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HomeMy WebLinkAbout14 - Civic Center Project - Selection of Broker-Administrator (OCIP)CITY OF NEWPORT BEACH HUMAN RESOURCES DEPARMENT CITY COUNCIL REPORT Agenda Item No. 14 September 28, 2010 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: Lauren Farley, HR/Risk Management Administrator Ext. 3302 1fa rleya newpo rtbeachca. oov Terri Cassidy, Human Resources Director ext. 3303 tcassidy(a_)NewportBeachca.gov SUBJECT: Owner Controlled Insurance Program (OCIP) for the Civic Center Project — Selection of Broker /Administrator ISSUE: Consider approval of an appropriation in the amount of $295,000 to provide for an OCIP Broker /Administrator for the OCIP plan for the Civic Center Project. 1. Approve a budget amendment appropriating funds from Civic Center Project bond proceeds for the OCIP Broker /Administrator for the Civic Center Project (CCP) and approve a Professional Services Agreement with Aon Risk Services Inc. in an amount not to exceed two hundred and ninety -five thousand ($295,000) for 30 months with one six (6) month extension, if needed. Bond proceeds will not be needed for the construction contract and those savings will be applied toward the OCIP. BACKGROUND: The Civic Center Project is approaching the start of construction for the first phase. City procedures and prudent business practices require that contracts executed'to provide services to the City have proper insurance to protect City assets. For most contracts this is done by a contractual transfer of risk by requiring minimal coverage limits of $1 million dollars and basic coverage for general liability, workers compensation and auto liability plus naming the City as an additional insured. Depending on the type of service /contract additional coverage types such as pollution liability or professional liability and increased policy limits may be required. Historically, Council has approved the utilization of traditional insurance contract language, coverage types, and limits for Capital 1 Improvement Projects (CIP), including the current excavation contract for the CCP. Because the CCP is the single largest capital improvement project the City has undertaken, staff explored other insurance protection and contractual models to provide proper protection and reduce costs. One of the alternative insurance models examined is an owner controlled insurance program (OCIP) which provides centralized volume purchasing for insurance costs, broader general liability and workers compensation insurance coverage for projects with construction values exceeding $50 million. Staff's analysis determined that this program has many advantages over traditional insurance practices. An OCIP eliminates multiple insurers and cost duplication, coverage gaps and inadequate limits, potential uninsured contractors, coordinates loss control and loss prevention efforts and provides a competitive advantage for minority, small and specialty contractors. Since the CCP is a single site capital improvement project, the OCIP model offers an advantage for insuring the remaining phases of the Civic Center Project by providing increased protection through comprehensive insurance coverage, risk control, and risk transfer. The OCIP model would secure the financial integrity of the project during and after completion of construction and allows for centralized purchase of other types of insurance such as builder's risk and pollution liability, if needed. FEASIBILITY STUDY: Ron Rakich of Ron Rakich & Associates conducted the feasibility study of an OCIP for the Civic Center. The feasibility study reviewed both OCIP and Contractor Controlled Insurance Program (CCIP) concepts for the Civic Center Project. The result of the study was very favorable to proceed with the OCIP model on the Civic Center Project for the remaining construction phases (Attachment A — Feasibility Study Executive Summary). An OCIP would provide better general liability and workers compensation coverage with these primary advantages: • insurance limits of at least $50 million under the OCIP, exceeding traditional amounts of one to five million dollars per contractor; • Insurance protection for the project up to 10 years (not only during the time contractors are on- site); • Elimination of any coverage issues for the City as an additional insured — additional insured status and coverage provided is limited by state statute; • Cash flow earnings on deferred premium and loss payment; • OCIP is cost neutral, paid through reduced bid /contract amounts not loaded with insurance premium and markup; • Dividends or returned premiums based on favorable claims reporting; and 2 • OCIP manages the overall safety program to ensure that all contractor employees are properly trained in required safety practices. The secondary advantages for implementing an OCIP are project savings stemming from administration and operational areas not tied to the direct cost of construction value (Attachment B — Estimated Cost Savings). • Net project savings of up to $653,000 if the combined losses on the project are at or below 30 %; • Minimizes internal staff time from risk management, city attorney, city manager, city clerk and public works on claims and litigation matters; More control over claims, litigation and settlement negotiations • Eliminates the need to use the third party general liability claim administrator to enforce claim tenders pursuant to contractor's contractual indemnification clause COUNCIL FINANCE COMMITTEE ACTION At its July 26, 2010 meeting, the Council Finance Committee approved the release of a request for qualifications to solicit proposals from the best qualified and priced OCIP broker /administrators to fully realize the savings listed above in the Feasibility Study. Five firms submitted proposals ranging from minimum qualifications and lowest price of $125,000 to very qualified and highest price of $465,000. The proposals were reviewed and the top three OCIP broker /administrators were chosen for interviews based on their experience with public sector OCIP plans, depth of their team members and pricing. The interview panel consisted of five evaluators representing City departments from Administrative Services — Finance and HR/Risk Management, plus two Risk Managers from other public agencies. Upon completion of the interviews, Aon Risk Services, Inc (Aon) was selected for their ability to demonstrate their depth of experience, leadership in this specialty field and overall quality of broker and administrative services. Aon's fees were in the mid -range of the fees proposed, but the additional cost will be more than offset through savings in the actual insurance premiums secured through their knowledge and reputation in the insurance markets, excellence