HomeMy WebLinkAboutContracts & Agreements_141-2011_CCv0001.pdf AGREEMENT TO FURNISH PROFESSIONAL ACTUARIAL SERVICES
Ih This agreement for professional actuarial services ("Agreement") is made and entered into this
25"' day of August, 2011 ("Effective Date"), by and between the City of Redlands, a municipal
corporation ("City") and Actuarial & Financial Consulting ("Consultant"). City and Consultant are
sometimes individually referred to herein as a"Party"and, together, as the-Parties."
In consideration of the mutual promises contained herein, City and Consultant agree as follows:
ARTICLE I -ENGAGEMENT OF CONSULTANT
1.1 City hereby engages Consultant to perform professional actuarial consulting services in
connection with City's proposed implementation of Governmental Accounting Standards Board
45 rules (the "Services"). The specific Services which Consultant shall perform are more
particularly described in Exhibit "A," entitled "Scope of Services and Rate Schedule," which is
attached hereto and incorporated herein by this reference.
1.2 The Services shall be performed by Consultant in a professional manner, and Consultant
represents that it has the skill and the professional expertise necessary to provide the Services to
City at a level of competency presently maintained by other practicing professional consultants
in the industry providing like and similar types of services.
1.3 Consultant shall comply with all applicable Federal, State and local laws and regulations in the
performance of its obligations under this Agreement including,but not limited to, the Americans
with Disabilities Act and the Fair Employment and Housing Act.
ARTICLE 2 -RESPONSIBILITIES OF CITY
2.1 City shall make available to Consultant information in its possession that may assist Consultant
in performing the Services.
ARTICLE 3 -PAYMENT AND NOTICE
3.1 The total compensation for Consultant's performance of the Services shall not exceed the
amount of Thirteen Thousand Seven Hundred Fifty Dollars($13,750). City shall pay Consultant
on a time and materials basis up to the -not to exceed" amount, based upon the rates shown in
Exhibit"A."
12 Consultant shall submit monthly invoices to City describing the work performed during the
preceding month. Consultant's invoices shall include a brief description of the Services
performed, the dates the Services were performed, the number of hours spent and by whom, and
a description of reimbursable expenses, if any. City shall pay Consultant no later than thirty
(30) days after receipt and approval by City of Consultant's invoice, provided (1) the Services
reflected in the invoice were performed to the reasonable satisfaction of City in accordance with
the terms of this Agreement, (2) that the number of hours of Services set forth in the invoice
reflects the amount of time ordinarily expended for such Services by members of the profession
currently practicing in the same locality under similar conditions, and (3) that all expenses. rates
and other information set forth in the invoice are consistent with the terms and conditions'of the
Agreement.
3.3 All notices shall be given in writing by personal delivery or by mail. Notices, sent by mail
should be addressed as follows:
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City: Tina T. Kundig, Finance Director;City Treasurer
City of Redlands
PO Box 3005
Redlands, CA 92373
Consultant: Marvin J. Paull, Principal
Actuarial&Financial Consulting
27505 Fern Pine Way
Murrieta, CA 92562
When so addressed, such notices shall be deemed given upon deposit in the United States Mail. Changes
may be made in the names and addresses of the person to whom notices and payments are to be given by
giving notice pursuant to this section.
ARTICLE 4 -INSURANCE AND INDEMNIFICATION
4.1 All insurance required by this Agreement shall be maintained by Consultant for the duration of
its performance of the Services. Consultant shall not perfonn any Services unless and until all
required insurance listed below is obtained by Consultant. Consultant shall provide City with
certificates of insurance and endorsements evidencing such insurance prior to commencement of
the Services. All insurance policies shall include a provision prohibiting cancellation of the
policy except upon thirty(30)days prior written notice to City.
4.2 Workers Compensation and Employer's Liability. If Consultant has employees, Consultant
shall secure and maintain Worker's Compensation and Employer's Liability insurance
throughout the duration of this Agreement in accordance with the laws of the State of California,
with an insurance carrier acceptable to City. In the event Consultant has no employees,
Consultant hereby certifies to City that it has secured from the District of Industrial Relations a
certification of consent to self-insure.
4.3 Professional Liability Insurance. Consultant shall secure and maintain professional liability
insurance throughout the term of this Agreement in the amount of One Million Dollars
($1,000,000)per claim made.
4.4 Business Auto Liability Insurance. Consultant shall secure and maintain business auto liability
coverage, with minimum limits of One Million Dollars 01,000,000) per occurrence, combined
single limit for bodily injury liability and property damage liability throughout the term of this
Agreement. This coverage shall include all Consultant owned vehicles used in connection with
Consultant's provision of the Services, hired and non-owned vehicles, and employee non-
ownership vehicles. Such insurance shall be primary and non-contributing to any insurance or
self insurance maintained by City. City shall be named as an additional insured.
