1998-156 O INANCE NO
AN ORDINANCE AUTHORIZING THE CITY MANAGER TO EXECUTE A CONTRACT
WITH WILLIAM M MERCER, INC TO PROVIDE PROFESSIONAL SERVICES TO ASSIST
THE CITY IN EVALUATING AND SELECTING A HEALTH CARE PROVIDER AND TO
PROVIDE RELATED SERVICES AS SET FORTH IN THE CONTRACT, PROVIDING FOR
THE EXPENDITURE OF FUNDS THEREFOR AND PROVIDING AN EFFECTIVE DATE
(PROFESSIONAL SERVICES AGREEMENT # 2217, AWARDED TO WILLIAM M MERCER
INC, IN AN AMOUNT NOT TO EXCEED $64,000 00 PER YEAR)
WHEREAS, the C~ty needs a professional consultant to provxde professional services,
mcludmg, w~thout llmltatton actuarial services, to assist ~t in selecting the most quahfied, lowest
responsible b~dder to prowde health insurance to ~ts employees, develop benefits and design strategy,
momtor the ongoing admlmstratxon of healthcare plans, and to perform other related functions, and
WHEREAS, the C~ty Manager has recommended that the C~ty contract with Wflham M
Mercer, Ine to prowde such serwees, and
WHEREAS, the Cxty Council deems ~t m the pubhc interest to so contract for such
healthcare serwees, NOW THEREFORE,
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS
~ That the C~ty Manager ~s authorized to enter ~nto a contract w~th Wllham M
Memer, Ine, to prowde profesmonal servmes to evaluate and select the most quahfied, lowest
responsible provider for health msurance and to provide related serwces, substantially ~n the form
of the Professtonal Services Agreement for Health Care Consultant whmh ~s attached hereto and
made a part oftlus ordinance as ffwntten word for word here~n
~ That the C~ty Manager ~s hereby anthonzed to expend the funds as prowded
m the attached Professional Servmes Agreement
~ That this ordinance shall become effective lnrmedmtely upon ~ts passage and
approval
PASSEDAND APPROVED ttus the f~'tL4~ dayof ~.~. ~, ,1998
JACI~ILLER, MAYOR
ATTEST
JENNIFER WALTERS, CITY SECRETARY
APPROVED AS TO LEGAL FORM
HERBERT L PROUTY, CITY ATTORNEY
' ' ' ~IC--E
PROPOSAL2217 PROF~$SI~
ORDINANCE
PROFESSIONAL SERVICES AGREEMENT
FOR HEALTH CARE CONSULTANT
STATE OF TEXAS §
COUNTY OF DENTON §
THIS AGREEMENT ts made and entered tnto as of the 18th day of
duly ,19 98, by and between the Ctty of Denton, Texas, a Texas munm~pal
corporation, w~th its pnnctpal office at 215 East McKtnney Street, Denton, Denton
County, Texas 76201, hereinafter called "OWNER" and Wtlham M Mercer,
Incorporated, w~th xts corporate office at 2200 Ross Avenue, State 3500, Dallas, TX,
75201, hereinafter called "CONSULTANT," acting herein, by and through their duly
authorized representatives
WITNESSETH, that in constderatton of the covenants and agreements herein
contained, the parties hereto do mutually agree as follows
ARTICLE I
EMPLOYMENT OF CONSULTANT
The OWNER hereby contracts w~th the CONSULTANT, as an mdependent
contractor, and the CONSULTANT hereby agrees to perform the servmes heretn m
counectxon w~th health msurance consulting servmes as stated m the sectaons to follow,
hereinafter sometimes referred to as the ProJect, with dthgence and tn accordance wtth
the prevailing professional standards customarily obtmned for such servmes m the State
of Texas The profesmonal servmas set out heretn are as follows CONSULTANT shall
provide all servmes mutually agreed between the parttes, ~ncludtng but not hmtted to,
actuarml servmes to asstst OWNER m evaluatmg and selecting the most quahfied, lowest
responsible bidder to prowde health tnsurance to OWNER's employees, developing
benefits desxgn strategy, and momtonng the ongoing admm~stratton of health care plans
and performance by insurers, as more fully set forth tn Arttcle II heretn
ARTICLE II
SCOPE OF SERVICES
The CONSULTANT shall perform the followtng servmes tn a professxonal
manner
A All those sermees set forth m CONSULTANT's proposal letter dated March 26,
1998, wluch ts attached hereto and made a part hereof as Exh~btt "A" as if written
word for word herem
B If there xs any conflict between the terms of this Agreement and the exbabxts attached
to tbas Agreement, the terms and cond~txons of th~s Agreement wxll control over the
terms and condxtxons of the attached exh~btts or task orders
ARTICLE III
PERIOD OF SERVICE
Th~s AGREEMENT shall become effectxve upon execution of tbas Agreement by
the OWNER and the CONSULTANT and upon ~ssue of a notme to proceed by the
OWNER, and shall rematn m fome for a period of 36 months Tbas Agreement ~s subject
to consideration for renewal upon mutual consent of both part,es for two add~taonal