in administration of the program by working closely with CW Driver and CW Driver selected contractors, thorough safety and loss control programs and claims management (Attachment C — Professional Services Agreement with Aon Services). Environmental Review Adoption of OCIP Broker /Administrator and additional insurance services are not ""projects" as defined in the California Environmental Quality Act (CEQA) 3 Implementing Guidelines. As a result, no environmental review is needed in this matter. Fundina Availabill Funding will be available from bond proceeds and transferred from the construction account from the overall project savings due to reduced bids /contracts fees to pay for insurance premiums and mark up as allocated in the budget for traditional insurance procurement for each contracted phase of the CCP. Prepared by: Submitted By: Lauren Farley Terri Cassidy HR/Risk Management Administrator Human Resources Director Attachments: A — Feasibility Study Executive Report B - Estimated Cost Savings C - Professional Services Agreement � ''I Executive Summary Background In February of 2008 the citizens of Newport Beach voted to relocate City Hall to from its current location on the Balboa peninsula to a new location at 1100 Avocado Avenue near the Newport Beach Central Library and close to Corona del Mar Plaza, Corporate Plaza, and Fashion Island. More than fifty (50) teams submitted designs for the planned complex. A series of public meetings were held to evaluate and rank the finalists. Recommendations from these meetings were conveyed to the Newport Beach City Council, and in November 2008 the concept plan of architects Bohlin Cywinski Jackson (BCJ) of San Francisco was formally selected by the Council. According to current plans, the Avocado site not only will accommodate a new City Hall, but also will involve an expansion to the Central Library, creation of three parks, a city office building housing over two hundred employees who work at Newport Beach City Hall, and a parking structure to service the library and City Hall buildings. The project also will include a community room, city council chambers, and a restored wetlands area. This new Civic Center Complex will be the largest public works project ever undertaken by the City of Newport Beach. Initial excavation and dirt removal is scheduled to begin in a few short weeks followed by construction of the parking garage, City Hall facilities and library expansion, and then completion of the surrounding parks and restored wetlands area The entire Civic Center Complex is slated for completion in January of 2013. Study Objective and Scope The City of Newport Beach commissioned this feasibility study to assess whether an Owner Controlled Insurance Program (OCIP) would provide sufficient benefits to justify the use of this risk management technique to finance risks arising out of construction of the new Civic Center Complex. Thus, the principal objective of this study is to determine whether an OCIP is a feasible risk financing . option for the Complex. This study also discusses the feasibility of other risk financing options such as a Contractor Controlled Insurance Program (CCIP) and /or traditional risk financing in which contractors purchase their own insurance and name the City as an additional insured. This study also analyzes: compliance with applicable State and Federal regulations; current insurance, construction services, and financing market conditions; political concerns; significant project risks and the probability of their occurrence; advantages and disadvantages of each of the above - mentioned risk financing strategies (including a cost/benefit analysis of each); and details how an OCIP may be structured to best suit the City's needs during construction and thereafter. City of Newport Beach OCIP Feaslblifty Study What is an OCIP? An OCIP is a technique for consolidating the workers' compensation insurance and general liability insurance coverage for most participants in a large construction project. The project owner, also referred to as the OCIP "sponsor," buys insurance coverage for qualified parties and recovers from the contractors and subcontractors the amount each would have spent on these types of insurance absent the OCIP. From an insurance underwriting standpoint, OCIP is a way to underwrite the project, rather than underwriting each of the individual construction companies constructing the project. Usually the OCIP sponsor also arranges coverage for the property under construction, called "builder's risk" or "course of construction" insurance. Consolidation of coverage increases the volume of insurance premium for a single insurer or insurance group and should generate discounts on that basis alone. In an OCIP there is one insurer and one insurance broker instead of many. If losses are kept low through a concerted safety and claims management effort, additional savings can accrue to the OCIP sponsor (the project owner) as return premium. A variant of this consolidated concept is called a "contractor controlled insurance program" (CCIP) in which a contractor or construction manager acts as sponsor. As mentioned above, the alternative to consolidation is the so- called "traditional" approach where each party buys its own workers' compensation and general liability coverage. Depending on its relationship to others in the overall program, the participant may agree to indemnify, defend, and add other parties to its liability policies as additional insureds. In a traditional situation, the owner of the project acquires some protection through the indemnification agreement and status as additional insured on the contractor policies. As noted in several places in this report, such coverage as may be afforded to an additional insured is increasingly unreliable as a source of financial protection. Findings and Conclusions As in most major decisions involving a project, there are factors for and against a particular course of action OCIP is no exception. In this situation, we have identified the following factors in favor of and against OCIP. Factors in favor of OCIP 1. Certainty of coverage While coverage provided by contractors will not normally provide additional insured protection to the City for active negligence, an OCIP will include the City as named insured and provide them with added protection, including coverage for the City's active negligence. California statutes (section 2782 Cal Civil Code, section 11580.4 Cal Insurance Code) limit the scope of coverage for additional insureds in construction contracts, especially for public entities. Even in a CCIP coverage for active negligence by the public entity may be thwarted by the statutes. It is important to have an insurance program in place that provides protection to all parties involved. Aside from the statutory coverage issues, a contractor's liability insurance limits could be reduced by losses on other projects unless special limits are arranged for the owner's project. Insurers are loathe to pay out large losses on behalf of additional insureds and additional insured endorsement forms contain many restrictions and limitations. 