R-88-1115 - 5/12/1988MERRILL, CHANEY & ASSOCIATES
Independent Insurance Consultants
May 10, 1988
TO THE CITY OF ROUND ROCK, TEXAS:
Re: Agreement for Consulting for Property and Liability
Gentlemen:
Pursuant to our letter and attached papers dated May 9, 1988, we agree
to amend the letter whereas we named "Property Insurance ", and to add
the following:
In addition to Property Insurance, which would include Buildings and
Contents, Computers, Contractor's Equipment, Radios and Radio Towers,
we would also review Worker's Compensation, General Liability, Vehicle
Liability and Physical Damage„ and other policies excepting Group
Health, Life, Pension Plans, and other Benefit type coverages.
We understand that you would like to leave out the reviews of Contracts,
so the price would be a maximum of $6,000, payable one /half when the
Specifications were completed, and one /half when the policies were
checked, but no later than 90 days after the effective date of the
policies, or January 1, 1989.
This contract would cover all other agreements as stated in the letter
and forms given you on May 9, 1988.
Merrill, Chaney & Associates
By:
RECEIVED JUN 2 1988
City of Round R ck
BY: i� t° Ro ,A
Mike Robinson, Mayor
5- 0774 . 1
Date
Date
RICHARD L CHANEY, CLU, CFP
R S MERRILL, SR, CPCU, CW
JERRY D TODD PhD, CPCU, CW.
ASSOCIATE
BANK OF THE WEST BLDG #210 • 609 CASTLE RIDGE ROAD • AUSTIN, TEXAS 78746 -5126 • (512) 327 -9451
WHEREAS, the City of Round Rock has a need for insurance
consultant services to review the City's property insurance
requirements, to develop specifications for advertising for bids, and
to review and compare bids that are received, and
WHEREAS„ Merrill, Chaney & Associates has submitted a written
proposal to provide the needed services, and
WHEREAS, the Council wishes to approve said proposal, Now
Therefore
BE IT RESOLVED BY THE COUNCIL OF THE CITY OF ROUND ROCK, TEXAS,
THAT
The Mayor is hereby authorized and directed to execute on behalf
of the City, the written proposal from Merrill, Chaney & Associates,
a copy of said proposal being attached hereto and included herein for
all purposes.
ATTEST:
/ /.
NE LAND, City Secretary
G5CRRRESINS
RESOLUTION NO. ///.5
MIKE ROBINSON, Mayor
City of Round Rock, Texas
MERRILL, CHANEY & ASSOCIATES
Independent Insurance Consultants
May 10, 1988
TO THE CITY OF ROUND ROCK, TEXAS:
Re: Agreement for Consulting for Property and Liability
Gentlemen:
RICHARD L CHANEY, CLU. CFP
R, S MERRILL, SR, CPCU, CLU
JERRY D TODD, PhD, CPCU, CLU,
ASSOCIATE
Pursuant to our letter and attached papers dated May 9, 1988, we agree
to amend the letter whereas we named "Property Insurance ", and to add
the following:
In addition to Property Insurance, which would include Buildings and
Contents, Computers, Contractor's Equipment, Radios and Radio Towers,
we would also review Worker's Compensation, General Liability, Vehicle
Liability and Physical Damage „ and other policies excepting Group
Health, Life, Pension Plans, and other Benefit type coverages.
We understand that you would like to leave out the reviews of Contracts,
so the price would be a maximum of $6,000, payable one /half when the
Specifications were completed, and one /half when the policies were
checked, but no later than 90 days after the effective date of the
policies, or January 1, 1989.
This contract would cover all other agreements as stated in the letter
and forms given you on May 9, 1988.
Merrill, Chaney & Associates
By:
R. S. Merrill, Sr. Date
City of Round RR Round R gck
�
Mike Robinson, Mayor
Date
BANK OF THE WEST BLDG. #210 • 609 CASTLE RIDGE ROAD • AUSTIN, TEXAS 78746 -5126 • (512) 327 -9451
MERRILL, CHANEY & ASSOCIATES
Independent Insurance Consultants
May 9, 1988 -
Mr. David Kautz, Assistant Director of Finance
City of Round Rock, Texas
Municipal. Building
Round Rock, Texas 78664
Re: Enclosed bid for Consulting Services for Property & Casualty
Dear Mr. I {autz:
Enclosed you will find the following forms:
RICHARD L CHANEY, CLU, CEP
R S. MERRILL. SR, CPCU, CLU
JERRY D TODD. Ph D, CPCU. CLU.
ASSOCIATE
1. A tentative time - table for reviewing the Property Insurance
for the City of Round Rock, developing Specifications, and
comparing the various bids that are received. This can be
changed to fit the particular needs of the City. .
2. A schedule of the methods we would use in working with the
City in accomplishing their goals regarding their insurance
program. These are set up in $ separate Phases.
3. A schedule of possible contracts you might want us to review.
Please note that we have given you a choice on the items to be consi-
dered in Phase I. We understand the legal contracts were reviewed
just 3 or 4 years ago, and recommendations were made at that time.
Therefore, we could leave off this item if you like.'
Our fees would be based on $75.00 per hour, and the work would be done
by R. S. Merrill, Sr., and by Dr. Jerry Todd. Because of the fact that
Dick Merrill is already heavily engaged during the time period in which
this work would need to be done, Dr. Todd would be the lead consultant.
