21-426FILE REFERENCE FORM
X Additional File Exists
Additional File Contains Records Not Public, According to the Public Records Act
Other
FILE(S)
Ordinance Created By 20-1463
First Amendment to Agreement – Ordinance 21-426
Date Initials
08/04/2020 CW
03/16/2021 CW
ORDNANCE NO. 21-426
AN ORDINANCE OF THE CITY OF DENTON, A TEXAS HOME-RULE MUNicmAL
CORPORATION, AUTHORIZING THE APPROVAL OF A FIRST AMENDMENT TO A
CONTRACT BETWEEN THE CITY OF DENTON AND TEXAS SERIES OF LOCKTON
COMPANES, LLC, AMENDING THE CONTRACT APPROVED BY CITY COUNCEL ON
AUGUST 4, 2020, IN THE NOT-TO-EXCEED AMOUNT OF $480,000.00; SAD FIRST
AMENDMENT FOR THE COST OF ADDITIONAL BROKER SERVICES; PROviDnqG FOR
THE EXPENDITURE OF FUNDS THEREFOR; AND PROVDING AN EFFECTIVE DATE
(FILE 7365 – PROV[DHqG FOR AN ADDITIONAL FIRST AMENDMENT EXPENDITURE
AMOUNT NOT-TO-EXCEED $75,000.00, WITH THE TOTAL CONTRACT AMOUNT NOT-
TO-EXCEED $555,000.00).
WHEREAS, on August 4, 2020, by Ordinance No. 20- 1463, the City awarded a contract to
Texas Series ofLockton Companies, LLC, in the amount of $480,000.00, for property and causality
insurance brokerage services; and
WHEREAS, the additional fees under the proposed First Amendment are fair and reasonable
and are consistent with, and not higher than, the recommended practices and fees applicable to the
Provider’s profession, and such fees do not exceed the maximum provided by law; NOW,
THEREFORE,
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDARqS:
SECTION 1. The First Amendment, increasing the amount of the contract between the City
and Texas Series ofLockton Companies, LLC, which is on file in the office of the Purchasing Agent,
in the amount of Seventy-Five Thousand and 00/100 (§75,000.00) Dollars, is hereby approved and
the expenditure offLmds therefor is hereby authorized in accordance with said amendment. The total
contract amount increases to 8555,000.00.
SECTION 2. This ordinance shall become effective immediately upon its passage and
approval.
The motion to approve this ordinance was made by '--Ses5e MOt S and
seconded by Ot b Al N\\n\c/ , the ord) y the
following vote [ L - LI :
Aye
X/-
\/
\/’
V/
\/
\/
Nay
Mayor Gerard Hudspeth:
Birdia Johnson. District 1 :
Connie Baker. District 2:
Jesse Davis. District 3 :
John Ryan, District 4:
Deb Armintor, At Large Place 5 :
Paul Meltzer, At Large Place 6:
Abstain Absent
7
PASSED AND APPROVED thi, th, IOW d,y ,f MarCh -, 2021
GERARD Hub iN
ATTEST:
ROSA RIOS, CITY SECRETARY
Jllllllllz
, , _c/a'..
APPROVED AS TO LEGAL FORM:
AARON LEAL, CITY ATTORNEY
atl
BY: _ pITt:';F?afTlitT:Hiti;';:F'n£'m
VXfUr AIMUS.'::,""a
DocuSign Envelope ID: COD2AC90-63B4-4B27-963A-7342A381E227
DENTON
Docusign City Council Transmittal Coversheet
7365
File Name Amendment 1 in
P„„h„i„g C,.t„t L ''i H '"'11
surance
City Council Target Date March 16’ 2021
Piggy Back Option
Contract Expiration
Ordinance
Broke r
PSA
Not App11cab1 e
August 3 , 2023
21–426
DocuSign Envelope ID: COD2AC90-63B44B27-963A-7342A381E227
FIRST AMENDMENT TO CONTRACT
BY AND BETWEEN THE CITY OF DENTON, TEXAS
AND TEXAS SERIES OF LOCKTON COMPANIES, LLC.
PSA 7365
THE STATE OF TEXAS §
§COUNTY OF DENTON
THIS FIRST AMENDMENT TO CONTRACT 7365 (“Amendment”) by and
between the City of Denton, Texas (“City”) and Texas Series ofLockton Companies, LLC.
(“Consultant”); to that certain contract executed on August 4, 2020, in the original not-to-
exceed amount of $480,000 (the “Agreement”); for services related to property and
casualty insurance brokerage services.
