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HomeMy WebLinkAbout7. Village Manager's Report 12/18/2012Village of Mount Prospect Mount Prospect, Illinois INTEROFFICE MEMORANDUM TO: MICHAEL E. JANONIS, VILLAGE MANAGER ?:>� 6 FROM: FINANCE DIRECTOR t a1 DATE: DECEMBER 12, 2012 SUBJECT: 2013 PROPERTY AND WORKERS COMPENSATION INSURANCE PROGRAM PURPOSE: To present a recommendation for the property and workers compensation insurance program for the policy beginning January 1, 2013 and ending December 31, 2013. ♦r DISCUSSION: The Village's current property and workers compensation insurance policies are set to expire on December 31, 2012. With the assistance of the Village's insurance consultant, staff sought quotes with the existing broker and insurance companies to secure coverage for 2013. We did not seek alternative proposals for the 2013 renewal because of the continued narrow market for municipal risks. There is still only one competitive insurer for the excess WC - Safety National. Federal Insurance (Chubb) has been the most competitive on cost and coverage for property. The following is a brief summary of our expiring insurance program, an analysis of the proposals received, and a summary of the insurance package being recommended by staff and its consultant. Expiring Program Attachment I provides a listing of the current schedule of insurance in force, showing the type of coverage, the carrier, policy limits, and the broker of record. Village buildings and vehicles were insured this past year by Federal Insurance (Chubb) Company. Property values on which the premium was based totaled $88,958,031. A $25,000 deductible is in place for this coverage. The annual premium was $93,500. The broker offering the coverage was Arthur J. Gallagher and Co. Excess workers compensation coverage was purchased from Safety National, which insured the Village for individual claims in excess of $550,000. There is a $1 million aggregate limit for worker compensation claims. The annual premium was $52,848. The broker again was Arthur J. Gallagher and Co. Proposal Received Nugent Consulting Group assisted the Village in securing proposals from our current broker and underwriters. Attachment II presents a summary of renewal options offered by Arthur J. Gallagher and Co. for the upcoming policy period. A breakdown of premium by coverage type for policy year 2012 is also included. The initial renewal quote for property coverage increased 6.4% from the prior year and totals $99,466. Insurable values increased 3.0 %. The initial renewal quote for excess workers compensation coverage increased 31.9% from the prior year from $52,848 to $69,702. Cost for WC coverage is being driven by Safety National municipal book of business in Illinois as a whole. Due of the poor condition of the Illinois municipal WC marketplace and benefits in place for sworn police and fire personnel, there are no other competitive insurers doing excess WC. Property and Workers' Compensation Insurance Program December 12, 2012 Page 2 Due to the size of the proposed increase we requested additional coverage options from the broker. The self - insured retention (SIR) levels were adjusted in the various options to determine if a savings in the annual premium could be realized. SIR /Deductible levels are found in the lower half of Attachment II. As expected, increases to the SIR for property and WC coverage resulted in a lower premium. Staff discussed with the consultant what an appropriate level of exposure would be for a village of our size and claims experience. It was decided that the village would increase the SIR for WC coverage to $600,000 (Option 1) for all classes of employees at a savings of $3,982. The savings for increasing the SIR further were relatively low against the additional risk to be taken with a higher retention level. The deductible for property was increased from $25,000 to $50,000 (Option 3) resulting in a savings of $5,487. This deductible has been at the $25,000 level since before 2003. The total for all premiums and commissions for selected coverage levels is $172,081, an increase of 8.4% from the 2012 premium. The village realized a savings of $9,469 by adjusting SIR /Deductible levels without a significant amount of additional