HomeMy WebLinkAboutFin GASB 45 Actuarial Services 2013Agenda Item No: 3. c
SAN R 1 1EL CITY COUNCIL AGENDA REPORT
Department: MANAGEMENT SERVICES
Prepared by: Anil Comelo, HR Director City Manager Approval:
SUBJECT: AGREEMENT WITH BARTEL ASSOCIATES, LLC FOR ACTUARIAJ
CONSULTING SERVICES RELATED TO A GASB 45 VALUATION
RECOMMENDATION: Adopt Resolution.
In 2004, the Government Accounting Standards Board (GASB) issued rules relating to the
accounting and reporting of Other Post -Employment Benefits (OPEB). These include all benefits
— other than retirement benefits — that are earned by employees as a result of active service, but
are not paid -out as benefits until the beneficiaries have retired.
In the past, the City of San Rafael has contracted with Bartel Associates, LLC for actuarial
services in accordance with GASB 45 requirements, including an analysis of the City's OPEB
data, preparation of a formal valuation report and an executive summary of the findings. The
City would again like to contract with Bartel Associates for a June 30, 2013 GASB 45 actuarial
valuation of the City's retiree healthcare plan as of June 30, 2013.
FISCAL IMPACT:
The fees to conduct the GASB 45 valuation are approximately $22,500, as outlined in the
attached Professional Services Agreement and scope of work, with a fee of no more than
$8,000 for additional services as needed.
ATTACHMENTS:
• Resolution
• Agreement Between the City of San Rafael and Bartel Associates, LLC
1 1%01 :1 A k
Council Meeting:
Disposition:
i •1
RESOLUTION OF i OF OF
RAFAEL
AUTHORIZING
iR MANAGER
♦R i EXECUTE 1
AGREEMENT WITH BARTEL ASSOCIATES, LLC FOR
ACTUARIAL CONSULTING SERVICES RELATED GASB
45 VALUATION
certifiedWHEREAS, GASB 45 establishes standards for accounting and financial reporting of
"Other Post Employment Benefits" (OPEBs) and requires each public agency to engage a
actuary • calculate several actuarial measures estimating and future costs
relatedand liabilities of an agency's OPEBs; and
WHEREAS, the City has contracted with Bartel Associates, LLC in the past for actuarial
services to GASB i •
WHEREAS, the City would like to contract with Bartel Associates, LLC to provide actuarial
services for a June 30, 2013 GASB 45 valuation of the City's retiree healthcare plan.
NOW, THEREFORE, BE IT RESOLVED, that the City Council of the City of San Rafael
hereby approves and authorizes the City Manager to execute an Agreement with Bartel
Associates, for actuarial • • services related to i GASB valuation, copy of
is on file with the City Clerk.
1, Esther C. Beirne, Clerk of the City of San Rafael, hereby certify that the foregoing
Resolution was duly w • reqularly introduced and adopted at i regular ! of w Rafael
City Council held on the 19tfi day of August 2013, by the following vote to wit:
AYES: • •"Colin,• •lly, Heller, McCullough r Mayor Phillips
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AGREEMENT WITH BARTEL ASSOCIATES, LLC FOR ACTUARIAL CONSULTING
SERVICES RELATED TO A GASB 45 VALUATION
This Agreement is made and entered into this day of August 2013, by and between
the CITY OF SAN RAFAEL (hereinafter "CITY"), and BARTEL ASSOCIATES, LLC
(hereinafter "CONTRACTOR").
AGREEMENT
•
I . PROJECT COORDINATION.
A. The City Manaer shall be the representative of the CITY for all purposes unde
gr this
Agreement and ANIL COMELO, the Human Resources Director is hereby designated the PROJECT
MANAGER for theCITY, and said PROJECT MANAGER shall supervise all aspects of the progress and
execution of this Agreement.
