Since June 2002, the City has contracted for property and casualty brokerage services pursuant to Local Government Code, Chapter 252.024, Purchasing and Contracting Authority of Municipalities. The City is unique to the insurance markets as a municipality because of its electric utility, which limits the number of insurance markets for property, boiler and machinery, and liability insurance. Specialty insurance markets provide quotes only to licensed agencies and will not provide direct quotes to parties seeking to purchase insurance direct. Prior to the City Council engaging a broker of record, the City solicited annual proposals for each line of coverage, which reduced the number of insurance markets accessed because of the limited number of agencies responding to the request for proposals, often omitting better quality insurance markets. The proposal process also prohibits negotiations once insurance quotes are received. Additional benefits of using the broker of record method for purchasing insurance are ensuring that there are no gaps in coverage, same or better insurance terms from prior year, and a comprehensive understanding of the City’s risks. In 2006, the City Council requested that staff issue a Request for Proposal and obtain quotes from local insurance agents. The contract was awarded to Palmer and Cay of Dallas, who partnered with Sanford Insurance Agency of Lubbock, Texas, at a cost of $80,000. In 2008, the pricing dropped to and has remained at $75,000 annually. Palmer and Cay ultimately became Wells Fargo Insurance Services and then USI Southwest, Inc. Sanford Insurance Agency became Sanford and Tatum Insurance Agency and now operates under the name Heritage-RM dba Sanford & Tatum Insurance Agency, but the consulting and broker relationship has continued since that time. City staff issued a Request for Proposals, RFP 21-15810-KM, and proposals were solicited from qualified insurance professionals. While 6 companies expressed an interest, only 1 response was received. Heritage-RM, LLC dba Sanford & Tatum Insurance Agency, Lubbock, Texas, partnered with USI Insurance Services, El Paso, Texas, is the recommended vendor. This proposer offers 80+ years of public entity and large account experience, in addition to a local agent/broker partnership with a great references and excellent financial standing. The annual cost of $75,000 is guaranteed for the term of the contract, which is 1 year with the option to renew for 4 additional years. |