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HomeMy WebLinkAboutR-2006-120 Acordia Northwest, Inc. Contract Extension (re: insurance broker / risk management services)RESOLUTION NO. R-2006- 120 A RESOLUTION authorizing the City Manager of the City of Yakima to execute a two-year extension of a professional services contract for property and casualty insurance broker and risk management services with Acordia Northwest, Inc. WHEREAS, the City of Yakima requires 'professional services related to insurance brokerage services for property and casualty insurance broker and risk management services for the City of Yakima; and WHEREAS, the City's current three-year contract for property and casualty insurance broker and risk management services commenced on September 1, 2003, and continues to August 31, 2006, with an option for a two-year extension; and WHEREAS, section 2.1 of the City's current contract for property and casualty insurance broker and risk management services allows a two (2) year extension, making the total contract term five (5) years, with an expiration date of August 31, 2008; and WHEREAS, due to the sale of the Yakima Marsh Advantage America office, the name of the City's property and casualty insurance broker and risk management services provider was changed from Marsh Advantage America to Acordia Northwest, Inc. in January, 2006; and WHEREAS, Acordia Northwest, Inc. represents that it has the expertise necessary and is willing to perform the professional services required by the City in accordance with the terms and conditions of the Contract; and WHEREAS, the City of Yakima and Acordia Northwest, Inc. desire to extend their Professional Services Contract for property and casualty insurance broker and risk management services for a two-year term, from September 1, 2006 through August 31, 2008; and WHEREAS, the City Council finds it to be in the best interest of the City to authorize the City Manager to execute and extend the Professional Services Contract for the property and casualty insurance broker and risk management services with Acordia Northwest, Inc., under the terms and conditions set forth in the Extension of Professional Services Contract attached hereto; now, therefore, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF YAKIMA: The City Council authorizes the City Manager to execute a two-year extension of the professional services contract for property and casualty insurance broker and risk management services with Acordia Northwest, Inc., for two years from September 1, 2006, to August 31, 2008, in accordance with the conditions set forth therein. ADOPTED BY, THE CITY COUNCIL this 15th day of August, 2006. ATTEST: City Clerk Davi dler, Mayor R-aoob i2d Extension of Professional Services Contract This Extension of the existing Professional Services Contract (City Contract No. 2003-82, hereinafter "Contract") with Marsh Advantage America, in which the Contractor is now identified herein under the name of Acordia Northwest, Inc. (hereinafter "Contractor") is made and entered into by and between the City of Yakima (hereinafter the "City"), and the Contractor. Whereas, the City entered into said Contract with the Contractor for professional assistance related to Property & Casualty Broker and Risk Management Services for the City of Yakima; and Whereas, the original term of said Contract was for a three (3) year period ending August 31, 2006; and Whereas, Section 2.1 of said Agreement allows the City to extend the Contract for two (2) additional years, making the total contract term five (5) years and. ending August 31, 2008; and Whereas, the City wishes to exercise its option to extend the Contract for an additional two (2) year period; and Whereas, the City wishes to continue the compensation to the Contractor at the current level of Forty Five Thousand Dollars ($45,000.00) for the first year of the two year extension, after which the second year's compensation shall be subject to negotiation as provided in Section 3.5 of the Contract; Now, therefore, the City and the Contractor agree to the following extension of the existing Contract, under the conditions set forth: The term of the Contract (City Contract No. 2003-82) is hereby extended through August 31, 2008, at which time said. Contract shall terminate, unless sooner terminated by either party in accordance with Section 13 of the Contract. Compensation shall remain at the current level of Forty Five Thousand Dollars for the first year of the extension period, after which the second year's compensation shall be subject to negotiation as provided in Section 3.5 of the Contract. (jc)contract extension/ Acordia Northwest, Inc. 1 Except as expressly modified herein, all other terms and conditions of the Contract between the City of Yakima and Acordia Northwest, Inc. (City Contract No. 2003-82) shall remain in full force and effect. CITY OF YAKIMA ACORDIA NORTHWEST, INC. By: 'v R.A. Zais, Jr., City Manager Date: $' ATTEST: _Le Arruaa �1cr�City Clerd Ai a City Contract Number: e7W3-1a2 ,ese/itZal1 dO . aoo 6 /,70 By: Jo,p-1 Pearson Senior Vice President Date: - -2 G • (jc)contract extension/Acordia Northwest, Inc. 2 BUSINESS OF THE CITY COUNCIL YAKIMA, WASHINGTON AGENDA STATEMENT Item No. For Meeting Of August 15, 2006 ITEM TITLE: Consideration of Resolution authorizing the extension of the existing Professional Services Contract for property and casualty insurance broker and risk management services with Acordia Northwest, Inc. SUBMITTED BY: Finance and Legal Departments CONTACT PERSON/TELEPHONE: Rita DeBord, Finance Director, #575-607 SUMMARY EXPLANATION: This resolution authorizes approval and execution of a two-year contract extension for property and casualty insurance broker and risk management services with Acordia Northwest, Inc. The City's insurance broker advises the City on insurance coverage and markets its insurance coverage for various types of insurance, including property, excess liability, boiler and machinery, and excess workers compensation insurance. Joel Pearson and Deborah Krautwurm of Acordia work on the Acordia service team, and have provided insurance and risk management services to the City since the 1980's. The current contract with Acordia will expire August 31, 2006. In 2003, the City performed a formal and extensive RFP and selection process prior to contracting with Acordia for insurance broker and risk management services. The agreement signed at that time included a three-year contract with an option to extend the contract for an additional two-year period with the mutual agreement of both parties. The City has received excellent service from the brokers over the past three years and staff recommends invoking the extension option in the current contract for the additional two-year period. The current contract provides for broker compensation of $45,000 for year three of the contract (Sept. 2005 through August 2006). The proposed contract extension retains all the same basic contract elements as the original contract; compensation for the services will be held at the current amount of $45,000 annually through August, 2007 at which time the extension provides a provision for a review and re -negotiation of the compensation for year two, as the two parties deem appropriate. Note: a copy of the proposed contract is enclosed; however, a signed copy from Acordia had not been received at time of printing. We expect to have the contract signed prior to the Tuesday Council meeting. Resolution X Ordinance Other (Specify) Contract X Mail to (name and address): Joel Pearson, Senior Vice President, Acordia Northwest, Inc. P. O. Box 2547-2547, Yakima, WA 98907 Phone: (509) 248-7460 Funding Source Risk Management Fund APPROVED FOR SUBMITTAL:City Manager STAFF RECOMMENDATION: Adopt Resolution. BOARD/COMMISSION RECOMMENDATION: COUNCIL ACTION: Resolution adopted. RESOLUTION NO. R-2006-120 \\Apollo\Users\ranson\COUNCIL\Council Agenda Items\2006\08-15-06 Agenda Stmt - Ins.Br.oker Contract.doc PROFESSIONAL SERVICES CONTRACT THIS PROFESSIONAL SERVICES CONTRACT is made and entered into by and between the City of Yakima, a Washington municipal corporation (hereinafter the "City"), and Marsh Advantage America ("Marsh") (hereinafter the "Contractor"). WHEREAS, the City of Yakima requires professional services related to insurance brokerage services for Property & Casualty Broker and Risk Management Services for the City of Yakima. WHEREAS, the Contractor represents that it has the expertise necessary and is willing to perform the professional services required by the City in accordance with the terms and conditions of this Contract. NOW, THEREFORE, in consideration of the mutual covenants, promises, and agreements set forth herein, it is agreed by and between the City and Contractor as follows: Section 1. Scope of Work 1.1 The minimum services that the Contractor will provide include: (a) Market and advise the City on its insurance coverage; (b) Prepare accurate quarterly and year-end claims reports promptly; and (c) Provide risk management services, including but not limited to review of vendor certificates of insurance to meet contract requirements; advise on wording for insurance requirements and the amounts of appropriate insurance coverage in City contracts; and training for City personnel as required. 1.2 Contractor shall provide the services and staff described in the text of the Professional Services Contract, including all attachments, which are incorporated herein by this reference. These attachments include the City Request for Proposal, and the Contractor's Proposal. The Professional Services Contract, the City Request for Proposal, and the Contractor's Proposal are referred to herein as the "Contract." The Contract specifies the working relationship between the City and the Contractor, and specific obligations of both parties. 1.3 Except as otherwise specifically provided in this Contract, Contractor shall furnish the following, all as the same may be required to perform the services described in paragraph 1.1 in accordance with this Contract: personnel, labor and supervision; and technical, professional and other services. All such services, property and other items furnished or required to be furnished, together with all other obligations performed or -1- \\Pdnt2\Users\bfowler\WORD DOCUMENTS\Contracts-RFPs\Prof Svcs Contract -Marsh -FINAL 8-11-03.doc required to be performed, by Contractor under this Contract are sometime collectively referred to in this Contract as the "Services." 1.4 All provisions of this Contract are intended to be complementary, and any Services required by one and not mentioned in another shall be performed to the same extent as though required by all. Details of the Services that are not necessary to carry out the intent of this Contract, but that are not expressly required, shall be performed or furnished by Contractor as part of the Services, without any increase in the compensation otherwise payable under this Contract. Section 2. Period of Performance 2.1 The period of performance under this Contract will be three (3) years, commencing on September 1, 2003, and continuing until August 31, 2006. An additional extension of two (2) years may be offered, at the option of the City, making the total contract term five (5) years, to August 31, 2008. In the event the City elects to extend the Contract for the additional two-year term, the City shall provide written notice to the Contractor at least sixty (60) days prior to the end of the initial three-year Contract period, or on or before July 2, 2006. Section 3. Compensation 3.1 As full compensation for satisfactory performance of the Services, City shall pay Contractor Thirty-five Thousand Dollars ($35,000.00) for the first year of the Contract, Forty Thousand Dollars ($40,000.00) for the second year of the Contract, Forty-five Thousand Dollars ($45,000.00) for the third year of the Contract, and Forty-five Thousand Dollars ($45,000.00) for each remaining year thereafter, if the Contract is extended. 3.2 Each annual fee shall be paid by the City to Contractor in three installments, in four- month intervals. The three invoices that will be submitted each year by Contractor to the City of Yakima will be submitted on or about January 1, May 1, and September 1 of each year. The first invoice for the first year of the Contract will be submitted on or about January 1, 2004. Each of Contractor's invoices shall set forth a description of the Services performed during the applicable period, and any reimbursable costs and expenses incurred in connection with such Services. With each invoice, the Contractor will also submit a report to the City listing the City departments with whom the Contractor worked and the issues that the Contractor worked on for the respective City departments during the previous four month period. 