluate insurance programs in light of industry trends, claims history, loss development, legal or regulatory requirements, and market conditions. 8. In accordance with parameters and criteria established by the City, provide recommendations regarding the insurance programs, risk financing, insurance carriers, limits, deductible levels, administrators and service providers. 9. Provide actuarial/loss forecasting analysis andlossdevelopment factors annually. 10. Review loss exposures. 11. Assist with budget projections on future insurance costs. 12. Review insurance quotes, binders, policies and endorsements for accuracy, make recommendations regarding changes, modifications and/or coverage enhancements, and negotiate changes with carriers. 13. Offer advice on claims and assist with billing isjsues when needed. 14. Prepare insurance certificates. 15. Assist with establishing insurable values when',needed. 16. Assist with the transition process associated with changing insurance carriers and/or claims administrators. Act as a technical resource by providing regular updates on current market conditions, issues and trends that may affect the City. 3 17. Attend meetings of the Elgin City Council and other administrative meetings as requested. 18. Provide concise, timely and effective special executive summary reports, as needed. 19. Provide benchmarking reports as needed. 20. Provide up to 100 hours of loss control services per year. The agreement would be for a four-year term commencing July 1, 2011, and ending September 30, 2015. The city also retains the right under the agreement to terminate the agreement at any time upon written notice to Mesirow. Mesirow's annual fixed fee will be $29,500 for each of the four years. Mesirow will be providing the initial services from July 1, 2011 through October 1, 2011 without an additional fee to the city. INTERESTED PERSONS CONTACTED None. FINANCIAL ANALYSIS "til) Mesirow's annual fixed fee would be $29,500 for each of the four years of the agreement. By comparison, this amount is $25,100 a year less than the average annual fee of$54,600 the city has paid to the current insurance broker Lundstrom Insurance for the past four years. Additionally, because Mesirow would be providing more comprehensive services than the city's current insurance broker,the city would also be able to phase out two other consulting vendors Assurance Safety Consulting and Risk Resources. Assurance Safety Consulting provides various safety consulting services to the city's safety committee and the city has paid to Assurance Safety Consulting an average annual fee for the past three years of $9,800. Risk Resources provides insurance consulting services to the city's risk management office and the city has paid to Risk Resources an average annual fee for the past four years of$6,300. Eliminating these two other consulting vendors would calculate to additional average savings for the city of approximately$16,100 per year. As compared to the current insurance broker and the two other consulting vendors, the proposed agreement with Mesirow would provide total average savings to the city for contractual insurance broker and risk management services of approximately$41,200 per year. A) 4 rbk BUDGET IMPACT FUND(S) ACCOUNT(S) PROJECT#(S)j AMOUNT AMOUNT BUDGETED AVAILABLE Risk Management 630-0000-796-30-99 N/A $200,000 $162,000 LEGAL IMPACT None. ALTERNATIVES The city council may choose to continue to procure more limited insurance broker and risk management services through a variety of vendors, but at an additional cost to the city. NEXT STEPS 1. Enter into the insurance broker services agreement with Mesirow Insurance Services. 2. Issue a broker of record letter to existing insurance carriers. r'' 3. Transition the insurance brokerage account from Lundstrom Insurance to Mesirow Insurance Services. 4. Transfer insurance policies and administrative files. 5. Initiate insurance renewal meetings with Mesirow for the renewal of the city's insurance program effective October 1, 2011. I Originators: Kelly Wasilewski, Risk Management Asistant William A. Cogley, Corporation Counsel/Chief Development Officer Final Review: Colleen Lavery, Chief Financial Officer', William A. Cogley, Corporation CounsI/Chief Development Officer Richard G. Kozal,Assistant City Mana er/Chief Operating Officer Approved: / # 7 rtit/.// Sea,/R. Stegall, City Manager/ H.....A.A...