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Home My WebLink About19862 RES - 07/21/1987A RESOLUTION AUTHORIZING THE EXECUTION OF AN AGREEMENT WITH THE WYATT COMPANY TO ASSIST THE CITY IN SELECTING A SOLE BROKER OF RECORD TO OBTAIN PROPOSALS AND COVERAGES FOR EXCESS OR SURPLUS INSURANCE. BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF CORPUS CHRISTI, TEXAS: SECTION 1. That the City Manager is hereby authorized to execute an agreement with The Wyatt Company to assist the City in selecting a sole broker of record to obtain proposals and coverages for excess or surplus insurance, a substantial copy of which agreement is attached hereto as Exhibit A. 6e---12,6(4z,(AA-L-6/ MA OR APPROVED: 30 DAY OF .r. , 19 537 HAL GEORGE, CITY ATTORNEY 06P.O1O.01 t City Attorn THE CITY OF CORPUS CHRISTI, TEXAS 195w MICROFILMED CONFIDENTIAL PROPOSAL FOR CORPUS CHRISTI, TEXAS Prepared for: Mr. Daniel R. Blosser Risk Manager Prepared by: THE WYATT COMPANY 1900 RepublicBank Tower 325 North St. Paul Street Dallas, Texas 75201 Gerald M. McGarry, A.R.M. Consultant Risk Management Services THE 0JQ'Y COMPANY r r F 1 1 { 1 L L L L L L L �—L THE EMPLOYEE BENEFITS COMPENSATION PROGRAMS EMPLOYEE COMMUNICATIONS ADMINISTRATIVE SYSTEMS RISK MANAGEMENT INTERNATIONAL SERVICES %� rya# COMPANY ACTUARIES AND CONSULTANTS 1900 REPUBLICBANK TOWER 325 NORTH ST. PAUL STREET DALLAS, TEXAS 75201 214) 979-3800 June 25, 1987 Mr. Daniel R. Blosser Risk Manager/Safety Officer Department of Risk Management City of Corpus Christi 110 N. Shoreline Corpus Christi, Texas 78401 Dear Mr. Blosser: OFFICES IN PRINCIPAL CITIES AROUND THE WORLD Thank you for requesting The Wyatt Company to provide information for the City of Corpus Christi's insurance renewal bid process. We have included a proposal which describes the steps the we would follow in carrying out the assignment. As we understand it, the City of Corpus Christi is desirous of formalizing its bidding, based on a review of exposures so as to permit the securing of the most favorable and acceptable program with respect to coverage, limits, ser- vice, and cost. Our proposal, which follows, is intended to result in these goals for the City. OBJECTIVES 1. To assist the City in securing an overall insurance program tailored to its needs at the most reasonable cost. 2. To provide certainty that the resulting insurance program is placed through capable insurance intermediaries with insurance companies qualified to provide the coverage and services required by the City. 3. To provide further certainty that the placement of the insurance pro- gram is accomplished on a basis which will reflect favorably on your organization in terms of professionalism and fairness in its dealings with the insurance community. 4. To streamline the bidding process in the interest of efficiency, effectiveness, and minimization of the administrative burden on your department. -2- GENERAL MEANS OF ACHIEVING OBJECTIVE Prepare specifications for the City's insurance program and evaluate the proposals received in response to those specifications. SCOPE Preparation of written specifications and exposure data for quotation on insurance and as approved by you. This step will ensure that all carriers presenting proposals for your insurance coverage are going to follow your specifications and bid on a program meeting your needs in a manner which will make a meaningful comparison possible. It will also ensure that each carrier is using the same exposure and loss information, so the successful bidder will not be in a position to justify deviation from their proposal based on alleged lack of information. Adequate allowances will be granted to carriers to improve on the specified coverage if they choose, but such departures can be evaluated, and every bidder's basic program should be the same. Carry out an allocation of insurance companies among the competing agents to avoid difficulties in the obtaining of the most competitive bids. Insurance companies are very sensitive to multiple requests for propo- sals on the same account and tend to react negatively to such requests - possibly to the extent of not giving anyone a quotation, demanding written letters of authority designating one broker, giving