Gallagher Benefit Services Renewal Proposal July 2018 Copyrighted
July 2, 2018
City of Dubuque Consent Items # 12.
ITEM TITLE: Gallagher Benefit Services Renewal Proposal
SUMMARY: City Manager recommending approval of the renewal
proposal from Gallagher Benefit Services, Inc. for benefit
consulting and actuarial services effective July 1, 2018
through June 30, 2019, and authorize the City Manager to
sign the Amendment.
SUGGESTED DISPOSITION: Suggested Disposition: Receive and File; Approve
ATTACHMENTS:
Description Type
Gallagher Benefit Services Renewal Proposal-NNM City Manager Memo
Memo
Staff Memo Staff Memo
Amendment Supporting Documentation
Agreement Supporting Documentation
Insurance Schedule J Supporting Documentation
THE CITY OF Dubuque
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7A13 2017
TO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
SUBJECT: Gallagher Benefit Services Renewal Proposal
DATE: June 25, 2018
Personnel Manager Randy Peck recommends City Council approval of the renewal
proposal from Gallagher Benefit Services, Inc. for benefit consulting and actuarial
services at an annual fee of$34,500, effective July 1 , 2018 through June 30, 2019, and
authorize the City Manager to sign the Amendment.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
�� �� ���
Mic ael C. Van Milligen �� �
MCVM:jh
Attachment
cc: Crenna Brumwell, City Attorney
Teri Goodmann, Assistant City Manager
Cori Burbach, Assistant City Manager
Randy Peck, Personnel Manager
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TO: Michael C. Van Milligen, City Manager
FROM: Randy Peck, Personnel Manager
SUBJECT: Gallagher Benefit Services Renewal Proposal
DATE: June 22, 2018
I received the attached Renewal Proposal from Gallagher Benefit Services, Inc., for
benefit consulting and actuarial services. The annual fee will be $34,500.
I recommend that the City Council approve the Amendment to the Administrative
Services Agreement with Gallagher Benefit Services, Inc., for benefit and actuarial
services at an annual fee of$34,500, effective July 1, 2018 through June 30, 2019, and
authorize you to sign the Amendment.
RP/tlb
Attachment
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AMENDMENT TO
GALLAGHER BENEFIT SERVICES, INC,
AGREEMENT
The Consulting Agreement by and between Gallagher Benefit Services, Inc. ("Gallagher") and
The City of Dubuque, Iowa (the "Client"), effective October 1, 2002, and subsequently amended July 1,
2016, January 1, 2017 and May. 1, 2017, is hereby amended as set forth below.
Effective July 1, 2018:
1. Section .11(A) — TERM - hereby reflects the teen of this Agreement is extended through June 30,
2019.
2, Section I.IT(13)(1) -- Obligation of Client - is hereby modified and amended to reflect the fee
payable to Gallagher as follows:
Beginning July 1, 2018, Gallagher shall be compensated in an amount of $34,500 per year.
All other terms and conditions of the Agreement shall remain in full force and effect.
IN WITNESS WHEREOF'`, the parties hereto have caused this Amendment to be duly executed.
GALLAGHER BENEFIT SERVICES, INC. CITY OF DUB ;) IJE, IOWA
By: By:
Name: Be,h Adel -Sart Name: Michael C. Van Milligen
Title: t G Pr k eM Title: City Manager
Date: G. 19 ' f Date: 7/.3/(k—
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AGREEMENT
THIS AGREEMENT is made and entered into this lst day of October 2002 by and between The City of Dubuque,
Iowa ("clienY') and GALLAGHER BENEFIT SERVICES,INC,,a Delaware corporation("Gallagher").
I. RECITALS
A. Client desires to receive professional consulting services for its Employee Benefit Program (the '
"Program"), The Program includes coverage for life, medical, dental, prescription drugs, workers ',
compensation and flexible spending account benefit plans, �I
B. Gallagher is engaged in tlie business of advising its clients on their insurance needs and procuring insurance ��
on behalf of its clients as an insurance consultant.
C. Gallagher desires to provide certain consulting services and Client desires to have Gallagher provide such
consulting services in accordance with the terms hereof.
II. TERM&TERMINATION
A. TERM �
This Agreement shall be effective for an initial term commencing October 1,2002, and shall remain in full force and
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effect until June 30, 2003. Thereafter, this Agreement shall be automatically renewed for successive one (1) year
terms until terminated as provided herein.
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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 thirty(30) days written notice prior to the conclusion of any
term. In the event either pariy materially breaches this Agreement at any time, this Agreement shall ternunate upon
the failure of the breaching party to remedy the breach within tlurty (30) days of receipt of written notice of tha �
breach.