exposure. The insurance companies being recommended are very sound financially and have an excellent claims payment history. Federal Insurance is rated A + +, XV (Superior) by A.M. Best, a recognized insurance company rating service. Safety National Casualty Corp. is rated A, IX (Excellent). RECOMMENDATION: It is recommended the Village purchase property and excess workers compensation insurance from Arthur J. Gallagher and Co. with premiums and broker's fees totaling $172,081. David O. Erb Finance Director DOE/ Attachments I: \Insurance \Memos \2012 \2013 Renewal - Property and WC.docx Attachment I VILLAGE OF MOUNT PROSPECT SCHEDULE OF INSURANCE IN FORCE December 31, 2012 Type of Coverage Property & Inland Marine Workers' Compensation Self - Insured Liability Program General Liability Auto Liability Employment Practices Liability Police Professional Liability Public Officials Liability (Errors and Omissions) Excess Liability Fiduciary Liability - Police Pension Fiduciary Liability - Fire Pension Public Employee Dishonesty Depositors Forgery Public Officials Bond - President Public Officials Bond - Manager Public Officials Bond - Treasurer Contingent Tax Interruption Employee & Retiree Health Ins. Third Party Administrators Workers' Comp Claims Administration Liability Claims Administration CCMSI Gallagher Bassett I: \Insurance \Schedule of Coverage \December 31, 2012.xlsx Deductible/ Specific Aggregate Self- Insured Excess Excess Expiration Policy Carrier Retention Limit Limit Date Number Broker Premium Federal Insurance / Chubb $25,000 $88,958,031 none 01/01/13 35826710 Arthur J. Gallagher $93,500 Safety National Insurance Co. $550,000 Statutory $1,000,000 01/01/13 SP- 11-174 -I1- Arthur J. Gallagher $52,848 N/A $2,000,000 $0 $0 - $0 N/A $2,000,000 $0 $0 - $0 N/A $2,000,000 $0 $0 - $0 N/A $2,000,000 $0 $0 - $0 N/A $2,000,000 $0 $0 - - $0 High -level Excess Liability Pool $2,000,000 $12,000,000 $12,000,000 04/30/18 n/a n/a $74,453 Federal Insurance / Chubb $25,000 $5,000,000 $5,000,000 08/01/13 8158 -5499 Arthur J. Gallagher $10,000 Federal Insurance/ Chubb $25,000 $5,000,000 $5,000,000 08/01/13 8169 -8992 Arthur J. Gallagher $11,416 Travelers $5,000 $500,000 none 05/01/13 105779765 Arthur J. Gallagher $2,330 Travelers $1,000 $100,000 none 05/01/13 105779765 Arthur J. Gallagher Incl. in above ITT Hartford $0 $100,000 $100,000 05/01/13 83BSBDK7589 Hobbs Group $400 ITT Hartford $0 $100,000 $100,000 05/01/13 83BSBCQ9763 Hobbs Group $400 ITT Hartford $0 $250,000 $250,000 05/01/13 83BSBAK8746 Hobbs Group $1,150 Federal Insurance / Chubb $25,000 $9,000,000 $9,000,000 01/01/13 35826710 Arthur J. Gallagher Incl. in Prop Intergovernmental Personal $30,000/ Benefit Cooperative $75,000 none none 06/30/14 n/a n/a Varied CCMSI Gallagher Bassett I: \Insurance \Schedule of Coverage \December 31, 2012.xlsx Attachment II VILLAGE OF MOUNT PROSPECT 2013 INSURANCE RENEWAL SIR /Deductible Levels Property Values Initial 92,717,046 $ 92,717,046 $ 92,717,046 $ 92,717,046 $ Expiring Renewal Option 1 Option 2 Option 3 Option 4 Coverage 2012 2013 2013 2013 2013 2013 Property $ 93,500 $ 99,466 $ 99,466 $ 99,466 1 $ 93,979 1 $ 89,863 Excess Workers Compensation 52,848 69,702 65,720 54,434 54,434 54,434 Gallagher Fee 12,382 12,382 12,382 12,382 12,382 12,382 $ 158,730 $ 181,550 $ 177,568 $ 166,282 $ 160,795 $ 156,679 SIR /Deductible Levels Property Values $ 88,958,031 $ 92,717,046 $ 92,717,046 $ 92,717,046 $ 92,717,046 $ 92,717,046 Property Deductible 25,000 25,000 25,000 25,000 50,0001 100,000 Auto Physical Damage Deductible 100,000 100,000 100,000 100,000 100,000 100,000 WC Self- insured Retention 550,000 550,000 600,000 750,000 750,000 750,000 WC Self- insured Retention - Police /Fire 550,000 600,000 600,000 750,000 750,000 750,000 Total 2013 Property and WC Insurance Program $ 172,081 Savings from Initial Renewal Quote $ 9,469 I: \Insurance \Memos \2012 \mt prospect 2013 renewal.xlsx Mrs- M Mount Prospect Public Works Department �M�/ INTEROFFICE MEMORANDUM TO: FROM: DATE: SUBJ: Background VILLAGE MANAGER MICHAEL E. JANONIS DIRECTOR OF PUBLIC WORKS DECEMBER 10, 2012 DESIGN ENGINEERING SERVICES AND BIDDING ASSISTANCE FOR 2011 COMPREHENSIVE FLOOD STUDY PHASE 1 IMPROVEMENTS ($109,069.94) The Village Board recently approved $2.5 million in financing for the construction of the 2011 Comprehensive Flood Study Phase 1 improvements. This group of improvements includes the following projects: Hatlen Heights Storm Sewer Improvements $1,610,000 Hatlen Heights Sanitary Sewer Improvements $105,000 Lonnquist Combined Sewer Improvements $200,000 Lonnquist Storm Sewer Improvements $135,000 Golfview Estates Stormwater Improvements $400,000 Lawrence Lane Storm Sewer Improvements $50,000 Total: $2,500,000 Staff proposes to construct all of these projects during the 2013 construction season. Plans and specifications for the Golfview Estates Stormwater Improvements ($400,000) are nearly complete and are presently under review. Bidding documents are being drafted and will be finalized in the first quarter of 2013. Staff anticipates that this project will be let for bidding in April 2013 and presented to the Village Board for contract award in May 2013. Construction will start in June 2013 and reach final completion in September 2013. This project was designed in -house by engineering division staff. Staff proposes to bid and award this work as a stand -alone project. In addition, staff proposes to provide all bidding services, engineering layout, and construction inspection utilizing in -house staff. Consequently, staff does not anticipate utilizing consulting engineers on this project. This project will be distinctly referred to as the Golfview Estates Stormwater Improvements Project. The scope of work for the Golfview Estates Stormwater Improvements Project primarily involves re- grading existing ditches and replacing culvert pipes. The means to perform this work (ditch Page 2 of 3 Design Engineering Services and Bidding Assistance for 2011 Comprehensive Flood Study Phase 1 Improvements ($109,069.94) December 10, 2012 re- grading) is materially different than the means (open -cut excavation) necessary to construct the other Phase 1 projects. Consequently, staff does not anticipate that any cost savings or efficiencies will be gained by including this project with the other Phase 1 projects. The remaining projects, including the Hatlen Heights Storm Sewer Improvements ($1,610,000), the Hatlen Heights Sanitary Sewer Improvements ($105,000), the Lonnquist Combined Sewer Improvements ($200,000), the Lonnquist Storm Sewer Improvements ($135,000), and the Lawrence Lane Storm Sewer Improvements ($50,000) will all likely be constructed utilizing similar means (open -cut excavation). Consequently, staff anticipates that cost savings may be realized by combining these projects into a single project. Staff refers to this compiled project as the 2011 Comprehensive Flood Study Phase 1 Improvements Project (the Phase 1 projects). The total estimated cost for these projects is $2,100,000. Staff proposes to let bids for the Phase 1 projects in April 2013 and present bid results to the Village Board in May 2013. Construction should start in June 2013 and all projects should reach final completion by November 2013. Unfortunately, staff lacks the resources and expertise to prepare satisfactory plans, specifications, and bidding documents necessary to construct the Phase 1 projects. Consequently, staff asked Burns & McDonnell consulting engineers of Downers Grove, Illinois for a proposal to provide specified design engineering services and bidding assistance for the Phase 1 projects. Proposal Burns & McDonnell has submitted a cost proposal to provide the requested professional services at a cost not to exceed $109,069.94. Discussion Staff has reviewed Burns & McDonnell's proposal and determined that they have allotted adequate and qualified resources necessary to design all of the proposed improvements in a manner consistent with the proposed project schedule. In addition, their cost proposal includes appropriate allocations for requisite sub - contracted technical assistance. Their fee includes $99,069.94 for Burns & McDonnell labor and expenses as well as $9,000 for subcontracted geotechnical drilling services and $1,000 for subcontracted environmental laboratory analysis services. Burns & McDonnell has successfully performed a variety of civil engineering projects for the Village over the course of 20 years. Of particular relevance to the Phase 1 projects