B. CONTRACTOR. CONTRACTOR shall assign a single PROJECT DIRECTOR to have
overall responsibility for the progress and execution of this Agreement for CONTRACTOR. DOUG
PRYOR is hereby designated as the PROJECT DIRECTOR i`
2. DUTIES OF CONTRACTOR.
CONTRACTOR shall perform the duties and/or provide services as further provided in the
proposal attached hereto as Exhibit "Aincluding:
A. Prepare a GASB 45 valuation of the CITY's retiree healthcare plan as of June 30, 2013.
B. Provide basic information for one or more pension and retiree health reform concepts.
C. Other data analysis as requested by the CITY
3. DUTIES OF CITY.
CITY shall provide input from the PROJECT MANAGER as to the Data Requirements outlined in
Exhibit "A". CITY staff shall provide cooperation and information as reasonably required to assist
CONTRACTOR perform the services and duties required under this agreement and shall compensate
CONTRACTOR pursuant to the provisions of section 4, below.
For the CONTRACTOR's full performance of the duties and services described herein, CITY shall
pay CONTRACTOR a professional services fee in an amount not to exceed $22,500 for a GASB -45
valuation. and a fee not to exceed $8,,000 for additional consulting services related to this project as
needed. These fees are based on the hourly rates as outlined in Attachment "Awhich include provisions for
miscellaneous expenses (travel, telephone, copying, etc.). The total amount of this agreement, including
additional services, shall not exceed $30,500.00.
Payment will be made upon receipt by PROJECT MANAGER of itemized invoices submitted by
CONTRACTOR.
Version 2-15-11
5. TERM OF AGREEM
The term of this Agreement shall be from the execution of this Agreement until CONTRACTOR's
completion of performance of all duties and services under this Agreement, or December 31, 2013,
whichever is earlier. The City Manager may extend the contract term, as needed, but no more than an
additional calendar year.
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A. Discretionary. Either party may terminate this Agreement without cause upon
thirty (3 o) days written notice mailed or personally delivered to the other party.
B. Cause. Either party may terminate this Agreement for cause upon fifteen (15) days
written notice mailed or personally delivered to the other party, and the notified party's failure to
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cure or correct the cause of the termination, to the reasonable satisfaction of the party giving such
notice, within such fifteen (15) day time period.
C. Effect of Termination. Upon receipt of notice of termination, neither party shall
incur additional obligations under any provision of this Agreement without the prior written consent
of the other.
D. Return of Documents. Upon termination, any and all CITY documents or
materials provided to CONTRACTOR and any and all of CONTRACTOR's documents and
materials prepared for or relating to the performance of its duties under this Agreement, shall be
delivered to CITY as soon as possible, but not later than thirty (30) days after termination.
7. OWNERSHIP OF DOCUMENTS.
The written documents and materials prepared by the CONTRACTOR in connection with
the performance of its duties under this Agreement, shall be the sole property of CITY. CITY may
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use said property for any purpose, including projects not contemplated by this Agreement.
8. INSPECTION AND AUDIT.
Upon reasonable notice, CONTRACTOR shall make available to CITY, or its agent, for
inspection and audit, all documents and materials maintained by CONTRACTOR in connection
with its performance of its duties under this Agreement. CONTRACTOR shall fully cooperate
with CITY or its agent in any such audit or inspection.
9. ASSIGNABILITY.
The parties agree that they shall not assign or transfer any interest in this Agreement nor the
performance of any of their respective obligations hereunder, without the prior written consent of
the other party, and any attempt to so assign this Agreement or any fights, duties or obligations
ansing hereunder shall be void and of no effect.
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A. During the term of this Agreement, CONTRACTOR shall maintain, at no expense
to CITY, the following insurance policies:
I . A commercial general liability insurance policy m the minimum amount o
one million ($ 1 1000,000) dollars per occurrence for death, bodily injury, personal injury,, or prope
damage. I
2. An automobile liability insurance policy, for owned, non -owned, and hired
vehicles, in the minimum amount of one million ($ 1,000,000) dollars per occurrence.
