2014-019ORDINANCE NO, 2014 -019
AN ORDINANCE OF THE CITY OF DENTON, TEXAS PROVIDING FOR,
AUTHORIZING, AND APPROVING THE PURCHASE OF EXCESS WORKERS;
COMPENSATION INSURANCE COVERAGE FOR THE CITY OF DENTON, THROUGH
THE CITY'S SOLE BROKER OF RECORD, MCGRIFF, SEIBELS AND WILLIAMS OF
TEXAS, INC., AND IN ACCORDANCE WITH CHAPTER 252.024 OF THE TEXAS LOCAL
GOVERNMENT CODE SUCH COVERAGE IS EXEMPT FROM THE REQUIREMENTS OF
COMPETITIVE BIDDING; AND PROVIDING AN EFFECTIVE DATE (FILE 5455
AWARDED TO MIDWEST EMPLOYERS CASUALTY IN THE ONE (1) YEAR NOT -TO-
EXCEED AMOUNT OF $91,996 AND A THREE (3) YEAR NOT -TO- EXCEED AMOUNT
OF $304,408).
WHEREAS, Section 252.024 of the Local Government Code provides that a municipality
may select a licensed insurance broker as the sole broker of record to obtain proposals and
coverages for excess or surplus insurance that provides necessary coverage and adequate limits
of coverage in structured layered excess coverages in all areas of risk requiring special
consideration, including public official liability, police professional liability, and airport liability;
and need not be submitted to competitive bids; and
WHEREAS, the City Council wishes to procure one or more of the items mentioned in
the above paragraph; NOW, THEREFORE,
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
SECTION 1. The following purchase of materials, equipment or supplies, as described
in the "File" listed hereon, and on file in the office of the Purchasing Agent, and the license
terms attached are hereby approved:
FILE
NUMBER VENDOR AMOUNT
5455 Midwest Employers Casualty $304,408
SECTION 2. The City Council hereby finds that this bid, and the award thereof,
constitutes a procurement of items that are available from only one source, including, items that
are only available from one source because of patents, copyrights, secret processes or natural
monopolies; films, manuscripts or books; electricity, gas, water and other utility purchases;
captive replacement parts or components for equipment; and library materials for a public library
that are available only from the persons holding exclusive distribution rights to the materials; and
need not be submitted to competitive bids.
SECTION 3. The acceptance and approval of the above items shall not constitute a
contract between the City and the person submitting the quotation for such items until such
person shall comply with all requirements specified by the Purchasing Department.
SECTION 4. The City Manager is hereby authorized to execute any contracts relating to
the items specified in Section 1 and the expenditure of funds pursuant to said contracts is hereby
authorized.
SECTION 5. The City Council of the City of Denton, Texas hereby expressly delegates
the authority to take any actions that may be required or permitted to be performed by the City of
Denton under File 5455 to the City Manager of the City of Denton, Texas, or his designee.
SECTION 6. This ordinance shall become effective immediately upon its passage and
approval.
PASSED AND APPROVED this the —j_ day of ae 2014,
K I3URROI�i : HS, MAYOR
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
BY: mi"le,
r
s dEtP;: }.q 5455
DocuSign Envelope ID: OA297D1B -1ABB- 4308- BD46- 7DFECOE55ACD
Request for City Manager Approval of Purchase
DATE: December 30, 2015 Questions concerning this
acquisition may be directed
DEPARTMENT: Materials Management to Scott Payne 349 -7836
ACM: Bryan Langley
SUBJECT
Approve the final premium renewal through Midwest Employers Casualty Company for Excess
Worker's Compensation Insurance Coverage in the amount of $147,331. This final premium
amount will aggregate the total three (3) year premium amount to $364, 251. This exceeds the
total amount approved by Council ($304,408) by $59,843- therefore requiring City Manager
approval (File 5455).
FILE INFORMATION
On January 7, 2014, the City Council approved the purchase of Excess Workers' Compensation
Insurance Coverage for the City of Denton, through the City's sole broker of record, McGriff,
Seibels, and Williams of Texas, Inc., and in accordance with Chapter 252.024 of the Texas Local
Government Code such coverage is exempt from the requirements of competitive bidding. The
insurance coverage was through Midwest Employers Casualty Company (MECC) in the one (1)
year not -to- exceed amount of $91,966 and a three (3) year not -to- exceed amount of $304,408).
The City of Denton has a $500,000 per occurrence Self - Insured Retention (SIR) under this
policy with insurance coverage up to the statutory benefit levels under workers' compensation.
