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HomeMy WebLinkAbout6. MANGERS REPORT 12/16/03TO: FROM: DATE: SUBJECT: Village of Mount Prospect Mount Prospect, Illinois INTEROFFICE MEMORANDUM VILLAGE MANAGER MICHAEL E. JANONIS ASSISTANT VILLAGE MANAGER DECEMBER 5, 2003 VILLAGE HALL FURNITURE BIDS RESULTS When it became public that the Village was building a new Village Hall, several furniture vendors contacted staffto express interest in being considered for the project. The contact information was accumulated and filed until the furniture bid package was completed and the construction process was to the point that the furniture vendor could physically view the conditions and compare them to the actual architectural plans, but before the walls were enclosed in case there was a need to adjust electrical outlets. Based on this timing, a furniture RFP was sent to six vendors in early November. The bid package was separated into three components: 1) Kimball Office Furniture; 2) Movable Furniture (conference tables, chairs, etc.); and, 3) Window Blinds. The bids were separated in an effort to offer the vendors the opportunity to participate in at least one component in case they were not able to provide Kimball FUrniture systems. The Village has previously standardized Kimball furniture through previous purchases of 13 sets of systems furniture. The existing Kimball Furniture will be moved from the existing Village Hall to the new building. However, it was not necessary to standardize the chairs and tables to a specific brand as long as the style was similar in nature to the existing Kimball style. The window blind component was added since there is a need to have window blinds and it made sense to offer the furniture vendors the opportunity to coordinate the installation instead of Village staff trying to coordinate. The vendors were encouraged, but not required to provide a comprehensive proposal for all components as a single response. The vendors also were required to purchase the furniture through a direct government contract whereby the actual manufacturer price was already set through state government negotiations which is below the manufacturer's suggested retail. The vendors were required to meet certain governmental contract purchase criteria to participate in the governmental pricing program. Finally, the bid response includes the dismantling and moving of the existing Kimball furniture sets to the new building and installation of all the new furniture at a time convenient to the Village. ILLAGE HALL FURNITURE BIDS RESULTS December 5, 2003 Page 2 A single response was received from Henricksen, the vendor the Village has worked with to acquire previous sets of Kimball furniture. However, the response inCluded a partner, KI, for the movable furniture portion. KI was among the six vendors that received the RFP package. While the overall project will be coordinated and managed by Henricksen, the other vendor will participate in the selection and necessary assistance. Below is a summary of the bids results. · Package A: Kimball Furniture - $390,770.50 · Package B: Moveable Furniture/Chairs/Tables - $208,448.44 · Package C: Window Blinds - $18,969.25 The total bid cost is $618,188.19, which includes all design and installation services. The original budget for furnishings was established at $350,000. The $350,000 was a general estimate and as the project progressed, it became evident that that amount was not sufficient. It is possible to limit the furniture purchases to the budget amount, but much of the non-Kimball furniture is a hodgepodge of different furniture sets from different manufacturers that have been adapted to the current available space and purpose. If the furniture purchase is limited to the original $350,000, it is very likely the existing furniture sets may not fit the new space available or function well with the new building design. The total project cost of the parking deck came in $440,000 under the Village Board approved budget. Approximately, $200,000 was expected in savings from the parking deck and was intended to provide some relief to the Village Hall budget amount. The remaining $240,000 could be applied to the furniture cost, which will leave only $28,188.19 and that amount can be absorbed into the total project budget. Based on the funds available in the total project budget it would be recommended that all necessary furniture sets be replaced with this purchase for use in the new Village Hall. Staffwould recommend the Village enter into a contract for furniture purchase, design, and installation services with Henricksen in an amount not to exceed $618,188.19. There are adequate construction budget funds available for the