2003-25414 Reso
RESOLUTION NO. 2003-25414
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF
MIAMI BEACH, FLORIDA, ACCEPTING THE CITY MANAGER'S
RECOMMENDATION OF ARTHUR J. GALLAGHER AND CO., AS THE CITY'S
BROKER OF RECORD FOR PROPERTY AND LIABILITY INSURANCE, AND
AUTHORIZING THE ADMINISTRATION TO ENTER INTO NEGOTIATIONS
ARTHUR J. GALLAGHER AND CO., AND IF NEGOTIATIONS ARE
SUCCESSFUL, AUTHORIZING THE MAYOR AND CITY CLERK TO EXECUTE
AN AGREEMENT WITH ARTHUR J. GALLAGHER, PURSUANT TO
REQUEST FOR PROPOSALS (RFP) NO. 61-02/03, FOR THE PURPOSE OF
OBTAINING INSURANCE COVERAGE, AS NEEDED BY THE CITY FOR AN
ANNUAL AMOUNT NOT TO EXCEED $25,000.
WHEREAS, the City of Miami Beach Risk Management Program consists of both
self-insured and insured programs depending on the type of exposures; and
WHEREAS, the City requires that the selected BrokerlAgent provide, at a
minimum, the following services:
1. Provide assistance to the City's Risk Manager in determining the City's
commercial insurance needs;
2. Prepare reports informing the City's Risk Manager regarding insurance market
conditions that may affect the City's policies and risk exposures prior to policy
renewal;
3. Prepare bid specifications and underwriting data (subject to the approval of the
City's Risk Manager) to submit to acceptable insurance markets for the purpose
of obtaining quotations for insurance coverage;
4. Upon direction from the City, approach all acceptable insurance companies on
behalf of the City, and obtain written, competitive quotes for insurance coverage.
A complete list of the companies contacted, along with their response, must be
submitted;
5. Present to the City all insurance coverage proposals obtained. This report
must contain a comprehensive analysis by the broker of the proposals obtained
with recommendations for the selection of one proposal for the particular risk to
be covered;
6. Negotiate, on behalf of, and with direction from, the City with all insurance
carriers to obtain the best prices, terms and conditions available;
7. Review all insurance policies and invoices received for policies purchased by
the City to assure their accuracy and appropriateness;
8. Review and evaluate existing City policies to provide recommendations for
possible improvement of price, terms, and conditions;
9. Service existing policies as necessary. This includes but is not limited to,
issuing certificates of insurance to provide evidence of coverage, promptly
making policy changes, and obtaining endorsements;
10. Report any claims to the insurance carrier and monitor the handling and
disposition of the claim to assure the City's policy rights are protected;
11. Provide an annual report summarizing all insurance coverage in place,
anticipated market conditions, recommendations and strategies; and
WHEREAS, a Request for Proposal (RFP) was issued on August 12, 2003, with
an opening date of October 15, 1999. Eleven (11) specifications were issued, resulting
in the receipt of proposals from the following two (2) firms:
1. Arthur J. Gallagher and Co.
2. The Aon Group; and
WHEREAS, The Aon Group was deemed non-responsive for failure to provide
their company's annual financial report and a list of insurance companies used for
placement and premium volume for the past three years; and
WHEREAS, Letter to Commission (LTC) No. 233-2003, appointed the following
individuals to serve as members of the Evaluation Committee for RFP No. 61-02/03 -
Broker of Record (the "Committee"):
Cliff Leonard, Risk Manager
Georgina Echert, Assistant Director, Finance Department
Judy Weinstein, Assistant City Attorney
Joe Pallant, Resident and Insurance Professional
Ron Stone, Resident and Insurance Professional; and
WHEREAS, the Committee convened on November 4, 2003, and discussed the
following:
. Cone of Silence requirements and Government in the Sunshine Laws.
. Project overview (Le., scope of services).
. Evaluation process and committee decision; and
WHEREAS, the Committee unanimously agreed that Gallagher's proposal is
excellent considering their wealth of experience and qualifications when compared to
their proposed annual fee of $25,000, which is guaranteed for 4 years; and
WHEREAS, Gallagher has more hands-on experience (more than 26 years) with
governmental insurance programs than any other broker in the country; and
WHEREAS, the City Manager concurs with the evaluation committee's
recommendation.
NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND CITY
COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, accept the City Manager's
recommendation of Arthur J. Gallagher and Co., as the City's Broker of Record for
property and liability insurance, and authorizing the Administration to enter into
negotiations with Arthur J. Gallagher and Co., and if negotiations are successful,
authorizing the Mayor and City Clerk to execute an agreement with Arthur J. Gallagher,
pursuant to Request for Proposals (RFP) No. 61-02/03, for the purpose of obtaining
insurance coverage, as needed by the City for an annual amount not to exceed
$25,000.
Passed and adopted this 25th day of November
,2003.
ATTEST:
_1Wwif~~
CITY CLERK
T:\AGENDA \2003\nov2503\consent\BrokerofRecordReso.doc
APPROVED AS TO
FORM & LANGUAGE
& FOR EXECUTION
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CITY OF MIAMI BEACH
COMMISSION ITEM SUMMARY
~
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Condensed Title:
A Resolution Accepting the City Manager's Recommendation, Authorizing Negotiations, and Execution of
Agreement with Arthur J. Gallagher and Co., forthe Purpose of Obtaining Insurance Coverage, as Needed
by the City for an Annual Amount of $25,000.
Issue:
Shall the City Commission Adopt the Resolution?
Item Summary/Recommendation:
The Evaluation Committee unanimously agreed that Gallagher's proposal is excellent considering their wealth
of experience and qualifications when compared to their proposed annual fee of $25,000, which is
guaranteed for 4 years. For comparison purposes, Aon's proposed fee was $75,000, or 200% higher than
Gallagher's proposed fee.
Gallagher has more hands-on experience (more than 26 years) with governmental insurance programs than
any other broker in the country. Attached is a list of governmental clients including the total property values.
The City Administration recommends that the City Commission authorize the Administration to negotiate and
award this contract to Arthur J. Gallagher and Co. for a three-year period effective January 26, 2004, with
options to renew for an additional two years, for an annual amount not to exceed $25,000.
ADOPT THE RESOLUTION.
Advisory Board Recommendation:
I
Financial Information:
Source of Amount Account Approved
Funds: 1 $25,000 Account Number 540.1790.000.312
IF;"~.J 2
3
. 4
Total
Cit Clerk's Office Le
Gus Lopez, ext. 6641
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Si n-Offs:
DepartmentDitector
Assistant City Manager
City Manager
Agenda Item
Date
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CITY OF MIAMI BEACH
CITY HALL 1700 CONVENTION CENTER DRIVE MIAMI BEACH, FLORIDA 33139
www.miamibeachfl.gov
To:
COMMISSION MEMORANDUM
Mayor David Dermer and
Members of the City Commission
Date: November 25, 2003
Jorge M. Gonzalez
cityManage~(60.~~/A;
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY
OF MIAMI BEACH, FLORIDA, ACCEPTING THE CITY MANAGER'S
RECOMMENDATION OF ARTHUR J. GALLAGHER AND CO., AS THE
CITY'S BROKER OF RECORD FOR PROPERTY AND LIABILITY
INSURANCE, AND AUTHORIZING THE ADMINISTRATION TO ENTER
INTO NEGOTIATIONS ARTHUR J. GALLAGHER AND CO., AND IF
NEGOTIATIONS ARE SUCCESSFUL, AUTHORIZING THE MAYOR AND
CITY CLERK TO EXECUTE AN AGREEMENT WITH ARTHUR J.
GALLAGHER, PURSUANT TO REQUEST FOR PROPOSALS (RFP) NO.
61-02/03, FOR THE PURPOSE OF OBTAINING INSURANCE COVERAGE,
AS NEEDED BY THE CITY FOR AN ANNUAL AMOUNT NOT TO EXCEED
$25,000.
ADMINISTRATION RECOMMENDATION
From:
Subject:
Adopt the Resolution.
AMOUNT AND FUNDING
$25,0000
ANALYSIS
Funds are available from the Account Number 540.1790.000.312.
