SR 05-10-2022 3D
City Council
Report
City Council Meeting: May 10, 2022
Agenda Item: 3.D
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To: Mayor and City Council
From: Gigi Decavalles-Hughes, Director, Finance Department, Risk Management
Subject: Approval of First Modification to Agreement with Alliant Insurance Services,
Inc. for Property Insurance Brokerage Services
Recommended Action
Staff recommends that the City Council authorize the City Manager to negotiate and
execute a first modification to agreement #10433 in the amount of $267,000 with Alliant
Insurance Service, Inc. for property insurance brokerage services. This will result in an
eight-year amended agreement with a new total amount not to exceed $692,000, with
future year funding contingent on Council budget approval.
Summary
The City has utilized the services of Alliant Insurance Services, Inc. (Alliant) to
underwrite, negotiate, and secure its property insurance coverage. This type of
insurance coverage is critical for the organization, as it protects the City’s facilities and
vehicles, valued at over $1.3 billion, against risks such as fire, floods, and earthquakes.
The current property insurance broker agreement with Alliant is set to expire at the end
of the current fiscal year. Alliant agreed to extend the agreement for three years at the
current annual rate with no year-to-year increases. Staff believes that such a
modification to the agreement would be prudent and cost-effective for the City given the
current inflationary environment.
Discussion
The Risk Management Division of the Finance Department is responsible for ensuring
the City has sufficient insurance in place to cover all liability, workers’ compensation,
and property losses. In order to ensure that the City has access to the broadest range of
high-quality property insurance coverage at the most competitive price, Risk
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Management staff has relied on a professional insurance brokerage firm to procure the
coverage. In addition, only professional brokers can secure difficult, but much needed,
earthquake coverage for City buildings.
Alliant has been the City’s property insurance broker for the last 30 years. The company
is considered a leader in the public entity insurance industry and is responsible for
designing the Alliant Property Insurance Program (APIP). The program was developed
specifically to meet the extensive needs of America’s municipalities, hospitals, and
nonprofit organizations. Most cities and counties in California participate in APIP; the
program annually insures over $450 billion worth of public entity property across the
country. The City has participated in APIP since its inception in the mid-1990s and can
only continue to do so as Alliant’s client. The program provides numerous advantages
for the City, such as:
• APIP’s size and market share can almost always ensure the City obtains the best
coverage at the most competitive price, and it can better weather market swings.
• APIP provides ample policy limits of $1 billion in all-risk coverage and a low
deductible of $100,000 per occurrence for most losses.
• APIP offers more comprehensive coverage than traditional property insurance
policies. For example, it provides municipal bond and tax revenue interruption
coverage, builders’ risk insurance at no cost for projects valued at $25 million or
less, and trained animal coverage (e.g., police dogs, patrol horses, etc.).
On February 28, 2017 (Attachment A), Council approved an agreement with Alliant for
property insurance brokerage services following a competitive selection process. With
the agreement set to expire on June 30, 2022, Alliant approached staff about extending
the agreement. After some negotiation, Alliant agreed to not increase its annual
brokerage fee for the next three years. Given Alliant’s proven track record of securing
property insurance coverage for the City through its proprietary program, staff believes
that it will be in the City’s best interests to extend the contract for an additional three
years rather than to go through a new procurement process.
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Past Council Actions
Meeting Date Description
February 28, 2017
(attachment A)
Authorize agreement with Alliant Insurance Services, Inc.
following RFP process.
Financial Impacts and Budget Actions
Staff seeks authority to approve funding from the Self Insurance, Risk Management -
Administration Fund to increase the amount of the agreement with Alliant Insurance
Service, Inc. for property insurance brokerage services. The annual cost for the
extension of the agreement is $89,000, which is the same as the cost for FY 2021-22.
Future year funding is contingent on Council budget approval.
