Ordinance No. 10,406ORDINANCE NO. 10,406
AW AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF BAYTOWN,
TEXAS, AUTHORIZING A CONSULTING/BROKERAGE AGREEMENT WITH
HOLMES, MURPHY & ASSOCIATES, INC.: AUTHORIZING PAYMENT BY
THE CITY OF BAYTOWN, THE SUM OF FORTY THOUSAND AND NO /100
DOLLARS (540,000.00); AND PROVIDING FOR THE EFFECTIVE DATE
THEREOF.
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BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS:
Section 1: That the City Council of the City of Baytoxvai, Texas, hereby authorizes the
City Manager to negotiate and execute a consulting/brokerage agreement with Holmes, Murphy &
Associates. Inc., for fiscal year 2006 -07 under terms and conditions deemed acceptable to the City
Manager and City Attorney.
Section 2: That the City Council of the City of Baytown authorizes payment to Holmes,
Murphy & Associates, Inc., of the sum of FORTY THOUSAND AND NO /100 DOLLARS
(540,000.00), pursuant to the Agreement.
Section 3: That the City Manager is hereby granted general authority to approve any
change order involving a decrease or an increase in costs of TWENTY -FIVE THOUSAND AND
NO /100 DOLLARS (525,000.00) or less; however, the original contract price may not be increased
by more than twenty -five percent (25 %) or decreased by more than twenty -five percent (25 %)
without the consent of the contractor to such decrease.
Section 4: This ordinance shall take effect immediately from and after its passage by the
City Council of the City of Baytown.
INTRODUCED, READ and PASSED by the affirmative vote 010 City Council of the City
of Baytown this the 14th day of September, 2006.
O p9- ---
, City Clerk
APPROVED A'S TO FORM:
Aw' ACIO RAMIREZ, S . City Attorney
DONCARLOS,
RAKarenWiles \City Council \Ordinances\2006\September 14\H olmesMurphyBenefitConsultingServicesContract06- 07.doc
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City of Baytown
BAYTOW
February 1,2007
Mr. Jarrad Wills
Holmes, Murphy&Associates, Inc.
Senior Account Executive
3333Lee Parkway, Suite 900
Dallas,TX 75219-5139
Re: Letter of Agreement—Employee Benefits Advisory Services
Dear Mr. Wills:
This Letter Agreement("Agreement")will evidence the terms and conditions by which Holmes Murphy
Consultant")will perform employee benefits advisory services as further detailed hereinbelow(the
Services") for and on behalf of the City of Baytown(the"City").
1.City's Obligations
1.01 The City shall use its best efforts to provide non-confidential City records, including utilization
information, for the Consultant's usage in performing the Services for and on behalf of the City.
1.02 The City shall pay the Consultant a fee of FORTY THOUSAND AND NO/100 DOLLARS
40,000.00)to perform the Services specified herein for a one-year period commencing on
October 1, 2006. The City shall make payments to the Consultant monthly on an equal basis.
2.Consultant's Obligations
2.01 The Consultant will provide the following services for and on behalf of the City in accordance
with best commercial practices:
a.Review of employee health benefits for quality of the benefits provided, cost
effectiveness, competitiveness, and plan administration (by both the City and the
provider). Make recommendations concerning any changes in terms, conditions, and
limits;
b.Review prior-years utilization information to prepare models/data showing trends on
claims and utilization including medical, dental, vision and pharmaceutical (mail order
and retail) coverages for the purpose of making recommendation to the City for
optimizing future health benefits while controlling costs;
c.Assist with annual health benefits, TPA, EAP, Stop Loss, etc., renewals, including
negotiation of any changes in contracts, including,but not limited to,the following:
1) Management of the negotiations with the carriers geared to achieving cost
containment;
2) RFP Development to involve tailoring the RFP to the exact desires, needs and
financial directions provided by the City;
3) Exploration of funding alternatives;
2401Market Street P.O. Box 424 Baytown,Texas 77522-0424 (281)422-8281 Fax (281)420-6586 baytown@baytown.org
Letter Agreement
City of Baytown
February 1,2006
Page 2
4) Evaluation of vendor responses to assure that variation in coverage and costs
