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8. B. Renewal of Excess Workers' Compensation Insurance Policy (702-04) REPORTS: Finance Director, July 20, 1992 (City's Property Insurance) Human Resources Director, July 15, 1992 (Workers' Compensation) City Manager Everett provided an overview of last year's request for proposal process for property insurance and stated that based on the bid process a broker was chosen and the property insurance placed with Jack Castle Insurance of Redwood City. Mr. Everett described the cost of the RFP process and advised that the standard practice among governmental agencies, is to maintain the same broker for about three years before undergoing another RFP process. Mr. Everett advised that the staff recommendation is to approve Jack Castle Insurance as property insurance broker for another year, and enter into the RFP process next year. Staff has determined that the worker's compensation insurance offered by Mr. Vreeburg's company is the best available and recommends retention of Boring-Riefenrath-Vreeburg for worker's compensation insurance and it is up to the Council if Mr. Vreeburg's company should be named as broker of record in that area. Assistant Finance Director Brian Ponty described the property insurance proposal by Jack Castle Insurance offered to the Council for August 1992 to July 1993 underwritten by three companies: Factory Mutual with a rating of A+, New England Insurance Company with a rating of A-, and RLI Insurance Company with a rating of A-. In answer to questions from Council regarding the practice of the RFP process every 3-5 years, Mr. Ponty advised he spoke to several city's risk managers and the Bay Cities JPA, which handles Redwood City's general liability coverage, and determined that three to five years is common practice for cities and private industry as well. Mr. Ponty stated two pluses to a three year RFP process are: 1) to save staff time educating a new broker as to the specific requirements of the City's insurance needs and yearly changes; and, 2) theoretically the broker chosen from the small group of the most competent brokers available will provide a very similar product as the others. In response to questions from Council asking why a limited term contact was signed with the audit firm but not with the insurance broker, Mr. Ponty advised that insurance contracts are signed between the City and the insurance company, not the broker, but staff would look into the matter. Also, Mr. Ponty advised that Mr. Castle had provided an oral report, but the City had not asked for a written report; and, the RFP, Item C, did refer to a term of one year. City Manager Everett advised insurance policies are bought for a period of one year at a time. In response to Council questions regarding the City's original expectations of the RFP and the subject of another firm being asked to submit a proposal for 1992/93, Mr. Ponty advised there was a series of miscommunications and misunderstandings between himself and Mr. Vreeburg which resulted in a bid for property insurance being submitted to the City by Mr. Vreeburg when there had been no formal opening of a bid process. The staff responded to Mr. Vreeburg's request to provide a bid to the City, by stating there was "no harm to the City if he wanted to submit a proposal", but it would have to be done in time to be presented to the Council for consideration at the July 20th Council Meeting. City Manager Everett advised the bid was accepted at the individual's insistence. MINUTE BOOK NO. 5~ Regular Meeting Minutes July 20, 1992 Page No. 146 Page 6