3.3 City of Yakima shall pay each of Contractor's invoices within thirty (30) days after the City's receipt and verification thereof; provided, however, that all such payments are expressly conditioned upon Contractor providing services hereunder that are satisfactory to the City. -2- \\Pdnt2\Users\bfowler\WORD DOCUMENTS \Contracts-RFPs\Prof Svcs Contract -Marsh -FINAL 8-I 1-03.doc 3.4 Any additional service(s) provided by the Contractor which are to be paid by the City must have prior written approval of the City. 3.5 If, at any time during the term of the Contract, the City of Yakima enters into or becomes a member of a risk pool for liability coverage or for any other type of insurance coverage covered by this Contract, then the parties agree that they will renegotiate the compensation and services, since a reduction in compensation and services may be warranted. This change will be done consistent with the provisions of Section 12 of this Contract. Section 4. Performance by Contractor 4.1 Delegation of Professional Services. The services provided for herein shall be performed by Contractor, and no person other than regular associates or employees of Contractor shall be engaged on such work or services. Contractor shall not (by contract, operation of law or otherwise) delegate or subcontract performance of any Services to any other person or entity without the prior written consent of the City. Any such delegation or subcontracting without the City's prior written consent shall be voidable at the City's option. No delegation of subcontracting of performance of any of the Services, with or without the City's prior written consent, shall relieve Contractor of its responsibility to perform the Services in accordance with this Contract. Contractor shall be fully responsible for the performance, acts and omissions of Contractor's employees, Contractor's subcontractors, and any other person who performs or furnishes any Services (collectively, the "Support"). 4.2 Contractor shall at all times be an independent contractor and not an agent or representative of the City with regard to performance of the Services. Contractor shall not represent that it is, nor hold itself out as, an agent or representative of the City. In no event shall Contractor be authorized to enter into any agreement or undertaking for or on behalf of the City. 4.3 Contractor shall perform the Services in a timely manner and in accordance with the standards of the profession. At the time of performance, Contractor shall be properly licensed, equipped, organized, and financed to perform the Services in accordance with this Contract. Subject to compliance with the requirements of this Contract, Contractor shall perform the Services in accordance with its own methods. 4.4 Contractor shall take all reasonable precautions to protect against any bodily injury (including death) or property damage that may occur in connection with the Services. -3- \\Pdnt2\Users\bfowler\WORD DOCUMENTS \Contracts-RFPs\Prof Svcs Contract -Marsh -FINAL 8-1 I-03.doc Section 5. Compliance with Laws 5.1 Contractor shall comply with all applicable laws, ordinances, rules, regulations, orders, licenses, permits, and other requirements, now in effect, of any governmental authority (including, but not limited to, such requirements as may be imposed upon the City and applicable to the Services). Contractor shall furnish such documents as may be required to effect or evidence such compliance. All laws, ordinances, rules and orders required to be incorporated in agreements of this character are incorporated in this Contract by this reference. Section 6. Taxes and Assessments 6.1 Contractor shall be solely responsible for and shall pay all taxes, deductions, and assessments, including but not limited to federal income tax, FICA, social security tax, assessments for unemployment and industrial injury insurance, and other deductions from income which may be required by law or assessed against either party as a result of this Contract. In the event the City is assessed a tax or assessment as a result of this Contract, Contractor shall pay the same before it becomes due. Section 7. Nondiscrimination Provision 7.1 During the performance of this Contract, Contractor shall not discriminate on the basis of race, age, color, sex, religion, national origin, creed, marital status, political affiliation, or the presence of any sensory, mental or physical handicap. This provision shall include but not be limited to the following: employment, upgrading, demotion, transfer, recruitment, advertising, layoff or termination, rates of pay or other forms of compensation, selection for training, and the provision of Services under this Contract. Section 8. Inspection: Examination of Records 8.1 The records relating to the Services shall, at all times, be subject to inspection by and with the approval of the City, but the making of (or failure or delay in making) such inspection or approval shall not relieve Contractor of responsibility for performance of the Services in accordance with this Contract, notwithstanding the City's knowledge of defective or non -complying performance, its substantiality or the ease of its discovery. Contractor shall provide the City sufficient, safe, and proper facilities and equipment for such inspection and free access to such facilities. 8.2 Contractor shall promptly furnish the City with such information related in the Services as may be requested by the City. Until the expiration of three (3) years after final payment of the compensation payable under this Contract, Contractor shall provide the City access to (and the City shall have the right to examine, audit and copy) all of Contractor's books, documents, papers and records which are related to the Services of this Contract. -4- \\Pdnt2\Uscrs\bfowlcr\WORD DOCUMENTS\Contracts-RFPs\Prof Svcs Contract -Marsh -FINAL 8-11-03.doc Section 9. Property and Confidential Information 9.1 Contractor shall not, without the prior written consent of the City, disclose to third parties any information received in connection with the Services unless: (a) information is known to Contractor prior to receiving the same directly or indirectly in connection with the Services; (b) information is in the public domain at the time of disclosure by Contractor; or (c) information is received by Contractor from a third party who does not have an obligation to keep the same confidential. Section 10. Indemnification and Hold Harmless 10.1 Contractor agrees to protect, defend, indemnify, and hold harmless the City, its elected officials, officers, employees and agents from any and all claims, demands, losses, hens, liabilities, penalties, fines, lawsuits, and other proceedings and all judgments, awards, costs and expenses (including reasonable attorneys' fees and disbursements) resulting from death or bodily injury to any person or damage or destruction to a third party or third parties to the extent caused by any negligent act and/or omission of the Contractor, its officers, employees, agents, and/or subcontractors, arising out of the performance of this Contract. 10.2 Nothing contained in this Section or this Contract shall be construed to create a liability or a right of indemnification in any third party. Section 11. Insurance Provided by Contractor At all times during performance of the Services, the Contractor shall secure and maintain in effect insurance to protect the City and the Contractor from and against all claims, damages, losses, and expenses arising out of or resulting from the performance of this Contract. Contractor shall provide and maintain in force insurance in limits no less than that stated below, as applicable. The City reserves the right to require higher limits should it deem it necessary in the best interest of the public. 11.2 Commercial Liability Insurance. Before this Contract is fully executed by the parties, Contractor shall provide the City with a certificate of insurance as proof of commercial liability insurance with a minimum liability limit of One Million Dollars ($1,000,000.00) per occurrence combined single limit bodily injury and property damage, and Two Million Dollars ($2,000,000.00) general aggregate. The certificate shall clearly state who the provider is, the coverage amount, the policy number, and when the policy and provisions provided are in effect. Said policy shall be in effect for the duration of this Contract. The policy shall name the City, its elected officials, officers, agents, and employees as additional insureds, and shall contain a clause that the insurer will not cancel or change the insurance without first giving the City thirty (30) calendar days prior -5- \\Pdnt2\Users\btowler\WORD DOCUMENTS \Contracts-RFPs\Prof Svcs Contract -Marsh -FINAL 8-1 1-03.doc written notice (any language in the clause to the effect of "but failure to mail such notice shall impose no obligation or liability of any kind upon the company" shall be crossed out and initialed by the insurance agent). The insurance shall be with an insurance company or companies rated A -VII or higher in Best's Guide and admitted in the State of Washington. 11.3 Commercial Automobile Liability Insurance. Before this Contract is fully executed by the parties, Contractor shall provide the City with a certificate of insurance as proof of commercial automobile liability insurance with a minimum liability limit of One Million Dollars ($1,000,000.00) per occurrence combined single limit bodily injury and property damage. Automobile liability will apply to "Any Auto" and be shown on the certificate. The certificate shall clearly state who the provider is, the coverage amount, the policy number, and when the policy and provisions provided are in effect. Said policy shall be in effect for the duration of this Contract. The policy shall name the City, its elected officials, officers, agents, and employees as additional insureds, and shall contain a clause that the insurer will not cancel or change the insurance without first giving the City thirty (30) calendar days prior written notice (any language in the clause to the effect of "but failure to mail such notice shall impose no obligation or liability of any kind upon the company" shall be crossed out and initialed by the insurance agent). The insurance shall be with an insurance company or companies rated A -VII or higher in Best's Guide and admitted in the State of Washington. 11.4 Professional Liability Insurance. Before this Contract is fully executed by the parties, Contractor shall provide the City with a certificate of insurance as evidence of Professional Errors and Omissions Liability Insurance with coverage of at least Three Million Dollars ($3,000,000.00) per occurrence and an annual aggregate limit of at least Three Million Dollars ($3,000,000.00). The certificate shall clearly state who the provider is, the amount of coverage, the policy number, and when the policy and provisions provided are in effect. The insurance shall be with an insurance company rated A -VII or higher in Best's Guide. If the policy is on a claims made basis, the retroactive date of the insurance policy shall be on or before the inception date of the Contract, or shall provide full prior acts. The insurance coverage shall remain in effect during the term of this Contract and for a minimum of three (3) years following the termination of this Contract. Section 12. Changes 12.1 The City may, at any time by written notice thereof to Contractor, make changes in the Services within the general scope of this Contract (including, but not limited to, additions to or deletions from any Services, suspension of performance and changes and location of performance). 12.2 If any change under paragraph 12.1 causes a significant increase or decrease in the cost of the time required for performance of the Services, an equitable adjustment in the compensation and schedules under this Contract shall be negotiated to reflect such increase or decrease, and this Contract shall be modified in writing accordingly. Such -6- \\Pdnt2\Users\bfowler\WORD DOCUMENTS\Contracts-RFPs\Prof Svcs Contract -Marsh -FINAL 8-1 I-03.doc equitable adjustment shall constitute full compensation to Contractor for such change. If any change under paragraph 12.1 results in a decrease in the Services to be performed, Contractor shall not be entitled to anticipated profit on Services not performed and the loss of anticipated profit shall not reduce the decrease in compensation under this Contract resulting from such exchange. Further, Contractor shall not be entitled to any reallocation of cost, profit or overhead. 