2. Bettercoverage OCIPs usually contain coverage benefits unavailable to contractors. They are non cancelable, except for very limited circumstances. They provide dedicated high limits. In addition, an OCIP will provide completed operations coverage (coverage for losses caused by the contractor's work that do not occur or manifest until after construction is complete) to the insureds out to the statute of repose (10 years in California). Without the benefit of OCIP completed operations protection, the City would have to rely on contractors' ability to City of Newport Beach OCIP FeasiblMy Study 2 negotiate and renew proper coverage for the ten year statutory period. With the potential for catastrophic loss it may be unwise to rely on the contractors' ability to follow through in maintaining coverage and stay in business. 3. Reduced Litigation Potential Under the traditional system where each parry has their own insurance, individual insurers will often spend much time arguing about who is at fault and not enough time and effort in attempting to settle the case. With an OCIP coverage is provided to all parties by the same insurer or group of insurers. Use of a single insurer covering all construction parties greatly reduces the likelihood of litigation as the parties' interests are aligned financially and legally. This is a major benefit of any OCIP. 4. Control An OCIP gives the sponsor enhanced control over the entire process, from determining the level of protection, to settling claims, to transitioning the construction insurance program to the permanent insurance program. Some of these control factors may be especially important to the City of Newport Beach. 5. Experienced Construction Manager with emphasis on safety C.W. Driver (CWD) is a contractor with 90 years experience and a strong emphasis on site safety. CWD employs a safety director responsible for random and regular job site inspection and compliance by subcontractors. CWD's experience in the industry and safety resources coupled with a capable broker/ administrator and insurance company resources could improve the chance for a favorable loss experience on the project, thus improving the potential for owner savings. 6. Single location with no complex construction methods The Avocado location provides one single, manageable job site. Also, Civic Center construction involves no complex construction methods and no use of dangerous equipment such as tower cranes and /or airlifting. As opposed to OCIPs with multiple and broadly defined work sites, one single location with straightforward construction tends to focus program efforts and facilitates the implementation of superior administration, risk control, and claims management programs. 7. Removes insurance barrier for small and emerging contractors Under an OCIP the owner arranges basic insurance for the construction Project. This eliminates a situation whereby prime contractors pass down onerous insurance requirements to their subcontractors, a practice which tends to reduce the pool of subcontractors eligible to work on the Complex. Eliminating the insurance barrier would make the construction program more attractive to small and emerging contractors and may result in more bids on the Project. - Factors against OCIP 1. Minimal Project Size and Uncertain Construction Value In some cases COPS smaller than $100 million may not yield cost savings. This is because of reduced economies of scale for insurance purchasing, and because of minimum cost to set up OCIP administration which offsets premium discounts obtainable by the owner. Construction value of the Civic Center Project may vary from early estimates. Estimated hard costs to be included in the owner - controlled program range' anywhere from $93 million to $120 million. City of Newport Beach OCIP Feasibilify Study - - - 3 Recent competitive bidding conditions on public works projects have resulted in wide fluctuations from owner and engineer estimates with actual bids arriving often below those early estimates. For example, a series of contracts put out to bid by Caltrans last year resulted in winning bids averaging more than 30% below engineers' estimates. If these conditions continue construction value may fall below the projected $93 million in hard costs resulting in a project value that is less than ideal and possibly too small to achieve economies of scale requisite for cost savings as a result of the OCIP. In this case, however, both the contractor and the City's public works representative have repeatedly assured us that this market condition has been taken into account and that the City should be confident in its project cost estimates. 2. Potential for Less Than Optimal Carrier Participation Low construction value is a less attractive risk to OCIP insurance carriers. Some potential markets may not quote a smaller project, or if they do, their rates may be high due to lack of competition and lack of enthusiasm for the project because of its size. If only a few carriers participate in a competitive OCIP procurement, the City may not achieve the economies of scale necessary to make the OCIP financially viable. Reduced carrier competition may escalate OCIP costs. However, the current soft market may encourage some insurers that might have traditional minimum size requirements for an OCIP to pursue this opportunity. Based on an informal canvas of underwriters we believe there would be a reasonably high level of interest among underwriters for this project. a Administrative Concern and No Prior Experience with OCIP Even with the most efficient and experienced broker administering a consolidated insurance program, OCIPs place a demand on internal staff resources to properly oversee, administer, and monitor the program. Despite an experienced and capable risk management and project management staff, the City has not previously been involved with an OCIP. Further, current City staff may be pressed to devote the necessary time and resources to management of the OCIP without sacrificing time and resources required of their existing job obligations. This issue can be addressed by supplementing City resources with contracted construction risk financing expertise. An estimated cost for such services has been included in the proforma analysis in the chapter "Cost/Benefit Analysis." 