twelve-month periods, wxth negotmtton of the terms, conditions and cost for the
successxve years Ttus Agreement may be sooner terminated xn accordance with the
prowsxons hereof Txme ~s of the essence m tbas Agreement The CONSULTANT shall
make all reasonable efforts to complete the servxces set forth herem as expedxtlously as
possthle and to meet the schedule estabhshed by the OWNER, acting through xts Cxty
Manager or bas designee, wbach schedule shall be estabhshed after consultatxon w~th the
CONSULTANT
ARTICLE IV
COMPENSATION
A COMPENSATION TERMS
1 "Subcontract Expense" as defined as expenses incurred by the
CONSULTANT m employment of others xn outside firms for servmes ~n the
nature of the subcon~actor or subconsultants work to assxst CONSULTANT
2 "D~rect Non-Labor Expense" ~s defined as that expense for any assxgnment
recurred by the CONSULTANT for supphes, transportatxon and eqmpment,
travel, commumcat~ons, subsxstence, and lodging away from home, and
s~mflar ~nc~dental expenses ~n connection w~th that assignment
B BILLING AND PAYMENT For and ~n consideration of the professional services to
be performed by the CONSULTANT hare~n, the OWNER agrees to pay a set monthly
fee of $5 00 per active participating employee per month for the first twelve months
of tbas Agreement The monthly fee per employee wall be $5 25 and $5 50 for the
second and tl~rd years of th~s Agreement, respectively Consulting fees wall be
subject to a monthly m~mmum of $4,000 and a monthly max~mmn not to exceed
$5,000, m add~taon to any d~rect non-labor expense The total annual fee for each year
ofttus Agreement, mcludmg reimbursement for D~rect Non-Labor Expense, shall not
exceed $64,000
Nothing contmned in th~s Artacle shall reqmre the OWNER to pay for any work wbach
~s unsatisfactory, as reasonably determined by the City Manager or h~s designee, or
2
which is not submitted in compliance with the terms of this Agreement The
OWNER shall not be required to make any payments to the CONSULTANT while
the CONSULTANT is in default under this Agreement with respect to the work to
winch the default applies
It is specifically understood and agreed that the CONSULTANT shall not be authorized
to undertake any work pursuant to this Agreement which would require additional
payments by the OWNER for any charge, expense, or reimbursement above the
maximum not to exceed fee as stated, unless CONSULTANT is requested to perform
tasks outside the scope presented in this contract If additional assistance is required
from the CONSULTANT, estimates of professional fees will be provided and
presented to OWNER for approval before proceeding with any additional tasks The
CONSULTANT shall not be pad additional payments by the OWNER for any
charge, expense, fee or reimbursement above the maximum not to exceed figure nor
perform any additional sermces, without obtmmng prior written authorization from
the OWNER
CONSULTANT and OWNER expressly understand and agree that CONSULTANT shall
not receive any compensation for the services provided for herein, from any other
source
C ADDITIONAL SERVICE For additional services authorized in writing by the
OWNER in Article III, the CONSULTANT shall be prod based on a professional fee
proposal provided by the CONSULTANT at the time additional services are
requested by the OWNER Payments for additional services shall be due and payable
upon submission by the CONSULTANT, and shall be in accordance w~th subsection
B hereof Statements shall not be submitted more frequently than monthly
D PAYMENT If the OWNER fails to make payments due the CONSULTANT for
services and expenses within sixty (60) days after receipt of the CONSULTANT's
undisputed statement thereof, the amounts due the CONSULTANT will be increased
by the rate of one percent (1%) per month from the smd sixtieth (60th) day, and, in
addition, the CONSULTANT may, after giving seven (7) days' written notice to the
OWNER, suspend services under this Agreement until the CONSULTANT has been
pud in full all amounts due for services, expenses, and charges, provided, however,
nothing herein shall require the OWNER to pay the late charge of one pement (1%)
set forth herein w~th respect to certmn work if the OWNER reasonably determines
that such work is unsatisfactory, in accordance with this Article IV, "Compensation"
ARTICLE V
OBSERVATION AND REVIEW OF THE WORK
The CONSULTANT will exercise reasonable care and due diligence in