12.3 Notwithstanding any dispute or delay in arriving at a mutually acceptable equitable adjustment under paragraph 12.2, Contractor shall immediately proceed with performance of the Services as changed pursuant to paragraph 12.1. If Contractor intends to assert a claim for equitable adjustment under paragraph 12.2, Contractor must, within sixty (60) days after Contractor's receipt of any notice under paragraph 12.1 that does not set forth an acceptable adjustment, submit to the City a written statement of the basis and nature of the adjustment claimed. Contractor shall not be entitled to any adjustment unless such written statement is submitted by Contractor to the City within the applicable period. Section 13. Termination 13.1 The City may, by giving the Contractor thirty (30) calendar days written notice of termination, terminate this Contract as to all or any portion of the Services not then performed, whether or not Contractor is in breach or default, and with or without cause. Upon receipt of any such notice of termination, Contractor shall, except as otherwise directed by the City, immediately stop performance of the Services to the extent specified in such notice. Contractor shall have the same termination rights as the City in Section 13. 13.2 In the event of termination pursuant to paragraph 13.1, an equitable adjustment shall be made in the compensation payable to Contractor under this Contract, provided that such compensation as so adjusted shall in no event exceed a percentage of the total compensation otherwise payable under this Contract equal to the percentage of the Services satisfactorily completed at the time of termination. Further, Contractor shall not be entitled to any reallocation of cost, profit or overhead. Contractor shall not in any event be entitled to anticipated profit on Services not performed on account of such termination. Contractor shall use its best efforts to minimize the compensation payable under this Contract in the event of such termination. 13.3 If the City purports to terminate or cancel all or any part of this Contract for Contractor's breach or default when Contractor is not in breach or default which would pei not such termination or cancellation, such termination or cancellation shall be deemed to have been a termination by the City pursuant to paragraph 13.1 and the rights of the parties shall be determined accordingly. -7- Pdnt2\Users\bfowler\WORD DOCUMENTS \Contracts-RFPs\Prof Svcs Contract -Marsh -FINAL 8-11-03.doc Section 14. Miscellaneous 14.1 Assignment. This Contract, or any interest herein, or claim hereunder, shall not be assigned or transferred in whole or in part by Contractor to any other person or entity without the prior written consent of the City. In the event that such prior written consent to an assignment is granted, then the assignee shall assume all duties, obligations, and liabilities of Contractor stated herein. 14.2 No Conflict of Interest. Contractor represents that it or its employees do not have any interest and shall not hereafter acquire any interest, direct or indirect, which would conflict in any manner or degree with the performance of this Contract. Contractor further covenants that it will not hire anyone or any entity having such a conflict of interest during the performance of this Contract. 14.3 No Insurance. It is understood that the City does not maintain liability insurance for Contractor and/or its employees. 14.4 Severability. If any portion of this Contract is changed per mutual agreement or any portion is held invalid, the remainder of the Contract shall remain in full force and effect. 14.5 Integration. This written document constitutes the entire agreement between the City and Contractor. There are no other oral or written Contracts between the parties as to the subjects covered herein. No changes or additions to this Contract shall be valid or binding upon either party unless such change or addition be in writing and executed by both parties. 14.6 Rule of Construction. In the event of an inconsistency in this Contract, unless otherwise provided herein, the inconsistency shall be resolved by giving precedence in the following order: (a) "Professional Services Contract." (b) City Request for Proposal. (c) Contractor's Proposal. 14.7 Notices. Unless stated otherwise herein, all notices and demands shall be in writing and sent or hand delivered to the parties to their addresses as follows: TO CITY: Rita Anson, Finance Director, AND TO: Sue Ownby, Purchasing Manager City of Yakima Finance Department City of Yakima City Hall — First Floor City Hall — First Floor 129 North Second Street 129 North Second Street Yakima, WA 98901 Yakima, WA 98901 -8- \\Pdnt2\Users\bfowler\WORD DOCUMENTS\Contracts-RFPs\Prof Svcs Contract -Marsh -FINAL 8-11-03.doc TO CONTRACTOR: Joel Pearson, Senior Vice President Deborah Krautwurm, Vice President Marsh Advantage America 1430 North 16th Avenue P. O. Box 2547 Yakima, WA 98907 or to such other addresses as the parties may hereafter designate in writing. Notices and/or demands shall be sent by registered or certified mail, postage prepaid, or hand delivered. Such notices shall be deemed effective when hand delivered at the addresses specified above, or three (3) days after the date of mailing to the addresses specified above. 14.8 Governing Law. This Contract shall be governed by and construed in accordance with the laws of the State of Washington. 14.9 Venue. The venue for any action to enforce or interpret this Contract shall lie in the Superior Court of Washington for Yakima County, Washington. CITY OF YAKIMA: MARSH ADVANTAGE AMERICA: By By Richard A. Zais, Jr., City Manager Joel . yrson, Senior Vice President Date: / ;Z t Date: / 3 /0 3 ATTEST: By `11 % `t .1 City Clerk City Contract No. 'i221 - - -9- \\Pdnt2\Users\bfowler\WORD DOCUMENTS\Contracts-RFPs\Prof Svcs Contract -Marsh -FINAL 8-1 1-03.doc STATE OF WASHINGTON ) ) ss. COUNTY OF YAKIMA ) I hereby certify that I know or have satisfactory evidence that Joel Pearson is the person who appeared before me, and said person acknowledged that he signed this instrument, and on oath stated that he was authorized to execute the instrument and acknowledged it as the Senior Vice President of Marsh Advantage America to be the free and voluntary act of such party for the uses and purposes mentioned in the instrument. DATED: Ile: �� � 2 00 " ouvvc, , Print Name: Su s c, y NOTARY PUBLIC in and for the Statof Washington, residing at 1G t ovr-'l' My appointment expires: �vl v $ � ? 0 b -10- \\Pdnt2\Users\bfowler\WORD DOCUMENTS\Contracts-RFPs\Prof Svcs Contract -Marsh -FINAL 8-11-03.doc BUSINESS OF THE CITY COUNCIL YAKIMA, WASHINGTON AGENDA STATEMENT Item No.* 13 For Meeting Of August 19, 2003 ITEM TITLE: Consideration of resolution authorizing a Professional Services Contract for property and casualty insurance broker and risk management services with Marsh Advantage America. SUBMITTED BY: Finance, Purchasing and Legal Departments CONTACT PERSON/TELEPHONE: Rita Anson, Finance Director, 575-607 SUMMARY EXPLANATION: This resolution authorizes approval and execution of a contract for property and casualty insurance broker and risk management services with Marsh Advantage America ("Marsh"). The City's insurance broker advises the City on insurance coverage and markets its insurance coverage for various types of insurance, including property, excess liability, boiler and machinery, and excess workers compensation insurance. Joel Pearson and Deborah Krautwurm of Marsh work on the Marsh service team, and have provided insurance and risk management services to the City since the 1980's. The current contract with Marsh will expire August 31, 2003. The City formed a team to establish the selection process; this team consisted of Sue Ownby (Purchasing Manager), Helen Harvey (Assistant City Attorney), Cindy Epperson (Financial Services Manager), Edna Pettyjohn (Accountant) and Rita Anson (Finance Director). The selection team prepared a RFP, reviewed and assessed applications, conducted interviews and prepared their recommendation for Council's consideration. The City's Request for Proposal No. 10314 for property and casualty insurance broker and risk management services was published in the newspaper on May 18 and 19, 2003, and also was mailed to 36 insurance companies. Marsh and one other insurance broker submitted responses to the Request for Proposal. Both insurance brokers were experienced and responsible brokers. Based on various factors, including cost, the selection team is recommending Marsh. The team recommends that Council approve the enclosed insurance broker contract which is for a three-year period commencing September 1, 2003 through August 31, 2006, with an option to extend the Contract for an additional two years. The compensation under the Contract for each year of the three-year period is $35,000, $40,000 and $45,000 respectively, to be paid in three annual installments. Note: a copy of the proposed contract is enclosed; however, we had not received a signed copy from Marsh at time of printing. We expect to have the contract signed prior to the Tuesday Council meeting. Resolution X Ordinance Other (Specify) Contract X Mail to (name and address): Joel Pearson, Senior Vice President, Marsh Advantage America, P. O. Box 2547. Yakima, WA 98907 Phone: (509) 248-7460 Funding Source Risk Management APPROVED FOR SUBMITTAL: City Manager STAFF RECOMMENDATION: Adopt Resolution. BOARD/COMMISSION RECOMMENDATION: COUNCIL ACTION: Resolution adopted. RESOLUTION R-2003-116 \\ISNT\Users\ranson\Council Agenda Items\2003\08-19-03 Agenda Stmt - Ins. Broker Svcs - Marsh.rtf RESOLUTION NO. R-2003-116 A RESOLUTION authorizing the City Manager of the City of Yakima to execute a professional services contract for property and casualty insurance broker and risk management services with Marsh Advantage America. WHEREAS, the City of Yakima requires professional services related to insurance brokerage services for property and casualty insurance broker and risk management services for the City of Yakima; and WHEREAS, the City's current contract for property and casualty insurance broker and risk management services expires on August 31, 2003; and WHEREAS, Marsh Advantage America represents that it has the expertise necessary and is willing to perform the professional services required by the City in accordance with the terms and conditions of the Contract; and WHEREAS, the City of Yakima and Marsh Advantage America desire to enter into a Professional Services Contract for property and casualty insurance broker and risk management services for a three-year term, from September 1, 2003 through August 31, 2006, with an option to extend the Contract for an additional two years; and WHEREAS, the City Council finds it to be in the best interest of the City to authorize the City Manager to execute a Professional Services Contract for the property and casualty insurance broker and risk management services with Marsh Advantage America; now, therefore, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF YAKIMA: The City Council authorizes the City Manager to execute the attached professional services contract for property and casualty insurance broker and risk management services with Marsh Advantage America. ADOPTED BY THE CITY COUNCIL this 19th day of August, 2003. ATTEST: Is/ KAREN Se ROBERTS, CMC City Clerk F y �� �_yi• ; A Mary Place, Mayor rteq,e;t, to he a true and correct copy of the 1 filed in my office. CITY CLERK Deputy, Marsh Advantage America 1430 N. 16th Avenue P.O Box 2547 (98907) Yakima, WA 98902 509-248-7460 Fax 509-248-9007 800-572-9170 July 25, 2002 City of Yakima Attn: Archie Sutton 129 N. 2nd Street Yakima, WA 98901 MARSH An MNIC Company INSURANCE POLICY Dear Archie: Enclosed is your renewal insurance book containing: Directory of Client Service Team Schedule of Insurance Broker Service Agreement Insurance Policy - Excess Workers' Compensation Policy Thank you for allowing us to serve as your insurance broker. Sincerely, t oel Pearson ,,��/7iv. Senior Vice President jmb Enclosure ,,.