HomeMy WebLinkAboutRESPONSE - RFP - P928 CONSULTING SERVICES TO REVIEW MARKET ANALYSIS AND EMPLOYEE BENEFITS PRACTICESArthur J. Gallagher & Co.
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Presented by:
Gallagher Benefit Services, Inc.
6399 S. Fiddler's Green Circle,
Suite 200
Greenwood Village, CC 80111
Contact: Don R. Heilman
303-889-2686
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RFP # P92A
Gallagher Benefit Services. Inc.
GALLAGHER BENEFIT SERVICES, INC.
Gallagher Benefit Services, Inc. (GBS) is a member of the Benefits
Division of Arthur J. Gallagher & Co. and is located in Greenwood
Village, Colorado.
For over 40 years, GBS has been providing benefit consulting services
to many of Colorado's premier employers, including:
➢ Adams County
➢ Douglas County
➢ Larimer County
➢ City of Littleton
➢ City of Aurora
➢ City of Northglenn
GBS is the largest benefit consulting office in the Rocky Mountain
Region, with more than 50 employees dedicated to serving our clients.
Our Colorado staff includes:
➢ 13 benefit consultants with an average of 21 years of
experience in the industry
➢ 9 account managers, with an average of 12 years in the benefits
industry, who support the consultants in serving our clients
➢ 2 professional insurance underwriters, each with over 20 years
of industry experience, who provide financial analysis services
Our benefit consulting staff works as a team and pools its significant
expertise to bring the most creative benefit solutions to our clients.
The stability of our staff is unique in today's world. It assures our
clients of continuity of service.
PUBLIC SECTOR EMPHASIS
Of particular note to the City is GBS' commitment to, and
demonstrated experience in, the public sector. A significant portion of
our office's operation is geared to serving governmental plan sponsors.
In fact, of the 25 largest Colorado public employers (23 when the
federal government and U.S. Postal Service are excluded), 10 are
current GBS clients, and 18 have been served at one time or another
by current GBS consultants. Included in Appendix 5 is an Illustrative
Public Sector Client List served by our Denver office.
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We have enjoyed longstanding relationships with many of these
clients. In addition, the managing partner serves as our corporate
Public Entity Niche Leader, which brings to the City the added benefit
of maintaining a pulse on developments and trends specific to
governmental entities throughout the country.
The entire team assigned to the City has public sector experience.
Beyond our comprehensive consulting expertise, the team has
consulted with other public entities on alternative funding assessments,
cafeteria plan development and retiree health considerations, including
pre -funding approaches. Among clients for whom these specific
services have been provided:
➢ Boulder County
➢ Douglas County
➢ State of Colorado
In addition to our local strengths, we are readily able to call upon a
variety of national resources, including:
Our Technical Services and Compliance Unit — this is a corporate
resource dedicated to serving our various offices as an internal
resource on the full range of technical, compliance and regulatory
issues that arise from day to day. As an added benefit, this support is
contemplated within our hourly rate structure, and as such, will not be
billed separately.
➢ We maintain a dedicated health actuarial unit which offers a
wealth of capabilities and resources, including:
• Proprietary plan design pricing software
• Comprehensive data bases for benchmarking analyses
• Data warehousing capabilities and expertise
• Dedicated claims payor auditing services (included in our
proposal)
• Utilization management evaluation expertise
• Direct provider contracting expertise
• Large claims audit/negotiations
LEE & BURGESS ASSOCIATES
Lee & Burgess Associates of Colorado, LLC is a full service
management consulting firm that focuses on Organizational
Effectiveness and Human Capital Management. The Company was
founded in 1979 in Kansas City and established its Denver operations
with specific public sector focus in 1989. It is headquartered in
Centennial, Colorado and currently does not have any other corporate
locations.
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The experience and depth of our professional team that includes four
senior professionals, allows us to sere clients nationwide. Our
professionals view the challenges you face as opportunities to help you
succeed. Drawing on the client organization's strategic and
operational plans, Lee & Burgess develops creative, customized
solutions that contribute to improving the organization's
competitiveness. These solutions include:
➢ Assessing the human capital management within an
organization and using the findings to assist in the development
of plans and best practices that respond to and support
statutory compliance as well as the management of employee -
related strategic priorities.
➢ Building reward and recognition systems that reinforce both
individual and team achievement of organization goals and
objectives.
➢ Designing incentive compensation plans that motivate improved
performance and business results.
➢ Establishing automated and manual processes for managing
human capital requirements throughout the organization.
➢ Designing employee communications processes and media that
deliver the intended message clearly and concisely.
➢ Developing performance management systems that measure
individual effectiveness in achieving the organization's priorities.
3. What is the location of the office from which consulting
services would be provided?
The locations of the offices from which consulting services will be
provided are as follows:
Gallagher Benefit Services, Inc. Lee & Burgess Associates, LLC
6399 S Fiddler's Green Circle, #200 7955 E Arapahoe Court, #3000
Greenwood Village, CO 80111 Centennial, CO 80112
4. What is the turnover rate among consultants and staff
personnel during the past two years?
As with any professional services firm, we realize some turnover from
time to time. The turnover rate among GBS consultants and staff
personnel for the past two years has been 6.5% and 9.5%,
respectively.
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Lee & Burgess Associates, since its establishment in Denver in 1989
specifically to sere the public sector, has maintained a small
professional staff of 4-5 professionals dedicated primarily to the delivery
of public sector compensation and compensation related services.
During the past two years one individual resigned and one is currently
transitioning into retirement.
5. What is your firm's philosophy in the approach to benefits
consulting?
The philosophy of GBS is one that seeks to partner with our clients in a
way to best complement their in-house resources and expertise. We
strive to provide ongoing insight into evolving trends, while providing
technical expertise that allows our clients to provide benefits that meet
their human resources and fiscal objectives. We structure our team to
assure responsiveness. We seek to empower our clients to make fully
informed decisions and then work hand in hand to support the
implementation and ongoing administrative efforts.
Lee & Burgess Associates only addresses benefits as a part of the
total compensation picture in the client environment. Our philosophy
concerning benefits consulting echoes that of GBS and serves as a
compliment from a total compensation perspective.
6. Provide information on the principal consultant who would
be responsible for the project. What is his/her professional
background and experience? Specifically, include the
individual's experience in dealing with public employers. If
you expect to utilize other personnel to accomplish the
duties specified in this RFP, provide the same information
requested above for each of the personnel listed.
GBS
Mr. Don R. Heilman, Area Vice President, will sere as the overall
project manager, and also as the principal consultant. Mr. Heilman has
worked extensively with large public sector employers and plan
sponsors for over 15 years in varying capacities. He has served as
senior consultant to public entities for over 12 years, and has worked
with any number of plans in either an ongoing partnership or project
capacity. Among clients served by Mr. Heilman, along with highlights
of services provided:
➢ State of Colorado
➢ State of Kansas
➢ State of Montana
➢ City of Billings, MT
➢ City of Colorado Springs
➢ City of Des Moines, IA
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➢ City of Littleton
➢ City of Tulsa, OK
➢ Oklahoma State University
➢ Texas A&M University
➢ Douglas County
➢ Los Alamos County, NM
➢ Aurora Public Schools
➢ Billings Public Schools, MT
Through this broad experience, Mr. Heilman has developed strategic
insight and technical depth in a number of topical areas of importance
to the City, including:
➢ Self -funding
➢ Network assessment
➢ Strategic plan redesign
➢ Strategic pricing/employee contribution development
➢ Pharmacy evaluation, plan design
➢ Multiple option arrangements
➢ Cafeteria plan development
➢ Consumer driven health initiatives
➢ Paid time off assessment and redesign
➢ Retiree health delivery and financing, including pre -funding
Mr. Heilman has extensive experience in working with employers in
Northern Colorado. While serving as a senior consultant with his prior
firm, he was the primary consultant to both the City of Fort Collins and
Poudre Valley Schools. He currently is the managing partner for
Larimer County.
In addition, Mr. Heilman will work closely with a multi -disciplinary team,
comprised of the following members.
Ms. Paulette Jerpe will serve in a co -consulting capacity. Her
responsibilities will include internal project coordination, technical
insight and assistance in report preparation.
Ms. Jerpe has over 22 years experience underwriting and marketing
self -funded health and dental plans. She spent 4 years as an
underwriting trainer. Thus, she has both a keen understanding of self -
funding, and an excellent ability to communicate the concepts of self -
funding at various levels of understanding.
Of particular note are the Northern Colorado public employers that Ms.
Jerpe serves. Among her clientele:
➢ Larimer County
➢ City of Loveland
➢ Weld County School District #6
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In addition, she is primary consultant to the City of Aurora and Cherry
Creek School District #5.
Ms. Joyce Postlewait will sere as senior underwriter. Ms. Postlewait
has been with Gallagher Benefit Services for 14 years, and has over
20 years of experience, including seven years of experience in a senior
underwriting capacity for a major insurance carrier.
Ms. Postlewait works extensively with many of our large, self -insured
clients, providing the same types of services that will be provided for
the City, including data analysis, plan design pricing, rate forecasting,
contribution modeling and reserves assessment.
Ms. Lori Bowen will sere as account manager. Ms. Bowen has over
15 years of experience. Her primary roles will be to assist in plan
design assessment, conduct employer benchmarking and support the
compilation of the various sources of input.
