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. <br /> DEPARTMENT OF FINANCIAL MANAGEMENT <br /> RISK MANAGEMENT DIVISION <br /> MEMORANDLTM NO. 2000-109 <br /> September 06, 2000 <br /> TO: The Honorable Terry M. Howley, Mayor <br /> City Council Members <br /> FROM: Steve Garm , ' y Manager <br /> Beth B. Cou , irector of Financial Management�� <br /> J. Barry Leonar , Risk Manage <br /> SUBJECT: NON-HEALTH SELF-INSURANCE PROGRAM <br /> Transmitted herewith are two resolutions. One authorizes renewal of the brokerage <br /> contract with Arthur J. Gallagher and Company for the contract years 2000-2002, and the other <br /> approves the administrative services agreement with Gallagher Bassett Services for the City's <br /> non-health self-insurance program for contract years 2000-2003. <br /> We have completed the first annual renewal of our three-year non-health self-insurance <br /> program. The property insurance market has "hardened" and we can expect costs to rise for the <br /> next few years. <br /> Gallagher Bassett Services has offered a three-year rate guarantee for the claims handling <br /> fee. The increases would be 4% in years 1 and 2, and 3% in year 3. The increase for a one-year <br /> contract is 5%. <br /> Below is a comparison between expiring and renewal costs. <br /> PROGRAM ELEMENT EXPIIZING RENEWAL DIFFERENCE <br /> A. J. Gallagher <br /> Excess Insurance 187,815 196,684 4.72% <br /> Brokerage Fee 32,500 32,500 0.00% <br /> SUBTOTAL 220,315 229,184 4.02% <br /> Gallagher Bassett <br /> Claims Handling 80,123 83,386 4.07% <br /> Administration 22,433 22,787 1.58% <br /> SUBTOTAL 102,556 106,173 � 3.52% <br /> TOTAL 322,871 335,357 3.87% <br /> Staff will be available at the Council meeting to answer any questions. <br />