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Home My WebLink AboutAgenda Statement 1975/12/09 Item 10CITY OF CHULA VISTA ~ ITEM N0. 10 COUNCIL AGENDA STATEMENT FOR MEETING OF: 12-9-75 ITEM TITLE Resolution #7964 -Accepting proposal for Risk Management Audit - Warren, McVeigh, Griffin and Huntington SUBMITTED BY~ City Manager and Director of Fi nancP ITEM EXPLANATION The City Council authorized the City Manager to seek proposals from qualifi management firms on October 27, 1975. The attached Request for Proposals H to five firms, the following submitting proposals: 1. Warren, McVeigh, Griffin and Huntington $ 3,500 2. Mund, McLaurin and Company 6,000 3. EBASCO Risk Management Consultants, Incorporated 10,500 risk mailed While each of the submitting firms proposed to perform the work as requested in our September 12, 1975, Request for Proposals and each of them appears qualified to perform the work, a wide variation in price does exist among and between the firms. A telephone check with the City Manager of the City of Santa Fe Springs was made to veri y the per- formance of Warren, McVeigh, Griffin and Huntington, the low bidder, and it as reported by that city that they were extremely pleased with the work and comprehensiv nature of the report submitted approximately two years ago. Since that time, this irm has been employed on an hourly basis to help them on day-to-day insurance proble s. They were recommended highly by that city who indicated that the report, due to i s com- prehensive nature, is still being implemented. Financial Statement Sufficient funds are avilable in account 01-1700-5233. EXHIBITS ATTACHED Agreement Resolution .~ Ordinance - Plat Environmental Document: Attached Submitted on ~eque~for - Proposals STAFF RECOMMENDATION: Accept the proposal of Warren. McVeigh. Griffin and Huntington in the $3 ,500. BOARD/ COMMISSION RECOMMENDATION COUNCIL ACTION Approval. ant of Form A-113 (Rev 5-75) ,: WARREN, McVEIGH, GRIFFIN & HUNTINGTON RISK MANAGEMENT CONSULTANTS CITY OF CHULA VISTA PROPOSAL FOR RISK MANAGEMENT AUDIT October 7, 1975 /~ ~~ ~~ 200 NEWPORT CENTER DRIVE, NEWPURT BEACH, CALIFORNIA 92680 (714) 644-4882 WARREN, McVEIGH, GRIFFIN & HUNTINGTON RISK MANAGEMENT CONSULTANTS October 7, 1975 City of Chula Vista 276 Fourth Avenue Chula Vista, California 92010 Attention: Mr. Gordon Grant, Finance Director ' PROPOSAL FOR RISK MANAGEMENT AUDIT In response to the City~s request for proposals, dated September 29, 1975, Warren, McVeigh, Griffin ~ Huntington proposes to conduct a comprehensive audit of the insurance and risk management program of the City of Chula Vista. PURPOSE The purposes of the proposed study are to: 1. Provide management with an objective, professional analysis of all aspects of the CityRS risk manage- ment program, including: (a) Identification and measurement of loss exposures; (b) Potential areas of cost reduction; (c) Loss prevention and risk control techniques; (d) Adequacy of insurance coverages; (e) Insurance purchasing methods; (f) Efficiency of administrative procedures. 2. Establish sound guidelines for development of a mo efficient program which will minimize total risk management cost by properly balancing the cost of: -- Losses assumed without insurance; -- Loss prevention activities--safety, security and fire protection; 200 NEWPORT CENTER DRIVE, NEWPORT BEACH, CALIFORNIA 92860 (714) 644-4882 City of Chula Vista -Z- October 7, 1975 -- Claim handling and control; -- Property, liability and workers' compensation insurance; -- Operational and administrative functions relati to the above. SCOPE The scope of the audit will include items 1-6 of the Work Pr gram in the Request for Proposals dated September 29, 1975. Spec'fically, the audit will include the review and analysis of: 1. Present risk management practices of the City and recommendations relating to improvements thereon, including: (a) City policy (written or unwritten) and philosophy with regard to all risk management functions; (b) Internal insurance and risk management administ ative responsibilities, resources and effectiveness. These subjects encompass: i) Personnel requirements; ii) Extent of communications (up and down); iii) Records (losses, premiums, values, loss prevention data, technical information, etc.) ; iv) Reports to management; v) Claim administration; vi) Extent of risk analysis; and vii) Procedures for dealing with insurance sources. (c) The relation of loss prevention activity (fire protection, safety, security) to risk manageme t needs and results. (d) Services provided by insurance agents, insurance carriers and other outside sources, including the evaluation of alternative methods for selection of such sources. WARREN, McVEIGH, GRIFFIN & HUNTINGTON City of Chula Vista -3- October 7, 1975 (c) The relati n of loss p evention a tivity ( ire protection safety sec rity) to ri k manage ent needs and sults. I (d) Service provi ed by 'nsurance age ts, insuranc carrier and of er out~s,ide s urces, including the eva uation f alte native~metho fo~sel~c ion of such ources. 