•1 2 6 C HumeResources Division Marsh Advantage America is a service of SEABURY & SMITH Dept. of Labor & Industries Self -Insurance Section P 0 Box 44891 Olympia, WA 98504-4891 SELF-INSURED EMPLOYER CERTIFICATE OF EXCESS INSURANCE It is necessary to complete this form if your firm elects to reinsure its workers' compensation liability. Please have your insurance provider assist you in properly completing this form. This information is required in accordance with RCW 51.14.020 (5) and WAC 296-15-050 Official Use only UBI Account ID Self -Insurer City of Yakima Excess Insurer Employers Reinsurance Corporation Address of Excess Insurer 5200 Metcalf, PO Box 2991, Overland Park, KS 66201-1391 X Type of Policy Policy Number 0006397 New Policy Policy Renewal (Old Policy Number of changed): 0006397 Change to Policy Cancellation of Policy (Effective Date of Cancellation): Reinstatement of Policy Policy Period From: July 1, 2002 To: July 1, 2003 WC -$25,000,000 X SPECIFIC: Retention $500,000 Maximum Liability of Excess Insurer EL -$1,000,000 AGGREGATE: Retention (Stop Loss) Maximum Liability of Excess Insurer This policy contains the following endorsements: ® Yes 0 No This policy is not intended to provide for the payment of any costs, benefits or compensation which the self-insured employer may be obligated to pay pursuant to the provisions of Title 51 RCW, in excess of 80 % of any such liabilities , as required by RCW 51.14.020(5). ® Yes 0 No It is further understood that this excess insurance company and its personnel do not participate in the administration of the responsibilities of the self-insured ' 1e 5RCW. DATE July 9, 2002 EXCESS INSURER Employers Reinsurance Corporation BY Russell Simmons, CPCU, ARe F207-095-000 Self-insured employer Certificate of excess insurance 1-89 Revised 01/02 PG -20 (Washington) Official use only LINUS LOTUS Marsh Advantage America SCHEDULE OF YOUR CURRENT INSURANCE 00°'iep*eslae'1t ',o tis+ Aavatt ag ettAmerica. 1A301-1• 16th 41 Moue 1 130 pp.aoxVA 989029 24$,1460 800.512.9110 oc 50 9,201460 i 509.248.900 boN•com P sotAsea doe\.peat CITY OF YAKIMA i'^ I. 2ND STREET MA, WA 98901 'OUNTS POLICY TERM LIMITS COMMENTS Ma" S Pace of 5 ab ryT&Sm�kca th'��c. _,Ak.;n Employee for Disease Employer's Liability Limit: Each Accident Each Employee for Disease �.V $25,000,000 $25,000,000 $1,000,000 $1,000,000 Self -Insured Retention: Each Accident $500,000 Each Employee for Disease $500,000 07/01/2002 TO 07/01/2003 Premium: $25,000.00 Page 1 of 4 Printed: 7/25/2002 jmb Marsh Advantage America IMPORTANT INFORMATION The insurance schedule is only a general outline of your insurance program and does not amend, extend or alter the coverage afforded by your insurance policies. For specific coverage information including limitations and exclusions, please refer to your actual insurance policies. In the course of your business operations, you may sign leases, contracts and other agreements that transfer financial obligations to you. We suggest that you have your attorney and a Marsh representative review these documents before you sign them to make sure you are not accepting risk that will not be covered by your insurance policies. Marsh Advantage America and its affiliated companies ("Marsh") may have agreements with insurers providing the insurance coverage which is placed by Marsh, pursuant to which Marsh may derive compensation contingent upon such factors as the size, growth and/or overall profitability of total business placed by Marsh with such insurers. Such contingent compensation is considered an industry standard and would be in addition to any other compensation Marsh may receive such as retail and wholesale brokerage fees or commissions, administrative fees, etc. Schedule / Info Statement Page 2 of 4 Printed: 7/25/2002 Name and Position Joel Pearson Account Executive Jana Bland Account Coordinator Alison Freisz Account Assistant Becky Anseth Claims Ronda Ide Employee Benefits Carla L. Savage Employee Benefits Ann Bowen Accounting Rachael Birdwell Bonds and/or Aviation Schedule / Directory Marsh Advantage America TEAM CONTACT DIRECTORY OUR PHONE NUMBER IS: (509) 248-7460 1-800-572-9170 Fax: (509) 248-9007 Phone Extension Internet Address 211 joel.pearson@seabury.com 226 jana.m.bland@seabury.com 201 alison.j.freisz@seabury.com 229 becky.l.anseth@seabury.com 232 ronda.r.ide@seabury.com 240 carla.l.savage@seabury.com 202 ann.m.bowen@seabury.com 235 rachael.birdwell@seabury.com OUR MAILING ADDRESS IS: P.O. BOX 2547, YAKIMA, WA 98907-2547 OUR STREET ADDRESS IS: 1430 N. 16TH AVENUE, LAKE ASPEN, YAKIMA, WA 98902-1381 Page 3 of 4 Printed: 7/25/2002 Marsh Advantage America BROKER SERVICES AGREEMENT "Marsh Advantage America insurance services outlined below will be provided as long as we are your broker of record / consultant" 1=> Review your insurance needs with you. i=> Prepare insurance specifications and market your insurance coverages with appropriate carriers. ta> Place coverage with sound carriers, meeting Marsh's security requirements. 1=> Review insurance policies for accuracy. 1=> Prepare schedules of your insurance coverage. c> Submit claims to the insurance carrier on your behalf and assist in settlement of the claim when necessary. i=> Answer insurance related questions which may arise. l=> Review insurance requirements in contracts when requested. i=> Issue Insurance Certificates as requested. Schedule / BSA Page 4 of 4 Revision Date: February 2, 1998 Printed: 7/25/2002 SPECIFIC EXCESS WORKERS COMPENSATION AND EMPLOYERS LIABILITY INDEMNITY POLICY EMPLOYERS REINSURANCE CORPORATION No. 0006397 SCHEDULE 1. Insured: City of Yakima 2. Mailing address: 129 N. 2nd Street Yakima, WA 98901 3. Named states: Washington 4. Excluded states: None 5. Policy Period: (a) From: July 1, 2002 (b) To: July 1, 2003 Both days at 12:01 A.M. standard time at the Insured's address shown in Item 2 of this Schedule 6. Retention: (a) Each accident: $500,000 (b) Each employee for disease: $500,000 7. Limit each accident: (a) Policy Part One, Workers Compensation: $25,000,000 (b) Policy Part Two, Employers Liability: $1,000,000 8. Limit each employee for disease: (a) Policy Part One, Workers Compensation: $25,000,000 (b) Policy Part Two, Employers Liability: $1,000,000 ERC -2120 I 9. Premium: (a) (b) Minimum: (c) Deposit: . •.. !! . $25,000.00 $25,000.00 : Rate: $0.0187 per worker hour* *Salaried personnel included at 40 hours per week each person 10. Endorsement serial numbers: Endorsement No. 1 - S-38 Endorsement No. 2 - S-45 (12/97) Endorsement No. 3 - SC -77 Endorsement No. 4 - S-78 Endorsement No. 5 - 'SAC -WA Countersigned EMPLOYERS REINSURANCE CORPORATION HOME OFFICE - 5200 Metcalf, P.O. Box 2991 Overland Park, Kansas 66201 (913) 676-5200 or 1-800-255-6931 Licensed Resident Agent ERC -2120 I Date Authorized Representative SPECIFIC EXCESS ANNUAL RETENTION ENDORSEMENT Schedule Item 6 shall read as follows: 6. Retention each accident or each employee for disease: (a) As respects loss comprised of medical expenses, rehabilitation expenses and periodic income benefits: The first $150,000 incurred during the first retention period The first $125,000 incurred during the second retention period The first $100,000 incurred during the third retention period The first $ 75,000 incurred during each subsequent retention period (b) $500,000, as respects loss: (i) comprised of liability imposed by law for damages (ii) comprised of lump sum benefits (including lump sum benefits payable in installments) rather than periodic income benefits (iii) for which you purchase an annuity or make other financial arrangement to discharge your liability for payment of periodic income benefits (iv) for which any governmental entity requires you to make a deposit to fund the payment of periodic income benefits (c) subject to a maximum retention of $500,000 Page 1 of 2 All other telms and conditions of this policy shall remain unchanged. This endorsement forms a part of the policy to which attached, effective on the inception date of the policy unless otherwise stated herein. (The information below is required only when this endorsement is issued subsequent to the preparation of the policy.) Endorsement Effective July 1, 2002 Named Insured City of Yakima Countersigned Authorized Representative Policy No. 0006397 Endorsement No, 1 EMPLOYERS REINSURANCE CORPORATION Endorsement Serial No. S-38 President & CEO Secretary SPECIFIC EXCESS ANNUAL RETENTION ENDORSEMENT With respect to this endorsement: (1) Claim expenses (listed in Subparagraph 3 of the definition of loss) shall be included with the above described kind of loss to which they pertain. (2) The term "retention period" shall mean consecutive twelve month periods of time commencing on the date the accident or disease exposure occurs and on each anniversary of that date. (3) Each medical service is incurred upon the date the medical service is furnished. Each rehabilitation expense is incurred upon the date that your payment is due for the rehabilitative service provided Each periodic income benefit is incurred during the period of time to which the income benefit pertains. Page 1 of 2 All other terms and conditions of this policy shall remain unchanged. This endorsement forms a part of the policy to which attached, effective on the inception date of the policy unless otherwise stated herein. (The information below is required only when this endorsement is issued subsequent to the preparation of the policy.) Endorsement Effective July 1, 2002 Named Insured City of Yakima Countersigned Authorized Representative Policy No. 0006397 Endorsement No. 1 EMPLOYERS REINSURANCE CORPORATION (2-4-ecZ L—..._ AAL44... .4 -4. -/4 - Endorsement Serial No. S-38 President Si CEO Seeretary BROAD FORM COVERAGE ENDORSEMENT I. In consideration of the premium charged, it is hereby understood and agreed that: A. Federal Acts Coverage 1. Part One of the policy shall also apply to loss paid by you because of liability imposed upon you by: (i) The Longshore and Harbor Workers Compensation Act (33 USC Sections 901-950). (ii) The Defense Base Act (42 USC Sections 1651-1654). (iii) The Outer Continental Shelf Lands Act (43 USC Section 1333.c). (iv) The Nonappropriated Fund Instrumentalities Act (5 USC sections 8171-8173). 2. Part Two of the policy shall also apply to loss paid by you because of liability imposed upon you by: (i) The Jones Act (46 USC Section 688 ). (ii) The Federal Employers Liability Act (45 USC Sections 51-60). (iii) The Migrant and Seasonal Agricultural Worker Protection Act (29 USC Sections 1801-1872). B. Voluntary Compensation Coverage Part One of the policy shall also apply to payments you gratuitously make because of bodily injury by accident or disease sustained by any employee included within either group described below (or to the employee's dependent) for benefits indicated in the workers compensation law of the state where the employee is normally employed, but only if that state is named in Schedule Item 3. Employees: a) those employees not covered under the worker's compensation law of a state listed in Schedule Item 3; or b) those employees who sustain a bodily injury while traveling or temporarily (less than 2 years) working outside of the United States of America. This voluntary compensation coverage does not apply: (a) unless the gratuitous benefits are paid as a result of an accident or disease exposure occurring during the policy period and in the course of employment; or (b) if the employee (or dependent) is entitled to benefits under any workers compensation law; or (c) to bodily injury intentionally caused or aggravated by you; or (d) in the event an employee who receives gratuitous payments from you for a bodily injury brings a common law action against you based on that bodily injury, in which event, policy Part Two will apply. This voluntary compensation coverage does apply: (a) to bodily injury resulting from diseases endemic to a region outside the United States of America; and Page 1 of 2 Endorsement Serial No. S-45(12/97) II. (b) to limited repatriation expenses such that Part One loss will include the amount of transportation expenses you incur returning an employee who sustains a bodily injury while traveling or temporarily working outside the United States of America (or, in the case of death, returning the employee's body) to the location where the employee is normally employed which exceeds the cost of returning the employee in an uninjured condition. This voluntary compensation coverage will be reduced, in the event the employee is eligible for benefits under a foreign workers compensation law and you are paying premiums for that coverage, by any workers compensation benefits payable under the foreign law. It is also understood and agreed that: A. Unintentional Failure to Report Your unintentional failure to disclose or accurately identify all hazards existing as of the inception date of this policy shall not constitute grounds for a declination of coverage by us. B. Waiver of Subrogation If you enter into a written contract with another party that requires you to waive your right of subrogation against the party, the last paragraph ("Recovery From Others") contained in Part One and Part Two of the policy will not apply with respect to the party with whom you contracted. C. Cancellation The second sentence of Paragraph E of policy Part Five is amended to read as follows: We may cancel this policy by giving you at least 90 days advance notice (30 days when we cancel for non-payment of premium) by registered mail stating the cancellation date. D. Punitive Damages - Employers Liability Exclusion 3 contained in Paragraph H of policy Part Two does not apply with respect to jurisdictions where insurance of punitive damages is permitted by applicable law. Page 2 of 2 All other temus and conditions of this policy shall remain unchanged. This endorsement forms a part of the policy to which attached, effective on the inception date of the policy unless otherwise stated herein. (The information below is required only when this endorsement is issued subsequent to the preparation of the policy.) Endorsement Effective July 1, 2002 Named Insured City of Yakima Countersigned Authorized Representative Policy No. 0006397 Endorsement No. 2 EMPLOYERS REINSURANCE CORPORATION (2-6-eL.