4.4. SR 03-18-2013 - Laserfiche WebLink

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firms on compliance with mandatory elements,municipal experience, expertise, customer service, transition approach,and quality of interview responses and made a recommendation to the city administrator. As the City Council is aware,under state statute,the selection of an insurance firm is considered a professional service. The purpose of this process is to select the firm that will provide the most value to the city,not just in terms of costs. Below are some of the reasons why Northern Capital Insurance Group was selected: • The fee is the lowest of the nine proposals • Fee includes workers compensation analysis,not an extra charge • Transition phase includes physical and photographic audit of all facilities and equipment • Had done their research about the City and Utilities for the interview • Many city clients • Outlined a multi-year trend analysis for deductible recommendations example FINANCIAL IMPACT Staff prepared the RFP to include a compensation system based on an annual fee rather than a commission. The annual fee will be paid directly by the city to the firm. Previously, the commission was included in the cost of the premium and paid by the LMCIT to the insurance agent of record. Staff believes switching from commission-based to fee-based services provides greater budget certainty and transparency. Over the past three years,with a commission rate of 7.5% for property/casualty and 2% for workers compensation,the amount paid by the city and ERMU was: 2012-$33,361 , 2011 -$29,682 2014 $ 9,000 $ 3,500 $12,500 2010- $29,733 2015 $ 9,000 $ 3,500 $12,500 2016 $ 9,000 $ 3,500 $12,500 The chart to the right shows Northern Capital's proposed fees 2017 $ 9,000 $ 3,500 $12,500 for services. The city and ERMU will see substantial savings 2018 $ 9,000 $ 3,500 $12,500 over the next five years. Total $45,000 $17,500 $62,500 Regarding the savings,the committee felt it was important to invest some of the savings to enhance our safety and wellness programs. The fire chief is reviewing the program and will bring recommendations to the council to review later in the year or in the 2014 budget. ATTACHMENTS • League memo on"The Agent's Role and Compensation in LMCIT" • Resolution appointing Northern Capital Insurance Group as insurance agent of record N:\Public Bodies\City Council\Council RCA\Agenda Packet\03-18-2013\4.4 recommendinsuranceagentofrecord.docx