Contract Modification Request
Agreement #
Current
Authorized
Amount
Modified
Request
Amount
Dept Account #
Total Revised
Contract
Amount
10433 $425,000 $267,000 75300001.534540 $692,000
Prepared By: Oles Gordeev, Risk Manager
Approved
Forwarded to Council
Attachments:
A. Attachment A - Authorize Agreement with Alliant Insurance Services, Inc.
B. OAKS INITIATIVE FORM 4.20.22
C. 5.5.2017 Alliant Professional Services Agreement
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City Council Report
City Council Meeting: February 28, 2017
Agenda Item: 3.A
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To: Mayor and City Council
From: Gigi Decavalles-Hughes, Director, Finance Department, Risk Management
Subject: Property Insurance Brokerage Services
Recommended Action
Staff recommends that the City Council:
1. Award RFP #92 to Alliant Insurance Services, Inc., a California-based company,
for property insurance brokerage services; and
2. Authorize the City Manager to negotiate and execute a professional services
agreement with Alliant Insurance Services, Inc., in an amount not to exceed
$425,000 for a five-year period, with future year funding contingent on Council
budget approval.
Executive Summary
The City has an ongoing need for professional property insurance brokerage services to
underwrite, market, and secure its property insurance coverage. This type of insurance
protects the City’s buildings and vehicles, valued at over $890 million, from the perils of
fire, flood and/or earthquake. The City’s current property insurance broker agreement is
set to expire at the end of this fiscal year, and in preparation for this, staff solicited
proposals in accordance with procurement policies and received responses from three
brokerage firms. A panel of City staff subsequently evaluated each firm’s proposal and
determined that Alliant Insurance Services, Inc. provided the most responsive bid. The
panel recommends the City pursue a five-year contract with Alliant at a cost of
$425,000.
Background
Alliant Insurance Services, Inc. has served as the City’s property insurance broker for
the last twenty-five years. The City has maintained this long standing broker
relationship with Alliant because it offers access to the Alliant Property Insurance
Program (APIP) - formerly known as the Public Entity Property Insurance Program or
PEPIP. APIP was developed specifically to meet the unique needs of public entities,
and as the largest property placement in the world, its market share and strength has
helped to ensure the City obtains the best property insurance coverage at the most
3.D.a
Packet Pg. 256 Attachment: Attachment A - Authorize Agreement with Alliant Insurance Services, Inc. (5079 : Property Insurance Brokerage Services)
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competitive price. The City has participated in APIP since its inception and can only
continue to do so as a client of Alliant. The City’s current property insurance broker
agreement with Alliant is set to expire on June 30, 2017 (see June 26, 2012 staff
report). The City continues to survey the marketplace for broker services every five
years to determine what other property insurance options are available, and whether
these options can compete with APIP’s offerings.
Discussion
The City uses a professional property insurance brokerage firm to procure its property
insurance coverage. This is necessary for two reasons: 1) it ensures the City has
access to the broadest range of high quality insurance coverage at the most competitive
price, and 2) it provides the City with access to property insurance markets only
available to professional brokers (e.g., earthquake coverage for City facilities, wave-
wash coverage for the Pier, etc.).
The broker is responsible for all aspects of procuring property insurance. This includes
such tasks as evaluating the City’s property insurance program and recommending
alternatives to address changing coverage needs; developing and marketing the
program to insurers capable of meeting the City’s needs; and securing cost-effective
coverage on behalf of the City.
Consultant Selection
The City issued a Request for Proposals (RFP) for property insurance brokerage
services on October 17, 2016. The RFP was posted on the City’s on-line bidding site,
and notices were advertised in the Santa Monica Daily Press in accordance with City
Charter and Municipal Code provisions. A total of 118 vendors were notified of the
RFP. Of those notified, 10 prospective vendors downloaded the RFP and three
brokerage firms submitted proposals (Alliant Insurance Services, Arthur J. Gallagher &
Company, and AON Risk Services West, Inc.).