4. Unsecured Financing Though the City currently has funds on hand to execute dirt moving and excavations at the Project site, the bulk of the program's projected financing is coming from asset - backed bonds not scheduled for issuance until November 2010. Assets which will collateralize these bonds are City-owned properties, but at this time appraisals have not yet been executed to determine estimated values of such properties, nor has the City determined exactly which assets will be used to back the bonds. Scope changes because of lack of financing or delays because of financing cause problems with OCIPs which are designed to cover a specific period and for which rates are developed based on assumptions about payroll and construction value. 5. Schedule Risk The City has broken ground and begun dirt removal on the project; however the proper mechanisms are not yet in place for implementation of an OCIP. A broker must be selected to help underwrite the program and market the planned OCIP to carriers. Coverage must be obtained, and contractors enrolled before the start of construction on the Complex. The City will need to move quickly to put these measures in place before the start of construction. On the other hand, setbacks to the construction schedule are possible with their own unique consequences. if funding is delayed, the construction schedule, now slated to begin in earnest this November, could slip. OCIP insurers commit to a finite construction schedule. Delays can be problematic, but not insurmountable, City of Newport Beach CCIP Feasibility Study - - 4 when it comes to extension of policy periods and reinsurance. For the relatively short duration of this project, modest delays should not be critical, and measures can be use in the negotiations to assure carrier continuation even if delays occur. 6. Savings Potential To show a positive economic outcome, our proforma indicates savings will accrue at lower loss levels since the ultimate cost of the OCIP is a function of losses plus fixed cost. The total loss is limited by a device known as "stop loss insurance" as explained in the report. Thus, the proforma shows that in a worst case scenario, where losses exceed 65% of total maximum premium (losses plus foxed costs), the City would show a nominal ($690) "loss" under an OCIP. With excellent losses, in the range of 30% of total premium, the City would show a savings of approximately .7% of construction value, or about $630,000. According to surveys conducted by major brokers, the average OCIP shows a savings of about I% of construction value, but these surveys include much larger projects in which economies of scale work to the advantage of the OCIP sponsor. Recommendations Weighing the factors above, we conclude that a consolidated insurance program is a feasible risk financing option for this Project with little economic risk and potential for some savings. If the principal motivation is protection or reduction of potential litigation, an OCIP may be the preferred choice. If properly managed, an OCIP could produce savings along with the other benefits. If the City of Newport Beach chooses an OCIP as its risk financing method for this project, it should aggressively pursue the following: 1. Immediately request letters of interest from brokers with experience handling OC /Ps. To market the OCIP, the City of Newport Beach would need to select an OCIP insurance broker. This is a highly specialized sector of the insurance brokerage services market, and only a few brokers possess adequate resources, experience, and ability to provide the required service needed to effectively assemble and manage an OCIP. The City should begin the search fora capable broker as soon as possible. The broker will assist in creation of specifications for the entire OCIP program, market the program to potential carriers, provide insight to the City during the carrier selection process, and then manage the OCIP once the chosen coverage is bound. The importance of the City's relationship with its broker should not be underestimated, as a success of this program rests largely on the ability of the broker and client to communicate with ease and work in tandem to reach OCIP objectives. 2. Attempt to firm -up numbers Numbers such as projected construction hard costs, GMP, and sources of financing for the project should be determined before marketing coverage on the potential OCIP. Estimated construction value that dwindles as the project moves forward, change orders that substantially increase projected costs, and cost related delays may prevent the City from capturing savings on the Project and at worst may lead to an OCIP that is doomed to poor performance due to deficient planning before starting construction. ATTACHMENT B Estimated Savings Exhibit 5 displays one range of financial outcomes for a City of Newport Beach OCIP program based on the variables identified as "Assumptions' in the table, e.g., combined rates. Other ranges of outcomes are possible based an variables selected. The variables shown are based an recent research involving a number of current public works OCIPs in California. Exhibits - Cost Comparison Traditional vs. OCIP Assumptians Cost Comparison: Combined lass ratio 30% 40% 59% GO% ER Irl-B& MI HOBO 530,100; 530,100, 530,190 539,1001 Contractor Cast 2,445.900 2,445,990 2,445,900 2,445,909 2,445,900 Contractor GL hold 244,590 244,590 244,590 244,590 244,590 n om mn n ini oin n ani nin n om mn 9 �ni gin OC /P WEAL Maximum 1,767,000 1,767,000 1,767,000 1,767,000 ucuil0 OCIP fixed costs HOBO 530,100; 530,100, 530,190 539,1001 Converted Losses 583,110 777.480 971,850 1,166220 1,263,405 Administration Total DEEP As %of CV 435,090 1,548,219 435,000 1,742,580 435,000 1,936,950 435,000 2,131.320 435,00Q 2,202,000. 0.70% 0.49% 428% 0.08% 0.00 %' r q4H0 PROFESSIONAL SERVICES AGREEMENT WITH AON RISK INSURANCE SERVICES WEST, INC FOR OWNER CONTROLLED INSURANCE PROGRAM (OCIP) BROKER/ADMINISTRATOR THIS AGREEMENT FOR PROFESSIONAL SERVICES ( "Agreement ") is made and entered into as of this 29TH day of September 2010, by and between the CITY OF NEWPORT BEACH, a California Municipal Corporation ( "City "), and Aon Risk Insurance Services West, Inc. a Corporation whose address is 707 Wilshire Blvd., Suite 2600, Los Angeles, California 90017 ( "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 a full service local municipality. C. City desires to engage Consultant to perform work as the OCIP Broker /Administrator for the Civic Center Project ( "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's team for purposes of Project, shall be Jim Holobaugh, Program Director and Gayle Ramsdell, Program Manager. 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 March 2013, with one six (6) month extension, unless terminated earlier as set forth herein. 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 ( "Work" or "Services "). 