4.5 Hold Harmless and Indemnification. Consultant shall defend, indemnify and hold harmless City
and its elected officials, employees and agents from and against any and all claims, losses or
liability, including, attorneys fees, arising from injury or death to persons or damage to property
occasioned by Consultant's and its officers', employees' and agents' negligent and wrongful
acts or omissions in performing the Services.
ARTICLE 5 -CONFLICTS OF INTEREST
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5.1 Consultant covenants and represents that it does not have any investment or interest in real
property and shall not acquire any interest, direct or indirect, in the geographical area covered by
this Agreement or any other source of income, interest in real property or investment which
would be affected in any manner or degree by the performance of Consultant's Services.
Consultant further covenants and represents that in the performance of its duties hereunder, no
person having any such interest shall perform any Services under this Agreement.
5.2 Consultant agrees it is not a designated employee within the meaning of the Political Reform
Act because Consultant:
A. Does not make or participate in:
(i) any City governmental decisions regarding approval of a rate, rule or regulation,
or the adoption or enforcement of laws;
(ii) the issuance, denial, suspension or revocation of City permits, licenses,
applications, certifications, approvals, orders or similar authorizations or
entitlements;
(iii) authorizing City to enter into, modify or renew a contract;
(iv) granting City approval to a contract that requires City approval and to which
City is a party, or to the specifications for such a contract;
(v) granting City approval to a plan, design,report, study or similar item;
(6) Adopting, or granting City approval of,policies, standards or guidelines for City
or for any subdivision thereof.
B. Does not serve in a staff capacity with City and in that capacity participate in making a
(Tovermnental decision or otherwise perform the same or substantially all the same duties for
City that would otherwise be performed by an individual holding a position specified in City's
Conflict of Interest Code under Government Code section 87302.
5.3 In the event City officially determines that Consultant must disclose its financial interests by
completing and filing a Fair Political Practices Commission Form 700, Statement of Economic
Interests,Consultant shall file the subject Form 700 with the City Clerk's office pursuant to the
written instructions provided by the Office of the City Clerk.
ARTICLE 6 -GENERAL CONSIDERATIONS
6.1 In the event any action is commenced to enforce or interpret any of the terms or conditions of
this Agreement the prevailing Party shall, in addition to any costs and other relief, be entitled to
the recovery of its reasonable attorneys' fees, including fees for use of in-house counsel by a
Party
6.2 Consultant shall not assign any of the Services to be performed under this Agreement, except
with the prior written approval of City and in strict compliance with the terms, provisions and
conditions of this Agreement.
6.3 All documents, records, electronic data files, databases, and other documents developed by
Consultant pursuant to this Agreement, and any copyright interest in such documents, shall
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become the property of City and shall be delivered to City upon completion of the Services, or
upon the request of City. Any reuse of such documents and any use of incomplete documents
will be at City's sole risk.
6.4 Consultant is for all purposes an independent contractor. Consultant shall supply all tools and
instrumentalities required to perform the Services. All personnel employed by Consultant are
for its account only, and in no event shall Consultant or any personnel retained by it be deemed
to have been employed by City or engaged by City for the account of, or on behalf of City.
6.5 Unless earlier terminated, as provided for below, this Agreement shall terminate upon
completion and acceptance of the Services by City.
6.6 This Agreement may be terminated by City, in its sole discretion and without cause, by
providing five (5) business days prior written notice to Consultant (delivered by certified mail,
return receipt requested)of intent to tertninate.
6.7 If this Agreement is terminated by City, an adjustment to Consultant's compensation shall be
made,but(1)no amount shall be allowed for anticipated profit or unperformed services, and(2)
any payment due Consultant at the time of termination may be adjusted to the extent of any
additional costs to City occasioned by any default by Consultant.
6.8 Upon receipt of a termination notice, Consultant shall immediately discontinue all services
affected,and within five(5)days of the date of the termination notice, deliver or otherwise make
available to City, copies (in both hard copy and electronic form, where applicable) of any data,
design calculations, drawings, specifications, reports, estimates, summaries and such other
information and materials as may have been accumulated by Consultant in performing the
Services required by this Agreement. Consultant shall be compensated on a pro-rata basis for
work completed up until notice of termination.
6.9 Consultant shall maintain books and accounts of all payroll costs and expenses related to the
Services. Such books shall be available at all reasonable times for examination by City at the
office of Consultant.
6.10 This Agreement, including the Exhibit incorporated herein by reference, represents the entire
agreement and understanding between the Parties as to the matters contained herein, and any
prior negotiations, written proposals or verbal agreements relating to such matters are
superseded by this Agreement. Any amendment to this Agreement shall be in writing, approved
by City and signed by City and Consultant.
6.11 This Agreement shall be governed by and construed in accordance with the laws of the State of
California.
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Ili WITNESS WHEREOF, duly authorized representatives of the City and Consultant have
signed in confinnation of this Agreement,
CITY OF REDLANDS ACTUARIAL& FINANCLAL
CONSULTING
Tina T. Kundig -Marvrin J, Paull, ncipal
Finance Director/City Treasurer
ATTEST:
Sam Irwin, Ci41er
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EXHIBIT "A"
Scope of Sen Ices and Rate Schedule
MARVIN J.PAULL,F.S.A.,F.C.A.,E.A.,M.A.A.A.