„ 5 41)ATTACHMENTS A. Proposed Agreement with Mesirow Insurance Services, Inc. for Insurance Broker Services 41) 6 1 ' AGREEMENT THIS AGREEMENT is made and entered into as of the 22nd day of June, 2011, by and between the CITY OF ELGIN,an Illinois municipal corporation(hereinafter referred to as"CITY") and Mesirow Insurance Services,Inc.,an Illinois corporation(hereinafter referred to as"BROKER"). WHEREAS, the CITY desires to engage the BROKER to furnish certain professional services in connection with providing to the CITY insurance broker and consulting services for the CITY in connection with the CITY'S risk management programs (hereinafter referred to as the "PROJECT"); and WHEREAS,the BROKER represents that it is in compliance with Illinois Statutes relating to professional registration of insurance brokers and has the necessary expertise and experience to furnish such services upon the terms and conditions set forth herein below. NOW,THEREFORE, it is hereby agreed by and between the CITY and the BROKER that the CITY does hereby retain the BROKER for and in consideration of the mutual promises and covenants contained herein,the sufficiency of which is hereby acknowledged to perform the services relating to the PROJECT as described herein, subject to the fllowing terms and conditions and stipulations,to-wit: rik1. SCOPE OF SERVICES A. All work hereunder shall be performed under Ithe direction of the CITY'S Risk Management Assistant Kelly Wasilewski, herein after referred to as the "RISK MANAGER". B. BROKER shall provide the insurance broker and risk management consulting services to the CITY as outlined in Attachment A entitled"Scope of Services"dated May 25, 2011, a copy of which is attached hereto and made a part hereof by this reference. C. The BROKER shall insure the services pe ormed under this Agreement are performed with due diligence, in a competentprofessional manner in accordance with the standard procedure and practices generally accepted in the insurance brokering profession. 2. SCHEDULE BROKER shall provide the services to the CITY pursuant to this Agreement as requested by the CITY and in accordance with a schedule as from time-to-time directed by the CITY. r 3. WORK PRODUCT 4111) All work product prepared by the BROKER pursuant hereto including, but not limited to, reports,plans,designs,calculations,estimates,work drawings,studies,photographs,models and recommendations shall be the property of the CITY and shall be delivered to the CITY upon request of the RISK MANAGER; provided, however, that the BROKER may retain copies of such work product for its records. BROKER'S execution of this Agreement shall constitute BROKER'S conveyance and assignment of all right, title and interest, including but not limited to any copyright interest, by the BROKER to the CITY of all such work product prepared by the BROKER pursuant to this Agreement. The CITY shall have the right either on its own or through such other brokers as determined by the CITY to utilize and/or amend such work product. Any such amendment to such work product shall be at the sole risk of the CITY. Such work product is not intended or represented to be suitable for reuse by the CITY on any extension to the PROJECT or on any other project,and such reuse shall be at the sole risk of the CITY without liability or legal exposure to the BROKER. 4. PAYMENTS TO THE BROKER A. The CITY shall reimburse the BROKER for services under this Agreement a lump sum of Twenty-Nine Thousand Five Hundred Dollars($29,500)per year regardless of actual Costs incurred by the BROKER unless substantial modifications to the PROJECT are authorized by the CITY and approved by way of written amendment to this Agreement. 41111) B. The CITY shall pay to the BROKER such annual fee of Twenty-Nine Thousand Five Hundred Dollars ($29,500) for each year this Agreement is in effect in two installments, with the first installment in the amount of Fourteen Thousand Seven Hundred Fifty Dollars ($14,750) being paid on October 1 of each year this Agreement is in effect and the second installment of Fourteen Thousand Seven Hundred Fifty Dollars ($14,750) being paid May 1 each year this Agreement is in effect. C. Notwithstanding anything to the contrary in this agreement, BROKER shall not receive additional compensation for the time period between July 1, 2011 and September 30,2011,it being agreed and understood that BROKER'S fee for the time period of July 1, 2011 through September 30, 2012 shall be in the total amount of Twenty-Nine Thousand Five Hundred Dollars ($29,500). D. The BROKER shall not accept any contingent commission on the CITY'S account. 5. INVOICES A. The BROKER shall submit invoices in a format approved by the CITY. -2 - B. The BROKER shall maintain records showing actual time devoted and cost incurred. The BROKER shall permit the authorized representative of the CITY to inspect and audit all data and records of the BROKER for woik done under this Agreement. The BROKER shall make these records available at reasonable times during the Agreement period and for one (1)year after termination of this Agreement. 