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. 3.1 Consultant shall submit all requests for extensions of time for performance in writing to the Project Administrator not later than ten (10) calendar days after the start of the condition that purportedly causes a delay. The Project Administrator shall review all such requests and may grant reasonable time extensions for unforeseeable delays that are beyond Consultant's control. 3.2 For all time periods not specifically set forth herein, Consultant shall respond in the most expedient and appropriate manner under the circumstances, by either telephone, fax, hand - delivery or mail. 4. COMPENSATION TO CONSULTANT City shall pay Consultant for the Services on a time and expense not -to- exceed basis in accordance with the provisions of this Section. Consultant's compensation for all Work performed in accordance with this Agreement, including all reimbursable items and subconsultant fees, shall not exceed Two Hundred, Ninety Five Thousand Dollars and no /100 ($295,000) without prior written authorization from City. 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 quarterly invoices to City describing the Work performed the preceding quarter. Consultant's bills shall include the name of the person who performed the Work, a brief description of the Services performed and /or the specific task in the Scope of Services to which it relates, the date the Services were performed, the number of hours spent on all Work billed on an hourly basis, and a description of any reimbursable expenditures. City shall pay Consultant no later than thirty (30) days after approval of the quarterly invoice by City staff. 4.2 Should the City consider purchasing additional insurance coverage for the Civic Center Project, such as Builders Risk, Pollution Liability or Professional Liability, the City shall pay Consultant a five percent (5 %) commission fee for the procurement of those additional policies. However, the City's decision to purchase any additional insurance coverage is at its sole discretion. Professional Services Agreement Page 2 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. 5. PROJECT MANAGER Consultant shall designate a Project Manager, who shall coordinate all phases of the Project. This Project Manager shall be available to City at all reasonable times during the Agreement term. Consultant has designated Jim Holobaugh, Program Director be its Project Manager. Consultant shall not remove or reassign the Project Manager 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 /Risk Management Department. Lauren Farley, HR/Risk Management Administrator or her designee, 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. CITY'S RESPONSIBILITIES In order to assist Consultant in the execution of its responsibilities under this Agreement, City agrees to, where applicable: A. Provide access to, and upon request of Consultant, one copy of all existing relevant information on file at City. City will provide all such materials in a timely manner so as not to cause delays in Consultant's Work schedule. 8. STANDARD OF CARE 8.1 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 Professional Services Agreement Page 3 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. 8.2 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. 8.3 Consultant shall not be responsible for delay, nor shall Consultant be responsible for damages or be in default or deemed to be in default by reason of strikes, lockouts, accidents, or acts of God, or the failure of City to furnish timely information or to approve or disapprove Consultant's Work promptly, or delay or faulty performance by City, contractors, or governmental agencies. 9. HOLD HARMLESS a. General Indemnity Obligation. To the fullest extent permitted by law, the Broker agrees to defend (through legal counsel acceptable to the District) indemnify and hold harmless, the City, its City Council, boards and commissions, officers, employees, agents and volunteers ( "Indemnitee(s) "), from and against any liability (including liability for claims, suits, actions, arbitration proceedings, administrative proceedings, regulatory proceedings, losses, expenses or cost of any kind, whether actual, alleged or threatened, including attorneys fees and costs, court costs, interest or defense costs, including expert witness fees) where the same arise out of, are a consequence of, or are in any attributable to, in whole or in part, the performance of this Agreement by Broker or by any individual or entity that Broker shall bear the legal liability thereof including but not limited to officers, agents, employees or subcontractors of Broker. The Indemnitees shall be entitled to the defense and indemnification provided for hereunder regardless of whether the loss is in part caused or contributed to by the acts or omissions of an Indemnitee or any other person or entity; provided, however, that nothing contained herein shall be construed as obligating the Broker to indemnify and hold harmless any Indemnitee to the extent not required under the provisions of Part (c) of this Section 9. b. Indemnity for Professional Negligence. To the fullest extent permitted by law, the Broker agrees to indemnify and hold harmless the City, its City Council, boards and commissions, officers, employees, agents and volunteers ( "Indemnitee(s) ") against any and all losses and reimburse any Indemnitee for any attorney's fees or court costs incurred in defense of any action brought against such Indemnitee, that arise out of or relate to any act or omission constituting professional negligence on the part of the Professional Services Agreement Page 4 Broker or its Subcontractors, or their respective employees, agents, representatives or independent contractors. G. Limitations on Indemnity Obligation. Without affecting the rights of the District under any other provision of this Agreement, Broker shall not be required to indemnify or hold harmless an Indemnitee for a loss due to that Indemnitee's sole negligence, active negligence or willful misconduct; provided, however, that such sole negligence, active negligence or willful misconduct has been determined by agreement of the Broker and that Indemnitee or has been adjudged by the findings of a court of competent jurisdiction. In instances where an Indemnitee's active negligence accounts for only a percentage of the loss involved, the obligation of the Broker will be for that portion of the loss not due to the active negligence of that Indemnitee. d. Subcontractor Indemnity Agreements. The Broker agrees to obtain or cause to be obtained executed defense and indemnity agreements with provisions identical to those set forth in this Section 9 from each and every Subcontractor, of every tier. In the event the Broker fails to do so, the Broker agrees to be fully responsible to provide such defense and indemnification according to the terms of this Section 9. e. No Limitation by Employee Benefits. In claims against any Indemnitee under Paragraph 9 (a), above by an employee of Broker or any Subcontractor, of any tier, anyone directly or indirectly employed by them or anyone for whose acts they may be liable, the indemnification obligation under Paragraph 9 (a) shall not be limited by the amount or type of damages, compensation or benefits payable by or for the Broker or a Subcontractor under any policy of insurance, workers' compensation acts, disability benefit acts or other employee benefit acts. 10. 