2. The present self-insured workers' compensation progr including funding, claim handling, administration an cost-effectiveness of self-insurance. 3. The implication of studies currently underway for "j int powers" arrangement with other South Bay cities or o her groups in California. ~ 4. The existing program of insurance,. covering property, liability and workers' compensation exposures, to determine: (a) Degree of protection afforded or lacking; (b) Rate structures and the effect of consolidatin coverages; (c) Efficiency of insurance market utilization. S. City activities which create risks of accidental loss. Each major risk of loss will be identified and its potential impact, both direct and indirect, will be measured. Our review will include the following general categories of risk: (a) Property loss exposures, including both direct and consequential loss potentials; (b) Third-party liability exposures; (c) Employee and third-party crime risks; (d) Workers' compensation and employers' liability exposures. 6. City's financial capabilities for assuming losses w'thout insurance. The objective will be to establish prud nt and economic risl~ retention criteria and methods, a ainst which current and future practices may be evaluated.. 7. Major contracts, leases or bond indentures to determine indemnity and insurance provisions and to assess the adequacy of the City's contract review procedures. WARREN, McVEIGH, GRIFFIN & HUNTINGTON City of Chula Vista -4- October 7, 1975 PLAN OF ACTION Results will be achieved by a sequence of activity to includ 1. Interviews with members of management to determine: (a) Operating goals, to discern the direction in which the City is moving and to gain insights ~i~ current and future activities; (b) Types and extent of activities subject to loss; (c) Fiscal aspects of loss assumption, accounting and methods of funding losses and expenses. 2. Physical inspections of all major facilities, in ord to obtain insights into operational hazards, loss potentials, procedures, communications, claim contro and loss prevention needs. ito :r 3. Study of contractual liability and insurance provisi ns contained in the City's major lease agreements, cons ruct- ion contracts, bond indentures and other legal agree ents. 4. Evaluation of the historical pattern of claims and losses. 5. Detailed review and sununarization of each insurance policy now carried by the City (except employee benefits programs). 6. Review of the City's budgets, financial statements and other fiscal data. 7. Interviews with current insurance agency personnel a~d independent claim adjusters. 8. Evaluation of the current risk retention program, i eluding details of the administration of the self-insured workers' compensation program. 9. Synthesis of all data collected into a comprehensive report to management (in duplicate), giving a concise summ ry of all major conclusions, but with technical supportin data sufficient to enable thorough analysis of all aspec s of the study. MATERIAL TO BE SUPPLIED CONSULTANT Best results will be achieved if the following are made available at the onset of the study: WARREN, McVEIGH, GRIFFIN & HUNTINGTON City of Chula Vista -S- October 7, 1975 1. History of insurance premiums and losses incurred, bey line and by year, for at least five years. 2. Schedule of property values by location, categorized as buildings, contents, mobile equipment, vehicles, etc. i 3. Complete copies of all existing insurance policies, including all endorsements and pertinent correspondence. In addition, copies will be requested, as the study progress s, of contracts, leases, bond indentures, insurance rate calculations and other relevant data. COSTS We propose to complete this audit for a flat charge of $3,50 , including all out-of-pocket expenses. One-half of this fee ould be due at the time this proposal is accepted, the other half coming due at the time the report is delivered to the City. COMPLETION OF STUDY It is anticipated that this study will be completed between 0 and 120 days from the date of acceptance of our proposal. This ontem- plates prompt submission of all material requested and ident'fied