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III. AGREEMENT i
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A. Obligations of G111agher �
1. Financial Reports
Gallagher will prepare an annual report analyzing claims experience, benefits paid, contributions,
administrative expenses, gross and net cost of insured bene�ts, net cost of any self-insured coverages and
otlier relevant items that pertain to the plans. Gallagher will also provide up to two interim financial
reports for the self-funded plans per contract year that will allow the City to monitor the performance of
those plans.
The annual report includes a projected income and expense budget Uased on an analysis of prior
experience and known or anticipated factors affecting fizture operations. Together with an evaluation of
the plan's reserve position, this budget serves as a guide to financial and benefit planning decisions.
2. Consultation
Gallagher will be available for consultation on many aspects of the plan's operation including claims,
reserves, and insurance company performance, as well as the plan's overall progress and development.
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Gallagher is available to consult with the City's legal counsel and the plan administrator regarding
changes to be made in the plan of benefits and eligibility for such benefits,
3. Benefit Changes
Gallagher will provide advice and then take appropriate action as authorized by the City for implementing
any benefit changes including revision in premium and plan recordkeeping procedures, master policy
certificates, and booklet amendments or modifications,
4. Insurance Company Negotiations
As authorized by the City, Gallagher will negotiate with the insurance companies to obtain appropriate
adjustments. In the event that an insuxance company's proposed annual retention is not consistent with its
projection or if the renewal premium rates do not appear justified by claims experience, Gallagher will
attempt to obtain more favorable results for the plan. An annual renewal report will be prepared for the
City. Services under this Section include workers' compensation stop-loss insurance and third party
administration(TPA) services.
5, SeIF-Insured Benef'its
For all benefits self-funded by the City, Gallagher will calculate the appropriate reserve and claims trend
factors to be taken into account from a sound planniug and policy point of view,
6. COBRA
Gallagher will update the COBRA premiums for core coverage and for total health coverage charged to
former participants and family rnembers who elect to continue the plan's health coverage. (5pecial
COBRA experience studies and manuals are not within this retainer.)
7, Annual Audits and Filin�s with the Government
Gallagher will work closely with the auditor and the plan adtninistrator to provide any required data or
infornlation we may have readily available to expedite the preparation of any required fmancial report, e,g.
Form 5500 for cafeteria plans and Iowa Chapter 509(A)requirements (if this optional service is selected by
the City).
8. Communication with Participants
Gallagher will be available for consultation with the City, legal counsel, or the plan administrator to assist in
drafting notices to plan participants about plan or adnunisnarive changes. Also, we will review all policies
and amendments drafted by the City's Adnuuistrator,
9. Administrative 5upport
Gallagher shall continue to be available for consultation with the plan administrator, as requested, with
regard to routine changes in forms and procedures and general recordkeeping, in terms of efficiency and
cost. Compliance with the recorclkeeping requu•ements of laws or regulations are matters subject to the
advice of legal counsel and the City. However, Gallagher shall be available for consultation in this regard
from a non-legal standpoint.
10. Organization of Issues
Gallagher will be available for consultation and will assist in preparing meeting agendas to aid tha City in
reaching decisions on issues that arise in the cot�rse of plan operation or that flow from our annual report,
plan design or adnviustration questions,national and 'mdustry h•ends,or public policy,
11. Coordination with Other Profession�l Advisors
Gallagher will, as appropriate, coordinate our efforts with those of legal counsel, the plan admuiistrator and
the auditor regarding policy matters of interest to the City and the efficient operation of the plans,
12. Trends in Le�islation,New Benefits,Plan Design i
By means of our publications and special advisory reports, Gallagher shall continue to keep you apprised of
new developments in the employee benefits field that may bear upon yotu• planning and policy decisions,
However, specific tecbnical compliance advice in connection with compliance with new legislation or
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regularions that occur after the effective date of tlus retainer will generally be treated as a supplementary
service, at an additional fee, based on our regular rime charge rates. Of course, questions on the
interpretation and application of laws, regulations, rulings and court decisions are a legal matter, subject to
legal counsel's advise.
13, Meetin�s
Gallagher will attend up to two meetings with the City as requested per contract year. Of course,between
meetings Gallagher will be continually available for consultarion by phone and in writing to the City, the
plan administrator and the plan's other professional advisor,
Other Supplementary Services
The preceding list of services describe the matters that regularly arise in the course of the Plan's annual
operations that call for general consulting services. However, it is difficult to predict in advance whether
your Plan will be involved in complicated,time consumiug special problems, and,if so,to what extent.
