SR-01-24-1978-6KSanta Monica, Cal!, irnia, January 16, 1978
TO: Mayor and City Council
FROM: City Staff
SUBJECT: Renewal of Risk Management Contract with JAN 4 197Q
Mund, McLaurin and Company >
Introduction
This report transmits a recommendation that the City renew its contract with
Mund, McLaurin and Company for Risk Management analysis services for a
twelve -month period on an hours expended basis with a cost not to exceed
$7,000.00.
Background
The City Council approved an agreement with Mind, McLaurin for the period
January 1, 1977 to December 31, 1977. During this period, and pursuant to
the contract terms, Mund, McLaurin (Mund) provided the following services:
1. Program Decision - Mund met with City staff several times
during the year for the purpose of evaluating charges in aspects
of the Risk Management program especially in the worker's
compensation and liability area.
.. ... .... ... .... ... .
2. Insurance Procurement - Working with City staff, Mund provided
the Independent Insurance Agents Association of Santa Monica
with the guidance necessary for the renewal of the City's
excess liability and property damage insurance policies. One
of the major benefits Mund provides is its complete familiarity
with municipal placements in the insurance market; since they
provide advisory placement services for 12 cities in L.A.,County.
JAN
2 4 1978
T0: Mayor and City ncil January 16, 1978
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Mund has also developed the major components of a contract
between the City and the Agents Association. This draft contract
is currently being reviewed by the Association and will be
presented to Council for approval within thirty days. This
contract will specify the responsibility of the Association in:
A. Providing expertise on insurer selection, placement,
and research on available policy forms and the costs
thereof;
B. Providing expertise in translating the insurance
needs of the City into information or specifications
that are meaningful to underwriters;
C. Advice on the insurance market response to new or
revised plans and programs that the City may choose to
adopt.
3. Funding /Budgeting - Mund worked with City staff in two essential
areas. First, insurance premiums are being targeted to coincide
with the City's annual operating budget cycle. Secondly, recommend-
ations were made and implemented concerning the level and adequacy
of reserve funding for the various self- insurance funds.
4. Claims /Administration - Mund has provided advice to the City
Attorney's office when requested with respect to the retention and
evaluation of the City's Worker's Compensation Claims Administrator
(Brown Brothers).
City staff is very pleased with capability of Mund, McLaurin
and Company and especially its representative, Mr. Don Voller.
T0: Mayor and City l acil January 16, 1978
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Through the guidance of Mund, McLaurin, the City has been able
to satisfy its insurance needs in the very volatile municipal.
insurance market.
Mund, McLaurin will specifically assist the City during 1978 by:
1. Developing a specific safety and loss prevention program
to be implemented by City staff.
2. Preparing the City to accept higher self- insurance
retention levels (should the current market conditions
continue) by reviewing our reserve levels in the worker's
compensation and excess liability reserve funds.
3. Assisting in the preparation of premium and reserve
funding for the five -year financial projection.
4. Developing insurance coverage for volunteer City worker --
worker's compensation.
S. Monitoring the effectiveness of the marketing capabilities
of the Agents Association and providing assistance in
locating available insurance markets
During the 1978 calendar year, Mund, McLaurin would.continue to provide the
services noted and emphasized above. However, because the City staff has
achieved a higher level of expertise in Risk Management, it is proposed that
the services of Mund, McLaurin be utilized and hours expended on the basis
Of specific requests and direction so that the time available can be channeled
in the most productive manner with respect to the City's needs. The hourly rate
for such services is $50.00 and a maximum fee of $7,000 is proposed. This is
TO: Mayor and City ncil
the same maximum fee allowed in the previous contract.
Recommendation
January 16, 1978
It is recommended that the Council authorize the City Attorney to prepare an
agreement with Mund, McLaurin and Company as outlined in this report and
authorize the City Manager to execute said agreement on behalf of the City.
Prepared by: DAVID P. DOLTER
Assistant City Manager
WAM .E
Reference:
Contract No. 2449
(CCS)