within the proposal, and as may be requested during this stu y. In addition, we would make ourselves available after the study, if requested, for a meeting with any City officials concerned w th the subjects of the study or implementation of its recommendatio s. CONSULTANT PERSONNEL AND QUALIFICATIONS To insure objectivity as well as the professional competence of its work, Warren, McVeigh, Griffin F, Huntington acts solely in a advisory capacity to management. It does not participate in commissi ns, ox any other remuneration from any insurance company, broker or agent. Our firm, unlike many other consultants, specializes in the ype of overall risk management audit outlined in this proposal. Su h specialization is unique in the professional field of .risk m nagement consulting. Now seven years old, the firm is a partnership f four individuals. All are thoroughly qualified in general risk m nagement, but with individual specialities as shown in the appended re umes. All hold the CPCU designation and have lectured widely on ri k management subjects. If this proposal is accepted, a partner of the firm will be assigned to direct and coordinate the audit. All work on the project will be performed by this partner and J. A. Robertson, with assistance from other principals of the firm, as needed. WARREN, McVEIGH, GRIFFIN & HUNTINGTON City of Chula Vista -6- October 7, 1975 We are also writers and publishers of the internationally-r cognized reference work, PRACTICAL RISK MANAGEMENT. An excerpt from this publication is enclosed to give you an idea of the type of subject matter it contains.. In addition, a brochure which outlines our activities and professional competence is enclosed. REFERENCES ' A partial list of clients of Warren, McVeigh, Griffin F, Hun ington is enclosed with this proposal. For references we encourag you to contact the following: Mr. Gerald Surfus, Risk Manager County of Los Angeles 726 Hall of Administration Los Angeles, California (213) 947 1158 Mr. R. L. Williams, City Manager City of Santa Fe Springs 11710 Telegraph Road P.O. Box 2120 Santa Fe Springs, California 90670 (213) 868 0511 hirs. Sara Walker, Personnel Department County of Orange 625 N. Ross Santa Ana, California 92701 (714) 834 2868 Mr. David C. Koester, City Manager , City of Santa Cruz 809 Center Street Santa Cruz, California 95060 (408) 426 5000 We will be glad to furnish additional references if desired The following individuals of our firm are available to be c ntacted during evaluation of proposals for this study: James A. Robertson, CPCU, C. C. Griffin, CPCU, or R. R. Huntington, CPCU (714) 644-4862 The foregoing proposal is a firm offer for consulting services and may be accepted by the City on the terms outlined until November 30, 1975. WARREN, McVEIGH, GRIFFIN & HUNTINGTON .~ City of Chula Vista ~-7- October 7, 1975 The opportunity to present this proposal to the City of Chula Vista is appreciated. iVe are enthusiastic about the prospect of ' performing this study for you. All that we would reQuire to begin work is the signature of the appropriate City official n one of the copies of this proposal. WARREN, McVEIG~i, GRIFFIN ~ HUNTINGTON BY JAR: jm Enclosures ACCEPTED BY: CITY OF CHULA VISTA By Title Date WARREN, McVEIGH, GRIFFIN & HUNTINGTON orm iv3. F-229 22/?3 CI:RTIFICATi' OF CITY/DIRECTOR O1' FIlVFIdCE Certification of Una~~prcF:ri.~.ted F!ala:,:ce Z hFRf:E3Y CERTIFY th«t '_ra rnclney requiter: for ~..e appropriation of funds fer tale uurpcse set fortr. in the attachaci resa?.ution is available in t:h~v Treasur;~, or ~s anticipa~e:d to comp into tY:e Treasury, and is c!~herwise u:.approps:i«ted. Amount $ Fund Purpose Bidder Dire: t::r o` £in?nca Tht~ City of CYll~la Vis~:a Date =s:' Certific~:t~.cn :,i "J.:e.nc>.~nbered B~aiance x iiEP,FBY CERTI'r'Y ti~aL tt'1~~ in:ies~zt.~~.r.'ness :.rld cz,l3.c_ atiorl t0 ~e incurre~ '.^.,1' the ;:0:2_a:~.~"~. U:" :~A`:'.E'-?'.:<_xl;" ?1;.'.i'10..'..?.~:~ ~?~' ~2t' attached resciutialz Cci7 J~ =::.r'.lr: G'Z :1.'. i:h{:.!~'.: t'!,a.: Ji^!.:J'riQi Of any of the provysl.ons cf ;..,: _aara.:t.~F" ,.r *r~e City o:` Ch{_a v' ~tw, o th~ Cons~itutic.z ar .~h4 _av.~ o~ _:?.:~ ~'c:::..~=- o~ ::ate.... ~,::_ __ ~_ sufficient I1UnieS hav_ ~Jo^'I~ i::%?:~.'7 %~.?':.!::~.,-C),i '.=h°' :::~=.'~~7SE' Of ~;cil:l contract, that ~uf `i c.enr .. ~)tl~ ~ tT:; 1:1F~fA ul~c c~;al ZLj~ ~:i%:^iS Gi tli:- contract are actuary ir, t~, area tlt~y. or are anti<~.~ ated to tome lnto tha '_'rea5i:ry tU M e CE:CW.:. C~~ ~,1.1: :.:j-:~~SOp'='_'..~:~=U'1 ~~t.`?~l wt:ich the Same are t:J be Q~,"iirv:7, c."1C1 ~.'~':c':'~ `~c?.