The City is self - funded for our workers' compensation exposures, and although the City has had
no workers' compensation claims that have exceeded $500,000, the City is still liable for all
reasonable and necessary medical expenses, indemnity benefits, impairment benefits, and other
related expenses if an employee is injured on the job while in the course and scope of
employment. There is no cap on the potential costs of a workers' compensation claim.
Our first renewal premium for the 12/31/2014 through 12/31/2015 policy period was $124,954.
The final renewal premium for the 12/31/2015 through 12/31/2016 policy period was $147,331.
This would bring the three year cost to $364,251, which would exceed the three year not -to-
exceed amount of $304,408 by $59,843.
The basis for our premium calculation involves two main factors:
1) The excess workers' compensation rate calculated by the underwriter based on our risk
factors and history; and
2) The total annual payroll.
Since the initial proposal from MECC, our rate has only increased by 2.77% but our payroll
amount has increased by 55.83 %, which is the driving force behind the overall premium
increase. This payroll increase has occurred because of the number of new positions the City has
added over the last two years, but most notably due to errors in our initial payroll values which
drastically under reported our exposure. The increase in both factors is illustrated below:
DocuSign Envelope ID: OA297D1B -1ABB- 4308- BD46- 7DFECOE55ACD
Request for City Manager Approval
Page 2
Table 1 — Premium Calculation Comparison
Year
Rate
Payroll
Total Premium
2013 -2014
$0.1514 per $100
$60,763,724
$91,996
2014 -2015
$0.1514 per $100
$82,532,450
$124,954
2015 -2016
$0.1556 per $100
$94,685,710
$147,331
Increase
2.77%
55.83%
60.15%
PRIOR ACTION /VIEW (COUNCIL, BOARDS, COMMISSIONS)
A three (3) year contract was awarded by Council on January 7, 2014 (Ord# 2014 -019).
RECOMMENDATION
Approve the final premium renewal through Midwest Employers Casualty Company for Excess
Worker's Compensation Insurance Coverage in the amount of $147,331.
PRINCIPAL PLACE OF BUSINESS
Midwest Employers Casualty Company
Chesterfield, Missouri
ESTIMATED SCHEDULE OF PROJECT
The insurance coverage period will be from January 1, 2016- December 31, 2017.
CONTRACT ADMINISTRATOR
Scott Payne, Risk Manager
FISCAL INFORMATION
Funds for the Excess Workers' Compensation insurance coverage are budgeted in 860002.6719
Attachment l: Renewal Quote Requested by:
Name Scott Payne
Phone 349 -7836
Requisition# 127408
DocuSign Envelope ID: OA297D1B -1ABB- 4308- BD46- 7DFECOE55ACD
Request for City Manager Approval
Page 3
Respectfully submitted:
F ,EDo cuSigned by:
'6' u bV' &
Purc asing
Expenditure Approved:
DocuSigned by:
qmiiwor Designate
1/7/2016
Date
DocuSign Envelope ID: OA297D1B -1ABB- 4308- BD46- 7DFECOE55ACD r
/ �I
j iti Vr
Excess Workers' Compensation Quote
Effective Dates: December 31, 2015 — 2016
Carrier: Midwest Employers Casualty Corporation
A.M. Best Rating: A+ XV
Quote Options:
Policy Terms
Option 1
Option 2
Option 3
Option 4
Named States
TX
TX
TX
TX
Specific:
Specific Limit
Statutory
Statutory
Statutory
Statutory
Specific Retention
$500,000
$550,000
$600,000
$500,000
Employers Liability:
Employers Liability Limit
$1,000,000
$1,000,000
$1,000,000
$1,000,000
Employers Liability Retention:
See Specific
See Specific
See Specific
See Specific
Aggregate:
N/A
N/A
N/A
N/A
Rating Basis:
Est. Annual Payroll
$94,865,709
$94,865,709
$94,865,709
$94,865,709
Est. Annual Manual Premium
$1,854,129
$1,854,129
$1,854,129
$1,854,129
Rate:
.1556
.1506
.1457
.1579
Premium:
Total Est. Premium
$147,331
$142,597
$137,957
$299,018
Policy Minimum Premium
$132,598
$128,337
$124,161
$269,116
Deposit Premium
$147,331
$142,597
$137,957
$149,509
Terrorism Risk Ins. Act of
2002 (including in Total
Deposit Due
$4,420
$4,278
$4,139
$4,486
Total Premium Due:
$147,331
$142,597
$137,957
$299,018
CONDITIONS / COMMENTS:
* MECC must be notified of any aircraft changes occurring during the policy
period.
