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PROFESSIONAL SERVICES AGREEMENT
BETWEEN THE CITY OF MIAMI BEACH
AND
GALLAGHER BENEFIT SERVICES, INC.
FOR
BENEFIT CONSULTANT SERVICES, PURSUANT TO
REQUEST FOR PROPOSALS (RFP) NO. 49 -09/10
This Professional Services Agreement ( "Agreement ") is entered into this 1s day of January
2011, (Effective Date) between the CITY OF MIAMI BEACH, FLORIDA, a municipal
corporation organized and existing under the laws of the State of Florida, having its principal
offices at 1700 Convention Center Drive, Miami Beach, Florida, 33139 ( "City "), and
GALLAGHER BENEFIT SERVICES, INC., a Florida CORPORATON, whose address is
2255 GLADES ROAD, SUITE 400E, BOCA RATON, FL 33431 (Consultant).
SECTION 1
DEFINITIONS
Agreement: This Agreement between the City and Consultant, including any
exhibits and amendments thereto.
City Manager: The chief administrative officer of the City.
Consultant: For the purposes of this Agreement, Consultant shall be deemed to be
an independent contractor, and not an agent or employee of the City.
Services: All services, work and actions by the Consultant performed or
undertaken pursuant to the Agreement.
Fee: Amount paid to the Consultant as compensation for Services.
Proposal Documents: Proposal Documents shall mean City of Miami Beach RFP No. 49-
09/10 for Benefit Consultant Services, together with all amendments
thereto, issued by the City in contemplation of this Agreement issued
by the City, and the Consultant's proposal in response thereto
(Proposal), all of which are hereby incorporated and made a part
hereof; provided, however, that in the event of an express conflict
between the Proposal Documents and this Agreement, the following
order of precedent shall prevail: this Agreement; the City's RFP; and
the Proposal.
Risk Manager: The Risk Manager of the City, with offices at 1700 Convention Center
Drive, Third Floor, Miami Beach, Florida 33139: telephone number
(305) 673 -7000, Ext. 6435: and fax number (305) 673 -7023.
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SECTION 2
SCOPE OF SERVICES (SERVICES)
2.1 In consideration of the Fee to be paid to Consultant, Consultant shall provide the
work and services described in their response to RPF 49 -09/10 as detailed in Exhibit "A"
hereto (the Services). These services include, but are not limited to assistance to the City
Administration in determining the City's employee benefit program, actuarial support and
analysis of the City's self- funded medical and dental plans, reporting, market analysis,
Request for Proposals (RFP) for the City's group medical, dental and voluntary benefit plans,
assist with the interpretation and compliance of all legislation related to group health plans,
and actuarial support for the group health and dental plans including GASB 45 filings.
SECTION 3
TERM
The term of this Agreement (Term) shall commence upon execution of this Agreement by all
parties hereto, and shall have the Effective Date as indicated on Page 1, hereto. The
Agreement shall be for an initial term of two (2) years (from the Effective Date), with three (3)
one year renewal options, to be exercised at the City Manager's sole option and discretion,
by providing Consultant with written notice of same no Tess than thirty (30) days prior to the
expiration of the initial term (or each renewal option, as the case may be).
SECTION 4
FEE
4.1 In consideration of the Services to be provided, Consultant shall be compensated on
a fixed annual fee basis, as follows:
• $190,000 annually without completion of an actuarial analysis for the City's
Governmental Accounting Standards Board (GASB 45) filing for a that year; or
• $200,000 annually with completion of an actuarial analysis for the City's
Governmental Accounting Standards Board (GASB 45) filing for that year.
Consultant is compensated from fees received directly from the Administrative Services Only
Provider (ASO Provider) currently utilized by the City. However, as permitted by law,
Consultant may receive both commission and /or fees.
Consultant hereby covenants, warrants and represents to the City that it is not (nor shall it, at
any time during the term herein, be) an affiliate of the ASO Provider. The ASO Provider that
was recommended by Consultant does not directly or indirectly have the power to exercise a
controlling influence over the management or policies of Consultant. Consultant is neither
trustee, plan administrator, fiduciary nor an employer which has employees in the health care
plan, has the ability to recommend other insurance contracts or ASO providers, and is not
limited by any agreement with the health care plan.
