Loading...
HomeMy WebLinkAboutC-4862 - PSA for Benefits Broker & Consulting ServicesAMENDMENT NO. TWO TO PROFESSIONAL SERVICES AGREEMENT WITH AON CONSULTING, INC. FOR BENEFITS BROKER ARID CONSULTING SERVICES THIS AMENDMENT NO. TWO TO PROFESSIONAL SERVICES AGREEMENT ( "Amendment No. Two "), is entered into as of this 15t day of January, 2012, by and between the CITY OF NEWPORT BEACH, a California Municipal Corporation ( "City "), and AON CONSULTING, Inc. a New Jersey Corporation, whose address is 1901 Main Street, Suite 400, Irvine, California, 92614 ( "Consultant'), and is made with reference to the following: RECITALS: A. On January 1, 2009, City and Consultant entered into a Professional Services Agreement ( "Agreement') with Consultant to conduct benefits broker and consulting services ( "Project'). B. On March 1, 2011, City and Consultant entered into Amendment No. One to the Agreement (Amendment No. One) to reflect a reduction in the compensation paid to Consultant for fiscal year 2011/ 2012 and to update insurance requirements. C. City desires to enter this Amendment No. Two to reflect a reduction in services and reduction in the compensation paid to Consultant for Fiscal Year 2011/2012. D. City and Consultant mutually desire to amend the Agreement, as provided below. NOW, THEREFORE, it is mutually agreed by and between the undersigned parties as follows: 1. COMPENSATION The introductory paragraph to Section 4 of the Agreement shall be amended in its entirety and replaced with the following: As full compensation for all Services performed in accordance with this Agreement for Fiscal Years 2009/2010 and 201012011 City shall pay Consultant One Hundred and Thirty Five Thousand Dollars and no /100 ($135,000.00) per fiscal year, plus all approved reimbursable items and subconsultant fees. As full compensation for all Services performed for Fiscal Year 2011/ 2012, City shall pay Consultant Fifty One Thousand Dollars and no /100 ($51,000), plus all approved reimbursable items and subconsultant fees pursuant to Exhibits A and B, attached hereto and incorporated herein by reference. No billing rate changes shall be made during the term of this Agreement without the prior written approval of City. 2. INTEGRATED CONTRACT Except as expressly modified herein, all other provisions, terms, and covenants set forth in Agreement shall remain unchanged and shall be in full force and effect. IN WITNESS WHEREOF, the parties hereto have executed this Amendment No. One on the dates written below. APPROVED AS TO FORM: OFFICE OF THE CITY ATTORNEY Date: By: Aaron C. Harp, M� City Attorney ATTEST: Date: 5'0z�-12� By: Leilani I. Brown City Clerk CITY OF NEWPORT BEACH, A California municipal corporation Date: -V-241-1— By: Dave Ki City Manager CONSULTANT: Aon Consulting, Inc, a New Jersey �prpora ion Date: // Senior Vice Pr dent Date: By: A 14 Patty ssell, As � ant Vi Presid Attachments: Exhibit A — Scope of Services Exhibit B — Schedule of Billing Rates ( / r Ms. Lauren Farley HR/Risk Management Administrator December7, 2011 Page 3 of 11 Exhibit A Services to be Provided up&ad July 302010 Develop pre - underwriting projection to minimize renewal Annually Included surprises and prepare for vendor negotiations Request and coordinate renewal activities with all vendors • Wellness and Disease Management • Dental • Vision • Life and AD &D Annually Included • Disability • FSA/COBRA • Elective Benefits • Quantify financial impact of renewal and negotiate any variance Annually Included between renewal and Aon Hewitt's pre - underwriting projection • If necessary, market benefit programs (RFP) to mutually agreed upon vendors As needed o Utilize RFI database to identify vendor capabilities (recommended once Included • Draft and distribute on -line RFP to market every 3 years) • Respond to carrier questions and data requests • Prepare and present a detailed marketing and renewal report including: • Total and itemized costs • Rate guarantees • Network access and provider disruption analysis :o Service capabilities • Performance guarantees As needed Included • 'Benefit designs and variances • Carrier financial ratings • Full disclosure of proposals and compensation prior to. binding • Arrange for and 'conduct finalist meetings • Negotiate best and final offers • Prepare final marketing report • Conduct vendor site visits As needed Included • Manage implementation process • Review and, negotiate final agreements and contracts to ensure they conform to bid specifications • Review all vendor provided employee communications; SPDs and benefit booklets As needed Included • Coordinate the administrative set -up between the employer and vendors for reporting, billing, banking and data transfers o Assist with the cam letion and review of all re, uired up&ad July 302010 "Itt Ms. Lauren Parley HR/Risk Management Administrator December 7, 2011 . Page 4 of 11 Frnane al ft9ana ement�'a`nd,Re ,ortrn • C.rq ` "� � ` • Develop budget projection applications and other documents as needed to bind • Calculate pre - renewal projection coverage Ongoing • Calculate accruals and COBRA rates for self- insured plans o Manage a post implementation debriefing with vendors to Included • Develop employee contributions discuss performance and needed areas for improvement • Evaluate, alternative funding options Conduct pre - implementation audits as appropriate (typically As needed Not Included funded by vendor) • Actuarial development of Incurred But Not Reported reserves Prepare and submit Executive Summary of final decisions Annually (f necessary Included Frnane al ft9ana ement�'a`nd,Re ,ortrn • C.rq ` "� � ` • Develop budget projection • National Aon'Hewitt vendor liaisons to leverage Ann Hewitt's • Calculate pre - renewal projection scale and facilitate key service and account management Ongoing • Calculate accruals and COBRA rates for self- insured plans Annuallyor as Included • Develop employee contributions needed • Evaluate, alternative funding options issues /problems and measure results against performance As needed • Actuarial impact of design change alternatives standards • Actuarial development of Incurred But Not Reported reserves Annually Included (if necessary) • Financial reporting package Monthly Ongoing • Claims and enrollment by plan (frequency TBD) (for self- funded Included • Actual plan expenses compared to budget plans) • Historical cost trend analysis • Coverage appeals • �:ey - /.:xf •-. a a't On otn tSemttce"'9- &%V.endo v,.a.:.• - s.r I 1.. tlHana ement� �.'`�..� p . ire.t �� +FC -A Y.�r�i' 16.. ±Y ,47 !4zL'. ��t •'i'�g "ir • National Aon'Hewitt vendor liaisons to leverage Ann Hewitt's scale and facilitate key service and account management Ongoing Included issues • Facilitate service meetings with vendors to address issues /problems and measure results against performance As needed Included standards • Provide assistance in resolving escalated vendor service issues • Claims Ongoing Included • Billing • Eligibility • Coverage appeals • Employee claim and clinical advocacy As needed Included • Meet as needed to review financials and to discuss /review Ongoing Included other open items • Review vendor updates to contracts and benefit summaries for Ongoing Included accurate terms, plan requirements and plan design Updated July 30 2010 Ms. Lauren Farley HR/Risk Management Administrator December 7, 2011 Page 5 of 11 gry i > ;s}. r¢Qr,�; *..