If our assistance involves services which are beyond, but incidental to our regular services, then, of course,
Gallagher would render such services witlun the scope of this retainer. If, on the other hand, the occasion
requires the expenditure of tirne not anticipated within this retainer, we would proceed only after
consultation with the City. Our compensation for such agreed-upon supplementary services will be based '
on our regular time-charge rates. ',
In addition to those items referred to earlier, some fiu-ther examples follow of supplementary consulting and !
achtarial services that may be required by the Plan: �
1. Analysis of and compliance widi new legislation of new regulations adopted after the effective date I�i
of this retainer,which affects your Plan,
2. Litigation,law suits, or arbitration.
3. Competirive bidding for the solicitation of bids from insurance cornpanies to underwrite all or a
portion of the Plan's benefits (including stop-loss, ASO arrangements, minimum premituris, or tax shelter I
annuity programs)or from other vendors to provide other services to the Plan.
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4. Drafting of revised Summary Plan Descriptions or plan documents, subject to legal counsel's and �
the City's approval.
5. Redesign of basic administ�•ative and/or recordlceeping methods and computer systems,
6. New procedures, calculations and determinarions required due to changes in accounting/auditing
standards, usually through guidelines issued by the Governmental Accounting Standards Board, through
state or federal lagislation.
7. Services involving special claims audits.
8. Assisting legal counsel in the preparation of materials in support of special IRS ruling applications,
reviews or appeals, includ'uig conversations or meeting with IRS staff to the extent requested by legal
cotmsel and the City.
9. Special st�idies on retiree health coverage costs and financing.
10, Assistance in the evaluation and selecHon of alternative delivery systems such as new HMO's
PPO's,EPO's or in the development of such systems.
ll. Consultation on the development, unplementation and monitoring of Employee Assistance
Programs(EAPs).
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12. Services involving Tax Sheltered Annuity (403(b)) program, deferred compensation (457) and
other retirement programs.
13, Auditing the basic data maintained by the plans for their recordkeeping purposes or made available
to us for calculation purposes.
14. Any services not specifically set#'orth in this retainer.
Account Manaeement
Gallagher will provide notification of any change in senior account management, and understands that the
continuation of this Agreement is contingent upon the satisfactory transition in account management responsibilities,
as determined solely by the City.
B. Obligations of Client
1, Gallagher shall be compensated an amount of$15,750 for the period of October 1,2002—June 30, '
2003, For the period July 1, 2003 —June 30, 2004, fees will be payable in an amount of$21,000. Billings j
will be submitted semi-annually in advance. Travel expenses,including coach airfare,rental car,meals and 'i
accommodations will be reimbursed based on actual costs, �
2. In addition to the fees provided herein, it is understood and agreed that other parties, such as III
excess and surplus line brokers, wholesalers, re-insurance intermediaries, underwriting managers and �I
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 I
Client pursuant to tlus Agreement. Any such fees or commissions will not constitute compensation to �
Gallagher under Section III.B.1 above. �
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3, Gallagher and certain of its insurance can•ier markets from time to time enter into arrangements �
providing for addirional compensation to be paid to Gallagher by such canier generally with respect to the j
volume of premitun or insurance coverages written tl�rough Gallagher with such carrier. �
4. Client is responsible for payment of premiums for all insurance placed by Gallagher on its behalf. I
If any amount is not paid ui full when due, including premium payments to insurance companies, that
nonpayment shall constihrte a material breach of this Agreement that shall allow Gallagher to terminate this ;
Agreement, at its option, in accordance with Section II.B. . ;
C. MutualObligRtions I
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1. Ownership of Records and Documents �
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a. Gallagher agrees that all books, records, lists of names, journals, ledgers and other i
recorded information developed specifically in connection with the adininistration of
Client shall 1lways be and remain the property of Client.
Gallagher agrees to keep all such material confidential and not to reproduce, disclose or
disseminate the material or the inforniation contained therein to tlurd parties without the
prior written consent of Client. Upon termination of this Agreement for any reason,
Gallagher shall unmediately rehu7i all such material, and any copies thereof,to Client.
b. Client agrees that Gallagher is the sole owner of the following material and that Client has
no right to its use following termination of this Agreement;
i. Proprietary computer prograrns;
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ii. Proprietary procedures and methods of administration; and
iii. , Underwriting and client files developed by Gallagher.