6. TERMINATION OF AGREEMENT Notwithstanding any other provision hereof,the CITY may terminate this Agreement at any time upon sixty (60) days prior written notice to the;'BROKER. In the event that this Agreement is so terminated,the BROKER shall be paid for services actually performed and reimbursable expenses actually incurred prior to termination,except that reimbursement shall not exceed the task amounts set forth under Paragraph 4 above. 7. TERM The term of this Agreement shall commence on July 1,2011,and shall end on September 30, 2015. 8. NOTICE OF CLAIM If the BROKER wishes to make a claim for additional compensation as a result of action (111k taken by the CITY,the BROKER shall give written notice of his claim within fifteen (15) days after occurrence of such action. No claim for additional compensation shall be valid unless so made. Any changes in the BROKER'S fee shall be valid only to the extent that such changes are included in writing signed by the CITY and the BROKER. Regardless of the decision of the RISK MANAGER relative to a claim submitted by the BROKER, all work required under this Agreement as determined by tlhe RISK MANAGER shall proceed without interruption. 9. BREACH OF CONTRACT If either party violates or breaches any term of this Agreement,such violation or breach shall be deemed to constitute a default, and the other party has the right to seek such administrative, contractual or legal remedies as may be suitable to the violation or breach; and, in addition, if either party, by reason of any default, fails within fifteen(15)days after notice thereof by the other party to comply with the conditions of the Agreement,the other party may terminate this Agreement. Notwithstanding e foregoing,or anything else to the contrary in this Agreement, with the sole exception ofian action to recover the monies the CITY has agreed to pay to the BROKER pursuant to P4ragraph 4 hereof, no action shall be commenced by the BROKER against the CITY for monetary damages. BROKER hereby further waives any and all claims to interest on money claimed to be due pursuant to this Agreement,and waives any and all such rights to interest which it claims it may otherwise be entitled pursuant to law,including,but not limited to,the local Government Prompt Payment rib* Act,as amended,(50 ILCS 501/1,et seq.)or the Ill inoisl Interest Act,as amended(815 ILCS - 3 - 205/1,et seq.). Additionally,BROKER shall not be entitled to,and hereby waives,any and all rights that it may have to file suit or bring any cause of action or claim for damages against the City of Elgin and/or its officials, officers, employees, agents, attorneys, boards and commissions, and other affiliated entities or persons of any nature whatsoever in whatever form after two (2)years from the termination or expiration of this Agreement. 10. INDEMNIFICATION To the fullest extent permitted by law,BROKER agrees to and shall indemnify,defend and hold harmless the CITY, its officers,employees,agents,boards and commissions from and against any and all claims, suits,judgments, costs, attorneys fees, damages or other relief, including, but not limited to,workers' compensation claims, in any way resulting from or arising out of negligent actions or omissions of the BROKER in connection herewith, including negligence or omissions of employees or agents of the BROKER arising out of the performance of this Agreement. In the event of any action against the CITY, its officers, employees, agents, boards or commissions, covered by the foregoing duty to indemnify, defend and hold harmless such action shall be defended by legal counsel of the CITY'S choosing. The provisions of this paragraph shall survive any expiration,completion and/or termination of this Agreement. 11. NO PERSONAL LIABILITY No official, officer,employee, attorney or agent of the CITY shall be charged personally or ) held contractually liable under any term or provision of this Agreement or because of their execution, approval or attempted execution of this Agreement. 12. INSURANCE A. Comprehensive Liability. The BROKER shall provide, pay for and maintain in effect,during the term of this Agreement,a policy of comprehensive general liability insurance with limits of at least $1,000,000 aggregate for bodily injury and $1,000,000 aggregate for property damage. The BROKER shall deliver to the RISK MANAGER a Certificate of Insurance naming the CITY as additional insured. The BROKER shall endeavor to notify the RISK MANAGER with thirty (30) days written notice of any modification or termination of the insurance policy. The Certificate of Insurance shall include the contractual obligation assumed by the BROKER under Paragraph 10 entitled "Indemnification". There shall be no endorsement or modification of this insurance to make it excess over other available insurance. -4 - B. Comprehensive Automobile Liability. Comprehensive