Mr. Don Gasparro, FSA, will oversee data analysis, benchmarking
and modeling efforts. Mr. Gasparro oversee the actuarial unit for GBS,
and is responsible the development and maintenance of our
proprietary data warehouse, as well as the various forecasting, plan
design and predictive modeling software.
LEE & BURGESS
Ms. Karin S. Connell, Principal, will sere as the project manager for
the compensation component of the assignment, working closely with
Mr. Heilman. Ms. Connell offers over twenty years of experience in
directing and providing human resources management services. She
has served public and private sector executives since 1978, counseling
on matters of compensation, organization planning, management, and
resource allocation.
Since joining Lee & Burgess in 1993, she has worked with numerous
governmental and private sector organizations in the design of
compensation plans and development of employee -related
management solutions.
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Ms. Connell holds a Bachelor's degree in Business and Economics
with Finance and Communications as areas of emphasis from Boise
State University. She is a member of the Colorado Human Resource
Association and the Rocky Mountain Compensation Association,
where she has served as the Program Chair on the Board. She
chaired the founding Board of Directors for the Strategic Total
Compensation Forum, the Idaho affiliate of World At Work (previously
American Compensation Association). She is a member of the
Denver Metro Chamber of Commerce.
Representative public sector clients include:
➢ Adams County, Colorado
➢ Arapahoe County, Colorado
➢ Arapahoe Library District
➢ Chaffee County, Colorado
➢ City of Aurora, Colorado
➢ City of Brighton, Colorado
➢ City of Cortez, Colorado
➢ City and County of Denver, Colorado
➢ City of Carbondale, Colorado
➢ City of Castle Rock, Colorado
➢ City of Estes Park, Colorado
➢ City of Evans, Colorado
➢ City of Fountain, Colorado
➢ City of Jackson, Wyoming
➢ City of Lakewood, Colorado
➢ City of Littleton, Colorado
➢ City of Snowmass Village, Colorado
➢ City of Vail, Colorado
➢ Colorado Springs School District #11
➢ Cunningham Fire Protection District, Colorado
➢ Douglas County, Colorado
➢ El Paso County, Colorado
➢ Fremont County, Colorado
➢ Larimer County, Colorado
➢ Mesa County, Colorado
➢ Moffat County, Colorado
➢ Morgan County, Colorado
➢ Park County, Colorado
➢ State of Colorado
➢ Steamboat Springs Fire & Rescue, Colorado
➢ South Metro Fire Protection District, Colorado
➢ Teton County, Wyoming
Ms. Kristi L. Rudy, Senior Compensation Consultant, will serve as a
consultant with responsibilities including compensation market and
analytical expertise. Ms. Rudy offers eighteen years of management
and supervisory experience, having served both the public and private
sectors. Since joining the firm in 1998, she has been primarily involved
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in the design and analysis of salary surveys, job evaluation methods
and human resources policies and procedures, as well as assisting
clients with developing compensation and classification systems.
She has served in official professional capacities with San Diego
County, California, and the U.S. District Court in Denver, Colorado.
Her private industry experience as a general manager in retail includes
recruiting, training, sales and marketing and performance evaluation,
as well as designing and implementing operational and human
resources management policies and procedures.
Ms. Rudy holds a Bachelor's degree in Sociology and Psychology from
New Mexico State University. She is a member of the Society for
Human Resource Management, Rocky Mountain Compensation
Association and the Colorado Human Resources Association, and has
held memberships in the Denver Metro Chamber of Commerce and
the California Probation, Parole and Correctional Association. She has
served as an Instructor of Public Service and Administration with
California Community Colleges.
Current client summary includes:
➢ Adams County, Colorado
➢ Alamosa County, Colorado
➢ Archuleta County, Colorado
➢ Brookings County, South Dakota
➢ City of Aurora, Colorado
➢ City of Brighton, Colorado
➢ City of Brookings, South Dakota
➢ City of Englewood, Colorado
➢ City of Laramie, Wyoming
➢ City of Littleton, Colorado
➢ City of Longmont, Colorado
➢ City of Montrose, Colorado
➢ City of Sterling, Colorado
➢ Clear Creek County, Colorado
➢ Conejos County, Colorado
➢ Cunningham Fire Protection District, Colorado
➢ Douglas County Library District, Colorado
➢ Fremont County, Colorado
➢ Larimer County, Colorado
➢ Logan County, Colorado
➢ Montrose County, Colorado
➢ Park County, Colorado
➢ Project 7 Water District, Colorado
➢ Teton County, Wyoming
➢ Town of Eagle, Colorado
➢ Town of Jackson, Wyoming
➢ Rio Grande County, Colorado
➢ Saguache County, Colorado
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➢ Sedgwick County, Colorado
➢ Tri-County Health Department, Colorado
➢ Wheeler Opera House, Aspen, Colorado
Professional summaries of the various team members are included in
Appendix 2.
7. Has the principal consultant performed a project of this
nature? If so, please describe three such projects. Specify
the scope of work for the project, and the topics you were
asked to investigate.
Mr. Heilman, through his extensive work with public entities, regularly
advises on prevailing practices and evolving cost management
strategies. Among areas he has addressed:
➢ Practical and strategic plan design
➢ Alternative funding strategies
➢ Contribution strategies, including cost sharing, dependent
subsidization, rate tier alternatives
➢ Consumer driven health initiatives
➢ Credit -based cafeteria plan provisions
➢ Consolidated paid time off considerations
➢ Retiree health plan design delivery and financing
Mr. Heilman played key roles in the work performed for both the State
of Colorado Auditor and Douglas County projects (referenced in
question 1 above). In addition, as part of our ongoing consulting for
Aurora Public Schools, he has recently addressed the following on
behalf of the District:
➢ Benchmarking of plan design and contributions among other
school districts
➢ Assessment of the value/desirability and cost impact of multiple
carriers/plan options
➢ Impact of alternative rating methodologies
➢ Feasibility of a cafeteria plan
➢ Alternative approaches for delivery of short term and long term
disability coverage
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8. How do you define an organization's "market" for
benchmarking purposes? How many organizations should
be included to achieve a credible market?
From a benefits perspective, we typically see employers benchmarking
against local/regional employers. It is important to take both benefit
design and contributions into account, as both are integral to arriving at
a relative value of the benefit.
We also typically see a stronger reliance on comparison among
employers in a given sector. So, for example, a public employer
typically places more emphasis on the practices of other public
employers. That said, we believe it is important to also factor in the
practices of employers in the private sector, for a number of reasons:
➢ Accountability to all stakeholders, including taxpayers
➢ Recruiting/retention, as it relates to positions for which you are
competing with the private sector
➢ Avoidance of potential cost shifting of benefits costs from other
employers, including those in the private sector
Another factor to consider is employer size. Due to economies of
scale, lack of resources and other factors, smaller employers tend to
offer lesser benefits than larger employers. Thus, we typically focus on
practices among other more comparably sized employers.
From a compensation standpoint, L&B traditionally sees public sector
employers of comparable size and mission with Fort Collins using
local, regional, and national benchmarks, depending on the recruiting
requirements for the level of position and/or particular discipline. Other
than the introduction of the national market for management and some
professional positions, L&B subscribes to the same views as
Gallagher, which provides continuity for the assessment of total
compensation competitiveness.
9. What is your firm's experience in working with self -funded
governmental plans? Please provide three references for
your work with such plans, including the client's name, a
contact at the client and the number of employees of each
client.
Both Mr. Heilman and Ms. Jerpe have extensive experience with self -
funding. In particular, both have consulted extensively to public
entities on the feasibility and ongoing operations of self -funded
arrangements. In addition, with a dedicated underwriter on the team,
the City is assured of the expertise to effectively operate any self -
funded programs in a fiscally sound, risk tolerant manner.
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March 17, 2004
Mr. James B. O'Neill II, CPPO, FNIGP
Director of Purchasing & Risk Management
City of Fort Collins
Purchasing Division
215 North Mason Street, 2"d Floor
Fort Collins, CO 80524
Re: RFP No. P928 — Consulting Services
Dear Mr. O'Neill:
Gallagher Benefit Services, Inc., in partnership with Lee & Burgess
Associates, LLC, is pleased to submit this proposal to conduct a review
of the market analysis and employee benefit practices of the City of
Fort Collins. Our combined experience and areas of expertise
uniquely qualify us for this project, based on our:
➢ unmatched public sector experience
➢ extensive work with governmental entities in Northern Colorado
➢ significant underwriting expertise, supported by actuarial
resources, proprietary data bases and software modeling tools
➢ depth and knowledge of the proposed consulting team
➢ familiarity and experience in working with the governing bodies
of public agencies, including city councils, county
commissioners and school boards
We would welcome the opportunity to meet with the evaluation team to
review our proposal and qualifications in greater detail, and to address
any outstanding issues. In the meantime, please contact us with any
questions.
Thank you for your consideration for this important review.
Sincerely,
' J0
Don R. Heilman
Area Vice President
cc: Karin Connell, Senior Consulting Principal, Lee & Burgess
Associates
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A large majority of our clients self -fund one or more of their benefit
programs. The following three references are provided, per your
request.
➢ City of Billings, MT — 800 Employees
Ms. Karla Stanton
406-657-8265
➢ City of Loveland — 650 Employees
Mr. John Van Eden
970-962-2373
➢ City of Littleton — 450 Employees
Mr. Kevin Burke
303-795-3857
10. Describe any pending litigation against your firm.
There is no current or threatened litigation against GBS.