3. If any licensed professional performs any of the services required to be
performed under this Agreement, a professional liability insurance policy in the minimum amount
of one million $1,000,000) dollars to cover any claims arising out of the CONTRACTOR's
performance of services under this Agreement.
B. The insurance coverage required of the CONTRACTOR in Subparagraph A above,
�-hall also meet the following requirements:
I . Except for professional liability insurance, the insurance -policies shall be
endorsed for contractual liability and personal injury.
2. Except for professional liability insurance, the insurance policies shall
provide in their text or shall be specifically endorsed to name the CITY, its officers, agents,
employees, and volunteers, as additionally named insureds under the policies, and to provide that
the insurance shall be primary with respect to any insurance or coverage maintained by CITY and
shall not call upon CITY's insurance or coverage for any contribution.
3. CONTRACTOR shall provide to City's Project Manager, (a) Cercates of
Insurance evidencing the insurance coverage required herein, and (b) text from the insurance
policies or the endorsements as specified in Subparagraph B(2).
4. The insurance policies shall provide that the insurance carrier shall not
cancel, terminate or otherwise modif�- the terms and conditions of said insurance policies except
upon ten (10) days written notice to City's Project Manager.
5. If the insurance is written on a Claims Made Form,, then,, following
termination of this Agreement, said insurance coverage shall survive for a period of not less than
five years.
6. The insurance policies shall provide for a retroactive date of placement
coinciding with the effective date of this Agreement.
7. The insurance shall be approved as to form and sufficiency by PROJECT
MANAGER and the City Attorney.
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C. If it employs any person, CONTRACTOR shall maintain worker's compensation
d employer's liability insurance, as required by the State Labor Code and other applicable laws
md regulations, and as necessary to protect both CONTRACTOR and CITY against all liability
for injuries to CONTRACTOR's officers and employees.
D. Any deductibles or self-insured retentions in CONTRACTOR's insurance policies
must be declared to and approved by the City's Risk Manager and the City Attorney. At CITY's
option, the deductibles or self-insured retentions with respect to CITY shall be reduced or
eliminated to CITY's satisfaction, or CONTRACTOR shall procure a bond guaranteeing payment
of losses and related investigations, claims administration, attorney's fees and defense expenses.
I I LVI 10 11 a H
A. Except as provided in Subparagraph B., CONTRACTOR shall indemnify,
release, defend and hold harmless CITY, its officers, and employees, against any claim, demand,
suit, judgment, loss, liability or expense of any kind, including attorney's fees, arising out of or
resulting in any way, in whole or in if from any acts or omissions, intentional or negligent, of
CONTRACTOR or CONTRACTOR's officers, agents and employees in the performance of
their duties and obligations under this Agreement.
B. Where the services to be provided by CONTRACTOR under this Agreement are
design professional services to be performed by a design professional as that term 'is defined
under Civil Code Section 2782.8, CONTRACTOR shall, to the fullest extent permitted by law,
indemnify, release, defend and hold harmless CITY, its officers, and employees, against any
claim, demand,,suit judgment, loss, liability or expense of any kind, including attorney's fees,
that arises out of, pertains toor relates to the negligence, recklessness, or willful misconduct of
CONTRACTOR in the performance of its duties and obligations under this Agreement.
12. NONDISCRIMINATION.
CONTRACTOR shall not discrnate, in any way, against any person on the basis of age,
sex, racecolorreligion, ancestry, national origin or disability in connection with or related to the
performance of its duties and obligations under this Agreement.
13. COMPLIANCE WITH ALL LAWS.
CONTRACTOR shall observe and comply with all applicable federal, state and local laws,
ordinancescodes and regulations, in the performance of its duties and obligations under this
Agreement. CONTRACTOR shall perform all services under this Agreement in accordance with
these laws, ordinances, codes and regulations. CONTRACTOR shall release, defend, lndemnif�
and hold harmless CITY iits officers, agents and employees from any and i. liabilities,,
penalties, fines and all other consequences from any noncompliance or violation of any laws,
ordinances, codes or regulations.
