1991-064cooperly o
ORDINANCE NO 91664
AN ORDINANCE AUTHORIZING THE MAYOR TO EXECUTE AN AGREEMENT BETWEEN
THE CITY OF DENTON AND COOPERS & LYBRAND, INC RELATING TO PROFES-
SIONAL SERVICES FOR A COMPREHENSIVE EVALUATION OF THE CITY'S EM-
PLOYEE HEALTH INSURANCE PROGRAM, AUTHORIZING THE EXPENDITURE OF
FUNDS THEREFORE, AND PROVIDING AN EFFECTIVE DATE
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS
SECTION I That the Mayor is authorized to execute an agree-
ment between the City of Denton and Coopers & Lybrand, Inc rela-
ting to a comprehensive evaluation of the City's Employee Health
Insurance program under the terms and conditions contained within
said amendment, a copy of which is attached hereto and made a part
hereof
SECTION II That the City Council hereby authorizes the ex-
penditure of funds not to exceed Thirty-five Thousand Eight Hundred
($35,800) Dollars
SECTION III That this ordinance shall become effective
immediately upon its passage and approval
PASSED AND APPROVED this the day of 1991
ATTEST
JENNIFER WALTERS, CITY SECRETARY
BY sbd_d
APPROVED AS TO LEGAL FORM
DEBRA A DRAYOVITCH, CITY ATTORNEY
3060L41091
AGREEMENT BETWEEN THE CITY OF
DENTON AND COOPERS & LYBRAND, INC
The City of Denton, Texas, a Municipal Home Rule City sit-
uated in Denton County, Texas, hereinafter called "City", acting
herein by and through its City Manager and Coopers & Lybrand,
Inc , a professional corporation doing business in Texas, herein-
after called "Consultant', hereby mutually agree as follows
I SERVICES TO BE PERFORMED
City hereby retains Consultant to perform the hereinafter
designated professional services Consultant agrees to perform
the following services
A Conduct a comprehensive evaluation of the City's Employee
Health Insurance Program with Sanus/New York Life and to
develop minimum alternative plans and options The Con-
sultant will rate alternatives and present written recom-
mendations
B In connection with performing the services described in
Section I A , Consultant will provide the following ser-
vices
1 Meet with local medical providers (doctors and hospi-
tals) to negotiate arrangements for direct contracting
with the City at favorable terms
2 Prepare for and direct discussion sessions with Denton
Regional Medical Center, Denton Community Hospital and
Denton Independent Physicians Association of Denton
County
3 Investigate development of contract with appropriate
tertiary care facilities located in the D/FW metroplex
4 Obtain and furnish City a preliminary contract from
each provider or group of providers, as appropriate
5 Meet with Employee Insurance Committee (EIC) to deve-
lop three plan alternatives for final analysis and
actuarial projections by the consultant
Perform actuarial projections and provide written and
oral reports
Rate selected plans based upon agreed-upon provider
arrangements and plan design alternatives and actuarial
projections and provide City with written and oral re-
ports
8 Undertake and proceed to negotiate with Sanus for
December 1, 1991 plan year renewal
9 Develop final draft contract with the appropriate
hospitals, physicians and or physician groups and
tertiary care facilities and submit to the City for
finalization
C Consultant shall exercise the same degree of care, skill
and diligence in the performance of these services as is
ordinarily provided by professionals under similar cir-
cumstances
II TERM OF AGREEMENT
Consultant shall commence rendering services within ten (10)
working days of receiving notification of contract approval
Consultant agrees to adhere to the following project schedule
Activity/Task
Time Frame
1 Meet with 5 providers
(hospital/physician groups)
o Within 10 working days
after contract approval
Estimate 3 meetings for each
provider at 2 hours per meet-
ing Senior Consultant (Pro-
ject Director) will attend and
direct meetings
2 Data Analysis for Meetings
Develop relevant historical
providers predicted utili-
zation data for each pro-
vider Associate Actuary
in Benefits and Compensation
will assist in data analysis
Estimate 8 hours per provider
Project Director and Consul-
tant's Actuary to review
o Within 15 working days
upon completion of meet-
ings with Denton
3 Plan Design Alternatives
(a) Project Manager develops
three plan design alter-
natives
o Within 15 working days of
completion of prior task
PAGE 2
(b) Meet with EIC to discuss
options
(i) Prepare for meeting
(ii) Attend meeting
(iii) Update plan option
per meeting
4 Rate Selected Plans and o Within 15 working days of
perform actuarial projections completion of prior task
Based upon results from
EIC meetings, identifying
--Hospital reimbursement
--Physician reimbursement
--Plan design
--Employee demographics
--Historical data
Chief Actuary, who is cer-
tified, will perform the
actuarial projections and
will rate the plans An
estimated 16 hours for each
plan will be required
5 Project Director Meetings
o Within 15 working days upon
completion of prior task
(a) Prepare for and attend
two meetings with City
Council
(b) Prepare for and attend
two meetings with City
Management
6 Negotiate with Sanus
o Within 15 working days upon
completion of prior task
Project Director will
negotiate with Sanus for