-- 44L4..e..., President 5 CEO Secretary Endorsement Serial No. S-45(12/97) MODIFIED CLAIMS REPORTING DUTIES Paragraph B of Part Three of the policy is amended to read as follows: B. Your Claims Reporting Duties. You must give us written notice as soon as you learn of any of the following events involving loss which exceeds (or might in the future exceed) 50% of your retention: (a) (b) (c) (d) (e) (f) (g) claim; award; verdict; action; suit; proceeding; judgment. All other terms and conditions of this policy shall remain unchanged. This endorsement forms a part of the policy to which attached, effective on the inception date of the policy unless otherwise stated herein. (The information below is required only when this endorsement is issued subsequent to the preparation of the policy.) Endorsement Effective July 1, 2002 Named Insured City of Yakima Countersigned Authorized Representative Policy No. 0006397 Endorsement No. 3 EMPLOYERS REINSURANCE CORPORATION Endorsement Serial Serial No. SC -77 President 8 CEO Secretary CLARIFICATION OF EMPLOYERS LIABILITY EXCLUSION Exclusion 8 contained in Paragraph H of Part Two of the policy is amended to read as follows: 8. damages arising out of coercion, criticism, demotion, evaluation, reassignment, discipline, defamation, harassment, humiliation, discrimination against or termination of any employee, or any personnel practices, policies, acts or omissions. All other terms and conditions of this policy shall remain unchanged. This endorsement forms a part of the policy to which attached, effective on the inception date of the policy unless otherwise stated herein. (The information below is required only when this endorsement is issued subsequent to the preparation of the policy.) Endorsement Effective July 1, 2002 Named Insured City of Yakima Countersigned Authorized Representative Policy No. 0006397 Endorsement No. 4 EMPLOYERS REINSURANCE CORPORATION g, --/&.-- Endorsement Serial No. S-78 President & CEO sac rotary WASHINGTON ENDORSEMENT In accordance with the prohibitions contained in RCW 51.14.020(5): A. The indemnity afforded by Part One of the policy pertaining to the workers compensation law of Washington shall be limited to 80% of your liability under that law. B. We do not participate in the administration of your responsibilities under the workers compensation law of Washington. All other terms and conditions of this policy shall remain unchanged. This endorsement forms a part of the policy to which attached, effective on the inception date of the policy unless otherwise stated herein. (The information below is required only when this endorsement is issued subsequent to the preparation of the policy.) Endorsement Effective July 1, 2002 Named Insured City of Yakima Countersigned Authorized Representative Policy No. 0006397 Endorsement No. 5 EMPLOYERS REINSURANCE CORPORATION President & CEO Secretary Endorsement Serial No. SAC -WA SPECIFIC EXCESS WORKERS COMPENSATION AND EMPLOYERS LIABILITY INDEMNITY POLICY In return for the payment of the premium and subject to all tern's of this policy, we agree with you as follows: GENERAL SECTION A. Self -Insurance. Your acceptance of this policy indicates that you are now and will remain until the end of the policy period a duly qualified self -insurer in each state named in Schedule Item 3. If you are not a duly qualified self -insurer with respect to any loss covered by this policy, this policy will apply as if you were. B. The Policy. This policy includes the Schedule and the endorsements listed in Schedule Item 10. It is a contract of insurance between you (the Insured named in Schedule Item 1) and us (the Insurer named on the Schedule). The only agreements relating to this insurance are stated in this policy. The tenns of this policy may not be changed or waived except by endorsement issued by us to be a part of this policy. Endorsements amending Schedule Items 1, 3, 4, 6, 7 or 8 apply with respect to accidents and disease exposures occurring at or after 12:01 A.M. on the endorsement's effective date. C. Policy Period means the period of time covered by this policy as shown in Schedule Item 5. If this policy is cancelled, the policy period will end at 12:01 A.M. on the cancellation date. D. Workers Compensation Law includes occupational disease law. It does not include the provisions of any law that provide non -occupational disability benefits. E. State means any state of the United States of America and the District of Columbia. PART ONE - WORKERS COMPENSATION A. How This Part Applies. Part One applies to loss paid by you because of liability imposed upon you by the workers compensation law of any state named in Schedule Item 3. Part One also applies to loss paid by you because of liability imposed upon you by the workers compensation law of any other state which is not shown in Schedule Item 4. LIABILITY MUST RESULT FROM BODILY INJURY BY ACCIDENT OR BODILY INJURY BY DISEASE SUSTAINED BY AN EMPLOYEE YOU NORMALLY EMPLOY 114 A STATE NAMED IN SCHEDULE 11'hM 3. Bodily injury includes resulting death. Bodily injury by accident must occur during the policy period. A disease is not bodily injury by accident unless it results directly from bodily injury by accident. Bodily injury by disease must be caused or aggravated by the conditions of your employment. The employee's last day of last exposure to the conditions causing or aggravating such bodily injury by disease must occur during the policy period. Bodily injury by disease does not include disease that results directly from bodily injury by accident. ERC 2120 I Page 1 B. Your Retention. You must retain loss as shown in Schedule Item 6. Your retention applies to Part One loss and to Part Two loss together. IT IS IMPORTANT FOR YOU TO UNDERSTAND THAT YOUR RETENTION FOR DISEASE APPLES SEPARATELY TO EACH EMPLOYEE. Naming more than one Insured in Schedule Item 1 does not increase your retention. C. Our Indemnity. We will indemnify you for loss paid by you in excess of your retention. This indemnity may be reduced by a late reporting penalty. D. Our Limit. The most loss we will reimburse you for with respect to each accident is shown in Schedule Item 7(a). The most loss we will reimburse you for with respect to each employee for disease is shown in Schedule Item 8(a). Naming more than one Insured in Schedule Item 1 does not increase our limit. E. Late Reporting Penalty. As respects each accident or each employee for disease: 1. If you .do;;ttot:'give us written notice within one year of when required; by�Part Three, our indenini€y`will be reduced by 15%. If you do not give us written noticwithin three years of when:required by Part Three, our indemnity will be reduced by 40%. F. Loss means the amount actually paid by you for regular benefits provided under the workers compensation law in effect upon the date the accident or disease exposure occurs. Loss includes: 1. the amount paid by you in settlement of claims for regular benefits under the workers compensation law; 2. the amount paid by you in satisfaction of awards or judgments for regular benefits under the workers compensation law; 3. court costs, interest upon awards and judgments, and allocated investigation, adjustment and legal expenses pertaining to workers compensation claims. This subparagraph 3 does not include: (i) salaries paid to your employees; (ii) service company fees; (iii) claims administrator fees. G. Exclusions. Part One does not cover:, 1. loss insured by full coverage workers compensation or employers liability insurance; 2. loss payable under the workers compensation law of any state which is not named in Schedule Item 3, if you are protected from the loss by any other insurance; 3. punitive or exemplary damages because of bodily injury sustained by any employee; ERC 2120 I Page 2 4. punitive, exemplary or compensatory damages because of your conduct, or the conduct of anyone acting for you: (a) in the investigation, trial or settlement of any workers compensation claim; (b) in failing to pay or delay in payment of any workers compensation claim; 5. any assessment made upon self -insurers, whether imposed by statute, regulation or otherwise. H. Payments You Must Make. You are responsible (without reimbursement from us) for any payments in excess of the benefits regularly provided by the workers compensation law including those required because: J. 1. of your serious and willful misconduct; 2. you knowingly employ an employee in violation of law; 1 you fail to comply with a health or safety law or regulation; or 4. you discharge, coerce or otherwise discriminate against any employee in violation of the workers compensation law. Other Insurance. If, as respects any state named in Schedule Item 3, any other insurance exists protecting you against loss covered by this insurance, this insurance shall apply in excess of the other insurance. Recovery From Others. We have your rights, and the rights of persons entitled to compensation benefits from you, to recover our loss from anyone liable for the injury. You will do everything necessary to protect those rights for us and to help us enforce them. The recovered loss remaining after deducting our recovery expenses will first be used to reduce our loss. Then we will pay the balance, if any, to you. PART TWO - EMPLOYERS LIABILITY A. How This Part Applies. Part Two applies to loss paid by you for damages imposed upon you by the law of any state shown in Schedule Item 3. Part Two also applies to loss paid by you for damages imposed upon you by the law of any other state which is not shown in Schedule Item 4. DAMAGES MUST RESULT FROM BODILY INJURY BY ACCIDENT OR BODILY INJURY BY DISEASE SUSTAINED BY AN EMPLOYEE YOU NORMALLY EMPLOY IN A STATE NAMED IN SCHEDULE 1'1'EM 3. Bodily injury includes resulting death. Bodily injury must arise out of and in the course of the injured employee's employment by you. Bodily injury by accident must occur during the policy period. A disease is not bodily injury by accident unless it results directly from bodily injury by accident. Bodily injury by disease must be caused or aggravated by the conditions of your employment. The employee's last day of last exposure to the conditions causing or aggravating such bodily injury by disease must occur during the policy period. Bodily injury by disease does not include disease that results directly from bodily injury by accident. ERC 2120 I Page 3 B. Your Retention. You must retain loss as shown in Schedule Item 6. Your retention applies to Part One loss and to Part Two loss together. IT IS IMPORTANT FOR YOU TO UNDERSTAND THAT YOUR RETENTION FOR DISEASE APPLTF,S SEPARATELY TO EACH EMPLOYEE. Naming more than one Insured in Schedule Item 1 does not increase your retention. C. Our Indemnity We will indemnify you for loss paid by you in excess of your retention. This indemnity may be reduced by a late reporting penalty. D. Our Limit. The most loss we will reimburse you for with respect to each accident is shown in Schedule Item 7(b). The most loss we will reimburse you for with respect to each employee for disease is shown in Schedule Item 8(b). Naming more than one Insured in Schedule Item 1 does not increase our limit. E. Late Reporting Penalty. As respects each