•' R 4+1 • Monitor and report on carrier financial ratings for contracted At renewal, marketing and Included vendors stewardship Included • Coordinate benefit decisions and plan details with vendor(s) • Provide industry overview and benefit trends Annually • Plan design decisions Ongoing Included • Facilitate meetings /conference calls between vendors • Solicit feedback on Aon Hewitt's services Included • Develop and manage implementation schedule for any plan Ongoing Included changes and /or service changes and industry trends Included • Manage vendor participation in annual enrollment process Annually Included • Coordinate with communications resources in the creation and 'Annually Included review of open enrollment materials • National and global geographic experts in most every �'ccouii4; aha` eme fc: ,aT132�`'�' Z—, i > ;s}. r¢Qr,�; *..•' R 4+1 i,ta'�4�j1� � ,!; • Completion of stewardship report • Compliance review of SPD benefit provisions, contracts, • Review prior year accomplishments vs. objectives Included agreements and plan documents • Provide industry overview and benefit trends Annually Included • Develop goals and objectives for upcoming year Included • Compliance assessment and scorecard to determine if current • Solicit feedback on Aon Hewitt's services Included compliance practices are appropriate and identify areas at risk _ • Ongoing meetings with your staff to discuss issues, open items Ongoing Included and industry trends Included • Complete an action plan and update regularly Ongoing Included • Access to national resources and subject matter experts • National and global geographic experts in most every major U.S. city and country Ongoing Included • National subject matter experts in most area of employee . benefits and administration Coin fia 9 C ' n`�dM4r 3 aiaton Su M' • Compliance review of SPD benefit provisions, contracts, Ongoing Included agreements and plan documents • Aon Hewitt legal consultant support Ongoing Included • Compliance assessment and scorecard to determine if current Onetime Included compliance practices are appropriate and identify areas at risk • Health and welfare plan documentation review As needed Included Updated July 30 2010 Ms. Lauren Farley HR/Risk Management Administrator December 7, 2011 Page 6 of l l Exhibit B — Payment for Services Aon Consulting is named broker of record for the plan. Aon Consulting will receive fees in the amount of $51,000 annually to be billed monthly in the amount of $4,250. While we believe Nye have outlined the scope of our work properly, events occur such as major reorganizations, layoffs or a scope change that can greatly affect the income we receive. When such events occur, with your approval, Aon Consulting will adjust our income to an appropriate level justified by our time records. During the course of the assignment, should the City of Newport Beach. and Aon Consulting agree to have Aon Consulting undertake additional projects, we would work within a separate proposal, fee estimate and Letter of Engagement. We will bill you monthly on a time and expense basis as we incur charges for the additional services. If additional services not listed in Exhibit A are provided to the plan, then you will pay for those services based on the time and expense required to complete the assignment, or via an additional fixed fee if we so agree. Aon Consulting will disclose to you all marketing quotes, including any applicable rates, received prior to binding any coverages for your insurance programs. You will also be provided prior to binding with an accounting of any amounts to be paid to Aon Consulting, Aon Consulting affiliates, and/or non- Aon Consulting intermediaries if available, in connection with coverages placed for your insurance programs, including any fees, if applicable, paid to Aon Consulting for services it provides to third parties. In addition, Aon Consulting will annually provide you with,a summary of all Aon revenue applicable to your insurance programs. Aon Consulting accepts from insurers only permissible forms of compensation. In some instances, insurance placements made by Aon Consulting on your behalf may require the payment of state surplus lines or other premium taxes and/or fees in addition to the premium itself. Aon Consulting will make every effort to identify any of these taxes and/or fees in advance, but in all instances the payment of these taxes and/or fees will remain your responsibility. Ann Consulting will invoice you for the payment of these taxes and fees. You acknowledge your responsibility to report and communicate in writing to Aon Consulting changes in exposures, loss- related data and other material changes during the course of this Agreement. Aon Consulting's goal is to procure insurance for you with insurance companies possessing the financial strength to perform in today's economic environment. Toward this objective, Aon Consulting regularly reviews publicly available information concerning an insurer's financial condition including, but not limited to: 0 approvals by various regulatory authorities; Updaad July 30 7010 Ms. Lauren Farley I-I UPjsk Management Administrator December 7, 2011 Page 7 of 11 analyses of insurers by professional rating agencies such as A.M. Best, Standard and Poors, and Moody's; . o the input of our global affiliates and correspondents. Most Aon Consulting placements are made with insurers that are rated "Excellent" by the professional rating agencies; however, Aon Consulting does not guarantee the solvency of any insurer. Aon Consulting encourages you to review the publicly available information made available by Aon Consulting, The decision to accept or reject an insurer will be made solely by you. Aon Consulting and /or its affiliates may from time to time maintain contractual relationships with the insurers that are recommended as potential markets, or with whom your coverage may ultimately be placed. Further details concerning Aon Consulting's relationship with insurance carriers can be found at http: / /www.aon.c,om/ about -aon/ corporate- govemance/guidelines. policies /market - relationship.jsp. The services and work product provided by Aon Consulting hereunder are provided for your exclusive use, to be used solely for your internal business purposes; they are not intended to be used or relied upon by third parties. You agree that you will not, during the course of this Agreement and for one (1) year thereafter, directly or indirectly communicate, divulge or otherwise disclose any work product to any individual or entity that provides services of a similar nature to those services provided by Aon Consulting and shall prevent, to the best of your ability, the disclosure of this work product to such others. In the event that your operations or your insurance programs substantially change by merger, acquisition, expansion or other material change in scope and nature of exposures, you will inform Aon Consulting, and you and Aon Consulting will negotiate in good faith to revise this Agreement as appropriate. Aon Consulting's obligation to render services will terminate at the end of the Agreement. Change in Scope Please be aware that requested changes in the scope of services provided by Aon Consulting could result in an increase in fees and charges. Changes in scope could include, but are not limited to the following: a A material increase in the number of employees and/or the number of participants; • Amendments or changes to the plan design or plan operation; • Change of your payroll or other vendors or systems which are integral to the performance of our services; • Change of your organizational contacts; • Assignment of additional roles, responsibilities or functions related to the plan; or UpdshA,1Wy302010 I IeVridt Ms. Lauren Farley HR/Risk Management Administrator December 7, 2011 Page 8 of 11 Other factors which were not anticipated and increase the complexity or timing of plan operations or