Consultant shall provide, on an annual basis, complete disclosure of all fees and /or
commissions received pursuant to this Agreement as detailed in Exhibit "B ".
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SECTION 5
TERMINATION
5.1 TERMINATION FOR CAUSE
If the Consultant shall fail to fulfill in a timely manner, or otherwise violates, any of
covenants, agreements, or stipulations material to this Agreement, the City, through
its City Manager, shall thereupon have the right to terminate this Agreement for
cause. Prior to exercising its option to terminate for cause, the. City ,shall notify the
Consultant of its violation of the particular term(s) of this Agreement, and shall grant
Consultant ten (10) days to cure such default. If such default remains uncured after
ten (10) days, the City may terminate this Agreement. without further notice to
Consultant. Upon termination, the City shall be fully discharged from any and all
liabilities, duties, and terms arising out of, or by virtue of, this-Agreement.
i .
Notwithstanding the above, the Consultant shall not be relieved of liability to the City
for damages sustained by the City by any breach of the Agreement by the
Consultant. The City, at its sole option and discretion, shall be entitled to bring any
and all legal /equitable actions that it deems to be in its best interest in order to
enforce the City's right and remedies against Consultant. The City shall be entitled to
recover all costs of such actions, including .reasonable attorneys' fees.
5.2 TERMINATION FOR CONVENIENCE OF THE CITY
THE CITY MAY ALSO, THROUGH ITS CITY MANAGER, AND FOR ITS
CONVENIENCE AND WITHOUT CAUSE, TERMINATE'THE AGREEMENT AT ANY
TIME DURING THE TERM BY GIVING WRITTEN NOTICE TO CONSULTANT OF
SUCH TERMINATION; WHICH SHALL BECOME, EFFECTIVE WITHIN THIRTY (30)
DAYS FOLLOWING RECEIPT BY THE CONSULTANT'OF SUCH NOTICE. IF THE
AGREEMENT IS TERMINATED FOR CONVENIENCE BY THE CITY,
CONSULTANT, SHALL BE. PAID FOR ANY SERVICES SATISFACTORILY
PERFORMED UP . TO THE DATE OF TERMINATION; FOLLOWING WHICH THE
CITY SHALL BE DISCHARGED FROM ANY AND ALL LIABILITIES, DUTIES, AND
TERMS ARISING OUT OF, OR BY VIRTUE OF, THIS AGREEMENT: .
5.3 TERMINATION FOR INSOLVENCY
The City . also.reserves the right to terminate the Agreement in the event the
Consultant is placed either in voluntary or involuntary bankruptcy or makes an
assignment for the benefit of creditors. In such event, the right.:.and obligations. for
the parties shall be the same as provided, for in Section 5.2.
SECTION 6
INDEMNIFICATION AND INSURANCE REQUIREMENTS
6.1 INDEMNIFICATION
Consultant agrees to indemnify and hold harmless the City of Miami Beach and its officers,
employees, agents, and ' contractors, from and against any and all actions (whether at law or
in equity), claims, liabilities, losses, and expenses, including, but not limited to, attorneys'
fees and costs, for personal, economic or bodily injury, wrongful death, loss of or damage to
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property, which may arise or be alleged to have arisen from the negligent acts, errors,
omissions or other wrongful conduct of the Consultant, its officers, employees, agents,
contractors, or any other person or entity acting under Consultant's control or supervision, in
connection with, related to, or as a result of the Consultant's performance of the Services
pursuant to this Agreement. To that extent, the Consultant shall pay all such claims and
losses and shall pay all such costs and judgments which may issue from any lawsuit arising
from such claims and losses, and shall pay all costs and attorneys' fees expended by the
City in the defense of such claims and losses, including appeals.
The parties agree that one percent (1%) of the total compensation to Consultant for
performance of the Services under this Agreement is the specific consideration from the City
to the Consultant for the Consultant's indemnity agreement. The provisions of this Section
6.1 and of this indemnification shall survive termination or expiration of this Agreement.
6.2 INSURANCE REQUIREMENTS
The Consultant shall maintain and carry in full force during the Term, the following insurance:
1. Consultant General Liability, in the amount of $1,000,000;
2. Consultant Professional Liability, in the amount of $1,000,000;
3. Automobile Liability, in the amount of $1,000,000 each occurrence — owned /non-
owned /hired automobiles included; and
4. Workers Compensation & Employers Liability, as required pursuant to Florida Statutes.
The insurance must be furnished by insurance companies authorized to do business in the
State of Florida. All insurance policies must be issued by companies rated no less than "B +"
as to management and not less than "Class VI" as to strength by the latest edition of Best's
Insurance Guide, published by A.M. Best Company, Oldwick, New Jersey, or its equivalent.