~ .!!OTl~:, :lOi.' c1Ci=L:3iiV, iri the Treasury, together ~r~.th ~~_c r~c:n~_es 2n~:lCipa'l::e'~ *,o ::G.'Gr~_ in~o the TreauurV, t0 she CtiE'U.=.~, .,~ :~4:`_Qc_~.L~~~':~ri.:i~ir~;l 2.~'E.'. ^ti:e'-~iSE unencuznbere:=1. Azr~ount D?ot to Excead $ 3,500.00 ___ ~,___ __~__ _ - ----~- s ' ; -1700-5233 ___'• ~%~~L-.~„T_ l _~~~ `-_ ~_ Date 12/2/75 _ ;~y .~...___.___._--_--______ _.__ Funa General Lep::./1-,l.ti~:i+..y Insurance Purpose Accepting Proposal for Risk Mana ement Audit sidaer Warren, McVeigh, Griffin and Huntington ___ - ' ' ~ ~ /v ' "' ~ ~ ~ !~ ~ L •T w~~JI77,~. ii .LirM •• ~~';'~ia~l/~i ~ ~--I/T~t-n~l/, sn/1 , ~ ,~~ '.,/.111(: rllltt,t[ttt ft.' '-' t-~lat'•t-It 1' • .jn~~,,. } ,. ~~ ~`+. ~~ .i'e,r //.%,lf~n%I/(U•ui(liflil • ~ , t -f;-i- t 4= t~ ~~ t ~ ~ _ t '_ ~ ~i' t~"~~ _~ ~ 4Fij 1',~tuhf.'(l=~ F~-y t~'i eiti 1~'+ i~~ ....~....~ Z J OFFICE OF THE Clt~ ~~ C~lll1' `- t,~l~~(x CITY MANAGER CALIFOR 'I~ September 12, 1 75 REQUEST FOR PROPOSALS The City of Chula Vista is soliciting proposals from consultants to conduct comprehensive risk manage-nent audit of the City's current insurance program nd make recommendations thereon. Proposal Requirements The proposal should generally conform to the following format: 1. Introduction An overall introduction to the proposal including a statement of the consultant's understanding of the study, planned approach, and maximum time to complete. 2. Personnel The individual or individuals to be used in the study together with a b ief resume of their qualifications and experience .applicable to the study i tended. 3. A list of three or more former clients (including addresses and phone n tubers) for whom similar services have been performed. Q. The proposal shall be signed by an official authorized to bind the offe and shall contain a statement that the proposal is a firm offer for at leas a thirty (30) day period. ~ 5. The proposal shall contain the name, address, and telephone number of t e individual with authority to negotiate a contract and available to be contacted during proposal evaluations. 27G FQURTH AVENUE CHULA VISTA, CALIFORNIA 92010 TELEPIIONE 427 3300 } Request for Proposals Page 2 General Information The following general information should be taken into consideration when preparing a proposal: 1. The contracting agency will be the City of Chula Vista with Mr. Gordon Grant, Finance Director, serving as the City's chief contact. He may be reached at the Chula Vista City Hall, 276 Fourth Avenue, Chula Vista, 92010, or by telephone at (714) 427-3300, extension 281. 2. The consultant will have access to all public records dealing with current and past insurance history and practices. No computations, tabulations, or analysis of data should be anticipated by the con- sultant from the City. 3. This request for proposals does not commit the City of Chula Vista to award the contract or to pay for costs incurred in making a proposal. The City of Chula Vista reserves the right to accept or reject all proposals, to negotiate with any qualified firm or indi- vidual or to cancel this request for proposals. 4. consultants should submit at least two copies of their proposal. 5. Proposals will only be considered from individuals or firms not involved in selling insurance of any type or affiliated with insurance companies, agents; o~^ brokers. 6. Proposals must be submitted on or before October 17, 1975, in order to be considered. V~ork Program The contemplated insurance audit should include: 1. A review and evaluation of present risk management practices of the City and recommendations relating to improvements thereon. 2. Analysis of present self-insurance workman's compensation program as to sufficiency, retention plans, and cost effectiveness. 3. Preliminary recommendations on the feasibility of a joint powers arrangement with other South Bay cities, whereby insurance risks and premiums would be pooled. (~•~o specific or final plan is anticipated, but general guidelines, as well as advantages and disadvantages, should be developed..) Request for Proposals Page 3 4. Thorough review of all insurance policies (except employee benefit plans) to dete rniine adequacy and comprehensiveness of current policies. 5. Development of alternatives and recommendations for the treatment of risks and the selection of the most feasible and economical methods for risk avoidance, transfer, self-insurance, deductible insurance, etc. 6. Analysis of major leases and third party contractual liability to disc) areas of concern from City's liability assumption andJor risk transfer point of view. ~ Lane F. Cole City Manager LFC:ERA:md se 9G ~/