Lee & Burgess Associates, LLC has no current or threatened litigation.
11. Describe any litigation that has been brought against your
firm during the last 3 years.
We carry errors and omissions insurance to protect us and ultimately
our clients. We have never had an errors and omissions claim in the
35+ year history of the company. The only litigation we have been
involved with is with former employees regarding non -compete
agreements.
Lee & Burgess Associates of Colorado, LLC, carries errors and
omissions insurance as a component of its risk management plan. We
have never had an errors and omissions claim in the 15 years that this
business has been in Colorado.
12. Describe the professional liability coverage carried by your
firm.
GBS
Carrier:
Effective Date:
General Liability Limits
Each Occurrence:
Aggregate:
Excess Liability Limits
Each Occurrence:
Aggregate:
Hartford Insurance
10/01 /03 - 10/01 /04
$1,000,000
$3,000,000
$25,000,000
$25,000,000
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L&B
Professional Liability:
Carrier: Philadelphia Indemnity
Insurance Company
Effective Date: 6/06/2003 — 6/06/2004
Professional Liability Limits
Each Occurrence: $1,000,000
Aggregate Per Policy Period: $1,000,000
Commercial General Liability:
Carrier: American Family
Insurance Company
Effective Date: 3/27/2003 — 3/27/2004
Renewal in Progress for
3/27/2004/05
Commercial General Liability Limits
Each Occurrence: $1,000,000
General Aggregate: $2,000,000
13. Beyond the stated scope of this project, what additional
information would be required for the successful completion
of this project? Have any vital questions or concerns been
omitted?
GBS
We have included in Section III a comprehensive data request.
Additional informational requirements may be identified during an initial
fact finding meeting.
L&B
Assuming all information outlined in Section III -- Compensation is
available, Lee & Burgess believes that it has sufficient information to
conduct the assignment.
14. Describe any problems you foresee in your ability to conduct
the services described in this RFP.
We do not foresee any problems, so long as the required data is
provided timely, and is in readily useable format.
15. What is your estimated cost to complete this project? Please
describe the methodology used to derive your estimate.
See Section IV.
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Our efforts will commence with a project initiation meeting. This
meeting would include appropriate staff/council members, and is to
accomplish a number of objectives, including:
➢ Introductions
➢ Role identification
➢ Articulation/clarification of project goals/objectives
➢ Identification of applicable project parameters
➢ Discussion and review of "current state"
➢ Assessment of current working knowledge among council
members, to assure informed dialogue and identify appropriate
level of communications
➢ Review of data request
➢ Identify key vendor contacts
➢ Identification of any "sacred cows"
➢ Review/refine time line, checkpoints
➢ Schedule, to the extent possible, subsequent meetings
As indicated above, a key to the successful outcome of the project will
be to assess the current knowledge level and understanding of key
compensation/benefits concepts among council members. Our
experience tells us that it is important to assure a reasonable level of
understanding of fundamentals/technical elements, in order to
establish an appropriate foundation for the remainder of the project.
As such, we would look to explore the value of, and need for, an
educational session. Such a session would occur early on in the
project, and would include council members and other key
constituents, as determined during this initial meeting.
Beyond these initial efforts, we will then proceed on two parallel tracks
— one specific to compensation considerations and the second relating
to the medical and dental programs.
Compensation
Assignment Start -Up
To assist us in developing an understanding of the City's pay
objectives and strategic direction, we will conduct the following
activities:
➢ Meet with elected officials and department heads to review and
discuss the City's pay philosophy, current pay system,
compensation practices, and issues of concern, and to define
the City's survey process.
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➢ Collect and review data essential for evaluating the City's
current compensation plans and practices. Data collected will
include, but not be limited to, organizational charts, employee
listings, job descriptions, job evaluation tools and procedures,
current pay plans and employee salary data, human resources
policies and procedures, standard operating procedures (where
appropriate) and other related materials.
Optional Education: Conduct a compensation seminar and
discussion for members of the management team. We recommend
this as a start-up component because we often find that elected
officials and managers have limited exposure to different salary
administration concepts. We utilize this seminar to provide
management with a broad understanding of various approaches, the
advantages/disadvantages of each and the opportunity to explore
alternatives as a leadership team.
Analyses, Findings, Recommendations and Presentation
Upon completion of the initial phase of the assignment with the City,
we will proceed with quantitative as well as qualitative assessments
and comparisons of current practices prominent among the
organizations within the City's selected market benchmark, taking into
consideration the trends and practices of those outside that select
group.
We will, in conjunction with GBS:
➢ Present our findings and recommendations.
➢ Work with management to define any changes that may result
from the assessment.
Benefits
In addition to our initial organization meeting, we also would expect to
conduct a detailed operational review. This review will be
accomplished via a thorough interview of Human Resources staff.
This process will assure that we have a clear understanding of current
operational and administrative parameters/practices. It will also enable
us to verify/obtain any possible data/informational resources that will
contribute to our assessment and analysis.
In terms of data requirements, the following sets forth the data we will
look to obtain. This data would need to either be provided by the City,
or obtained from the City's vendors, and at a minimum, should include
the following:
➢ Electronic census, to include all eligible employees, including
the following elements:
♦ Age/date of birth
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♦ Sex
♦ Salary
♦ Employment status (full-time, benefit -eligible part-time,
retiree, etc.)
♦ Current medical, dental plan election — option and tier
Average enrollment, by plan and tier for 2002, 2003
Employer and employee contribution rates for medical, dental —
2003, 2004
Fixed costs for 2004
Copy of current SPDslplan documents
Descriptions of any current wellness, prevention or health
promotion programs
Copy of current vendor contracts — TPA, UM, network, PBM,
stop -loss
Any language (collective bargaining, City ordinance, etc.) that
has an impact on plan design, eligibility, or funding
Paid claims data for 2002, 2003 — broken down by:
♦ incurred versus paid claims — "triangulation"
♦ employee, spouse & dependents
♦ active versus retirees (and for retirees, pre -Medicare
versus Medicare -eligible)
♦ type of service:
• inpatient hospital (to include number of admits,
days)
• outpatient hospital
• inpatient surgical
• outpatient surgical
• office visits by primary, specialty care (to include
number of claims)
professional
• diagnostic lab
• diagnostic x-ray
• diagnostic magnetic imaging
• emergency room
• chiropractic
♦ major diagnostic category, ranked in order of paid claims
♦ provider utilization:
• in -network versus out -of -network claims payments
• top hospitals, by amount paid
• top physicians, by number of claims, amount paid
♦ claims for claimants in excess of $75,000
♦ paid prescription drug claims:
• total dollars paid, by therapeutic class
• total claims & dollars paid, by generic, formulary,
non -formulary
• total claims and dollars paid, by retail versus mail
order
• total rebates received for 2002, 2003
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♦ current network configuration — medical, dental
♦ current Poudre Valley Hospital negotiated reimbursement
arrangements
We would hope to obtain most/all of this data within two -three weeks of
contract award. This data will be analyzed to assess key areas of
utilization, and compared to age -adjusted normative data in our
proprietary database. This data will also be analyzed to identify
potential areas for future cost management initiatives, such as targeted
plan design, wellness, utilization management and disease
management programs.
Among issues we will look to address:
➢ What are potential risk management considerations for today?
In the future?
➢ What types of dependent subsidization is in place today?
Appropriate?
➢ What do demographics and utilization suggest in the way of
prudent plan design? Cost management programs?
Prevention?
➢ What types of stratification are appropriate for cost allocation —
between plans, by salary, by tier?
➢ How should cafeteria plan provisions best be integrated into the
benefits delivery model?
➢ What is the best approach for enhancing employee
consumerism?
In addition, we will gather current data from your peer group of
employers to benchmark current City benefit value against these
employers. In assessing the value of a benefit, it is important to look
both at employee contributions and the underlying benefit itself. As
such, we will assess the relative actuarial values of the prominent
programs in place for the various employers in the benchmark, and
then combine this value with the employee contribution component to
arrive at an overall value. This analysis will be facilitated by the use of
our proprietary software tools that were designed by our dedicated
health actuarial unit to determine the relative value of alternative plan
designs.
This data gathering will be enhanced, in terms of both efficiency and
effectiveness, through our ongoing work and/or familiarity with many of
the employers reflected in the City's peer group. Specifically, GBS has
conducted ongoing or project work for fully two-thirds of the twelve
cities in this group. This distinct advantage will be of direct benefit to
the City.
JMD:1Prospects12003\ProposalslCity of Fort Collins-31704.doc 22
This value will then serve as the basis for the comparison of the City's
benefits programs with those of its peer groups. In addition, we will
access other published surveys and proprietary databases to comment
on prevailing practices more broadly. This data will be drawn from
other larger employers in both the public and private sectors.
This analysis will enable us to bring a broader perspective as to
potential cost management and plan design/delivery approaches.
Further, it will contribute to our assessment as to the relevance and
merits of other/additional benchmarks as we consider
recommendations for future strategy.