purchase. David Strahl H:~VILM\Village Hall\Furniture\VB Cover Memo Furniture Bid Results.doc Village of Mount Prospect Mount Prospect, Illinois INTEROFFICE MEMORANDUM TO: FROM: DATE: SUBJECT: MICHAEL JANONIS, VILLAGE MANAGER DIRECTOR OF FINANCE DECEMBER 10, 2003 2004 PROPERTY AND CASUALTY INSURANCE PURPOSE: To present a recommendation to purchase property and casualty insurance for the policy year beginning January 1, 2004 and ending December 31, 2004. DISCUSSION: The Village's current property and casualty insurance policies are set to expire on December 31, 2003. As with the insurance renewal for 2003, staff negotiated With the' existing brokers and insurance companies to secure coverage for 2004. The limited number of brokers and insurers in the marketplace necessitated the negotiated renewal for 2004. We anticipate sending out a Request for Proposal for the Village's insurance program for 2005 pending improvements in the insurance market. The following is a brief summary of our expiring insurance program, an analysis of the various proposals received, and a summary of the insurance package being recommended by staff and its consultant. Expiring Program Attached is a current schedule of insurance in force, showing the type of coverage, the carrier, policy limits, and the broker of record (Attachment 1). The Village's buildings and vehicles were insured this past year by the Hartford Insurance Company. The amount of coverage was $48.8 million, with a $25,000 deductible. The annual premium was $54,170. The broker offering the coverage was Arthur J. Gallagher and Co. General liability insurance (including auto, police professional, employment practices and public officials) was provided by Illinois National Insurance Company, an AIG company. This policy provides for $1,750,000 of coverage in excess of a $250,000 self-insured retention (SIR) for each claim. If you recall, the original liability policy for 2003 called for $750,000 in coverage over the SIR amount. Effective May 1, 2003 the attachment point of HELP (High- PROPERTY AND CASUALTY INSURANCE 12/10/2003 Page 2 level Excess Liability Pool) was increased to $2 million due to operational changes within the HELP pool. This required the Village to acquire additional insurance mid-year. There is no aggregate limit, except for the public officials liability coverage that carries a $750,000 aggregate limit. The annual premium for this coverage, purchased through Marsh USA, was $190,000. Excess workers compensation coverage was purchased from Safety National, which insured the Village for individual claims in excess of $300,000. There was a $1 million aggregate limit. The annual premium was $30,857. The broker was Arthur J. Gallagher and Co. The Village purchased a stand-alone liability insurance policy to cover the activities of its paramedics/EMT's. The insurer was Western World. The coverage was $1 million per occurrence with a $250 deductible. The annual premium was $7,184. The broker was Arthur J. Gallagher. Proposals Received As with last year, uncertain economic conditions continue to adversely affect the insurance industry. Due to this uncertainty and the lack of both brokers and insurers in the marketplace, staff worked with existing brokers and underwriters to try and obtain favorable renewal quotations. The results were mixed. Increases for the Liability, Excess Workers Compensation and Broker Fees came in close to what was expected. Property coverage though, saw a significant increase from the prior year (71%) due to factors found in the marketplace. Attached is a report from Nugent Consulting Group, the firm that assisted the Village in soliciting proposals from the various brokers and underwriters (Attachment 2). Mr. Nugent presents a summary of the different renewal options offered by Marsh USA and Arthur J. Gallagher and Co. for the upcoming policy period. As you can see in the Nugent Report, the renewal quotes for property insurance for 2004 increased substantially (71%, from $54,170 to $92,745). The total for all premiums and commissions as quoted is $361,020, an increase of 23.3% over the 2003 premiums. According to the brokers and our independent consultant, the quotes, while high, remain competitive given the current marketplace. A total of $310,415 was included in the proposed 2004 budget for this coverage. Most of the shortfall in the 2004 budget was due to the higher than expected Property Insurance premium ($92,745 versus $60,578). No adjustment to the 2004 budget is being recommended at this time. Funds from Liability or Workers Comp Claims accounts may be available later in the year depending on our claims experience in those areas. insurance policies being recommended are the same as the