design work is their experience with the 2011 Comprehensive Flood Study. Burns & McDonnell authored that study and developed its recommendations; including all of the Phase 1 projects. Because of this experience, Burns & McDonnell is intimately familiar with the Village's sewer systems, drainage patterns, and, most importantly, the flooding problems endured by Mount Prospect Page 3 of 3 Design Engineering Services and Bidding Assistance for 2011 Comprehensive Flood Study Phase 1 Improvements ($109,069.94) December 10, 2012 residents. Consequently, it is our opinion that Burns & McDonnell is uniquely, arguably exclusively, well qualified to design these improvements. The Burns & McDonnell fee is approximately 5% of the anticipated construction cost for the Phase 1 projects ($2,100,000). Typically, we expect design fees to be approximately 8% of construction costs. As such, Burns & McDonnell's fee avails a 3% ($58,930) savings from the norm. When queried on the steadfastness of this savings, Burns & McDonnell responded that the savings is a consequence of their familiarity with the Village and the problems addressed by the Phase 1 projects. They advised that this familiarity manifests real savings because they have already completed substantial portions of the data collection and conceptual layout work. In addition, they are already familiar with the Village's standard specifications, sewer construction codes, and bidding documents. Perhaps most importantly, Burns & McDonnell staff, including the project manager Randy Patchett, have established relationships with residents that will be impacted by these proposed improvements. Recommendation I recommend that the Village Board accept the proposal from Burns & McDonnell consulting engineers to provide specified design engineering services and bidding assistance for the 2011 Comprehensive Flood Study Phase 1 Improvements for a fee not to exceed $109,069.94. Sufficient funds for this proposed expenditure are available in the 2013 budget. Cc: Director of Finance David Erb Deputy Director of Public Works Jason Leib Village Engineer Jeff Wulbecker Water /Sewer Superintendent Matt Overeem Streets /Buildings Superintendent Paul Bures Village of Mount Prospect Mount Prospect, Illinois INTEROFFICE MEMORANDUM TO: DAVID ERB, FINANCE DIRECTOR FROM: DEPUTY FINANCE DIRECTOR DATE: DECEMBER 13, 2012 SUBJECT: COPIER LEASES PROPOSAL IZ.IISI IZ The Finance Department is requesting a waiver of the bid process to lease five copiers. BACKGROUND The Village began the practice of leasing copiers in 2002. Overall, staff has been very pleased with the leasing arrangement. Through the years the Village has negotiated leased copiers from companies such as Imagetech, Chicago Office Technology, and Nexus Office Systems, Inc. Currently all of the Department copiers are leased. In 2010, the Village negotiated lease agreements with Nexus Office Systems, Inc. to provide Canon equipment for the Finance, IT, Human Services departments, as well as, two copiers in the Police Department. Nexus has provided outstanding customer service and the departments have been very pleased with the reliability of the Canon equipment. The Police Department, Fire Department, and Clerk's Office copier lease agreements are up in January 2013. The lease agreements are with Chicago Office Technology Group (COTG) for the leasing and service of four Toshiba and one Xerox copiers. Personnel from the Police, Fire, Finance and Clerk's Office began discussing the replacement of the copiers in October. The points of discussion included reliability, speed, functionalities, types of print and copy jobs, print volume, space constraints, upgrades needed and any other comments and concerns. The discussions determined that all departments need copy, print, fax, and scan functionalities. Feedback on the Toshiba color copier regarding its reliability and the service received from COTG for all of the Departments is less than desirable. The Finance Department was asked to research new copiers that provide the functionalities needed and to negotiate another lease for new copiers. Copier Leases December 12, 2012 Page 2 We received proposals form COTG, Gordon Flesch and Nexus. Due to the reliability and the service issues that