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HomeMy WebLinkAboutContract 45199 (2)CITY SECRETARY C CONTRACT NO.__ t PROFESSIONAL SERVICES AGREEMENT FOR BENEFIT CONSULTING SERVICES This PROFESSIONAL SERVICES AGREEMENT FOR BENEFIT CONSULTING SERVICES ("Agreement") is made and entered into by and between the CITY OF FORT WORTH (the "City"), a home -rule municipal corporation of the State of Texas, acting by and through its duly authorized Assistant City Manager, and GALLAGHER BENEFIT SERVICES, INC. ("Consultant"), a Delaware corporation acting by and through its duly authorized Area President — Central Texas. For purposes of this Agreement, City and Consultant may each be referred to individually as a "party" and collectively as the "parties." 1. SCOPE OF SERVICES. Consultant hereby agrees in good faith and with due diligence to provide the City with professional advising and consulting services related to the benefit programs and offerings for the City's current and former employees. Consultant shall provide certain consulting and advising services on an on -going basis for a set annual fee ("Core Basic Services"). In addition, Consultant shall provide other specialized consulting and advising services on an as -requested, fee -for -service basis ("Special Services"). Attached hereto and incorporated for all purposes incident to this Agreement is Exhibit "A," Statement of Work, which more specifically describes the services to be provided hereunder, both in terms of Core Basic Services and Special Services. 2. TERM. This Agreement shall govern and encompass all services provided by Consultant to City during an initial three-year period, beginning January 1, 2014 and expiring December 31, 2016 (the "Initial Term"), unless terminated earlier in accordance with the provisions of this Agreement. This Agreement may be extended for up to two additional one-year periods by signed, written mutual agreement of the parties (each a "Renewal Term"). 3. COMPENSATION. As full and complete compensation for Core Basic Services provided during the Initial Term, the City shall pay Consultant One Hundred Thirty -Two Thousand Five Hundred Dollars ($132,500.00) per Contract Year, which equates to Three Hundred Ninety -Seven Thousand Five Hundred Dollars ($397,500) for the entire Initial Term. In addition, for all Special Services provided during the Initial Term, the City shall pay Consultant an amount not to exceed One Hundred and Fifty Thousand Dollars ($150,000.00). Fees for Special Services shall be imposed on a per -services basis in accordance with the terms of the Fee Schedule, which is attached hereto as Exhibit "B" and incorporated herein for all purposes as though it were set forth at length. For the entire Initial Term, the City's total monetary obligation o C dttor;kit",9:1 ultant shall exceed Five Hundred Forty -Seven Thousand Five Hundred Doll r�) r3 ��U11 11! PSA — Benefits Consulting nit] Vijj(_)1T lift P4011 o 14 RECEIVED DEC 13 2013 City shall not be liable for any additional payment to Consultant unless such additional amount is agreed to in writing in the form of an executed amendment to this Agreement or a separate contract between the parties. For purposes of this provision, a "Contract Year" shall be a twelve month period beginning on January 1 and ending on December 31. In the event this Agreement is extended for one or more Renewal Terms, the parties agree that the City shall pay Consultant One Hundred Forty -Four Thousand Four Hundred and Fifty Dollars ($144,450.00) per Renewal Term as full and complete compensation for Core Basic Services As part of the renewal process, the parties will negotiate and agree to a not -to -exceed amount for Special Services to be provided during each Renewal Term 4. TERMINATION. 4.1. Written Notice. Either party may terminate this Agreement at any time, with or without cause, by providing the other party with 30 days' written notice of termination. 4.2 Non -appropriation of Funds. In the event no funds or insufficient funds are appropriated by the City in any fiscal period for any payments due hereunder, City will notify Consultant of such occurrence, and this Agreement shall terminate on the last day of the fiscal period for which appropriations were received without penalty or expense to the City of any kind whatsoever, except as to the portions of the payments herein agreed upon for which funds shall have been appropriated. 