Except as required by Iowa Public Records law or other court order, client agrees to
keep all such material confidential and not to reproduce, disclose or disseminate the
material or the informatiou contained therein to third parties without the prior written
consent of Gallagher, Upon tertnination of this Agreement for any reason, Client shall
immediately return all such material, and any copies thereof, to Gallagher,
2. Waiver of Nonperformance
No waiver of any default in perfozmance on the part of Gallagher or like waiver by Client, or any '
breach or a series of breaches of any of the tern�s, covenants or conditions of tMs Agreement shall �
constitute a waiver of any subsequent breach or a waiver of said terms, covenants or conditions. I
Resort to any remedies referred to herein shall not be constnied as a waiver of any other rights and �
remedies to which either party is entitled under this Agreement or otherwise.
3. PartialInvalidity
Should any part of this Agreement, for any reason, be declared invalid by a court of competent
j�uisdiction, the remaining portion shall remain in full force and effect as if this Agreement had
been executed without the invalid portion.
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4. Governing Law
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The validity, interpretation and performance of this Agreement shall be controlled and construed
according to the internal laws of the State of Iowa.
5. 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.
6. Entire Agreement; ModiGcntion or Amendment
Tkus Agreement and die Exhibit hereto represent tlie entu•e 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 modificarion or amendment sh�ll be attached to, and shall thereupon become a
part of this Agreement.
7. Headings
Headings herein are for convenience of reference only and shall not be considered in any
interpretation of this Agreement.
�. Practice of Law
It is understood and agreed that Gallagher will not perforn�, and Client will not request
performance of, any services which may constitute the unauthorized practice of law,
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9. Counterplrts
This Agreement may be executed by the parties in several counterparts, each of which shall be
deemed to be an original copy.
10. 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.
11. Subcontracting
Gallagher will not subcontract any or all of the services required to be performed by it hereunder
without prior approval of the City.
12. Insurance Ii
Gallagher shall secure and rnaintain during the term of tlus Agreement insurance coverage as set I
forth in the attached Inst�rance Schedule. �I
13. Indemnification I'
Gallagher agrees to defend, indemnify and hold City, its officers, agents and employees harmless I
from and against any and all claims of any kind arising out of Gallagher's negligence in the �
perforn�ance of this Agreement, �
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed on the date first written �
above, i
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CLIEN AM { I
� / �- /�� .- �� ��.._(1� i
Signahue Date
City Nk�nager
Title ;
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GALLA + BENEFIT SERVI ES,INC,
BY:
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C1ty af Dubuque Insurance Requirem�nts for Prafessional Services
� INSURANCE SCMEDULE J �
..
'�,Gallagher Benefit Services, �nc.shall furnish a signed certificate of insurance to the City of Dubuque, I'owa for �
the coverage required in �xhiblt I prior to commenc(ng worl<and at the ond oF th� project if the I
term of worl< is longer than 60 days, Contractors presenting annual cerkifioates shall present a
certificate at the end of each proJect with the final billing. Each certificate shall be prepared on
the most current ACORb form approved by the lowa Department oF Insurance or an equivalent
�pprovad by the Finance Dlrector, Each certificate shall Include a statement under Descriptlon of
Operations as fo why the certificate w�s issued, Eg; PraJect# or Projeot Location at
or construction of
2, All policies oF insurance required hereunder shall be with an insurer authorized to do businoss in �
� lowa and aN insurers shall have a rating of A or better in tho current A,M, Best's Rating Guide,
3. Each certificate shall b�furnlshed to the Personnel Dep�rtment of the Clty of Dubuque.
�, Failure to pravide caverage required by this Insurance Schedule shaii not be deemed a waiver of
these requirements by the City of Dubuque. Failure#o obtain or mafntain the requ(red Insurance
shall be conslderecl a materl�l breach of this agreement.
5. Contractors shall require all subconsult�nts�nd sub-subconsultants to obtain and ma(ntain during
the performance oP work Insurance for the coverag�s described (n this Insurance Schedule and
shall obt�in certificates of insurances fram all such subconsultants and sub-subconsultants.
Contractors agree that they shali be liable for the fallure o6 a subconsultant and sub-
subconsultant to obtain and main#aln such coverages, The City may request a copy of such
certificates from the Contractor.
6, All requ(rod endorsements shall be attached to cerfiificate of insurance.
7. Whenever a specific ISO farm is listed, required the current edition of the form must be used, or
an equivalent form may be substituled if approved by the �fnance pirector and subJect to tho
cantractor identifyfng and listing (n writing ail deviations and exclusions from the ISO form.
8, Contractors shall be required to carry the mfnimum coverage/Iimits, or greater iF requirad by law
or nther legal agreement, in Exhibit (, If the contractor's limits of liability are higher than the
required minimum limits then the provider's limits shall be thls�greement's required Iimits.
