Item Coversheet

Resolutions - C7  G




COMMISSION MEMORANDUM

TO:Honorable Mayor and Members of the City Commission 
FROM:Jimmy L. Morales, City Manager 
DATE:June  5, 2019
 



SUBJECT:

A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, ACCEPTING THE RECOMMENDATION OF THE CITY MANAGER, PURSUANT TO REQUEST FOR PROPOSALS (RFP) 2019-048-WG FOR INSURANCE BROKER OF RECORD; AUTHORIZING THE ADMINISTRATION TO ENTER INTO NEGOTIATIONS WITH MCGRIFF, SEIBELS & WILLIAMS, INC., THE TOP RANKED PROPOSER; AND FURTHER AUTHORIZING THE MAYOR AND CITY CLERK TO EXECUTE AN AGREEMENT UPON CONCLUSION OF SUCCESSFUL NEGOTIATIONS BY THE ADMINISTRATION.


RECOMMENDATION

Adopt the Resolution.

ANALYSIS

The City is self-insured and self-administers claims for General, Automobile, and Professional Liability.  We do not purchase excess coverage for these lines.   The City is also self-insured for Workers’ Compensation claims and has a third-party administrator that handles all claims.  The City purchases Excess Workers’ Compensation coverage, with a $1,000,000 self-insured retention.  The City’s property insurance needs are covered by the following six (6) policies: (1) National Flood Insurance Program (“NFIP), (2) All Risk (including windstorm), (3) Builder’s Risk for Convention Center, (4) Boiler/Machinery (equipment breakdown), (5) Fine Arts (Bass Museum and Art in Public Places) and (6) Terrorism (including Active Shooter Coverage). 

 

The Total Insured Value (TIV) for all buildings/structures, throughout the City is $594,912,956, with an additional estimated $29,699,478 for Fine Arts (Bass Museum and Art in Public Places). The policy includes a Named Windstorm sublimit of $30 million.  During the June 2015-16 policy period, the City moved the Miami Beach Convention Center (“MBCC”) off the citywide All Risk property insurance program to a Builder’s Risk policy while major renovations are underway (December 2015 – 2019).  The MBCC is the City’s largest single structure, valued at approximately $445 million before the renovations, and expected to value $700 million after renovations. 

  

On December 11, 2013, the Mayor and City Commission approved the issuance of the Request for Qualifications RFQ No 2014-056-MF for Insurance Broker of Record for Property and Liability Insurance   As a result, the City, pursuant to Resolution No. 2014-28551, executed its existing agreement for Brokerage services effective May 14, 2014, with Arthur J. Gallagher Risk Management Services, Inc.

 

In anticipation of the expiration of the current agreement, the City issued RFP 2019-048-WG, for Insurance Broker of Record, in order to provide assistance to the City’s Risk Management Department in determining the City’s commercial insurance needs, including but not limited to, the review of all insurance policies and invoices received for policies purchased by the City, to assure their accuracy and appropriateness and obtain a variety of coverage terms and conditions to protect the risks of the City.

 

 

RFP PROCESS

On February 13, 2019, the City Commission approved the issuance of the RFP No. 2019-048-WG, Insurance Broker of Record. The Procurement Department issued solicitation notices to 340 vendors utilizing www.publicpurchase.com. 107 prospective proposers accessed the advertised solicitation. RFP responses were due and received on April 22, 2019. The City received a total of six (6) proposals from the following firms. After further due diligence, the proposal submitted by Florida League of Cities was deemed non-responsive for failure to meet the minimum qualifications requirements, and for failure to include a signed Appendix A.