we've had with COTG, we felt it necessary to move away from COTG and to research the Canon equipment for the departments. Both Nexus and Gordon Flesch lease Canon copiers. The main goal is to standardize the service, and provide the departments with reliable equipment with the functionality needed. To date, we have struggled with providing all departments or divisions with good quality service, due to the various service providers. Nexus has proven to provide good quality equipment and service to the departments and divisions in which the copiers are located. Nexus provided a proposal with good pricing. Nexus is a small company founded in 1982 with forty employees. Their corporate office is located in Rockford, and the technicians are dispatched from an Elgin office. The Nexus solution includes four Canon iR C5255 copiers, and one Canon iR 4051 copier which will provide copy, print, scan, and fax functionalities. The Gordon Flesch Company is a larger company with the corporate office located in Geneva and six branch offices in the area. The Gordon Flesch solution is also the same as above; and, their pricing for service is lower than Nexus. The Canon iR C5255 copiers are color copiers which will be located in the Police Department Administration and Investigations Divisions, Fire Department, and Clerk's Office. The Canon iR 4051 copier is a high speed black and white copier which will be located in the Clerk's Office. The copiers will be replacing existing copiers. Our research and experience found that Canon is a superior brand when compared to the Xerox brand. RECOMMENDATION Although the cost of service is higher, we recommend leasing the Canon products from Nexus Office Equipment Inc. for the five copiers in need of replacement. Nexus has provided outstanding service over the two year period and the Canon copiers have proven to be reliable. We will obtain the main goal which is to provide standardization of equipment and to provide quality service of the equipment. Funds are included in the operating budgets of the three departments to continue the leases and pay the service contract fees. 4 -Year Nexus Gordon Flesch (1) Canon Black -White Digital Copier & (4) Toshiba Color Copiers $ 62,928.00 $ 63,144.00 Annual Maintenance Agreement (4- years) $ 52,560.00 $ 38,376.00 Copier Leases December 12, 2012 Page 3 As indicated above, pricing was obtained for four -year lease agreements. Included with the memorandum are the proposals from Nexus Office Systems, Inc. and Gordon Flesch on the pricing for the five copiers and specifications. Nexus recommended a four year lease agreement for the Canon copiers. After reviewing the needs of the departments, the average life of the machines and the cost, it is recommended that we lease the five Canon replacement copiers from Nexus for a four -year period at an amount not to exceed $62,928. Lynn Jarog Deputy Finance Director ATTACHMENTS H:WCCT\Copiers\2012 Board ProposaRProposal VB 2012 Memo.doc Village of Mount Prospect Mount Prospect, Illinois INTEROFFICE MEMORANDUM TO: MICHAEL E. JANONIS, VILLAGE MANAGER FROM: FINANCE DIRECTOR DATE: DECEMBER 17, 2012 SUBJECT: SUPPLEMENTAL MEMO — COPIER LEASE AND MAINE AGREEMENT In a memo dated December 13, 2012 provided to the Village Board by the Finance Department, staff recommended the lease of five replacement copiers from Nexus Office Equipment for an amount not to exceed $62,928. The term of the lease is four years at $15,732 per year. In addition to the annual lease payment staff is also requesting approval of a one year maintenance agreement, also with Nexus. The cost of the annual maintenance agreement is $13,140. The maintenance agreement covers all scheduled preventive maintenance work and includes all parts, supplies, service, labor and guaranteed service response time. Toner is included in the cost of maintenance. Item C under the Village Manager's Report is a motion to approve an agreement with Nexus Office Systems to lease five copiers for a four year period in an amount not to exceed $62,928. 