Actuarial&Financial Consulting
27505 Fern Pine VVay
Murrieta,CA 92562
(951)304—9696—Phone
(951)461—4616- Fax
July 31,2,011
Tina Kundig
Finance Director
City of Redlands
35 Cajon Avenue,Suite 30
Redlands,CA 92373
Re: Proposal for Actuarial Consulting Services—Post-Retirement Medical Benefits
Dear Tina:
As you requested,I am submitting this proposal to provide actuarial consulting services in connection with the Post-
Retirement Medical Benefits(PRMB)provided to eligible employees by the City of Redlands.
The following material includes discussion of the Background,Scope of Services,Data Requirements and Timing&
Fees.
Background
Based on the prior valuation,the City currently has approximately 450 active employee and 260 currently retired
employees receiving post-employment benefits.Benefits provided include medical,dental for I group and vision for
Safety Management and Fire personnel.The City pays the full premium for retirees until age 65 and$397 per month
after 65,both subject to inflation(max increase of$20/month after age 65).Eligibility for benefits requires retirement
and 15 years of service for Safety and 20 years of service for other employees. Safety Employees are eligible for
disability benefits.Miscellaneous new hires after March 2010 are not eligible for benefits.In the event of the retiree's
death,benefits continue to the surviving spouse.
The actuarial valuation will be based on the census data provided and the actuarial and economic assumptions that are
adopted.The calculations will produce the liabilities and annual plan costs on the basis of the requirements of GASB
45.Results will be presented in a final report to be presented at the offices of the City.
Scope of Services
Once we receive the census data and plan information.the actuarial valuation can begin.The following tasks outline the
general steps included in the process.
L Review the plan benefits and the census data for any missing or inappropriate information.Discuss with the
City any data issues that need clarification or correction.
2. Discuss and agree upon the actuarial assumptions and cost method to be applied in the valuation.Assumptions
include medical trend,salary increases, interest discount,mortality,turnover,rate of retirement,etc.
Calculations will be performed on the basis of one set of assumptions and Actuarial Cost Method to be
determined in discussions with the Citv.
1 Perform the 6/30/2010 actuarial valuation to determine the liabilities(OPEB Obligation)the annual cost
(Annual Required Contribution and Expense)to provide for benefits and projected benefit payments.
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4. Summarize results in a report and present them to the City.Results will be shown separately for Police,Fire
and Miscellaneous Employees
5. Perform requested additional calculations or analysis to reflect benefit plan and or
assumption alternatives if requested by the City.
6. Provide alternative calculation-results.
Data Requirements (Active,Deferred Vested& Retired Employees)
Enclosed is a sample data layout chart that summarizes the census data required to perform their valuation.This may
need to be modified depending on the specific plan benefit provisions determined after the initial implementation
meeting.The census information should be provided electronically in Excel format and sent by e-mail.
Fees &Timing
Our fees to perform tasks I through 4, under the Scope of Services above,will be$ 13,750 and include two meetings
with the City in the course of the project.The purpose of the initial meeting will be to discuss the plan background and
broad objectives of the City and to initiate the collection of plan information and census data required to perform the
valuation.At the second meeting I will present results at your offices and answer questions regarding the report.There
will be no travel costs added on to the above fees.
If there are requests for additional calculations under alternative plan benefit or assumptions,there will he additional
fees depending on the complexity and nature of the alternative.As examples,a flat interest rate change will cost$850
while a complex contribution provision can cost up to
$ 1,500 or more.In place of a precise calculation however,a rough estimate can often be made in place of a
computerized calculation to save on fees.Additional work will not be undertaken unless approved in advance by the
City
Under GASB 45,full valuations for a group your size are required at least once every other year unless there are
significant changes in census,benefits or assumptions during the middle year.
Once the participant information has been verified and there is a clean data file,we can deliver the valuation results in
approximately 7 to 8 weeks.
I look forward to working with you again and can commence the project once you authorize us to proceed.If you have
any questions or wish to discuss this proposal,please call me at(951)304-9696.
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CITY OF REDLANDS
POST-RETIREMENT MEDICAL DATA
DATA LAYOUT
ACTIVE EMPLOYEES
SPOUSE Employee Insurance
male :m Spouse Bargaining Plan
Date of DATE OF Date of female:f Date of Group Coverage insurance Medicare Retiree Annual
Name EE# Gender Birth HIRE Particip. none :0 Birth Code Code Premium Coverage Contribution Sala
ry
? NIA N/A for
actives
RETIRED EMPLOYEES
SPOUSE Employee Insurance Medicare
male : m Spouse Bargaining Plan Coverage
Date of DATE OF Date of female:f Date of Group Coverage Insurance Yes=I Retiree Annual
Name EE# Gender Birth RETIRE Particip. none :0 Birth Code Code Premium No=2 Contribution Sala
ry
Not NIA for
needed
retirees
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