The City of Yorkton is changing its insurance broker after a decision by Yorkton Council at its regular meeting Monday.
The City had been using Independent Agencies since July 2003, when it was transferred to Farrell Agencies Ltd. Initially the contract was for three years, but Council would extend the period by two years.
In 2008 the brokering of the City's insurance went back to Independent Agencies Western Financial Group. At the time the motion passed was "that the City use Independent Agencies Western Financial Group for the upcoming two years. Further that the Administration be directed to do a request for proposals no later than April 2010 for insurance coverage on a seven year contract, and further that the City use the proposal call for insurance every seven years thereafter," explained information circulated to Council Monday.
"The last resolution was prompted on the basis that changing brokers every three years was not a worthwhile exercise. That with professional services, typically a five to seven year contract would be more desireable," said Lonnie Kaal, director of finance with the City.
In April of this year, "a Request for Proposals was issued and advertised with copies provided to the two local brokers."
Proposals were received from Western Financial Group and Farrell Agencies Ltd.. On April 30th, meetings were held with both firms to discuss the contents of their proposals. The evaluating committee consisted of the City Manager, Director of Community Development, Parks and Recreation and the Director of Finance, explained Kaal.
Kaal said both proposals had merit.
"Both firms are capable of looking after the City's insurance needs. When rating the firms on a point system the numbers were very, very close," she said.
Kaal said the Western Financial Group "ranked higher in the area of 'depth and breadth of services available'," while Farrell Agencies Ltd. "ranked higher in the area of 'conceptual appreciation of the City's risk management needs and proposed solutions'."
In addition, "both firms indicated that they would go to the market and provide the City with comparables to make a decision on different carriers. Both acknowledged that SGI would likely continue to be the major carrier," said Kaal.
However, "when ranking the firms, it was agreed by the evaluating committee that Farrell Agencies Ltd. was the firm of choice, albeit, by a small margin," said Kaal.
"Appointing a broker is a soft service and we trust them to ensure we have adequate coverage, with reliable carriers at the most reasonable price. At this time, Farrell Agencies Ltd. is deemed to be the successful firm in providing these services to the City. They have volunteered to provide the City with detail regarding carriers and rates. Since this was not previously specified, we have included additional verbiage regarding disclosure in the recommended resolution," detailed information circulated to Council.
The recommendation of Administration was "1that Farrell Agencies Ltd. be awarded the contract to provide insurance brokerage and associated services for a period of seven years from July 1, 2010, to June 30, 2017. That Farrell Agencies Ltd. assist administration in setting up a risk management program and further that they will on an annual basis provide details of competing carriers, rates and changes in coverage to Administration.."
Councillor Chris Wyatt questioned why the City wouldn't go with the firm which Administration noted had a larger network and ability to draw on expertise resources?
Kaal reiterated both firms had merit, but in total it was unanimous by the three-member committee to go with the Farrell Agencies proposal.
Coun. Ross Fisher said he too was curious about choosing the firm with less access to specialized staff.
Fisher also wanted more time to look into the individual proposals.
"I'm uncomfortable making this decision today," he said, adding with $350,000 in annual premiums it is a major expenditure over seven years. "I'd be much more comfortable having more information."
Fisher moved to table the issue, but his motion was defeated with only he and Wyatt in favour.Coun. Bob Maloney said the three-member Administrative review obviously had researched the two proposals carefully.
"If this is their recommendation I fully support it," he said.
The Administration recommendation passed with Councillors Wyatt and Fisher opposed.