If the review and report of the legal contracts is desired, we estimate
total fees to be a maximum of 38,000. If we leave off legal contract
review, we estimate total fees to be a maximum of 36,000.
This estimate is based on your office furnishing us with proper
schedules of the items to be insured, such as property values, possibly
with Replacement cost and Actual cash values, vehicle schedule, computer
,schedule, contractor's equipment, mobile radios & towers, etc.
. We would also need copies of your current policies, and would need to
spend at least one day visiting with several of your supervisors, such
as the Police Chief, Fire Chief, Maintenance Supervisor, Waterworks
Supervisor, etc.
If you have any questions please call me at (512) 327 - 9451.
Sincerely,
R AW, R fI 4 WEST #99I(F• 609 CASTLE RIDGE ROAD • AUSTIN, TEXAS 78746 -5126 • (512) 327 -9451
2-
May 9, 1988
PHASE I
Identification of Exposures
and Risk Management Application
Identify and quantify exposures through meetings with several Department
Heads and /or Supervisors to learn the operation of each department.
Rev ' ew the procedures of the Risk Management function as it now exists.
(pa 4 4 k -:. +, �1..-
Do a loss- assumption analysis to determine the appropriate deductible
levels.
Review methods to exercise more control over insurance costs.
Determine what management controls might be implemented in the way of
management meetings, financial reports, and other similar activities.
Check contractural exposures. Review a number of your contracts with
other parties to determine exposures and develop the proper procedure
to be established for future operations. (See note at bottom of page.)
Review present method of funding insured and non - insured risks.
Make recommendations for implementation of a safety program through
better Risk Management, especially through the cooperation of the
Engineering Department of your carrier.
NOTE: We understand that your Contractual exposures were addressed
relatively recently, so this could be left out if you so desire.
The amount of the fees mentioned in our letter would be reduced
by $2,000.00 if you did not want this portion of the work done.
May 9, 1988
PHASE II
Evaluation of Existing Coverages
Matching Coverages to Exposures
Audit present policies to see if they give the best coverage at the best
price.
Check experiencve modifiers for all policies, including losses and
reserves assigned to each policy.
Check ctaims handling procedures for the City and for the Company.
Check to see if proper rating codes are being appied to Liability and
Worker's Compensation policies.
Check audit procedures and payroll limitation procedures.
Eliminate restrictions when they are too restrictive.
Add additional endorsements where there are coverage gaps.
May 9, 1988
PHASE III
Develop Specifications, Evaluate Bids,
Recommendations to City, Check Policies
Develop Comprehensive Insurance Specifications to be submitted to the
Insurance market via qualified agents, companies, or associations of
your choice. (6 maximum for quoted price).CMGx (p 4o CG 01,41 j
Evaluate the bids when they are received and make recommendations as to
which ones we judge would be best.
Check the policies when they are received to be sure they have been
issued correctly according to the specifications. Review any difference
with the City, and with the agent, company or association, and help get
the coverages changed as promised in the bid.
5
May 9, 1988
TENTATIVE TIME TABLE FOR CITY OF ROUND ROCK INSURANCE PLACEMENT:
Current policies expire October 1, 1988
June 20, 1988 Specifications delivered to the City for checking
M,nt2
3o 1988
r '
August )', 1988
Specifications mailed to agents, or ready for
pickup by agents at the City office.
Bids must be turned in to the City.
September 1, 1988 Consultant has completed review of the bids,
makes recommendations to the City on this date.
September 8, 1988 Council has completed review of the bids,
makes the award on this date.
October 1, 1988 New policies go into effect.
99979 Consultant reviews policies delivered by the
winning agent or company, to be sure they have
been issued as the bid promised.
DATE: May 10, 1988
SUBJECT: Council Agenda, May 12, 1988
ITEM: 16C. Consider a resolution authorizing the Mayor to enter
into a contract for review of the Round Rock Insurance
Program with Merrill, Chaney and Associates.
STAFF RESOURCE PERSON: Sam Huey
5/9/88
City of Round Rock Insurance Program Review
City insurance coverage will be up for renewal on October 1
193:5. Teas Municipal League currently provides the coverage and
has done so for three years. The insurance market has softened
to the extent this year that the City would likely see a cost
savings through a formal bidding process.
Staff recommends retaining Merrill, Chaney and Associates to
evaluate and bid the City's insurance requirements. If retained
the firm would contract to provide the following services:
1. Evaluate the City's insurance needs for Property, Casualty,
Liability, Worker's Compensation, and Public Officials
2. Develop insurance coverage specifications for the purpose of
obtaining bids
3. Evaluate the bids when received and recommend the coverage
judged to be the best
4. Check the policies when received to ensure compliance with
the specifications
The total fee estimate for the above services will be a maximum
of $6,000
Merrill, Chaney and Associates is recommended for the following
reasons:
J. The complexity of the insurance market and recent insurance
legislation requires e ;:pert assistance in developing
specifications and evaluating bids.
2. Dr. Jerry Todd with Merrill, Chaney, will be the principal person
working on the project. Dr. Todd has performed this service for
the City in the past and is familiar with our operations.
3. Merrill, Chaney has been highly recommended as being
, knowledgeable concerning municipal government insurance needs and
familiarity with insurance legislation