WHEREAS, the City deems it necessary to further expand the services provided by
Consultant to the City pursuant to the terms of the Agreement, and to provide an additional
not-to-exceed amount $75,000 with this Amendment for an aggregate not-to-exceed
amount of $555,000; and
FURTHERMORE, the City deems it necessary to further expand the goods/services
provided by Consultant to the City;
NOW THEREFORE, the City and Consultant (hereafter collectively referred to as the
“Parties”), in consideration of their mutual promises and covenants, as well as for other
good and valuable considerations, do hereby AGREE to the following Amendment, which
amends the following terms and conditions of the said Agreement, to wit:
1.The additional services described in Exhibit “A“ of this Amendment, attached
hereto and incorporated herein for all purposes, for professional services related to
the property and casualty insurance brokerage services, are hereby authorized to be
performed by Consultant. For and in consideration of the additional services to be
performed by Consultant, the City agrees to pay, based on the cost estimate detail
attached as Exhibit “A“ a total fee, including reimbursement for non-labor expenses
an amount not to exceed $75,000.
2. This Amendment modifies the Agreement amount to provide an additional $75,000
for the additional services with a revised aggregate not to exceed total of $555,000.
The Parties hereto agree, that except as specifically provided for by this Amendment, that
all of the terms, covenants, conditions, agreements, rights, responsibilities, and obligations
of the Parties, set forth in the Agreement remain in full force and effect.
7365 PSA – Amendment #1 Page 1 of 2
DocuSign Envelope ID: COD2AC90-63B44B27-963A-7342A381E227
IN WITNESS WHEREOF, the City and the Consultant, have each executed this
Amendment electronically, by and through their respective duly authorized representatives
and officers on this date 03/16/2021
“CITY”“CONSULTANT”
CITY OF DENTON, TEXAS
A Texas Municipal Corporation
TEXAS SERIES OF LOCKTON
COMPANBS, LLC.
By:
By:
Sara Hensley, InterIm City Manager
AUTHORLZED SIGNATURE, TITLE
ATTEST:
ROSA RIOS, CITY SECRETARY APPROVED AS TO LEGAL FORM:
AARON LEAL, CITY ATTORNEY
By:
ALMtLLLALAAhPL
'DocuSlgned by:
THIS AGREEMENT HAS BEEN
BOTH REVIEWED AND APPROVED
as to financial and operational
obligations and business terms.
Ti ffany Thompson
SIGNATURE PRINTED NAME
DIrector of Human Resources
TITLE
Human Resources
DEPARTMENT
7365 PSA – Amendment # 1 Page 2 of 2
DocuSign Envelope ID: COD2AC90-63B4-4B27-963A-7342A381E227
@‘
Exhibit A
Proposal
CITY OF DENTON, TEXAS
and
TEXAS SERIES OF LOCKroN COMPANIES, LLC
This Proposal is for OF DENTON, TEXAS C'Client’) and is presented by the TEXAS SERIES OF LOCKTON COMPANIES, LLC C’Lockton").
COMPENSATION, DISCLOSURE AND PAYMENT TERMS any particular client insurance policy, but the overall amount of
Additional Compensation received by Lockton has historically ranged
from 0.5-4% of overall premium volume placed with a carrier. The
amount of supplemental commission on eligible placements is
established at the beginning of a calendar year based on Lockton’s
historical and current performance typically measured using some or
all of the same performance factors by which contingency payments
are calculated.
1.1 Fee. All insurance brokerage and/or other insurance
brokerage related services set forth in Addendum A associated with
placing the following lines of coverage are services required by
applicable law or regulation to be or are customarily performed by a
licensed insurance broker (including a person designated by
applicable law as a consultant licensed to render services as an
insurance broker). Any services (other than services as a consultant
licensed to render services as an insurance broker) that may from
time to time be included in or rendered in connection with the
foregoing services are embedded in or ancillary to the performance
of Lockton’s insurance brokerage services and will be performed
without separate payment for such consulting services (if any). The
services to be rendered under this Proposal will be performed by
Lockton for compensation in the form of a fee in the amount of
$75,000:
1.4 Agreement to Forego Receipt of Commissions. In
consideration of Clients agreement to pay the fee set forth above,
Lockton agrees that it will seek to have all placements referenced in
Section 1.1 above made on a net of commission basis.
In the event an insurer will not comply with this request or it is not in
Client’s best interest, any such commissions will be disclosed to Client
and either deducted from the premium billed to Client, in the case of
agency-billed placements, or, in the case of direct-billed placements,
returned to the insurer with the request that the insurer either credit
the commission amount toward Client's premium obligation or return
it directly to Client. If any insurer refuses to credit or return
commission on a direct-billed placement to Client, Lockton will return
the commission directly to Client.