which affect our responsibilities or duties. Out -of- Pocket Expenses Charges from third party vendors for printing or production services on your behalf will be passed through to you, as well as any sales or use tax that Ann Consulting becomes obligated to pay in connection with services provided on your behalf. If you require copies of files for transferring services to other service providers during or after this engagement, these services will be available based on our standard hourly time and expense rates. Upde dJuly 302010 0, m/. L/ AMENDMENT RIO. ONE TO PROFESSIONAL SERVICES AGREEMENT WITH AON CONSULTING, INC. v FOR BENEIFTS BROKER AND CONSULTING SERVICES THIS AMENDMENT NO. ONE TO PROFESSIONAL SERVICES AGREEMENT ( "Amendment No. One "), is entered into as of this 151 day of March, 2011, by and between the CITY OF NEWPORT BEACH, a California Municipal Corporation ( "City "), and AON CONSULTING, Inc a New Jersey Corporation whose address is 1901 Main Street, Suite 400, Irvine, California, 92614 ( "Consultant "), and is made with reference to the following: RECITALS: A. On January 1, 2009, City and Consultant entered into a Professional Services Agreement ( "Agreement ") with Consultant to conduct benefits broker and consulting services( "Project ") B. City desires to enter into this Amendment No. One to reflect a reduction in the compensation paid to Consultant for fiscal year 2011/ 2012. C. City and Consultant mutually desire to amend the Agreement, as provided below. NOW, THEREFORE, it is mutually agreed by and between the undersigned parties as follows: 1. COMPENSATION The introductory paragraph to Section 4 of the Agreement shall be amended in its entirety and replaced with the following: As full compensation for all Services performed in accordance with this Agreement for fiscal years 2009/ 2010 and 2010/ 2011 City shall pay Consultant one hundred and thirty five thousand dollars and no /100 ($135,000.00) per fiscal year, plus all approved reimbursable items and subconsultant fees.. As full compensation for all Services performed for fiscal year 2011/ 2012, City shall pay Consultant one hundred and fifteen thousand dollars and no /100 ($115,000), plus all approved reimbursable items and subconsultant fees. No billing rate changes shall be made during the term of this Agreement without the prior written approval of City. 2. INSURANCE Section 13 of the Agreement shall be amended in its entirety and replaced with the following: 2.1 Without limiting Consultant's indemnification of City, and prior to commencement of Work, Consultant shall obtain, provide and maintain at its own expense during the term of this Agreement, policies of insurance of the type and amounts described below and in a form satisfactory to City. 2.1.1 Proof of Insurance. Consultant shall provide certificates of insurance to City as evidence of the insurance coverage required herein, along with a waiver of subrogation endorsement for workers' compensation. Insurance certificates and endorsement must be approved by City's Risk Manager prior to commencement of performance. Current certification of insurance shall be kept on file with City at all times during the term of this contract. City reserves the right to require complete, certified copies of all required insurance policies, at any time. Consultant shall procure and maintain for the duration of the contract insurance against claims for injuries to persons or damages to property, which may arise from or in connection with the performance of the Work hereunder by Consultant, his agents, representatives, employees or subconsultants. The cost of such insurance shall be included in Consultant's bid. 2.1.2 Acceptable Insurers. All insurance policies shall be issued by an insurance company currently authorized by the Insurance Commissioner to transact business of insurance in the State of California, with an assigned policyholders' Rating of A- (or higher) and Financial Size Category Class VII (or larger) in accordance with the latest edition of Best's Key Rating Guide, unless otherwise approved by the City's Risk Manager. 2.1.3 Coverage Requirements. 2.1.3.1 Workers' Compensation Coverage. Consultant shall maintain Workers' Compensation Insurance (Statutory Limits) and Employer's Liability Insurance (with limits of at least one million dollars ($1,000,000)) for Consultant's employees in accordance with the laws of the State of California, Section 3700 of the Labor Code In addition, Consultant shall require each subconsultant to similarly maintain Workers' Compensation Insurance and Employer's Liability Insurance in accordance with the laws of the State of California, Section 3700 for all of the subconsultant's employees. Any notice of cancellation or non - renewal of all Workers' Compensation policies must be received by City at least thirty (30) calendar days (ten (10) calendar days written notice of non - payment of premium) prior to such change. Consultant shall submit to City, along with the certificate of insurance, a Waiver of Subrogation endorsement in favor of City, its officers, agents, employees and volunteers. 2.1.3.2 General Liability Coverage. Consultant shall maintain commercial general liability insurance in an amount not less than one million dollars ($1,000,000) per occurrence for bodily injury, personal injury, and property damage, including without limitation, blanket contractual liability. 2.1.3.3 Automobile Liability Coverage. Consultant shall maintain automobile insurance covering bodily injury and property damage for all activities of the Consultant arising out of or in connection with Work to be performed under this Agreement, including coverage for any owned, hired, non -owned or rented vehicles, in an amount not less than one million dollars ($1,000,000) combined single limit for each accident. 2.1.3.4 Professional Liability (Errors & Omissions) Coverage. Consultant shall maintain professional liability insurance that covers the Services to be performed in connection with this Agreement, in the minimum amount of one million dollars ($1,000,000) limit per claim and in the aggregate. 2.1.4 Other Insurance Provisions or Requirements. The policies are to contain, or be endorsed to contain, the following provisions: 2.1.4.1 Waiver of Subrogation. All insurance coverage maintained or procured pursuant to this agreement shall be endorsed to waive subrogation against City, its elected or appointed officers, agents, officials, employees and volunteers or shall specifically allow Consultant or others providing insurance evidence in compliance with these requirements to waive their right of recovery prior to a loss. Consultant hereby waives its own right of recovery against City, and shall require similar written express waivers and insurance clauses from each of its subconsultants. 2.1.4.2 Enforcement of Contract Provisions. Consultant acknowledges and agrees that any actual or alleged failure on the part of the City to inform Consultant of non - compliance with any requirement imposes no additional obligations on the City nor does it waive any rights hereunder. 2.1.4.3 Requirements not Limiting. Requirements of specific coverage features or limits contained in this Section are not intended as a limitation on coverage, limits or other requirements, or a waiver of any coverage normally provided by any insurance. Specific reference to a given coverage feature is for purposes of clarification only as it pertains to a given issue and is not intended by any party or insured to be all inclusive, or to the exclusion of other coverage, or a waiver of any type. 2.1.4.4 Notice of Cancellation. Consultant agrees to oblige its insurance agent or broker and insurers to provide to City with thirty (30) days notice of cancellation (except for nonpayment for which ten (10) days notice is required) or nonrenewal of coverage for each required coverage. 