4.3 Duties and Obligations of the Parties. In the event that this Agreement is terminated prior to its expiration, the City shall pay Consultant for services actually rendered up to the effective date of termination and Consultant shall continue to provide the City with services requested by the City and in accordance with this Agreement up to the effective date of termination 5. DISCLOSURE OF CONFLICTS AND CONFIDENTIAL INFORMATION. Consultant hereby warrants to the City that Consultant has made full disclosure in writing of any existing or potential conflicts of interest related to Consultant s services under this Agreement In the event that any conflict of interest arises following execution of this Agreement, Consultant shall immediately make full disclosure to the City in writing. Consultant, for itself and its officers, agents, and employees, further agrees that it shall treat all information provided to it by the City ("City Information") as confidential and shall not disclose any such information to a third party without the prior written approval of the City, provided, however, that written approval shall not be required for the use of aggregate or de -identified City PSA — Benefits Consulting Page 2 of 14 Information in connection with providing services, including, but not limited to providing such information to third parties in connection with a Request for Proposal as outlined in the Scope of Services. Consultant shall store and maintain City Information in a secure manner and shall not allow unauthorized users to access, modify, delete or otherwise corrupt City Information in any way. Consultant shall notify the City immediately if the security or integrity of any City Information has been compromised or is believed to have been compromised. 6. RIGHT TO AUDIT. Consultant agrees that the City shall, until the expiration of three (3) years after final payment under this Agreement and at no additional cost to the City, have access to and the right to examine at reasonable times any directly pertinent books, documents, papers and records of the Consultant involving transactions relating to this Agreement Consultant agrees that the City shall have access during normal working hours to all necessary Consultant facilities and shall be provided adequate and appropriate work space in order to conduct audits in compliance with the provisions of this section The City shall give Consultant reasonable advance notice of intended audits. Consultant further agrees to include in all Consultant's subcontractor agreements hereunder a provision to the effect that the subcontractor agrees that the City shall, until expiration of three (3) years after final payment of the subcontract, have access to and the right to examine at reasonable times any directly pertinent books, documents, papers and records of such subcontractor involving transactions related to the subcontract, and further that City shall have access during normal working hours to all subcontractor facilities and shall be provided adequate and appropriate work space in order to conduct audits in compliance with the provisions of this paragraph City shall give subcontractor reasonable notice of intended audits. 7. INDEPENDENT CONTRACTOR. It is expressly understood and agreed that Consultant shall operate as an independent contractor as to all rights and privileges granted herein and not as agent, representative or employee of the City. Subject to and in accordance with the conditions and provisions of this Agreement, Consultant shall have the exclusive right to control the details of its operations and activities and be solely responsible for the acts and omissions of its officers, agents, servants, employees, contractors, and subcontractors. Consultant acknowledges that the doctrine of respondeat superior shall not apply as between the City, its officers, agents, servants, and employees and Consultant, its officers, agents, employees, servants, contractors, and subcontractors. Consultant further agrees that nothing herein shall be construed as the creation of a partnership or joint enterprise between City and Consultant. 