The following endorsements apply to quote option 4:
CMB -187 Two Year Policy Short Rate Table
ISI -285 More Than One Premium Adjustment
The following endorsements apply to all quote options:
CMB -11 Amendment to Schedule Item 11
CMB -195 Policyholder Disclosure Notice of Terrorism Insurance
ISI- 254 -EXC Aircraft Exclusion
ISI -TX Texas
CMB -TX Texas Important Notice
CMB -TX -EL Texas Employers Liability
DocuSign Envelope ID: OA297D1B -1ABB- 4308- BD46- 7DFECOE55ACD
r I JA 1, MidwestEmployers
Poli~bilclosure
Notice of Terrorism
Insurance Coverage
Coverage for acts of terrorism, as defined in the Terrorism Risk Insurance Act as amended, (the "Act "), is included in
the quote for your policy.
As defined in Section 102(1) of the Act: The term "act of terrorism" means any act that is certified by the Secretary of
the Treasury - -in consultation with the Secretary of Homeland Security, and the Attorney General of the United
States - -to be an act of terrorism; to be a violent act or an act that is dangerous to human life, property, or
infrastructure; to have resulted in damage within the United States, or outside the United States in the case of certain
air carriers or vessels or the premises of a United States mission; and to have been committed by an individual or
individuals as part of an effort to coerce the civilian population of the United States or to influence the policy or affect
the conduct of the United States Government by coercion. Under your coverage, any losses resulting from certified
acts of terrorism may be partially reimbursed by the United States Government under a formula established by the Act.
However, your policy may contain other exclusions which might affect your coverage, such as an exclusion for nuclear
events. Under the formula, the United States Government generally reimburses 85% through 2015; 84% beginning on
January 1, 2016; 83% beginning on January 1, 2017; 82% beginning on January 1, 2018; 81 % beginning on January 1,
2019 and 80% beginning on January 1, 2020 of covered terrorism losses exceeding the statutorily established
deductible paid by the insurance company providing the coverage. The Act contains a $100 billion cap that limits
United States Government reimbursement as well as insurers' liability for losses resulting from certified acts of
terrorism when the amount of such losses exceeds $100 billion in any one calendar year. If the aggregate insured
losses for all insurers exceed $100 billion, your coverage may be reduced.
The portion of your annual premium that is attributable to coverage for acts of terrorism, as defined in the Act, is shown
below and does not include any charges for the portion of losses covered by the United States Government under the
Act.
0199816 0200130 0200131 0200132
TRIA Charge $4,420 $4,278 $4,139 $4,485
Name of Insurer: Midwest Employers Casualty Company
Name of Insured: City of Denton
Policy #: EWC008917
Effective Date: 12/31/2014
MECC Account Manager: Jim Vita
City of Denton, Texas
MECC Annual Services Summary
Client Advisor Consulting
Management View Report "Benchmarking" Presented
Industry Practice Leader Consulting
Discussion - General
Attended Client Meeting
Client Contact Information
Contact Name
Title
Tom Keel
Safety & Claims Administrator
Bryan Langley
Finance Director
Scott Payne
Risk Manager
MECC Team Contact Information
Contact Name
Role
David Parker
Industry Practice Leader
Jacque Jones
Sales Representative
Jim Vita
Senior Client Advisor
Sue Baehr
Client Services Coordinator
Activity Date Client Participant MECC Participant
01/22/2015 Scott Payne Jim Vita
Activity Date Client Participant MECC Industry
Practice Leader
06/05/2015 Tom Keel David Parker
01/15/2015 Scott Payne David Parker
Email
Work Phone
tom.keel@cityofdenton.com
940 - 349 -7807
bryan.langley @cityofdenton.com
940 - 349 -8224
scott.payne @cityofdenton.com
940 - 349 -7836
Email
Work Phone
dmparker @mwecc.com
636449 -7247
jcjones @mwecc.com
636449 -7224
jvita @mwecc.com
636449 -7249
sbaehr @mwecc.com
636449 -7151
SME03=1M 1.
Kr
itylPasualty
11 1+
IsrW. R. Berkley Company
1 1, l 1 1:::::: G 1:+, I I Y 3 1:::::: 1: , V I C 1:::::: I 1:::::'A I. 1 1, 1 1:::::: 1. S I I I 1::::� I 1:::::: X 1� 1:::::: 1' I 1 3 1::: I 3 1 1. 1::: 1, l G I I I \4 1:::::' A I I 1 1:::::: 1 1 C I 1::: S 1::::� 0 N S I V 1::: I 1 1, l 1, l V A I I V 1:::
Discover a New Way to Experience the MECC Difference!
As a valued MECC partner, you are only one click away
from accessing information specific to your workers' doing what's right,
compensation program, along with available resources ' N[ 11h,11 11 1�'A,Y,
I a
that can enhance your current program.
The MECC website offers popular features, such as:
• Web Events
• Industry Toolkits
• Online Benchmark Reports
• Resource Library
• Industry News
• Online Training Courses
LM
Also view the website from your mobile
device.