All of Consultant's certificates shall contain endorsements providing that written notice shall
be given to the City at least thirty (30) days prior to termination, cancellation or reduction in
coverage in the policy.
Original certificates of insurance must be submitted to the City's Risk Manager for approval
(prior to any work and /or services commencing) and will be kept on file in the Office of the
Risk Manager. The City shall have the right to obtain from the Consultant specimen copies
of the insurance policies in the event that submitted certificates of insurance are inadequate
to ascertain compliance with required coverage.
The Consultant is also solely responsible for obtaining and submitting all insurance
certificates for any sub - consultants.
Compliance with the foregoing requirements shall not relieve the Consultant of the liabilities
and obligations under this Section or under any other portion of this Agreement.
The Consultant shall not commence any work and or services pursuant to this Agreement
until all insurance required under this Section has been obtained and such insurance has
been approved by the City's Risk Manager.
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SECTION 7
LITIGATION JURISDICTIONNENUE /JURY TRIAL WAIVER
This Agreement shall be construed in accordance with the laws of the State of Florida. This
Agreement shall be enforceable in Miami -Dade County, Florida, and if legal action is
necessary by either party with respect to the enforcement of any or all of the terms or
conditions herein, exclusive venue for the enforcement of same shall lie in Miami -Dade
County, Florida. By entering into this Agreement, Consultant and the City expressly waive
any rights either party may have to a trial by jury of any civil litigation related to or arising out
of this Agreement.
SECTION 8
LIMITATION OF CITY'S LIABILITY
The City desires to enter into this Agreement only if in so doing the City can place a limit on
the City's liability for any cause of action, for money damages due to an alleged breach by
the City of this Agreement, so that its liability for any such breach never exceeds the sum of
$10,000. Consultant hereby expresses its willingness to enter into this Agreement with
Consultant's recovery from the City for any damage action for breach of contract to be
limited to a maximum amount of $10,000.
Accordingly, and notwithstanding any other term or condition of this Agreement, Consultant
hereby agrees that the City shall not be liable to the Consultant for damages in an amount
in excess of $10,000 for any action or claim for breach of contract arising out of the
performance or non - performance of any obligations imposed upon the City by this
Agreement.
Nothing contained in this section or elsewhere in this Agreement is in any way intended to
be a waiver of the limitation placed upon the City's liability, as set forth in Section 768.28,
Florida Statutes.
SECTION 9
[INTENTIONALLY DELETED]
SECTION 10
GENERAL PROVISIONS
10.1 AUDIT AND INSPECTIONS
Upon reasonable verbal or written notice to Consultant, and at any time during normal
business hours (i.e. 9AM — 5PM, Monday through Friday, excluding nationally recognized
holidays), and as often as the City Manger may, in his /her reasonable discretion and
judgment, deem necessary, there shall be made available to the City Manager, and /or such
representatives as the City Manager may deem to act on the City's behalf, to audit,
examine, and/ or inspect, any and all other documents and /or records relating to all matters
covered by this Agreement. Consultant shall maintain any and all such records at its place
of business at the address set forth in the "Notices" section of this Agreement.
10.2 [INTENTIONALLY DELETETD]
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10.3 ASSIGNMENT, TRANSFER OR SUBCONSULTING
Consultant shall not subcontract, assign, or transfer all or any portion of any work and /or
service under this Agreement without the prior written consent of the City Manager, which
consent, if given at all, shall be in the Manager's sole judgment and discretion. Neither this
Agreement, nor any term or provision hereof, or right hereunder, shall be assignable unless
as approved pursuant to this Section, and any attempt to make such assignment (unless
approved) shall be void.
10.4 PUBLIC ENTITY CRIMES
Prior to commencement of the Services, the Consultant shall file a State of Florida Form
PUR 7068, Sworn Statement under Section 287.133(3)(a) Florida Statute on Public Entity
Crimes with the City's Procurement Division.
