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AGREEMENT
Between City of Miami Beach, FL and Gallagher Benefit Services, Inc
For ConsultantlBroker Services
This Consulting Agreement (this "Agreement") is made on this 1st day of October 2005 . by and between
Gallagher Benefit Services, Inc., a Delaware corporation ("GBS"), and the City of Miami Beach. Florida (the
"City").
The City wishes to enter into a consulting relationship with GBS with the terms and conditions set forth in this
Agreement, and GBS is willing to accept such a consulting relationship.
In consideration of and in reliance upon the previous paragraph and the terms and conditions contained in this
Agreement, the City and GBS agree as follows:
1. Engagement
The City engages GBS as an employee benefits consultant as stated in this Agreement and GBS accepts
this engagement. During the time that GBS is performing services for the City under this Agreement, and for all
purposes outlined in this document, GBS' status will be that of an independent contractor of the City.
2. Term and Termination
The Effective Date of this Agreement is October 1, 2005. The term of GBS' engagement under this
Agreement (the "Consulting Period") will begin as of the Effective Date and will remain in effect for one (1) year
ending on September 30, 2006 with the option for four (4) one (1) year renewal terms upon mutual agreement by
both parties. Either party may terminate this Agreement with or without cause, at any time during the initial term
(or any renewal term, as the case may be) by giving the other party at least thirty (30) days written notice of its
intent to terminate. In the event of such termination, City shall be responsible to GBS for any services performed
prior to the date of termination and GBS shall be responsible to City to continue to provide services in connection
with the coverages placed with the carriers listed in Section 4 below until the date of termination of this Agreement.
3. Services
GBS will provide employee benefits management consulting services to the City and consult with its
employees, representatives, agents and contractors as to such matters as more fully described in Exhibit A attached
to this Agreement and incorporated herein. GBS will perform other services as the City and GBS mutually agree in
writing.
4. Compensation
1. Subject to any changes as may be mutually agreed by the parties, GBS will receive, as
compensation for its services under this Agreement, commissions not to exceed $200.000. GBS
will be compensated by the insurance company under the contracts it has placed on the City of
Miami Beach's behalf as set forth in Exhibit B. GBS shall provide, upon request of the City,
complete disclosure of all commissions received pursuant to this Agreement.
2. It is agreed that if the City opts not to have GBS complete the actuarial analysis as required for
GASB 45 (Governmental Accounting Standards Board), GBS' commission will not exceed
$190.000 for that year.
In the event an insurance company cancels or refuses to renew an insurance coverage that had been placed by GBS,
on behalf of the City of Miami Beach, GBS will use its best efforts to obtain appropriate replacement coverage from
another insurance company.
Standard GBS Consulting Agreement
version date 7-2005
Page 1 of7
In addition to such commissions outlined in this Agreement, GBS may also receive investment income on fiduciary
funds temporarily held by it, such as premiums or return premiums, as well as fees for arranging premium fmancing
for clients with third parties. Other parties, such as excess and surplus lines brokers, wholesalers, reinsurance
intermediaries, underwriting managers, captive managers and similar parties, some of which may be owned in whole
or in part by GBS' corporate parent, may earn and retain usual and customary commissions and fees in the course of
providing insurance products to clients. Any such fees or commissions will not constitute compensation to GBS
under this Agreement.
5. Performance and Scope
(a) Reliance. In the performance of its duties, GBS may rely upon, and will have no obligation to
independently verify the accuracy, completeness, or authenticity of, any written instructions or information provided
to GBS by the City or its designated representatives and reasonably believed by GBS to be genuine and authorized
by the City.
(b) No Practice of Law. GBS will not be obligated to perform, and the City will not request
performance of, any services which may constitute unauthorized practice of law. The City will be solely responsible
for obtaining any legal advice, review or opinion as may be necessary to ensure that its own conduct and operations,
including the engagement of GBS under the scope and terms as provided herein, conform in all respects with
applicable State and Federal laws and regulations (including ERISA, the Internal Revenue Code, State and securities
laws and implementing regulations) and, to the extent that the City has foreign operations, any applicable foreign
laws and regulations.
(c) Subcontractors. Subject to the prior written consent of the City, GBS may cause another person or
entity, as a subcontractor ofGBS, to provide some or all of the services required to be performed by GBS hereunder.
