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Home My WebLink About3.a. Proposal for Risk Management Consulting f A CITY OF ROSEMOUNT EXECUTIVE SUMMARY FOR ACTION CITY COUNCIL MEETING DATE: September 20, 1994 AGENDA tTEM: Proposal for Risk Management Consulting AGENDA SECTION: Services Department Heads Report PREPARED BY: Jeff May, Finance Director AGENDA�ip�:� � � � ! � C ATTACHMENTS: Proposal, List of References and Profites APPROVED B • Attached for your consideration is a proposal from American Risk Services, fnc.(ARS) to provide the City of Rosemount with risk management consultant services for our workers compensation insurance and our general Iiability insurance. Currently, we try to handle these tasks internally with assistance from our agent for these policies. What we have found is that we do not have the expertise or the time to keep on top of the issues invoived with risk management.' We have been expioring the option of retaining either an agent or a consultant to help us with these services for quite some time. We have been informed by the League that we must have an agent. We also have been informed by the league that if we are going to change agents it must be done during our renewal period. For workers compensation our renewal date is October 1 st and for general liability our renewal date is November 1 st. ARS is not licensed to be an agent. Therefore, if we are to retain their company, we must also have an agent. This is not an uncommon practice as can be seen by the number of cities that ARS contracts for services with. Our current agent receives 2% of our workers compensation premiurns as a commission and 10% of our general liability premiums as a commission. We are currently working with this agency to continue providing minimum services on a fee basis which , will allow us to meet the teague's requirement of retaining an agent of record. Hopefully, by Tuesday evening we will have something more concrete to inform you of regarding this issue. If we are unable to work out something with our current agent, we have already begun exploring other alternatives. Mark Flaten, President of ARS, will be present Tuesday evening to give a brief presentation of his company's services and to answer any questions that you may have. RECOMMENDED ACTION: Motion to approve the City af Rosemount entering into a one year agreement with American Risk Services, Inc. to provide the City with risk management services. COUNCIL ACTION: r _ � 12800 Whitewater Drive,Suite 150 Minneapolis,MN 55343-6469 TeL•(6l2)933-�H00 American Risk Services, Inc. . ' Fax:(612)933-8458 August 26, 1994 Mr.Jeffrey A.May Finance D'uector The City of Rosemount 2875 145th Street West P O Box 510 Rosemount,Minnesota 55068-0510 Re: Proposal for Risk Management Cansultin�Services Dear Jeffrey: American Risk Services,Inc. (ARS}is pleased to submit the following proposal based upon our meeting of August 25, 1994. BACKGROUND INFORMATION AND EXPERIENCE ARS is an established risk management and employee benefit consulting firm founded in 1979. We do not sell insurance nor aze we affiliated with any insurance agency, insurance company or provider. Acc4rdingly, we can assess The City of Rosemount's risk management and insurance program in an unbiased manner. ARS does not benefit from a commission of any sort or any financial arrangement as a result of our work or recommendations. Our proposal is intended to assess The City of Rosemount's current risk management/insurance program to protecE the financial assets. This proposal consists of two service options. One praviding 12 month continuous counsel services, the other a retainer program. CONTINUOUS COUNSEL Clients without a full time on staff risk manager, as well as clients who wish to supplement their own intemal expertise can benefit gready from the continuing services of our staff. The following is a representative list of services provided to our continuous counsel clients: • Risk management audit. • Spec�cations and remarketing. • Insurance policy negotiations: • Non insurance contract review and interactive negotiations: • Fee negotiations. Risk Management • Employee Benefits . Consultants � . > � American Risk Services,Inc. Mr.Je,fj''rey A.May The City ofRosemount August26, 1994 � Page 2 • Claim management. • Represent clients at administrative hearings. • Coordinate loss prevention activities. • Develop risk management information system. • Maintain premium and loss records,audits,etc. Our professional staff will assist you in managing your risk management and insurance prograrns on a day to day, as needed,basis. A. Obiective The goal of risk management is the preservation of the assets and earning power of the entity. Asset