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. 11. COOPERATION Professional Services Agreement Page 5 1 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. 12. 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. 13. 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. 14. 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, policies of insurance of the type and amounts described below and in a form satisfactory to City. A. 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. B. 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. C. Coverage Requirements Professional Services Agreement Page 6 I. 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. ii. General Liability Coverage. Consultant shall maintain commercial general liability insurance in an amount not less than ten million dollars ($10,000,000) per occurrence for bodily injury, personal injury, and property damage, including without limitation, blanket contractual liability. 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 accident. iv. 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 ten million dollars ($10,000,000) limit per claim and in the aggregate. D. Other Insurance Provisions or Requirements. The policies are to contain, or be endorsed to contain, the following provisions: 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 Professional Services Agreement Page 7 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. ii. 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. iii. 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. iv. 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. E. 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. F. 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. 15. 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: 16. 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. Professional Services Agreement Page 8 17. 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. 18. CONFIDENTIALITY A. The Services and work product provided by Consultant hereunder are provided for the exclusive use of City. Data, recommendations, proposals, reports, and similar information and work product provided by Consultant ( "Confidential Information "), are not to be distributed to, used, or relied upon by other parties without the prior written consent of City and Consultant, except that Confidential Information may be distributed to, used, or relied upon by City's legal, accounting and non - insurance financial advisors. Confidential Information shall be, and shall remain, the exclusive property of Consultant and /or its affiliates. B. "Confidential Information" includes any process, system, formula, pattern, model, device, compilation, method, financial analysis, marketing activity, techniques, guidelines, policies, and specifications for the administration of an Owner Controlled Insurance Program; AonWrap and related databases that are disclosed by Consultant to City; and certain sections of Consultant's proposal to City as marked "Proprietary". "Confidential Information" shall not include any information (i) that was already in the possession of Consultant or City prior to its receipt from the other party, without any limitation on its use or disclosure; (ii) is or becomes available to the general public through no act or fault of Consultant or City; (iii) is rightfully disclosed to Consultant or City by a third party without restriction on its use or disclosure; or (iv) is demanded by any state or federal government agency or by court order. C. Each party agrees that, during the Service Period of this Agreement, and for two (2) years thereafter, it will: (a) hold all Confidential Information it receives from the other party in strict confidence, and with the same degree of care that it gives to its own proprietary and confidential information, but not less than a reasonable degree of care, and will not directly or indirectly communicate, divulge, distribute, or otherwise disclose any Confidential Information to others, except as may be required by law, and then only to the extent required by law; (b) not use Confidential Information commercially, or for any other purpose, except the above - stated purpose; (c) limit the dissemination of, and access to, Confidential Information to those personnel and affiliated entities that have a need for access to such Confidential Professional Services Agreement Page 9 Information for the above - stated purpose, and that are under an obligation of confidence consistent with this Agreement; (d) not copy or reproduce any records containing Confidential Information, or divulge such records to others, except as needed for the purposes of this Agreement; and (e) return to the other party, within thirty (30) calendar days of its request, or upon termination of this Agreement, that party's Confidential Information, and use reasonable efforts to destroy all copies thereof, and any other records containing Confidential Information, except that the returning party may retain one (1) copy for the sole purpose of determining its continuing obligations under this Agreement. D. City acknowledges and agrees that Consultant is in the business of providing consulting services to clients utilizing Consultant's knowledge, including background software, ideas, concepts, methodologies, and processes ( "Prior Works'). Consultant reserves all right, title and interest in and to any of the Prior Works that Consultant shall use in the course of the Services for Client. E. Nothing contained herein shall prohibit Consultant from using any of Consultant's general knowledge or knowledge acquired under this Agreement to perform similar services for others; provided however, that Consultant shall not use any of City's Confidential Information in providing services to others or provide to others any custom software created by Consultant specifically for City. 19. 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. 20. CITY'S RIGHT TO EMPLOY OTHER CONSULTANTS City reserves the right to employ other Consultants in connection with the Project. 