accident or each employee for disease: 1. If you do•;rigt'give us written notice within one year of when required; b Part Three, our indenmity"will be reduced by 15%. If you do not give us written notice' within three years of whe :.required by Part Three, our indemnity will be reduced by 40%. F. Loss means the amount actually paid by you for damages imposed upon you by law. Loss includes: 1. the amount paid by you in settlement of claims for legal damages; 2. the amount paid by you in satisfaction of awards or judgments for damages; 3. court costs, interest upon awards and judgments, and allocated investigation, adjustment and legal expenses pertaining to employers liability claims. This subparagraph 3 does not include: (i) salaries paid to your employees; (ii) service company fees; (iii) claims administrator fees. G. Damages includes: 1. damages for which you are liable to a third party by reason of a claim or suit against you by that third party to recover the damages claimed against such third party as a result of injury to your employee; 2. damages for care and loss of services; and 3. damages for consequential bodily injury to a spouse, child, parent, brother or sister of the injured employee; provided that these damages are the direct consequence of bodily injury that arises out of and in the course of the injured employee's employment by you; and 4. damages because of bodily injury to your employee that arises out of and in the course of employment, claimed against you in a capacity other than as employer. ERC 2120 I Page 4 H. Exclusions. Part Two does not cover: 1. liability assumed under a contract. This exclusion does not apply to a warranty that your work will be done in a workmanlike manner; 2. loss payable under the law of any state which is not named in Schedule Item 3, if you are protected from the loss by any other insurance; 3. punitive or exemplary damages because of bodily injury sustained by any employee; 4. punitive, exemplary or compensatory damages because of your conduct, or the conduct of anyone acting for you: (a) in the investigation, trial or settlement of any employers liability claim; (b) in failing to pay or delay in payment of any employers liability claim. 5. bodily injury to an employee while employed in violation of law with your actual knowledge or the actual knowledge of any of your executive officers; 6. any obligation imposed by a workers compensation, occupational disease, unemployment compensation, or disability benefits law, or any similar law; 7. bodily injury intentionally caused or aggravated by you. This exclusion does not apply to claim expenses (listed in subparagraph 3 of the definition of loss) related to the injury; 8. damages arising out of the discharge of, coercion of, or discrimination against any employee in violation of law. I. Other Insurance. If, as respects any state named in Schedule Item 3, any other insurance exists protecting you against loss covered by this insurance, this insurance shall apply in excess of the other insurance. J. Recovery From Others. We have your rights to recover our loss from anyone liable for an injury covered by this insurance. You will do everything necessary to protect those rights for us and to help us enforce them. The recovered loss remaining after deducting our recovery expenses will first be used to reduce our loss. Then we will pay the balance, if any, to you. PART THREE - CLAIMS A. Your Claims Handling Duties. It is your responsibility to investigate, settle, defend and appeal any claim made against you. It is also your responsibility to investigate, settle, defend and appeal any suit brought or other proceeding instituted against you. ERC 2120 I Page 5 B. Your Claims Reporting Duties. You must give us written notice as soon as you learn of: 1. any of the following events involving loss which exceeds (or might in the future exceed) 50% of your retention: (a) claim; (b) award; (c) verdict; (d) action; (e) suit; (f) proceeding; (g) judgment; 2. any accident involving: (a) disability for a period of nine months or more; (b) spinal cord injury; (c) a permanent total disability as defined in the workers compensation law; (d) serious burn injury; (e) brain injury. C. Claims Information. You agree to send to us any claim infounation which we may request. D. Claims Participation By Us. At our own election and expense, we have the right to participate with you in the settlement, defense or appeal of any claim, suit or proceeding which might involve a loss to us. E. Settlements. You agree not to make any voluntary settlement involving loss to us without our written consent. PART FOUR - PREMIUM A. Deposit and Adjustment Premiums. At the beginning of the policy period you must pay us the deposit premium shown in the Schedule. At the end of the policy period: 1. you will owe us the amount by which the fmal premium is greater than the deposit premium; or 2. we will owe you the amount by which the deposit premium is greater than the final premium. B. Payroll Report. Within 45 days after the end of the policy period, send us a report showing the amount of payroll earned by your employees during the policy period. C. Final Premium. The final premium due us for the policy period will be computed as shown in Schedule Item 9(a). Unless this policy is cancelled, final premium will be at least the minimum premium shown in the Schedule. ERC 2120 I Page 6 If we cancel this policy, final premium will be calculated pro rata based on the time this policy was in force. Final premium will not be less than the pro rata share of the minimum premium. If you cancel this policy, final premium will be more than pro rata; it will be based on the time this policy was in force, and increased by the customary short rate table and procedure. Final premium will not be less than the short rate portion of the minimum premium. D. Payroll means the gross pay to your employees for the policy period plus other amounts and items received by your employees as part of their pay for the policy period. We will send you a payroll reporting foul' describing what is included in payroll. E. Records. You will keep records of infounation needed to compute premium. You will provide us with copies of those records when we ask for them. F. Audit. You will let us or our representatives examine and audit all your payroll records. The audits may be conducted during your regular business hours. PART FIVE - CONDITIONS A. Agreement Upon Terms. Your acceptance of this policy means that you agree with us upon the terms of this policy. B. Sole Representative. The Insured first named in Schedule Item 1 will act on behalf of all Insureds to change this policy, accept loss payments, receive return premium and give or receive notice of cancellation. C. Bankruptcy or Insolvency. Your bankruptcy or insolvency will not relieve us from the payment of any claim covered by this policy. D. Transfer of Your Rights and Duties. Your rights or duties under this policy may not be transferred without our written consent. This provision does not apply to duties transferred to a service company or a claims administrator. E. Cancellation. You may cancel this policy by giving us at least 30 days advance notice by registered mail stating the cancellation date. We may cancel this policy by giving you at least 30 days advance notice by registered mail stating the cancellation date. Our mailing of registered notice to your address shown in Schedule Item 2 will be sufficient proof that we cancelled this policy. We have executed this policy by printing below the facsimile signatures of our President and Secretary and by the actual signature of our authorized representative on the Schedule. EMPLOYERS REINSURANCE CORPORATION (2..aL., President & CEO 44..:4-e.., . ERC 2120 I Page 7 Secretary LEGAL DEPARTMENT 200 South Third Street Yakima, Washington 98901-2830 December 4, 2003 Joel Pearson Senior Vice President Marsh Advantage America P.O. Box 2547 Yakima, WA 98907 Dear Joel: Enclosed is a conformed copy of the Professional Services Contract between the City of Yakima and Marsh Advantage America. This copy shows your signature as well as the signatures of the City Manager and the City Clerk. We appreciate your cooperation and assistance in this matter. The City looks forward to working with you and Deb and the employees at Marsh in the coming years. Sincerely, Helen A. Harvey Assistant City Attorney HAH/klw Enclosure cc/enc: Deb Krautwurm y,[rck Zais, City Manager Rita Anson, Finance Director Cindy Epperson, Financial Services Manager Sue Ownby, Purchasing Manager Civil _Division (509) 575-6030 y Criminal Division (509) 575-6033 g Fax (509) 575-6160 PROFESSIONAL SERVICES CONTRACT THIS PROFESSIONAL SERVICES CONTRACT is made and entered into by and between the City of Yakima, a Washington municipal corporation (hereinafter the "City"), and Marsh Advantage America ("Marsh") (hereinafter the "Contractor"). WHEREAS, the City of Yakima requires professional services related to insurance brokerage services for Property & Casualty Broker and Risk Management Services for the City of Yakima. WHEREAS, the Contractor represents that it has the expertise necessary and is willing to perform the professional services required by the City in accordance with the terms and conditions of this Contract. NOW, THEREFORE, in consideration of the mutual covenants, promises, and agreements set forth herein, it is agreed by and between the City and Contractor as follows: Section 1. Scope of Work 1.1 The minimum services that the Contractor will provide include: (a) Market and advise the City on its insurance coverage; (b) Prepare accurate quarterly and year-end claims reports promptly; and (c) Provide risk management services, including but not limited to review of vendor certificates of insurance to meet contract requirements; advise on wording for insurance requirements and the amounts of appropriate insurance coverage in City contracts; and training for City personnel as required. 1.2 Contractor shall provide the services and staff described in the text of the Professional Services Contract, including all attachments, which are incorporated herein by this reference. These attachments include the City Request for Proposal, and the Contractor's Proposal. The Professional Services Contract, the City Request for Proposal, and the Contractor's Proposal are referred to herein as the "Contract." The Contract specifies the working relationship between the City and the Contractor, and specific obligations of both parties. 1.3 Except as otherwise specifically provided in this Contract, Contractor shall furnish the following, all as the same may be required to perform the services described in paragraph 1.1 in accordance with this Contract: personnel, labor and supervision; and technical, professional and other services. All such services, property and other items furnished or required to be furnished, together with all other obligations performed or -1- \\Pdnt2\Users\bfowler\WORD DOCUMENTS\Contracts-RFPs\Prof Svcs Contract -Marsh -FINAL 8-11-03.doc required to be performed, by Contractor under this Contract are sometime collectively referred to in this Contract as the "Services." 1.4 All provisions of this Contract are intended to be complementary, and any Services required by one and not mentioned in another shall be performed to the same extent as though required by all. Details of the Services that are not necessary to carry out the intent of this Contract, but that are not expressly required, shall be performed or furnished by Contractor as part of the Services, without any increase in the compensation otherwise payable under this Contract. Section 2. Period of Performance 2.1 The period of performance under this Contract will be three (3) years, commencing on September 1, 2003, and continuing until August 31, 2006. An additional extension of two (2) years may be offered, at the option of the City, making the total contract term five (5) years, to August 31, 2008. In the event the City elects to extend the Contract for the additional two-year term, the City shall provide written notice to the Contractor at least sixty (60) days prior to the end of the initial three-year Contract period, or on or before idly 2, 2006; Section 3. Compensation 3.1 As full compensation for satisfactory performance of the Services, City shall pay Contractor Thirty-five Thousand Dollars ($35,000.00) for the first year of the Contract, Forty Thousand Dollars (840,000.00) for second year of the Contract, Forty-five for the vvvaa� OS .y-iiye Thousand Dollars (845,000.00) for the third year of the Contract, and Forty-five Thousand Dollars ($45,000.00) for each remaining year thereafter, if the Contract is extended. 