and earning power can become impaired by a number of physical perils as well as by legal liabilities. Our risk management review will assist in identifying and quantifying the risks of your organization. Upon completion of this review, coupled with The City of Rosemount's risk taking and risk transfer philosophy, we will analyze your present risk managemenUinsurance program to see how the program will respond predictably to losses. We will also assist in the developing of services rendered by the insurance brokers and carriers. B. Scope and MethodoloQv Identr rcation. The identification phase starts with interviewing The City of Rosemount's key personnel to eacpose potential losses which can adversely affect the financial strength of the organization. Through the dialogue with various individuals we strive to identify these exposures. Other exposures will be derived from: • List of properties including building,contents and business interruption value • Insurance carriers'claim listings for the past five years. • Insurance audits for the past five years. • Workers'compensation modification promulgadon worksheets. • Current insurance policies with all endorsements. • Annual Budget Statement. • Other contracts(i.e.purchase orders,leases of premises,agreements with various urilities). • Touring your key facilities. Quanti �ing the Risk Once the risks have been identified,we would proceed to estimate the potential losses associated with those risks. We will estimate the projected frequency and severity of lossesbased upon historical experience as well as incorporating subjective factors that will affect future claim experience. These subjective factors include changes in The City of Rosemount's operations and long range planning goals. From the statistical measurements we will quantify and investigate various funding methods including the reasonableness of deductibles. , � American Risk Services Inc. , Mn Jeffrey A.May The City ofRosemount August 26, 1994 � Page 3 C. Servicin€�of Account We will review the flow of information between the insurance carriers and thc Company. For example,a copy of the quarterly loss experience reports,insurance policies,endorsements,correspondence and other contracts can be sent to our office. We will review these documents as Ihey are received. If a problem is discovered,we will immediately contact you to work out a solution If no pmblem arises,we will simply maintain our files. We will alsa answer,by phone,your day ta day questions. D. Benefits The Citv of Rosemount Can Expect From The Project • A risk managemendinsurance program specifically designed for The City of Rosemount that is very cost effective and responsive to the risk inherent to your Company. • An unbiased professional to access with questions,problems or education. PERSONNEL ASSIGNED TO THE PROJECT The project consultants will be Mark Flaten and John Simacek. The vitae of the preceding consultants are enclosed. FEE SCHEDULE Total Fee Monthly Installments Continuous Counsel Service $6,000 $500(12) It would be our pleasure to work with The Ciry of Rosemount to meet the goals cited. Sincerely, � ��'-�� ,�� Mark T.Flaten President I accept the proposal as indicated below: Continuous Counsel [ ] Acceptedby: Title: Date: . I2800 Whitewater Drive,Suite 150 Minneapolis,MN 55343-6469 T TeL•(612)933-4y00 American Risk Services, 111C. Fax:(612)933-8458 CONFIDENTIAL Representative Client List: Minnesota Masonic Home Universal Hospital Services,Inc. Wilder Foundation Hubbazd Milling Company Volunteezs of America Health Services Appliance Recycling Centers of America Midwest Health Care Management Advance Machine Company,Inc. Missionary Oblates of Mary Immaculate Analysts International Corporation Twin City Christian Homes Network Computer Systems St Ann's Residential Services,Inc. BMC Industries,Inc. Field Financial Corporation INCSTAR Diversified Energies,Inc. Zycad Corporation Dyco Petroleum Corporation Detector Electronics Corporation Nugget Oil Corporation Nortronics Company Egan Companies,Inc. Smead Manufacturing Corporation Minnesota Vikings Football Club,Inc. Polaris Industries,Inc. "Minnesota Twins Baseball Club Sterner Lighting Systems,Inc. Volunteers of America of Minnesota Gabberts,Inc. Plastic ProducLs Co.,Inc. G�M� Spartan Products,Inc. Metro Sales,Inc. Embers Restaurants Austads Company Tom Thumb Food Markets,Inc. Pam Companies McFazland Clinic Daktronics,Inc. Hazeltine National Golf Club American Westezn Corporation Rockler Companies,Inc. x�� Wessin&Gorman,Inc. Health One Arnold&McDowell Methodist Hospital Moss&Barnett Ridgeview Medical Center Gray,Plant,Mooty,Mooty&Bennett Hutchinson Community Hospital Hutchinson Schools Cardiac Surgical Associates Hutchinson/Willmar