discovering and promptly reporting to the OWNER any defects or deficiencies in the
work of the CONSULTANT or any subcontractor or subconsultants
ARTICLE VI
OWNERSHIP OF DOCUMENTS
All documents prepared or furmshed by the CONSULTANT (and
CONSULTANT's subcontractors or subeonsultants) specifically and exclusively for
OWNER pursuant to this Agreement are instruments of service, and shall become the
property of the OWNER upon the termination ofth~s Agreement The CONSULTANT is
entitled to retmn copies of all such documents The documents prepared and furmshed by
the CONSULTANT are intended only to be applicable to this ProJect, and OWNER's use
of these documents in other projects shall be at OWNER's sole risk and expense In the
event the OWNER uses any of the information or materials developed pursuant to tbas
Agreement in another project or for other purposes than specified herein, CONSULTANT
is released from any and all liability relating to their use in that project, but the OWNER
shall have the right and authority to use these documents, materials, and data for any
purpose Notwithstanding anything to the contrary contmned in tbas Agreement, it is
understood and agreed that the CONSULTANT shall retain all of its rights in its
methodologies and methods of analysis, ideas, concepts, expressions, know how,
methods, teehmques, skills, knowledge and experience possessed by the CONSULTANT
prior to, or acquired by the CONSULTANT during, the performance of tbas Agreement
and the CONSULTANT shall not be restricted in any way with respect thereto
ARTICLE VII
INDEPENDENT CONTRACTOR
CONSULTANT shall provide services to OWNER as an independent contractor,
not as an employee of the OWNER CONSULTANT shall not have or claim any right
arising from employee status
ARTICLE VIII
INDEMNITY AGREEMENT
The CONSULTANT shall indemnify and save and hold harmless the OWNER
and xts officers, and employees from and agmnst any and all liability, claims, demands,
damages, losses, and expenses, including, but not limited to court costs and reasonable
attorney fees incurred by the OWNER, and including, w~thout limitation, damages for
bodily and personal injury, death and property damage, resulting directly from the
negligent acts or wrongful omissions of the CONSULTANT or its officers, shareholders,
4
authorized agents, or employees in the execution, operation, or performance of flus
Agreement
Noflung in ttus Agreement shall be construed to create a liability to any person
who Is not a party to this Agreement, and nothing herein shall waive any of the parties'
defenses, both at law or equity, to any claim, cause of action, or litigation filed by anyone
not a party to this Agreement, including the defense of governmental immunity, which
defenses are hereby expressly reserved
ARTICLE IX
INSURANCE
Dunng the performance of the services under this Agreement, CONSULTANT
shall mmntaln the following insurance (other than Professional Liability Insurance) with
insurance compames heensed to do business m the State of Texas by the State Insurance
Commission or any successor agency that has a rating with Best Rate Carriers of at least
an A- or above
A Comprehensive General Liability Insurance w~th bodily m. lury limits of not less than
$500,000 for each occurrence and not less than $500,000 in the aggregate, and with
property damage limits of not less than $100,000 for each occurrence and not less
than $100,000 In the aggregate
B Automobile Liability Insurance with bodily injury limits of not less than $500,000 for
each person and not less than $500,000 for each accident, and w~th property damage
limits of not less than $100,000 for each accident
C Workers' Compensation Insurance in accordance with statutory requirements, and
Employers' Liability Insurance with limits of not less than $I00,000 for each
accident
D Professional Liability Insurance with limits of not less than $1,000,000 annual
aggregate
E The CONSULTANT shall furnish insurance certificates or insurance policies at the
OWNER's request to evidence such coverages The insurance policies shall contain a
provision that such insurance shall not be canceled or materially modified w~thout
thirty (30) days' prior written notice to CONSULTANT In such event,
CONSULTANT shall provide immediate written notice to OWNER and shall, prior
to the effective date of the change or cancellation, serve substitute policies furnishing
the same coverage
5
ARTICLE X
ARBITRATION AND ALTERNATE DISPUTE RESOLUTION