21. 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 Professional Services Agreement Page 10 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. 22. 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: Lauren Farley, HR/Risk Management Administrator Human Resources Department City of Newport Beach 3300 Newport Boulevard PO Box 1768 Newport Beach, CA 92658 Phone: 949 - 644 -3302 Fax: 949 - 644 -3305 All notices, demands, requests or approvals from CITY to Consultant shall be addressed to Consultant at: Attention: Jim Holobaugh, Program Director Aon Risk Services /Construction Services Group 707 Wilshire Blvd, Suite 2600 Los Angeles, CA 90017 Phone: 213 - 630 -3264 Fax: 847 - 953 -2814 23. CLAIMS The Consultant and the City expressly agree that in addition to any claims filing requirements set forth in the Contract and Contract documents, the Consultant shall be required to file any claim the Consultant may have against the City in strict conformance with the Tort Claims Act (Government Code sections 900 et seq.). 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 Professional Services Agreement Page 11 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 LAWS 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. 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. NO THIRD PARTY BENEFICIARIES The Services performed under this Agreement are for the benefit of City, and there are no intended or incidental third party beneficiaries of this Agreement, or of any of the Services provided under this Agreement. 29. 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. Professional Services Agreement Page 12 30. 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. 31. 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. 32. 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. 33. 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. 34. LOSS CONTROL SERVICES Consultant's risk, loss control and safety services are purely advisory in nature, and are for the sole purpose of assisting City in monitoring Contractors' compliance with Project safety standards for the OCIP. Consultant's risk, loss control and safety services are not intended to constitute a safety inspection as provided by a safety engineering service for the purpose of identifying every loss potential, statutory or code violation, or violation of good practice. Rather, Consultant's services are intended to assist City in the development of risk control procedures. Consultant does not either expressly or impliedly guarantee, ensure, or warrant in any way the safety of any of City's Project sites, that City or the Project sites are in compliance with any law or regulation, or that City will receive a specific claim payment or monetary savings as a result of Consultant's advice. Consultant's employees shall not be required to perform any tests, or make any inspections that such employees are not legally permitted to perform or make. If Consultant or one of its affiliates prepares a loss control report regarding some or all of City's operations, City hereby consents and agrees that any such report may be disclosed to insurers, or prospective insurers, for the OCIP. 35. 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. Professional Services Agreement Page 13 IN WITNESS WHEREOF, the parties have caused this Agreement to be executed on the day and year first written above. APPROVED AS TO FORM: OFFICE OF THE CITY ATTORNEY: a By: My e e champ, ASS stand pity ttorney r ATTEST: 1A Leilani I. Brown, City Clerk Attachments: A08 -00093 5.13.10 CITY OF NEWPORT BEACH, A Municipal Corporation Keith D. Curry, Mayor CONSULTANT. Aon Risk Services, Inc By: (Corporate Officer) Title: Program Director Print Name: By: (Corporate Officer) Title: Senior Executive Vice President Print Name: Exhibit A — Scope of Services Professional Services Agreement Page 14 Exhibit A Scope of Services Required Outline in your Response the services your firm will provide. If certain services are to be provided through an insurer, other broker or independent contractor, explain in detail what services each will provide and how all services will be coordinated. Service requirements include but are not limited to the following: A OCIP Insurance Brokerage Services 1) Perform all site review and data gathering necessary to prepare underwriting submissions to OCIP insurance markets. 2) Work with the City to develop appropriate specifications for coverages providing the broadest available protection and appropriate extensions of coverage. Develop a comprehensive submission and submit to City for review. Present these specifications to qualified insurance markets. 3) Evaluate insurer offerings and identify the best OCIP insurance solutions including appropriate coverage, policy limits, and risk - financing structure. Provide written support for recommendations. 4) Schedule interviews with the most qualified insurance responders. Work with City representatives in identifying the best candidate to provide coverage. Negotiate with underwriters on terms and conditions to obtain the most beneficial and cost - effective coverages available to the City. 5) Provide, if requested from time to time by the City, insurance quotations for additional insurance coverages such as professional liability and pollution liability. 6) Verify the accuracy of rates and premiums. Assist in establishing estimated costs and payrolls for premium calculations. 7) Review all insurer audits and verify their accuracy. 8) Verify wording on new policies, binders, certificates, endorsements or other documents when they are received. Confirm that all negotiated coverage enhancements are provided and obtain revisions in such documents when needed. 9) Promptly submit originals of all policies and endorsements to the City. 10) Oversee and coordinate all services provided by underwriters and insurance service providers. 11) Assure that all coverages are placed with financially responsible insurers. 12) Provide assistance with project close out including audit of final costs, verification of outstanding liabilities, and recovery of unused loss funds. Exhibit A B OCIP Program Administration 13) Assure that the OCIP program complies with all relevant laws and regulations, including reporting, contractor safety screening and establishment of required programs. 14) Determine eligibility for, enroll, and establish close out procedures for all construction contractors in the OCIP. 15) Assist as required in the preparation and distribution of an insurance reference document for all enrolled contractors. 16) Prepare and distribute pre -bid materials explaining the OCIP to prospective bidders. 