• Property (Denton Energy Center)
1.2 Disclosure. In addition to the compensation set forth
above, Client acknowledges, consents and agrees that Lockton may
also receive other compensation such as incentive or contingency
payments or bonuses and/or supplemental commissions from
insurance companies, intermediaries (which may be affiliated with
Lockton) or other third parties as a result of being an insurance
broker (collectively, "Additional Compensation"). Lockton may also
receive interest or investment income on funds temporarily held by it,
such as premiums or return premiums, service fees or other
compensation from premium finance companies for administrative
services provided to or on behalf of the premium finance companies
relative to the financing of client insurance premiums, and/or service
fees from insurers for consulting and/or administration services
specific to an insurer.
Client acknowledges and agrees that any contemplated commission
deduction, or any credit request or return of any such commission to
an insurer or Client will be done to accomplish and maintain the total
agreed-upon compensation to Lockton and is not an inducement to
purchase or renew coverage through Lockton.
1.5 Payment Schedule. Client shall pay the fee set forth
above based on the following payment schedule:
Fee Due Date
March 15, 2021
Fee Amount Due
$75,000
1.3 Additional Texas Disclosure. Pursuant to Texas Code
Section 4005.004, Client acknowledges that although the amount of
such Additional Compensation which may be paid to Lockton is not
known or reasonably estimable, the method(s) and factor(s) used for
determining the amount(s) of such Additional Compensation, if any,
can be described as follows: Contingency payments or bonuses are
based on the overall performance of a partial or entire book of
business Lockton places with an insurance company, and Lockton’s
eligibility and the amount of any such compensation may vary
depending on the line of business and a number of "contingent"
factors related to future performance such as overall premium
volume, premium growth year-over-year, persistencE profItability
and/or retention targets set by the carrier. As such, a contingency
payment received by Lockton from an insurer is difficult to tie back to
Client will provide full payment to Lockton for all fee invoices
submitted within 30 days of Client's receipt of each invoice.
SERVICES
2.1 Scope of Services. The compensation set forth in Section 1
above is intended to compensate Lockton for placement of the line(s)
of coverage indicated and to provide the services listed in Addendum
A. In the event Client: 1) requests that Lockton place coverage on
any line(s) of business not indicated in Section 1; 2) requests that
Lockton provide other services beyond those set forth in
Addendum A; or 3) makes an acquisition or otherwise experiences
growth such that the level and/or scope of services needed by Client
Proposal
Page 1 of 4
DocuSign Envelope ID: COD2AC90-63B4-4B27-963A-7342A381E227
shall significantly exceed the level of services as contemplated at the
inception of the parties relationship, Client and Lockton agree to
review in good faith the additional services required and increase the
fee set forth herein or agree to other compensation (such as
commissions on additional placements) in addition to the fee.
cease for any reason to constitute at least a majority of the Board;
3) consummation of a reorganization, merger, consolidation or sale
or other disposition of all or substantially all of the assets of the Client
unless the beneficial owners of the outstanding Client common stock
and voting securities continue to own, directly or indirectly, more than
50% of, respectively, the then outstanding common stock and voting
power of the then outstanding voting securities; or 4) approval by the
stockholders of Client of a complete liquidation or dissolution of Client.
The Client shall be solely responsible for all final decisions relating to
its insurance and risk management.
2.2 Use of Intermediaries. When, in Lockton’s professional
judgment, it is necessary or appropriate, Lockton may utilize the
services of foreign or domestic intermediaries to assist in the
servicing, marketing and/or placement of Client's insurance/risk
management programs. However, this may only be done after
consultation with and prior approval by Client. Lockton will advise
Client whether any proposed intermediary is affiliated with Lockton.
Any such intermediary shall be compensated by commissions earned
on placement of Client's policies handled by that intermediary, or by
payment of a separate fee agreed to by Client and the intermediary
if commissions are not properly payable on Client’s placements. Such
commissions and fee shall be in addition to the compensation paid to
Lockton as described herein.
2.3 Insurance Proposals and Summaries. Insurance
documents prepared by Lockton containing proposals to bind
coverage, summaries of coverages, and certificates of insurance
placed are furnished to Client as a matter of information for Client’s
convenience. These documents are not intended to reflect the terms,
conditions, limitations and exclusions of such policies, are not
themselves insurance policies and do not amend, alter or extend the
coverages afforded by such policies. The insurance afforded by the
proposed or placed policies is subject to all the terms, conditions,
limitations and exclusions contained in such policies.
