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Home My WebLink AboutPR 12933: LIABILITY INSURANCE CITY OF PORT ARTHUR SAFETY & RISK MANAGEMENT MEMORANDUM TO: Stephen B. Fitzgibbons, City Manager FROM: Lisa Colten, Safety & RIsk Management Coordinator DATE: November 30, 2004 SUBJECT: A Resolution Authorizing rite City Manager to Reject the Bid of Leon Petty Insurance Agency, Re-Advertise for Bids, and to Preliminarily Bind the City of Port Arthur for the Health Depa, t, dent Liability Insurance Coverage COMMENT RECOMMENDATION: I recommend approval of Proposed Resolution No. 12933 authorizing the City Manager to reject the bid of Leon Petty Insurance Agency, re-advertise for bids, and to preliminarily bind the City for the Health Department Liability Insurance. The coverage period will be from January 1, 2005 through December 31, 2005. The current year's insurance premium is estimated to be $65,551.77. The bid amount for the Insurance is based on the estimated number of patient visits for 2004. The current estimate, as provided by the Health Department, projects over 40,000 patient visits. The final cost will be calculated based on an audit of patient visits to be conducted by the carder at the end of the policy year. Coverage is being provided by Underwriters at Lloyd's London through its agent, Business Insurance Group, and will expire December 31, 2004. Limit of liability for the policy (including Professional Liability end Commercial General Liability) is $1,000,000 ($3,000,000 aggregate) with a $10,000 deductible. It is necessary that this insurance renewal be handled in this manner due to time constraints (i.e. rejection of current bid, scheduled Council meetings, and to prevent lapse in coverage.) BACKGROUND: The City carries both Professional and General Liability Insurance to cover the operation of the City Health Department. This Insurance would cover any claim for damages adsing from an injury occurdng while on the Health Department premises (i.e. slip & fall claims) or as a result of treatment received through the Health Department (i.e. malpractice claim). The City advertised for bids for Insurance Coverage. Sixteen agencies requested and were sent bid packets. The only response received back was from Leon Petty Insurance Agency. The bid was opened in accordance with State Law and the City Charter, then was sent to RVVL Group, the City's consultant, for analysis. Mr. Lazarus recommended (attached) that the bid received from Leon Petty Insurance Agency be rejected due to it being non-responsive and indicating a premium of almost two and a half times more than the current. Therefore, the City is re- advertising for additional bids to be received on December 15, 2004, which will provide the City additional options for coverage. The approval of this recommendation will ensure appropriate Professional and Commercial General Liability Insurance Coverage for the Health Department Clinic. "REMEMBER, WE ARE HERE TO SERVE THE CITIZENS OF PORT ARTHUR' Stephen B Fitzgibbons November 30, 2004 Page 2 of 2 BUDGETARY/FISCAL EFFECT: Proposed funding is as follows: Health Department Insurance Fund....001-1301-541.52 STAFFING/EMPLQYEE EFFECT: No effect on staffing levels: SUMMARY: I recommend approval of Proposed Resolution No. 12933 authorizing the City Manager to reject the bid of Leon Petty Insurance Agency, re-advertise for bids, and to preliminarily bind the City for the Health Department Liability Insurance. The coverage period will be from January 1, 2005 through December 31, 2005. The current year's insurance premium is estimated to be $65,551.77. The bid amount for the Insurance is based on the estimated number of patient visits for 2004. The current estimate, as provided by the Health Department, projects over 40,000 patient visits. The final cost will be calculated based on an audit of patient visits to be conducted by the carder at the end of the policy year. Coverage is being provided by Underwriters at Lloyd's London through its agent, Business Insurance Group, and will expire December 31, 2004. Limit of liability for the policy (including Professional Liability and Commercial General Liability) is $1,000,000 ($3,000,000 aggregate) with a $10,000 deductible. It is necessary that this insurance renewal be handled in this manner due to time constraints (i.e. rejection of current bid, scheduled Council meetings, and to prevent lapse in coverage.) Attachment 'REMEMBER, ~ ARE HERE TO SERVE THE CITIZENS OF PORT ARTHUR" P.R. No. 12933 11/30/04 UC RESOLUTION NO. A RESOLUTION AUTHORIZING THE CITY MANAGER TO REJECT THE BID OF LEON PETTY INSURANCE AGENCY, RE-ADVERTISE FOR BIDS, AND TO PRELIMINARILY BIND THE CITY OF PORT ARTHUR FOR THE HEALTH DEPARTMENT LIABILITY INSURANCE COVERAGE PROPOSED FUNDING BY: Health Department Liability Insurance Fund: (001-1301-541.52-00) WHEREAS, the existing liability insurance coverage for the Health Department expires on December 31, 2004; and, WHEREAS, the City has received the attached correspondence (Exhibit 'A") from RWL Group indicating that the sole bid received did not fully comply with the bid specifications, and therefore should be rejected. Additional renewal quotations or bids will not be available until December 15, 2004; and, NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PORT ARTHUR, TEXAS: · ~ction 1. That the facts and opinions in the preamble are true and correct. Section 2. That the bid of Leon Petty Insurance Agency is rejected, and the City Manager or his designee shall immediately re-advertise for proposals. Section3. That the City