2.1.5 Timely Notice of Claims. Consultant shall give City prompt and timely notice of claims made or suits instituted that arise out of or result from Consultant's performance under this Agreement. 2.1.6 Additional Insurance. Consultant shall also procure and maintain, at its own cost and expense, any additional kinds of insurance, which in its own judgment may be necessary for its proper protection and prosecution of the Work. 3. INTEGRATED CONTRACT Except as expressly modified herein, all of in Agreement shall remain unchanged and her provisions, terms, and covenants set forth shall be in full force and effect. IN WITNESS WHEREOF, the parties hereto have executed this Amendment No. One on the dates written below. APPROVED AS TO FORM: OFFICE OF THE CITY ATTORNEY Assistant City Attorney ATTEST: IZ II Date- By:. Leilani I. Brown City Clerk CITY OF NEWPORT BEACH, A California municipal corporation Date: 6t tat zM By:*�`�� f Dave Kiff City Manager CONSULTANT: Aon Consulting, Inc, a New Jersey corporation Date: 1) 1-1,o By: YA4 1,/A !,( I h/M��� Karevi Albanese, Senior Vice P esident Date: --q 2 I C�ristop er- DeWinter, Specialist Attachments: Exhibit A — Scope of Services Exhibit B — Schedule of Billing Rates 3. INTEGRATED CONTRACT Except as expressly modified herein, all other provisions, terms, and covenants set forth in Agreement shall remain unchanged and shall be in full force and effect. IN WITNESS WHEREOF, the parties hereto have executed this Amendment No. One on the dates written below. APPROVED AS TO FORM: OFFICE OF THE CITY ATTORNEY Date: By: Mynette D. Beauchamp Assistant City Attorney ATTEST: Date: Leilani I. Brown City Clerk CITY OF NEWPORT BEACH, A California municipal corporation Date: By: Dave Kiff City Manager CONSULTANT: Aon Consulting, Inc, a New Jersey corporation Date: Karen IA banese, Senior Vice President Date: S / L f f( B A6K Chlriistop6erDeWinter, Specialist Attachments: Exhibit A — Scope of Services Exhibit B — Schedule of Billing Rates scopeATTACHMENT A C& ��vrn I Exhibit A — Services to be Provided Comments tr ^2J o-.•; y nt -,s 1;i..;' J- i, Y.^ . i, kimanerl Management , , `- v „e`� �, , A. Marketing Services • Provide cost projections and funding analysis to include employer cost and employee contributions • Conduct review of business provisions in supplier/carrier contract • Monitor AM Best ratings of suppliers/carriers As needed review of HMO, PPO Provider Database Analysis to assess market potential B. Cost Control Strategy Analysis Quarterly review of actual claims vs. budget u Analyze factors driving plan costs and recommend opportunities to better manage cost, access, and quality o Benchmark medical plan costs and employee contributions on an annual or as needed basis a Provide select claims reports on a monthly or quarterly basis (if available o As needed review of HMO, PPO Provider Database Analysis to estimate cost savings potential with alternative plans and delivery mechanisms u Develop alternative employee contribution strategies and formulas, as needed C. Alternative Funding Analysis as needed u Self-funding a National sto -loss alliance Em to ee contribution strategies A. On oin Mana ement • Assist with billing issues and other vendor problems • Troubleshoot problem claims issues • Coordinate with vendor to resolve issues on delivery, enrollment and other contract issues J wr Comments A ScheduledMana ement • Negotiate/re- negotiate performance standards for carriers/supplier annually, if applicable a Meet with your staff on an as needed basis to discuss issues and open items e Evaluate and assist with elective benefit offers u Conduct quarterly meetings with carriers/suppliers to identify issues/problems and monitor performance against performance standards, if applicable t IlT Plagani�'B,enefit Management • Review programs to determine if competitive — on regional, industry and size basis using Aonl-Iewitt's Database for plan design • Review cost per member against normative data from AonHewitt's Database JV Tmplemen4ation Services • Help negotiate final contracts to ensure they conform to bid specifications • Participate. in design ands stem review meetings • Review contracts and booklets • Establish procedures with vendors • Review applications • Post implementation debriefing a� Compliance a D.64 at4.y Suppfurt • Send bulletins on hot topics and legislative issues • Access to AonHewitt ERISA .attorney /consultant • Upon request, provide additional information to assist in client's fulfillment of ERISA fiduciary duties VI Aeconnt,Mgnagement and Client Services' ;, �' o Completion of stewardship re ort a Meet with your staff on an as needed basis to discuss issues and open items Complete an action plan and update regularly o Inform you of changes in the insurance marketplace ILI all�ldifedf iiul m---Comments • Periodic seminars • Ancill ary benefits strategy • Wellness incentives ATTACBMENT B Schedule of BMEM6 motes: Exhibit B — Payment for Services For completing the assignment outlined in this letter, the City of Newport Beach will pay to AonHewitt a fixed fee of $115,000 plus associated out -of- pocket expenses. The fee applies without regard to the amount of time that AonHewitt spends on the assignment. We will bill you monthly. Invoices will be in the amount of $9,583.33. Payment is due within 30 days of the invoice date. The charges for each phase of the assignment are as follows Phase I: $115,000 Phase II: $ TBD During the course of the assignment•, should the City of Newport Beach and AonHewitt agree to have AonHewitt undertake additional projects, we would work within a separate proposal, fee estimate and Letter of Engagement. We will bill you monthly on a time and expense basis as we incur charges for the additional services. If additional services not listed in Exhibit A are provided to the plan, then you will pay for those services based on the time and expense required to complete the assignment, or via an additional fixed fee if we so agree. We will provide an annual accounting of the services provided and the commissions and referral fees received. Aonflewitt accepts from insurers only permissible forms of compensation. If you have elected to compensate us an a time and expense basis, of on a fee -only basis, AonHewitt will use its best efforts to negotiate placements for your insurance programs on a net of (without) commission basis, to AonHewitt; however, if is not always possible or advisable to do so. 