3.2 Each annual fee shall be paid by the City to Contractor in three installments, in four- month intervals. The three invoices that will be submitted each year by Contractor to the City of Yakima will be submitted on or about January 1, May 1, and September 1 of each year. The first invoice for the first year of the Contract will be submitted on or about January 1, 2004, Each of Contractor's invoices shall set forth a description of the Services performed during the applicable period, and any reimbursable costs and expenses incurred in connection with such Services. With each invoice, the Contractor will also submit a report to the City listing the City departments with whom the Contractor worked and the issues that the Contractor worked on for the respective City departments during the previous four month period. 3.3 City of Yakima shall pay each of Contractor's invoices within thirty (30) days after the City's receipt and verification thereof; provided, however, that all such payments are expressly conditioned upon Contractor providing services hereunder that are satisfactory to the City. -2- \\Pdnt2\Users\bfowler\WORD DOCUMENTS\Contracts-RFPs\Prof Svcs Contract -Marsh -FINAL 8-11-03.doc 3.4 Any additional service(s) provided by the Contractor which are to be paid by the City must have prior written approval of the City. 3.5 If, at any time during the ten i> of the Contract, the City of Yakima enters into or becomes a member of a risk pool for liability coverage or for any other type of insurance coverage covered by this Contract, then the parties agree that they will renegotiate the compensation and services, since a reduction in compensation and services may be warranted. This change will be done consistent with the provisions of Section 12 of this Contract. Section 4. Performance by Contractor 4.1 Delegation of Professional Services. The services provided for herein shall be performed by Contractor, and no person other than regular associates or employees of Contractor shall be engaged on such work or services. Contractor shall not (by contract, operation of law or otherwise) delegate or subcontract performance of any Services to any other person or entity without the prior written consent of the City. Any such delegation or subcontracting without the City's prior written consent shall be voidable at the City's option. No delegation of subcontracting of performance of any of the Services, with or without the City's prior written consent, shall relieve Contractor of its responsibility to perform the Services in accordance with this Contract. Contractor shall be fully responsible for the performance, acts and omissions of Contractor's employees, Contractor's subcontractors, and any other person who performs or furnishes any Services (collectively, the "Support"). 4.2 Contractor shall at all times be an independent contractor and not an agent or representative of the City with regard to perfoiinance of the Services. Contractor shall not represent that it is, nor hold itself out as, an agent or representative of the City. In no event shall Contractor be authorized to enter into any agreement or undertaking for or on behalf of the City. 4.3 Contractor shall perform the Services in a timely manner and in accordance with the standards of the profession. At the time of performance, Contractor shall be properly licensed, equipped, organized, and financed to perform the Services in accordance with this Contract. Subject to compliance with the requirements of this Contract, Contractor shall perform the Services in accordance with its own methods. 4.4 Contractor shall take all reasonable precautions to protect against any bodily injury (including death) or property damage that may occur in connection with the Services. -3- \\Pdnt2\Users\bfowler\WORD DOCUMENTS \Contracts-RFPs\Prof Svcs Contract -Marsh -FINAL 8-1 I -03.doc Section 5. Compliance with Laws 5.1 Contractor shall comply with all applicable laws, ordinances, rules, regulations, orders Sectio licenses, permits, and other requirements, now in effect, of any governmental authority (including, but not limited to, such requirements as may be imposed upon the City and applicable to the Services). Contractor shall furnish such documents as may be required to effect or evidence such compliance. All laws, ordinances, rules and orders required to be incorporated in agreements of this character are incorporated in this Contract by this reference. 6. Taxes and Assessments 6.1 Contractor shall be solely responsible for and shall pay all taxes, deductions, and assessments, including but not limited to federal income tax, FICA, social security tax, assessments for unemployment and industrial injury insurance, and other deductions from income which may be required by law or assessed against either party as a result of this Contract. In the event the City is assessed a tax or assessment as a result of this Contract, Contractor shall pay the same before it becomes doe Section 7. Nondiscrimination Provision --7.1-- During the -performance of this -Contract; -Contractor shall not discriminate on the basis of race, age, color, sex, religion, national origin, creed, marital status, political affiliation, or the presence of any sensory, mental or physical handicap. This provision shall include but not be limited to the following: employment, upgrading, demotion, transfer, recruitment, advertising, layoff or termination, rates of pay or other forms of compensation, selection for training, and the provision of Services under this Contract. Section 8. Inspection: Examination of Records 8.1 The records relating to the Services shall, at all times, be subject to inspection by and with the approval of the City, but the making of (or failure or delay in making) such inspection or approval shah not relieve Contractor of responsibility for performance of the Services in accordance with this Contract, notwithstanding the City's knowledge of defective or non -complying performance, its substantiality or the ease of its discovery. Contractor shall provide the City sufficient, safe, and proper facilities and equipment for such inspection and free access to such facilities. 8.2 Contractor shall promptly furnish the City with such information related in the Services as may be requested by the City. Until the expiration of three (3) years after final payment of the compensation payable under this Contract, Contractor shall provide the City access to (and the City shall have the right to examine, audit and copy) all of Contractor's books, documents, papers and records which are related to the Services of this Contract. -4- \\Pdnt2\Users \bfowler\WORD DOCUMENTS\Contracts-RFPs\Prof Svcs Contract -Marsh -FINAL 8-1 I-03.doc Section 9. Property and Confidential Information 9.1 Contractor shall not, without the prior written consent of the City, disclose to third parties any information received in connection with the Services unless: (a) information is known to Contractor prior to receiving the same directly or indirectly in connection with the Services; (b) information is in the public domain at the time of disclosure by Contractor; or (c) infoimation is received by Contractor from a third party who does not have an obligation to keep the same confidential. Section 10. Indemnification and Hold Harmless 10.1 Contractor agrees to protect, defend, indemnify, and hold hainiless the City, its elected officials, officers, employees and agents from any and all claims, demands, losses, liens, liabilities, penalties, fines, lawsuits, and other proceedings and all judgments, awards, • _ luding reasonable attorneys' fees and disbursements)—resulting from death or bodily injury to any person or damage or destruction to a third party or third parties to the extent caused by any negligent act and/or omission of the Contractor, its officers, employees, agents, and/or subcontractors, arising out of the perfoiiiiance of this Contract. 10.2 Nothing contained in this Section or this Contract shall be construed to create a liability or a right of indemnification in any third party. Section 11. Insurance Provided by Contractor At all times during performance of the Services, the Contractor shall secure and maintain in effect insurance to protect the City and the Contractor from and against all claims, damages, losses, and expenses arising out of or resulting from the performance of this Contract. Contractor shall provide and maintain in force insurance in limits no less than that stated below, as applicable. The City reserves the right to require higher limits should it deem it necessary in the best interest of the public. 11.2 Commercial Liability Insurance. Before this Contract is fully executed by the parties, Contractor shall provide the City with a certificate of insurance as proof of commercial liability insurance with a minimum liability limit of One Million Dollars ($1,000,000.00) per occurrence combined single limit bodily injury and property damage, and Two Million Dollars ($2,000,000.00) general aggregate. The certificate shall clearly state who the provider is, the coverage amount, the policy number, and when the policy and provisions provided are in effect. Said policy shall be in effect for the duration of this Contract. The policy shall name the City, its elected officials, officers, agents, and employees as additional insureds, and shall contain a clause that the insurer will not cancel or change the insurance without first giving the City thirty (30) calendar days prior -5- \\Pdnt2\Users\bfowler\WORD DOCUMENTS\Contracts-RFPs\Prof Svcs Contract -Marsh -FINAL 8-11-03.doc written notice (any language in the clause to the effect of "but failure to mail such notice shall impose no obligation or liability of any kind upon the company" shall he crossed out and initialed by the insurance agent). The insurance shall be with an insurance company or companies rated A -VII or higher in Best's Guide and admitted in the State of Washington. 11.3 Commercial Automobile Liability Insurance. Before this Contract is fully executed by the parties, Contractor shall provide the City with a certificate of insurance as proof of commercial automobile liability insurance with a minimum liability limit of One Million Dollars ($1,000,000.00) per occurrence combined single limit bodily injury and property damage. Automobile liability will apply to "Any Auto" and be shown on the certificate. The certificate shall clearly state who the provider is, the coverage amount, the policy number, and when the policy and provisions provided are in effect. Said policy shall be in effect for the duration of this Contract. The policy shall name the City, its elected officials, officers, agents, and employees as additional insureds, and shall contain a clause .i_ ..�_ will _1 _1__ ..L without first the !"�;+. +1.:,-4. that the insurer will not cancel or change the insurance giving the City thirty .� effect (3(30) calendar days prior written notice (airy language ill the clause to the of ect of "but failure to mail such notice shall impose no obligation or liability Of any kind upon the company" shall be crossed out and initialed by the insurance agent). The insurance shall be with an insurance company or companies rated A -VII or higher in Best's Guide and admitted in the State of Washington. 11.4 Professional Liability Insurance. Before this Contract is fully executed by the parties, Contractor ctor shall provide City with certificate of insurance as evidence of O�Vh1t1 a0�tV1 Jll 11 provide the O�ll� tl1411 a certificate Professional Errors and Omissions Liability Insurance with coverage of at least Three Million Dollars ($3,000,000.00) per occurrence and an annual aggregate limit of at least Three Million Dollars ($3,000,000.00). The certificate shall clearly state who the provider is, the amount of coverage, the policy number, and when the policy and provisions provided are in effect. The insurance shall be with an insurance company rated A-VIi or higher in Rest's Guide. If the policy is On a claims made basis, the retroactive date of the insurance policy shall be on or before the inception date of the Contract, or shall provide full prior acts. The insurance coverage shall remain in effect during the term of this Contract and for a minimum of three (3) years following the termination of this Contract. Secti©n 12. Changes 12.1 The City may, at any time by written notice thereof to Contractor, make changes in the Services within the general scope of this Contract (including, but not limited to, additions to or deletions from any Services, suspension of performance and changes and location of performance). 