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CITY and CONTRACTOR do not intend,, by any provision of this Agreement,, to create in
any third party, any benefit or right owed by one party, under the terms and conditions of this
Agreement, to the other party.
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All notices and other communications required or permitted to be given under this
Agreement, •including any notice of •change of address, •shall be •in writing and given by personal
delivery, or deposited with the United States Postal Service, postage prepaid, addressed to the
parties intended to be notified. Notice shall be deemed given as of the date of personal delivery, or
if mailed, upon the date of deposit with the United States Postal Service. Notice shall be given as
follows:
TO CITY: Anil Comelo, Human Resources Director
City of San Rafael
1400 Fifth Ave. (P.O. Box 151560)
San Rafael,, CA 94915-1560
TO CONTRACTOR: Doug Pryor, Vice President
Bartel Associates, LLC
411 Borel Avenue, Suite 445
San Mateo, CA 94402
•1 91101120094 1
For the purposes, and for the duration, of this Agreement, CONTRACTOR, its officers,
agents and employees shall act in the capacity of an Independent Contractor, and not as employees
of the CITY. CONTRACTOR and CITY expressly intend and agree that the status of
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CONTRACTOR iits officers, agents and employees be that of an Independent Contractor and not
that of an employee of CITY.
17. ENTIRE AGREEMENT -- AMENDMENTS.
A. The terms andconditions of this Agreement, all exhibits attached, and all documents
expressly incorporated by reference, represent the entire Agreement of the parties with respect to the
subject matter of this Agreement.
B. This written Agreement shall supersede any and all prior agreements, oral or wn*tten.,
regarding the subject matter between the CONTRACTOR and the CITY.
C. No other agreement, promise or statement, written or oral,, relating to the subject
matter of this Agreement, shall be valid or binding, except by way of a written amendment to this
Agreement.
D. The terms and conditions of this Agreement shall not be altered or modified excepo
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by a written amendment to this Agreement signed by the CONTRACTOR and the CITY.
E. If any conflicts arise between the terms and condons of this Agreement, and the
terms and conditions of the attached exhibits or the documents expressly incorporated by reference,
the terms and conditions of this Agreement shall control.
18. SET-OFF AGAINST DEBTS.
CONTRACTOR agrees that CITY may deduct from any payment due to
CONTRACTOR under this Agreement, any monies which CONTRACTOR owes CITY under
I ordinance, agreement, contract or resolution for any unpaid taxes, fees, licenses, assessments,
unpaid checks or other amounts.
The waiver by either party of any breach or violation of any term, covenant or condition of
this Agreement, or of any ordinance, law or regulation, shall not be deemed to be a waiver of any
other term, covenant, condition, ordinance, law or regulation, or of any subsequent breach or
violation of the same or other term, covenant, condition, ordinance, law or regulation. The
subsequent acceptance by either party of any fee, performance, or other consideration which may
become due or owing under this Agreement, shall not be deemed to be a waiver of any preceding
breach or violation by the other party of any term, condition, covenant of this Agreement or any
applicable law, ordinance or regulation.
20. COSTS AND ATTORNEY'S FEES.
The prevang party in any action brought to enforce the terms and conditions of this
Areement, or arising out of the performance of this Agreement, may recover its reasonable
gcosts
(including claims administration) and attorney's fees expended in connection with such action.
CONTRACTOR is exempt from the business license requirement of the San Rafael
Municipal Code because CONTRACTOR is based outside of and will conduct business outlined in
Exhibit A outside of San Rafael city limits. CONTRACTOR shall pay any and all state and
federIl taxes and any other applicable taxes. CITY shall not be required to pay for any work
performed under this Agreement, until CONTRACTOR has provided CITY with a completed
Internal I Revenue Service Forrn W-9 (Request for Taxpayer Identification Number and
Certification).