This analysis will take into account a number of key attributes:
➢ Organizational program configuration
➢ Eligibility
➢ Benefit delivery — cafeteria plan considerations, opt -outs
➢ Plan design — incorporating findings from data/utilization
analysis
➢ Cost sharing — contribution strategies
➢ Retiree health — fire & police, general
➢ Funding/risk management
➢ Cost management — wellness, disease management
➢ Vendor integration/coordination
➢ Provider integration/coordination
➢ Administrative considerations
➢ Technological considerations
➢ Short and long-term cost implications
➢ Education/communication implications
Through our extensive involvement with employers in Colorado, and
specifically northern Colorado, we will have access to a variety of
potential sources to assess the current contractual terms in place with
Poudre Valley Hospital. We will obtain this information (subject to
issues of confidentiality) to determine the competitiveness of the
current arrangement. We will also comment on possible approaches
and corresponding potential impacts on cost and employee relations
relative to alternative network configurations/contracting approaches.
In determining approximate cost impacts, we will rely on our extensive
underwriting/actuarial expertise. This process will also rely on our
actuarial tools/normative databases to arrive at projected financial cost
impacts.
Our findings will be summarized into a cohesive report. The report will
distinctly address issues specific to compensation and benefits, and then
incorporate these respective findings into an overall, total compensation
perspective. This report will be submitted in draft form to the City's
designated project team, seeking comments/input. This feedback will be
used to refine/finalize our report, which then will be presented to the
designated audience.
JMD:\Prospects\2003\Proposals\City of Fort Collins31704.doc 23
For all proposed services except the Council educational session, our
proposed fixed fee is $46,000. The fee for the optional education
session will be $2,500.
This fee is all-inclusive, and contemplates one presentation of our
findings. Additional presentations, as well as any services desired
subsequent to the delivery of our report, will be provided on a fee for
service basis, or as otherwise agreed upon.
We propose to have our fee payable in two installments. Fifty percent
will be billed in June, with the remainder billed upon completion of the
project.
JMD:\Prospects\2003\Proposals\City of Fort Collins-31704.doc 24
Arthur J. Gallagher & Co. is a full service consulting and brokerage
firm, tailoring services and programs to meet its clients' needs.
Gallagher Benefit Services (GBS)
The employee benefits division of Arthur J. Gallagher & Co. provides
its clients with information support, assistance in plan design and
management, as well as the coordination of all plan operation issues.
We have nationwide consulting experience with diverse, multi -site
clients and provide our clients with a partner exceedingly familiar with
the needs and objectives of employee benefit programs.
Gallagher Retirement Services, Inc. (GRS)
GRS delivers innovative solutions for retirement plan customers
through practice offices across the country, providing a single source
of expertise, blending national resources with local market knowledge.
Gallagher Brokerage Services Division (BSD)
This division specializes in structuring property/casualty insurance and
risk management programs for commercial, industrial, institutional, and
governmental organizations through a nationwide network of offices.
Gallagher Bassett Services, Inc. (GB)
Gallagher Bassett Services, Inc. provides a broad range of risk
management services — including claims and information
management, risk control consulting, appraisals, and claims
investigations to corporations and institutions worldwide on a totally -
integrated or select, stand-alone basis.
Gallagher Bassett International, Inc. (GBI)
GBI is a London -based subsidiary that provides unbundled risk
management services to foreign insurance companies, reinsurance
companies, overseas brokers, and risk managers of overseas
organizations, as well as to companies in the U.S. that are foreign
controlled.
Gallagher Benefit Administrators (GBA)
GBA is a third -party administrator which serves the self -funded
employee benefit marketplace by integrating highly effective managed
cost and quality assurance programs with claims administration
services.
JMD:\Prospe ts\2003\Proposals\City of Fort Collins-31704.doc
Arthur J. Gallagher & Co. (Bermuda) Ltd.
This is an offshore subsidiary providing access to the many specialized
insurance and reinsurance companies operating with the Bermuda
marketplace, acting as an intermediary to place excess protection for
pools, captives, risk retention groups, and other self-insurance
arrangements.
Gallagher Captive Services, Inc.
This is a subsidiary specializing in the design and development of
group, association, and single -parent captives. Its comprehensive
captive services encompass feasibility studies, domicile management,
and program management.
Arthur J. Gallagher (UK) Limited
This is a Lloyd's broker which directly accesses Lloyd's and other
London and international insurance markets, placing risks for Arthur J.
Gallagher & Co.'s U.S. brokers, other brokers and carriers worldwide,
and direct retail clients.
International Risk Specialists (ISRS)
ISRS is a wholesale facility which helps Arthur J. Gallagher & Co.
brokers access differentiated insurance programs, excess and surplus
lines carriers, and standard markets through the world to provide
clients with the most favorable and competitive alternatives.
Arthur J. Gallagher Intermediaries, Inc.
This is a specialty marketing subsidiary operating as a casualty
reinsurance intermediary and surplus lines broker for domestic and
captive insurance companies, risk -sharing pools, and independent
insurance brokers.
Risk Management Partners Ltd. (RMP)
This division has sales offices in both England and Scotland and is one
of just a handful of companies currently marketing insurance and risk
management products and services to U.K. public entities. It is jointly
owned by Arthur J. Gallagher & Co. and a subsidiary of American Re
Corp., the international reinsurance giant.
JMD:\Prospe ts\2003\Proposals\City of Fort Collins31704.doc
EMPLOYEE BENEFITS CONSULTING PROPOSAL FOR: CITY OF
FORT COLLINS
TABLE OF CONTENTS
Executive Summary.............................................................. Section I
Consultant Questionnaire .................................................... Section II
Project Narrative.................................................................. Section III
Proposed Compensation ....................................................Section IV
Appendix............................................................................... Section V
Appendix 1- About the Arthur J. Gallagher Group of
Companies
Appendix 2 - Professional Summaries
Appendix 3 - Highlights of our Actuarial Tools
Appendix 4 -GBS Illustrative Public Sector Client List
JMD:\Prospeds120031Proposals\City of Fort Collins-31704.doc
GBS and certain of its insurance carrier markets from time to time
enter into arrangements providing for additional compensation to be
paid to GBS by such carrier generally with respect to the total volume
of premium or insurance coverages written through GBS with that
carrier (i.e., all insurance policies with that carrier where GBS is the
broker). It is not clear at this time what these fees are, but you may
contact us for more information regarding these arrangements. In
addition to the fees and/or commissions retained by GBS, GBS
affiliates, such as excess and surplus lines brokers, wholesalers,
reinsurance intermediaries, and similar parties, may earn and retain
commissions and /or fees in the course of providing insurance
products.
JMD:\Prospects\2003\Proposals\City of Fort Collins-31704.doc
EMPLOYEE BENEFIT PLAN MANAGEMENT
➢ Financial Analysis and Management
➢ Plan Design Consulting
➢ Benefits Administration Support
➢ Compliance
➢ Communication
➢ Benchmarking
➢ Competitive Bidding, Selection and Negotiation
ACTUARIAL ANALYSES
➢ Retiree Health
➢ Cafeteria Plans
➢ Data Warehousing
➢ In-depth Analytics
RETIREMENT PLAN SERVICES
➢ Plan Integration and Transition
➢ Investment Selection
➢ Compliance
➢ Communication
EXECUTIVE PROGRAMS
➢ Supplemental Retirement Planning
➢ Buy -Sell Arrangements
➢ Key employee insurance
COMMUNICATION SERVICES
➢ Summary Plan Descriptions/Documents
➢ Plan Enrollment Communications
➢ Technology Based Communication
HUMAN RESOURCE CONSULTING
➢ Compensation
➢ Executive Recruiting
➢ Policy Manuals, Audits
THIRD -PARTY CLAIMS ADMINISTRATION
➢ Medical, Dental, STD
➢ Section 125
➢ COBRA/HIPAA
➢ Premium Administration
INTERNATIONAL BENEFIT CONSULTING
➢ Plan Design
➢ Funding
➢ Compensation
JMD:\Prospects\2003\Proposals\City of Fort Collins-31704.doc
DON R. HEILMAN
AREA VICE PRESIDENT
FIELDS OF EXPERTISE
➢ Managed care
➢ Self -funding
➢ Flexible benefits
➢ Paid time off design
➢ Retiree health
➢ Data analytics
AFFILIATION/DESIGNATIONS
➢ College and University Personnel
Association
➢ State and Local Government
Benefits Association
➢ Colorado Group Insurance
Association
➢ Licensed Health & Life Agent
EXPERIENCE
➢ Fifteen years experience in employee benefits
➢ Twelve years experience with The Segal Company
➢ Previously managed health programs for a state government
CREDENTIALS
➢ B.S. — Mathematics: UND
➢ Graduate work in statistics
➢ Frequent speaker
➢ Author of numerous
publications
CLIENTS
➢ State of Iowa
➢ State of Kansas
➢ Oklahoma State University
➢ Texas A&M University
➢ Corporate Express
➢ Evolving Systems
➢ Janus
➢ Aurora Public Schools
➢ Billings Public Schools
➢ City of Billings
K:\8cus-a-I\G BS\Resumes\DonHeilman.doc
6/03
PAULETTE JERPE, CLU
BENEFIT CONSULTANT
FIELDS OF EXPERTISE
➢ Self -Funded Plans
➢ Large Employer Life, LTD,
STD, & Voluntary Products
AFFILIATION/DESIGNATIONS
➢ Chartered Life Underwriter
➢ Licensed Life & Health Broker
➢ Member in Good Standing of the
Society of Financial Service
Professionals
➢ Professional Member — Colorado
