REPORT TO COUNCIL
SUBJECT
Title
Action to Authorize the City Manager to Negotiate and Execute an Agreement with Alliant Insurance Services Inc. to Provide Insurance Broker and Related Services for a Total Not to Exceed Compensation of $766,100
Report
BACKGROUND
Alliant Insurance Services (Alliant) has provided insurance broker and related services to the City for more than 20 years without a service agreement. During this time, Alliant has been compensated through a retail commission arrangement where Alliant retains a percentage of the gross premiums billed to the City, the percentage varying based on Alliant’s arrangement with individual insurers.
Upon review of the current condition, the City’s current Risk Manager identified two priorities: a) entering into a two year service agreement with Alliant to memorialize business and legal terms and conditions including a scope of work and compensation schedule, and b) initiating a Request for Proposals (RFP) process to competitively solicit the market and transition to a new firm if a different vendor is selected through the competitive process.
DISCUSSION
Staff requests City Council approval of a two-year agreement with Alliant effective July 1, 2026. Under the agreement, Alliant will continue to provide insurance broker, account management, administration, insurance placement and renewal, claims, and property appraisal services.
For the first year of the term, staff has negotiated a fixed fee of $370,000 for insurance broker services on insurance programs except for those obtained through the Public Risk Innovation, Solutions, and Management (PRISM) risk pool. PRISM utilizes Alliant for insurance broker services and allocates all costs of its programs, including administrative costs, to participating members. City Code Section 2.105.270(b) indicates that the City, through the City Manager and/or the Purchasing Division Manager, may contract with a vendor based on an agreement negotiated by a joint powers agency.
The fixed fee in Year 1 of the term represents a $256,100, or 41%, decrease in cost compared to the $626,100 in retail commission received by Alliant in Fiscal Year 2025/26. The fixed fee for Year 2 of the term represents a 3% increase over Year 1. Typical commission rates for insurance programs outside of PRISM range from 10% to 15%. The fixed fee for Year 1 is equivalent to a 7.5% commission based on the premiums paid in Fiscal Year 2025/26.
The agreement has a termination for convenience clause allowing the City to terminate the contract at any time during the two-year term, thus allowing flexibility to complete the RFP process and transition to a new vendor, if required. Included in the maximum compensation amount of $766,100 is a $15,000 contingency to allow staff the ability to add insurance product lines or additional property appraisals. Additional services (if required) will be executed by amendment(s) and signed by both parties.
With respect to the City’s other insurance programs outside of PRISM, the Purchasing Division Manager has determined that the proposed interim two-year agreement with Alliant is exempt from competitive bidding pursuant to City Code Section 2.105.290(c), which states that a procurement process would not be useful or produce any advantage where, due to circumstances beyond the control of the City, the time necessary to use the competitive procurement procedure would result in substantial economic loss to the City or substantial interference with a critical City operation. Approval of this agreement would allow the City to maintain continuity of insurance broker services with an insurance broker that can access insurance markets globally until such time as the City can explore alternative offerings through a competitive procurement process.
ENVIRONMENTAL REVIEW
The action being considered does not constitute a “project” within the meaning of the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines section 15378(b)(5) in that it is fiscal activity that does not involve any commitment to any specific project which may result in a potential significant impact on the environment.
FISCAL IMPACT
The FY 2026/27 Proposed Operating Budget includes funding for costs being allocated to the General Fund, Electric Utility Fund, and Convention Center Maintenance District Fund. The FY 2026/27 Operating Budget for the Santa Clara Stadium Authority adopted on March 10, 2026, includes funding for the Stadium Authority’s portion of the costs.
COORDINATION
This report has been coordinated with the Finance Department and City Attorney’s Office.
PUBLIC CONTACT
Public contact was made by posting the Council agenda on the City’s official-notice bulletin board outside City Hall Council Chambers. A complete agenda packet is available on the City’s website and in the City Clerk’s Office at least 72 hours prior to a Regular Meeting and 24 hours prior to a Special Meeting. A hard copy of any agenda report may be requested by contacting the City Clerk’s Office at (408) 615-2220, email clerk@santaclaraca.gov or at the public information desk at any City of Santa Clara public library.
RECOMMENDATION
Recommendation
1. Authorize the City Manager to negotiate and execute a two-year agreement with Alliant Insurance Services Corporation to provide Insurance Broker and Related Services for a two-year term commencing on July 1, 2026, and ending on June 30, 2028 with a maximum compensation not to exceed seven hundred sixty-six thousand one hundred dollars ($766,100), inclusive of a fifteen thousand dollar ($15,000) contingency in substantially the form presented, subject to budget appropriations and review and approval as to final form by the City Attorney; and
2. Authorize the City Manager or designee to take any actions as necessary to implement and administer the Agreement including the execution of minor amendments to add or delete services within the overall scope of services.
Staff
Reviewed by: Glen Googins, City Attorney
Approved by: Jovan Grogan, City Manager
ATTACHMENTS
1. Agreement with Alliant Insurance Services, Inc.