8. LIABILITY AND INDEMNIFICATION. CONSULTANT SHALL BE LIABLE AND RESPONSIBLE FOR ANY AND ALL PROPERTY LOSS, PROPERTY DAMAGE, AND/OR PERSONAL INJURY, INCLUDING DEATH, TO ANY AND ALL PERSONS, OF ANY KIND OR CHARACTER, WHETHER REAL OR ASSERTED, TO THE EXTENT CAUSED BY THE NEGLIGENT ACT(S) OR PSA — Benefits Consulting Page 3 of 14 OMISSION(S), MALFEASANCE, OR INTENTIONAL MISCONDUCT OF CONSULTANT, ITS OFFICERS, AGENTS, SERVANTS, OR EMPLOYEES. CONSULTANT COVENANTS AND AGREES TO, AND DOES HEREBY, INDEMNIFY, HOLD HARMLESS, AND DEFEND THE CITY, ITS OFFICERS AGENTS, SERVANTS, AND EMPLOYEES, FROM AND AGAINST ANY AND ALL CLAIMS OR LAWSUITS FOR EITHER PROPERTY DAMAGE OR LOSS (INCLUDING ALLEGED DAMAGE OR LOSS TO ANY BUSINESS AND ANY RESULTING LOST PROFITS) AND/OR PERSONAL INJURY, INCLUDING DEATH, TO ANY AND ALL PERSONS, OF ANY KIND OR CHARACTER, WHETHER REAL OR ASSERTED, ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT TO THE EXTENT CAUSED BY THE NEGLIGENT ACT(S) OR OMISSION(S), MALFEASANCE, OR INTENTIONAL MISCONDUCT OF CONSULTANT, ITS OFFICERS, AGENTS, SERVANTS, OR EMPLOYEES. Notwithstanding any other term or provision of this Agreement, Consultant shall not be liable for punitive damages. 9. ASSIGNMENT AND SUBCONTRACTING. Consultant shall not assign or subcontract any of its duties, obligations, or rights under this Agreement without the prior written consent of the City. Any attempted or purported assignment or subcontract entered into without the City s consent shall be void. If the City grants consent to an assignment, the assignee shall execute a written agreement with the City and the Consultant under which the assignee agrees to be bound by the duties and obligations of Consultant under this Agreement. The Consultant and Assignee shall be jointly liable for all obligations under this Agreement prior to the assignment If the City grants consent to a subcontract, the subcontractor shall execute a written agreement with the Consultant referencing this Agreement under which the subcontractor shall agree to be bound by the duties and obligations of the Consultant under this Agreement as such duties and obligations may apply. The Consultant shall provide the City with a fully executed copy of any such subcontract. 10. INSURANCE. Consultant shall provide the City with certificate(s) of insurance documenting policies of the following minimum coverage limits that are to be in effect prior to commencement of any work pursuant to this Agreement 10.1 Coverage and Limits. (a) Commercial General Liability $1,000,000.00 Each Occurrence $2,000,000.00 Aggregate (b) Automobile Liability PSA — Benefits Consulting Page 4 of 14 $1,000,000.00 Each accident on a combined single limit basis or $250,000.00 Bodily injury per person $500,000.00 Bodily injury per occurrence $100,000.00 Property damage Coverage shall be on any vehicle used by the Consultant its employees, agents, or representatives in the course of the providing services under this Agreement 'Any vehicle" shall be any vehicle owned, hired, and non -owned. (c) Workers' Compensation Statutory limits Employer's liability $100,000.00 Each accident/occurrence $100,000.00 Disease - per each employee $500,000.00 Disease - policy limit This coverage may be written as follows: Workers' Compensation and Employers' Liability coverage with limits consistent with statutory benefits outlined in the Texas Workers' Compensation Act (Tex. Gov't Code § § 401.001 et. seq.) and minimum policy limits for Employers' Liability of $100,000.00 each accident/occurrence, $500,000.00 bodily injury disease policy limit and $100,000.00 per disease per employee (d) Professional Liability (Errors & Omissions) $1,000,000.00 Each Claim Limit $1,000,000.00 Aggregate Limit Professional Liability coverage may be provided through an endorsement to the Commercial General Liability (CGL) policy or a separate policy specific to Professional E&O Either is acceptable if coverage meets all other requirements Coverage shall be written on a claims -made basis and be maintained for the duration of this Agreement and for one (1) year following completion of services. An annual certificate of insurance shall be submitted to the City to evidence coverage. 10.2 Certificates. Certificates of Insurance evidencing that the Consultant has obtained all required insurance shall be delivered to the City prior to Consultant proceeding with any work pursuant to this Agreement Any commercial general liability insurance policies required under this Agreement shall be endorsed to name the City as an additional insured thereon, as its interests may appear. All policies shall contain a Waiver of Subrogation for the benefit of the City of Fort Worth.. The PSA — Benefits Consulting Page 5 of 14 term City shall include its employees, officers, officials, agent, and volunteers in respect to the contracted services. Any failure on the part