Group Insurance Association (CGIA)
➢ Five of Eight parts completed of
CEBS
EXPERIENCE
➢ Twenty Years Underwriting Self -Funded Plans
➢ Twenty -Two Years Experience in Employee Benefits
➢ Two Years Employee Benefit Consulting
CREDENTIALS
➢ Bachelor of Science — Seattle
University — Health Information
Science
CLIENTS
➢ Metro Wastewater Reclamation
District
➢ Cherry Creek School District #5
➢ Forest Oil Corporation
➢ Larimer County
➢ Lehrer's Flowers
➢ Research Electro-Optics Inc
➢ City of El Centro, CA
➢ City of Aurora, CO
➢ Micro Motion
➢ Medical Group Management
Association
K:\acus-al\GBS\Resumes\Pa uletteJerpe. doc
6/03
LORI BOWEN
ACCOUNT REPRESENTATIVE
FIELDS OF EXPERTISE AFFILIATION/DESIGNATIONS
➢ Assisting Account Managers ➢ Licensed Life & Health Broker in
and Consultants on Wide Colorado
Range of Projects
➢ Bid Specifications and
Analysis
➢ Contract and Document
Review
➢ Research Projects
➢ Excel Reports
EXPERIENCE
➢ Account Representative at Gallagher Benefit Services, Inc. since 1985
CREDENTIALS
➢ Bachelor of Science — Colorado State University, Graduated with Highest
Distinction
K:\kcus-a-I\GBS\Resumes\Lo,iBo"n.doc
6/03
JOYCE POSTLEWAIT
SENIOR UNDERWRITER
FIELDS OF EXPERTISE
➢ Claim and Funding Projections
➢ Development of Benefit Plan
Design and Contribution
Strategies
➢ Benefit Plan Change Pricing
➢ Claims Data Analysis
AFFI LIATIOWDESIG NATIONS
➢ Health Insurance Associate
➢ Professional Member — Colorado
Group Insurance Association (CGIA)
➢ Licensed Life & Health Broker
EXPERIENCE
➢ Employee Benefits Underwriting Consultant since 1989
➢ Seven Years Underwriting Experience in the Group Insurance Actuarial
Department of a Major National Insurance Company
➢ Four Years Property & Casualty Rating and Underwriting Experience
CREDENTIALS
Bachelor of Arts — Cum Laude
- Southern Illinois University -
Psychology
Certificate of Insurance —
Insurance Institute of America
REPRESENTATIVE LIST OF
CLIENTS USING
UNDERWRITING SERVICES
➢ Black Hawk County, IA
➢ Boulder County
➢ Campbell County, WY t
Consolidated Benefit Trust
➢ Chateau Communities
➢ Cherry Creek School District #5
➢ Christian & Missionary Alliance
➢ City of Dubuque, IA
➢ City of El Centro, California
➢ City of Littleton
➢ Corporate Express
➢ Denver Public Schools
➢ Illinois State University
➢ Visiting Nurse Association
K:\#cus-a-I\GBS\resumesUoycePostlewait.doc
6/03
DONATO J. GASPARRO, FSA MAAA, FCA
PRESIDENT, CONSULTING GROUP
dgasparro@niis-apex.com
Don is the President of the Consulting Group at NiiS/APEX. He is a
recognized leader in the healthcare arena and has over 21 years experience
in health care actuarial and underwriting business.
Don leads the firm's effort in strategic planning, underwriting, audit and
actuarial consulting to the senior management of the firm's clients. His
clients include domestic and foreign entities that assume financial and/or
actuarial risk such as insurance and reinsurance companies, provider
sponsored health plans, MGUs, employers, and government agencies.
Don is actively involved in the actuarial community and has served on several
actuarial committees of the American Academy of Actuaries. Currently he
participates on the Federal Health and Welfare Committee of the Academy.
Don has been integrally involved in establishing guidelines in the changing
healthcare delivery system.
Don is frequently quoted in the insurance industry trade journals and was
founder of the Provider Excess Loss Association (PELA).
Don was the co-founder and Managing Director of The Apex Management
group prior to the merger with Northshore International Insurance Services.
EXPERIENCE
➢ Providing strategic planning advice to senior management of plan
sponsors in the development of renewal and financial projection
models for healthcare programs such as HMOs, POSs, PPOs and
Indemnity Plans.
➢ Providing strategic planning advice to plan sponsors in the design and
pricing flexible benefit and managed care programs.
➢ Designing pricing retiree healthcare plans, including defined dollar
benefit programs and FAS 106 forecasts.
➢ Developing, pricing and evaluating employer stop -loss programs.
➢ Performing financial evaluations of HMOs and other healthcare
organizations.
➢ Developing models to measure total rate of return on life, health, and
annuity products.
➢ Developing insurance products, financial illustrations, demographic
projections, and continuation tables for continuing care retirement
communities.
➢ Providing advice on capital and surplus strategies for healthcare
organizations.
➢ Developing risk -sharing strategies for provider groups entering
capitation arrangements with managed care organizations.
Prior to NiiS/APEX, Don was a managing Consultant and Team Leader at
Foster Higgins, Assistant Vice President and Actuary at a major insurance
carrier, and a Consultant at Tillinghast/Towers Perrin.
EDUCATION AND PROFESSIONAL DESIGNATION
Don has a BA degree in Mathematics from The College of New Jersey. He
also has an MBA with an emphasis in Finance from Pennsylvania State
University. Don is a Fellow with Society of Actuaries, a Member of the
American Academy of Actuaries, and a Fellow with the Conference of
Consulting Actuaries. He also is a Certified Life Underwriter (CLU) and a
Chartered Financial Consultant (ChFC).
K:\4cus-al\GBS\Resumes\DonGasparro.doc
7/03
KARIN S. CONNELL
Ms. Connell, Lee & Burgess Associates Principal, offers over twenty years of
experience in directing and providing human resources management services
as a consultant to and manager in private industry. She has counseled
industry executives on matters of organization planning and compliance,
management, and resource allocation.
Having served clients representing public and private sector organizations
ranging in revenue size from $5 million to over $5 billion, her experience
includes:
➢ Assessing the human resources function within an organization and
establishing the automated and manual processes associated with
managing employees throughout the organization.
➢ Developing, reviewing and customizing compensation plans involving
all organization levels, including executives.
➢ Designing and conducting compensation market surveys and
analyses and developing pay plans and systems.
➢ Designing and conducting work climate and culture studies in order to
analyze and use the results for the design of organizational changes
and development of employee communications.
➢ Evaluating company -wide standards for managing employees;
developing and directing the implementation of policies, along with the
formal adoption and rescission processes and procedures.
➢ Developing company -wide employee communications involving
significant issues of change.
➢ Conducting customized management and professional selection and
development programs.
Prior to entering the consulting profession, Ms. Connell served as the
Manager of Human Resources Information Systems for Boise Cascade
Corporation. While there, her systems contributions received international
recognition from Fortune 100 companies that include IBM, Union Pacific
Railroad, Weyerhaeuser, Kodak, Federated Department Stores, John
Hancock Life, and Crown Zellerbach.
Ms. Connell holds a Bachelor's Degree in Business Economics and Finance
with Communications as an area of emphasis from Boise State University.
She is a member of the Colorado Human Resource Association and a
founding member of the Colorado Outplacement Industry Coalition. She
chaired the founding Board of Directors for the Strategic Total Compensation
Forum an Idaho affiliate of the American Compensation Association, and is
currently a member and has served as the Program Chairperson on the
Board of the Rocky Mountain Compensation Association. Karin represents
the Company membership with the Denver Metro and South Metro Chambers
of Commerce.
KA#CUS-a- \Byerly\resumes\Karin Connell-LBBAOo
KRISTI L. RUDY
Ms. Rudy offers fifteen years of management and supervisory experience in
both the public and private sectors, including six years as a Probation
Academy trainer. She has ten plus years of experience in customer service
and community relations. In addition to the full range of compensation
analyses and plan design services, Ms. Rudy has provided human resources
management direction in the areas of recruiting, hiring, training and
developing of policies and procedures.
Specifically, her experience includes:
➢ Developing policies and procedures, job descriptions, and
performance management and evaluation systems.
➢ Designing and presenting staff operational training programs and
training guidelines.
➢ Counseling in career management and employee development.
➢ Designing, administering and assessing employee surveys focusing
on career transitioning, inter -department communications, and
company goals and missions.
Prior to entering the consulting profession, Ms. Rudy was a general manager
and marketing coordinator for The Daily Grind Coffee Company. She
successfully established a consistent customer base and for three
consecutive years, increased annual revenues by a compounding 10% in
corporate catering alone.
From 1980 to 1993, Ms. Rudy was employed with San Diego County
Probation in southern California and with the U.S. District Courts in Denver,
Colorado. Her experience with those organizations includes conducting
investigations, case management and supervision, security classification and
staff training. In addition, she served on the budget committee and was a
department representative for a non-profit, charitable organization called
Volunteers in Probation, Inc. This organization provided goods and services
for juvenile and adult probationers as well as promoted their emotional, social
and physical growth.
Ms. Rudy holds a Bachelor's Degree in Sociology and Psychology from New
Mexico State University. She has held a Limited Service Credential with
California Community Colleges as an instructor in Public Service and
Administration and memberships in the Denver Metro Chamber of Commerce
and California Probation, Parole and Correctional Association. She is a
current member of Colorado Human Resources Association and Rocky
Mountain Compensation Association.