Visit www.MWECC.com today to login or to request a password.
wwwrnweccxorn was des4yned �brthe tatest versions ofinternetExptorewr (ver. 8 and up) and Ftash (ver. 11 and up).
Member company of the W.R. Berkley Corporation • A.M. Best Rating A+ (Superior)
MA
14755 NORTH OUTER FORTY DR. SUITE 300 • CHESTERFIELD, MO 63017 • WWW.MWECC.COM • 1.877.WRK.COMP
S t C U ft t
Certificate Of Completion
Envelope Id: OA297D1B1ABB4308BD467DFECOE55ACD
Status: Completed
Subject: Please DocuSign this document: 5455
Source Envelope:
Document Pages: 8
Signatures: 2
Envelope Originator:
Certificate Pages: 2
Initials: 0
Karen E. Smith
AutoNav: Enabled
karen.smith @cityofdenton.com
Envelopeld Stamping: Enabled
IPAddress: 129.120.6.150
Time Zone: (UTC- 06:00) Central Time (US & Canada)
Record Tracking
Status: Original
Holder: Karen E. Smith
Location: DocuSign
12/30/2015 10:20:11 AM
karen.smith @cityofdenton.com
Signer Events
Signature
Timestamp
Karen E. Smith
Completed
Sent: 12/30/2015 10:22:03 AM
karen.smith @cityofdenton.com
Viewed: 12/30/2015 10:22:11 AM
Assistant Purchasing Manager
Signed: 12/30/2015 10:22:35 AM
City of Denton
Using IP Address: 129.120.6.150
Security Level: Email, Account Authentication
(Optional)
Electronic Record and Signature Disclosure:
Not Offered
ID:
Elton Brock
by,
Sent: 12/30/2015 10:22:37 AM
ED—Signed
b�n ��OC�
elton.brock @cityofdenton.com
Viewed: 12/30/2015 11:40:26 AM
Purchasing Manager
4E9FEBACE935410
Signed: 12/30/2015 11:45:15 AM
City of Denton
Security Level: Email, Account Authentication
Using IPAddress: 129.120.6.150
(Optional)
Electronic Record and Signature Disclosure:
Not Offered
ID:
George C. Campbell ee„s9�ed by, Sent: 12/30/2015 11:45:16 AM
george.campbell@cityofdenton.com ED
�� (Awrk , Viewed: 1/7/2016 11:45:49 AM
City Manager 4884Ee25FOE6480 Signed: 1/7/2016 11:45:58 AM
City of Denton
Using IPAddress: 129.120.6.150
Security Level: Email, Account Authentication
(Optional)
Electronic Record and Signature Disclosure:
Not Offered
ID:
In Person Signer Events Signature Timestamp
Editor Delivery Events Status Timestamp
Agent Delivery Events Status Timestamp
Intermediary Delivery Events Status Timestamp
Certified Delivery Events Status Timestamp
Carbon Copy Events Status Timestamp
Carbon Copy Events
Status
Jane Richardson COPIED
jane .richardson @cityofdenton.com
Security Level: Email, Account Authentication
(Optional)
Electronic Record and Signature Disclosure:
Not Offered
ID:
Jennifer Bridges �'I E
jennifer.bridges@cityofdenton.com
Security Level: Email, Account Authentication
(Optional)
Electronic Record and Signature Disclosure:
Not Offered
ID:
Julia Klinck
julia.klinck@cityofdenton.com
Contracts Administration Supervisor
City of Denton
Security Level: Email, Account Authentication
(Optional)
Electronic Record and Signature Disclosure:
Not Offered
ID:
III�q� mlll m nn n�
Scott Payne �I
scott.payne @cityofdenton.com
Security Level: Email, Account Authentication
(Optional)
Electronic Record and Signature Disclosure:
Not Offered
ID:
Notary Events
Envelope Summary Events Status
Envelope Sent
Hashed /Encrypted
Certified Delivered
Security Checked
Signing Complete
Security Checked
Completed
Security Checked
Timestamp
Sent: 1/7/2016 11:46:00 AM
Viewed: 1/7/2016 11:52:04 AM
6Y a ,iWIUp► "ZoS[ciiICI:R1I1718I
Sent: 1/7/2016 11:46:00 AM
Viewed: 1/8/2016 8:58:57 AM
Sent: 1/7/2016 11:46:00 AM
Viewed: 1/7/2016 11:54:29 AM
Timestamp
Timestamps
1/7/2016 11:46:00 AM
1/7/2016 11:46:00 AM
1/7/2016 11:46:00 AM
1/7/2016 11:46:00 AM