Council votes to bid out employee benefits contract

The City Council voted Tuesday to invite brokerages that service city employees' medical benefits to bid for a contract with Laguna Beach.

Representatives of two city employee associations convinced the City Council to reject a staff recommendation to extend a contract with the previous brokerage without getting bids or consulting the city's Health Care Task Force, which acts on behalf of the associations.

"Staff is recommending a sole source [single option] contract with very little documentation — nothing more than words of praise for work the company has done to date," said John Latta, vice president of the Orange County Professional Firefighters Assn., which includes the Laguna Beach department.

Latta was not impressed by the praise. He said, when pressed by Councilman Steve Dicterow, that he was dissatisfied with Willis Risk and Insurance Services.

"They [city staff] offer you no alternatives and there are other brokers out there that would very much like to bid for something like this," Latta said.

His statement hit a nerve with Dicterow.

"Frankly, I am embarrassed that I didn't pull this from the consent calendar," Dicterow said. "I have a history on this council of not liking us to do things without putting them out to bid. I believe it is inappropriate not to put out a contract of this size to bid."

The commission cap on the contract is $170,000 for two years.

Mayor Kelly Body voted against putting the contract out to bid.

"Willis has done a great job for us and I wanted to move forward," Boyd said on Wednesday. "Later in the meeting, we voted for a project without sending it out to bid, based on a council member's opinion of the company's expertise and experience with the city, which was exactly what John [Pietig] said about Willis.

"We should be consistent."

Staff recommended the extension of the contract with Willis Risk and Insurance Services, citing the company's competence, effective communication of developments in the health care field, favorable negotiations on behalf of the city, familiarity with city needs and its dealings with the associations.

The company provided brokerage services for the city employees benefits plan from May 2010 to December 30 and has continued to provide services in the interim.

The plan includes medical and dental benefits, as well as long-term disability, life insurance and accidental death and dismemberment, according to the staff report.

When asked by Councilman Robert Whalen if the services would continue if the contract was put out to bid, Pietig said he could probably arrange a short-term contract.

Laguna Beach Police Employees Assn. President Larry Bammer said he only learned about the extension Monday night when he read the agenda to see if there were issues about which he wanted to speak.

"What I find so shocking is that we are in a negotiating year and this is a fundamental issue that we have negotiated for in the past," Bammer said.

Latta said the proposal to extend the contract should not have been presented to the council without being vetted by the city's Health Care Task Force, which was created to advise the city on issues of importance to the employee associations.

Pietig said the staff has been happy with Willis, but will be happy to sit down and discuss the concerns of the associations.

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