K \NCUS-a-1\Byerly\resu meMKristi R udy-L&B. doc
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F:\USERSIJMD\Prospects\TemplatesVAppendix\AJG Web Page.doc
Gallagher Benefit Services, Inc. (GBS), in partnership with Lee &
Burgess Associates, LLC, is proposing to conduct a review of the
market analysis and employee benefits practices of the City of Fort
Collins. Based on your RFP, it is our understanding that you have the
following objectives:
♦ determine appropriateness of current benchmarks for
compensation and benefit programs
♦ assess appropriateness of current target positioning in relation
to benchmarks
♦ assess current medical and dental cost containment strategies
♦ determine opportunities, and associated potential impacts for
additional cost containment efforts
The following illustrates the qualifications that uniquely position us to
partner with the City of Fort Collins in meeting its employee benefits
objectives.
Key Elements in Our Proposal
1. GBS is one of the premier benefits consulting firms in Colorado,
and is unmatched in our work with the public sector. In addition,
Lee & Burgess Associates specializes in providing
comprehensive compensation consulting services to
governmental organizations.
2. Our proposed consulting team possesses significant experience
in Northern Colorado, with both of our firms having worked with
many of the municipalities in your benchmark employer group, as
well as numerous other public employers in Northern Colorado.
3. As one of the largest benefits consulting firms in Colorado, GBS is
able to draw upon a wealth of experience and expertise in
identifying past cost containment solutions that merit
consideration for the City.
4. In addition to significant underwriting and analytical expertise, we
are also able to call upon proprietary actuarial tools to enhance
the quality and accuracy of our impact analysis.
We appreciate the opportunity, and look forward to presenting our
services.
JMD:\Prospects\2003\Proposals\City of Fort Collins-31704.doc
www.gailagherbenefits.com
l
gbsinsight
Welcome to GBS Insight, the platform
designed to offer participating clients
new "insight" into managing their
company's employee benefit
programs.
USER NAME
PASSWORD
LOGIN : O
If you forgot your password or have
difficulty logging in, call 866.471.0836
n Learn more about Gills Insight
N On October 16, 2003, the
IRS announced cost -of -
living adjustments (COLAs)
to qualified retirement plan
dollar limitations and other
items for the 2004 tax year.
To learn more, see COLA
Update, 2004
The Benefits of Business
N November 21, 2003,
Gallagher Benefit Services,
Inc. acquires Babcock
Atthe core of every benefit planning, delivery and
Consulting, Inc. of Metairie,
administration service, is a Gallagher Benefit Services
LA. For more information
partner. In fad, for over 75 years, Gallagher Benefit
see Merger Partners.
Services (GBS) has long understood that successful
businesses are made from successful partnerships, At
Gallagher Benefit Services, each engagement is measured
N January 7 & 8, 2004
by its relationship, not by size. Today, Gallagher Benefit
"HIPAA Administrative
Services operates worldwide, and still conducts business,
Simplification and Privacy
one relationship at a time.
Regulations." See Events &
Seminars.
N January 16, 2004
"Increasing Awareness,
Changing Perception, &
Shifting Culture." See
Events & Seminars.
® Gallagher Benefit Services, Inc. 2003 Legal Info Pnvacy Policy Contact Us
JMD:\current\GBS Web Page.doc
Welcome to ...
ghsinsight
I€� User Profile
IBarbara
M.
Duncan
-%_P11
Corporate Express
Welcome to GBS Insight, the platform designed to offer participating
barbara_duncan(acexp.com
clients new "insight" into managing their company's employee benefit
303.664.2503
programs.
fax 303.664.2509
To view a publication below, scroll over the publication title and click
to launch the document.
1 Environmental Way
Broomfield, CO 80021
Once you are finished viewing one of the publications below,
hit the back button in your browser to return to
The Gallagher News section will
www.gallagherbenefits.com.
serve as a means to
communicate timely, topical
Directions Newsletter
information. The content in this
Directions - Summer 2003
section will change frequently.
Directions - Spring 2003
® Directions - Winter 2003
HIPAA Newsletter
® HIPAA Newsletter - October, 2003
® HIPAA Newsletter - September, 2003
® HIPAA Newsletter - August, 2003
Technical Bulletin
® IRS Announces Pension Plan Limits for 2004
IRS Revenue Ruling Allcws Health Plans tc Reimburse Over-the-
Ccunter Drugs
DOL Addresses Allocation of Plan Expenses in Defined
Contribution Plans
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F:\USERS\JMD\Prospects\Templates\Appendix\GBS Insight Web Page.doc
WELCOME
Proposal Request I Contset I Homo
"We view Gallagher Byerly as our long term, strategic partner and our consulting
arrangement has been financially beneficial everyyear.
They bring new ideas and products to our attention with recommendations to enhance
our program andfor control costs.
We are particularly pleased with the team assigned to work with us (including a local
underwriter) and their depth of expertise and longevitywith the Gallagher Company."
Corporate Express
Welcome to Gallagher Byerly, Inc.
Why Gallagher Byerly, Inc. (GBI)?
Our culture is rooted in dedicated, loyal client service, backed by over 40
years of stability in the employee benefit consulting and administration
business. We believe our people make the difference, not only because of their
extensive experience, but because of their dedication to building relationships
and their commitment to client satisfaction.
e Leader In the regional benefits community for over 40 years - as the
largest and most experienced firm in Colorado, GBI has consistently been
instrumental in shaping the design and delivery of cost effective benefits
solutions.
e Depth of consulting
staff - our consultants
are unmatched in their
knowledge in the
employee benefits field,
all with over 10 years of
direct, relevant
experience. This depth
enables our clients to
obtain strategic insight
into the design and
delivery of cost
effective benefit
programs.
Online Quotes
Compare health plan features and prices, side by side, for
individuals, families and small groups.
New Tools to Control Rx Costs
John Adler, from our New Orleans Office, tells us valuable
information in the quest to reduce costs.
UNIFORMED SERVICES EMPLOYMENT AND
REEMPLOYMENT RIGHTS ACT
For those employees who have been, or will be called to
active duty, there have been important updates regarding
their rights and our responsiblities. We strongly encourage
everyone to read this update.
Depth of our service teams - with dedicated, multi -disciplinary teams, you
are assured of highly responsive, accurate assistance in support of day-to-day
administration, freeing you and your staff to concentrate on your key business
initiatives.
a One of the top three domestic benefits/risk management consulting
and brokerage firms - Our size provides you with the benefit of our
considerable leverage in representing your interests when negotiating with
your insurers and vendors.
o Client diversity - the diversity of our clientele assures you keen insight
into design, financing and administrative issues across the entire benefits
spectrum.
Our unparalleled analytical/underwriting expertise - you can expect
meaningful reporting and analysis, data -driven negotiations and accurate
forecasting and budgeting.
e Our performance guarantee - we are so confident in our approach and
our capabilities that we regularly enter into performance guarantees with our
clients.
F:\USERSUMD\Prospects\Templates\Appendix\GBI Web Page.doc
Nei iSJAPEX
➢ Proprietary analytics / underwriting tool
➢ Group -specific
➢ Detailed plan design parameters
➢ Accurate, timely and unlimited plan design variations
➢ Pooling / stop -loss cost -benefit analysis
F:\USERSUMO\Prospects\Templates\Appendix\NiisApex.doc
Gallagher Benefit Services, Inc. -Technology Resources
emeam insurance. c o i Tit Arthur J. Gallagher & Co. has joined with eHealthInsurance.com to
YOUR ULTIMATE RESOURCE FOR HEALTH INSURANCL Provide a wide selection of health plans to small business owners,
= individuals and families —with the convenience of online, side -by -
side health plan benefit and price comparisons, as well as online applications.
At eHealthInsurance.com, you can compare plan types and insurance companies to find the health insurance that suits your needs and
budget goals. An online application speeds the process of obtaining your coverage, and customer care representatives are available
before, during and after the purchase to answer your questions and provide advice through online chat, e-mail or by phone. Your
confidential information will be kept secure and not shared with anyone who isn't involved in processing your quote or application.
With the click of a mouse, eHealthlnsurance.com turns the process of finding the right health insurance into one -stop shopping
convenience. Select the category of insurance you need:
• Health Insurance for Individuals & Families
• Health Insurance for Small Groups (up to 50 lives)
• Medicare Supplemental Plans for Seniors
Business owners are invited to contact Gallagher Benefit Services if they need additional quotes for small group health plans or other
employee benefits.
Mneft�il ■ Vint BenefitPoint simplifies the employee benefits business by helping carriers and
broker/consultants build stronger relationships with each other as well as their employer clients by:
• Eliminating the paper with Internet -based process automation
• Delivering an infrastructure that makes the procurement, distribution and management of employee benefits more efficient
• Lowering the cost of selling and distributing products and services
• Providing better access to employee benefit products and services, while providing information so people can make better
decisions
Core Offerings
BenefitPoint provides a complete suite of employee benefits B2B products and services.
Application Suite
• Client management, benefits eProcurement
• Online communications, enrollment and administration -- offered through whereiwork's CommunicationStudio,
BenefitStudio and HRStudio
• Employee Benefits and worksite products
• Employee choice benefits program - offered through BenefitsAlliance, A BenefitPoint Company
• Analytic and data mining services
Nllhere U oflk Whereiwork provides tools for employers, focusing on web -based benefits administration and
employee services. Based in San Francisco and New York City, Whereiwork serves companies
nationwide with online solutions for enrollment, communications, administration and analysis. Our in-house team of dedicated
benefits experts and technologists has delivered cutting -edge products to HR and benefits professionals since 1996.
