SR 03-14-2023 5D
City Council
Report
City Council Meeting: March 14, 2023
Agenda Item: 5.D
1 of 3
To: Mayor and City Council
From: Lori Gentles, Chief People Officer, Human Resources Department
Subject: Award Contract to Alliant Insurance Services, Inc. for Employee Benefit
Consulting Services
Recommended Action
Staff recommends that the City Council:
1. Adopt a finding of no possibility of significant effect on the environment pursuant
to Section 15061(b)(3) (Common Sense Exemption) of the California
Environmental Quality Act (CEQA) Guidelines.
2. Authorize the City Manager to negotiate and execute an agreement with Alliant
Insurance Services, Inc. for employee benefit consulting services for the Human
Resources Department. This recommended award is made as an exception to
the competitive bidding process pursuant to Municipal Code section 2.24.250 (c)
and is for a total amount not to exceed $550,000 (including a $54,320
contingency) over five years with future year funding contingent on Council
budget approval.
Summary
Like most large employers, the City of Santa Monica offers access to a range of health
care insurance plans as an employee benefit. To ensure cost-effectiveness in a
competitive marketplace for health plan coverage, the City contracts with a consultant to
provide benefits consulting services which includes the negotiation of health and welfare
insurance benefit plans and renewals with insurance carriers, issuing and assisting with
requests for proposals for health insurance coverage, handling problematic insurance
claim issues, proactive communication of emerging trends and regulatory updates, and
other employee health and welfare issues.
5.D
Packet Pg. 204
2 of 3
Discussion
The City’s current employee benefit consultant, Alliant, was awarded a five-year
contract following a competitive request for proposal (RFP) process in 2018. Alliant
provides a full range of employee benefits consulting services and day-to-day benefit
plan administration, which includes the following services: renewal negotiations with
carriers; contract review; claims/service assistance with vendors; legislative updates
and interpretation; client meetings; vendor interface (correspondence and meetings);
plan design; employee benefits strategic planning; financial analysis; claims experience
analysis and reporting; plan marketing and general consulting services related to City
employee benefit plans.
Vendor Selection
Exception to Competitive Bidding
Staff recommends Alliant Insurance Services, Inc., to provide employee benefit
consulting services as an exception to competitive bidding per Municipal Code section
2.24.250 (c). The City of Stockton conducted a competitive RFP process in which Alliant
was unanimously selected from seven (7) proposals and the negotiated rate for services
for the City of Santa Monica is more competitive than what was included in the City of
Stockton RFP.
The Santa Monica Municipal Code allows an exception to the competitive bidding
process if a competitive bidding process was followed by a governmental agency,
federal, state, county, city, joint powers agency, special district, or cooperative
purchasing agency and the goods or services supplied to the City are at the same or
better price.
Environmental Review
The award contract would have no possibility of significant effect on the environment,
and therefore, is exempt pursuant to Section 15061(b)(3) (Common Sense Exemption)
of the California Environmental Quality Act (CEQA) Guidelines.
Financial Impacts and Budget Actions
Staff seeks authority to approve funding from the General Fund to award a contract with
Alliant Insurance Services, Inc., for employee benefit consulting services. Future year
funding is contingent on Council budget approval.
5.D
Packet Pg. 205
3 of 3
Contract Request
FY 2023-24 Amount Future Years Department Account # Total Contract Amount
$94,300 $455,700 01130004.552010 $550,000
Prepared By: Mark Brower, Deputy Director
Approved
Forwarded to Council
Attachments:
A. City of Stockton Staff Report
B. OAKS
5.D
Packet Pg. 206
City of Stockton
Legislation Text
File #:21-0930,Version:1
MOTION AUTHORIZING THE CITY MANAGER TO EXECUTE AN AGREEMENT WITH ALLIANT
INSURANCE SERVICES, INC. FOR BENEFITS CONSULTING SERVICES
RECOMMENDATION
It is recommended that the City Council authorize by motion the City Manager to execute an
Agreement (Attachment A)with Alliant Insurance Services,Inc.for benefits consulting services.It is
further recommended that this motion authorize the City Manager to take appropriate action to carry
out the purpose and intent of this agreement.