Automobile Liability Insurance covering all owned,non-owned and hired motor vehicles with limits of not less than $500,000 per occurrence for bodily injury and/or property damage. C. Combined Single Limit Policy. The requirements for insurance coverage for the general liability and auto exposures may be melt with a combined single limit of $1,000,000 per occurrence subject to a$1,000,000 aggregate. D. Professional Liability. The BROKER shall carry Brokers Professional Liability Insurance covering claims resulting from error, omissions or negligent acts with a combined single limit of not less than $1,000,000 per claim. A Certificate of Insurance shall be submitted to the RISK MANAGER as evidence of insurance protection. The BROKER shall endeavor to notify the RISK MANAGER with thirty (30) days written notice of any modification or termination of the insurance policy. 13. RECORDS AND INFORMATION The BROKER understands the confidentiality of the information it receives and acknowledges that such information will be used only for the purpose of meeting objectives of this Agreement. Further,any output from this Agreement is to be kept confidential and is for the sole use of the CITY. Such information and/or output shall not be revealed to other parties without the written permission of the CITY. All records received by the BROKER from the CITY shall remain the sole property of the CITY and all such records, or exact copies thereof, shall be turned over intact to the CITY,iwithin thirty (30) days of request. The BROKER will make reasonable efforts to retain files and records for at least five years after expiration of coverage for each insurance/bond affected for CITY'S account. BROKER shall endeavor to provide the CITY with ninety (90) days' advance notice of any file destruction. BROKER shall retain files longer, or retain same, as directed by CITY. Confidentiality - Confidential information shall inclu4e without limitation: A. All information that concerns the business affairs of the CITY, including, without limitation, financial information, and all otlher data, records, and proprietary information involving the CITY'S business operations,including their residents and suppliers; B. Any information developed or created by thea, BROKER in connection with the services being rendered under this Agreement by the BROKER including but not limited to design, reports, estimates and concepts; and C. Any other information reasonably identified by the CITY as confidential;provided, however, that confidential information shall not include the following: ("14' (i) Information known by, or generally available to the insurance - 5 - industry or the public at large through no breach by BROKER of this 441) confidentiality agreement; (ii) Any information given to the BROKER by a third party without continuing restrictions on its use; (iii) Information disclosed by BROKER with CITY'S written approval; and (iv) Information required to be disclosed by law. 14. NONDISCRIMINATION In all hiring or employment made possible or resulting from this Agreement,there shall be no discrimination against any employee or applicant for employment because of sex,age,race, color,creed,national origin,marital status,of the presence of any sensory,mental or physical handicap, unless based upon a bona fide occupational qualification, and this requirement shall apply to, but not be limited to, the following: employment advertising, layoff or termination,rates of pay or other forms of compensation and selection for training,including apprenticeship. No person shall be denied or subjected to discrimination in receipt of the benefit of any services or activities made possible by or resulting from this Agreement on the grounds of sex,race,color,creed,national origin,age except minimum age and retirement provisions, marital status or the presence of any sensory,mental or physical handicap. Any violation of this provision shall be considered a violation of a material provision of this Agreement and shall be grounds for cancellation, termination or suspension, in whole or in part, of the Agreement by the CITY. 15. ASSIGNMENT AND SUCCESSORS This Agreement and each and every portion thereof shall be binding upon the successors and the assigns of the parties hereto; provided, however, that no assignment shall be made without the prior written approval of the CITY, and the CITY may refuse to approve any such proposed assignment in its sole and exclusive discretion. 