HomeMy WebLinkAbout1985-08-06; City Council; 7057-1; Cal-Surance agreement amendmentCARLSBAD — AGENDAttLL
ARtt 7057-#1
MTG 8/6/85
DFPT RM
TITLE:
RESOLUTION AMENDING AGREEMENT' WITH
CAL-SURANCE ASSOCIATES., INC., FOR
INSURANCE BROKERAGE SERVICES
DEPT. HD. f\~j^'
HITY ATTYV//3
^2**CITY MGR.<gr^S-
ozooo
RECOMMENDED ACTION:
Approve Resolution No. 8089, amending agreement" with Cal-Surance Associates,
Inc. to allow payment of insurance commissions up to a maximum of $12,000
annually.
.ITEM EXPLANATION
In February, 1981, the City Council authorized the_staff to seek bids for the
- appointment of one insurance broker to handle the purchase of insurance for the
City. Twelve proposals were received and were graded based on cost, municipal
insurance experiences, and access to the markets. The five brokers receiving
the highest grades were interviewed by members of the City staff and the City's
Risk Management Consultant. Based on this process and a careful check of
references, Cal-Surance Associates was selected to be the best qualified to
serve the City in the capacity. On April 21, 1981, Council approved the
appointment of Cal-Surance Associates as Broker of Record to handle the
marketing of all casualty and property insurance purchased by the City. -The
services provided by Cal-Surance have been at the highest level, effecting
-substantial premium savings during the first three years of service, and
" maintaining continuity o'f protection during the current market crisis.
Under the agreement between the City and Cal-Surance, as amended effective duly
1, 1982, the payment for broker services is subject to a maximum fee of $10,000.
Based on the insurance-marketplace today, the standard commission on the City's
premiums is estimated to be $18,000. The amount of work required to place the
City's insurance in today's markets has increased substantially,'and Cal-Surance
has requested an increase in their remuneration. Following negotiations with
the City's broker, staff is recommending amending of the agreement to increase
maximum commissions or fees included in premiums payable in any fiscal year from
,$,10,000 to $12,000. , •'
FISCAL IMPACT '*
Commission payments are included in premiums that are paid. Although this
•amendment will increase the commission costs, the cost will be spread over all
City insurance-programs that are placed by Cal-Surance Associates, Inc.
FXHIBIT
1. Resolution No. 8089.
2. City of Carlsbad Premiums and Commissions, 1983-84- and 1984-85.
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RESOLUTION NO. 8089
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD,
CALIFORNIA, AMENDING AGREEMENT WITH CAL-SURANCE ASSOCIATES,
INC. FOR INSURANCE BROKERAGE SERVICES.
WHEREAS, the City has contracted with Cal-Surance Associates, Inc. for
insurance brokerage services for the placement and purchase of insurance for the
City; and
WHEREAS, said agreement provided that compensation for said services should
not exceed $10,000 in insurance commissions; and .'•''•-
WHEREAS, after negotiations the parties to said contract have agreed that
effective duly 1, 1985 certain changes in compensation are necessary;
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad,
California as follows: . '
1. That Section 3, COMPENSATION, of said agreement shall be .deleted in its
entirety.
2. That effective July 1, 1985 the following paragraph shall be
substituted therefore:
Section 3
COMPENSATION •
Insurance brokerage commissions or fees included in premiums payable to
BROKER shall not exceed the current commission rate payable by each insurer for
like business, and subject to an annual minimum of $7,500, shall in no event
exceed Twelve Thousand Dollars ($12,000) in any twelve month period unless
authorized in advance by the CITY. BROKER shall, upon request, provide to the
CITY a full report and acocunting of all commissions received.
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PASSED, APPROVED AND ADOPTED at a regular meeting of the City Council on the
6th day of August , 1935, by the following vote, to wit: • -
AYES: Council Members Casler, Lewis, Kulchin, and Chick
' NOES: None ,
ABSENT: Council Mamber Pettine
MARY H. CAS1ER, Mayor
ATTEST:
ALETHA L. RAUTENKRANZ, City Clerk
(SEAL)
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