SUMMARY
The City currently contracts with Gallagher Benefit Services to provide benefit consultant and actuary
services.The agreement with Gallagher will expire on January 31,2022.Pursuant to Stockton
Municipal Code (SMC)3.68.070,the Human Resources Department issued a Request for Proposals
(RFP)on July 12,2021,to solicit proposals for Benefit Consulting Services for the City of Stockton
(City)employee benefits program.On October 29,2021,the RFP Evaluation Committee (Committee)
interviewed proposers and unanimously chose Alliant Insurance Services,Inc.(Alliant).If approved,
the agreement with Alliant will commence on February 1,2022,and continue for an initial three years
until January 31, 2025, with an option to extend for two additional one-year option periods.
Alliant will bill the City for services rendered based on a flat fee as noted in the contract;however,
annual fees shall not exceed $150,000 or $450,000 for the initial three-year term for providing
comprehensive benefit consulting as required by the City.The billing structure is similar and
consistent with the current benefits consultant contract.
It is recommended that Council approve a motion to approve findings pursuant to Stockton Municipal
Code section 3.68.070 (SMC)and authorize the City Manager to execute a Professional Services
Agreement with Alliant.
DISCUSSION
Background
The City provides a comprehensive benefits program,including a variety of health and voluntary
benefits,to its active employees and their eligible dependents.For medical,the City offers five fully
insured plan options through Kaiser Permanente;the Point-of-Service Plan since July 1,2021,which
is a three-tier plan consisting of a Health Maintenance Organization (HMO)Tier,Participating
Provider Tier,and Non-Participating Provider Tier;Traditional HMO since 2011 and an HSA-Qualified
High Deductible Health Plan HMO since 2016.In addition,the City also added the Sutter Health Plus
plan in 2016.The City also offers two dental plan options through Delta Dental and one vision plan
option through Vision Service Plan.Other City-provided benefits include a section 125 plan for health
City of Stockton Printed on 5/6/2022Page 1 of 4
powered by Legistar™
5.D.a
Packet Pg. 207 Attachment: City of Stockton Staff Report (5558 : Award Contract to Alliant Insurance Services, Inc. for Employee Benefit Consulting Services)
File #:21-0930,Version:1
option through Vision Service Plan.Other City-provided benefits include a section 125 plan for health
care,dependent care expenses,limited flexible spending account,and commuter benefits,life
insurance,long-term disability,employee assistance services,and voluntary benefit plans such as
supplemental life insurance, short term disability, accident, critical illness, and hospital indemnity.
In the past several years,the City has seen significant benefit-related changes affecting active
employees and retirees.It is critical that the City have the assistance of industry experts to help
manage insurance vendor relationships,including negotiating premium rates,ensuring continued
compliance with legislative requirements such as the Affordable Care Act;and conducting required
actuarial services.The City’s benefit consultant is also directly involved in working with staff on
designing benefit plans that meet the specific needs of plan participants,helping to improve
healthcare delivery,and developing cost containment measures that maintain and reduce program
costs,all while providing the best possible level of customer service and competitive benefits to all
employees.
Present Situation
Gallagher has been the City’s benefits consultant and provider of actuarial services since October
2017.Gallagher’s contract has been amended on two occasions to adjust the scope of services and
associated costs as conditions have required.Although the current agreement automatically renewed
on October 1,2021,the City will amend the contract to set a termination date for January 31,2022.
On July 12,2021,the City Manager approved and authorized Human Resources staff to conduct the
RFP process.
The RFP for Benefit Consulting Services was issued on September 9,2021.The City received seven
(7)proposals.These proposals were approved for the interview phase of the RFP,including Keenan
&Associates (Oakland,CA),Alliant Insurance Services,Inc.(San Francisco,CA),Bolton an IMA
Company (Pasadena,CA),Gallagher Benefit Services (Walnut Creek,CA),Burnham Benefits
Insurance Services (Roseville,CA),Bohannon Insurance Group (Modesto,CA),and Segal
(Glendale, CA).
The Committee was established to evaluate the proposals submitted and select the best available
consulting company.The Committee was comprised of the Director of Human Resources,Deputy
Director of Human Resources,Risk Manager/Safety Officer,Budget Officer,and a Human Resources
Analyst I.