are identified;
5) Conduct fmalist interviews, along with the City, to explore intangibles such as
personalities,service orientation and responsiveness;
6) Provide renewal analysis report,based on renewal negotiation to cover program
and claims cost projections as well as complete information on benefit designs;
and
7) All recommendations to involve close collaboration with the City;
d. If Health Benefits, TPA, EAP, Stop Loss, etc., plans are marketed, prepare bid
specifications, identify the appropriate markets, analyze proposals submitted, make
recommendations, and assist in negotiation of(preferably multi-year) contracts. Audit
the resulting contracts for accuracy of coverage,terms,and conditions;
e. Monitor ongoing contracts,including provider plan administration,provider compliance
with contract,and incurred claims;
f.Provide annual claims review and recommendations on funding, projections, rate
structures and required reserves to maintain financial viability of the health benefits
program. This will include assisting the City staff in the preparation of projected new
budget figures for the Health/Dental Benefits, Stop Loss,etc.;
g. Inform the City of health care benefits or industry practices,costs,and trends on a local,
regional and national basis and its effects on the public and private sector;
h. Inform the City of the regulatory environment and of any State or Federal legislation
affecting employee benefits, including but not limited to HIPPA, COBRA and other
IRS updates and regulations. Assist the City with maintaining or achieving compliance
with such regulations. Such assistance shall include, but not be limited to, the
following:
1) Providing legislative updates;
2) Evaluating plan design to confirm compliance with state and federal
regulations;
3) Reviewing benefit plan documents for accuracy;
4) Conducting comprehensive review of summary plan description, contracts and
employee summaries to outline variances and inconsistencies which may lead
to employee litigation;
5) Ensuring that COBRA and HIPPA processes are in compliance;and
6) Conducting periodic training sessions on regulatory issues as required;
i.Be available to meet, as needed, with City Council, City staff, the employee benefits
Trustees,vendors and the general employee population;
j.Assist in design and delivery of employee health benefits communication pieces,
including presentations at the Health Benefits Fair;
Letter Agreement
City of Baytown
February 1,2006
Page 3
k. Be available as needed to answer questions and resolve issues that arise during the year
regarding the employee benefits contract administration and service provisions;
1.Provide advice on improving the City's wellness program;
m. Prepare and provide detailed monthly, quarterly, and annual reports on the plan's
expenditures by items such as coverage lines, employee classifications, dependent
classes, service zones,types of provider,and other items as requested by the City;
n. Fully inform the City as to its options for providing existing and future health/dental
and any other benefit plans;
o. Assist the City with implementation plans for any coverage/services, integrating
appropriate assignments of duties to vendors;
p. Provide assistance with developing/coordinating data from carriers for reporting
requirements such as GASB regulations and other fmancial reporting;and
q. Provide coordination, monitoring and filing of reinsurance claims with the stop loss
carrier.
2.02 The Consultant shall provide the Services required herein in accordance with the experience and
services outlined in Section 4 of its proposal dated July 24, 2006, which section by this
reference is incorporated herein for all intents and purposes.
2.03 The Consultant shall perform all services under this Agreement with the care and skill
ordinarily used by members of Consultant's profession practicing under the same or similar
circumstances, time and locality. Consultant shall use its areas of expertise in marketing
leverage, clinical management for utilization monitoring, disease management and wellness
management; legal services; actuarial services; and underwriting. The Consultant shall be
responsible for the technical accuracy of its services and documents resulting therefrom.