'In instances where a commission is paid to Aonflewitt, we will credit the commission against our fees, where we are permitted to do so by applicable law. We will advise you of all such commissions in writing prior to binding. If AonHewitt is required, for any reason, to return any commissions that were credited against the fee, you agree to reimburse AonHewitt for this amount. AonHewitt will disclose to you all marketing quotes, including any applicable commission rates, received prior to binding any coverages for your insurance programs. You, will also be provided prior to binding with an accounting of any amounts to be paid to AonHewitt, AonHewitt affiliates, and/or non - AonHewitt 'intermediaries if available, in connection with coverages placed for your insurance programs, including any fees, if applicable, paid to AonHewitt for services it provides to third parties. In addition, AonHewitt will annually provide you with a summary of all Ann revenue applicable to your insurance programs. AonHewitt accepts from insurers only permissible forms of compensation. In some instances, insurance placements made by AonHewitt on your behalf may require the payment of state surplus lines or other premium taxes and/or fees in addition to.the premium itself. AonHewitt will make every effort to identify any of these taxes and/or fees in advance, but in all instances the payment of these taxes and/or fees will remain your responsibility. AonHewitt will invoice you for the payment of these taxes and fees. You acknowledge your responsibility to report and communicate in writing to AonlIewitt changes in exposures, loss- related data and other material changes during the course of this Agreement. AonHewitt's goal is to procure insurance for you with insurance companies possessing the financial strength to perform in today's economic environment. Toward this objective, AonHewitt regularly reviews publicly available information concerning an insurer's financial condition including, but not limited to: C .approvals by various regulatory authorities; o analyses of insurers by professional rating agencies such as A.M. Best, Standard and Pours, and Moody's; G the input of our global affiliates and correspondents. Most AonHeyvitt placements are made with insurers that are rated `Excellent" by the professional rating agencies; however, AonHewitt does not guarantee the solvency of any insurer. AonHewitt encourages you to review the publicly available information made available by Aonliewitt. The decision to accept or reject an insurer will be made solely by you. AonHewitt and/or its affiliates may from time to time maintain contractual relationships with the insurers that are recommended as potential markets, or with whom your coverage may ultimately be placed. Further details concerning AonHewitt's relationship with insurance carriers can be found at http: / /www.aon.com/ about -aon/ corporate- governanc&guidelines- policies /market - relationship jsp. The services and work product provided by AonHewitt hereunder are provided for your exclusive use, to be used solely for your internal business purposes; they are not intended to be used or relied upon by third parties. You agree that you will not, during the course of this Agreement and for one (1) year thereafter, directly or indirectly communicate, divulge or otherwise disclose any work product to any individual or entity that provides services of a similar nature to those services provided by AonHewitt and shall prevent, to the best of your ability, the disclosure of this work product to such others. In the event that your operations or your insurance programs substantially change by merger, acquisition, expansion' or other material change in scope and nature of exposures, you will inform AonHewitt, and you and AonHewitt will negotiate in good faith to revise this Agreement as appropriate. AonHewitt's obligation to render services will terminate at the end of the Agreement. Change in Scope Please be aware that requested changes in the scope of services provided by AonHewitt could result in an increase in fees and charges. Changes in scope could include, but are not limited to the following: • A material increase in the number of employees and/or the number of participants; • Amendments or changes to the plan design or plan operation; • Change of your payroll or other vendors or systems which are integral to the performance of our services; • Change of your organizational contacts; n Assignment of additional roles, responsibilities or functions related to the plan; or Other factors which were not anticipated and increase the complexity or timing of plan operations or which affect our responsibilities or duties. Out -of- Pocket Expenses Out -of- pocket expenses (including transportation, hotels, meals, etc.) will be billed as soon as possible after the actual expenses are incurred. Charges from third party vendors for printing or production services on your behalf will be passed through to you, as well as any sales or use tax that AonHewitt becomes obligated to pay in connection with services provided on your behalf. If you require copies of files for transferring services to other service providers during or after this engagement, these services will be available based on our standard hourly time and expense rates. PROFESSIONAL SERVICES AGREEMENT WITH AON CONSULTING FOR BENEFITS BROKER AND CONSULTING SERVICES THIS AGREEMENT is made and entered into as of this 1st day of January, 2009, by and between the CITY OF NEWPORT BEACH, a Municipal Corporation ( "City "), and Aon Consulting, Inc a Corporation whose address is 1901 Main Street, Suite 400, Irvine, California, 92614 ( "Consultant'), and is made with reference to the following: RECITALS A. City is a municipal corporation duly organized and validly existing under the laws of the State of California with the power to carry on its business as it is now being conducted under the statutes of the State of California and the Charter of City. B. City is planning to execute the City of Newport Beach Health and Benefit Services Agreement. C. City desires to engage Consultant to conduct benefits broker and consulting services as further described in the Scope of Services attached hereto as Exhibit A ( "Project'). D. Consultant possesses the skill, experience, ability, background, certification and knowledge to provide the services described in this Agreement. E. The principal member[s] of Consultant for purposes of Project, shall be Chris DeWinter, Specialist and Johan DeKeyzer, Senior Vice President. F. City has solicited and received a proposal from Consultant, has reviewed the previous experience and evaluated the expertise of Consultant, and desires to retain Consultant to render professional services under the terms and conditions set forth in this Agreement. NOW, THEREFORE, it is mutually agreed by and between the undersigned parties as follows: 1. TERM The term of this Agreement shall commence on the above written date, and shall terminate on the 31st day of December, 2009, at which time will automatically renew for a subsequent period of 3 years. A 60 day advanced written notice is required should the City not intend to renew. 2. SERVICES TO BE PERFORMED Consultant shall diligently perform all the services described in the Scope of Services attached hereto as Exhibit A and incorporated herein by reference. The City may elect to delete certain tasks of the Scope of Services at its sole discretion. 3. TIME OF PERFORMANCE Time is of the essence in the performance of services under this Agreement and the services shall be performed to completion in a diligent and timely manner. The failure by Consultant to perform the services in a diligent and timely manner may result in termination of this Agreement by City. Notwithstanding the foregoing, Consultant shall not be responsible for delays due to causes beyond Consultant's reasonable control. However, in the case of any such delay in the services to be provided for the Project, each party hereby agrees to provide notice to the other party so that all delays can be addressed. 4. COMPENSATION TO CONSULTANT City shall pay Consultant for the services on a fixed fee of $135,000.00, plus associated out of pocket expenses in accordance with the provisions of this Section and the Payment of Services attached hereto as Exhibit B. and incorporated herein by reference. Consultant's compensation for all work performed in accordance with this Agreement, including all reimbursable items and subconsultant fees, shall not exceed one hundred and thirty five thousand Dollars and no /100 ($135,000.00 per year) without prior written authorization from City for services provided for fiscal years 2009 through 2012. (Total compensation for initial terms of the agreement shall not exceed $540,000.00. No billing rate changes shall be made during the term of this Agreement without the prior written approval of City. 4.1 Consultant shall submit monthly invoices to City describing the work performed the preceding month. City shall pay Consultant no later than thirty (30) days after approval of the monthly invoice by City staff. 