22-023FILE REFERENCE FORM
X Additional File Exists
Additional File Contains Records Not Public, According to the Public Records Act
Other
FILES)
Date Initials
Awarded Contract by Ordinance 20-1463 08/04/2020 CW
First Amendment by Ordinance 21-426 03/16/2021 CW
Second Amendment by Ordinance 22-023
01/04/2022 1 CW
ORDINANCE NO. 22-023
AN ORDINANCE OF THE CITY OF DENTON, A TEXAS HOME -RULE MUNICIPAL
CORPORATION, AUTHORIZING THE APPROVAL OF A SECOND AMENDMENT TO A
CONTRACT BETWEEN THE CITY OF DENTON AND TEXAS SERIES OF LOCKTON
COMPANIES, LLC, AMENDING THE CONTRACT APPROVED BY CITY COUNCIL ON
AUGUST 4, 2020, IN THE NOT -TO -EXCEED AMOUNT OF $480,000.00; AMENDED BY
AMENDMENT 1 APPROVED BY THE CITY COUNCIL; SAID SECOND AMENDMENT FOR
BROKERAGE SERVICES FOR THE PLACEMENT OF THE DEC PROPERTY COVERAGE
RENEWAL FOR THE 2021/2022 POLICY YEAR AND THE 2022/2023 POLICY YEAR;
PROVIDING FOR THE EXPENDITURE OF FUNDS THEREFOR; AND PROVIDING AN
EFFECTIVE DATE (FILE 7365 — PROVIDING FOR AN ADDITIONAL SECOND
AMENDMENT EXPENDITURE AMOUNT NOT -TO -EXCEED $152,250.00, WITH THE
TOTAL CONTRACT AMOUNT NOT -TO -EXCEED $707,250.00).
WHEREAS, on August 4, 2020, by Ordinance No. 20-1463, the City awarded a contract to
Texas Series of Lockton Companies, LLC in the amount of $480,000.00, for property and causality
insurance brokerage services; and
WHEREAS, on March 16, 2021, by Ordinance No. 21-426, the City awarded a contract to
Texas Series of Lockton Companies, LLC in the amount of $75,000.00, for property and causality
insurance brokerage services; and
WHEREAS, the additional fees under the proposed Second 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 ORDAINS:
SECTION 1. The Second Amendment, increasing the amount of the contract between the
City and Texas Series of Lockton Companies, LLC, which is on file in the office of the Purchasing
Agent, in the amount of One Hundred Fifty -Two Thousand Two Hundred Fifty and 00/100
($152,250.00) Dollars, is hereby approved and the expenditure of funds therefor is hereby authorized
in accordance with said amendment. The total contract amount increases to $707,250.00.
SECTION 2. This ordinance shall become effective immediately upon its passage and
approval.
The motion to approve this ordinance was made by Jessey ; 5 and
seconded by (z -,c�_ n 1 c IL This ordinance was passed and approved by the
following vote [_I_ - _0]:
Mayor Gerard Hudspeth:
Vicki Byrd, District 1:
Brian Beck, District 2:
Jesse Davis, District 3:
Alison Maguire, District 4:
Deb Armintor, At Large Place 5
Paul Meltzer, At Large Place 6:
Aye Nay
Abstain Absent
PASSED AND APPROVED this the �1 fi%, day of J u -n vcx <-, 2022.
ATTEST:
ROSA RIOS, CITY SECRETARY
BY:,,�1iy�
APPROVED AS TO LEGAL FORM:
MACK REINWAND, CITY ATTORNEY
Digitally signed by Marcella
Lunn
DN: cn=Marcella Lunn, o,
f �� j ou=City of Denton,
BY: J� email=marcella.lunn@cityofden
Tom. com, c=
Date: 2021.12.09 08:17:01
-06'00'
GERARD HUDS ETH, MAYOR
DocuSign Envelope ID: D35D23F7-6CE7-4CB6-A29C-8F7347DD2lC5
I CITY
OtF
DENTON
Docusign City Council Transmittal Coversheet
PSA
7365
File Name
Amendment 2 Insurance Broker
Purchasing Contact
Gabby Leeper
City Council Target Date
JANUARY 4, 2022
Piggy Back Option
Not Applicable
Contract Expiration
AUGUST 4, 2023
Ordinance
22-023
CDS
DocuSign Envelope ID: D35D23F7-6CE7-4CB6-A29C-8F7347DD2lC5
SECOND 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 SECOND AMENDMENT TO CONTRACT 7365
("Amendment") by and between the City of Denton, Texas ("City") and
TEXAS SERIES OF LOCKTON COMPANIES, LLC. ("Consultant"); to that
certain contract executed on August 4, 2020, in the original not -to -exceed
amount of $480,000 (the "Original Agreement"); amended on March 16, 2021
in the additional amount of $75,000 aggregating a not -to -exceed amount of
$555,000 (the "First Amendment"); (collectively, the Original Agreement and
the First Amendment are 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 $152,250 with this
Amendment for an aggregate not -to -exceed amount of $707,250; 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
6405 PSA — Amendment #5 Page 1 of 2
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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
$152,250.
2. This Amendment modifies the Agreement amount to provide an
additional $152,250 for the additional services with a revised aggregate
not to exceed total of $707,250.
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.
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 -
01/04/2022
"Consultant"
TEXAS SERIES OF LOCKTON
COMPANIES, LLC
By:DocuSlgned by:
b� 156i6
AUTHORIZED SIGNATURE, TITLE
APPROVED AS TO LEGAL FORM:
MACK REINWAND, CITY
ATTORNEY
By: DocuSigned by:
(,ulna,,
4B070831 MAA438...
6405 PSA — Amendment #5
"CITY"
CITY OF DENTON, TEXAS
A Texas Municipal Corporation
DocuSlgned by:
BY5�: H
SARA 44EM3 8r942TNTERIM CITY MANAGER
ATTEST:
ROSA RIOS, CITY SECRETARY
By:DocuSlgned by:
THIS Ad"— MM TIAS BEEN
BOTH REVIEWED AND APPROVED
as to financial and operational
obligations and business terms.
DocuSigned by:
Nil..
Tiffany Thomson
PRINTED NAME
Director of Human ResourcesHR
TITLE DEPARTMENT
DocuSign Envelope ID: D35D23F7-6CE7-4CB6-A29C-8F7347DD21C5
Exhibit A
Proposal
CITY OF DENTON, TEXAS
and
TEXAS SERIES OF LOCKTON COMPANIES, LLC
This Proposal is for CITY OF DENTON, TEXAS ("Client'o and is presented by the TEXAS SERIES OF LOCKTON COMPANIES, LLC ("Lockton").
COMPENSATION, DISCLOSURE AND PAYMENT TERMS
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 for the second annual term (August 4, 2021 - August 3,
2022) and $77,250 for the third annual term (August 4, 2022 - August
3, 2023:
• 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.
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, persistency, profitability
Proposal
Page 1 of 4
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
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.
1.4 Agreement to Forego Receipt of Commissions. In
consideration of Client's 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.
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 Lock -ton 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 Fee Amount Due
March 15, 2022 $75,000
March 15, 2023 $77,250
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
DocuSign Envelope ID: D35D23F7-6CE7-4CB6-A29C-8F7347DD21C5
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
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.
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 Clients
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 analytics services to
its clients ("Modeling and Analytics 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.
Modeling 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
Proposal
common stock of Client 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 Client's Board
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.
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Addendum A - Seances
I. 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.
0. 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 ""
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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
LQO[TON