10.5 EQUAL EMPLOYMENT OPPORTUNITY
In connection with the erforman
p ce of the Services, the Consultant shall not discriminate
against any employee or applicant for employment because of race, color, national origin,
religion, sex, gender identity, sexual orientation, disability, marital and familial status, or
age.
10.6 CONFLICT OF INTEREST
The Consultant herein agrees to adhere to and be governed by all applicable Miami -Dade
County Conflict of Interest Ordinances and Ethics provisions, as set forth in the Miami -Dade
County Code, and as may be amended from time to time; and by the City of Miami Beach
Charter and Code (as some may be amended from time to time); both of which are
incorporated by reference herein as if fully set forth herein.
The Consultant covenants that it presently has no interest and shall not acquire any
interest, direct or indirectly, which could conflict in any manner or degree with the
performance of the Services. The Consultant further covenants that in the performance of
this Agreement, no person having any such interest shall knowingly be employed by the
Consultant. No member of or delegate to the Congress of the United States shall be
admitted to any share or part of this Agreement or to any benefits arising there from.
SECTION 11
NOTICES
All notices and communications in writing required or permitted hereunder, shall be
delivered personally to the representatives of the Consultant and the City listed below or
may be mailed by U.S. Certified Mail, return receipt requested, postage prepaid, or by a
nationally recognized overnight delivery service.
6
Until changed by notice in writing, all such notices and communications shall be addressed
as follows:
TO CONSULTANT: Gallagher Benefit Services
2255 Glades Road, Suite 400E
Boca Raton, FL 33431
Attn: Richard G. Schell, Area Vice - President
TO CITY: City of Miami Beach
Human Resources Department
1700 Convention Center Drive
Miami Beach, FL 33139
Attn: Sue Radig, HR Administrator I
Notice may also be provided to any other address designated by the party to receive notice if
such alternate address is provided via U.S. certified mail, return receipt requested, hand
delivered, or by overnight delivery. In the event an alternate notice address is properly provided,
notice shall be sent to such alternate address in addition to any other address which notice
would otherwise be sent, unless other delivery instruction as specifically provided for by the
party entitled to notice.
Notice shall be deemed given on the day on which personally served, or the day of receipt by
either U.S. certified mail or overnight delivery.
SECTION 12
MISCELLANEOUS PROVISIONS
12.1 CHANGES AND ADDITIONS
This Agreement cannot be modified or amended without the express written consent of the
parties. No modification, amendment, or alteration of the terms or conditions contained herein
shall be effective unless contained in a written document executed with the same formality
and of equal dignity herewith.
12.2 SEVERABILITY
If any term or provision of this Agreement is held invalid or unenforceable, the remainder of
this Agreement shall not be affected and every other term and provision of this Agreement
shall be valid and be enforced to the fullest extent permitted by law.
12.3 ENTIRETY OF AGREEMENT
The City and Consultant agree that this is the entire Agreement between the parties. This
Agreement supersedes all prior negotiations, correspondence, conversations, agreements or
understandings applicable to the matters contained herein, and there are no commitments,
PP ents,
agreements or understandings concerning the subject matter of this Agreement that are not
contained in this document. Title and paragraph headings are for convenient reference and
are not intended to confer any rights or obligations upon the parties to this Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their appropriate officials, as of the date first entered above.
FOR CITY: CITY OF MIAMI BEACH, FLORIDA
ATTEST:
By: 6 �/J/. / . ! /� 2
Robert Parcher 1't ie Herrera Bower
City Clerk Mayor
FOR CONSULTANT: GALLAGHER BENEFIT SERVICES, INC.
ATTEST:
.., 1111 " 1 "111I■
—di/ A.
Secretary Pre- ident
., 9 2 i ,,,5'4'g /7
Print Name Print Name / Title
APPROVED AS TO
FORM & LANGUAGE
8: FOR EX ECUTION 'Ott
•
(* uorney Date
r
8
Exhibit A
Detailed Scope of Services
Scope of Services
Below is a list of the services Gallagher Benefit Services agrees to provide The City of
Miami Beach in an ongoing basis:.
♦ Work with City's Human Resources Department and medical plan provider to
develop in depth analysis of current medical program
♦ Prepare and assist in the City's RFP processes for its medical, dental, life,
disability and voluntary benefits plans including informing the City of any
alternate funding mechanisms as they become available.