of the City to request required insurance documentation shall not constitute a waiver of the insurance requirement. Consultant shall notify City as soon as reasonably practicable upon receipt of any notice of cancellation or reduction in limits of coverage for any insurance policy required under this Agreement. On receipt of such notice, Consultant shall acquire additional or alternate insurance to ensure that all types and amounts of coverage required herein remain in place at all times and shall promptly provide City with certificates for any such additional or alternate insurance. In addition to any notice required under Section 13, all insurance -related notices shall be sent to the Risk Manager City of Fort Worth, 1000 Throckmorton, Fort Worth, Texas 76102, with copies to the City Attorney at the same address. 11. COMPLIANCE WITH LAWS, ORDINANCES, RULES AND REGULATIONS. Consultant agrees to comply with all applicable federal, state, and local laws, ordinances, rules, and regulations If the City notifies Consultant of any violation of such laws, ordinances, rules, or regulations, Consultant shall immediately desist from and correct the violation. 12. NON-DISCRIMINATION COVENANT. Consultant, for itself, its personal representatives, assigns, subcontractors, and successors in interest, as part of the consideration herein, agrees that in the performance of Consultant's duties and obligations hereunder, it shall not discriminate in the treatment or employment of any individual or group of individuals on any basis prohibited by law. If any claim arises from an alleged violation of this non-discrimination covenant by Consultant, its personal representatives, assigns, subcontractors, or successors in interest, Consultant agrees to assume such liability and to indemnify and defend the City and hold the City harmless from such claim. 13. NOTICES. Notices required pursuant to the provisions of this Agreement shall be conclusively determined to have been delivered when (1) hand -delivered to the other party, its agent, employee, servant, or representative, (2) delivered by facsimile with electronic confirmation of the transmission, or (3) received by the other party by United States Mail, registered, return receipt requested, addressed as follows: To CITY: City of Fort Worth Attn Asst City Mgr for Human Resources 1000 Throckmorton Street Worth TX 76102-6311 Facsimile' (817) 392-8654 With copy to: Law Department at same address To CONSULTANT: Gallagher Benefit Services, Inc Attn: P. Todd Dorton 4547 Lakeshore Drive Waco, Texas 76710 Facsimile: (254) 756-4200 Law Department at Gallagher Benefit Services, Inc Itasca Illinois PSA — Benefits Consulting Page 6 of 14 14. SOLICITATION OF EMPLOYEES. Neither the City nor Consultant (each a "Hiring Party") shall, during the Initial or Renewal Terms of this Agreement and additionally for a period of one yeas after its termination, solicit for employment or employ, whether as employee or independent contractor, any person (i) who is or has been employed by the other party during any term of this Agreement and (ii) with whom the Hiring Party had contact during any term of this Agreement, without the prior written consent of the person's employer. With regard to Consultant, this provision shall only apply to individuals located in Consultant's Austin, Texas and Waco, Texas offices. Further, this provision shall not prohibit either party from hiring an individual who is employed by the other party and who responds to a general solicitation or advertisement of employment. 15. GOVERNMENTAL POWERS. It is understood and agreed that by execution of this Agreement, the City does not waive or surrender any of its governmental powers. 16. NO WAIVER. The failure of either party to insist upon the performance of any term or provision of this Agreement or to exercise any right granted herein shall not constitute a waiver of the City's or Consultant's respective right to insist upon appropriate performance or to assert any such right on any future occasion. 17. GOVERNING LAW / VENUE. This Agreement shall be governed by and construed in accordance with the internal laws of the State of Texas If any action, whether real or asserted, at law or in equity, is brought on the basis of this Agreement, venue for such action shall lie in state courts located in Tarrant County, Texas or the United States District Court for the Northern District of Texas, Fort Worth Division. 