16. DELEGATIONS AND SUBCONTRACTORS Any assignment,delegation or subcontracting shall be subject to all the terms,conditions and other provisions of this Agreement and the BROKER shall remain liable to the CITY with respect to each and every item, condition and other provision hereof to the same extent that the BROKER would have been obligated if it had done the work itself and no assignment, delegation or subcontract had been made. Any proposed assignment, delegation or subcontractor shall require the CITY'S advanced written approval and the CITY may refuse - 6 - (1116k to approve any such proposed assignment, delegation or subcontracting in its sole and exclusive discretion. 17. NO CO-PARTNERSHIP OR AGENCY This Agreement shall not be construed so as to create a partnership, joint venture, employment or other agency relationship between the parties hereto. The parties intend and agree that the BROKER shall act as an independent contractor. 18. SEVERABILITY The parties intend and agreed that, if any paragraph, sub-paragraph,phrase,clause or other provision of this Agreement, or any portion thereof, shall be held to be void or otherwise unenforceable, all other portions of this Agreement shall remain in full force and effect. 19. HEADINGS The headings of the several paragraphs of this Agreement are inserted only as a matter of convenience and for reference and in no way are they intended to define,limit or describe the scope of intent of any provision of this Agreement, nor shall they be construed to affect in any manner the terms and provisions hereof or the interpretation or construction thereof. 20. MODIFICATION OR AMENDMENT This Agreement and its attachments constitutes the entire Agreement of the parties on the subject matter hereof and may not be changed,modified, discharged or extended except by written amendment duly executed by the parties. Each party agrees that no representations or warranties shall be binding upon the other party unless expressed in writing herein or in a duly executed amendment hereof, or change order as herein provided. 21. APPLICABLE LAW This Agreement shall be deemed to have been made in,and shall be construed in accordance with the laws of the State of Illinois. Venue for the resolution of any disputes or the enforcement of any rights pursuant to this Agreement shall be in the Circuit Court of Kane County, Illinois. 22. NEWS RELEASES The BROKER may not issue any news releases without prior approval from the RISK MANAGER,nor will the BROKER make public proposals developed under this Agreement without prior written approval from the RISK MANAGER prior to said documentation becoming matters of public record. r - 7 - • t f• 23. COOPERATION WITH OTHER BROKERS The BROKER shall cooperate with any other brokers in the CITY'S employ or any work associated with the PROJECT. 24. INTERFERENCE WITH PUBLIC CONTRACTING The BROKER certifies hereby that it is not barred from bidding on this contract as a result of a violation of 720 ILCS 5/33E et seq. or any similar state or federal statute regarding bid rigging. 25. SEXUAL HARASSMENT As a condition of this contract,the BROKER shall have written sexual harassment policies that include, at a minimum,the following information: A. the illegality of sexual harassment; B. the definition of sexual harassment under state law; C. a description of sexual harassment, utilizing examples; D. the vendor's internal complaint process including penalties; Al) E. the legal recourse, investigative and complaint process available through the Illinois Department of Human Rights,and the Illinois Human Rights Commission; F. directions on how to contact the department and commission; G. protection against retaliation as provided by Section 6-101 of the Human Rights Act. A copy of the policies shall be provided by BROKER to the Department of Human Rights upon request(775 ILCS 5/2-105). 26. SUBSTANCE ABUSE PROGRAM. As a condition of this agreement, BROKER shall have in place a written substance abuse prevention program which meets or exceeds the program requirements in the Substance Abuse Prevention Public Works Project Act at 820 ILCS 265/1 et seg. A copy of such policy shall be provided to the CITY'S RISK MANAGER prior to the entry into and execution of this agreement. 111) - 8 - 27. WRITTEN COMMUNICATIONS All recommendations and other communications by the BROKER to the RISK MANAGER and to other participants which may affect cost or time of completion, shall be made or confirmed in writing. The RISK MANAGER may also require other recommendations and communications by the BROKER be made or confirmed in writing. 28. NOTICES All notices, reports and documents required under this Agreement shall be in writing and shall be mailed by First Class Mail, postage prepaid, addressed as follows: A. As to the CITY: Kelly Wasilewski, Risk Management Assistant City of Elgin 150 Dexter Court Elgin, Illinois 60120-5555 Telephone: (847) 931-5917 Fax: (847) 931-5665 E-Mail: wasilewski_k@cityofelgin.org With a copy to: William A. Cogley, Corporation Counsel City of Elgin 150 Dexter Court Elgin, Illinois 60120-5555 Telephone: (847) 931-5600 Fax: (847) 931-5665 E-Mail: cogley_w@cityofelgin.org B. As to the BROKER: Michael Mackey Senior Managing Director-Public Sector Services Mesirow Insurance Services, Inc. 353 North Clark Street Chicago, Illinois 60654 Telephone: (312) 595-7900 Fax: (312) 595-7163 E-mail: mmackey@mesirowfinancial.com (Pik - 9- a. . 