2.4 Modeling and Analytics Services
Lockton provides various modeling and/or data analytiu services to
its clients C'Modeling and Analytia Services") and may provide such
services to Client. Client authorizes Lockton to 1) to disclose
information it receives from Client, its insurers and/or third-party
administrators to Lockton’s affiliates, parents, employees, and/or to
third parties as necessary to perform such Modeling and Analytics
Services, and 2) to contribute such information to benchmarking
databases created by or for Lockton to facilitate the creation of
analytic reports for its clients, provided that such reports shall not
include any information that personally identifies Client or its
employees.
Ma]eling and Analytics Services will be based upon a number of
assumptions, conditions and factors, as well as information provided
by third parties. If any such information provided to or utilized by
Lockton is inaccurate, incomplete or should change, the Modeling and
Analytics Services provided by Lockton could be materially affected.
As Modeling and Analytics Services are subject to inherent uncertainty
and involve variables beyond Lockton’s control, actual results may
differ materially from Lockton’s projections. The parties agree that
Lockton shall have no liability to Client if 1) Lockton is provided
inaccurate or incomplete information, or 2) actual results differ from
Lockton’s projections. Modeling and Analytics Services do not
constitute, and are not intended to be a substitute for, independent
actuarial, accounting or tax advice.
2.5 Fee Due Upon Change in Control. In the event Client
experiences a "Change in Control" (as defined herein), the annual fee
will be deemed fully earned and payable by Client as of the effective
date of the Change in Control. "Change in Control" shall be defIned
as any of the following events: 1) the acquisition by an external
organization of 50% or more of the then outstanding shares of
common stock of CIIent or the combined voting power of the then
outstanding voting securities of Client entitled to vote generally in the
election of directors; 2) individuals who constitute the Clienfs Board
Proposal
DocuSign Envelope ID: COD2AC90-63B44B27-963A-7342A381E227
Addendum A Services
1.General Services
A. Analyze proposals when received and present coverage alternatives/options to Client.
B. Analyze renewal proposals and present renewal options to Client.
C. Answer Client questions and provide research or advice as needed.
D. Compile renewal rating and loss information.
E. Compile underwriting, rating and claims data received from Client.
F. Complete renewal applications (except where the application is a warranty to the policy).
G. Complete underwriting applications (except where the application is a warranty to the policy).
H. Conduct renewal process with existing insurance carriers.
I. Evaluate the competitiveness of current insurance premium pricing and rate levels.
J. Obtain competitive proposals for Client where necessary.
K. Prepare annual summary of insurance.
L. Prepare insurance coverage specifications.
M. Process policy changes, additions/deletions, premium invoices,
N. Review coverage terms.
O. Review issued insurance policies for compliance with accepted proposal terms.
P. Review issued policy for compliance with renewal proposals.
Q. Develop/maintain/review premium allocation system to appropriate divisions or subsidiaries.
R. Issue certificates of insurance. Same day service as necessary.
S. Prepare and conduct Client account review meetings.
T. Prepare and present annual stewardship reports.
U. Prepare periodic Client reports describing open items, status of special projects and other relevant issues.
V. Provide Client with updates regarding market conditions/products.
W. Review contracts for risk management/insurance implications.
II. Claims Management Services
A. Assist Client where needed on claims Issues and serve as Client advocate with insurance carriers or TPAs where
appropriate, e.g., claim-handling strategy, reserve adequacy/accuracy, questionable coverage situations,
reservation of rights, coverage denials, etc.
B. Assist Client with claim reporting to insurance carriers or TPAs as requested by Client and agreed upon by
Lockton .
Proposal
DocuSign Envelope ID: COD2AC90-63B4-4B27-963A-7342A381E227
C. As outlined herein, Lockton will provide Claims Management services. It is estimated that these services will involve
25 hours of work performed. It is understood and agreed, in the event the scope of work increases beyond the
hours agreed, Lockton reserves the right to discuss additional compensation for the additional services.
III. Loss Control Services
A. As outlined below, Lockton will provide Loss Control services. It is estimated that these services will involve 25 hours of work
performed. It is understood and agreed, in the event the scope of work increases beyond the hours agreed, Lockton reserves the
right to discuss additional compensation for the additional services.
B.Assist in marketing efforts as directed by Lockton CID.
C.Monitor carrier loss control inspection reports and provide feedback, as appropriate.
D.Review loss control inspection reports from insurers and provide comments,
E.Review loss experience. Analyze and comment on loss trends, major causes of loss, etc.
F.When available and beneficial, direct carrier Loss Control services to assist in reducing the Total Cost of Risk.
Proposal hEW