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Agenda Special 07-15-03 CITY COMMISSION CITY OF DELRAY BEACH. FLORIDA WORKSHOP - TUESDAY. _IULY 15. 2003 6:00 P.M. FIRST FLOOR CONFERENCE ROOM DELRAY BEACH 1993 2001 The City will furnish appropriate auxiliary aids and services where necessary to afford an individual with a disability an equal opportunity to participate in and enjoy the benefits of a service, program, or activity conducted by the City. Contact Doug Randolph at 243-7127, 24 hours prior to the program or activity in order for the City to reasonably accommodate your request. Adaptive listening devices are available for meetings in the Commission Chambers. WORKSHOP AGENDA 1. Neighborhood Advisory Council Proposal 2. Potential Bond Issue for Parks and Other Needs (Land Acquisition) 3. Presentation regarding proposed budget for FY 2003-2004 (Tentative) 4. Commission Comments Please be advised that if a person decides to appeal any decision made by the City Commission with respect to any matter considered at this meeting, such person will need to ensure that a verbatim record includes the testimony and evidence upon which the appeal is based. The City neither provides nor prepares such record. TO: THRU: FROM: SUBJECT: DAVID T. HARDEN, CITY MANAGER LULA BUTLER, DIRECTOR/CO/MMUNITY IMPROVEMENT~ JAN'~T MEEKS, EDUCATION COORDINATOR WORKSHOP MEETING OF JULY 15, 2003 DISCUSSION REGARDING THE ESTABLISHMENT OF A NEIGHBORHOOD ADVISORY COUNCIL Most of our Neighborhoods are now well established and are functioning on their own. In order to increase the effective way in which we communicate with the neighborhoods we are proposing to establish a permanent Neighborhood Advisory Council. The mission of the Neighborhood Advisory Council would be to develop and recommend to the City Commission general policies, strategies and programs relating to the development, preservation, improvement and revitalization of Delray Beach Neighborhoods on an on-going basis. The main goals of a Neighborhood Advisory Council would be to help maintain broad- based community involvement with the residents, create neighborhood outreach initiatives, enhance communication, improve the aesthetics of the neighborhoods and identify any potential threats to the stability of the neighborhoods. Staff has developed some suggestions in the creation and appointments of such an Advisory Council which is provided below. COMPOSITION/APPOINTMENT/TERMS The City currently contains 152 neighborhood associations including planned developments and condominium associations. Staff is recommending the appointment of 15 residents and 2 youth representatives for a working Council of 17 members. In order to provide a good cross representation of appointees, staff recommends that the city be divided into 6 zones (see attached map) with two appointments from each zone. In addition, it is recommended that there be 3 at-large and 2 youth appointments for a total of 17 members. The terms of service could be structured similar to those of the other established Advisory Boards within the city. City Commission Documentation Neighborhood Advisory Council Page 2 ORGANIZATION The organization of the Council could be similar to other boards in which it elects a chairperson and Vice-Chairperson to preside at its meetings and other officers as the Council may deem necessary. The Chairperson would be designated as the official spokesperson of the Advisory Council and act as the liaison between the established neighborhood associations and the City Commission. The Neighborhood Advisory Council will need to formulate rules and regulations for the conduct of its business. The Neighborhood Advisory Council should have staff technical and logistical support as designated by the City Manager. It would be appropriate that the staff designee be from the Community Improvement Department as it currently provides support and outreach to the homeowner associations. QUALIFICATIONS OF MEMBERS It should be the intent, if possible, that the membership of the Neighborhood Advisory Council include members who are currently or have previously been active with their neighborhood association and/or been on the Board of Directors. A member should be a resident of Delray Beach for at least two years. If a member of the Neighborhood Advisory Council ceases being a resident of the City of Delray Beach, that member should no longer be qualified to serve on the Council. It may be appropriate to also consider a membership that is not limited to residents, but also includes businesses and/or professional organizations active in a neighborhood zone. This would be particularly appropriate in the downtown area where new mixed- use developments are being constructed. The City Commission may wish to consider the "at large" appointments for this membership. The Youth Council would be a good soume