18. SEVERABILITY. If any portion or provision of this Agreement is held to be invalid, illegal, or unenforceable, the validity, legality, and enforceability of the remaining portions and provisions shall not in any way be affected or impaired. 19. FORCE MAJEURE. The City and Consultant shall exercise their best efforts to meet their respective duties and obligations as set forth in this Agreement. If either party is unable, either in whole or part, to fulfill its obligations under this Agreement due to acts of God; strikes, lockouts, or other industrial disturbances; acts of public enemies; wars; blockades; insurrections; riots; epidemics; PSA — Benefits Consulting Page 7 of 14 public health crises; earthquakes; fires; floods; restraints or prohibitions by any court, board, department, commission, of agency of the United States or of any state; declaration of a state of disaster or of emergency by the federal, state, county, or City government in accordance with applicable law; issuance of a Level Orange or Level Red Alert by the United States Department of Homeland Security; any arrests and restraints; civil disturbances; of explosions* or some other reason beyond the party's reasonable control (each a "Force Majeure Event"), the obligations so affected by such Force Majeure Event will be suspended only during the continuance of such event 20. HEADINGS NOT CONTROLLING. Headings and titles used in this Agreement are for reference purposes only and shall not be deemed a part of this Agreement 21. REVIEW OF COUNSEL. The parties acknowledge that each party and its counsel have had the opportunity to review and revise this Agreement and that the normal rules of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement or any exhibit hereto. 22. AMENDMENTS / MODIFICATIONS / EXTENSIONS. No extension, modification, or amendment of this Agreement shall be binding upon a party hereto unless such extension, modification, or amendment is set forth in a written instrument, which is executed by an authorized representative and delivered on behalf of such party. 23. ENTIRETY OF AGREEMENT. This written instrument (together with any exhibit, attachment, or schedule attached hereto and any documents incorporated herein by reference) contains and constitutes the entire understanding and agreement between the City and Consultant, their assigns, and successors in interest, as to the matters contained herein. Any prior or contemporaneous oral or written agreement is hereby declared null and void to the extent in conflict with any provision of this Agreement. 24. SIGNATURE AUTHORITY. The person signing this Agreement hereby warrants that he/she has the legal authority to execute this Agreement on behalf of the respective party, and that such binding authority has been granted by proper order, resolution, ordinance or other authorization of the entity. The other party is fully entitled to rely on this warranty and representation in entering into this Agreement [SIGNATURES APPEAR ON FOLLOWING PAGE] PSA — Benefits Consulting Page 8 of 14 IN WITNESS WHEREOF, the parties hereto have executed this Agreement in multiples this 18th day of November, 2013. CITY OF FORT WORTH: By: Susan. Al�is Assistarif City Manager (2\ I I I' \-)7 Date: ATTEST: By: Mary J. I4ayser City Secretary APPROVED AS TO FORM AND LEGALITY: By: Denis C. McElroy Assistant City Attorney CONTRACT AUTHORIZATION: M&C: Cs yzJps(c Date Approved: i2((6f26'IT3 GALLAGHE NEFIT SERVICES By: P. Todd Dorton Area President —Central Texas Date: /"//a713 A By: r OFFICIAL RECORD CITY SECRETARY FT. WORTH, TX PSA — Benefits Consulting Core Basic Services EXHIBIT A STATEMENT OF WORK Each Contract Year during the Initial Term of this Agreement and any Renewal Term thereof, Consultant shall provide the City with the following Core Basic Services in exchange for the annual fee addressed in the Agreement: 1. General consulting and advising services requested by the City regarding its benefit programs. 2. Assistance with on -going review and assessment of the City s health and welfare benefit programs and their cost effectiveness, including suggesting innovative solutions as issues evolve. 3. Assistance in the general management of the City's benefit plans, including but not limited to, assistance in developing and monitoring administrative processes to ensure performance by the vendor(s) providing benefits and/or associated administrative services. 