expiring policies with regard to coverage, exclusions and limits with the following exceptions: ROPERTY AND CASUALTY INSURANCE 12/10/2003 Page 3 · The self-insured retention for Employment Practices Liability Insurance was increased from $250,000 to $500,000. · The Paramedics EMT Liability coverage was rolled int© the General Liability coverage. There is no longer a separate policy written for EMT coverage. All of the insurance companies being recommended are very sound financially and have an excellent claims payment history. These companies are rated A++(XV) by A.M. Best, a recognized insurance company rating service. RECOMMENDATION: It is recommended the Village purchase property & boiler and excess workers compensation insurance from Arthur J. Gallagher and Co. with premiums and broker's fees totaling $139,220. 2) It is recommended the Village purchase liability insurance from Marsh USA, Inc. with premiums and commissions totaling $221,800. DAVID O. ERB DIRECTOR OF FINANCE Attachments I:\lnsurance\Memos~2003\2004 Renewal Memo to MJ.doc 0 O0 0 0 0 0 d 0 0 0 0 0 0 0 0 0 0 o. ~, o. q o. q co 0 0 0 0 0 0 CD 0 0 0 0 0 0 0 o. o. o. o. o. o o. z z z z Z z o ~ o o '~ ,~ o~ 0 O0 CD 0 0 0 0 0 0 0 O0 0 0 0 0 0 0 0 o. o.o. o. o. o. o. o. o o. LO O0 0 0 0 c~ oo o. o. o. ~_r~ NUGENT CONSULTING GROUP INSURANCE & RiSK MANAGEMENT CONSULTING ATTACHMENT 2 December 9, 2003 Mr. Dave Erb Village of Mount Prospect 100 South Emerson Street Mount Prospect, IL 60056 Dear Dave: I have received renewal proposals for each of the lines of coverage expiring at the end of the year. The insurance market has continued to deteriorate. Insurers are looking for increases in all lines of insurance. Both brokers were authorized to approach alternative insurers. Only an alternative property quote is worth pursuing. There has been additional consolidation in the market since last year, with only three insurers providing excess coverage above a large retention for municipal risks. As a result of the tight supply, prices continue to increase. This year's increase is 11.5%. The only coverage change from 2003 to 2004 is an increase in the employment practices liability self-insured retention from $250,000 to $500,000. This is being done on all AIG clients. Property The property market has improved for most risks since the last renewal. There are only three insurers that will provide coverage to a property risk with your characteristics. Hartford has withdrawn from over-the-road physical damage coverage, so I do not recommend their quotation. Chubb will provide the same coverages as expiring, but at significantly greater cost. There are no other current alternatives. The cost increase is 71%. 2409 PF~'~CFITrkEE L",NE · NORTNBROOK, ILLii'IOIS ~00o2 · FELEPHONE (847) 412-0410 · FAC31MILE (847) 412-0610 60 i 7 PINE RIDGE ROAD · SUITE 237 · NAPLES, FLORIDA 34, [9 · TELEPHONE (94 r) 643- ~851 · FACSIMILE (847) 412-0610 age 2 Mr. Dave Erb December 9, 2003 Excess Workers Compensation The excess workers compensation premium will increase 20.%. This is the toughest line of coverage nationwide. Although cost will increase 20%, the Village will maintain the current self-insured retention of $300,000 per claim. Most municipalities are seeing increases in the self-insured retention to $400,000 due to costs associated with police and fire claims. Broker Fees Gallagher has requested a 5% increase in fee. Marsh has requested an 11% increase in fee. Fees represent 5.3% of the overall all cost. Standard commission is at least 10%. The Village continues to have very competitive fee arrangements. The overall increase is 23%. With the exception of the property coverage, all rates are in line with current market pricing. It is hoped that the market will improve and insurers will return for the 2005 renewal, so we can issue a coverage RFP and start driving the cost down again. Ml'cha~l D. Nugent, ARM President Village of Mount Prospect 2004 Insurance Renewal Liability Property & Boiler Excess Workers Compensation Broker Fee - Marsh Broker Fee - Gallagher Total 2003 2004 $ 190,000 $ 211,800 $ 54,170 $ 92,745 $ 30,857 $ 37,235 $ 9,000 $ 10,000 $ 8,800 $ 9,240 $ 292,827 $ 361,020 VILLAGE OF MOUNT PROSPECT Public Entity/Public Officials Liability Insurance Proposal December 31, 2003 to December 31, 2004 MARSH Presented by: Marsh USA Inc. 500 West Monroe Street Suite 2400 Chicago, II 60661-3630 Tel: ~J12/627-6000 VILLAGE OF MOUNT PROSPECT Public Entity/Public Officials Liability Proposal December 31, 2003 to December 31, 2004 EXECUTIVE SUMMARY We are pleased to have an opportunity to present a renewal proposal for the Village of Mount Prospect's Public Entity/Public Officials Liability coverage. The renewal quotation from C.V. Starr