The City of Miami Beach Risk Management Program consists of both self-insured and
insured programs depending on the type of exposures. Automobile, General Liability,
Police Liability, and Workers' Compensation exposures are self-insured. Damage to City
Property and certain specialized exposures (crime, underground storage liability etc.) are
insured. The City purchases insurance for the following:
1. Property Coverage IAII Risk for Buildings and Contents
2. Property Coveragel All Risk for Boiler and Machinery
3. Flood Coverage/Buildings and Contents
4. Property IFine Arts-Bass Museum
5. Crime/Employee Dishonesty
6. Liability/Underground Storage Tanks
7. Liability/Special Events (Special program to assist the public in obtaining
insurance for Special Events)
The City requires that the selected Broker/Agent provide, at a minimum, the following
services:
1. Provide assistance to the City's Risk Manager in determining the City's commercial
insurance needs.
2. Prepare reports informing the City's Risk Manager regarding insurance market
conditions that may affect the City's policies and risk exposures prior to policy renewal.
3. Prepare bid specifications and underwriting data (subject to the approval of the City's
Risk Manager) to submit to acceptable insurance markets for the purpose of obtaining
quotations for insurance coverage.
4. Upon direction from the City, approach all acceptable insurance companies on behalf of
the City, and obtain written, competitive quotes for insurance coverage. A complete list of
the companies contacted, along with their response, must be submitted.
5. Present to the City all insurance coverage proposals obtained. This report must contain
a comprehensive analysis by the broker of the proposals obtained with recommendations
for the selection of one proposal for the particular risk to be covered.
6. Negotiate, on behalf of, and with direction from, the City with all insurance carriers to
obtain the best prices, terms and conditions available.
7. Review all insurance policies and invoices received for policies purchased by the City to
assure their accuracy and appropriateness.
8. Review and evaluate existing City policies to provide recommendations for possible
improvement of price, terms, and conditions.
9. Service existing policies as necessary. This includes but is not limited to, issuing
certificates of insurance to provide evidence of coverage, promptly making policy changes,
and obtaining endorsements.
10. Report any claims to the insurance carrier and monitor the handling and disposition of
the claim to assure the City's policy rights are protected.
11. Provide an annual report summarizing all insurance coverage in place, anticipated
market conditions, recommendations and strategies.
A Request for Proposal was issued on August 12, 2003, with an opening date of October
15, 1999. Eleven (11) specifications were issued, resulting in the receipt of proposals from
the following two (2) firms:
1. Arthur J. Gallagher and Co.; and
2. The Aon Group.
The Aon Group was deemed non-responsive for failure to provide their company's annual
financial report and a list of insurance companies used for placement and premium volume
for the past three years.
Letter to Commission (LTC) No. 233-2003, appointed the following individuals to serve as
members of the Evaluation Committee for RFP No. 61-02/03 - Broker of Record (the
"Committee"):
Cliff Leonard, Risk Manager
Georgina Echert, Assistant Director, Finance Department
Judy Weinstein, Assistant City Attorney
Joe Pallant, Resident and Insurance Professional
Ron Stone, Resident and Insurance Professional
The Committee convened on November 4, 2003, and discussed the following:
. Cone of Silence requirements and Government in the Sunshine Laws.
. Project overview (Le., scope of services).
. Evaluation process and committee decision.
The Committee unanimously agreed that Gallagher's proposal is excellent considering
their wealth of experience and qualifications when compared to their proposed annual fee
of $25,000, which is guaranteed for 4 years. For comparison purposes, Aon's proposed
fee was $75,000, or 200% higher than Gallagher's proposed fee.
Gallagher has more hands-on experience (more than 26 years) with governmental
insurance programs than any other broker in the country. Attached is a list of
governmental clients including the total property values.
The City Administration recommends that the City Commission authorize the
Administration to negotiate and award this contract to Arthur J. Gallagher and Co. for a
three-year period effective January 26, 2004, with options to renew for an additional two
years, for an annual amount not to exceed $25,000.