(d) Conflict of Interest. GBS' engagement under this Agreement will not prevent it from taking
similar engagements with other clients who may be competitors of the City. GBS will, nevertheless, exercise care
and diligence to prevent any actions or conditions which could result in a conflict with the City's best interest.
that:
(e) Acknowledgements. In connection with GBS' services under this Agreement, the City agrees
(i) Although GBS will apply its professional judgment to access those insurance
companies it believes are best suited to insure the City's risks, there can be no assurance that the insurance
companies GBS has accessed are the only or are the best suited ones to insure the City's risks.
(ii) The fmal decision to choose any insurance company shall be made by the City
in its sole and absolute discretion. The City understands and agrees that GBS does not take risks, and that
GBS does not guarantee the fmancial solvency or security of any insurance company.
(iii) The compensation payable to GBS is solely for the services set forth under this
Agreement, including Exhibit A. Any additional administrative, claims representative or other services
(collectively, "Additional Services") will be governed by the terms of a separate agreement covering the
Additional Services.
(iv) The City is responsible for immediate payment of GBS' fees (if applicable) and
payment of premiums for all insurance placed by GBS on the City's behalf. If any amount is not paid in
full when due, including premium payments to insurance companies, that nonpayment will constitute a
material breach of this Agreement that will allow GBS to immediately terminate this Agreement, at its
option, without notice to the City, and may allow an insurance company for the City's risks to cancel any
applicable policies in accordance with the terms of such policies.
GBS Consulting Agreement
10/21/2005
Page 2 of7
6. Confidentiality
(a) City Information. GBS recognizes that certain confidential information may be furnished by the
City to GBS in connection with its services pursuant to this Agreement ("Confidential Information"). GBS agrees
that it will not disclose Confidential Information to third parties without the prior written consent of the City and ,
where such consent is given, only to those who, in GBS' and the City's mutual reasonable determination, have a
need to know such information. Confidential Information will not include information that (i) is in the possession of
GBS prior to its receipt of such information from the City, (ii) is or becomes publicly available other than as a result
of a breach of this Agreement by GBS, (iii) is or can be independently acquired or developed by GBS without
violating any of its obligations under this Agreement or (iv) is or would otherwise be considered a public record and
subject to disclosure under Florida Public Record Law. Disclosure by GBS of any Confidential Information pursuant
to the terms of a valid and effective subpoena or order issued by a court of competent jurisdiction, judicial or
administrative agency or by a legislative body or committee will not constitute a violation of this Agreement.
(b) HIPAA Privacy. In spite of Sections 6(a) above, GBS and the City will each comply with any
prohibitions, restrictions, limitations, conditions, or other requirements to the extent they apply to them directly or
indirectly pursuant to the Health Insurance Portability and Accountability Act of 1996 ("HIP AA") and its
implementing regulation concerning privacy of individually identifiable health information as set forth in 45 CFR
Parts 160-164, as amended from time to time. Where required, the City, as a representative of the health plans and
GBS will enter into a separate Business Associate Agreement.
(c)
Use of Names: Public Announcements. No party will use, in any commercial manner,
the names, logos, trademarks or other intellectual property of the other party without its
prior written consent. Except as may be required by law, no party will issue any press
releases or make any public announcements of any kind regarding the relationship
between the parties without the other party's prior consent.
7. Notices
Any notices, requests and other communications pursuant to this Agreement will be in writing and will be
deemed to have been duly given, if delivered in person or by courier, telegraphed, or by facsimile transmission
(provided that the sender received electronic confirmation of receipt by recipient) or sent by express, registered or
certified mail, postage prepaid, addressed as follows:
If to the City:
City of Miami Beach. FL
1700 Convention Center Drive
Miami Beach. FL 3313 9
Attention: Mavra D. Buttacavoli.
Director of HR and Risk Management
(Fax: 305-673-7529)
If to GBS:
Gallagher Benefit Services, Inc.
2255 Glade Rd.. Suite 400E
Boca Raton. FL 33431
Attention: Richard G. Schell
Area Vice President
(Fax: 561-995-6708)
Either party may, by written notice to the other, change the address to which notices to such party are to be delivered
or mailed.