29. COMPLIANCE WITH LAWS Notwithstanding any other provision of this AGREEMENT it is expressly agreed and understood that in connection with the performance of this AGREEMENT that the BROKER shall comply with all applicable federal,state,city and other requirements of law,including, but not limited to,any applicable requirements regarding prevailing wages,minimum wage, workplace safety and legal status of employees. Without limiting the foregoing, BROKER hereby certifies,represents and warrants to the CITY that all BROKER's employees and/or agents who will be providing products and/or services with respect to this AGREEMENT shall be legal residents of the United States. BROKER shall also at its expense secure all permits and licenses,pay all charges and fees and give all notices necessary and incident to the due and lawful prosecution of the work, and/or the products and/or services to be provided for in this AGREEMENT. The CITY shall have the right to audit any records in the possession or control of the BROKER to determine BROKER'S compliance with the provisions of this paragraph. In the event the CITY proceeds with such an audit the BROKER shall make available to the CITY the BROKER'S relevant records at no cost to the CITY. BROKER shall pay any and all costs associated with any such audit. IN WITNESS WHEREOF,the parties hereto have entered into and executed this agreement effective as of the date and year first written above. CITY OF ELGIN: AI) By: Sean Stegall, City Manager Attest: City Clerk MESIROW INSURANCE SERVICES, INC. By: Its F\Legal Dept\Agreement\Consultant Agreement-Mesirow Insurance.doc - 1 0 - } i • 1• T (Pik ATTACHMENT A SCOPE OF SERVICES DATED MAY 25, 2011 BROKER'S RESPONSIBILITIES 1. Serve as designated insurance broker of record for commercial insurance programs. 2. Develop an insurance marketing strategy, prepare insurance coverage specifications and submissions, and assist with preparing underwriting applications. 3. Analyze insurance proposals, meet with insurance company underwriters and present summary results of such analysis to the appropriate parties. 4. Negotiate insurance renewals and procure insurance policies as directed by the City. 5. Provide loss reports upon request. 6. Prepare and attend annual reviews of claims experience for all lines of coverage. Provide claims management services upon request. 7. Evaluate insurance programs in light of industry trends, claims history, loss development, legal or regulatory requirements, and market conditions. 8. In accordance with parameters and criteria established by the City,provide recommendations regarding the insurance programs,risk financing,insurance carriers,limits,deductible levels, administrators and service providers. 9. Provide actuarial/loss forecasting analysis and loss development factors annually. 10. Review loss exposures. 11. Assist with budget projections on future insurance costs. 12. Review insurance quotes, binders, policies and endorsements for accuracy, make recommendations regarding changes, modifications and/or coverage enhancements, and negotiate changes with carriers. 13. Offer advice on claims and assist with billing issues when needed. 14. Prepare insurance certificates. 15. Assist with establishing insurable values when needed. - 11 - 1 I • a 4111) 16. Assist with the transition process associated with changing insurance carriers and/or claims administrators. Act as a technical resource by providing regular updates on current market conditions, issues and trends that may affect the City. 17. Attend meetings of the Elgin City Council and other administrative meetings as requested. 18. Provide concise, timely and effective special executive summary reports, as needed. 19. Provide benchmarking reports as needed. 20. Provide up to 100 hours of loss control services per year. A) - 12 - 4 ELGIN THE CITY IN THE SUBURBS- DATE: June 23, 2011 TO: Kelly Wasilewski, Risk Management Assistant FROM: Jennifer Quinton, Acting City Clerk SUBJECT: Resolution No. 11-106, Adopted at the June 22, 2011, Council Meeting Enclosed you will find the agreement listed below. Please distribute this agreement to the other party and keep a copy for your records if you wish. If you have any questions please feel free to contact our office 847-931-5660 and we will do our best to assist you. Thank you. • Resolution Authorizing Execution of an Agreement with Mesirow Insurance Services, Inc. for Insurance Broker and Consulting Services for Risk Management Programs w