2.04
CONSULTANT AGREES TO AND SHALL INDEMNIFY AND HOLD
HARMLESS AND DEFEND THE CITY, ITS OFFICERS, AGENTS, AND
EMPLOYEES(HEREINAFTER REFERRED TO AS THE"CITY") FROM AND
AGAINST ANY AND ALL CLAIMS, LOSSES, DAMAGES, CAUSES OF
ACTION, SUITS AND LIABILITY OF EVERY KIND, INCLUDING ALL
EXPENSES OF LITIGATION, COURT COSTS, AND ATTORNEY'S FEES,
FOR INJURY TO OR DEATH OF ANY PERSON, FOR DAMAGE TO ANY
PROPERTY,OR FOR ANY BREACH OF CONTRACT,ARISING OUT OF,OR
IN CONNECTION WITH THE WORK DONE BY CONSULTANT UNDER
THIS CONTRACT CAUSED BY THE SOLE OR JOINT NEGLIGENCE OF
CONSULTANT. IT IS THE EXPRESSED INTENTION OF THE PARTIES
HERETO, BOTH CONSULTANT AND THE CITY, THAT THE INDEMNITY
PROVIDED FOR IN THIS PARAGRAPH IS INDEMNITY BY CONSULTANT
Letter Agreement
City of Baytown
February 1,2006
Page 4
TO INDEMNIFY AND PROTECT THE CITY FROM THE CONSEQUENCES
OF CONSULTANT'S OWN NEGLIGENCE, WHETHER THAT NEGLIGENCE
IS THE SOLE OR A CONCURRING CAUSE OF THE RESULTING INJURY,
DEATH OR DAMAGE. SUCH INDEMNITY SHALL NOT APPLY,
HOWEVER, TO LIABILITY ARISING FROM THE PERSONAL INJURY,
DEATH, OR PROPERTY DAMAGE OF PERSONS THAT IS CAUSED BY OR
RESULTS FROM THE SOLE NEGLIGENCE OF THE CITY. IN THE EVENT
THAT ANY ACTION OR PROCEEDING IS BROUGHT AGAINST THE CITY
FROM WHICH THE CITY IS INDEMNIFIED, CONSULTANT FURTHER
AGREES AND COVENANTS TO DEFEND THE ACTION OR PROCEEDING
BY LEGAL COUNSEL ACCEPTABLE TO THE CITY. THE INDEMNITY
PROVIDED FOR IN THIS SECTION SHALL SURVIVE THE TERMINATION
OR EXPIRATION OF THIS LETTER AGREEMENT.
2.05 Throughout the term of this Agreement, Consultant at its own expense shall purchase,maintain
and keep in force and effect insurance against claims for injuries to or death of persons or
damages to property which may arise out of or result from Consultant's operations and/or
performance of the Services under this Agreement,whether such operations and/or performance
be by Consultant, its agents, representatives, volunteers, employees or subcontractors or by
anyone directly or indirectly employed by any of them,or by anyone for whose acts any of them
may be liable.
Consultant's insurance coverage shall be primary insurance with respect to the City,its officers,
agents and employees. Any insurance or self-insurance maintained by the City, its officials,
agents and employees shall be considered in excess of Consultant's insurance and shall not
contribute to it.
The following is a list of standard insurance policies along with their respective minimum
coverage amounts required in this contract:
Commercial General Liability(CGL)
General Aggregate: $1,000,000
Products&Completed Operations: $1,000,000
Personal&Advertising Injury: $1,000,000
Per Occurrence: $500,000
a. Coverage shall be at least as broad as ISO CG 00 01 10 93
b. No coverage shall be excluded from standard policy without notification of
individual exclusions being attached for review and acceptance.
Business Automobile Policy(BAP)
Combined Single Limits: $1,000,000
a. Coverage for"Any Auto."
Workers' Compensation Insurance
Statutory Limits
Employer's Liability: $500,000
Letter Agreement
City of Baytown
February 1,2006
Page 5
Waiver of Subrogation required
Errors&Omissions(E&O)
Limit: $1,000,000
a. For all engineers,and/or design companies.
b. Claims-made form is acceptable.
Upon execution of this Agreement, Consultant shall file with the City valid Certificates of
Insurance and endorsements acceptable to the City. Such Certificates shall contain a provision
that coverage afforded under the policies will not be canceled, suspended, voided, or reduced
until at least thirty (30) days' prior written notice has been given to the City via certified mail,
return receipt requested.
Consultant shall also file with the City valid Certificates of Insurance covering all
subcontractors.
The following are general requirements applicable to all policies:
a. AM Best Rating of B+:VII or better for all liability policies.
b. Insurance carriers licensed and admitted to do business in State of Texas will be accepted.
c. Liability policies will be on occurrence form. E&0 can be on claims-made form.
d. The City, its officials and employees are to be added as Additional Insured to the
commercial general liability and business automobile policies.
e. Upon request of and without cost to the City, certified copies of all insurance policies
and/or certificates of insurance shall be furnished to the City's representative. Certificates
of insurance showing evidence of insurance coverage shall be provided to City's
representative prior to execution of this agreement.
3. Term.
This agreement will be for a one-year period commencing on October 1, 2006 and ending on
September 30,2007.