8 Af~cellaneous
(a) Severabilitv. The various provisions and subprovisions of this Agreement are severable and if any
provision or subprovision or part thereof is held to be unenforceable by any court of competent jurisdiction, then
such enforceability will not affect the validity or enforceability of the remaining provisions or subprovisions or parts
thereof in this Agreement.
GBS Consulting Agreement
10/21/2005
Page 3 of7
(b) Entire Agreement: Amendment. This Agreement, including all exhibits hereto, constitutes the
entire agreement between the parties and supersedes all prior agreements and understandings, whether oral or
written, between the parties regarding the subject matter hereof. This Agreement may be modified or amended only
by a written instrument executed by both parties.
(c) Litigation Jurisdiction! Venue. This Agreement shall be governed by and construed according to
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 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 THE
AGREEMENT THE CITY AND GBS EXPRESSL Y WAIVE ANY RIGHTS EITHER PARTY MAY HAVE TO A
TRIAL BY JURY OF ANY CIVIL LITIGATION RELATED TO, OR RISING OUT OF THIS AGREEMENT.
(d) Successors. This Agreement shall be binding upon and shall inure to the benefit of all
assigns, transferees and successors in the interest of the parties hereto.
(e) Counterparts. This Agreement may be executed by the parties in several counterparts,
each of which shall be deemed to be an original copy.
(f)
Agreement.
Survival of Provisions. Sections 2, 4, 6 and 7 will survive the termination of this
GBS Consulting Agreement
10/21/2005
Page 4 of7
~
IN WITNESS WHEREOF, the parties hereto have caused this Consulting Agreement to be duly executed on the
date fIrst written above.
;1
CIty 0
Mayor
Attest: rlftwd 'p ~
Signature
Robert Parcher, City Clerk
Print Name/Title
By:
APPROVED AS TO
FORM & LANGUAGE
& FOR EXECUTION
~~
I/IJ/a-
Date
GBS Consulting Agreement
10/21/2005
Page 5 of7
If
EXHIBIT A
SCOPE OF SERVICES
Subject to any changes and additions as may be mutually agreed by the parties, GBS will:
CONSULTING SERVICES PROVIDED ON AN "AS NEEDED BASIS
. Renewal analysis
o Review by GBS underwriters of carrier projections
o Preparation of "shadow" renewal projection
o Carrier negotiation
o Employee contribution modeling
o Benchmarking of projected cost
o Development of working rates
o Assistance with budget projections
o Renewal alternatives with cost impact of benefit plan changes
. Quarterly Financial Reports:
o Comparison to prior claim period
o Plan trends
. Annual Financial Reports (End of Year Accounting):
o Executive summary of program expenses
o Comparison of current costs to renewal costs
o Future plan costs projections
o Percent of benefit dollars paid by employee
o Benefits paid by type of service
o Plan funding/budget comparison
· Legislative and Corporate Compliance Support
o Provide legislative updates
o Evaluate plan design to confirm compliance with state and federal regulations
o Review of benefit plan documents
o Evaluate compliance with HIP AA, FMLA, COBRA, etc.
o Technical Bulletins and the HIP AA Monitor
· Carrier Marketing and Negotiations
o Strategy development to identify goals, analyze program costs and review both current and
alternative funding arrangements
o Management of the renewal with the current carrier is geared to achieving lower costs.
o Renewal strategy results in a management decision on whether or not to go to market to explore
alternatives to the current carrier
o Develop time line covering every aspect from RFP preparation to the delivery of employee
communications
o Analysis of employee disruption report and preparation of geo-access report
o Analysis of discounts provided by various carriers by using CPT codes and carrier pricing
o RFP development involves tailoring the RFP to the exact desires, needs and fmancial directions
provided by City management instead of using a generic RFP
o Exploration of funding alternatives
o Evaluation of vendor responses to identify variations in coverage and costs are identified
GBS Consulting Agreement
10/21/2005
Page 6 of7
"
f
o Conduct fmalist interviews to explore intangibles such as personalities, service orientation and
responsiveness
o Renewal analysis report, based on renewal negotiation, covers program and claims cost
projections as well as complete information on benefit designs
o Finalizing decisions involves close collaboration with the GBS team and City I HR management
and City executives
. Day to day administrative assistance
· Market Benchmarking Studies
o Local Area Surveys
o Industry Surveys
GBS Consulting Agreement
10/21/2005
Page 7 of7