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HomeMy WebLinkAboutCOW 2025-06-09 Item 5C - Agreement - Employee Benefit Broker with GallagherCOUNCIL AGENDA SYNOPSIS Initials Meeting Date Prepared by Mayor's review Council review 6/9/2025 TC 6/16/2025 TC ITEM INFORMATION ITEM NO. 5.C. STAFF SPONSOR: MARTY WINE ORIGINAL AGENDA DATE: 6/9/25 AGENDA ITEM TITLE Employee Benefit Broker services agreement: Gallagher CATEGORY ® Discussion Altg Date 6/9/25 ® Motion Alt Date 6/16/25 ❑ Resolution Mtg Date ❑ Ordinance Mtg Date ❑ Bid Award Mtg Date ❑ Public Hearing Mtg Date ❑ Other bltg Date SPONSOR ❑ Council ® Mayor ❑ Admin Svcs ❑ DCD ❑ Finance ❑ Fire ❑ P&R ❑ Police ❑ PIF SPONSOR'S SUMMARY The City of Tukwila previously engaged Alliant for employee benefits broker services under a three-year contract from 2023 to 2025. Following a competitive RFP process, Gallagher has been selected as the new provider. The contract has been vetted and reviewed by both the City attorneys and Gallagher's legal team. As the proposed three-year agreement with Gallagher (2025-2028) totals $84,000 annually and exceeds mayoral signing authority, I respectfully request Council review and approval of the contract. REVIEWED BY ❑ Trans&Infrastructure Svcs ❑ Community Svcs/Safety ❑ Finance & Governance ❑ Planning & Community Dev. ❑ LTAC DATE: N/A ❑ Arts Comm. ❑ Parks Comm. ❑ Planning Comm. COMMITTEE CHAIR: N/A RECOMMENDATIONS: SPONSOR/ADMIN. TC Croone/Human Resources COMMITTEE N/A COST IMPACT / FUND SOURCE EXPENDITURE REQUIRED $84,000 AMOUNT BUDGETED $150,000 APPROPRIATION REQUIRED $ Fund Source: 2025-2026 APPROVED BUDGET Comments: MTG. DATE RECORD OF COUNCIL ACTION 6/9/25 MTG. DATE ATTACHMENTS 6/9/25 Informational Memo dated June 9, 2025 Professional Services Contract: Gallagher Benefit Services, Inc. 6/16/25 51 City of Tukwila Thomas McLeod, Mayor Administrative Services Dept., Human Resources - TC Croone, Chief People Officer INFORMATIONAL MEMORANDUM To: City Council From: TC Croone, Deputy Director of Administrative Services and Chief People Officer CC: Mayor Thomas McLeod Date: June 9, 2025 Subject: Employee Benefit Broker services agreement: Gallagher ISSUE Consideration and approval of the services agreement between the City of Tukwila and Gallagher to perform employee benefit broker services, effective July 15, 2025. BACKGROUND The City of Tukwila previously engaged Alliant for employee benefits broker services under a three- year contract from 2023 to 2025. Following a competitive RFP process, Gallagher has been selected as the new provider. The contract has been vetted and reviewed by both the City attorneys and Gallagher's legal team. As the proposed three-year agreement with Gallagher (2025-2028) totals $84,000 annually and exceeds mayoral signing authority, I respectfully request Council review and approval of the contract. The council approved $150,000 for Human Resources to allocate for consulting fees in the 2025-2026 budget. DISCUSSION I welcome any questions or concerns that the council may have about the contract. RECOMMENDATION The Council is being asked to forward the contract authorization to the consent agenda at the June 16, 2025 Regular Meeting. ATTACHMENT • Professional Services Contract: Gallagher Tukwila City Hall • 6200 Southcenter Boulevard • Tukwila, WA 98188 • 206-433-1800 • Website: TukwilaWA.gav 52 City of Tukwila 6200 Southcenter Boulevard, Tukwila WA 98188 Contract Number: PROFESSIONAL SERVICES AGREEMENT (Includes consultants, architects, engineers, accountants, and other professional services) THIS AGREEMENT is entered into between the City of Tukwila, Washington, hereinafter referred to as "the City", and Gallagher Benefit Services, Inc., hereinafter referred to as "the Consultant", in consideration of the mutual benefits, terms, and conditions hereinafter specified. 1. Project Designation. The Consultant is retained by the City to perform benefit broker services. 2. Scope of Services. The Consultant agrees to perform the services, identified on Exhibit "A" attached hereto, including the provision of all labor, materials, equipment and supplies. 3. Duration of Agreement; Time for Performance. This Agr effect for a period commencing upon execution and end' terminated under the provisions hereinafter specified. commence upon written notice by the City to the Con : nt to perform all services and provide all work product re • ed pur than July 15, 2028 unless an extension of such - is gr.nte 4. Payment. The Consultant shall be paid by th rendered under this Agreement as follows. A. Payment for the work provided by t "B" attached hereto, provided that the exceed $7,000 per month by the City. B. The Consultant may su the work for parti vouchers will b to the Consu C. Final payment made promptly up the work under this ent shall be in full force and July 15, 2028, unless sooner under this Agreement