4. Evaluation of benefit trends and conduct of City -specific benchmark surveys and market surveys as requested by the City or deemed advisable by Consultant in its exercise of its reasonable professional discretion. Service as a central point of contact for insurance agents and representatives who make inquiries regarding the health and welfare benefits offered by and/or through the City. Review of vendor performance for the City's health and welfare benefit plans and offerings and negotiation of renewal rates. Assistance in reviewing and revising the Plan Document and Summary Plan Description for the City's self -funded medical plan, with such services to be provided in conjunction with City legal counsel and/or staff, if applicable. (NOTE - Core Basic Services does not include development of a new or wholly restated Summary Plan Description or Summary of Material Modifications Fees for such services would be negotiated and agreed to separately.) 8. Attendance and presentations at meetings of the City's Benefits Advisory Committee for benefit - related issues. 9. Attendance, participation, and presentations at meetings of the City Council and/or its Committees as requested by the City. 10. As requested by the City, performance of actuarial studies addressing the long-term cost/savings of the City's benefits and proposed revisions or enhancements thereto including the making of presentations on study findings. 11. Development of effective benefit communication plans and materials for benefit recipients. 12. General consulting and advisory services related to voluntary benefit products, health and welfare benefits, and wellness program incentives. PSA — Benefits Consulting Page 10 of 14 13. Assistance with preparation of Federal and State agency reports in conjunction with City legal counsel and/or staff. 14. Information and advice regarding current and proposed Federal and State statutes, rules, and regulations applicable to the City and impacting benefit plans. 15. Preparation and submission of an annual Strategy and Stewardship Report regarding City benefits, with such report to be provided to the City on or before January 31 st of each year. 16. Provision of the following services related to financial management of the City's benefits — a. Annual preparation and submission of a five-year budget projection for the healthcare fund b. Annual preparation and submission of a report on the incurred -but -not -reported (IBNR) liabilities associated with the City's benefit offerings c. Annual preparation and submission of healthcare -plan financial reporting required for the completion of the City's comprehensive annual financial report and audit (CAFR) 17. Benefit modeling as requested by the City or as deemed advisable by Consultant in its exercise of its reasonable professional discretion. 18. Benchmarking against similar cities as identified by Consultant and City. 19. Assistance with insurance marketing and renewal negotiation for the following City benefits: Calendar Year 2014 a. Dental — 3-year contract with 2, 1-year renewal options b. Life/AD&D - 3-year contract with 2, 1-year renewal options c. Supplemental Life & AD&D - 3-year contract with 2, 1-year renewal options d. Long Term Disability - 3-year contract with 2, 1-year renewal options Annual Renewals e. Stop Loss f. Medicare Plans g. Healthcare Plans 20. Serving as project lead on negotiation and implementation of benefit contracts. 21. Attendance at the City's Open Enrollment meetings as requested. 22. Serving as project lead on development of an annual Open Enrollment strategy. 23. Assistance with the review and revision of Summary Plan Descriptions for City benefits other than the self -funded medical plan with such benefits to include but not be limited to, dental, life insurance/AD&D, supplemental life long-term disability health savings account, and flexible spending account, with such service to be provided in conjunction with City legal counsel and/or third party legal counsel. (NOTE - Core Basic Services does not include development of a new or wholly restated Summary Plan Description or Summary of Material Modifications. Fees for such services would be negotiated and agreed to separately.) 24. Development of all benefit -related notices for benefit recipients as requested by the City. PSA — Benefits Consulting Page 11 of 14 25. Development of customized communications for open enrollment and other benefit -related purposes as requested by the City. 26. Consulting and advisory services related to the City's wellness and disease management programs, including, but not limited to, assistance and advice with development and implementation of a near -site clinic. 