·       Century Risk Advisors ("CRA")

·       Florida League of Cities (non-responsive)

·       Gehring Group ("Gehring")

·       McGriff, Seibels & Williams, Inc. ("McGriff")

·       USI Insurance Services ("USI")

·       Raymond James

 

On February 13, 2019, the City Manager appointed the Evaluation Committee via Commission Memorandum. The Evaluation Committee convened on May 17, 2019, to consider the five (5) responsive proposals received. The Committee was comprised of the following: Monica Beltran, Assistant Director, Parking Department, City of Miami Beach; Sonia Bridges, Division Director Risk Management, Human Resources Department, City of Miami Beach; and, Amy Knowles, Deputy Resiliency Officer, City Manager’s Office, City of Miami Beach.

 

The Committee was provided an overview of the project, information relative to the City’s Cone of Silence Ordinance and the Government Sunshine Law. The Committee was also provided with general information on the scope of services and a copy of each proposal.  The Committee was instructed to score each proposal pursuant to the qualitative evaluation criteria established in the RFP. The RFP stipulated that quantitative factors shall not be considered by the Evaluation Committee. Quantitative factors will be considered by the City Manager in preparing his recommendation to the City Commission. Accordingly, in considering quantitative factors, the City Manager may also consider any feedback or information provided by staff, consultants or any other third-party in developing an award recommendation.

 

The Committee’s evaluation process (qualitative factors) resulted in the ranking of proposers as indicated in Attachment A, in the following order:

 

1st -  McGriff, Seibels & Williams, Inc.

2nd -  (tie) USI Insurance Services

2nd -  (tie) Gehring Group

4th -  Century Risk Advisors

5th -  Raymond James

 

 

According to its proposal, McGriff, Seibels & Williams (McGriff) is a full service insurance brokerage and consulting firm, and is the fifth largest agency in the world, with more than $1.8 billion in revenue in 2017. Additionally, McGriff has the substantial financial backing of Branch Banking & Trust ("BB&T"), becoming a fully-owned subsidiary in 2004. McGriff specializes in public entity and educational services, port and terminal risk, aviation, manufacturing, railroad, healthcare and transportation industries, among others. McGriff maintains strong relationships with all major markets that underwrite public entity risks, with extensive experience with FEMA, environmental issues such as sea level rise, all of which allows McGriff to solve complex claims issues. Some of its clients include the City of Tampa, the University of South Florida, the Port of Houston Authority, and the City of Houston (TIV over $5 billion).

CONCLUSION

I have reviewed the proposals received and the results of the Evaluation Committee process. McGriff demonstrated significant experience through client listing, including experience work with public sector clients that face coastal exposures. McGriff clearly articulate its understanding of risk transfer alternatives, as well as documented how it has added value and yielded savings for its clients.

 

Because of the insured value of the City's property assets, totaling nearly $1.3 billion, and the City's exposure due to is coastal location, it is critically important that the City retain a firm with McGriff's client capacity and financial strength to assure that the City's insurance interests are managed to furthest extent possible. I concur with the assessment of staff and the Evaluation Committee that McGriff has the capacity and skills to serve as the City's insurance broker of record.

 

With regards to the cost of the services, the RFP asked respondents to submit two options for the City's consideration - an annual percentage fee based on the cost of all premiums and an annual flat fee regardless of the cost of the premiums. With regard to the annual flat fee option, McGriff proposed a fee of $107,000, which is considerably lower than the City is currently paying on a percentage of premium fee arrangement. However, it is important to note that the insurance broker of record provides critical advice and consultation to the City above and beyond its broker services. As such, the Administration will negotiate with McGriff to assure that the City's needs are met at the best possible cost, whether that be a flat fee, percentage of premium or some other hybrid compensation model.

 

Based on the foregoing, I recommend that the Mayor and City Commission approve the Resolution authorizing the Administration to enter into negotiations with McGriff, Seibels & Williams, Inc., the top ranked proposer; and further authorize the Mayor and City Clerk to execute an agreement upon conclusion of successful negotiations by the Administration.

KEY INTENDED OUTCOMES SUPPORTED
Build And Maintain Priority Infrastructure With Full Accountability

Legislative Tracking
Human Resources/Procurement

ATTACHMENTS:
Description
Resolution