shall ceed. The Consultant shall su. • this Agreement no later d in ng by the City. or completed work and for services II be made as provided on Exhibit f payment to the Consultant shall not written modification of the Agreement signed e City once per month during the progress of or that portion of the project completed to date. Such City and, upon approval thereof, payment shall be made proved. due the Consultant of the total contract price earned will be ertainment and verification by the City after the completion of ment and its acceptance by the City. D. Payment as provided in this section shall be full compensation for work performed, services rendered, and for all materials, supplies, equipment and incidentals necessary to complete the work. E. The Consultant's records and accounts pertaining to this Agreement are to be kept available for inspection by representatives of the City and the state of Washington for a period of three (3) years after final payments. Copies shall be made available upon request. 5. Ownership and Use of Documents. All documents, drawings, specifications and other materials produced by the Consultant in connection with the services rendered under this Agreement shall be the property of the City whether the project for which they are made is executed or not. The Consultant shall be permitted to retain copies, including reproducible copies, of drawings and specifications for information, reference and use in connection with the Consultant's endeavors. The Consultant shall not be responsible for any use of the said documents, drawings, specifications or other materials by the City on any project other than the project specified in this Agreement. Notwithstanding the foregoing, City shall own all final } 53 deliverables provided to City by Consultant as part of the services provided under this Agreement, provided however, Consultant shall retain sole and exclusive ownership of all right, title, and interest in, and to, its intellectual property and derivatives thereof which no data or Confidential Information of the City was used to create and which was developed entirely using Consultant's own resources, including any and all pre-existing or independently developed know-how, methods, processes and other materials prepared by Consultant. To the extent Consultant's intellectual property is necessary for the City to use the deliverables provided under this Agreement, Consultant grants to City a non-exclusive, royalty -free license to Consultant's intellectual property solely for City's use of such deliverables. 6. Compliance with Laws. The Consultant shall, in performing the services contemplated by this Agreement, faithfully observe and comply with federal, state, and local laws, ordinances and regulations, applicable to the services rendered by Consultant under this Agreement. 7. Indemnification, No Express Warranty, and Limitation of Liability. The Consultant shall defend, indemnify and hold the City, its officers, officials, employees and volunteers harmless from any and all claims, injuries, damages, losses or suits including attorney fees, brought by a third party directly arising out of or resulting from the negli• t or fraudulent acts, errors or omissions of the Consultant in performance of this Agree ► , except for bodily injuries and damages caused by the sole negligence of the City. Should a court of competent jurisdiction determin- at this A. -ment is subject to RCW 4.24.115, then, in the event of liability for dama• ' arising out of . ily injury to persons or damages to property caused by or resulting fro a c. rrent negligence of the Consultant and the City, its officers, officials, employees, ' olunteers, the Consultant's liability hereunder shall be only to the extent of t - Consul . 's negligence. It is further specifically and expressly understood that the indem .rove. herein constitutes the Consultant's waiver of immunity under Industrial Insur. CW, solely for the purposes of this indemnification. This waiver has . - -n mu nego ated by the parties. The provisions of this section shall survive the e ' i. . r to ation of this Agreement. Consultant expressly disclaims any and all war' ies, press r implied, including, without limitation, the warranties for merchantabili d - particular purpose. Notwithstanding any other term or provision of this . ee Consultant shall only be liable for actual damages incurred by the City and shall •le . ny indirect, incidental, special, consequential or punitive damages even if party a of the existence of such damages. Furthermore, the aggregate liability . per this A• ement, if any, of Consultant to the City for claimed losses or damages shall not e -d $1,' I,000.This provision applies to the fullest extent permitted by applicable law. 8. Insurance. The Consulta t shall procure and maintain for the duration of the Agreement, insurance