22. APPLICABLE LAW.
IN WITNESS WHEREOF,, the parties have executed this Agreement as of the day, month
and year first above written.
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CITY OF SAN RAFAEL BARTEL ASSOCIATES, LLC
NANCY MACKLE, City Manager
ESTHER C. BEIRNE, City Clerk
FkOBERT F. EPSTEIN, City Attorney
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DOUG PRYORI Vice -President
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Anil Comelo
Human Resources Director
City of San Rafael
PO Box 151560
San Rafael, California 94915-156*
GASB 45 - Other Post Employment Benefits (OPEB) Actuarial Valuation Fee Estimate
Bartel Associates would be pleased to provide the City of San Rafael actuarial consulting services.
This letter summarizes the project scope and our fee estimate for services for a June 30, 2013
GASB 45 actuarial valuation of the City's retiree healthcare plan.
Background
The prior June 3 0, 2011 GASB 45 actuarial valuation can be used for the 2012/13 and 2013/14 fisc
years. The June 30, 2013 GASB 45 valuation can be used for the 2014/15 and 2015/16 fiscal years]
Estimated Fees
Our fee to prepare a GASB 45 valuation of the City's retiree healthcare plan as of June 30, 2013 will
be approximately $20,000. While our fee estimate represents the likely cost of the valuation, it is
possible that the valuation may require additional time. We understand the City's budgeting needs and
agree not to bill more than $22,500 for the June 30, 2013 valuation unless the project scope changes.
The City may want to include a budget for additional pension and retiree healthcare projects that may
arise. The amount of this consulting budget will depend on the City's needs. We've assumed this
budget will be $6,000 to $8,000 in the following estimated fees.
Please note that our fee estimate assumes:
n We will bill the City at the following hourly rates:
Partner $250-$300
Assistant Vice President $200-$225
Senior Actuarial Analyst $150
Actuarial Analyst $125
Administrative Support $75
The City has made no changes to its retiree healthcare plan or healthcare providers since the last
actuarial valuation as of June 30, 2011.
ireb.
Anil Comelo
August 7, 2013
Page 2
• We will provide the actuarial certification, fiinding policy certification, and Excel valuation
information spreadsheet and certified final results discussion outline required by CalPERS to pre -
fund with the CERBT.
• Participant census data will be provided completely and accurately in an Excel spreadsheet with
one record per participant.
• Results are provided under the current GASB 45 OPEB accounting rules. GASB is currently
working on revisions to GASB Statements Nos. 43 and 45 and anticipates issuing amendments in
June 2013. Required implementation likely wouldn't be until the 2015/16 or later.
• The valuation will not include an implied subsidy. This is consistent with previous valuations and
complies with current Actuarial Standards of Practice (ASAP). There is an Exposure Draft ASOP
that would require community rated plans such as PEMHCA value an implied subsidy. However,
until (and if) that draft is finalized, we do not believe it is appropriate to include the implied
subsidy. We'll provide further details at the results meeting.
• Costs and liabilities will be provided using one funding method and one set of assumptions
including select and ultimate discount rates based on the City's current funding policy.
• The City has not changed its funding policy since the June 30, 2011 valuation.
• We will calculate the Actuarial Value of Assets and estimate the components of the Actuarial
Accrued Liability gain or loss since the last actuarial valuation.
• GASB 45 costs and liabilities will be presented for the plan as a whole with breakdowns for
• We will have one meeting with the City to review the valuation results and will provide a
preliminary valuation results discussion outline for the meeting. The discussion outline will
summarize the plan provisions, census data, actuarial methods and assumptions, and the valuation
results.
• There will be no additional charges for expenses (e.g., travel, telephone, copying, etc.). The hourly
rates listed above include our costs for these items.
• We will invoice the City monthly based on time incurred, subject to the above maximum fee.
