STAFF REPORT
Meeting Date:
June 23, 2026
CONSENT
10 SUBJECT: AMENDMENT FOR EMPLOYER BENEFIT BROKER SERVICES RECOMMENDATION: It is recommended that the City Council:
1. Authorize the City Manager to execute Amendment No. 1 to the Consultant Services Agreement with The Baldwin Group (formerly operating as Burnham Benefits Insurance Services), subject to approval as to form by the City Attorney, to ratify and confirm the employee benefits brokerage services provided since December 31, 2023, to extend the term of the Agreement through December 31, 2026, for total compensation under the Agreement and Amendment No. 1 not to exceed $225,000, and authorize the City Manager to extend the term for an additional one (1( year at the same annual rate if neccessary; and
2. Find that the recommended action is not subject to the California Environmental Quality Act (CEQA) pursuant to Section 15378 of the CEQA Guidelines.
SUMMARY OF THE MATTER
.This report recommends that the City Council authorize the City Manager to execute Amendment No. 1 to the Consultant Services Agreement with The Baldwin Group (formerly operating as Burnham Benefits Insurance Services) ("Consultant" or "Baldwin") for employee benefits brokerage services.
The City has contracted with Baldwin continuously since February 1, 2021 to market, negotiate, and implement employee benefit programs. The original Agreement expired on December 31, 2023; however, Baldwin continued providing brokerage services without interruption, and the City continued to rely on those services for administration of its employee benefit programs. Baldwin provided these services in a satisfactory manner.
Amendment No. 1 ratifies and confirms brokerage services provided during calendar years 2024 and 2025 and extends the Agreement through December 31, 2026 to ensure continuity of service while staff prepares and conducts a competitive Request for Proposals (RFP) process in 2027.
Compensation under the Agreement is capped at $75,000 annually. Amendment No. 1 authorizes compensation not to exceed $150,000 for services previously rendered in 2024 and 2025, and authorizes an additional $75,000 for services to be provided in 2026, for a total amendment amount not to exceed $225,000. All costs associated with the Agreement are budgeted within the City's Insurance Fund.
Therefore, no additional appropriation is required.
DISCUSSION
.Background
The City contracts with a brokerage firm to market, negotiate, and implement its employee benefit programs. The City’s employee benefits plan includes medical and dental benefits, as well as ancillary benefits such as flexible spending accounts, employee assistance programs, long-term disability, life insurance, and accidental death and dismemberment coverage.
AMENDMENT FOR EMPLOYER BENEFIT BROKER SERVICES
June 23, 2026
Following a competitive RFP process conducted in 2020, in which four firms responded and were evaluated by a panel that included representatives from the Laguna Beach Municipal Employees’ Association, the Laguna Beach Firefighters’ Association, the Laguna Beach Police and Fire Management Association, and the City’s Human Resources Division, the City Council, on January 26, 2021, authorized the City Manager to execute a Consultant Services Agreement with Burnham Benefits Insurance Services for the period of February 1, 2021 through December 31, 2023, in an amount not to exceed $75,000 annually, with an option to extend for one additional year. Burnham Benefits Insurance Services has since been acquired by and now operates as The Baldwin Group.
Contract Continuation
The original term of the Agreement expired on December 31, 2023. Although the formal term lapsed, the Consultant continued to provide brokerage services to the City without interruption, and the City continued to rely on those services for the administration of its employee benefit programs. During a recent review of contract records, staff identified that the formal agreement extension had not been brought forward for Council consideration. While services continued uninterrupted and compensation remained within historical levels, a formal amendment is necessary to ratify prior services and extend the agreement term.
Amendment No. 1 ratifies and confirms all brokerage services provided since December 31, 2023. The amendment further confirms that all terms and conditions of the original agreement, including insurance requirements, confidentiality provisions, and indemnification obligations, remained applicable during this period. Amendment No. 1 also extends the term of the Agreement through December 31, 2026 so that benefits administration may continue without disruption through the current calendar year. Staff is recommending that the City Council authorize execution of Amendment No. 1 in a form substantially similar to Attachment 1.
