R2014-21 AUTHORIZING AGREEMENT ARTHUR J. GALLAGHER

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DEPARTMENT OF FINANCIAL MANAGEMENT RISK MANAGEMENT DIVISION MEMORANDUM NO. 2014-03 DATE: March 12, 2014 TO: Honorable Mayor Michael T. McElroy and City Council FROM: Ryan McCrady, City Manager Gregg Zientara, City Treasurer& Director of Financial Management Scott Clark, Risk Manager SUBJECT: PROPERTY & CASUALTY BROKER SELECTION SUMMARY RECOMMENDATION: Staff recommends that City Council approve Arthur J. Gallagher and Company as the broker for City's self-insured property, liability and worker's compensation program for a period of five (5) years covering the insurance renewal periods of 10/2014-2015, 10/2015-2016, 10/2016-2017, 10/2017-2018 and 10/2018-2019. BACKGROUND: In July 2011 the City Council awarded to A. J. Gallagher the contract to broker the City's the City's self-insured property, liability and workers compensation for the insurance renewal periods of 10/2011-2012, 10/2012-2013 and 10/2013-2014. Gallagher's experience with the City and services they provide include: • Providing information regarding the public sector insurance market place from the standpoint of cost, service, coverage and security • Understanding of the City's area of exposure, identify programs, products and insurance that meets the City's insurance requirements • Assisting in the preparation of materials, specifications, and underwriting data required by insurers • Soliciting and analyzing quotations from companies capable of meeting the requirements and make recommendations for the City's consideration • Placing insurance coverage with the selected companies when directed by the City • Reviewing the accuracy and adequacy of policies of insurance and endorsements prior to deliver to the City • Presenting policy coverage questions to underwriters • Recommending and negotiate if necessary the details of the claims administrator contract In 2010 A. J. Gallagher purchased the Decatur insurance firm of Behnke & Company. Gallagher with the acquisition of Behnke has the distinction of providing continuous brokerage service to the City for 30 years. Gallagher gives the City the unique opportunity to have access to one of the largest and leading national and international governmental insurance brokers and all with service from Decatur. The cost for the expiring contract was $67,500 for insurance renewal period 10/2011-2012, $69,200 for period 10/2012-2013, and $70,930 for period 10/2013-2014. Gallagher would provide the same level of service at the fixed annual rate of $62,000 for the insurance policy years beginning 10/2014-15 through the insurance policy year of 10/2018-2019. 121