is up approximately 9.4%. This, however, is in addition to a mandatory increase in the Employment Practices Liabil!ty retention from $250,000 to $500,000. This increase in retention is an across the board underwriting mandate due to their deteriorating book of business. All other coverage is per expiring. We have requested additional pricing relief from C.V. Starr and have been told they will review our request, but that we will not have an answer until after December 1st. In addition to approaching the incumbent carrier, we have approached a number of alternative markets specializing in public officials liability. The following is a summary of carders and responses: Carrier AIG/C.V. Starr & Co. Response Provided a renewal quotation. Premium is up 9.4% over expiring. We are seeking additional relief. Genesis Insurance Premium indicate well above current program. Indication of $250,000 with equally high retention. Munich Declined; EPLI losses Claredon Coregis St. Paul Declined: Pricing Declined: Argonaunt re-structuring Declined: underwriting and pricing. Marsh is committed to: thoroughly understanding your public entity insurance needs in terms of your operations, exposures, risk management objectives and financial. Our team of professionals wants to create a partnership with your organization and involve Village of Mount Prospect in all major decisions with respect to planning, marketing, implementing and handling of all your important ongoing issues. Throughout the policy year we will continuously strive to provide value added services. Tom Seeberg, Senior Vice President/Client Executive will be responsible for developing the overall direction and strategy implementation for your account. Carol Radwanski, Client Representative, will also be available on a day to day basis to assist you with any of your insurance questions. These activities include coordinating all ancillary support service and acting as the primary interface with Village of Mount Prospect. A team chart of individuals dedicated to your account is included in the body of this proposal. By having a number of individuals at your disposal, we feel the service provided to your organization will be greatly enhanced We appreciate the opportunity to provide risk management services and insurance coverage for your organization and look forward to working with you in the coming year. MARSH An A~ Company VILLAGE OF. MOUNT PROSPECT PuMic Entity/pU"blic Officials Liability Proposal December 31, 2003 to December 31, 2004 PREMIUM SUMM/IR Y Insurer AM Best Limit Rate 2002°2003 2003-2004 % of Rating SIR Premium Premium Change AIG A++XV $1,750,00~) Flat $190,000' $209,800 10.4% $250,000 Terrorism $2,160'* Premium Marsh Fee $9,000 6% *Policy endorsed to higher limits effective 5/1/03. This premium is annualized for comparison. ** Additional Premium if Terrorism Coverage is accepted. MARSH An ~ Company VILLAGE OF MOUNT PROSPECT Public Entity/Public Officials Liability Proposal December 31, 2003 to December 31, 2004 Insurer: Policy Period: Coverage: Limit of Liability: Self Insured Retention: Endorsements: Other Conditions: Premium: Endorsements Illinois National Insurance Company 12/31/03 to 12/31/04 Special Excess Liability for Public Entities Occurrence form Coverage includes General and Automobile Liability, Employee Benefits Liability, Law Enforcement Liability, Employment Practices Liability and Public Officials Liability $1,750,000 Each Occurrence $1,750,000 Aggregate (Products & Public Officials Liability) Defense in addition to the limit of liability $250,000 Each Occurrence $500,000 Each Occurrence for Employment Practices Liability ONLY Defense included in SIR Per Form Manuscript form Premium due 30 days from policy inception $209,800 Mandatory Public Entity Endorsement Mold Exclusion Lead Exclusion Terrorism Exclusion MARSH An ~ Company VILLAGE OF MOUNT PROSPECT 2004 Risk Management Proposal EXECUTIVE SUMMARY We are pleased to offer the renewal terms for your Property and EXCeSs Workers' Compensation exposures. During the past year, we have seen the overall Property market begin to settle down. In some cases, we have actually seen rate reductions. Unfortunately, Mount Prospect's Property premium has increased significantly. The reason for the increase lies in the fact that fewer companies are willing to provide coverage for Over-the-road Automobile Physical Damage. Those that will entertain the coverage are carefully underwriting the exposure and charging substantial premiums for it. The Village's current Property carrier, Hartford, has offered competitive reneWal terms, but they no longer provide Over-the-road Automobile Physical Damage protection. Chubb has offered an alternative, which would include the