The part~es may agree to settle any d~sputes under th~s Agreement by subm~tttng
the dispute to arbitration or other means of alternate d~spute resolution, such as
mediation No arbitration or alternate d~spute resolution arising out of or relating to th~s
Agreement, revolving one party's d~sagreement, may ~nclude the other party to the
d~sagreement xanthout the other's approval
ARTICLE XI
TERMINATION OF AGREEMENT
A Notwithstanding any other prows~on of th~s Agreement, e~ther party may terminate
this Agreement by g~wng thirty (30) days' advance written not,ce to the other party
B Th~s Agreement may be tenmnated ~n whole or ~n part m the event of either party
substantially fmlmg to fulfill ~ts obhgat~on under th~s Agreement No such
termination will be effected unless the other party ~s g~ven (1) written notme
(dehvered by certffied marl, return receipt requested) of intent to terminate and settmg
forth the reasons specifying the non-performance, and not less than tlurty (30)
calendar days to cure the fmlure, and (2) an opportumty for consultation vnth the
terminating party prior to termmatton
C If the Agreement ~s terminated prior to completion of the services to be prowded
hereunder, CONSULTANT shall ~mmed~ately cease all services and shall render a
final bill for services to the OWNER w~thtn tlurty (30) days after the date of
temunat~on The OWNER shall pay CONSULTANT for all servmes properly
rendered and satisfactorily performed and for reimbursable expenses to termination
recurred prior to the date of termination Should the OWNER subsequently contract
with a new consultant for the continuation of serwces on the ProJect, CONSULTANT
shall reasonably cooperate m prowdmg mformat~on The CONSULTANT shall mm
over all documents prepared or furnished by CONSULTANT specffically and
exclusively for the OWNER pursuant to tlus Agreement to the OWNER on or before
the date of termination, but may mmntmn cop~es of such documents for ~ts use
ARTICLE XII
RESPONSIBILITY FOR CLAIMS AND LIABILITIES
Approval by the OWNER shall not constitute, nor be deemed a release of the
responsibility and habthty of the CONSULTANT, ~ts employees, assomates, authorized
agents, subcontractors, and subconsultants for the accuracy and competency of their
designs or other work, nor shall such approval be deemed to be an assumption of such
responsibility by the OWNER for any defect ~n the design or other work prepared by the
CONSULTANT, ~ts employees, subcontractors, authorized agents, and subconsultants
6
ARTICLE XIII
NOTICES
All notices, communications, and reports required or permitted under tins
Agreement shall be personally delivered or marled to the respective parties by deposlung
same m the United States mai to the address shown below, certified mai, return receipt
requested, unless otherwise specified herein
To CONSULTANT To OWNER
William M Mercer, Incorporated City of Denton
2200 Ross Avenue Ted Benavides, City Manager
State 3500 215 East McKlnney
Dallas, TX 75201 Denton, TX 76201
All notices shall be deemed effective upon receipt by the party to whom such
notice is given, or within three (3) days' marling, whichever is earlier
ARTICLE XIV
ENTIRE AGREEMENT
Tins Agreement, consisting of ten pages and one extublt, constitutes the complete
and final expression of the agreement of the parties, and as intended as a complete and
exclusive statement of the terms of their agreements, and supersedes all prior
contemporaneous offers, promises, representations, negotiations, discussions,
communications, and agreements which may have been made in connection w~th the
subject matter hereof
ARTICLE XV
SEVERABILITY
If any prowslon of this Agreement is found or deemed by a court of competent
jurisdiction to be invalid or unenforceable, it shall be considered severable from the
remainder of this Agreement and shall not cause the remainder to be invalid or
unenforceable In such event, the parties shall reform this Agreement to replace such
stricken provision wtth a valid and enforceable provision which comes as close as
possible to expressing the intention of the stricken provision
ARTICLE XVI
COMPLIANCE WITH LAWS
The CONSULTANT shall comply wath all federal, state, and local laws, rules,
regulations, and ordinances appheable to the work covered hereunder as they may now
read or hereinafter be amended
ARTICLE XVII
DISCRIMINATION PROHIBITED
In perform:ng the services required hereunder, the CONSULTANT shall not
dlscrlmmate agmnst any person on the basis of race, color, religion, sex, national origin or