A panel of staff from the Finance, Housing and Economic Development, and Public
Works Departments reviewed and evaluated the RFP submittals on the basis of
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Packet Pg. 257 Attachment: Attachment A - Authorize Agreement with Alliant Insurance Services, Inc. (5079 : Property Insurance Brokerage Services)
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experience, ability to fulfill the City’s unique property insurance needs, references, and
cost. The panel then conducted on-site interviews of all three firms. Through this
process, the panel confirmed that Alliant’s APIP continues to deliver the broadest
property insurance coverage at the most competitive price. Further, through APIP, the
City is guaranteed access to difficult, but much needed, high risk property coverage
(e.g., wave wash coverage for the Pier). Finally, APIP provides a variety of valuable
public entity-oriented coverages that are not offered in traditional property insurance
policies. For example, APIP provides municipal bond and tax revenue interruption
coverage, wave-wash coverage, trained animal coverage (e.g., police dogs, mounted
patrol horses, etc.), and ample policy limits ($1 billion in all-risk coverage). Relative to
broker fees, Alliant came in at mid-range; AON was higher, Gallagher was lower.
Based on the information presented above and SMMC 2.24.073 criteria, staff
recommends Alliant Insurance Services, Inc. as the best qualified firm to serve as the
City’s property insurance broker.
Financial Impacts and Budget Actions
The contract to be awarded to Alliant Insurance Services, Inc. is for an amount not to
exceed $425,000. Funds for the first year of the contract (July 1, 2017 to June 30,
2018) will be requested in the FY 2017-18 budget in the Finance Department. The
contract will be charged to account 58229-522040. Future funding is contingent on
Council budget approval.
Prepared By: Michael Spenelli, Risk Management Analyst
Approved
Forwarded to Council
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Packet Pg. 258 Attachment: Attachment A - Authorize Agreement with Alliant Insurance Services, Inc. (5079 : Property Insurance Brokerage Services)
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Attachments:
A. June 26, 2012 Staff Report
B. Oaks Initiative - AIS
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Packet Pg. 259 Attachment: Attachment A - Authorize Agreement with Alliant Insurance Services, Inc. (5079 : Property Insurance Brokerage Services)
CITY OF SANTA MONICA
OAKS INITIATIVE NOTICE
NOTICE TO APPLICANTS, BIDDERS, PROPOSERS
AND OTHERS SEEKING DISCRETIONARY PERMITS, CONTRACTS,
OR OTHER BENEFITS FROM THE CITY OF SANTA MONICA
Santa Monica’s voters adopted a City Charter amendment commonly known as
the Oaks Initiative. The Oaks Initiative requires the City to provide this notice and
information about the Initiative’s requirements. You may obtain a full copy of the Initiative’s
text from the City Clerk.
This information is required by City Charter Article XXII—Taxpayer Protection. It
prohibits a public official from receiving, and a person or entity from conferring, specified
personal benefits or campaign advantages from a person or entity after the official votes,
or otherwise takes official action, to award a “public benefit” to that person or entity. The
prohibition applies within and outside of the geographical boundaries of Santa Monica.
All persons or entities applying or receiving public benefits from the City of Santa
Monica shall provide the names of trustees, directors, partners, and officers, and names
of persons with more than a 10% equity, participation or revenue interest. An exception
exists for persons serving in those capacities as volunteers, without compensation, for
organizations exempt from income taxes under Section 501(c)(3), (4), or (6), of the
Internal Revenue Code. However, this exception does not apply if the organization is a
political committee or controls political committees. Examples of a “public benefit” include
public contracts to provide goods or services worth more than $25,000 or a land use
approval worth more than $25,000 over a 12-month period.