Please note that our fee estimate may be higher
• The City has changed its retiree healthcare plan design or has changed healthcare providers since
the June 30, 2011 actuarial valuation. (If the City has made anychanges to the retiree healthcare
plan since the June 3 0, 2011 valuation, it should provide us those changes so we can revise our fee
estimate, if necessary.)
• Participant data is not relatively clean and free from internal inconsistencies or is not provided in
electronic format (Excel workbook) with one record per participant.
• Data is not collected within approximately 3 months of the June 30, 2013 valuation date.
• Plan and financial information is not provided as requested or is not complete and internally
consistent.
■ Results are needed for additional assumptions, funding methods, contribution policies, or
alternative plan designs.
• Results are needed separately for additional employee groups.
• The City requests additional meetings. We will base our fee for additional meetings on our billing
rates and the time needed for the meetings and preparation.
• The City requests that we prepare a formal valuation report. Our estimated fee for a formal
valuation report summary is $2,000.
Anil Comelo
August 7, 2013
Page 3
■ The City requests a draft financial statement footnote. Our estimated fee for a draft financial
statement footnote is $1,000.
Data Requirements
In order for us to begin the GASB 45 study, please provide:
• Summary of plan provisions and copies of any recent MOUs for bargained employee groups that
are not available on the City's website.
• The City's most current CalPERS PEMHCA resolution(s), if different from that provided for the
June 30, 2011 valuation.
• City's June 30, 2012 and 2013 CAFR footnote and required supplementary information for the
retiree healthcare plan.
• Marin County Employees' Retirement Association 401(h) account reconciliation for fiscal years
2011/12 and 2012/13, including dates of any contributions and withdrawals.
• Dates and amounts of asset transfer(s) from the 401(h) to the CERBT, and any CERBT asset
statements
• Total pay-as-you-go costs (City's retiree healthcare contribution) for the 2012/13 fiscal, year.
• The City's latest monthly CalPERS health premium invoice. Please remove any Social Security
numbers.
m Active and retired participant data in electronic format (Excel workbook):
1W Active Data - name, employee number (not Social Security number), gender, birth date, hire
date, medical plan, single/2-party/family coverage, Medicare eligibty, pension plan (MCERA
Miscellaneous, Police or Fire Safety; or PARS), employee classification (full-time or part-time),
bargaining or employee group, and annual base compensation. Include any active employees
who have waived healthcare coverage. Note if hours for part-time employees are less than 20
hours per week. Indicate pay period for the compensation reported.
• Retiree Data - name, employee number (not Social Security number), gender, birth date, hire
date,, retirement type (service or disability), retirement date, medical plan, single/2-party/family
coverage, Medicare eligibility, MCERA pension plan (Miscellaneous, Police or Fire Safety),
bargaining or employee group, spouse's birth date (if available), portion of premium paid by the
City, portion of premium paid by the retiree, and whether the participant is a former employee or
surviving spouse. Include any retirees or surviving spouses of retirees who have waived
coverage. Include retirees and surviving spouses who do not participate in the City's healthcare
plans but receive a City contribution.
• In order to maintain confidentiality, please do not provide Social Security numbers. We will
delete any files that include Social Security numbers and request a revised file.
• Our fee estimate assumes that the City will merge and reconcile all data files and provide one
census file with one complete record for each employee and eligible retiree in an Excel
workbook. If the City needs our help to merge and reconcile data, our fees will be higher.
We may need additional data, depending on our review of the City's retiree medical plan design.
YI, e 0.
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Anil Comelo
August 7, 2013
Page 4
Timing
We are prepared to begin this project immediately. Normally, the valuation results meeting is set
about 4-6 weeks after receipt of the requested information.
211,
Sincerely,
Doug Pryor
Vice President
c: John Bartel, Bartel Associates
o:\c1ients\city of san rafae1\proposa1s\\ba sanrafael 13-08-07 opeb 11-06-3 )0 gash 45 fee letter.docx