for the City Commission to consider for appointments to fill the youth memberships. DUTIES AND RESPONSIBILITIES. The duties and responsibilities of the Neighborhood Advisory Council could include the following: A. Serving as liaison between the various neighborhood associations and the City Commission to resolve matters of concern. B. Serve as a public forum for input on issues relating to neighborhoods. City Commission Documentation Neighborhood Advisory Council Page 3 Maintaining a continuous public relations effort to improve communications between the neighborhoods and the City. This effort could include, but not be limited to the following: Information exchange through the News for Neighborhoods. · Creation of a neighborhood information Web page that may also contain a profile of each neighborhood. Placement of favorable material in local media through the City's Public Information Officer. D. Setting up guidelines for the process in which a neighborhood is selected for a Strategic Task Team Action Plan. E. Monitor the performance and success of the Strategic Task Team Action Plans. Hosting at least one Community Potluck Dinner per year. Create guidelines for the selection of the neighborhood participation, develop criteria for how the grant money is awarded, and monitor its expenditure. G. Hosting the Neighborhood Summit as deemed necessary. Providing comments to the City Commission from time to time regarding proposed redevelopment and its impacts upon the effects it may have on the stability of the neighborhoods. MEETINGS: Staffwould recommend that the Council meet at least once a month on a regular basis. It would be the intent of staff to advertise for interested parties to serve on the Advisory Council in the month of August with appointments to be made by the City Commission in September and the Council up and running in the month of October. Discuss and provide direction. Attachments: · Map CITY OF DELRAY BEACH, FLORIDA Neighborhood Advisory Council -- Appointment Zones -- IDA Date: July 10, 2003 Agenda Item No. X~ ..~ AGENDA REQUEST Agenda request to be placed on: __ Regular __ Special X Workshop __ Consent When: July 15, 2003 Description of Agenda Item: Discussion Regarding the Establishment of a Neighborhood Advisory Council Ordinance/Resolution Required: Yes N~o) Draft Attached: Yes / No Recommendation: Direction Department Head Signature: City Attorney Review/Recommendation (if applicable) Budget Director Review (required on all items involving expenditure of funds): Funding Available: Yes / No Funding Alternatives: Account # & Description: Account Balance: City Manager Review: Approved for agenda:~)/No Hold Until: Agenda Coordinator Review: Received: Action: Approved / Disapproved (if applicable) CITY COMMISSION CITY OF DELRAY BEACH~ FLORIDA WORKSHOP MEETING - TUESDAY, JULY 15~ 2003 6:00 P.M. - FIRST FLOOR CONFERENCE ROOM AGENDA ADDENDUM THE WORKSHOP MEETING AGENDA IS AMENDED BY ADDING THE FOLLOWING ITEM: SPECIAL MEETING AGENDA Pursuant to Section 3.12 of the Gqarter of the City of Delray Beach, Mayor Jeff Perlman has instructed me to announce a Special Meeting of the City Commission to be held for the following purposes: ARTHL~ J. GALLAGER: Consider approval of a thxee-year contract to A~ J. Gallagher for all property and casualty insurance brokerage services with all commissions to be included in the property and casualty insurance premiums. Please be advised that if a person decides to appeal any decision made by the City Commission with respect to any matter considered at this meeting, such person will need to ensure that a verbatim record includes the testimony and evidence upon which the appeal is based. The City neither provides nor prepares such record. To: From: Date: David T. Harden, Ci~ty Manager Joseph M. Saffor~nce Director July 12, 2003 Subject: Analysis of Insurance Broker Request for Proposals We recently issued an RFP (Request for Proposals) for property and casualty insurance brokerage firms. Property and casualty package insurance coverage is for employee crime, worker's compensation and employer liability, third party liability (general liability, auto liability, and public official's liability), property, and aggregate coverage in excess of our Loss Fund. The City has been with A.J. Gallagher for over 21 years and has utilized a "package" policy to cover its property and casualty needs. A copy of our current coverage provisions under the package policy is attached. We generally felt that the City was not being offered a sufficient number of alternative plan renewal options to evaluate and that the submitted plan was not issued on a timely basis for an appropriate evaluation period. This RFP was primarily issued to review other brokerage concepts and to provide for a broad consideration and analysis of market alternatives. The City received RFP's from the