SR-080527-1I~~+
~ ~,tYof city counC~i Repot
Santa Monica
City Council Meeting: May 27, 2008
Agenda Item: .~.~~.
To: Mayor and City Council
From: Karen Bancroft, Director of Human Resources
Subject: Interim Professional Services Agreement with Aon Consulting & Insurance
Services (AON)
Recommended Action
Staff recommends that City Council authorize the City Manager to execute an interim
agreement for professional services agreement with Aon Consulting & Insurance
Service (AON) to continue to provide employee benefits consulting services. from
January 1, 2008 through June 30, 2008. The interim agreement will extend the terms of
the contract with AON that expired on December 31, 2007, for a total cost of $25,000.
The expenditure will be covered by the amount that has been budgeted for employee
benefits. consulting services for FY2007-2008.
Executive Summary
AON was hired to provide the City of Santa Monica with a full range of employee
benefits consulting services. The contract with AON was set-up oh a calendar year
basis to correspond with. the health insurance plan year and therefore expired on
December 31, 2007. The City is now changing its employee benefits consulting
services contract to correspond with the City's fiscal year as of FY2008-2009. The
Human Resources Department is therefore requesting that an interim agreement with
AON be approved, on a month to month basis, to cover the services that AON has
already provided since January 1, 2008 and will continue to provide through June 30,
2008. No additional budget allocation will be needed to cover this interim agreement
since sufficient funds have been budgeted for employee benefits consulting services for
FY2007-2008.
Discussion
AON provides a full range of benefits consulting services including negotiating health
insurance renewals with insurance carrier, issuing and assisting with requests for
proposals for health insurance coverage, handling insurance and problematic insurance
claim issues, completing actuarial valuations and providing advice on .deferred
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compensation plans, cafeteria plans, savings plans and other employee health and
welfare issues.
The current contract with AON was set-up on a calendar year basis to correspond with
the health plan year and expired on December 31, 2007. AON has continued to provide
its services on a month-to-month basis to enable the City to transition to an employee
benefits consulting services. agreement that corresponds with the City's fiscal year.
AON has agreed to provide those services under the same terms as the contract that
expired on December 31, 2007.
The Human Resources Department is currently conducting a competitive bid process
for employee benefits consulting services for FY2008-2009 and estimates that the
competitive bid process will be completed by the end of June 2008. The Human
Resources Department is therefore requesting that an interim contract with AON be
approved to continue providing those services through the end of FY2007-2008. Anew
contract for employee benefits consulting services will be submitted to Council for
FY2008-2009.
Financial Impacts & Budget Actions
No additional budget allocation will be needed to cover the interim contract with AON
since sufficient funds have been. budgeted for employee benefits consulting services for
FY2007-2008. Funds are available in account number 01252.555060.
Prepared by:
Karen Bancroft, Director of Human Resources
Forwarded to Council:
v~ e
P. L nt Ewell
City anager
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Approved:
Reference Contract
No. 8930 (CCS).