On October 29,2021,the Committee interviewed the seven (7)proposers and asked vendor specific
questions based on the responses to the RFP,as well as questions based on the following evaluation
criteria:
1.Budgeting and reserve levels, rate development
2.Employee surveys
3.Compliance with federal and state law
After interviewing the seven (7)proposers and evaluating their responses,the Committee selected
Alliant to provide benefits consulting services.The Committee unanimously ranked Alliant as their
lead choice due to Alliant’s understanding of the City’s needs,which includes transitioning to Tyler
Munis and mental health and wellness for public safety.The Committee also recognized Alliant’s
understanding of the City’s unique needs through their work with many California public entities suchCity of Stockton Printed on 5/6/2022Page 2 of 4
powered by Legistar™
5.D.a
Packet Pg. 208 Attachment: City of Stockton Staff Report (5558 : Award Contract to Alliant Insurance Services, Inc. for Employee Benefit Consulting Services)
File #:21-0930,Version:1
understanding of the City’s unique needs through their work with many California public entities such
as California Association of Highway Patrolmen,East Bay Municipal Utility District (EBMUD),City of
Pleasanton, and City of San Jose.
Alliant has public entity expertise with over 1,000 public entity clients,including many cities,counties,
special districts,community college districts,and K-12 public schools.Alliant’s experience will help
the City to manage its health and welfare spend,reduce risk,improve employee benefits literacy,and
have a meaningful and impactful wellness program.Alliant’s knowledge of the healthcare
marketplace in conjunction with their expertise in working with clients of similar size positions them to
deliver highly customized account level service to the City.
Alliant has an understanding of the needs of public employers in a collectively bargained environment
and has been successful at finding cost savings without compromising employee benefit coverage.
Alliant works at the cutting edge of cost management strategies for employers and looks at
approaches that can make an impact in lowering trends over a multi-year period.The above services
were deemed superior by the review panel members as compared to the other proposals.
Findings
SMC section 3.68.070 provides an exception to the competitive bidding process in cases where the
City Council has approved findings to support and justify this action.
Findings to justify an exception to the competitive bidding process are as follows:
1.The RFP process was utilized as an exception to the competitive bidding process,as selection
based on cost alone does not necessarily guarantee the most appropriate vendor choice for
specialty services such as benefits consulting.A strict competitive basis for selection would
likely lower the quality of the services provided.
2.Selection based on cost alone does not take into account public sector experience or the
ability to provide consistent quality actuarial services.
3.These types of services,such as review of employee benefit pricing and levels of coverage
within the public sector,understanding state,and federal regulations and how they affect the
City of Stockton,and actuarial reports to set the City’s future liabilities,require experienced
professionals who have handled such services for other public entities and can work closely
with City staff, which is in the public interest.
4.The RFP process allows the vendors to specify what services they can provide to the City
rather than the City bidding specific services.
5.It is necessary for the City to hire outside professionals to handle these services as City staff
does not have the full expertise or capacity to perform these services.
City of Stockton Printed on 5/6/2022Page 3 of 4
powered by Legistar™
5.D.a
Packet Pg. 209 Attachment: City of Stockton Staff Report (5558 : Award Contract to Alliant Insurance Services, Inc. for Employee Benefit Consulting Services)
File #:21-0930,Version:1
FINANCIAL SUMMARY
The annual cost for benefit consultant services with Alliant will be $150,000 per year for years 1
through 3.Cost for the optional years will be determined and agreed upon at a later time.The three-
year cost with Alliant will be $450,000,compared to Gallagher’s consulting fee of $360,000 paid in
the last three years.This cost includes the Employee Navigator benefits administration platform,
which will be used during the transition period until the Tyler Munis system is fully implemented in
April/May 2022.These costs are based on an initial three (3)year agreement,with an option to
extend for two (2)additional years.While Alliant’s fee is 25%higher,the depth and expertise of
Alliant’s firm provides the City of Stockton with a consultant who will support us in our continued
growth.
Funding for the benefits consulting services agreement is budgeted in the Health Benefits Internal
Service Fund,account number 2510-000-630006-540-000-00-25-000-000 based on the anticipated
scope of work. The FY 2021-22 appropriation is sufficient for the anticipated services.
Attachment A - Alliant Insurance Services, Inc. Agreement
City of Stockton Printed on 5/6/2022Page 4 of 4
powered by Legistar™
5.D.a
Packet Pg. 210 Attachment: City of Stockton Staff Report (5558 : Award Contract to Alliant Insurance Services, Inc. for Employee Benefit Consulting Services)
Please attach additional pages if more space is required.
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.
5.D.b
Packet Pg. 211 Attachment: OAKS (5558 : Award Contract to Alliant Insurance Services, Inc. for Employee Benefit Consulting Services)
Please attach additional pages if more space is required.
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: ____________________
5.D.b
Packet Pg. 212 Attachment: OAKS (5558 : Award Contract to Alliant Insurance Services, Inc. for Employee Benefit Consulting Services)