following firms: · The Gehring Group, Palm Beach Gardens · Accordia, West Palm Beach · The Beacon Group, Boca Raton · Risk Management Associates (RMA), Plantation · Arthur J. Gallagher, Miami · Plastridge Agency, Delray Beach · Florida League of Cities, Tallahassee The submissions were reviewed by the Finance Director and the Risk Manager and a short-list was prepared. The Finance Director and Risk Manager conducted interviews from July 9th to July 11th for five (5) brokerage firms. Based upon submitted materials, the Florida League of Cities and the Plastridge Agency were not interviewed. The actual interviews were approximately two (2) hours in average length, some being over this average. The Gehring Group, Palm Beach Gardens This brokerage firm is basically new to the property and casualty market. represented by Kurt Gehring, President/CEO, Jason Nunemaker, V.P. They were Corporate Development, and Jan Cadenhead, V.P. and C.O.O. in the interview process. They have established an excellent reputation with the City in their Agent of Record capacity in our health insurance program and feel their services would be excellent in this new area. They, however, have only been in this market for one (1) year and thus have few references in the property and casualty market to date. They did not originally respond to the quote requirements by providing theft brokerage fees but responded after the RFP was issued. Their brokerage commissions would be $75,000 for the first year, $70,000 the second year, and $65,000 the third year. Their proposal would be either to separate the elements of our current package program and seek individual quotes on each or have the City become part of the Preferred Governmental Insurance Trust (PGIT) which is currently covered under the Ranger program. Accordia This brokerage firm was represented by Brian Cottrell, Sr. V.P., at the interview. This firm represented that it has 34 public entities including such entities as the Port of Palm Beach, Tequesta, Lantana and Palm Beach Gardens. Their proposal would be to have the City utilize the PGIT program. It was explained that, in order to become part of this program, our insurance premiums would be predicated upon the State rated worker's compensation rates as adjusted for our premium modifier and discounts for our deductible choice. In addition, we would be restricted to utilizing their claims administration firm, Preferred Government Claims Services (PGCS) instead of Gallagher Bassett who is our current claims administration firm and we would also have restrictions on the internal use of attorneys unless they are specifically approved by the Trust. Their brokerage commission fees would be $90, 000 for the first year, $90,000 for the second year, and $95,000 for the third year. The Beacon Group This brokerage firm was represented by Don Dresback, Executive V.P., and Richard Wurst, Account Executive at the interview. Mr. Dresback has impressive credentials as an officer in professional societies, a speaker and an educator in the field. They represent 11 public entities including references for Boca Raton, Ft. Lauderdale, Plantation, Sunrise, Deerfield Beach, Palm Beach County and Broward County. Many of these are only covered for single lines of insurance- not the entire account. Mr. Dresback responded well to all questions and had excellent commentary. They represented that they can offer a variety of alternatives such as a package program, separate coverages, or the PGIT program. They talked about changing our property plan year to March or April instead of October 1 in order to avoid hurricane season renewals, separately insuring windstorm coverage and preparing a CD-ROM of each facility for use by the underwriters. Their brokerage commission fees would be $75,000 for the first year, $80,000 for the second year, and $85,000 for the third year. Risk Management Associates (RMA) This brokerage firm was represented by Todd Higley, V.P. Public Entity Division, at the interview. This firm is "the largest provider of insurance and risk management services to the public sector in the State of Florida", was formed in 1992 by two (2) former A.J. Gallagher brokers and is a subsidiary of Brown & Brown, Daytona Beach. R/VIA uses the PGIT program almost exclusively. It was explained that this program was formed in 1999 for worker's compensation and just recently expanded to include the property and casualty market in October, 2002 (initial year). They currently represent 40 public entities including references to Bradenton, Jupiter, Dania Beach and partial coverage of Palm Beach County School District and Pensacola. Their brokerage commission fees would be $55,000 for the first year, $57,000 for the second year, and $60,000 for the third year. A.J.Galla~,her (Present Broker) This brokerage firm was represented by Gary Van der Voort, Area