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Finance Committee Date: 02/08/2011 By: Diana Lund Finance Information Title: Consider Fee for Agent of Record for Property, Casualty and Workers Compensation Item #: 4. 1. Background: The City of Ramsey has had an agreement with T.C. Field & Company since 1997 for agent of record services for property, casualty, and workers compensation insurance Services. In 2010, T.C. Field was bought out by Bearence Management Group, with the city's agent, Mark Lenz being retained by Bearence. In 1997, the fee paid for insurance services was $3000. Since inception, the fee has increased to the current rate of $5,305 for 2010. A recent payment history is as such: 2004 - $3,750 2005 - $3,750 2006 - $4,000 2007 - $4,500 2008 - $5,000 2009 - $5,150 2010 - $5,305 The current agreement with T.C. Field & Company ended on 2010. Professional services agreements, such as an agent of record, can be extended for an extended period of time. As the property, casualty and workers compensation rates have already been established for 2011 the city has the option of looking at a contract renewal with the Bearance Management Group for year 2012 or issuing an RFP for insurance services. At this time, the Bearance Management Group is asking for the consideration of a fee increase for 2011. A separate fee is paid to the Bearance Management Group for Workers Compensation insurance, which is approximately 2% of premiums paid. This amount is included within the total workers compensation premium paid by the city. For 2011, the 2% of premiums equates to approximately $2,316. In comparison, in 2010 the 2% premium was $2,552. The City's agent is proposing a 2011 fee of $5,800 which would represent a 9.3% increase from the 2010 fee of $5,305, but overall a 4.8% increase when factoring in the reduction in the 2% premium for workers compensation. A few of the neighboring cities were contacted regarding their agents of records fees for insurance. Those who responded were: Champlin: 10% of premiums or approximately $24,000 Anoka: $10,000 for Property and Casualty Insurance. 2% for workers compensation included within total premium paid (same as City of Ramsey) Recommendation: Staff recommends a not - top - exceed amount of $5,800 for the city's agent of record for property, casualty and workers compensation services.