1 would like to add to this item as a second motion to approve a one year maintenance agreement with Nexus Office Equipment in an amount not to exceed $13,140. While an alternate quote for annual maintenance received from Gordon Flesch Company came in $3,546 below that of Nexus we feel that the benefits provided by utilizing a single vendor for service and strong customer service from Nexus justify the additional cost. David 0. Erb Finance Director H: \ACCT \Copiers \2012 Board Proposal \Supplemental Copier Memo.docx canon Proposal by: 1�1�4(J Office Systems, Inc. In vestiga tio ns New Canon R C5255 55 Pages B/W 51 Pages Color Color Print/Fax /Color Scan 4 x 550 Sheet Trays 1 x 100 Sheet Bypass 50 -Sheet Staple Finisher 2/3 Hole Punch O Color Touch Screen Fire Department New Canon R C5255 55 Pages B/W 51 Pages Color Color Print /Fax /Color Scan 4 x 550 Sheet Trays AN 1 x 100 Sheet Bypass 50 -Sheet Staple Finisher Color Touch Screen Large Capacity Tray 2/3 hole punch Police Administration New Canon R C5255 55 Pages B/W 51 Pages Color Color Print/Fax /Color Scan 4 x 550 Sheet Trays 1 x 100 Sheet Bypass 50 -Sheet Staple Finisher 2/3 Hole Punch L Color Touch Screen Clerks - B[W New Canon R 4051 51 Pages per minute Print/Fax /Color Scan 4 x 550 Sheet Trays , 1 x 80 Sheet Bypass � a 1 x 2,700 Sheet Paper Deck 50 -Sheet Staple Finisher Color Touch Screen 2/3 Hole Punch Clerks -Color New Canon R C5255 55 Pages B/W 51 Pages Color Color Print /Fax /Color Scan 4 x 550 Sheet Trays 1 x 100 Sheet Bypass 1 x 2,700 Sheet Paper Deck 50 -Sheet Staple Finisher Color Touch Screen 2/3 Hole Punch ,...M Nexus Total Solution 48 -Month Municipal Lease with Fiscal Funding Addendum $ 1 /Month Monthly Blanket Maintenance $1,095 Includes 39,000 b/w and 13,000 color copies. Overages at .0095 and .059 GORDON C O M P A N Technology that works. People who perform. FIESCH® Y, I N C . Product Release Date: October 2012 • 55 Pages Per Minute - Black and White • 51 Pages Per Minute - Color • Network Printing • Network Color Scan to E -mail, File, FTP • Scan as Searchable PDF • Scan directly to Microsoft Word, PowerPoint • Cloud - Enabled: Scan and Print to /from the Cloud • Hard Drive Lock and Erase • 2 x 550 Sheet Standard Paper Cassettes • 100 Sheet Duplexing Automatic Document Feeder • Up to 12x18 Size Paper and 140 lb. Index • 100 Sheet Bypass Tray • Automatic Duplexing • 2GB Standard RAM + 160GB HDD • Delivery, Installation & Training • Access To Our Technical Support Center Picture May Not Represent Final Configuration Optional Accessories Included Cassette Feeding Unit Inner Finisher 213 Hole Puncher Paper Deck GFC Investment Options (1) Canon iR Advance 4051 (4) Canon IR Advance C5255 (2) C5255 w /Inner Finisher, 213 Hole Punch and Cassette Feeding Unit (2) C5255 w /Inner Finisher, 213 Hole Punch,Cassette Feeding Unit and Paper Deck GFC Leasing 48 Month $2,115.00 Toner Inclusive Maintenance Agreement Includes Maintenance for (5) machines (4) C5255 and (1) 4051 Includes 39,000 B &W Images and 13,000 Color Images B &W overages @ .0055 and Color overages @ .045 The Village of Mount Prospect December 131h 2012 Canon iR Advance C5255 Includes toner, drum, all parts, labor, travel time, technical updates and emergency calls. Also included is on -site Preventive Maintenance through Gordon Flesch Company's Quality Assurance Program. Technoloav that works. People who perform. GORDON FLESCH® C O M P A N Y, I N C. Technology that works. People who perform. Canon imageRUNNER Advance 4051 • 51 Pages Per Minute - Black and White • (2) 550 Sheet Standard Paper Cassettes • 100 Sheet Bypass Tray • 8.4" full- color, high resolution TFT Screen • Up to 12x18 Size Paper and 14 lb. Bond to 140 lb. Index • 150 Sheet Single Pass Duplexing Document Feeder • Automatic Duplexing • Network Printing - UFR II • Network Scan to E -mail, File, FTP • Scan as PDF Compact - Decreases File Size of Color Scans • Scan with 128 Bit Encryption • 2 GB Standard RAM + 80 GB HDD • Toner and Paper Can Be Replaced on the Fly • 1,200x1,200 dpi Resolution • Delivery, Installation & Training • Access to Our Technical Support Center Optional Accessories Included • Inner Staple Finisher w1213 Hole Puncher • 2,700 Sheet Paper Deck • 2 Additional 550 Sheet Adjustable Paper Cassettes The Village of Mount Prospect December 13th 2012 11 (1) Canon iR Advance -4051 Optional Accessories Included: Cassette Feeding Unit Paper Deck Inner Finisher with 213 Hole Punch Technology that works. People who perform.