4.2 City shall reimburse Consultant only for those costs or expenses specifically approved in this Agreement, or specifically approved in writing in advance by City. 4.3 Consultant shall not receive any compensation for Extra Work performed without the prior written authorization of City. As used herein, "Extra Work" means any work that is determined by City to be necessary for the proper completion of the Project, but which is not included within the Scope of Services and which the parties did not reasonably anticipate would be necessary at the execution of this Agreement. 2 5. PROJECT MANAGER Consultant shall designate a Specialist, who shall coordinate all phases of the Project. This Specialist shall be available to City at all reasonable times during the Agreement term. Consultant has designated Chris DeWinter to be its Specialist. Consultant shall not remove or reassign the Specialist or any personnel or assign any new or replacement personnel to the Project without the prior written consent of City. City's approval shall not be unreasonably withheld with respect to the removal or assignment of non -key personnel. Consultant, at the sole discretion of City, shall remove from the Project any of its personnel assigned to the performance of services upon written request of City. Consultant warrants that it will continuously furnish the necessary personnel to complete the Project on a timely basis as contemplated by this Agreement. 6. ADMINISTRATION This Agreement will be administered by the Human Resources Department. The Risk Manager shall be the Project Administrator and shall have the authority to act for City under this Agreement. The Project Administrator or his /her authorized representative shall represent City in all matters pertaining to the services to be rendered pursuant to this Agreement. 7. STANDARD OF CARE 7.1 All of the services shall be performed by Consultant or under Consultant's supervision. Consultant represents that it possesses the professional and technical personnel required to perform the services required by this Agreement, and that it will perform all services in a manner commensurate with community professional standards. All services shall be performed by qualified and experienced personnel who are not employed by City, nor have any contractual relationship with City. By delivery of completed work, Consultant certifies that the work conforms to the requirements of this Agreement and all applicable federal, state and local laws and the professional standard of care. 7.2 Consultant represents and warrants to City that it has, shall obtain, and shall keep in full force in effect during the term hereof, at its sole cost and expense, all licenses, permits, qualifications, insurance and approvals of whatsoever nature that is legally required of Consultant to practice its profession. Consultant shall maintain a City of Newport Beach business license during the term of this Agreement. 3 8. HOLD HARMLESS To the fullest extent permitted by law, Consultant shall indemnify, defend and hold harmless City, its City Council, boards and commissions, officers, agents, volunteers, and employees (collectively, the "Indemnified Parties ") from and against any and all claims (including, without limitation, claims for bodily injury, death or damage to property), demands, obligations, damages, actions, causes of action, suits, losses, judgments, fines, penalties, liabilities, costs and expenses (including, without limitation, attorney's fees, disbursements and court costs) of every kind and nature whatsoever (individually, a Claim; collectively, "Claims'), which may arise from or in any manner relate (directly or indirectly) to any breach of the terms and conditions of this Agreement, any work performed or services provided under this Agreement including, without limitation, defects in workmanship or materials or Consultant's presence or activities conducted on the Project (including the negligent and /or willful acts, errors and /or omissions of Consultant, its principals, officers, agents, employees, vendors, suppliers, consultants, subcontractors, anyone employed directly or indirectly by any of them or for whose acts they may be liable or any or all of them). Notwithstanding the foregoing, nothing herein shall be construed to require Consultant to indemnify the Indemnified Parties from any Claim arising from the sole negligence or willful misconduct of the Indemnified Parties. Nothing in this indemnity shall be construed as authorizing any award of attorney's fees in any action on or to enforce the terms of this Agreement. This indemnity shall apply to all claims and liability regardless of whether any insurance policies are applicable. The policy limits do not act as a limitation upon the amount of indemnification to be provided by the Consultant. 9. INDEPENDENT CONTRACTOR It is understood that City retains Consultant on an independent contractor basis and Consultant is not an agent or employee of City. The manner and means of conducting the work are under the control of Consultant, except to the extent they are limited by statute, rule or regulation and the expressed terms of this Agreement. Nothing in this Agreement shall be deemed to constitute approval for Consultant or any of Consultant's employees or agents, to be the agents or employees of City. Consultant shall have the responsibility for and control over the means of performing the work, provided that Consultant is in compliance with the terms of this Agreement. Anything in this Agreement that may appear to give City the right to direct Consultant as to the details of the performance or to exercise a measure of control over Consultant shall mean only that Consultant shall follow the desires of City with respect to the results of the services. 10. COOPERATION Consultant agrees to work closely and cooperate fully with City's designated Project Administrator and any other agencies that may have jurisdiction or interest in the work to be performed. City agrees to cooperate with the Consultant on the Project. n 11. CITY POLICY Consultant shall discuss and review all matters relating to policy and Project direction with City's Project Administrator in advance of all critical decision points in order to ensure the Project proceeds in a manner consistent with City goals and policies. 12. PROGRESS Consultant is responsible for keeping the Project Administrator and /or his /her duly authorized designee informed on a regular basis regarding the status and progress of the Project, activities performed and planned, and any meetings that have been scheduled or are desired. 