against claims for injuries to persons or damage to property which may arise from or in connection with the performance of the work hereunder by the Consultant, its agents, representatives, or employees. Consultant's maintenance of insurance as required by the agreement shall not be construed to limit the liability of the Consultant to the coverage provided by such insurance, or otherwise limit the City's recourse to any remedy available at law or in equity. Public Entity Full Availability of Consultant Limits. If the Contractor maintains higher insurance limits than the minimums shown above, the City shall be insured for the full available limits of Commercial General and Excess or Umbrella liability maintained by the Consultant, irrespective of whether such limits maintained by the Consultant are greater than those required by this Contract or whether any certificate of insurance furnished to the City evidences limits of liability lower than those maintained by the Consultant. A. Other Insurance Provision. The Consultant's Automobile Liability and Commercial General Liability insurance policies are to contain, or be endorsed to contain that they shall be primary insurance with respect to the City. Any Insurance, self-insurance, or insurance CA revised May 2020 Page 2 } 54 pool coverage maintained by the City shall be excess of the Consultant's insurance and shall not be contributed or combined with it. B. Notice of Cancellation. Any cancelled or non -renewed policy will be replaced with no coverage gap and a current Certificate of Insurance will be provided to the City. C. Failure to Maintain Insurance. Failure on the part of the Consultant to maintain the insurance as required shall constitute a material breach of contract, upon which the City may, after giving five business days' notice to the Consultant to correct the breach, immediately terminate the contract or, at its discretion, procure or renew such insurance and pay any and all premiums in connection therewith, with any sums so expended to be repaid to the City on demand. 9. Independent Contractor. The Consultant and the City agree that the Consultant is an independent contractor with respect to the services provided pursuant to this Agreement. Nothing in this Agreement shall be considered to create the relationship of employer and employee between the parties hereto. Neither the Consultant nor any employee of the Consultant shall be entitled to any benefits accorded City employees by virtue of the services provided under this Agreement. The City shall not be respon for withholding or otherwise deducting federal income tax or social security or for ributing to the state industrial insurance program, otherwise assuming the duties ployer with respect to the Consultant, or any employee of the Consultant. 10. Covenant Against Contingent Fees. The Con . nt w. rrants the has not employed or retained any company or person, other than . '•on. ' - employee working solely for the Consultant, to solicit or secure this contract, ane has not paid or agreed to pay any company or person, other than a bonafi• --mployeorking solely for the Consultant, any fee, commission, percentage, brokerage or a 'ther consideration contingent upon or resulting from the award or making of co► or breach or violation of this warrant, the City shall have the right to an . is co without liability, or in its discretion to deduct from the contract price or co -ra, , or herwise recover, the full amount of such fee, commission, percentage, br► gage • ift, ontingent fee. 11. Discrimination Prohibited. .ctor, regard to the work performed by it under this Agreement, will not .' -te • e grounds of race, religion, creed, color, national origin, age, veteran statu -x, se ori_ :tion, gender identity, marital status, political affiliation, the presence of . . isability, any other protected class status under state or federal law, in the selection and -ntion o- mployees or procurement of materials or supplies. 12. Assignment. The Con shall not sublet or assign any of the services covered by this Agreement without the exp ess written consent of the City. 13. Non -Waiver. Waiver by the City of any provision of this Agreement or any time limitation provided for in this Agreement shall not constitute a waiver of any other provision. 14. Termination. A. The City reserves the right to terminate this Agreement at any time by giving ninety (90) days advance written notice to the Consultant. B. In the event of the death of a member, partner or officer of the Consultant, or any of its supervisory personnel assigned to the project, the surviving members of the Consultant hereby agree to complete the work under the terms of this Agreement, if requested to do so by the City. This section shall not be a bar to renegotiations of this Agreement between surviving members of the Consultant and the City, if the City so chooses. 