Future Procurement/RFP
Staff intends to conduct a competitive Request for Proposals process in early 2027 for employee benefits brokerage and administration services. Conducting a new procurement process will provide an opportunity to evaluate service offerings, compensation structures, technology solutions, and market conditions to ensure the City continues receiving high-quality brokerage services at a competitive cost. Approval of Amendment No. 1 provides continuity of operations while allowing sufficient time to conduct a comprehensive and transparent procurement process.
To provide additional flexibility, staff is also requesting authority for the City Manager to extend the Agreement for up to one additional year, through December 31, 2027, if necessary. While staff anticipates completing the competitive procurement process in 2027, unforeseen circumstances could delay the solicitation, evaluation, contract negotiations, transition to a new service provider, or other implementation activities. Authorizing a one-year extension would ensure continuity and avoid any disruption to the program.
The following timeline summarizes the key events:
Date Action
AMENDMENT FOR EMPLOYER BENEFIT BROKER SERVICES
June 23, 2026
Staff to conduct a competitive
Request for Proposals (RFP)
for employee benefits
brokerage and administration
services for plan year 2027
City Council authorized a Consultant Services Agreement with Burnham Benefits Insurance Services for the period of February 1, 2021 through December 31, 2023, in an amount not to exceed $75,000 annually, with an option to extend for one additional year.
December 31, 2023 The original term of the Agreement expired. The Consultant continued to provide brokerage services to the City without interruption. 2024 – 2026 The Consultant (now operating as The Baldwin Group) continued to provide employee benefits brokerage services to the City.
June 2026
Amendment No. 1 presented to the City Council to ratify the services rendered since December 31, 2023 and extend the term through December 31, 2026.
Early 2027
Staff to conduct a competitive Request for Proposals (RFP) for employee benefits brokerage and administration services for plan year 2027
FINANCIAL ANALYSIS
The City does not pay the broker directly. Broker compensation consists of quarterly commissions that the insurance carriers build into the City's benefit plan premiums and remit to the broker, so the cost is embedded in premiums the City already pays through its Insurance Fund. Amendment No. 1 establishes a not-to-exceed cap of $150,000 for services rendered from January 1, 2024 through December 31, 2025.
Combined with the $75,000 not-to-exceed amount under the original Agreement, total compensation under the Agreement and Amendment No. 1 shall not exceed $225,000.
Period Not-to-Exceed Compensation
2024 (ratification) $75,000
2025 (ratification)) $75,000
Total under the Agreement and Amendment No. 1 $75,000
Total under the Agreement and Amendment No. 1 $225,000
All expenses associated with the service agreement are budgeted within the City’s Insurance Fund.
Therefore, no additional appropriation is necessary as a result of this action.
ALIGNMENT WITH CITY COUNCIL GOALS AND PRIORITIES
The recommended action supports the City Council's Fiscal Sustainability Strategic Priority by ensuring continuity of professional employee benefits brokerage services, maintaining effective risk management
AMENDMENT FOR EMPLOYER BENEFIT BROKER SERVICES
June 23, 2026
practices, and supporting efficient administration of employee benefit programs while staff conducts a competitive procurement process.
ENVIRONMENTAL ANALYSIS
This action is not subject to the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines Section 15378 because it does not qualify as a “project.” Section 15378 defines a project as an activity that may cause a direct or reasonably foreseeable indirect physical change in the environment. The recommended action involves approval of an amendment to a consultant services agreement for employee benefits brokerage services — an administrative activity that does not commit the City to any specific development proposal and does not authorize any physical change to the environment. No further environmental review is required.
ATTACHMENTS
1. Amendment No. 1 to Professional Services Agreement (Pgs. 5-6)
2. City Council Staff Report – January 26, 2021 (Pg. 7)
3. City Council Meeting Minutes – January 26, 2021 (Pgs. 8-14) Submitted By: Gavin Curran Approved: .David A Kiff
Gavin Curran, Assistant City
Manager
Dave Kiff, City Manager
Report Prepared By: Coordinated With:
Gavin Curran, Assistant City Manager Patrick Donegan, Assistant City Attorney