Chairman, Judy Arenz, Area Assistant Vice President (Boca Raton), Greg Butterfield, Director, and Lisa Rodriguez, Account Executive at the interview. A.J. Gallagher is the third largest broker in the United States established over 75 years ago. The firm has been in Florida over 25 years and has over 185 public entities in the State of Florida alone. The representatives of A.J. Gallagher explained, in detail, the PGIT program that was proposed by several brokerage firms. PGIT is a trust that has only been in existence for a few years and was initially only a worker's compensation trust. This is the first year it has allowed property and casualty. Currently there is no property and casualty excess reinsurance coverage in place for October 1a 2003. The trust is not rated and therefore their financial condition is not known. Reinsurance carriers were initially covering non- coastal entities that were generally small, not larger entities that can afford to self-insure large deductibles or have substantial self-insured retentions. Now that coastal entities are being added to the trust, the reinsurance carriers are not as receptive to the program. PGIT is insured on a blanket $100 million basis and there are no claims payments above this amount. Our property coverage is in excess of $67 million at the present time. Ifwe had a catastrophic event (which is the primary reason we have insurance), there may be no funds available to cover our loss because the cap had already been exceeded by the other entities. We understand Miami and Orlando have recently been added to the trust. If the trust becomes too large, the claims payment abilities become questionable. PGIT has its own claims administration firm which means our employees cannot continue to use Gallagher Bassett who is providing excellent services at the present time. In addition, the City would probably have to use PGIT legal services and would not be able to use our own attorneys. Their brokerage commission fees would be $95,000 for the first year, $95,000 for the second year, and $95,000 for the third year. They explained that it would not be in the best interests of the CRy to segregate out the commission fees and pay them direct as service fees since the carriers would simply charge the same premiums and absorb these fees and thus the City would double pay the costs. Commissions go to various entries and third parties in addition to A.J. Gallagher and the underwriters would not want to "so~t this out". We heard this from several brokers. It was also disclosed that the "normal" self-insured retention for worker's compensation and property for an entity our size would be $500,000 whereas we have $250,000 for worker's compensation and $75,000 for property. We therefore could possibly redesign our present plan structure and save premium dollars. Recommendations Based upon the information derived from the interviews of the five (5) brokerage firms, we would recommend the following: 1. Award a three (3) year contract to A.J.Gallagher for all property and casualty insurance brokerage services 2. Stipulate that all commissions be included in the property and casualty premiums 3. Direct A.J.Gallagher to proceed immediately to receive market quotes for our property and casualty renewals effective October 1~t. 4. Direct A.J.Gallagher to present several alternative plan options to include self- insured retention levels and alternative coverages prior to August 31~t 5. Direct A.J.Gallagher to present their plan for improved services to include CD- ROM of all structures and facilities, current appraisals of all properties, and other suggestions. We would appreciate City Commission approval of these recommendations as soon as possible to allow the broker sufficient time to prepare their renewals by the stated deadlines. Attachment: Package Policy "Insurance Program Renewal (10/1/2002- 10/1/2003)" Request to be placed on: __ Consent Agenda When: 07-15-03 Date: 07-14-03 X Special Agenda __ Workshop Agenda Description of agenda item: Approval to award a three-year contract to A.J. Gallagher for all property and casualty insuranc~ brokerage services with all commissions to be included in the property and casualty insurance premiums. See attached memorandum, ORDINANCEIRESOLUTION REQUIRED: YES NO Draft of Resolution Attached: YES NO Recommendation: Approval is recommended by Finance Director and Risk Manager. X Determination of Consistency with Co I . City Attorney Review/Recommendation (if applicable): N/A Budget Director Review (required on all items involving expenditure of funds): Funding available: Yes Funding alternatives (if applicable): No Account Number: Account Description: Account Balance: City Manager Review: Approved for Agenda: (~ ~ No Hold Until: Agenda Coordinator Review: Received: Action: Approved: Disapproved: N/A--commissions will be included in premiums.