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CC - CONSENT ITEM: (1) Ratification of Annual Insurance Policy Renewals for the City’s Insurance Portfolio for Fiscal Year 2024 - 2025 with a Premium of Approximately $4,352,142.84 as Presented by City’s Insurance Broker AON Risk Insurance Services West, Inc. (AON); (2) Waiver of Competitive Bidding Procedures Pursuant to Culver City Municipal Code Section 3.07.075.F.3; and (3) Amendment to Existing Professional Services Agreement with AON to Continue Providing Broker Services for the City’s Insurance Programs through December 31, 2024.
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Meeting Date: September 23, 2024
Contact Person/Dept.: Dana Anderson/Human Resources
Phone Number: (310) 253-5640
Fiscal Impact: Yes [] No [X] General Fund: Yes [] No [X]
Attachments: Yes [] No [X]
Public Notification: (E-Mail) Meetings and Agendas - City Council (09/17/2024)
Department Approval: Dana Anderson, Human Resources Director (09/12/2024) _____________________________________________________________________
RECOMMENDATION
Staff recommends the City Council (1) ratification of the recommended Fiscal Year 2023-2024 insurance renewal program with a premium of approximately $4,352,142.84, as presented by the City’s insurance broker AON Risk Insurance Services West, Inc.; (2) waive competitive bidding procedures pursuant to Culver City Municipal Code (CCMC) Section 3.07.075.F.3; and (3) approve an amendment to the existing professional services agreement with AON Risk Insurance Services West, Inc., to continue providing broker services for the City’s insurance programs through December 31, 2024.
BACKGROUND
Since 2016, the City of Culver City (City) has contracted with AON Risk Insurance Services West, Inc. (AON) to purchase insurance coverage for the City. The City is self-insured and annually purchases lines of insurance coverage to minimize the adverse effects of accidental losses and claims against the City.
The City is self-insured for major risk programs such as property, liability, excess earthquake/flood liability, general liability, auto, workers' compensation and other lines of insurance. To protect the assets of the City from potential loss, the City purchases various lines of insurance coverage for these risks. To assist in the purchase of various lines of insurance, the City entered into an agreement with AON Risk Insurance Services West, Inc. for professional insurance brokerage services.
DISCUSSION
AON has marketed the City's insurance program to carriers and has solicited pricing that, if approved, is $427,132.98 (11%) more than the current year while providing the same level of coverage.
The following is premium information for FY 23/24 Renewal Insurance Premiums for FY 24/25:
AON representatives explained changes in the market are as expected. The average increase experienced by the City is considered normal expected increase, except Public Entity Liability. The increase for the coverage is a result of exposure paid to settle recent claims.
Culver City Municipal Code (CCMC) Section 3.07.065 exempts certain general services, including insurance in subsection 2, from the formal competitive bid process. CCMC Section 3.07.045 requires a formal competitive bid process in the event the same vendor has been utilized for a period of five consecutive years; therefore, a new Request for Proposals (RFP) is being planned for issuance. To ensure continuation of services during this process, staff recommends City Council authorize an extension to the existing agreement with AON through December 31, 2024.
FISCAL ANALYSIS
The Adopted Budget for Fiscal Year 2024-2025 includes $4,352,142.84 for the insurance premiums in Account No. 30922220.650100 (Premium/Claims - Insurance Premiums Liability), Account No. 30922220.650200 (Premium/Claims - Insurance Premiums Other), Account No. 30922220.650400 (Premium/Claims - Workers Comp Ins Premiums). These accounts can be found in the Human Resources Department section of the budget book under the Premium/Claims expenditures
ATTACHMENTS
None.
MOTIONS
That the City Council:
1. Ratification of the recommended Fiscal Year 2024 - 2025 insurance renewal program with a premium of approximately $4,352,142.84, as presented by the City’s insurance broker AON Risk Insurance Services West, Inc.;
2. Waive competitive bidding procedures pursuant to Culver City Municipal Code (CCMC) Section 3.07.075.F.3;
3. Approve an amendment to the existing professional services agreement with AON Risk Insurance Services West, Inc. to continue providing broker services for the City’s insurance programs through December 31, 2024;
4. Authorize the City Attorney to review/prepare the necessary agreements; and
5. Authorize the City Manager to execute such documents on behalf of the City.