Technical College Century Motor Freight Litchfield School District Landscape Struchues Inc. Carlisle Plastics,Inc. Network Management,Inc. Ryan Construction Company Anoka Electric Cooperative Egan Companies,Inc. • City of Apple Valley C. S.McCrossan,Inc. City of Bloomington Meiropolitan Airports Commission City of Brooklyn Center SCIIv1ED Life Systems,Inc. City of Delano -. _ EdenTec City of Fairmont St Jude Medical,Inc. City of Hutchinson Medtronics,Inc. City of New Hope Angiomedics,Inc. City of St.Anthony BiaMedicus,Inc. City of S� Cloud Aequitron Medical,Inc. City of St.Louis Pazk Village of Superior August 25.1994 Risk Management . Employee Benefits . Consultants MARK T.FI.ATEN American Risk Services,Inc. 12800 Whitewater Drive, Suite 150 Minneapolis,Minnesota 55343 Tei(612)933-4940 Fa�c(612)933-8458 : Mr. Flaten serves as President and Chief Esecutive Officer of American Risk Services, Inc., a full service, Risk Management and Employee Benefits consulting firm since 1979. He brings to this position a broad background of consulting and management e.Yperience. Mark is a graduate of Mankato State University with a Bachelors Degree in Chemistry and a minor in Political Science. Prior to entering the Risk Management/Insurance industry, he served in the United States Air Force in Southeast Asia as an Early Warning Radar Electronic Technician. Prior to joining American Risk SeIvices, Inc., he held the following positions: • Special Agent-in-Charge-Continental Insurance Companies,Minneapolis,MN. • President-Coplein Insurance Agency,a subsidiary of Heritage Insurance Company>Madison,WI. ° • District Marketing Manager-Kemper Group,M'rnneapolis,MN. Mark has given numezous speeches on Risk Management and Employee Benefits'to industry groups, including the Swedish Trade Council in Stockholm, Sweden; the National Accountants Association and CPA Society of Minnesota for continuing education credits and many other organizations. Mark also serves on several corporate boards in various capacities, including: Chairperson of Volunteers of America of Minnesota 501(c)(3), a Social Service Organization; Director and Finance Committee Chairperson of the Volunteers of America Health Services SOI(c)(3), a Nursing Home Company; Chairperson of Volunteers of America Care Facilities; Director of Volunteers of America,Inc.,and Director of the Nfln-Profit Insurance Association. Specific areas of e.�pertise are the following: Emplayee Benefit Plan Designs E.ctended Care Facilities Hospitals Medical Device Manufacturers Trucking Firms Professional Sports Teams Municipalities Construction Intellectual Properties Health Care Cost Containment Oil and Gas JOHN R SIMACEK American Risk Services,Inc. 12800 Whitewater Drive, Suite 150 Minneapolis,Minnesota 55343 Tel(612)933-4900 Fax(612)933-8458 Mr. Simacek brings a broad insurance and loss control background to American Risk Services, and serves as Vice President of the Corporation. After serving in the Marine Corps during the Korean Campaign,John has held the foltowing positions: • Underwriter-Iowa National Insurance Company,Minneapolis,MN. " • Underwriter-United Stat�s Fidelity&Guaranty Insurance Company,Minneapolis,MN. • Underwriting Manager, Loss Control Manager, Premium Audit Manager - TransAmerica Insurance Group,Minneapolis,MN. • Regional Undenvriting Manager-TransAmerica Insurance Group, Chicago,IL. • Vice President, C.O.O. -Lakeland Fire and Casualty Company,Minneapolis,MN. • Vice President-FBS Insurance Agenry,Minneapolis,MN. • Risk Manager Pro Tem-First Bank System,Inc.Minneapolis,MN. He has been a public speaker on Risk Management,speaking before such organizations as Ice Skating Institute of America at an Internadonal Convention in Las Vegas, Nevada and their Minnesota Annual Convention; Minnesota Government Finance Officers Association; St.Paul Chapter of the National Association of Accountants and various other organizations, including Continuous Education Credit Courses. John is currently serving on the Board of Directors for the Metropolitan Publia Airport Foundation and is a former Chairperson and President. He is a past Chairperson of the City of Richfield Planning Commission;past President of the Underwrriting Managers Association; past member of the Governing Committee, Minnesota Automobile Insurance Plan; and has served as an officer and board member of several service organizations including Kiwanis; United States Amateur Hoekey Association;and USAHA Referees Association,District 5-6. Specific areas of expertise are the following: Loss Prevention/Safety Extended Care Facilities Municipalities Hospitals Financial Industry Construction Trucking Firms Manufacturing Building Management Medical Device Manufacturers