everyone the same quote, or possibly only quoting to the first agent contacting them (allowing some aggressive brokers to tie up the insurance market- place). Wyatt suggests some procedures in the assignment of insurance companies which are very practical, and are accepted as fair and equit- able by the insurance community. These tend to give every agent or broker authorized by the client a fair shot at the account, eliminate confusion in the marketplace, match the agent with the company with which he can best work, and increase the interest of the insurance com- munity in bidding on your account. Answer any inquiries regarding specifications. Almost inevitably there are questions which arise after the release of specifications and exposure information. We stand ready to answer these questions, and to assure all involved that no one is discrimi- nated against in the process of answering the questions. Evaluation of proposals received. This evaluation will take into consideration not only premium quota- tions, but also the capability of the bidder to serve your account, compliance with coverage specifications, the weight (plus or minus) which should be given to any departure from the specifications, and the stability of the proposed carrier in terms of both financial stability and marketplace stability. THE (Wjg217 COMPANY -3- QUALIFICATIONS The Wyatt Company is the largest independent consulting firm specializing in risk management, insurance, employee benefits, compensation, actuarial, and other related consulting services. We believe The Wyatt Company to be exceptionally well suited to carry out the assignment under consideration. Our risk management staff consists of over thirty (30) professional consultants with an excellent mix of experience of works very much to the client's advantage as we have the ability to assign to this project consultants with desired backgrounds in underwriting, rate making, actuarial analysis, self-insurance, claims administration and other complimentary attributes. Wyatt will complete this assignment using only full-time staff consultants. Many competing consulting organizations are one or two person firms who sub- -contract out to part-time "associates" work they cannot complete themselves because of time requirements or lack of expertise. Subcontracted work can be quite undesirable in terms of quality and consistency, and is deficient in terms of accountability of the consulting firm retained for their work. Municipalities are one of our largest class of clients. This gives us solid experience with the special problems faced by administration, as well as sound knowledge of the specialized coverages required. The Wyatt Company is an independent consulting firm established in the early 1940's. We are owned by our active employees and we have no ownership or affiliation with insurance carriers, agents or brokers. We do not place any insurance. We do not believe that a consulting firm can ensure objectivity unless it maintains this independence and separation from potential conflicts. PROJECT TEAM The Wyatt Company is known for the quality of its work, a reputation developed by assignment to each clients needs of capable and experienced persons in the respective disciplines required. For a study of the type under consideration, The Wyatt Company's practice is to make use of a project team. We find this a preferable approach, particu- larly considering the comprehensiveness of the desired scope of work. The team we propose is made up entirely of consultants with solid backgrounds in various disciplines. All of the consultants shown for this proposed assignment have considerable experience in insurance and risk management for municipalities: Project Manager Gerald M. McGarry, A.R.M. Consultant Arthur E. Parry, C.P.C.U. Analyst Richard G. Alford, A.R.M. Resumes on these consultants are enclosed. THE 6IJQY COMPANY 1 F 1 1 L L L L L -4- No part of our work would be subcontracted to another party. We have the experience and staff to carry out fully the work desired by the City. REFERENCES Cities are one of our largest classes of clients. A partial clients is shown on the attached representative client exhibit. Required Time One Week Two Weeks Two