27. General assistance with employee and family advocacy for issues related to benefits that have been escalated or that require escalation to the level of an Assistant Director a manager in the Benefits Division of the City's Human Resources Department. (NOTE: Core Basic Services do not include general day-to-day employee and family advocacy issues The nature and scope of such services and the associated fees would be negotiated and agreed to separately). 28. Coordination and conducting of online surveys of benefit recipients as requested by the City or as deemed advisable by Consultant in its exercise of its reasonable professional discretion. 29. Review and report regarding the HRAdvantage Handbook. 30. Oversight of certified fraud examiners. Special Services Each Contract Year during the Initial Term of this Agreement and any Renewal Term thereof, Consultant shall provide the City with the following Special Services as requested in exchange for the associated fee - for -service amount addressed in the Agreement and detailed in Exhibit B: 1. Dependent Eligibility Verification Audit (DEVA) of Health/Dental Plans Review and inspection of the enrolled population a City -identified benefit plan to: ensure eligibility of all enrolled dependents identify ineligible dependents; ensure the City's benefits continue to be for the exclusive benefit of eligible plan participants; reduce costs; and meet fiduciary obligations The methodology and scope of each requested DEVA shall be agreed in advance in writing by Consultant and City. 2. Full GASB Reporting and Roll Forward GASB Reporting Preparation of reports regarding the City's other -post -employment -benefit (OPEB) liability and other liabilities about which the City is required to report in order to meet standards and rules promulgated by the Governmental Accounting Standards Board (GASB). 3. GASB Scenarios Evaluation of how proposed changes to City benefits in scope, type, or amount would be anticipated to affect the City's other -post -employment -benefit (OPEB) liability or other liabilities about which PSA — Benefits Consulting Page 12 of 14 the City is required to report in order to meet standards and rules promulgated by the Governmental Accounting Standards Board (GASB). 4. Customized Assessment and Audits Performance of specialized Human Resources assessments or audits performed by HRAdvantage related to the City's current and potential benefit offerings and changes thereto with the scope of each assessment or audit to be developed in consultation with the City Manager's Office and the City's Human Resources Department. PSA — Benefits Consulting Page 13 of 14 EXHIBIT B FEE SCHEDULE In exchange for services provided in accordance with the terms of the Agreement and Exhibit A, Consultant shall be compensated as follows: Core Basic Services: Core Basic Services shall be compensated by payment of an annual fee of: (i) One Hundred Thirty -Two Thousand Five Hundred Dollars ($132,500.00) per Contract Year during the Initial Term and (ii) One Hundred Forty -Four Thousand Four Hundred and Fifty Dollars ($144,450.00) per Contract Year during any Renewal Term Special Services: Special Services shall be compensated on a fee -for -service basis as follows: Dependent Eligibility Verification Audit GASB Reporting and Roll Forward GASB Reporting GASB Scenarios Customized Human Resources Assessments and Audit $50,000.00 per audit $18,000.00 per report $1,200.00 per scenario To Be Determined but Not to Exceed $10,000.00 per assessment or audit PSA — Benefits Consulting Page 14 of 14 M&C Review Page 1 of 2 DATE: CODE: SUBJECT: CIL COUNCIL ACTION: Approved on 12/10/2013 Official site of the City of Fort Worth, Texas FORT WORTH 12/10/2013 REFERENCE **C-26585 LOG NAME: 14GALLAGHERCONSULTING NO.: TYPE: CONSENT PUBLIC NO HEARING: Authorize Execution of an Agreement with Gallagher Benefits Services, Inc., for Advisory Services for Issues Related to the City's Benefit Programs for an Annual Amount of $182,500 00 (ALL COUNCIL DISTRICTS) RECOMMENDATION: It is recommended that the City Council authorize an Agreement with Gallagher Benefits Services, Inc., for advisory consulting services for the City's benefit programs in the amount of $182,500.00 per year. DISCUSSION: The purpose of this Mayor and Council Communication (M&C) is to approve an Agreement with Gallagher