Over-the-road Automobile Physical Damage exposure, but it's a large increase over the expiring rate. We are available should you have any questions. Thank you. Walter Larkin Area Executive Vice President Katherine Bisceglia Senior Risk Management Representative R:\CLNTDOCS~O4\NONP ROFiT~14021 .DOC 2 Mount Prospect Fire Department Interoffice Memo TO: FROM: DATE: SUBJECT: MICHAEL E, JANONIS, VILLAGE MANAGER MICHAEL J. FIGOLAH, FIRE CHIEF DECEMBER 9, 2003 WAIVER OF BID - PETROCHEMICAL FIREFIGHTING EQUIPMENT Recommendation The Fire Department is requesting to waive the bidding process to purchase specialized petrochemical firefighting equipment from the following vendors: National Foam Equipment, Houston Texas, a sole source manufacturer of specialized petrochemical equipment for an amount not to exceed $20,739.82. A copy of their sole source letter is attached to this memo. Williams Fire and Hazard Control, Mauriceville Texas, a sole source manufacturer of specialized equipment for an amount not to exceed $21,455.00. A copy of their sole source letter is attached to this memo Backflround The Village is home to an 800~acre bulk petroleum storage facility and a pressurized pipeline that distributes petroleum products to and from the storage facility. The equipment we are requesting will provide enough reach to allow firefighting operations from on top of the dike walls, thereby providing enhanced extinguishing capabilities with a higher margin of safety for the firefighters. Listed below, we have identified the categories of equipment essential for fire personnel to safely extinguish a fire of the magnitude associated with a bulk petrochemical storage tank and/or facility: · Equipment that can be deployed in a strategic location on top of the dike walls. C:\Win2kProfiles'~RClinger\Local Settings\Temporary Intemet Files\OLKSD\JM-Waiver of Bid-Petrochemical Equipment-Village Manager.d~c TO: VILLAGE MANAGER SUBJECT: WAIVER OF BID DECEMBER 9, 2003 PAGE 2 · Equipment that can deliver adequate foam and dry chemical agents from the dike walls. · Equipment that can deliver the extinguishing agents from a safe distance. This type of equipment is typically found in industrial fire brigades protecting refineries, petrochemical process facilities, and petrochemical storage facilities, but is not available from other municipal fire departments in the surrounding area. After extensive research, the Fire Department staff has determined that the acquisition of the following equipment is needed for the safe extinguishment of a large petrochemical incident: · (1) 2000 gallon per minute high-capacity foam monitor · (3) Jet pump proportioners (delivers foam to the monitor) · (4) Hydro-chem nozzles · (2) 350-pound wheeled dry chemical units · (1) Daspit Tool with mount These items will be purchased from two separate vendors who are sole source manufacturers of the equipment listed above. Federal Grant Fundinq The Fire Department received a Federal Emergency Management Agency (FEMA) Grant for $42,650 for specialized petrochemical firefighting equipment. The total cost of the items to be purchased is $42,194.82. This amount is $455 less than the original prices received when the grant application was prepared. Seventy- percent of these funds ($29,536.37) were received as part of the Federal Grant awarded to the Fire Department this year. The remaining thirty-percent ($12,658.45) in matching funds will come from the Fire Department budget. MF/jm Attachments ational Foam The Foam Solutions Professionals A KIDDE INTERNATIONAL CONfPANY To: Mount Prospect F/re Department Paul Valentine From: Joe Stonecypher Re: National Foam Products November 21, 2003 National Foam has been doing business as Kidde Fire Fighting as of January 01, 2001, and will be billed as All mobile equipment manufactured by National Foam is custom made per specifications and as a result is sole source and only available from National Foam/Kidde Fire Fighting at tlxis time. Thank You, Joe Stonecypher Re~onal Sales Manager Kidde Fire Fighting 713-660-8790 Phone 713-660-9790 Fax 800-596-3199 Pager ILLIAMS Fire & Hazard Control, inc.~ P.O. Box 1359 Mauriceville, Texas 77626 USA Toll Free: 800-231-4613 Fax: 409-745-3021 24 Hour Emergency Numbers: 409-727-2347 or 281-999-0276 www.williamsfire.com Mount Prospect Fire Depamnent Mount Prospero, iL Attn: C76.c£ Malcolm Tel: 847-870- 5666 Fax: 847-870-5663 December 9, 2003 Chief: Malcolm: Thank you very much for thc opportunity to quote our proprietary firc fightin~ .... equipment. Tiffs equipment is manufactured by Williams Fire & l-lazard Control and is sole sore-ce. ('Tht~se.,r.,,~lacS,m.~l~f I call be of assiwraslce at telephone 1-800-2314613 or lax 409-745-2391. dSIgomestic Sales