JMG:MDB:CL:GL
T:\AGEN DA\2003\nov2503\consent\BrokerofRecord. doc
~
City of Miami Beach
Request for Proposals NO: 61-02/03
Broker of Record (Property & Liability Insurance)
Minimum Requirements -
3. Governmental Client List including Total Property Values
3. The Proposer must provide the number of and total property values of Florida
Government clients (minimum requirement - Government Clients-5, minimum
total property values-excess of $200,000,000)
Gallagher cleary has more Florida Public Entity property clients than any other broker in
the state of Florida. The RFP requests a minimum of 5 clients with total property values
exceeding $200,000,000. As you can see by the partial client list demonstrated below,
Arthur J. Gallagher & Co. - Miami clearly exceeds this requirement:
.r---
# Client Name Total Values
1. City of Miami Beach $381,000,000
2. Miami-Dade County BOCC $6,400,000,000
3. Miami-Dade County School Board $4,650,000,000
4. City of Hialeah $130,000,000
5. City of Riviera Beach $90,000,000
6. City of West Palm Beach $300,000,000
7. City of Lauderhill $50,000,000
8. Polk County BOCC $378,000,000
9. Polk County Public Schools $1,000,000,000
10. Lake County BOCC $150,000,000
11. Clay County Public Schools $460,000,000
12. Orange County BOCC $2,100,000,000
13. Duval County School Board $1,900,000,000
14. Northeast Florida Education Consortium $1,850,000,000,
15. Hillsboro County School Board $1,295,000,000
16. Florida Community Colleges $4,305,000,000
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Page: 11
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FEE SERVICE AGREEMENT
THIS AGREEMENT is made and entered into this 26th day of January 2004, by and between
CITY OF MIAMI BEACH, a municipal corporation (City), and ARTHURJ. GALLAGHER &
CO. (Florida), a Florida corporation (Gallagher).
I. RECITALS
A. City desires to insure its Property, Flood (NFIP), Fine Arts, Crime, Underground Storage
Tank Liability, Boiler & Machinery, Special Events, and other Property/Casualty risks as
needed.
B. Gallagher is engaged in the business of advising its clients on their insurance needs and
procuring insurance on behalf of its clients as an insurance broker.
C. Gallagher desires to provide certain administrative services and required insurance brokerage
services to City and City desires to have Gallagher provide such services in accordance with
the terms hereof.
II. TERM AND TERMINATION
A. Term
This Agreement shall be effective for an initial term ofthree (3) years commencing
January 26,2004 and shall remain in full force and effect until January 26,2007. Thereafter
this agreement may be renewed for two (2) successive one-year terms at the option of the
City.
B. Termination
Either party may terminate this Agreement, with or without cause, upon the conclusion of the
initial term or the conclusion of any successive renewal term by providing ninety (90) days
prior written notice. In the event either party materially breaches this Agreement at any time,
this Agreement shall terminate upon the failure ofthe breaching party to remedy the breach
within thirty (30) days ofreceipt of written notice ofthe breach.
FEE SERVICE AGREEMENT
1
III. AGREEMENT
A. Obligations of Gallagher
1. Gallagher shall provide services in accordance with Exhibit A, attached hereto and
made a part hereof.
2. Gallagher shall use its best efforts to secure insurance required for the proper
administration of City's business. In the event an insurance company cancels or
refuses to place the necessary insurance, Gallagher shall use its best efforts to obtain
the coverage from another insurance company.
B. Obligations of City
1. In addition to the fees provided herein, it is understood and agreed that other parties,
such as excess and surplus line brokers, wholesalers, reinsurance intermediaries,
underwriting managers and similar parties, some of which may be owned in whole or
in part by Gallagher's corporate parent, may earn and retain usual and customary
commissions and fees in the course of providing insurance products to City pursuant
to this Agreement. Any such fees or commissions will be the responsibility of City
and not Gallagher.
2. City is responsible for payment of premiums for all insurance placed by Gallagher on
its behalf, as long as placement was made with City's prior written approval.
3. If any amount is not paid in full when due, including premium payments to insurance
companies, that non-payment shall constitute a material breach of this Agreement,
and Gallagher may terminate this agreement for cause, at its options, in accordance
with Section n.B.