13. INSURANCE Without limiting Consultant's indemnification of City, and prior to commencement of work, Consultant shall obtain, provide and maintain at its own expense during the term of this Agreement, a policy or policies of liability insurance of the type and amounts described below and in a form satisfactory to City. A. Certificates of Insurance. Consultant shall provide certificates of insurance with original endorsements to City as evidence of the insurance coverage required herein. Insurance certificates must be approved by City's Risk Manager prior to commencement of performance or issuance of any permit. Current certification of insurance shall be kept on file with City at all times during the term of this Agreement. B. Signature. A person authorized by the insurer to bind coverage on its behalf shall sign certification of all required policies. C. Acceptable Insurers. All insurance policies shall be issued by an insurance company currently authorized by the Insurance Commissioner to transact business of insurance in the State of California, with an assigned policyholders' Rating of A (or higher) and Financial Size Category Class VII (or larger) in accordance with the latest edition of Best's Key Rating Guide, unless otherwise approved by the City's Risk Manager. D. Coverage Requirements. i. Workers' Compensation Coverage. Consultant shall maintain Workers' Compensation Insurance and Employer's Liability Insurance for his or her employees in accordance with the laws of the State of California. In addition, Consultant shall require each subcontractor to similarly maintain Workers' Compensation Insurance and Employer's Liability Insurance in accordance with the laws of the State of California for all of the subcontractor's 5 employees. Any notice of cancellation or non - renewal of all Workers' Compensation policies must be received by City at least thirty (30) calendar days (10 calendar days written notice of non- payment of premium) prior to such change. The insurer shall agree to waive all rights of subrogation against City, its officers, agents, employees and volunteers for losses arising from work performed by Consultant for City. ii. General Liability Coverage. Consultant shall maintain commercial general liability insurance in an amount not less than one million dollars ($1,000,000) per occurrence for bodily injury, personal injury, and property damage, including without limitation, contractual liability. If commercial general liability insurance or other form with a general aggregate limit is used, either the general aggregate limit shall apply separately to the work to be performed under this Agreement, or the general aggregate limit shall be at least twice the required occurrence limit. iii. Automobile Liability Coverage. Consultant shall maintain automobile insurance covering bodily injury and property damage for all activities of the Consultant arising out of or in connection with work to be performed under this Agreement, including coverage for any owned, hired, non -owned or rented vehicles, in an amount not less than one million dollars ($1,000,000) combined single limit for each occurrence. iv. Professional Errors and Omissions Insurance. Consultant shall maintain professional errors and omissions insurance, which covers the services to be performed in connection with this Agreement in the minimum amount of one million dollars ($1,000,000). E. Endorsements. Each general liability and automobile liability insurance policy shall be endorsed with the following specific language: The City, its elected or appointed officers, officials, employees, agents and volunteers are to be covered as additional insureds with respect to liability arising out of work performed by or on behalf of the Consultant. ii. This policy shall be considered primary insurance as respects to City, its elected or appointed officers, officials, employees, agents and volunteers as respects to all claims, losses, or liability arising directly or indirectly from the Consultant's operations or services provided to City. Any insurance maintained by City, including any self- insured retention City may have, shall be considered excess insurance only and not contributory with the insurance provided hereunder. iii. This insurance shall act for each insured and additional insured as though a separate policy had been written for each, except with respect to the limits of liability of the insuring company. iv. The insurer waives all rights of subrogation against City, its elected or appointed officers, officials, employees, agents and volunteers. V. Any failure to comply with reporting provisions of the policies shall not affect coverage provided to City, its elected or appointed officers, officials, employees, agents or volunteers. vi. The insurance provided by this policy shall not be suspended, voided, canceled, or reduced in coverage or in limits, by either party except after thirty (30) calendar days (10 calendar days written notice of non - payment of premium) written notice has been received by City. F. Timely Notice of Claims. Consultant shall give City prompt and timely notice of claim made or suit instituted arising out of or resulting from Consultant's performance under this Agreement. G. Additional Insurance. Consultant shall also procure and maintain, at its own cost and expense, any additional kinds of insurance, which in its own judgment may be necessary for its proper protection and prosecution of the work. 14. PROHIBITION AGAINST ASSIGNMENTS AND TRANSFERS Except as specifically authorized under this Agreement, the services to be provided under this Agreement shall not be assigned, transferred contracted or subcontracted out without the prior written approval of City. Any of the following shall be construed as an assignment: The sale, assignment, transfer or other disposition of any of the issued and outstanding capital stock of Consultant, or of the interest of any general partner or joint venturer or syndicate member or cotenant if Consultant is a partnership or joint- venture or syndicate or cotenancy, which shall result in changing the control of Consultant. Control means fifty percent (50 %) or more of the voting power, or twenty -five percent (25 %) or more of the assets of the corporation, partnership or joint- venture. 15. SUBCONTRACTING The parties recognize that a substantial inducement to City for entering into this Agreement is the professional reputation, experience and competence of Consultant. Assignments of any or all rights, duties or obligations of the Consultant under this Agreement will be permitted only with the express written consent of City. Consultant shall not subcontract any portion of the work to be performed under this Agreement without the prior written authorization of City. 7 16. OWNERSHIP OF DOCUMENTS Each and every report, draft, map, record, plan, document and other writing produced (hereinafter "Documents "), prepared or caused to be prepared by Consultant, its officers, employees, agents and subcontractors, in the course of implementing this Agreement, shall become the exclusive property of City, and City shall have the sole right to use such materials in its discretion without further compensation to Consultant or any other party. Consultant shall, at Consultant's expense, provide such Documents to City upon prior written request. 17. CONFIDENTIALITY All Documents, including drafts, preliminary drawings or plans, notes and communications that result from the services in this Agreement, shall be kept confidential unless City authorizes in writing the release of information. 18. RECORDS Consultant shall keep records and invoices in connection with the work to be performed under this Agreement. Consultant shall maintain complete and accurate records with respect to the costs incurred under this Agreement and any services, expenditures and disbursements charged to City, for a minimum period of three (3) years, or for any longer period required by law, from the date of final payment to Consultant under this Agreement. All such records and invoices shall be clearly identifiable. Consultant shall allow a representative of City to examine, audit and make transcripts or copies of such records and invoices during regular business hours. Consultant shall allow inspection of all work, data, Documents, proceedings and activities related to the Agreement for a period of three (3) years from the date of final payment to Consultant under this Agreement. 