F:\USERSVMD\Rospects\Template,s\Appendix\GBS Technology Rewumes.doc
�II1�lYC
EWAMIS M A R T B E IN
SmartBen is an interactive webste that allows employees to explore their world of benefits 24 hours a day, seven days a
week. It provides information ranging from an overview of an employee's health coverage to an in-depth look at their
retirement plan. SmartBen was designed to communicate the value and purpose of your benefits so that each and every
employee appreciates their costs and intentions. Currently there are over half -a -million employees using the system
today. The main goal of the SmartBen program is to personalize your employee benefit package through enhanced
communication technology, which eliminates negative employee perception of your company's benefit package.
SmartBen was designed specifically to
♦ Heighten benefit awareness
♦ Increase human resource personnel's productivity
♦ Reduce employee turnover
♦ Assist in the hiring process
♦ Streamline enrollments
• Increase flex plan participation
♦ Increase retirement plan participation
♦ Automate benefit enrollments and orientations
♦ Reduce significant paperwork (major elimination of manager/employee manuals)
♦ Improve speed and accuracy with carriers and administrators
♦ Decrease billing time and improved employee communication
♦ Present benefit and retirement information in multiple languages
7 W r O N R M A R T R F N H F I G
SmartBen was designed specifically to assist with time-consuming HR tasks and problems. It addresses issues that
affect an organization's bottom line by making HR more efficient this gives your staff the time to focus on strategically
important HR functions such as retention, recruiting, managing employee relations and developing competitive benefit
programs.
How many times does your HR staff answer the same questions over and over again? How much paper does your HR
staff push in a day? According to Forester Research, 60% to 80% of HR's time is spent on routine administrative tasks.
In today's information crazed society, the mountain of paperwork is only getting bigger... but it doesn't have to. SmartBen
can significantly reduce the amount of paperwork you push by having all the forms readily available to all employees
online 24 hours a day, seven days a week.
Unless benefits are communicated to the extent that their cost is understood and their intention is appreciated, then the
value and purpose of your benefits are severely compromised. Therefore, another goal of SmartBen is to personalize
your employee benefit package, through enhanced communication technology, which will eliminate a compromised
benefit program.
Your employees can access the SmartBen interactive capabilities to accomplish key benefit tasks for themselves, either
at work or in the comfort of their own home...
♦ To learn about benefits and plan details offered by their company
♦ To perform "what -if' calculations to promote more education benefit decisions
♦ To enroll in benefit programs that fit their personal and family needs
♦ To improve retirement planning and understanding of retirement choices
♦ To make Life Event changes such as divorce, birth of a child, marriage and so forth
♦ To complete totally paperless enrollments on-line
By using interactive storyboards and "what -if" assumption calculators, SmartBen educates your employees in easy to
understand language on the benefits of participating in your company's various qualified and pre-tax plans. Many clients
have seen dramatic Increases in participation in these plans, just by implementing the software. The tax savings alone
can be significant.
(Over)
P11%AR
4
Various studies have been done on the cost of enrolling employees with paper versus enrolling electronically over the
internet. With the signing of the Electronic Signature Bill, companies are now able to submit electronic signatures for their
employees on everything from 1-9s to W-4s to insurance applications. With SmartBen, all benefits can be enrolled
electronically and securely over the internet, saving your company thousands of dollars a year in enrollment expenses
alone.
Other functions of the SmartBen website include:
♦ Online job postings
♦ Complete calendar of events
♦ Company newsletter
♦ News service
♦ On -demand, personalized employee benefit statements
♦ Survey capability
♦ Online testing
♦ Company directory online plan descriptions & documents
HOW CAN SMARTBEN HELP YOUR EMPLOYEES?
SmartBen's interactive website allows your employees to explore their world of benefits 24 hours a day / 7 days a week.
Employees are now given the freedom and the power to educate themselves on everything from benefits to retirement
plans. SmartBen aids your employees in making their benefit and retirement decisions by utilizing:
♦ Decision support system technology (DSS) to guide them through life event changes and questions that are
specific to their personal and benefit needs.
♦ Online assumption calculators that assist them in making benefit decisions that impact their paycheck and future
retirement earnings.
♦ Animated graphical storyboards to educate them visually about your company's benefit package.
♦ Easy -to -use and find benefit descriptions that provide them access to benefit plan information and forms that save
both you and the employee valuable time.
♦ Powerful benefit and retirement projections to perform "what -if benefit planning for informed, self -serve decision
making.
♦ Benefit statements allow you or your employees to view or print benefit statements on demand.
♦ Immediate access to their benefit information at work or at home, 24 hours a day / 7 days a week.
♦ Multiple language capability so that all employees have access to their information
Summary plan descriptions and storyboards will provide your employees with access to plan benefit information in a
summary format with animated graphical storyboards. The benefits are detailed out in an easy to read topic index
platform.
Your employees can access personal and benefit data to perform "what -if' projections on the benefits available at your
company. They will also be able to visualize the real value of their job, which includes pay plus benefits.
Your employees will be able to truly understand the opportunity that your retirement plan provides. This will allow your
employees to project the value of their retirement plan, see what the future value of social security is projected to be,
begin to do some educated retirement planning and even be able to move allocation between their funds.
SmartBen is changing the way companies and their employees interact. Your employees will appreciate the opportunity
to learn about their benefits and enroll in the benefits that best suit their personal needs.
SmartBen is only available to Gallagher Benefit Services, Inc. (GBS) clients. Through our exclusive partnership, we are
able to offer this powerful tool at unheard-of costs, as an integrated component of our overall services.
For a demonstration of SmartBen and to discuss how GBS's overall services and approach will add significant value to
your benefits programs, please contact your GBS consultant or Don Bloomfield, Benefit Consultant (303-889-2656 or
don_bloomfield @ ajg.com).
KA#cus-a-I\GBS\Marketing\WHAT IS SMARTBEN.doc
ILLUSTRATIVE PUBLIC SECTOR
CLIENT LIST
CITIES, COUNTIES & OTHER
➢ State of Colorado
➢ New Mexico Interagency
Benefits Advisory Committee
➢
City of Aurora
➢
City of Billings, MT
➢
City of Dubuque, IA
➢
City of Longmont
➢
City of Loveland
➢
City of Northglenn
➢
City of Westminster
➢
Adams County
➢ Black Hawk County, IA
➢ Boulder County
➢ Campbell County Coordinated
Benefits Trust, WY
➢ Douglas County
➢ Larimer County
➢ Los Alamos County, NM
➢ Metro Wastewater Reclamation
➢ National Conference on Public
Employee Retirement Systems
EDUCATION
➢ Adams County Schools #14
➢ Aurora Public Schools
➢ Billings Public Schools, MT
➢ Boulder Valley Schools
➢ Brighton Schools #27J
➢ Cherry Creek Schools
➢ Denver Public Schools
➢ El Paso Schools #8
➢ Colorado State University
➢ San Luis Valley Combined
Educators
➢ SE Polk Schools, IA
➢ Sioux City Schools, IA
➢ Colorado Higher Education
Insurance Benefit Alliance
• Colorado School of Mines
• Metropolitan State College
• University of Northern
Colorado
➢ Community College and
Occupational Education System
• Arapahoe Community
College
• Red rocks Community
College
• Community College of
Denver
KA#prospec\TEMPLATES\Client List- Public.doc
Arthur J. Gallagher & Co.
i
Gallagher Benefit Services c
rFA 2 -kII-x
F FORT C
•l,11►I:
Gallagher Benefits Services
Lee & Burgess Associates
Best in Class
Arthur J. Gallagher & Co.
1. Has your firm ever performed a project of this nature? If so,
please describe up to three such projects. Specify the scope
of work for the project, and the topics you were asked to
investigate. Please provide three client references for your
performance in this type of project.
GBS has conducted a variety of projects of this nature. In fact, at the
onset of any ongoing consulting engagement, we regularly conduct a
general assessment, which entails an assessment of various plan
design, contribution and cost management provisions. This serves as
the basis for developing strategy and a corresponding work plan.
Three recent examples of similar work follow:
State of Colorado — We were retained by the State of Colorado
Auditor to conduct a comprehensive assessment of the State's medical
and dental environment. The study assessed:
➢ Competitiveness of plan design and benchmarking
➢ Competitiveness of contribution rates and benchmarking
➢ Methodology and strength of vendor selection and renewal
processes
➢ Cost management considerations/opportunities
➢ Viability/mechanics of self -insuring
➢ Types and methods of employee communications
➢ Types and methods of internal program administration
The report was very favorably received, with the State now proceeding
on a number of fronts, based on our findings and recommendations.
Specifically, they are now more aggressively looking to incorporate
technology into their administration and employee communications
efforts, are seriously exploring self -funding as part of their planning
efforts for 2005, and have modified their contribution strategy to
provide for more competitive cost sharing.
Reference:
David Kaye, Associate Director
State of Colorado
1313 Sherman Street, Room 122
Denver, CO 80203
303-866-2105
Boulder County — Boulder County has been a GBS client for many
years. Each year we prepare a benefit plan workshop for the Board of
County Commissioners. This presentation and accompanying report
includes an analysis of the current benefit structure, current plan
financial analysis, projected future plan costs and plan design
benchmarking with other governmental benefit plans. Strategic goals
JMD:\Prospects\2003\Proposals\City of Fort Collins-31704.doc 2
■ One of the largest benefits consulting firms in
Rocky Mountain Region
■ Unmatched public sector experience
■ Significant Northern Colorado presence
■ Extensive underwriting expertise supported with
a variety of actuarial tools and resources
Arthur J. Gallagher & Co.