♦ Suggest and /or develop additional medical plans, providing employee choice in
delivery of healthcare and to help reduce costs to the City and its employees as
necessary.
♦ Unlimited actuarial services to provide analysis of all benefit programs including:
plan design, claims, utilization trends and contribution strategies.
♦ Assist with all compliance issues including the Patient Protection and Affordable
Care Act, HIPAA, Medicare Part D, COBRA and GASB.
♦ Develop and suggest contribution strategies for the City's current five medical
plans.
♦ Complete review of all vendor summary plan descriptions for accuracy in benefits
provided and language and ensure compliance with all governmental regulation.
♦ Negotiate annual renewals for all the City's benefit plans as necessary.
♦ Full bi- annual GASB 45 evaluation and reporting.
♦ Provide the City with advice on the steps necessary to setup its OPEB Trust.
♦ Conduct the City's Healthcare Reform Forecasting Analysis
♦ Provide plan design modeling and contribution setting during renewal.
♦ Provide Medicare Part D attestation annually.
♦ Provide assistance in the oversight of the City's benefit program.
Exhibit B
Detailed Compensation Disclosure Statement
Gallagher Benefit Services, Inc.
-
A Subsidiary of Arthur J. Gallagher & Co.
January 31, 2011
Ms. Sue Radig
City of Miami Beach
1700 Convention Center Drive
Miami Beach, Florida 33139
RE: GALLAGHER BENEFIT SERVICES, INC. COMPENSATION DISCLOSURE STATEMENT
Dear Sue:
One of the core values highlighted in The Gallagher Way states, "We are an Open Society," and our open
society extends to the compensation Gallagher receives. Gallagher's policy is complete disclosure of all forms
of compensation. To achieve this purpose, the attached disclosure schedule reflects the commission or fee we
will earn on coverage we will place on your behalf.
In general, Gallagher may be compensated as follows:
1. Gallagher companies are primarily compensated from commissions or fees received from the brokerage
and servicing of policies handled for your account. As permitted by law, Gallagher companies may
receive both commissions and fees.
2. Gallagher companies may access other facilities, including wholesalers, reinsurance intermediaries,
underwriting managers and others that act as intermediaries for both Gallagher and other brokers in the
insurance marketplace. If such a facility was utilized in the placement of your account, it may have
earned and retained brokerage commission or fees for its work.
3. In placing, renewing, consulting on or servicing your insurance coverages, Gallagher companies may
participate in contingent commission arrangements with insurance companies that provide for additional
contingent compensation if certain underwriting, profitability, volume or retention goals are achieved.
Such goals are typically based on the total amount of certain insurance coverages placed by Gallagher
with the insurance company, not on an individual policy basis. As a result, Gallagher may be
considered to have an incentive to place your insurance coverages with a particular insurance company.
Our clients are always our top priority and we take pride in the fact that we always put our clients first.
Gallagher is committed to full transparency and we look to you for direction as to how Gallagher is to be
compensated for the services it provides.
One Boca Place
2255 Glades Road, Suite 400 E
Boca Raton, FL 33431
561.995.6706
Fax 561.995.6708 1 of 4
www.ajg.com
It should also be noted that:
• GBS is not an affiliate of the insurer whose Contract is recommended. This means the insurer whose contract
is recommended does not directly or indirectly have the power to exercise a controlling influence over the
management or policies of GBS.
• GBS' ability to recommend other insurance contracts is not limited by an agreement with the Insurance Carrier.
• GBS is effecting the transaction for the Plan(s) in the ordinary course of GBS business.
• The transaction set forth is at least as favorable to the Plan(s) as an arm's length transaction with an unrelated
party.
• GBS is not a trustee of the Plan(s).
• GBS is neither the Plan Administrator of the Plan(s), a fiduciary of the Plan(s), nor an employer which has
employees in the Plan(s).
For Plans subject to ERISA:
As stated above, ERISA requires Gallagher Benefit Services, Inc. (GBS) to make certain disclosures to you
concerning the sale of insurance, and the compensation that GBS will receive from it. Disclosure must be made
to an independent plan fiduciary for the ERISA Plan(s), and your acknowledgement confirms that you are
agreeing that this is a reasonable transaction in the best interest of participants in your ERISA Plan(s).
For more information on Gallagher's compensation arrangements, please visit www.ajg.com/compensation.
Page 2 of 4
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