Council herein authorizes the City Manager to preliminarily bind the City for Health Department Liability Insurance Coverage based on new bids to be received subject to review and approval by the City Attorney. SeCtion 4. That the City Council reserves the dght to review such insurance at the next available council meeting, and to pay for the earned premiums if there is a need of a cancellation or adjustment thereof. P.R. NO. 12933 11/30/04 LJC PAGE 2 OF 2 Section 5. That a copy of the caption of this Resolution be spread upon the Minutes of the City Council. READ, ADOPTED, AND APPROVED on this day of , A.D., 2004, at a Regular Meeting of the City Council of the City of Port Arthur, Texas, by the following vote: AYES: Mayor , Councilmembers NOES: Oscar G. Ortiz, Mayor Al-rEST: Evangeline Green, City Secretary APPROVED AS TO AVAILABILITY OF FUNDS: Rebecca Underhill, Director of Finance APPROVED AS TO FORM: Mark Sokolow, City Attorney APPROVED FOR ADMINISTRATION: Stephen B. Fitzgibbons, City Manager Yahoo! Mail = ljcolten~yahoo.com Page 1 of 2 ~XHIBI? '~' Mail Print- Close Window From: "RWL Group" <carolyn@rwlgroup.com> To: "Lisa Colten" <ljcolten@yahoo.com> Subject: Po~ Arthur Clinic Liability Renewal 1-1-05 Date: Non, 29 Nov 2004 11:09:43 -0600 Lisa: I have reviewed the quote submitted by Leon Petty Insurance Agency on the above coverage. The bid did not fully comply with the bid specifications. Areas of deficiency are as follows: 1. No certificate of insurance was provided reflecting professional liability for Leon Petty Insurance Agency. 2. No information was provided on the servicing staff or their qualifications; very little of the information provided on Mr. Petty related to insurance industry qualifications. 3. No description of services to be provided by the agency was provided. 4. No sample claims reporting guidelines was included with the bid. 5. No sample MIS claims report was provided with the bid. 6. Page 13 of the bid specifications, General Requirements, was not completed and submitted with the bid. There are several questions of importance on this page. 7. Page 15 of the completed portion of the bid specifications does not accurately reflect the bid that was submitted. 8. Page 17 of the bid specifications was not completed and submitted with the bid. This is particularly important as it not only contains important questions, but also is the page requiring the signature of an authorized person representing the agency submitting the bid. 9. No sample policy coverage form(s) were provided. Some sample endorsement forms were included in the bid, but not coverage forms. The coverage forms are necessary for us to determine what coverage is actually being bid. 10. There is contradiction between the completed bid specification form and the actual bid itself regarding whether or not the general liability portion of the coverage is being quoted on an occurrence basis or a claims made basis. 11. The submission is not a firm quote or bid; it is an indication. This means that the final premium at issue could be higher or lower than the indication. In addition, even though the effective date of the coverage would be January 1, 2005, the indication expires on December 10, 2004. http:~/us~f527~mai~~yah~~.c~m/ym/Sh~wLetter?b~x=~nb~x&MsgId=2484-~95~574-2969~~.~~ 11/30/2004 Yahoo! Mail - ljoolten~yahoo.eom Page 2 o! 2 12. The premium indicated is almost two and a half times more than the City is currently paying for the coverage. At this point I would recommend the City reject the bid, and put the coverage out for bid again. I would make the bid specifications available either the same day the advertisement runs for the first time, or the day after. The second advertisement should run as soon after the first as is permitted by the 'lwice in seven days" requirement. The bids should be due not later than December 10th at 3 p.m. If you will overnight them to me so I have them on December 13th, I will review them upon receipt and e-mail my recommendation to you on December 14th. i realize that your legal department wants the recommendation a full week prior to the Council meeting, however, if there is anyway you can get them to review the recommendation in less than a week, I would like to make the bids due December 15th, you overnight them to me for delivery on December 16th, and I will review them on the 16th and e-mail my recommendations on the 16th. I will need to know which timetable you approve so I can amend the bid specifications accordingly. If you decided to accept my recommendation to reject the bid, you need to notify Mr. Petty and determine if he wishes to participate in the re-bid. Time is of the essence here so let me know your decision as soon as possible, and what the schedule will be. If you decide to bid, I will revise the bid specifications to reflect the new timetable and e-mail the revised pages to you as soon as I hear from you. Let me know if you have any questions. Carolyn Miller Carolyn A. Miller, CPCU Senior Consultant RWL Group 300 North Coit Rd., Suite 810 Richardson, Texas 75080-5456 Phone: 972.907.9095 Fax: 972.907.9198 CONFIDENTIALITY NOTICE: This e-mail message, including any attachments, is for the sole use of the intended recipient(s). The information contained in this message may be private and confidential, and may also be subject to the work product doctrine. Any unauthorized review, use, disclosure or distribution is prohibited. Attachment Carolyn_A._Miller_CPCU.vcf .vcf file http://us.f527.mai~.yah~~~c~r~~ym/Sh~wLetter?b~x=~nb~x&Ms~Id=2484-~95~574-2969;... 11/30/2004