■ Colorado based
■ Recognized, leading provider of compensation
services
■ Significant client base in Colorado and
surrounding states
■ Specialize in Public Sector solutions tailored to
strategy and needs
Lee & Burgess Associates, LLC
Arthur J. Gallagher & Co.
■ Benchmarking
➢ Appropriate peer group(s)
➢ Appropriate positioning
■ Compensation
➢ Philosophy
➢ Market competitiveness
➢ Mix, delivery and cost
■ Benefits delivery
➢ Plan design
➢ Cost management
➢ Risk management
➢ Funding
Arthur J. Gallagher & Co.
Objective Setting/Training
COMPENSATION
Operational Review
Policies/Practices Ana
Benchmark Analyses
Report Preparation
Education
(optional)
BENEFITS
Operational Review
Information Analysis
Benchmark Analysis
Report Preparation
Report
lidation/Presentati
Arthur J. Gallagher & Co.
■ Conduct onsite interviews and discussions with
management
➢ Secure current views concerning City direction
➢ Solicit input regarding areas of concern
➢ Discuss current compensation methods and
trends
Lee & Burgess Associates, LLC
Arthur J. Gallagher & Co.
■ Secure current compensation plan and practice
information
➢ Collect data including
- Organizational charts
- Current pay plans
- Employee pay data
- Salary administration policies and procedures
- Internal survey approach and methodology
- Current benchmarks
• Market organizations and positions
Lee & Burgess Associates, LLC
Arthur J. Gallagher & Co.
■ Validate benchmarks - market organizations and
positions
➢ Compare and contrast policies and practices of:
-Current benchmark organizations
- Potential additions/modifications to the
selected market
➢ Validate selected benchmark positions
➢ Review the methodology used to update the
compensation plans using market benchmark
data
Lee & Burgess Associates, LLC
Arthur J. Gallagher & Co.
■ Conduct analyses of pay policies and practices
➢ Analyze salary administration policies and
practices
➢ Assess the City's competitive position using
market pay plan comparisons as well as actual
salaries
Lee & Burgess Associates, LLC
Arthur J. Gallagher & Co.
■ Present Findings and Recommendations
➢ Provide qualitative and quantitative results
- Base compensation
-Total compensation
➢ Present alternative
plans and practices
Lee & Burgess Associates, LLC
refinements to current
Arthur J. Gallagher & Co.
■ Obtain perspective, relative to:
➢ Eligibility
➢ Plan design
➢ Contribution structure
➢ Revenue flow/allocation
➢ Vendor management
➢ Data management
➢ Internal administration
Arthur J. Gallagher & Co.
and objectives are discussed and confirmed by the commissioners and
action plans are developed to meet the City's strategic and tactical
goals for the upcoming year. Recent activities have included:
➢ Design and implementation of a low cost PPO plan that
provides employees an additional choice of a comprehensive
yet affordable benefit program.
➢ Replacement of the PCP referral to specialty requirement for the
EPO plan, based on cost neutral plan design revisions.
➢ Analysis and recommendations of the potential cost impact to
add early retiree coverage to the current benefit plan offerings.
The County declined to implement this eligibility revision, based
on actuarial analysis of future costs.
Reference:
Anne Berg, Senior Human Resource Analyst
Boulder County
P.O. Box 471
Boulder, CO 80306
303-441-3587
Douglas County — We were retained to evaluate their overall health
and welfare programs, and to assist with financial and compliance
considerations with regard to their cafeteria plan, while competitively
bidding their coverages, with an eye toward self -funding. The project
was received very favorably, with the following goals accomplished:
➢ Replaced current medical carrier on fully insured basis, and
established ongoing data reporting/management processes
to better assess overall plan performance, and to set the
stage for self -funding in the upcoming year.
➢ Brought overall program in below initial budgetary
parameters, with comparable benefits and greater employee
choice.
➢ Revised the benefit credit methodology to better align credits
with overall philosophies and objectives, while bringing the
County closer to prevailing practices.
➢ Resolved technical/compliance concerns while avoiding any
negative employee impact.
As a result of our work, we have been retained by this organization in
an ongoing consulting relationship. Beyond the continued movement
toward self -funding and continued evaluation/management of the
cafeteria plan, we now are also exploring retirement/post-employment
health considerations.
JMD:1Prospects120031Proposals\City of Fort Collins-31704.doc 3
■ Plan design
■ Contribution allocation - explicit, implicit
subsidies
■ Utilization
■ Financing
■ Cost, risk management
■ Vendor administration
Arthur J. Gallagher & Co.
■ Key utilization by type of service
■ Leading diagnostic categories
■ Pharmacy benefit provisions, utilization
■ Provider discounts, include PVH
Arthur J. Gallagher & Co.
■ Access to existing client information
■ Survey of remaining peer group
■ Assimilation of both plan design and employee
contributions
=> "Total benefit" valuation
Arthur J. Gallagher & Co.
■ Observations
■ Alternatives
■ Impact
■ Summary and recommendation
Arthur J. Gallagher & Co.
■ Consolidation
■ Executive summary
■ Presentation
-------------------------------
■ Respond to questions
■ Available to assist with subsequent
implementation efforts
Arthur J. Gallagher & Co.
QUESTIONS?
Arthur J. Gallagher & Co.
Reference:
Sharon Anderson, Assistant Director, HR
Douglas County
100 Third Street
Castle Rock, CO 80104
303-660-7427
Lee & Burgess Associates, LLC, founded in 1979 in Kansas City and
established in Colorado in 1989, provides comprehensive
compensation review, planning and system design services as its core
business. We conduct an assessment of the current plans and
practices as the first phase of all compensation assignments to ensure
a clear understanding of the client's plans, policies, and procedures
along with the organization's management direction as well as
economic and cost management requirements.
Three examples of similar assignments are:
City of Littleton, Colorado — We were engaged and conducted an
assignment resulting in classification and compensation system
revisions for the City. We conducted:
➢ Job audits with employees in each position
➢ Revised or developed job descriptions
➢ Reviewed/revalidated the classification system
➢ A comprehensive market survey and analyses of Front Range
organizations
➢ Developed a revised market competitive compensation system
We continue to provide classification and compensation analyses for
the City on a request basis.
Reference:
Kevin Burke, Director of Administrative Services
City of Littleton
2255 W.Berry Avenue
Littleton, Colorado 80165
303-795-3857
City of Longmont, Colorado — We were engaged to conduct a two-
phase assignment for this northern Colorado city. In the first phase,
we developed and applied a classification plan model to replace the
point -factor job evaluation system. We developed a "banding"
approach for the classification of jobs across the organization.
JMD:\Prospeds\2003\Proposals\City 01 Fort Collins-31704.doo 4
During the second phase of the assignment, we:
➢ Conducted a comprehensive market survey of Front Range
organizations
➢ Developed a revised market competitive compensation system
➢ Assisted with the integration of classification and market
compensation
➢ Provided organization wide implementation guidance
Reference:
Karen Nazarro, Senior Human Resources Analyst
City of Longmont
350 Kimbark Street
Longmont, Colorado 80501
303-651-8608
City of Westminster, Colorado - We were engaged by the City to
conduct an audit and review of the City's cash compensation system
and to develop a new plan. We assessed:
➢ Market practices in comparable or competing organizations
➢ Recommended changes to the City's market sample
➢ Assessed pay practices
➢ Discussed pay practices and philosophies with employees and
managers
The results of our assignment were:
➢ The elimination of longevity steps with incorporation into the pay
ranges
➢ Development of extended open ranges, which simplified the
compensation structure
➢ Establishment of classifications placed in an open -range model
based on performance and competency
Reference:
Matt Lutkus, Deputy City Manager
City of Westminster
4800 W. 92"d Avenue
Westminster, Colorado 80031
303-430-2400
JMD:\Prospects\2003\Proposals\City of Fort Collins-31704.doc 5
2. Describe your firm, its history and size, the locations in
which it operates and the number of employees.
ARTHUR J. GALLAGHER & CO.
Arthur J. Gallagher & Co. is the nation's third largest insurance and risk
management broker/consultant. The Company was founded in 1927
and in 2002 celebrated its 75th anniversary and is publicly traded on
the New York Stock Exchange. It is headquartered in Itasca, Illinois.
The Gallagher companies plan, design and administer a full array of
customized employee benefit and property/casualty risk management
programs.
Gallagher serves clients through more than 200 offices in nine
countries through its more than 6,500 employees.
Albany, NY
Alic.� \/isiw
Fresno, CA
Ft. Lauderdale, FL
Grand Rapids, MI
Greenville, SC
Hammonton, NJ
Hartford, CT
Honolulu, HI
Norcross, GA
Norwalk, CT
Oklahoma City, OK
Orange, CA
Orlando, FL
Philadelphia, PA
Plattenville, LA
Pleasanton, CA
n_:---'-- u I
Warren, NJ
Washington, D. C.
Wayne, NJ
West Des Moines, IA
White Plains, NY
Wichita, KS
Worthington, OH
Yonkers, NY
Youngstown, OH
Information on the entire Gallagher group of companies is included in
the Appendix.
JMO:\Prospects\2003\Proposals\City of Fort Collins-31704.doc 6