15. Applicable Law; Venue; Attorney's Fees. This Agreement shall be subject to, and the Consultant shall at all times comply with, all applicable federal, state and local laws, CA revised May 2020 } Page 3 55 regulations, and rules, including the provisions of the City of Tukwila Municipal Code and ordinances of the City of Tukwila. In the event any suit, arbitration, or other proceeding is instituted to enforce any term of this Agreement, the parties specifically understand and agree that venue shall be properly laid in King County, Washington. The prevailing party in any such action shall be entitled to its attorney's fees and costs of suit. Venue for any action arising from or related to this Agreement shall be exclusively in King County Superior Court. 16. Severability and Survival. If any term, condition or provision of this Agreement is declared void or unenforceable or limited in its application or effect, such event shall not affect any other provisions hereof and all other provisions shall remain fully enforceable. The provisions of this Agreement, which by their sense and context are reasonably intended to survive the completion, expiration or cancellation of this Agreement, shall survive termination of this Agreement. 17. Notices. Notices to the City of Tukwila shall be sent to the following address: City Clerk City of Tukwila 6200 Southcenter Boulevard Tukwila, WA 98188 Notices to Consultant shall be sent to the following ad s: Gallagher Benefit Services, Inc. Attn: Office of General Counsel 2850 Golf Road Rolling Meadows, IL 60008 18. Entire Agreement; Modification. This represents the entire and integrated Agr supersedes all prior negotiati. .res amendment or modification . ' is A eeme writing and signed by the p her with attachments or addenda, en the City and the Consultant and tions, or agreements written or oral. No shall be of any force or effect unless it is in CA revised May 2020 } 56 Page 4 DATED this day of , 20 ** City signatures to be obtained by ** Consultant signature to be obtained by City Clerk's Staff ONLY. ** sponsor staff. ** CITY OF TUKWILA GALLAGHER BENEFIT SERVICES, INC.: By: Thomas McLeod, Mayor ATTEST/AUTHENTICATED: Andy Youn, City Clerk APPROVED AS TO FORM: Office of the City Attorne Printed Na . Title CA revised May 2020 } Page 5 57 Exhibit A DESCRIPTION OF SERVICES/SCOPE OF WORK Specific responsibilities of the Consultant will include, but will not be not limited to, the following: A. Plan Administration • Provide insurance brokerage and advisory services associated with employee benefit plans. This includes acting as an intermediary on the City's behalf with the underwriting community, conducting marketing activities, analyzing options and proposing recommendations, assisting the City in administering group insurance plans, responding to questions from and providing information to staff representatives, settling claim disputes, and other oversight services during the course of the programs. • Represent the City in all negotiations with carriers on all issues including those related to premiums, benefit levels, plan design and special terms and conditions. • Assist the City with the implementation of new programs incl Iternate funding arrangement or changes to existing programs, which may include attending . rious . •te meetings. • Assist with benefits committee meetings as needed. • Meet with and provide reports to various City repreitativ�/tvhen requested by the City, including the City Council, administration, employee groups, an • Provide a central resource for documents- tivities mounding the delivery of benefits. The resource includes benefit plan objectives, cal plan data, documentation of plan issues and decisions, efficiency of renewal • ses, d appropriate federal and state plan compliance. • Review benefit designs and p de re mend. ins on all health and welfare benefits to provide cost management and savings t • Provide input and re - .ti• on any mandated benefit design changes. Support annual benefits open enro -nt by p din: ne or more staff onsite to assist with benefit awareness (facilitating "lunch a -arns", m: ing in person with employees to explain benefits, etc). • Support Human Resour taff h one or more staff onsite during and after annual benefits open enrollment to manage EDI ., liaise with vendors, auditing, and compliance. • Support Human Resources staff during open enrollment and ad hoc requests with online benefits portal (currently NeoGov Benefits) to manage EDI feeds, liaise with vendors, auditing, and compliance. • Manage plan changes with vendors as necessary. • Provide leadership with carrier relationship management. • Assist with contract and policy review. B. Financial Analysis, Monitoring and Planning • Define objectives and initiatives through strategic planning to assist the City in