Weeks (Simultaneous) Two Weeks Two Weeks PROPOSED TIME SCHEDULE listing of Function Consultant to gather data, analyze, and review exposures. Consultant to prepare and write bid specifications including report of findings above. Specifications to be issued to interested agents, and alloca- tion of insurance carriers to be made. Agents to prepare their renewal proposals and present the proposals to the City and the consultant. Wyatt to analyze and compare proposals and submit written report and recommendation. This proposed time table can be expanded but it is hard to shorten, due to the current insurance market and other factors. This is why, with an October 1, 1987 expiration date, time is of the essence in getting the process started. FEE BASIS In the conduct of this assignment, we will act solely in a consulting and advisory capacity. We do not act as insurance brokers, and will not receive any commissions in connection with your insurance, or remuneration from any source other than the fee charged to you for our professional services. As with most other professional firms, we charge for our services on the basis of hours worked and the hourly billing rate of our staff plus out-of-pocket travel expenses involved in conducting this study. Bidding Specifications & Evaluation $17,000 - $20,000 The $20,000 figure will be our maximum fee for this assignment. THE 6iie7f COMPANY -5 - We are very pleased to have been called upon to submit this proposal and look forward to the opportunity to be of service to the City of Corpus Christi. If this proposal is found to be acceptable, please sign the enclosed copy and return it to us as authorization for this study. Sincerely, THE WYATT COMPANY A 174 Gerald M. McGarry, A.R.M. Consultant Risk Management Services GMM:abp Enclosures ACCEPTED BY: DATE: THE%atf COMPANY TEXAS GOVERNMENTAL REFERENCES City of Alexandria P. 0. Box 71 Alexandria, Louisiana 71301 Darrell Williamson Public Works Director Phone: (318) 473-1143 City of Alvin 216 West Sealy Street Alvin, Texas 77511 Fred Mendoza Director of Finance Phone: (713) 585-6165 City of Amarillo P. 0. Box 1971 Amarillo, Texas 79186 Don Cates Director of Finance Phone: (806) 378-3000 City of Arlington P. 0. Box 231 Arlington, Texas 76010 Peter Potempkin Risk Manager Phone: (817) 275-3271 City of Baytown P. 0. Box 424 Baytown, Texas 77250 Fritz Lanham City Manager Phone: (713) 422-8281 City of Beaumont Box 3827 Beaumont, Texas 77704 Kenneth E. Wall City Attorney Phone: (713) 838-0671 City of Bedford P. 0. Box 157 Bedford, Texas 76021 Jim Walker City Manager Phone: (817) 283-4646 CITIES City of Bellaire 7008 S. Rice Avenue Bellaire, Txas 77401-4495 R. Patt Lilly City Manager Phone: (713) 667-8315 City of Brady P. 0. Box 351 Brady, Texas 76825 Joe Benton City Manager Phone: (915) 597-2152 City of Brownfield 218 W. Main Street Brownfield, Texas 79316 Richard C. Fletcher City Manager Phone: (806) 637-4547 City of Brownsville P. 0. Box 911 Brownsville, Texas 78520 Steve Fitzgibbins City Manager Phone: (512) 542-4391 City of Burkburnett 415 Avenue C Burkburnett, Texas 76354 Lahoma Wood Treasurer Phone: (817) 569-2265 City of Clarksville 800 West Main Clarksville, Texas 75426 Jack Holt City Manager Phone: (214) 427-3834 City of Cleburne P. 0. Box 657 Cleburne, Texas 76031 Joel W. Victory Finance Director (817) 641-3321 THE i/0 C7ll COMPANY TEXAS GOVERNMENTAL REFERENCES (page 2) City of Del Rio P. 0. Box 4239 Del Rio, Texas Florencio P. Sauceda Finance Director Phone: (512) 774-2781 City of Denton 215 E. McKinney Street Municipal Building Denton, Texas 76201 Harlan Jefferson Risk Manager Phone: (817) 566-8200 City of Euless 201 North Ector Drive Euless, Texas 76034-3595 William Sustaire City Manager Phone: (817) 283-5381 City of Flower Mound 2121 Cross Timbers Road Flower Mound, Texas 75028 Charles Springer Administrative Assistant Phone: (214) 539-8511 City of Gainesville P. 0. Drawer J Gainesville, Texas 76240 William A. Gaither City Manager Phone: (817) 665-4323 City of Graham P. 0. Box 1449 Graham, Texas 76040 Larry M. Fields City Manager Phone: (817) 549-3324 City of Grapevine 413 Main Street Grapevine, Texas 76051 Dennis Dawson City Manager Phone: 481-0380 (metro) CITIES City of Harlingen P. 0. Box 