the 1992 plan year
Consultant shall complete, present and submit all contracts and
documents, including a final written report reflecting findings
and recommendations, not later than August 30, 1991 Deviation
from this schedule is permitted only if prior approval is granted
by City's Personnel Director or for reasons beyond the Consul-
tant's control
III COMPENSATION TO BE PAID CONTRACTOR
City agrees to pay Consultant for the services performed here-
under as follows
PAGE 3
A Amount of Payment for Services
City agrees to pay Consultant for the services performed
hereunder as estimated below
Estimated
TASK C & L HOURS FEES
1 Meet with 5 providers
(hospital/physician groups)
Estimate 3 meetings for each 30 $ 4,000
provider at 2 hours per
meeting Senior Consultant
(Project Director) will
attend and direct meetings
2 Data Analysis for Meetings
Develop relevant historical 40 $ 3,900
predicted utilization data
for each provider Associate
Actuary in Benefits and Com-
pensation will assist in data
analysis Estimate 8 hours
per provider
Project Director and Chief 16 $ 2,300
Actuary for Coopers and
Lybrand to review
3 Plan Design Alternatives
Project manager develops 16 $ 3,200
three plan design alter-
natives
(a) Project Manager develops
three plan design
alternatives
(b) Meet with EIC to discuss
options
(i) Prepare for meeting 8 19600
(ii) Attend meeting 4
(iii) Update plan option 8 1,600
per meeting
4, Rate Selected Plans and per-
form actuarial projections
PAGE 4
Estimated
TASK C & L HOURS FEES
Based upon results from
EIC meetings, identifying
--Hospital reimbursement
--Physician reimbursement
--Plan design
--Employee demographics
--Historical data
Chief Actuary, who is cer- 60 $10,000
tified, will perform the
actuarial projections and
rate the plans An estimated
16 hours for each plan will be
required
5 Project Director Meetings
(a) Prepare for and attend $1,600
two meetings with City
Council
(b) Prepare for and attend $1,600
two meetings with City
Management
6 Negotiate with Sanus
Project Director will 16 $3,200
negotiate with Sanus for
the 1992 plan year
Total Hours 214 $33,800
Estimated out-of-pocket expenses $ 2,000
(Travel, FAX, Federal Express, etc )
TOTAL FEES & EXPENSES $35,800
Consultant will charge the City based on actual professional time
spent and ex enses incurred In no event will the total project
cost exceed 35,800 for Consultant's fees and expenses unless Con-
sultant is requested to perform tasks outside the scope presented
in the proposal If additional assistance is required from the
Consultant, estimates of professional fees will be provided and
presented to City management for approval before proceeding with
any additional tasks
PAGE 5
Consultant for services provided and expenses incurred prior to
notice of cancellation
Executed this the 4 day of Qh4 1991
CITY OF DENTON, TEXAS
BY
ATTEST
JENNIFER WALTERS, CITY SECRETARY
BY
APPRO D AS 0 LEGAL FORM
DEBRA A DRAYOVITCH, CITY ATTORNEY
BY tl6eJ16IL-L)
COOPERS & LYBRAND
PAGE 7
B Dates of Payment The City will pay Consultant on a
monthly basis, within thirty (30) days of receipt of invoices for
completion of services provided for herein
IV SUPERVISION AND CONTROL BY CITY
It is mutually understood and agreed to by and between City
and Consultant that Consultant is an independent contractor and
shall not be deemed to be or considered an employee of the City
of Denton, Texas for the purposes of income tax, withholdin1,
social security taxes, vacation or sick leave benefits, worker s
compensation, or any other City employee benefit The City shall
have supervision and control of Consultant and any employee of
Consultant while on City premises, and it is expressly understood
that Consultant shall perform the services hereunder according to
the attached Consultant's proposal at the direction of the City
Manager of the City of Denton or his designee under this
agreement
V SOURCE OF FUNDS
All payments to Consultant under this Agreement are to be
paid by the City from funds appropriated by the City Council for
such purposes in the Budget of the City of Denton
VI INSURANCE
Consultant shall provide at its own cost and expense work-
men's compensation insurance, liability insurance, and all other
insurance necessary to protect Consultant in the operation of
Consultant's business
VII INDEMNIFICATION
Consultant shall and does hereby agree to indemnify and hold
harmless the City from any and all damages, loss or lia-
bility of any kind whatsoever to the extent proximately caused by
the error, omission or negligent act of Consultant, its officers,
agents, employees, invitees, and other persons for whom it is
legally liable, in the course of the performance of this Agree-
ment, and Consultant will, at its cost and expense, defend and
protect the City of Denton against any and all such claims and
demands The acceptance of Consultant's services by the City
shall not operate as a waiver of such right of indemnification
VIII CANCELLATION
City and Consultant each reserve the right to cancel this
Agreement at any time by giving the other party fourteen (14)
days written notice of its intention to cancel If the agreement
is cancelled before completion, the City agrees to compensate
PAGE 6