controlling/reducing health plan expenditures while retaining a competitive benefits program. • Regularly review claims experience, claims service, and claims administration to ensure maximum benefit to the City. CA revised May 2020 } 58 Page 6 • Analyze factors driving the City's plan costs and recommend opportunities to better manage costs, access and quality. Determine and recommend the most economical funding methods for the benefit programs. • Conduct strategic planning sessions to review performance of the City's current employee benefits coverage and establish future objectives and strategies to manage the employee benefit coverage. • Meet with and provide reports to various City representatives as required on an as -needed basis to discuss strategy and new issues. • Assist the City with the implementation and communication of new programs or changes to existing programs, which will include attending and presenting information at Open Enrollment meetings. • Research and advise the City of any new developments in the law and employee benefit programs on an ongoing basis. • As requested, prepare bid specifications and solicit proposals for insurance markets which specialize in group insurance plans or self -funded programs as needed. Evaluate bids and bidders, including administration, claim payment procedures, customer servi provider networks, reserve establishment policies, financial soundness, and identifying the cost -beneficial package from the various bidders. • Interface with insurance carriers as needed to assist the ' in the re tion of problems associated with the benefit programs. • Provide market data and recommendations for •le tation of benefits and programs as requested. • Monitor current market trends; Proactively - City o anticipated rate changes and suggest alternatives to support low costs to both the 1 ees. • Establish comprehensive claims rified coverage such as medical and pharmacy, detailing paid claims (and r: : - -nts, applicable), premium/funding and enrollment summaries. • Provide ongoing quarter) • .l si .lan financial experience. • Provide annual finan • Compare premium -s and emp ee contributions to local, regional or state public sector norms. • Provide assistance in c. lation • •Ian funding rates and prospective employee contributions. • Coordinate annual actuari. ► sis to recommend funding rates for the City's self -insured plans and to produce a three-year budg-t projection. C. Compliance • Provide updates and ongoing assistance with federal and state reporting and compliance as required by outside agencies. Assist the City in complying with all related Federal and State laws and regulations, as well as, contract requirements. • Research and advise the City on changes in statutes, rules, and regulations regarding the City's responsibility under federal and state laws and develop procedures to ensure its benefit programs are in good legal standing. • Research and advise the City regarding legal issues; represent the City in legal matters as appropriate, in partnership with the City attorney. CA revised May 2020 } Page 7 59 D. Employee Communications & Claims Resolution Support • Provide custom communications, online tools, and other interactive services so participants understand their employee benefits and the value thereof. • Develop and maintain an internal and external benefits website. • Provide updated benefit marketing materials such as fliers, brochures, etc. • Facilitate onsite benefit education sessions monthly and office hours to assist with employees understanding their benefits • Provide ongoing support, reporting, etc. for Healthcare Committee. Present information to Executive team, Healthcare Committee and other internal partners as needed. • Provide employee assistance for claims resolution through a Benefit Advocate service. • Coordinate with City representatives on employee relations issues concerning group insurance and benefit programs. E. Annual Renewals • Represent the City in negotiations with carriers on all es, includes hose related to premiums, benefit levels, plan design and special terms and con•' .ns. • Provide funding rates for renewal year for active em. ee -tirees, and COBRA participants. • Prepare Requests for Proposals (RFP's) for City b- it plans, including alternative funding arrangements. This includes evaluating theand mmending changes to the City based on the RFP findings. • Develop Summaries of Benefits an • Assist with preparation of Sum ► Plan -scrips (SPD) • Conduct annual competitive bi. .g f• d present renewal options. • Act as an advocate of theIoye. nd City in resolving difficult claims and administrative problems CA revised May 2020 } 60 Page 8 Exhibit B Compensation: Contractor shall receive an annual fee of $84,000, which will be invoiced to the City in the amount of $7,000 per month. CA revised May 2020 } Page 9 61