In order to facilitate compliance with the requirements of the Oaks Initiative, the City
compiles and maintains certain information. That information includes the name of any
person or persons who is seeking a “public benefit.” If the “public benefit” is sought by an
entity, rather than an individual person, the information includes the name of every person
who is: (a) trustee, (b) director, (c) partner, (d) officer, or has (e) more than a ten percent
interest in the entity. Therefore, if you are seeking a “public benefit” covered by the Oaks
Initiative, you must supply that information on the Oaks Initiative Disclosure Form. This
information must be updated and supplied every 12 months.
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Packet Pg. 260 Attachment: OAKS INITIATIVE FORM 4.20.22 (5079 : Property Insurance Brokerage Services)
CITY OF SANTA MONICA
OAKS INITIATIVE DISCLOSURE FORM
In order to facilitate compliance with the requirements of the Oaks Initiative, the City
compiles and maintains certain information. That information includes the name of any
person or persons who is seeking a “public benefit.” If the “public benefit” is sought by
an entity, rather than an individual person, the information includes the name of every
person who is: (a) trustee, (b) director, (c) partner, (d) officer, or has (e) more than a ten
percent interest in the entity.
Public benefits include:
1. Personal services contracts in excess of $25,000 over any 12-month period;
2. Sale of material, equipment or supplies to the City in excess of $25,000 over a 12-
month period;
3. Purchase, sale or lease of real property to or from the City in excess of $25,000
over a 12- month period;
4. Non-competitive franchise awards with gross revenue of $50,000 or more in any
12-month period;
5. Land use variance, special use permit, or other exception to an established land
use plan, where the decision has a value in excess of $25,000;
6. Tax “abatement, exception, or benefit” of a value in excess of $5,000 in any 12-
month period; or
7. Payment of “cash or specie” of a net value to the recipient of $10,000 in any 12-
month period.
Name(s) of persons or entities receiving public benefit:
Name(s) of trustees, directors, partners, and officers:
Name(s) of persons with more than a 10% equity, participation, or revenue interest:
Prepared by: ____________________________Title: __________________________
Signature: ______________________________________ Date: ________________
Email: ____________________________________ Phone: ____________________
FOR CITY USE ONLY:
Bid/PO/Contract # ____________________________ Permit # ___________________________
3.D.b
Packet Pg. 261 Attachment: OAKS INITIATIVE FORM 4.20.22 (5079 : Property Insurance Brokerage Services)
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Packet Pg. 262 Attachment: 5.5.2017 Alliant Professional Services Agreement (5079 : Property Insurance Brokerage Services)
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Packet Pg. 263 Attachment: 5.5.2017 Alliant Professional Services Agreement (5079 : Property Insurance Brokerage Services)
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Packet Pg. 264 Attachment: 5.5.2017 Alliant Professional Services Agreement (5079 : Property Insurance Brokerage Services)
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Packet Pg. 265 Attachment: 5.5.2017 Alliant Professional Services Agreement (5079 : Property Insurance Brokerage Services)
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Packet Pg. 266 Attachment: 5.5.2017 Alliant Professional Services Agreement (5079 : Property Insurance Brokerage Services)
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Packet Pg. 267 Attachment: 5.5.2017 Alliant Professional Services Agreement (5079 : Property Insurance Brokerage Services)
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Packet Pg. 268 Attachment: 5.5.2017 Alliant Professional Services Agreement (5079 : Property Insurance Brokerage Services)
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Packet Pg. 269 Attachment: 5.5.2017 Alliant Professional Services Agreement (5079 : Property Insurance Brokerage Services)
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Packet Pg. 270 Attachment: 5.5.2017 Alliant Professional Services Agreement (5079 : Property Insurance Brokerage Services)
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Packet Pg. 271 Attachment: 5.5.2017 Alliant Professional Services Agreement (5079 : Property Insurance Brokerage Services)
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Packet Pg. 272 Attachment: 5.5.2017 Alliant Professional Services Agreement (5079 : Property Insurance Brokerage Services)
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Packet Pg. 273 Attachment: 5.5.2017 Alliant Professional Services Agreement (5079 : Property Insurance Brokerage Services)