19. WITHHOLDINGS City may withhold payment to Consultant of any disputed sums until satisfaction of the dispute with respect to such payment. Such withholding shall not be deemed to constitute a failure to pay according to the terms of this Agreement. Consultant shall not discontinue work as a result of such withholding. Consultant shall have an immediate right to appeal to the City Manager or his /her designee with respect to such disputed sums. Consultant shall be entitled to receive interest on any withheld sums at the rate of return that City earned on its investments during the time period, from the date of withholding of any amounts found to have been improperly withheld. 20. ERRORS AND OMISSIONS E. In the event of errors or omissions that are due to the negligence or professional inexperience of Consultant which result in expense to City greater than what would have resulted if there were not errors or omissions in the work accomplished by Consultant, the additional design, construction and /or restoration expense shall be borne by Consultant. Nothing in this paragraph is intended to limit City's rights under the law or any other sections of this Agreement. 21. CITY'S RIGHT TO EMPLOY OTHER CONSULTANTS City reserves the right to employ other Consultants in connection with the Project. 22. CONFLICTS OF INTEREST The Consultant or its employees may be subject to the provisions of the California Political Reform Act of 1974 (the "Act "), which (1) requires such persons to disclose any financial interest that may foreseeably be materially affected by the work performed under this Agreement, and (2) prohibits such persons from making, or participating in making, decisions that will foreseeably financially affect such interest. If subject to the Act, Consultant shall conform to all requirements of the Act. Failure to do so constitutes a material breach and is grounds for immediate termination of this Agreement by City. Consultant shall indemnify and hold harmless City for any and all claims for damages resulting from Consultant's violation of this Section. 23. NOTICES All notices, demands, requests or approvals to be given under the terms of this Agreement shall be given in writing, and conclusively shall be deemed served when delivered personally, or on the third business day after the deposit thereof in the United States mail, postage prepaid, first -class mail, addressed as hereinafter provided. All notices, demands, requests or approvals from Consultant to City shall be addressed to City at: Attn: Risk Manager Human Resources Department City of Newport Beach 3300 Newport Boulevard Newport Beach, CA, 92663 Phone: 949 - 644 -3302 Fax: 949 - 644 -3305 All notices, demands, requests or approvals from CITY to Consultant shall be addressed to Consultant at: 9 Attention: Johan DeKeyzer Aon Consulting 1901 Main Street, Suite 400 Irvine, CA 92614 Phone: 949- 608 -6482 Fax: 866 -321 -0902 24. TERMINATION In the event that either party fails or refuses to perform any of the provisions of this Agreement at the time and in the manner required, that party shall be deemed in default in the performance of this Agreement. If such default is not cured within a period of two (2) calendar days, or if more than two (2) calendar days are reasonably required to cure the default and the defaulting party fails to give adequate assurance of due performance within two (2) calendar days after receipt of written notice of default, specifying the nature of such default and the steps necessary to cure such default, and thereafter diligently take steps to cure the default, the non - defaulting party may terminate the Agreement forthwith by giving to the defaulting party written notice thereof. Notwithstanding the above provisions, City shall have the right, at its sole discretion and without cause, of terminating this Agreement at any time by giving seven (7) calendar days prior written notice to Consultant. In the event of termination under this Section, City shall pay Consultant for services satisfactorily performed and costs incurred up to the effective date of termination for which Consultant has not been previously paid. On the effective date of termination, Consultant shall deliver to City all reports, Documents and other information developed or accumulated in the performance of this Agreement, whether in draft or final form. 25. COMPLIANCE WITH ALL LANDS Consultant shall at its own cost and expense comply with all statutes, ordinances, regulations and requirements of all governmental entities, including federal, state, county or municipal, whether now in force or hereinafter enacted. In addition, all work prepared by Consultant shall conform to applicable City, county, state and federal laws, rules, regulations and permit requirements and be subject to approval of the Project Administrator and City. 26. WAIVER A waiver by either party of any breach, of any term, covenant or condition contained herein shall not be deemed to be a waiver of any subsequent breach of the same or any other term, covenant or condition contained herein, whether of the same or a different character. i[i1 27. INTEGRATED CONTRACT This Agreement represents the full and complete understanding of every kind or nature whatsoever between the parties hereto, and all preliminary negotiations and agreements of whatsoever kind or nature are merged herein. No verbal agreement or implied covenant shall be held to vary the provisions herein. 28. CONFLICTS OR INCONSISTENCIES In the event there are any conflicts or inconsistencies between this Agreement and the Scope of Services or any other attachments attached hereto, the terms of this Agreement shall govern. 29. INTERPRETATION The terms of this Agreement shall be construed in accordance with the meaning of the language used and shall not be construed for or against either party by reason of the authorship of the Agreement or any other rule of construction which might otherwise apply. 30. AMENDMENTS This Agreement may be modified or amended only by a written document executed by both Consultant and City and approved as to form by the City Attorney. 31. SEVERABILITY If any term or portion of this Agreement is held to be invalid, illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining provisions of this Agreement shall continue in full force and effect. 32. CONTROLLING LAW AND VENUE The laws of the State of California shall govern this Agreement and all matters relating to it and any action brought relating to this Agreement shall be adjudicated in a court of competent jurisdiction in the County of Orange. 33. EQUAL OPPORTUNITY EMPLOYMENT Consultant represents that it is an equal opportunity employer and it shall not discriminate against any subcontractor, employee or applicant for employment because of race, religion, color, national origin, handicap, ancestry, sex or age. IN WITNESS WHEREOF, the parties have caused this Agreement to be executed on the day and year first written above. 11 APPROVED AS TO FORM: OFFICE OF THE CITY ATTORNEY: Mynette Beauchamp Assistant City Attorney ATTEST: EM Leilani Brown, City Clerk CITY OF NEWPORT BEACH, A Municipal Corporation Keith D. Curry Mayor CONSULTANT:Aon Consulting By:_ Title: Print By:_ Title: (Corporate Officer) (Financial Officer) Print Name: Attachments: Exhibit A — Scope of Services Exhibit B — Schedule of Billing Rates F: \users \cat\ shared\ ContractTemplatesPublishedonlntranet \FORM — Professional Service Agreemenl.doc Rev: 03.05.09 12