2207 Harlingen, Texas 78551 Daniel R. Gutierrez Administrative Assistant Phone: (512) 423-4230 City of Huntsville P. 0. Box 839 Huntsville, Texas 77340 Scott Bounds City Attorney Phone: (409) 291-5402 City of Hurst 1505 Precinct Line Road Hurst, Texas 76053 Dale Schultz Assistant City Manager Phone: (817) 281-6160 City of Jacksonville P. 0. Box 1390 Jacksonville, Texas 75766 Robert C. Eskridge Finance Officer Phone: (214) 586-3510 City of Jersey Village 16501 Jersey Drive Houston, Texas 77040 Carol Fox City Administrator Phone: (713) 466-6159 City of Katy P. 0. Box 617 Katy, Texas 77492 Diana Ulbig Treasurer Phone: (817) 391-9181 City of Lancaster P. 0. Box 548 Lancaster, Texas 75146 Carl Tomerlin City Manager Phone: (214) 227-2111 /� THE IJQf COMPANY TEXAS GOVERNMENTAL REFERENCES (page 3) City of Levelland P. 0. Box JJ Levelland, Texas 79336 Greg Ingham City Manager Phone: (806) 894-0113 City of Lewisville 151 West Church Lewisville, Texas 75067 Chuck Ownes City Manager Phone: (214) 436-2591 City of Longview 300 West Cotton Longview, Texas 75606 C. Ray Jackson Director of Municipal Services Phone: (214) 757-6661 City of Lubbock P. 0. Box 2000 Lubbock, Texas 79457 Rod Bouffard Assistant Director of Finance Phone: (806) 762-6411 City of Mansfield 1305 E. Broad Mansfield, Texas 76763 Ms. Tommie McGovern -Johnson Director of Finance Phone: (817) 473-9371 City of Missouri City P. 0. Box 666 Missouri City, Texas 77459 Dorothy Seckel Director of Finance Phone: (713) 499-1681 City of North Richland Hills P. 0. Box 18609 North Richland Hills, Texas 76118 Roger N. Line City Manager Phone: (817) 281-0041 City of Pampa, Texas P. 0. Box 2499 Pampa, Texas 79065 Mack Wofford City Manager Phone: (806) 665-8481 Town of Pantego 1614 S. Bowen Road Pantego, Texas 76013 Robert McDaniel City Manager Phone: (817) 274-1381 Paris, Texas P. 0. Box 1037 Paris, Texas 75460 Gene Anderson Director of Finance Phone: (214) 785-7511 Pasadena, Texas P. 0. Box 672 Pasadena, Texas 77501 Billy Storey Personnel Director Phone: (713) 477-1511 Richardson, Texas P. 0. Box 309 Richardson, Texas 75080 Howard Weaver Director of Personnel Phone: (214) 235-8331 Rowlett, Texas P. 0. Box 99 Rowlett, Texas 75088 Ronald Hutchison Finance Director Phone: (214) 475-3841 Seminole, Texas 101 E. Avenue A Seminole, Texas 79360 Lanny Lambert City Administrator Phone: (915) 758-3676 THE `2(14[[ COMPANY TEXAS GOVERNMENTAL REFERENCES (page 4) City of Stafford 2610 South Main Street Stafford, Texas 77477 Lawrence Vaccaro, Jr. Director of Municipal Service Phone: (713) 499-4537 City of Stephenville 354 North Belknap Stephenville, Texas 76401 Charlene Young Director of Finance Phone: (817) 965-7889 City of Tyler P. 0. Box 2039 Tyler, Texas 75701 Gary Gwyn City Manager Phone: (214) 597-6651 CITIES City of Vernon P. 0. Box 1423 Vernon, Texas 76384 Fred Hays City Manager Phone: (817) 552-2581 City of Waxahachie P. 0. Box 757 Waxahachie, Texas 75165 James H. Davis City Manager Phone: (214) 937-7330 City of West University Place 3800 University Boulevard Houston, Texas 77005 Donna Sims Director of Administration Phone: (713) 668-4441 THE QoPlf COMPANY THE WYATT COMPANY GERALD M. McGARRY, ARM CONSULTANT RISK MANAGEMENT SERVICES Responsibilities Project Manager on assignments for the review of Property and Casualty Risk Management and Insurance Programs, and consultation with clients on various risk management problems. Responsible for the creation of loss control, accident prevention and claims control pro- grams as they relate to client's internal operational structure. Experience The Bartlett Corporation and Central American Steamship Company -- Corporate Risk Manager for over 20 years. Implementation and administration of insurance, risk assumption, safety, and claims analysis and control programs. Marsh & McLennan Insurance Brokers, Inc. — Account Executive assigned to assisting Risk Manager and Financial Officers with the development of insurance and exposure control programs. Alexander & Alexander Insurance Brokers -- Vice President responsible for organizing, directing and maintaining effective teams suitable to the needs of clients. The Wyatt Company -- Consultant since 1986 Academic Background University of Connecticut -- Bachelor