By Amy Wenk

Since incorporating, Sandy Springs has outsourced most of its governmental functions to Denver-based CH2M Hill, including human resources.

But because that company is primarily an engineering firm, “they really didn’t have in-house expertise for human resources,” City Attorney Wendell Willard said. “As time went by, we felt there was a weakness there that wasn’t being completely addressed.”

So city officials decided it was time for another company to do the HR work for the city workers who are not CH2M Hill employees.

Because most of the city’s personnel are firefighters and police officers, officials decided to hire a HR firm with public safety expertise.

A request for proposals drew nine bids. An evaluation committee April 14 interviewed the three companies with the lowest bids. The committee unanimously ranked Atlanta-based Flex HR Inc. as the most responsive and cost-effective solution.

At its April 21 meeting, the City Council approved a contract with Flex HR.

“They are getting on board now,” said Willard, noting the contract was effective immediately.

The “not to exceed” $368,900 contract, which spans a year and two months, requires Flex HR to provide one full-time human relations manager, a part-time director of human resources and a part-time employment practices and administration manager and to offer a Web portal for employees to access human resources and benefits.

Flex HR will oversee benefits and other human resources needs for the mayor and City Council, the six non-CH2M Hill managerial positions, and all police and fire personnel.

Willard said the city will get a credit against its CH2M Hill contract since that company will no longer render those services.

The city attorney also discussed “a bubbling problem” regarding CH2M Hill’s insurance costs to the city.

In 2005, when the contract with CH2M Hill was being negotiated, the city agreed to fund $45 million in excess general liability coverage for the company.

The understanding was “as other cities came on board, they would be picking up a portion of that,” Willard said. But there was no agreement as to the formula for that division.

More than three years later, CH2M Hill serves nine cities, adding the likes of Johns Creek, Milton, Bonita Springs, Fla., and Centennial, Colo., to Sandy Springs.

Curious as to how the cost of the liability insurance was split among those cities, Willard asked for detailed information from CH2M Hill.

“My interest and concern was to be sure that our city was now not paying more its than fair share for this excess liability coverage,” he said.

His investigation revealed things “we felt were not properly being divided up between us and the other cities.”

CH2M Hill used revenue as a factor in deciding how to split the cost of the liability coverage, which Wendell said might not be fair.

“We were supposed to be a part of that decision since we are the ones paying the premium,” he said.

He also discovered CH2M Hill had a $10 million professional liability policy the city was helping to fund.

“They had, within their own organization, felt there was a right to make half of that as a cost of the excess liability,” Willard said. “I questioned that. It never was something discussed or agreed.”

He expects CH2M Hill to repay the city $200,000 to $300,000 for the professional liability premium.

“There are some other things about the division of the money that I am still working on,” Willard said, “so we hope to soon get all that resolved.”