C. Mutual Obligations
1. Ownership of Records and Documents
a. Gallagher agrees that all books, records, list of names, journals, ledgers and
other recorded information developed specifically in connection with the
administration of City's account shall always be and remain the property of
City.
Gallagher agrees to keep all such material confidential and not to reproduce,
disclose or disseminate the material or the information contained therein to
third parties without the prior written consent of City, to the extent possible
under the Public Records Laws of the State of Florida. Upon termination of
FEE SERVICE AGREEMENT
2
this Agreement for any reason, Gallagher shall immediately return all such
material, and any copies thereof, to City.
b. City agrees that Gallagher is the sole owner of the following material and the
City has no right to its use following termination of this Agreement:
I. Proprietary computer programs
n. Proprietary procedures and methods of administration
m. Underwriting and client files developed by Gallagher
City agrees all such material is confidential (to the extent possible under the
Public Records Laws ofthe State of Florida) and not to reproduce, disclose or
disseminate the material or the information contained therein to third parties
without the prior written consent of Gallagher. Upon termination of this
Agreement for any reason, City shall immediately return all such material,
and any copies thereof, to Gallagher.
2. Employees of Gallagher
City agrees that during the term of this Agreement and for a period of one year
following the date ofthe termination of this Agreement, it will not utilize the services
of any individual who was an employee of Gallagher during the term of this
Agreement, or any renewal, as an employee to perform services for City similar to
those services provided by Gallagher under this Agreement
3. Force Majeure
Gallagher shall not be liable for any delay or nonperformance of any covenants
contained herein nor shall any such delay or nonperformance constitute default
hereunder, or give rise at any liability for damages if such delay or nonperformance is
caused by "force majeure". As used herein, the term "force majeure" means fire,
explosions, action of the elements, strikes or other labor relations problems,
restrictions to restraints imposed by law, rule regulation or order of public authority,
whether federal, state or local, and whether civil or military, acts of military
authority, interruption of transportation facilities, acts of insurance companies,
underwriters or other assumers of risks of City, and any other cause which is beyond
the reasonable control of Gallagher and which by the exercise of reasonable diligence
Gallagher is unable to prevent. The existence of such causes of such delay or
nonperformance on the part of Gallagher thereby to such extent as may be necessary
to enable it to complete performance in the exercise of reasonable diligence after the
cause of delay or nonperformance has been removed.
FEE SERVICE AGREEMENT
3
4. Waiver of Nonperformance
No waiver of any default in performance on the part of Gallagher or like waiver by
City, of any breach or a series of breaches of any of the terms, covenants or
conditions of this Agreement shall constitute a waiver of any subsequent breach or a
waiver of said terms, covenants or conditions. Resort to any remedies referred to
herein shall not be construed as a waiver or any other rights and remedies to which
either party is entitled under this Agreement or otherwise.
5. Partial Invalidity
Should any part of this Agreement, for any reason, be declared invalid by court of
competent jurisdiction, the remaining portion shall remain in full force and effect as
if this Agreement had been executed without the invalid portion.
6. Governing Law
The validity, interpretation and performance of this Agreement shall be controlled
and construed according to the internal laws ofthe State of Florida.
7. Indemnification and Insurance
a. Gallagher agrees to indemnify, protect, save and hold hannless City from any
and all loss, cost, damage or exposure arising from the negligent acts or
omissions of Gallagher.
b. Gallagher agrees to maintain professional liability insurance (errors and
omissions) in the amount of$l million per occurrence throughout the term of
this agreement. Gallagher agrees to provide an original certificate of
insurance as evidence of this coverage,
8. Successors
This Agreement shall be binding upon and shall insure to the benefit of all assigns,
transferees and successors in the interest of the parties hereto.
9. Entire Agreement; Modification or Amendment
This Agreement and the Exhibit hereto represent the entire and exclusive statement
of the agreement of the parties and may be modified or amended only by a written
statement signed by both parties. Such modification or amendment shall be attached
to, and shall thereupon become a part of this Agreement.
10. Headings herein are for convenience of reference only and shall not be considered in
any interpretation of this Agreement.