4. General Conditions
4.01 The City,besides all other rights or remedies it may have, shall have the right to terminate this
Agreement with or without cause upon ten(10) days' written notice from the City Manager to
Consultant of the City's election to do so. Upon delivery of any notice of termination required
herein, Consultant shall discontinue all services in connection with the performance of the
Agreement. Within ten (10) days after receipt of the notice of termination, Consultant shall
submit a fmal statement showing in detail the services satisfactorily performed and accepted
and all other appropriate documentation required herein for payment of services. If this
Agreement is terminated for cause, Consultant shall be liable for any damage to the City
resulting therefrom. This liability includes any increased costs incurred by the City in
completing Consultant's work. The rights and remedies of the City in this section are in
addition to any other rights and remedies provided by law or under this Agreement.
4.02 Neither the City nor Consultant shall sell, assign, or transfer any of its rights or obligations
under this Agreement in whole or in part during the term hereof.
1
Letter Agreement
City of Baytown
February 1,2006
Page 6
4.03 Notwithstanding anything to the contrary contained in this Agreement, the City and Consultant
hereby agree that no claim or dispute between the City and Consultant arising out of or relating
to this Agreement shall be decided by any arbitration proceeding including, without limitation,
any proceeding under the Federal Arbitration Act (9 U.S.C. Sections 1-14), or any applicable
State arbitration statute, including, but not limited to, the Texas General Arbitration Act,
provided that in the event that the City is subjected to an arbitration proceeding notwithstanding
this provision, Consultant consents to be joined in the arbitration proceeding if Consultant's
presence is required or requested by the City of complete relief to be recorded in the arbitration
proceeding.
4.04 Failure of either party hereto to insist on the strict performance of any of the agreements herein
or to exercise any rights or remedies accruing thereunder upon default or failure of performance
shall not be considered a waiver of the right to insist on and to enforce by an appropriate
remedy, strict compliance with any other obligation hereunder to exercise any right or remedy
occurring as a result of any future default or failure of performance.
4.05 By this Agreement,the City does not consent to litigation or suit,and the City hereby expressly
revokes any consent to litigation that it may have granted by the terms of this Contract or any
other contract or agreement,any charter,or applicable state law. Nothing contained herein shall
be construed in any way so as to waive in whole or part the City's sovereign immunity.
Consultant assumes full responsibility for its work performed hereunder and hereby releases,
relinquishes and discharges the City, its officers, agents, and employees from all claims,
demands, and causes of action of every kind and character, including the cost of defense
thereof, for any injury to or death of any person (whether they be either of the parties hereto,
their employees, or other third parties) and any loss of or damage to property (whether the
property be that of either of the parties hereto, their employees, or other third parties) that is
caused by or alleged to be caused by, arising out of, or in connection with Consultant's work to
be performed hereunder. This release shall apply with respect to Consultant's work regardless
of whether said claims, demands, and causes of action are covered in whole or in part by
insurance.
4.06 This Agreement shall in all respects be interpreted and construed in accordance with and
governed by the laws of the State of Texas, regardless of the place of its execution or
performance. The place of making and the place of performance for all purposes shall be
Baytown,Harris County,Texas.
4.07 All parties agree that should any provision of this Agreement be determined to be invalid or
unenforceable, such determination shall not affect any other term of this Agreement, which
shall continue in full force and effect.
4.08 In the event of any ambiguity in any of the terms of this Agreement,it shall not be construed for
or against any party hereto on the basis that such party did or did not author the same.
Letter Agreement
City of Baytown
February 1,2006
Page 7
4.09 This Agreement contains all the agreements of the parties relating to the subject matter hereof
and is the full and fmal expression of the agreement between the parties. This Agreement shall
not be amended or modified without the express written consent of both parties hereto.
Should the above-referenced terms and conditions be acceptable to you, please present this Agreement
to an officer of your corporation for execution and return the same to my attention at the above-referenced
address. Thereafter, I will present it to the City Manager for approval. Should you have any questions or if I
may be of any assistance,please do not hesitate to contact me. Thank you for your assistance in this matter.
incerely,
Alison Froehlich-Smith
Director of Human Resources
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Robert D. Leiper
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Interim City Manager
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R:\Karen\Files\Contracts\Holmes Murphy Agreement\Holmes Murphy Agreement Clean02012007.doc