Page 1.af 4 Schedule J Professional Services November 2017 '
City of Dubuque Insurance Requirements for Professional Services
INSURANCE SCHEDULE J (confiinued)
Exhibit I
A) COMMERCIAL GENERAL LIABILITY
� General Aggregate Limit $2,000,000
Products-Completed Operations Aggregate Limit $1,000,000
Fersonal and Advertising Injury Limit $1,000,000
Each Occurrence $1,000,000
Fire Damage Limit(any one occurrence) $50,000
Medical Payments $5,000
, 1) Coverage shali be written on an occurrence, not claims made, form. The general
liability,coverage shall be written in accord with ISO form CG0001 or business
owners form BP0002. All deviations from the standard ISO commercial general
liability form CG 0001, or business owners form BP 0002, shall be clearly
identified.
2) Include ISO endorsement form CG 25 04"Designated Location(s) General
Aggregate Limit" or CG 25 03"Designated Construction Project(s)General
Aggregate Limit" as appropriate.
3) Include endorsement indicating that coverage is primary and non-conkributory.
4) Include Preservation of Governmental Immunities Endorsement. (Sample
attached).
5) Include additional insured endorsement for:
- The City of Dubuque, including all its elected and appointed officials, all its
� employees and volunteers, all its boards, commissions and/or authorities and
their board members, employees and volunteers. Use ISO form CG 2026.
6) Policy shall include Waiver of Right to Recover from Others endorsement.
B) AUTOMOBILE LIABILITY �
Combined Single Limit $1,000,000 ;
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C) WORKERS' COMPENSATION & EMPLOYERS LIABILITY
Statutory benefits covering all employees injured on the job by accident or disease as
prescribed by lowa Code Chapter 85 as amended.
Coverage A Statutory—State of lowa
Coverage B Employers Liability
Each Accident $100,000
Each Employee-Disease $100,000
Policy Limit-Disease $500,000
Policy shall include Waiver of Right to Recover from Others endorsement.
Nonelection of Workers' Compensation or Employers' Liability Coverage under lowa
Code sec, 87.22
_yes _form attached
Page 2 of 4 Schedule J Professional Services November 2017
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Clty of Dubuque Insurance Requirements for Professional Services
IN�U�.Af�C� SCHEDULE J (continued) I
D) UMBREI.LA/EXCESS I.IABILITY $1;000,000
Umbrella/excess Ilability coverage must be at least following Form with the underiyinc�
pollcles included herein,
�) PROFESSIONAL LIABILITY $1,Q00,000
Provide evicfence of coverage for 5 years�fter completion of proJect,
F) CYBER L.IABII.ITY , ' $1,000,000
. X yes ,�,na
Coverage For First and Third Party liability including but not Ilmited to lost data and
restoration, loss of income and cyber breach of informatian,
Page 3 of 4 Schedule J Professianal Services November 2017
City of Dubuque Insurance Requiremenfis for Professional Services
PRESERVATION OF GOVERNMENTAL IMMUNITIE� ENDORSEMENT
1. Nonwaiver of Governmental Immunitv. The insurer expressly agrees and states that the purchase
of this policy and the including of the City of Dubuque, lowa as an Additional Insured does not waive any
of the defenses of governmental immunity available to the City of Dubuque, lowa under Code of lowa
Section 670.4 as it is now exists and as it may be amended from time to time.
2. Ciaims Coveraqe. The insurer further agrees that this policy of insurance shall cover only those
claims not subject to the defense of governmental immunity under the Code of lowa Section 670.4 as it
now exists and as it may be amended from time to time. Those claims not subject to Code of lowa
Section 670.4 shall be covered_by the terms and conditions of this insurance policy.
3. Assertion of Government Immunitv, The City of Dubuque, lowa shall be responsible for asserting
any defense of governmental immunity, and may do so at any time and shall do so upon the timely written
request of the insurer.
4. Non-Denial of Coveraqe. The insurer shall not deny coverage under this policy and the insurer
shall not deny any of the rights and benefits accruing to the City of Dubuque, lowa under this policy for
reasons of governmental immunity unless and until a court of competent jurisdiction has ruled in favor of
the defense(s)of governmental immunity asserted by the City of Dubuque, lowa.
No Other Chanqe in Policv. The above preservation of governmental immunities shall not otherwise
change or alter the coverage available under the policy.
(DEPARTMENT MANAGER: FILL IN ALL BLANKS AND CHECK BOXES)
Page 4 of 4 Schedule J Professional Services November 2017