HomeMy WebLinkAboutAgenda Report - December 20, 2000 H-06CITY OF LORI COUNCIL COMMUNICATION
AGENDA TITLE: Authorization to enter into contract for Benefits Administration Consulting
Services for the City of Lodi.
MEETING DATE: December 20, 2000
SUBMITTED BY: Human Resources Director
RECOMMENDED ACTION: That City Council authorize staff to enter into a contract for Benefits
Administration Consulting Services with ABD Insurance and Financial
Services.
BACKGROUND INFORMATION:
Currently, the City contracts with MCV Insurance Producers to provide consulting services at a cost of
$80,400 per year. On August 2, 2000, City Council directed staff to prepare a Request for Proposals (RFP) for
Benefits Administration Consulting Services and obtain proposals from qualified firms.
On September 8, 2000 the RFP was issued and the availability of this document advertised. Staff sent the RFP
to eleven firms experienced in the insurance and benefits arena. Six firms, all qualified to provide benefits
consulting services responded. After careful review of the written proposals submitted, it was determined that
two should be dropped from the process. As large national companies inclined towards specialization in the
brokerage and insurance field, these firms would have to contract out a number of services. This additional
expense served to drive up the cost of these firms relative to the others. The four remaining firms were invited
to an interview. The interview panel, comprised of Keith Land, City Council member, Janet Keeter, Deputy
City Manager, Vicky McAthie, Finance Director, and Kirk Evans, Sr. Human Resources Analyst, met and
questioned these firms over the course of a day.
At the outset of this process it was made clear that price, while an important consideration, is but one
consideration in the overall process. The fees that the four finalist firms outlined in their proposals were:
Proposer
Fee
MCV Insurance Producers
$51,985
Bohannon Insurance Group
$64,536
ABD Insurance & Financial Services
$72,706 first year - drops to $69,538 in subsequent year(s)
Acordia, Inc.
$75,000
The interview panel carefully rated these firms based on all information presented. The panel determined that
ABD Insurance and Financial Services was the firm best qualified to serve as the City's benefits administration
consultant.
APPROVED:
H. Dix n Flynn — City Manager
. CITY OF LORI COUNCIL COMbIUNICAI'ION
ABD is an independent consulting, brokerage, administrative services operation that is not affiliated with any
insurance company, HMO or other benefit vendor. They are the 14`' largest U.S. retail broker with a total of
500 employees. They currently provide employee benefits services to 113 public sector clients in California,
of which 94 are cities. The Gold River office of ABD has 39 full-time employees servicing over 250 public
and private sector clients. Employee benefits account for over 40% of ABD's business.
As the City's benefits consultant, ABD will be taking on a very broad range of responsibilities.
Fundamentally, they will provide consultation, attend meetings and deliver other services as requested on any
matter pertaining to the operation of the City's employee benefit programs. However, their duties will go far
beyond this. Initially, their top priority projects will be to review the availability of alternative long-term
disability and medical plan insurers and plan designs in the local market place, make recommendations for
maximizing benefits within cost constraints and assist with the implementation and administration of selected
programs. They will conduct bi-annual actuarial analyses of all self-insured programs and provide COBRA
administration services. On a continuous basis they will provide monthly billing reconciliation services. ABD
will also serve as an important communications link with City employees in terms of providing information
regarding the structure of various plans, benefits offered, and the meaning of changes to plans as they occur.
With City Council approval, staff will prepare a two year agreement for Benefits Administration Consulting
Services with ABD Insurance and Financial Services.
FUNDING: Benefits fund
A) -t '\ "Qcx .
Vicky McAthie, Pinance Director
Respectfully submitted,
9 4"
Joanne 4. Narloch, Human Resources Director
APPROVED:
H. Dixon Flynn - City Manager
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A RESOLUTION OF THE LODI CITY COUNCIL
APPROVING CONTRACT WITH ABD INSURANCE
AND FINANCIAL SERVICES FOR BENEFITS
ADMINISTRATION CONSULTING SERVICES
NOW, THEREFORE, BE IT RESOLVED, that the Lodi City Council
hereby authorizes the City Manager to execute a contract with ABD Insurance
and Financial Services for Benefits Administration Consulting Services in the
amount of $72,706.00 for the first year, which drops to $69,538.00 in subsequent
year(s); and
BE IT FURTHER RESOLVED, that this contract will be in effect for a
period of two years.
Dated: December 20, 2000
I hereby certify that Resolution No. 2000-239 was passed and adopted by
the City Council of the City of Lodi in a regular meeting held December 20, 2000
by the following vote:
AYES: COUNCIL MEMBERS — Hitchcock, Howard, Land, Pennino
and Mayor Nakanishi
NOES: COUNCIL MEMBERS — None
ABSENT: COUNCIL MEMBERS — None
ABSTAIN: COUNCIL MEMBERS — None
SUSAN J. BLACKSTON
City Clerk
2000-239