Benefits Services, Inc. (Gallagher), for advisory consulting services for the City's benefit programs. The proposed Agreement is for a three year period with two, one-year renewal options. During the initial three year term, basic consulting services would be provided in the amount of $132,500.00 per year with an additional amount of $150,000.00, allocated for the entire three year term for special benefit -related projects such as dependent eligibility audits and GASB analysis of potential benefit changes. S ince 2003, Aon Consulting, Inc., has served as the City's consultant for issues related to its benefit plans (CSC No. 29292, as amended M&Cs C-19816, C-22583, G-16780, and C-25270). The current Agreement expires December 31 2013. Having worked with the same consultant for several years, Staff determined it would be in the City's best interest to ensure that it was getting the best overall product and price by going out to the market and giving all providers the opportunity to compete for the City's business. On April 24, 2013, a Request for Proposals (RFP) was issued, with responses required by June 6, 2013 The RFP was designed to solicit a provider for comprehensive consulting services regarding the City s health and welfare benefit plans beginning January 1, 2014. S taff received seven proposals in response to the RFP. An evaluation team with representatives from the Human Resources Department, the Purchasing Division, two members of Health Benefits Advisory Committee, and the Law Department thoroughly reviewed proposals and evaluated them based on five factors firm experience, firm or individual s qualifications and previous experience, quality of proposal, compliance with City's DBE requirement, and price The evaluation team agreed that of all the submissions, Gallagher's proposal offers the best overall quality of service and pricing by providing a broader range of services at a cost that is equal to or Tess than that of other proposers. U nder the proposed contract, Gallagher will provide consulting services and actuarial updates that the City requires year after year. In addition the City will be able, upon request, to engage Gallagher to provide additional specialized services as needed, such as dependent eligibility verification audits and analysis of the GASB impact of proposed changes to the City's benefit offerings. http://apps.cfwnet.org/council_packet/mc review.asp?ID=19268&councildate=12/10/2013 12/11/2013 M&C Review Page 2 of 2 The total cost of the three year Agreement for both core consulting services and special projects will not exceed the amount of $547,500.00. The cost of each one-year renewal will be in the amount of $144 450.00 for core services plus an agreed amount for specialized services. At this point, Staff anticipates allocating between the amounts of $50,000.00 and $75,000.00 for specialized services during each renewal term, meaning that the total amount for all services should not exceed the amount of $219,500.00 per renewal term. Only nine months of service will be provided during the remainder of the current fiscal year, from January 1 2014 to September 30, 2014, with the cost for this period being in the amount of $136,875.00. The balance of the funds for the first year's service will be requested as part of the Fiscal Year 2015 budget. AGREEMENT TERMS - Upon City Council's approval, the Agreement will be effective on January 1, 2014, and will expire on December 31, 2016. RENEWAL OPTIONS - This Agreement may be renewed for up to two, one-year periods at the City's option. This action does not require specific City Council approval provided that sufficient funds are appropriated for the City to meet its obligations during the renewal period. M/WBE OFFICE - Gallagher is in compliance with the City's MBE Ordinance by committee to a 10 percent African American participation annually. The City's MBE goal on this Agreement is 10 percent. FISCAL INFORMATION/CERTIFICATION: The Financial Management Services Director certifies that funds are available in the current operating budget, as appropriated, of the Group Health and Life Insurance Fund. TO Fund/Account/Centers FROM Fund/Account/Centers FE85 531200 0148510 $136.875.00 Submitted for City Manager's Office bv: Susan Alanis (8180) Originating Deaartment Head: Harry Anderson (2632) Additional Information Contact: Margaret Wise (8058) ATTACHMENTS http://apps.cfwnet.org/council_packet/mc review.asp?ID=19268&councildate=12/10/2013 12/11/2013