FEE SERVICE AGREEMENT
4
11. Practice of Law
It is understood and agreed that Gallagher will not perform, and City will not request
performance of, any services which may constitute the unauthorized practice oflaw.
12. Counterparts
This Agreement may be executed by the parties in several counterparts, each of
which shall be deemed to be an original copy.
13. Remedies Not Exclusive
No remedy conferred hereunder is intended to be exclusive of any other remedy and
each and every remedy shall be cumulative and shall be in addition to every other
remedy given hereunder or now or hereafter existing at law or in equity or by statute
or otherwise.
14. Subcontracting
Gallagher may not subcontract any of the services required to be performed by it
hereunder.
15. Request for Proposals No. 61-02/03 (Broker of Record) issued by City in
contemplation of the Agreement, together with all amendments thereto, if any, and
Gallagher's proposal in response thereto, is agreed as being incorporated by reference
in this Agreement and made a part thereof; provided, however, that in the event of an
express conflict between the Proposal documents and this Agreement, this
Agreement shall prevail.
16. Limitation of Liability
City desires to enter into this Agreement only if in so doing City can place a limit on
the City's liability for any cause of action for money damages due to an alleged
breach by City of this Agreement, so that its liability for any such breach of contract
be limited to a maximum of $25,000. Accordingly, and notwithstanding any other
term or condition ofthis Agreement, Gallagher hereby agrees that City shall not be
liable to Gallagher for damages in an amount in excess of$25,000, for any action or
claim for breach of contract arising out of the performance or non-performance of
any obligation imposed upon City by this Agreement. Nothing contained in this
paragraph 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 Florida statutes, Section
768.28.
FEE SERVICE AGREEMENT
5
EXHIBIT A
SERVICES
I. SCOPE OF SERVICES
Advisor-Insurance Broker agrees to assist the City with the following Risk Management
Services, as well as others that may become necessary during the contract period:
1. Provide assistance to the City's Risk Manager in determining the City's commercial
insurance needs.
2. Prepare reports informing the City's Risk Manager regarding insurance market
conditions that may affect the City's policies and risk exposure prior to policy
renewal.
3. Prepare bid specifications and underwriting data (subject to the approval of the City's
Risk Manager) to submit to acceptable insurance markets for the purpose of
obtaining quotations for insurance coverage.
4. Upon direction from the City, approach all acceptable insurance companies on behalf
of the City, and obtain written, competitive quotes for insurance coverage. A
complete list of the companies contacted, along with their response, shall be
submitted.
5. Present to the City all insurance coverage proposals obtained. This report must
contain a comprehensive analysis by the broker of the proposals obtained with
recommendations for the selection of one proposal for the particular risk to be
covered.
6. Negotiate, on behalf of, and with direction from, the City with all insurance carriers
to obtain the best prices, terms and conditions available.
7. Review all insurance policies and invoices received for policies purchased by the
City to assure their accuracy and appropriateness.
8. Review and evaluate existing City policies to provide recommendations for possible
improvement of price, terms, and conditions.
9. Service existing policies as necessary. This includes, but is not limited to, issuing
certificates of insurance to provide evidence of coverage, promptly making policy
changes, and obtaining endorsements.
10. Report any claims to the insurance carrier and monitor the handling and disposition
FEE SERVICE AGREEMENT
7
ofthe claim to assure the City's policy rights are protected.
11. Provide an annual report summarizing all insurance coverage in place, anticipated
market conditions, recommendations and strategies.
II. RISK MANAGEMENT FEES FOR CONTRACT TERM
$25,000 Per Year
In the event the City should require Gallagher to place on its behalf any policy above $30,000
in annual premium, (not currently purchased by the City or specifically named in LA. of this
agreement), or complete a special project of significant nature above and beyond the scope of
services stated in this agreement, the City and Gallagher will mutually negotiate and agree
upon a reasonable fee in addition to what is shown above. In the event a reasonable fee
cannot be negotiated, the City is not restricted by the existence ofthis agreement in obtaining
the necessary services in any manner it desires.
It is understood and agreed that Arthur J. Gallagher & Co. will receive standard commissions
on all NFIP Flood policies.
FEE SERVICE AGREEMENT
8