of Science Risk Management Institute -- Certificate Program Insurance Institute of America -- Associate in Risk Management Professional Activities Risk and Insurance Management Society - Legislative Chairman - 3 years Connecticut branch American Management Association Speaker at industrial seminars on cost reduction through the introduction of effective risk management techniques to the particular industry concemed. lielfreferestvvvee rev. 10/86 THE WYATT COMPANY ARTHUR E. PARRY, CPCU MANAGER RISK MANAGEMENT SERVICES Responsibilities Project Manager on assignments for the review of Property and Casualty Risk Management and Insurance Programs, and consultation with clients on various risk management problems including development of Association programs, special coverage concepts, self-insurance feasibility and implementation, analysis of insurance proposals, preparation of specifications, analysis of captive insurance company operations, and other assignments. Experience The Home Insurance Company - Eleven years (eight as corporate officer) in charge of development of new insurance contracts and rating programa. These included Association, Public Entity and Industrial programa involving unique coverage and deductible treatment, captive feasibility and safety groups. Meridien Insurance Company - Three years as corporate officer in Marketing. Zurich Insurance Company - Three years as corporate officer an Marketing which included development of Association programs for business, industry and charitable organizations utilizing safety groups and other techniques. Reserve Insurance Company - Two years as corporate officer for Product and Market Development including revision of Excess/Umbrella contracts, development of Transportation coverages and various Professional Liability coverages. Great Central Insurance Company - Over three years as corporate officer in Marketing including development of Food Wholesaler, Trade Association, and Industrial programs, many on a safety group basis. The Wyatt Company - Consultant since 1981. Academic Background Boston University - Bachelor's Degree in English Governors State University - Master's Degree in Business Administration American Institute for Property and Liability Underwriters - C.P.C.U. Diplome Casualty Actuarial Society - 6 Examinations Professional Activities Society of Chartered Property and Casualty Underwriters National Research Director - two years Member of National Committee - four years Agency - Company Operations - Research and Development (ACORD) - Member - two years AAIS - Committee Member - two years Speaker at seminars of Society of C.P.C.U., Society of Insurance Research and other professional societies. Contributor to professional journals of Society of C.P.C.U., Risk Insurance Management Society and others. Listed in Who's Who in Insurance. REV 1/86 L THE WYATT COMPANY RICHARD G. ALFORD, A.R.M. ANALYST RISK MANAGEMENT SERVICES Responsibilities Analyst in connection with assignments for the review of Property and Casualty Risk Management and Insurance Programs. Consultation with clients on various risk management problems including policy review, exposure identification, and evaluation and analysis. Experience C. E. Heath --Broker of North American Property and Casualty risks at Lloyd's and in the London market. Experience with lead and supporting underwriters. State of Florida, Surplus Lines Division --Contract analysis of excess and surplus lines business. Additional independent agency experience in Florida --Personal and Commercial Lines Customer Service. The Wyatt Company --Analyst since 1986. Academic Background The University of Georgia --Bachelor's Degree in Risk Management Insurance Institute of America --Associate in Risk Management REV. 2/87 L 1 F t1 r 1 L L L L L_L rev. 9/83 WYATT RISK MANAGEMENT CONSULTING AND ACTUARIAL PRACTICE In the course of many assignments, we attempt to determine the risk management philosophy of our client, and assist the client in developing that philosophy to enhance its profitability and security. It is, therefore, only fair that you know something about the philosophy of The Wyatt Company and its Risk Management consulting and actuarial practice. Long before The