12.2 If any change under paragraph 12.1 causes a significant increase or decrease in the cost of the time required for performance of the Services, an equitable adjustment in the compensation and schedules under this Contract shall be negotiated to reflect such increase or decrease, and this Contract shall be modified in writing accordingly. Such -6- \\Pdnt2\Users\bfowler\WORD DOCUMENTS\Contracts-RFPs\Prof Svcs Contract -Marsh -FINAL 8-11-03.doc equitable adjustment shall constitute full compensation to Contractor for such change. If any change under paragraph 12.1 results in a decrease in the Services to be performed, Contractor shall not be entitled to anticipated profit on Services not performed and the loss of anticipated profit shall not reduce the decrease in compensation under this Contract resulting from such exchange. Further, Contractor shall not be entitled to any reallocation of cost, profit or overhead. 12.3 Notwithstanding any dispute or delay in arriving at a mutually acceptable equitable adjustment under paragraph 12.2, Contractor shall immediately proceed with performance of the Services as changed pursuant to paragraph 12.1. If Contractor intends to assert a claim for equitable adjustment under paragraph 12.2, Contractor must, within sixty (60) days after Contractor's receipt of any notice under paragraph 12.1 that does not set forth an acceptable adjustment, submit to the City a written statement of the basis and nature of the adjustment claimed. Contractor shall not be entitled to any adjustment unless such written statement is submitted by Contractor to the City within the applicable period. Section 13. Termination 13.1 The City may, by giving the Contractor thirty (30) calendar days written notice of termination, terminate this Contract as to all or any portion of the Services not then performed, whether or not Contractor is in breach or default, and with or without cause. Upon receipt of any such notice of termination, Contractor shall, except as otherwise directed by the City, immediately stop performance of the Services to the extent specified in such notice. Contractor shall have the same termination rights as the City in Section 13. 13.2 In the event of termination pursuant to paragraph 13.1, an equitable adjustment shall be made in the compensation payable to Contractor under this Contract, provided that such compensation as so adjusted shall in no event exceed a percentage of the total compensation otherwise payable under this Contract equal to the percentage of the Services satisfactorily completed at the time of termination. Further, Contractor shall not be entitled to any reallocation of cost, profit or overhead. Contractor shall not in any event be entitled to anticipated profit on Services not performed on account of such termination. Contractor shall use its best efforts to minimize the compensation payable under this Contract in the event of such termination. 13.3 If the City purports to terminate or cancel all or any part of this Contract for Contractor's breach or default when Contractor is not in breach or default which would permit such termination or cancellation, such termination or cancellation shall be deemed to have been a termination by the City pursuant to paragraph 13.1 and the rights of the parties shall be determined accordingly. -7- \\Pdnt2\Users\bfowler\WORD DOCUMENTS \Contracts-RFPs\Prof Svcs Contract -Marsh -FINAL 8-11-03.doc Section 14. Miscellaneous 14.1 Assignment. This Contract, or any interest herein, or claim hereunder, shall not be assigned or transferred in whole or in part by Contractor to any other person or entity without the prior written consent of the City. In the event that such prior written consent to an assignment is granted, then the assignee shall assume all duties, obligations, and liabilities of Contractor stated herein. 14.2 No Conflict of Interest. Contractor represents that it or its employees do not have any interest and shall not hereafter acquire any interest, direct or indirect, which would conflict in any manner or degree with the performance of this Contract. Contractor further covenants that it will not hire anyone or any entity having such a conflict of interest during the performance of this Contract. 14.3 No insurance. It is understood that the City does not maintain liability insurance for /'� 1 / 9 Contractor and/or its employees. 14.4 Severability. If any portion of this Contract is changed per mutual agreement or any portion is held invalid, the remainder of the Contract shall remain in full force and effect. 14.5 Integration. This written document constitutes the entire agreement between the City and -Contractor. There- are -no other oral or written Contracts ---between -the parties- as --to the - subjects covered herein. No changes or additions to this Contract shall be valid or binding upon either party unless such change or addition be in writing and executed Icy both parties. 14.6 Rule of Construction. In the event of an inconsistency in this Contract, unless otherwise provided herein, the inconsistency shall be resolved by giving precedence in the following order: (a) "Professional Services Contract." (b) Cry Request for Proposal. (c) Contractor's Proposal. 14.7 Notices. Unless stated otherwise herein, all notices and demands shall be in writing and sent or hand delivered to the parties to their addresses as follows: TO CITY: Rita Anson, Finance Director, AND TO: Sue Ownby, Purchasing Manager City of Yakima Finance Department City of Yakima City Hall — First Floor City Hall — First Floor 129 North Second Street 129 North Second Street Yakima, WA 98901 Yakima, WA 98901 -8- \\Pdnt2\Users\bfowler\WORD DOCUMENTS\Contracts-RFPs\Prof Svcs Contract -Marsh -FINAL 8-11-03.doc TO CONTRACTOR: Joel Pearson, Senior Vice President Deborah Krautwurm, Vice President Marsh Advantage America 1430 North 16th Avenue P. O. Box 2547 Yakima, WA 98907 or to such other addresses as the parties may hereafter designate in writing. Notices and/or demands shall be sent by registered or certified mail, postage prepaid, or hand delivered. Such notices shall be deemed effective when hand delivered at the addresses specified above, or three (3) days after the date of mailing to the addresses specified above. 14.8 Governing Law. This Contract shall be governed by and construed in accordance with the laws of the State of Washington. 14.9 Venue. The venue for any action to enforce or interpret this Contract shall lie in the Superior Court of Washington for Yakima County, Washington. CITY OF YAKIMA: MARSH ADVANTAGE AMERICA: By• �\ �-'�� Richard A. Zais, Jr., City Manager Date: / 02 — 4/-- 0 ATTEST: B yC�� City Clerk City Contract No. ,,,&V3-,92. 675cLL 7) x) dill, ,k'�1��5 //6 By Joel rson, Senior Vice President Date: -9- 0,13/03 \\Pdnt2\Users\bfowler\WORD DOCUMENTS\Contracts-RFPs\Prof Svcs Contract -Marsh -FINAL 8-11-03.doc STATE OF WASHINGTON ) COUNTY OF YAKIMA ) ss. I hereby certify that I know or have satisfactory evidence that Joel Pearson is the person who appeared before me, and said person acknowledged that he signed this in_stniment, and on oath stated that he was authorized to execute the instrument and acknowledged it as the Senior Vice President of Marsh Advantage America to be the free and voluntary act of such party for the uses and purposes mentioned in the instrument. DATED: 4 3 2001 w-Y3Q- OF IN r -N. . 11 A 1 Print Name: '-- _ YN ,s� e� t P<- NOTARY f�"1 1 11111. 1 `1 CLlllV . d_i '^ J v�, Y l • L 'O� � tr i <- ✓ ° �9 rr n InY PUBLICand for Stat- „f vOT� in the U4id4h„ �lA Washington,. residing at �v* � Jk t V\ My appointment expires: 471.4 3 X2 b cD"?o -10- \\Pdnt2\Users\bfowier\WORD DOCUMENTS\Contracts-RFPs\Prof Svcs Contract -Marsh -FINAL 8-11-03.doc BUSINESS OF THE CITY COUNCIL YAKIMA, WASHINGTON AGENDA STATEMENT Item No.* /3 For Meeting Of August 19. 2003 ITEM TITLE: Consideration of resolution authorizing a Professional Services Contract for property and casualty insurance broker and risk management services with Marsh Advantage America. SUBMITTED BY: Finance, Purchasing and Legal Departments CONTACT PERSON/TELEPHONE: Rita Anson, Finance Director, 575-6079 ( SUMMARY EXPLANATION: This resolution authorizes approval and execution of a contract for property and casualty insurance broker and risk management services with Marsh Advantage America ("Marsh"). The City's insurance broker advises the City on insurance coverage and markets its insurance coverage for various types of insurance, including property, excess liability, boiler and machinery, and excess workers compensation insurance. Joel Pearson and Deborah Krautwurm of Marsh work on the Marsh service team, and have provided insurance and risk management services to the City since the 1980's. The current contract with Marsh will expire August 31, 2003. The City formed a team to establish the selection process; this team consisted of Sue Ownby (Purchasing Manager), Helen Harvey (Assistant City Attorney), Cindy Epperson (Financial Services Manager), Edna Pettyjohn (Accountant) and Rita Anson (Finance Director). The selection team prepared a RFP, reviewed and assessed applications, conducted interviews and prepared their recommendation for Council's consideration. The City's Request for Proposal No. 10314 for property and casualty insurance broker and risk management services was published in the newspaper on May 18 and 19, 2003, and also was mailed to 36 insurance companies. Marsh and one other insurance broker submitted responses to the Request for Proposal. Both insurance brokers were experienced and responsible brokers. Based on various factors, including cost, the selection team is recommending Marsh. The team recommends that Council approve the enclosed insurance broker contract which is for a three-year period commencing September 1, 2003 through August 31, 2006, with an option to extend the Contract for an additional two years. The compensation under the Contract for each year of the three-year period is $35,000, $40,000 and $45,000 respectively, to be paid in three annual installments. Note: a copy of the proposed contract is enclosed; however, we had not received a signed copy from Marsh at time of printing. We expect to have the contract signed prior to the Tuesday Council meeting. Resolution X Ordinance Other (Specify) Contract X Mail to (name and address): Joel Pearson. Senior Vice President, Marsh Advantage America. P. O. Box 2547. Yakima. WA 98907 Phone: (509) 248-7460 Funding Source Risk Management APPROVED FOR SUBMITTAL: �`o City Manager STAFF RECOMMENDATION: Adopt Resolution. BOARD/COMMISSION RECOMMENDATION: COUNCIL ACTION: Resolution adopted. RESOLUTION NO. R-2003-116 \\ISNT\Users\ranson\Council Agenda Items\2003\08-19-03 Agenda Stmt - Ins. Broker Svcs - Marsh.rtf RESOLUTION NO. R-2003-116 A RESOLUTION authorizing the City Manager of the City of Yakima to execute a professional services contract for property and casualty insurance broker and risk management services with Marsh Advantage America. WHEREAS, the City of Yakima requires professional services related to insurance brokerage services for property and casualty insurance broker and risk management services for the City of Yakima; and WHEREAS, the City's current contract for property and casualty insurance broker and risk management services expires on August 31, 2003; and WHEREAS, Marsh Advantage America represents that it has the expertise necessary and is willing to perform the professional services required by the City in accordance with the terms and conditions of the Contract; and WHEREAS, the City of Yakima and Marsh Advantage America desire to enter into a Professional Services Contract for property and casualty insurance broker and risk management services for a three-year term, from September 1, 2003 through August 31, 2006, with an option to extend the Contract for an additional two years; and WHEREAS, the City Council finds it to be in the best interest of the City to authorize the City Manager to execute a Professional Services Contract for the property and casualty insurance broker and risk management services with Marsh Advantage America; now, therefore, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF YAKIMA: The City Council authorizes the City Manager to execute the attached professional services contract for property and casualty insurance broker and risk management services with Marsh Advantage America. ADOPTED BY THE CITY COUNCIL this 19th day of August, 2003. ATTEST: City Clerk ry Place, Mayor