17) Explain the OCIP to contractors and provide assistance in preparing forms, deducting bid credits and determining interaction between the OCIP and the contractor's insurance program. Attend pre -bid conferences and pre- construction meetings to explain the program and answer questions 18) Screen contractor responses and design a system to verify that contractors have removed insurance costs from their charges as appropriate and account for savings to the City. Participate in negotiations as required to assure that proper charges are deducted. 19) Obtain required payroll information from contractors on a current basis to allow payroll -based loss analysis at least monthly. 20) Issue certificates of insurance for general liability and policies for workers' compensation to all construction contractors. 21) Issue evidence of insurance as required to third parties. 22) Assure that all required workers' compensation reports are submitted to appropriate agencies 23) Verify compliance by contractor and all other parties including consultants, with insurance requirements for exposures outside the OCIP (e.g., automobile liability, off -site general liability, professional liability etc.). 24) Meet with the City 's Risk Manager or other designated representative no less quarterly to discuss issues affecting the OCIP. 25) Attend occasional meetings with management or other persons as requested. 26) Work with City staff to prepare an annual report, including a summary of past activity and action plans (anticipated goals) for the coming contract period before the beginning of each year of service, including at a minimum: ■ Insured program earned premiums and incurred losses by year by coverage line, • Identified problem areas such as claim handling, safety hazards, uninsured risks, etc., Exhibit A ■ Services performed and planned, Savings as verified by identification of contractor - removed insurance costs in construction bids. 27) Maintain confidential all information provided pursuant to the contract, and return any written, computer - generated or other tangible documentation or proprietary information to City upon request or at the termination of the contract. Administrator shall not permit reproduction or use of confidential information except as authorized by the City. Documents generated, provided or prepared on behalf of the City are the property of the City and must be turned over to the City upon request in the form(s) requested (i.e., on diskette, paper, or otherwise). 28) Inform City immediately of any proposed changes of the individuals assigned to the administration unit and provide the qualifications of the prospective individuals. Such changes shall be made subject to agreement with the City. 29) Recommend appropriate contractor obligations for each line of coverage; identify loss situations in which such deductibles shall apply; invoice contractors for obligation; pursue to the extent necessary and recover deductible amounts from contractors and submit recovery checks to the City. C Loss Control Services 30) Work with, and assist the City on development of loss control programs. Review site - specific safety plans and advise on any deficiencies identified. Assist in contractor /subcontractor prequalification in accordance with Section 4420 of the California Government Code including: 1) pulling and reviewing contractor /subcontractor Experience Modification Ratings (EMRs), 2) reviewing contractor /subcontractor serious and willful violation history, and 3) reviewing contractor /subcontractor IIPPs. 31) Provide one or more on -site safety coordinator(s) and site safety services to include inspections, write -ups and specialized contractor training as needed, based on identified exposures or losses. 32) Review and comment on insurer loss control activities and recommendations and direct insurer safety activities as appropriate. 33) Monitor loss runs to identify developing loss trends. Recommend corrective action as appropriate. 34) Develop a master construction safety plan. Assist in determining that contractor site safety plans meet or exceed the minimum requirements of the master safety plan and all appropriate laws and regulations. 35) Identify the need for and provide a resource contractor personnel. Examples include but entry, crane operation, personal protective required by the IIPP. D Information Systems for safety training programs for are not limited to confined space equipment use, and others as 36) Maintain accurate claim data on an accident date basis and provide the City with a monthly status report to include the following: Exhibit A • Rosters of enrolled and non - enrolled contractors, including start-up and completion dates and identifying general- subcontractor relationships, • Payroll and man hours by contractor, • A compliance exception report identifying contractors not submitting required payroll, insurance compliance, enrollment or closeout forms, • A report of contractor loss performance tied to payroll and man hours, • Summaries of safety write -ups, by contractor, Applied deductibles and recoveries (by contractor and for third parties). 37) Provide claims and payroll information by individual contractor to the State Worker's Compensation Rating Bureau for promulgation of EMRs. Conduct meetings with contractors before filing unit statistical reports. Develop a system to assure that claims are assigned to the contractor involved in the loss and to avoid claim allocation errors. 38) At program end, prepare a closeout report documenting savings and success of the Project. In addition, the administrator shall perform the following: • Obtain final payroll information • Assist in resolving all outstanding claims • Audit any dividend or retro calculation and prepare a written report summarizing the audit's findings • Assist in any negotiations with insurers regarding reserves and dividend /retro adjustments E Claims 39) Assist in the timely adjustment and settlement of claims and losses and advise on coverage application to specific loss situations. 40) Provide, or assure that the OCIP insurer provides, workers' compensation claim management services to include designated nearby medical providers, case management, crisis management, rehabilitation and other services. 41) Provide third -party recovery and subrogation management to the extent losses occur within any self- insured retention or program deductible. 42) Manage all claims related to the OCIP for three years after project completion. 43) Organize and conduct semi - annual claim reviews with City risk management and construction personnel. It is the City's desire that the chosen OCIP Broker /Administrator provide support services through the closeout of the OCIP including potential claims activity under the completed operations portion of the coverage. It is anticipated that this period will extend out to the statute of repose.