Wyatt•Company had Risk Management consultants, it had developed four guiding principles — which apply, to all of The Wyatt Company operations, and form the foundation of the Risk Management practice as well. Those principles follow: 1. Unbiased Counsel: The Wyatt Company operates independently of insurance agents, brokers, or companies, banks or trust companies, legal or accounting firms, but in coopera- tion with such organizations as directed by its clients. The Wyatt Company does not sell, place, or underwrite insurance. The Wyatt Company does some consulting and actuarial work for insurance companies, or other service organizations, but takes care that any potential conflict of interest arising out of work of this nature is brought to the attention of our clients, and no actual conflict of interest ever arises. The stock of The Wyatt Company is owned solely by its active employees, and it derives its operating income from fees charged to clients for professional services. The firm acts solely in the interest of its clients on a wholly professional basis. 2. Competent Personnel: In the performance of professional services, it is essential that competent personnel be charged with the responsibility of evaluation, design, analysis, and consultation for our clients. Consequently, we have sought five characteristics in the staff involved in our Risk Management practice: (a) Integrity (b) Knowledge (c) Experience in diverse fields (d) Ability to communicate (e) Imagination 1 L t t 1 I L L 1_ L L L L L L9/83 -3- Insurance Company Experience: Actuaries (3) Underwriters (5) Claim Adjusters (2) Other Consulting Firms (7) Other Relevant Experience: Insurance Agents or Brokers (5) Insurance Services Office (3) Fire Protection Engineering (2) State Insurance Departments (2) Captive Management Firm (1) Insurance Education - Teaching (8) This diversity of experience on our staff enables The Wyatt Company to assign a team to any assignment with backgrounds which complement each other. A Wyatt team will operate on practical knowledge rather than conjecture or purely academic theory. In drawing up the composition of a project team, the assignment of persons with the greatest practical knowledge may take precedence over the geographic location of the client. That brings us to the next guiding principles of Wyatt. 3. Accessibility of Consultants: The Wyatt Company is organized in such a manner as to make its consultants and service personnel as readily accessible to its clients as possible. Wyatt has offices, at this time, in thirty-one cities in the United States and Canada. Of these, six are presently staffed for Risk Manage- ment Consulting (Chicago, Dallas, Detroit, San Francisco, Toronto, and Washington). Additional Wyatt offices will be staffed as need for these services develops, and as competent personnel become available. 4. Permanence of Organization: Business organizations, governmental entities, hospitals, associations, and other organizations, in retaining actuaries or consultants, frequently do so for work of a recurring and permanent nature. Consequently, it is advisable to engage a firm with permanence as opposed to a single consultant or a firm whose services may be affected by the death, disability, or retirement of a key individual. This avoids disruption in work being accomplished for the client, and the additional expense of initiating a new consultant. The foregoing sets forth the adherence of Wyatt to certain time -tested principles. There are some other things we would like you to know about The Wyatt Company. o We think that everyone should pay a fair, but not excessive, price for services. We charge fees for our services which are high enough for us to adequately compensate the type of person we seek for our staff. They are your assurance of competence. OFFICES OF V ,r ffcoMPANYa * Stars are offices staffed for Risk Management Wyatt International Overseas Offices • London • Manchester • Stockholm • Hong Kong • Manila • Munich • Kuala Lumpur 99.066.01 Corpus Christi, Texas day of The above resolution was passed by the following vote: Betty N. Turner David Berlanga, Sr. Leo Guerrero Frank Mendez Clif Moss Bill Pruet Mary Rhodes Mary Pat Slavik Linda Strong 19862 , 1987