ancestry, age, or physical handicap
ARTICLE XVIII
PERSONNEL
A The CONSULTANT represents that it has or will secure, at its own expense, all
personnel reqmred to perform all the services required under this Agreement Such
personnel shall not be employees or officers of, or have any contractual relations with
the OWNER CONSULTANT shall inform the OWNER of any conflict of interest or
potential conflict of interest that may arise during the term of this Agreement
B All services reqmred hereunder wall be performed by the CONSULTANT or under its
supervision All personnel engaged in work shall be qualified, and shall be
authorized and permitted under state and local laws to perform such services
ARTICLE XIX
ASSIGNABILITY
Neither party shall assign any interest in this Agreement, nor transfer any interest
in this Agreement (whether by assignment, novation, or otherwase) wathout the prior
written consent of the other party
ARTICLE XX
MODIFICATION
No waiver or modification of ttus Agreement or of any covenant, condition, or
limitation hereto contained shall be valid unless in writing and duly executed by the party
to be charged therewath, and no evidence of any waiver or modification shall be offered
or received m evidence in any proceeding arising between the parties hereto out of or
affecting th~s Agreement, or the rxghts or obligations of the part~es hereunder, and unless
such waiver or modification is in writing and duly executed, and the parties further agree
that the provisions of this section wall not be wmved unless as set forth herein
ARTICLE XXI
MISCELLANEOUS
A The followang exinbtts are attached to and made a part of ttus Agreement
Exhibit A - Proposal letter from CONSULTANT to OWNER dated March 26, 1998
8
B CONSULTANT agrees that OWNER shall, until the exparat~on of three (3) years after
tile final payment under thas Agreement, have access to and the right to examine any
darectly pertinent books, documents, papers, and records of the CONSULTANT
anvolvmg transactaons relating to thas Agreement CONSULTANT agrees that
OWNER shall have access dunng normal working hours to all necessary
CONSULTANT facthtaes and shall be provided adequate and appropriate workang
space m order to conduct audats m comphance wath thas sectaon OWNER shall gave
CONSULTANT reasonable advance notme of antended audats
C Venue of any stat or cause of actaon under thas Agreement shall he exclusavely m
Denton County, Texas Tins Agreement shall be construed in accordance wath the
laws of the State of Texas
D For the purpose of thas Agreement, the key persons who wall perform most of the
work hereunder shall be Mark Chromster, J~m Falconer, and Brenda Pagel However,
n0thmg hereto shall hmat CONSULTANT from usang other qualffied and competent
members of ats firm to perform the services reqmred herean
E CONSULTANT shall commence, carry on, and complete any and all projects with all
apphcable d~spatch, m a sound, economacal, and efficaem manner and an accordance
with the provasaons hereof In accomphshtng the projects, CONSULTANT shall take
such steps as are appropriate to ensure that the work ~nvolved as properly coordanated
w~th related work being earned on by the OWNER
F The OWNER shall assast the CONSULTANT by plamng at the CONSULTANT's
disposal all avmlable mformataon pemnant to the Project, ~ncludang prevaous reports,
any other data relative to the ProJect, and arranging for the access thereto, and make
all prows~ons for the CONSULTANT to enter m or upon pubhc and private property
as reqmred for the CONSULTANT to perform servmes under th~s Agreement
G The eaptaons of thas Agreement are for ~nformat~onal purposes only, and shall not ~n
any way affect the substantive terms or condataons of thas Agreement
IN WITNESS HEREOF, the Caty of Denton, Texas has caused th~s Agreement to
be e>~ecuted by ats duly authonzed Caty Manager, and CONSULTANT has executed thas
Agreement through ~ts duly authorized undersigned officer on tins the ~gph~ y day of
July- ,1998 ~--
CITY OF DENTON, TEXAS
TED BENAVIDES, CITY MANAGER
9
ATTEST
JENNIFER WALTERS, CITY SECRETARY
AS TO LEGAL FORM
HERBERT L PROUTY, CITY ATTORNEY
BY /
/
WILLIAM M MERCER, INCORPORATED
WI~ESS STATE OF TEXAS
COUNTY OF DALLAS
Thls instrument ~as acknowledged before
BY me on qay 11, 1998, by Mark Chronlster,
AssocIate, of W~ll~am ~1 Mercer, a Delaware
Corporation, on behalf of sa~d corporatIon.
James W. Falconer
Notary Public
~ Commission Expires 12-12-2001
10